E63: Christopher David on Arcade City, Decentralized Ride Sharing, and Building on Lightning
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show Notes

Christopher David is the CEO and Founder of Arcade City, a peer-to-peer platform that aims to decentralize ride-sharing and enable a circular Bitcoin economy.

In our talk, we spoke about Arcade City’s vision, the issues facing gig economy workers, and why Arcade City decided use Bitcoin, Lightning, and Nostr to bring their platform to life.

→ Arcade City: https://arcade.city/


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00:00 - Intro

02:30 - Christopher David Intro

08:46 - Arcade City’s Inception

17:07 - Why Is Arcade City Building on Lightning?

33:35 - Arcade City Payments, Communication, and Discovery

49:40 - Can Arcade City Disrupt Uber or Lyft?

1:13:26 - Scaling Arcade City

1:20:17 - The Lightning Round


Christopher David - 00:00:00:

I think finally, after many years of false starts, that we figured out the proper stack to do that. In short, bitcoin plus Lightning Network, plus Nostr. It was around 2021, and specifically going to the bitcoin conference in Miami, that was of me falling down the bitcoin rabbit hole a second time. What really kind of persuaded me to pivot Arcade to bitcoin. It was a one two punch. Number one, it was Jack Mallard's presentation about what all amazing circular networks and such that they had built started kind of thinking about, all right, we can pivot Arcade to Lightning. It was kind of tough to walk away from our shit coin, which we had been keeping us sort of afloat for a number of years. I've been building the sort of Nostr version of Arcade, not even building our own backend, just entirely throwing our requests to the domestic relay. The highest form of network is actually a group forming network, which is when you start with a peer to peer network. So you start with everyone can connect peer to peer however they want, but it has the added property of making it as easy as possible for groups to form.

Kevin Rooke - 00:01:14:

Christopher David is the founder and CEO of Arcade City, a peer to peer platform that aims to decentralized ride sharing and enable a circular bitcoin economy. In our discussion, we covered Arcade City's vision. We discussed the challenges facing gig economy workers globally today, and we discussed why Arcade City is building this platform on Bitcoin, on Lightning, and on Nostr, and why these tools are essential to bring this concept to life. Chris has asked to have his share of today's show splits sent to the Human Rights Foundation. So if you enjoy this show and if you've learned something new, the best way you can show your support is by sending in sats over the Lightning Network. Not going to ask you for likes, not going to ask you for follows. This show runs on sats. So I appreciate all the sats and comments you guys send in over Lightning. Just a quick message before we get into today's show. This episode is sponsored by Voltage. Voltage is the industry standard and next generation provider for Lightning Network infrastructure. Today's episode 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. Chris, thank you for taking the time to chat today. I am so excited to learn more about Arcade City because I've seen what you guys have put out in a couple of blog posts. I've seen your site, and you have a huge vision. And so before we get into the discussion about exactly what you're building, I want to step back and I want to learn about your background in bitcoin, how you first discovered it, and why you decided to build on Lightning.

Christopher David - 00:02:55:

Sure. So I got involved in bitcoin a little bit back in 2011. I was interested originally kind of through the Ron Paul scene, and one of my friends was talking about bitcoin all the time. And when bitcoin first spiked up to $30, I asked him, I was like, hey, man, is bitcoin going to keep going up? And he's like, eventually. So I bought a bunch of bitcoin at 30, and then it crashed down to three. I'm like, what the hell is this? We're still kind of interested in it as an experiment. And a couple of years later like, oh, my bitcoin is at $200 now. So sold most of it, and so thought I was cool at the time and then kicked myself hard since then. But I've been fascinated originally by bitcoin, kind of from the Austrian economics view, Ron Paul talking about sound money, and, hey, if it might be something that, if it takes off, could actually fulfill that. I was taken by the claims made by the founding team of Ethereum in 2014, 2015 when they launched, in part because at the time, I was driving full time for a few months for Uber. And so when the Ethereum was first launching, and they gave this example of, hey, look, bitcoin is great for money, but we're using this blockchain technology. We're going to use the technology underlying bitcoin to apply it to all these other areas, and it's going to enable us to build a world computer that can power decentralized applications. One of the key examples that they gave repeatedly, repeatedly, was, this is going to be able to decentralize Uber. You don't need this big corporation taking 20% per ride. Now, that resonated a lot with me as a driver because I was chafing against some of Uber's rules, not even just the fares. But when I was driving, I had about 20% of my customers liked my service so much, they asked how they could request me again. Well, it's against Uber and Lyft's terms of service for you as a driver to exchange contact information with your rider and build up your own recurring customer base. They don't offer any support for that in the app. And if you get caught doing it outside of the app, you risk being deactivated. Now, to me, that put the lie to their whole marketing line about be your own boss, Uber said. And that got me thinking, maybe there's a rationale here to build a genuine alternative to Uber. At the time, there was one other project that was trying to do something in the realm of decentralized ride sharing. Project called Lazoos out of Israel. Ended up having some good conversations with the founders. They really never got past the RND prototype phase. They had a pretty interesting consensus algorithm they put forward. I think it was called Proof of Location, something like that. But when we started Arcade City, it kind of grew out of this ban. So in New Hampshire, Uber got essentially banned, and so there was this hilarious event that happened where I was living in Portsmouth, New Hampshire at the time, and driving for Uber there and in Boston. And at one point there's this festival in New Year’s that happened, and about 100 people come to this very small town for this New Year's celebration. And the taxi cabs who everyone relied on for transportation because Uber, by that point, about half of their driver base was eviscerated because they weren't driving, because it was banned. So surge rates were like 9.9 X. Just crazy stuff. Well, the taxis were threatening to boycott that festival, which they did a few months prior. At Thanksgiving, they pull all their cabs over to the neighboring town and not serve anybody. So by this point, I had built relationships with about ten of the drivers in the Portsmouth area who I'd gotten to know through certain of these activism campaigns I had done to raise awareness about this Uber ban. And it was looking to be this absolute nightmare shaping up with the taxis and the Uber not being able to see eye to eye with the local government. It's just a bad situation. And so I put up a really quick website. I was like, let's take some ride reservations. Let's just organize some peer to peer rides, and let's actually see if we can provide service here. Turns out it was a complete nightmare. There were people, for example, at 02:00 A.m., walking home, walking to their hotel a mile and a half from downtown to their hotel at 02:00 A.m. In New Hampshire winter snow and ice on the ground. Eventually, after we had our prescheduled rides, we had our little ten drivers kind of fan out and offer rides to these people. And we took the edge off of a really bad situation. So we kind of got some press coverage out of that. And that began the story of Arcade City as its own entity. We did not begin sort of as this theoretical science project. If we're going to write a white paper. It began as we identify a real need here, which is there's corporations and governments fighting each other over regulations. They can't solve the need of providing reliable service to people who need it. And when that happens, people get screwed. And my argument is, if you enable more peer to peer networks that don't need to care, or they can kind of get around some of these onerous regulations, that's what's going to be needed to have reliable service be provided. And that was sort of the genesis of Arcade City.

Kevin Rooke - 00:08:46:

Interesting. So for me, Arcade City is new. I just saw it pop up recently in the Lightning community. But how long has this been? From inception in New Hampshire to today, how long have you been working on the project?

Christopher David - 00:08:59:

On and off since 2016. The main success story has been our Austin network. And again, it was only in the last year that we've been kind of pivoting to Bitcoin and the Lightning Network. And that's a whole story I'm happy to tell. But the main kind of foundational event for us was in May of 2016, when Uber and Lyft announced that they were going to be suspending service in Austin in 48 hours, walking away from their 8th largest market in the US. And putting 10,000 drivers out of a job. Now, by that point, we had built a little bit of a network in New Hampshire. We had launched a very basic mobile app for Android and iOS. We had had rides given by a few people in 28 states and Australia and gotten some inbound coverage. And drivers really loving the idea of, hey, I can actually build my own customer base. I can set my own pricing. And so when the Austin situation happened, it was kind of cool, because by that point, Uber had pulled out of a number of cities around Texas. They pulled out of Midlands, they pulled out of Corpus Christi. And in some of these areas, we had these Arcade City organizers build their own networks to kind of take advantage of this void. And at the time, we had our app live from maybe like, February to April of 2016, we took it down, because at that point, we were vetting all drivers centrally, and we just kind of had a big growth spike. We're like, all right, we need to figure out how to better decentralize this model. And so when the May situation happened, our app was out of the App Store. But we had, in areas like Midland, Texas, these little groups running on Facebook, where one driver, one Arcade City driver, would create a group called Arcade City Midland, request a Ride, and would have a team of former Uber drivers kind of folded in and providing requests to people. In Midland, Texas. They got on the news great local TV coverage of, hey, there's a Facebook group where people are offering rides. In the aftermath, Uber pulling out, and they showcase our drivers doing this amazing teamwork where a team of about seven drivers, and they would kind of trade requests back and forth to make sure that all the requests were covered. And I grew up to about 400 or 500 people, mostly riders, in some of these smaller Texas cities. And so when we got the Austin news, I went to the organizer of our Midland group, Eric. I said, Listen, man, we need to do this for Austin until we get the next version of our app out. You make the group, we'll promote the hell out of it, and let's do this again. But in big scale. On big scale. In Austin. We did that. That network, that group grew up to about 10,000 people in the first week. I came to Austin intending to be here for two weeks or so to help launch the network. Ended up falling in love with the city and moving here and moving my family here. But just some of the amazing. First of all. Some of the nightmare scenes repeated kind of like we experienced in New Hampshire. In Austin on 6th street. For example. Which is a big kind of like bar party scene in that first week when Uber and Lyft were gone and the taxis were you couldn't get a taxi. It was just too stressed. There were people literally going up to car windows on the street, banging on them, waving cash in the window. Can you take me? So we had drivers act like we were the only ride share active in that first week. So again helping to kind of take the edge off. So Arcade City was about we were the first of about ten different projects, mostly companies. One nonprofit that formed in Austin over the next couple of months after that, trying to fill this void left behind by Uber and Lyft. They ended up coming back about a year later after they overrode at the state level, some of the local regulations that they pulled out originally in protest to. But it's just been fascinating to watch. In that first year, a few of those companies died off. Most of them died off in a couple of years after Uber came back. The last one died off about a year ago, Ride Austin, just citing like COVID thing. And so of all of the ten projects that came to Austin, they're all dead now, except for Arcade City. We've just got this really small but persistent network of about it varies between 100 and 150 drivers. It's a Facebook group of about 30,000 people, and the network activity has died down mostly in the last year, largely due to COVID and people doing other things. But the fact that we've had a network on a shoestring budget be able to provide reliable transportation and deliveries every day for five years has been just really remarkable. And it's shown me that. Look. We've discovered something beautiful here. Which is we've kind of cracked the nut of how you actually provide decentralized services. As in peer to peer services. Without some massive corporation reliably on a shoestring budget and able to have answers for things like how you do safety and vetting and all the kinds of things you would expect from a modern ride sharing service. But to do it in a more community driven way. My short answer to how that actually works, it's not actually 100% peer to peer as people might think, like, oh, there's just like a rider and a driver, and they meet on a blockchain or something or on a website. It really is community driven. We had in those early days, this sort of leadership team emerged of some of the top drivers themselves, who might have built their own teams of seven to ten drivers, and who in those early days, we very quickly kind of gave them formal control over the network. Our request to them was look, write a charter spelling out what your policies are for, how you onboard new drivers to the network, how you handle rider disputes, what you charge for payments. They decided to kind of set one rate universally that would get changed during special events or whatever, but be transparent about how you're governing the network and then govern the network according to that. And that charter is something that's online I'm happy to link to anybody, but that's been sort of the governing charter of this group for five years. There have been rotations in and out of the leadership team and such. But we've shown that this model which we call a cooperative driven model, cooperative ride sharing, it works and works to the point where we've had organizations like for example, this think tank based in Oakland, California, the Sustainable Economies Law Center. They funded a paid grant research study, they sent researchers to Austin to interview our drivers, interview me, and they wrote 110 page case study on our Austin network as an example of what they call platform cooperativism leveraging sort of old techniques of you could call it labor organizing, but service providers providing service themselves minus a corporation leveraging some of the newer technologies. In this case the technologies being used were largely Facebook and kind of word of mouth, peer to peer texting and basic messaging services, which we have. I viewed my task as sort of the corporate level as I want to build a platform that can encapsulate the magic of our Austin network and export it to the world. I think finally, after many years of false starts, that we figured out the proper stack to do that. In short, Bitcoin plus Lightning Network, plus Nostr, plus our gorgeous mobile app that we've refined over the years, which we're now in the process of beta testing and putting out to the world. We've had some successes kind of launching this model via the app into other areas like the Philippines. But the name of the game has really been how do we bottle up the magic of our Austin network and export it to the world properly integrated blockchain technology, aka Bitcoin.

Kevin Rooke - 00:17:07:

Now, how did you decide you mentioned the tech stack there, Bitcoin, Lightning, Nostr in your app. How did you get from where you are today, or sorry, how did you get from your initial starting point five or six years ago to where you are today? What was the process like in determining what the correct tech stack should be for an app like this?

Christopher David - 00:17:28:

So, from the beginning our emphasis has been on getting product live and into users hands. So in the beginning it was just put out a simple in 2016 it was an ionic app and then react native app, just really simple, even if it's client server not get fancy about like token or weird blockchain stuff. So get a product out in 2016. Our focus in 2016 was on Ethereum, and this is largely just because that was the only real major decentralized application focused blockchain at the time. And that's where all the excitement was. That was even like before the ICO days. But the thinking was, yeah, here's a way for us to write code and put it onto a blockchain that can run by itself and we don't need to worry about censorship, and people can adapt it in ways that they want to. We spun our wheels with that. We just had some bad experiences. Not even so much technologically, but just culturally and organizationally. The first team, there's like a group of Ethereum developers in Europe that reached out to us in 2016, like, hey, we can help you build the Ethereum part of your app. And they joined our team. We added some Ethereum community heavyweights as advisors, like the talent dad joined as an advisor to Arcade City. But this was all in the context of us doing a Token sale. And the developers wanted to do the token sale sooner than later. Long story short, and maybe worthy of a longer conversation, but they stole our funding. We raised 600K worth of Ether in November of 2016 or so. There was just some drama. They took the money and they walked off with it, and they started their own project to compete with Arcade. There's all sorts of drama with that. So our first attempt to meaningfully integrate Ethereum was just like, the developers walked off and they thought that they had all this support from the Ethereum leadership that were their friends. And so they fucked us out of what became millions of dollars worth of Ether, which then got stolen from them in the parity hack of 2017. Just a massive clusterfuck. Okay, so 2017, end of 2017, we tried again, issued another token. We'll say, okay, if you're still holding our old token, you can convert it in. Around that time, that was like 2017 2018, the market started heating up, transaction fees starting getting crazy to the point where you can't really reason about building a Token or any meaningful Ethereum integration into an app that was going to cost you multiple dollars per interaction. So particularly around 2017 2018, the focus of the Ethereum community, no one was talking about decentralized Uber from the official team angle. There were a bunch of scammy ICOs. We lost count at about 20 of these projects that put up websites and they said, oh, we're going to build decentralized ride sharing on Ethereum, and here's our white paper and here's our website. Pay us money. None of those projects reached out to the only successful network that actually had riders and drivers active who are also trying to integrate with Ethereum. And the focus of the chain clearly became around this kind of shift toward defy and being okay with these really high transaction fees, which made usage of consumer focused applications that would require really small dollar transactions, just essentially impossible. And that was back when people were starting to think about layer twos as a solution to some of that. I remember some Ethereum meet up I went to in 2018 where they had some guy from Prismatic, one of the companies working on Ethereum Scalability, and they were talking about certain like, layer two things or if two things that they were excited they were going to come out in the next few months. And I remember this closed door private crypto investor salon, and people were pressing this guy from one of these firms working on scalability. They're like, no, really, like six months? Come on, how long do you think this is going to take? The guy's? Like, I think some of these things could take two years. That was four years ago. Five years ago. Ethereum has had no answer for companies like mine who want to meaningfully integrate chains that are actually putting usable apps into people's heads. So went through evaluating some other chains, solana Holo chain, the Telegram chain. I got excited about that. It was around 2021, and specifically going to the Bitcoin conference in Miami. That was kind of me falling down the Bitcoin rabbit hole a second time and what kind of persuaded me because I've been keeping my eye on the Lightning Network. And this seemed kind of promising over the last few years, just watching it develop. And what really kind of persuaded me to pivot Arcade to bitcoin was a one two punch number one, it was Jack Mallers' presentation about what all amazing circular networks and such that they had built in El Salvador, like, oh wow, here are people actually building networks where they're being meaningfully organized in communities that need it. These are not people focused on making the crypto rich, richer or arbitrary virtual worlds or shit coins. It's like, how do we provide value for people's lives? And to do that in a really successful way on a small scale that then gets scaled up to the level of a country, and now Bitcoin is legal tender. That was hugely inspiring to me. And also demonstrating, oh wow, the Lightning Network actually can and is working in production on a massive scale at the level of a country. It was that in combination with an excellent talk that I recommend people watch that's on YouTube called, I think it was called the Bitcoin stack. Ryan Gentry and Drew Ben Saw gave a talk and they started off the talk. Ryan said something like, I'm tired of people saying that they can't build their use case on bitcoin and they need to use a shit coin for it. And they gave us this excellent presentation about the state of bitcoin now and the different layers and what's being built out, but demonstrating that so many of the use cases that the crypto community, the altcoin shit coin people have been talking about are things that will be built in the bitcoin or the broader bitcoin ecosystem, but in layers on top of bitcoin. That started getting my head turning around, like, okay, if the Arcade City use case can be built on Lightning or on bitcoin, I want to. But the question has been one of timing, is this something that I, as a developer with limited resources, can go and meaningfully integrate? Now, the short answer was, okay, we can start with payments, which is like a huge thing anyways. And one of the ideas that I had fallen in love with earlier on. Years ago. Listening to Andreas Sentinelpoulos talking about streaming money. This idea of instead of you being paid via a paycheck once every two weeks from an employer. Being able to have bitcoin via the Lightning Network streamed to you instantly. It's just going to be a massive user experience upgrade compared to the Fiat system. And I could very clearly visualize having that applied to rideshare where instead of in the US. Some of the drivers are a little spoiled because the integration with the payment processors, you can usually hit the button to pay x percent to get paid out to your debit card immediately. But in plenty of countries around the world, it's not the case. You actually have to wait you get paid once a week. So one of the arguments that I've been making recently is like, hey, how about instead of being paid once per week, you're able to be paid instantly during the ride? Streaming the SAS directly from rider driver as one benefit, that is very clear, non speculative, very easy to implement that currently on Lightning Network. So started kind of thinking about, all right, we can pivot Arcade to Lightning. It was kind of tough to walk away from our shit coin, which we had been keeping us sort of afloat for a number of years. But the further I fell back down the bitcoin rabbit hole and I'm like. Oh. Actually. I'm recognizing how poisonous the incentives of having the shit coin are. Including specifically to projects like mine. Where we went through phases where our incentive was not to release a working product that people derive value from. It was to support the price of our tokens so that we can have more cash and runway ourselves and have our token speculators be excited. Fortunately, we never got too deep into that world. People would ask us like, when will you list on this exchange? Or when will you do more marketing? I've always resisted doing that. I said, look, when we release a product that has a meaningful integration of this token, then it'll market itself, and maybe then we'll do more like putting it on exchanges. And so fortunately, it was actually somewhat easy to walk away from the token because we just never had it listed anywhere. And letting people, if they want to convert tokens that they're holding into our standard investment instruments, safe nodes. So that's fine. But then my eyes have just in the last six to nine months been opened by okay, so there's now about four projects that are trying to solve also decentralized application or decentralized data layers adjacent to or anchored to bitcoin. And so putting on my Nerd architecture hat, participating in various bitcoin hackathons over the last year, I've been trying to wrap my head around what's possible and which ones we should be focusing on. So the four for those who don't know, and there might be more that I'm not aware of, you've got the Web5, which has been recently announced from Block, or recently coined as Web5. They've been working on that for a while, which I first learned about from reading the tbDEX white paper. But you have the combination of decentralized Identifiers plus Verifiable credentials, plus formerly called identity hubs, now called decentralized web nodes, kind of the shorthand for all that we're calling Web5. That's very promising. And one approach toward building a data layer where applications don't need to rely on fanciful blockchains. And a lot of those use cases can be done in this way that's anchored to bitcoin in the right way, but without stuffing a bunch of crap and the base change. So that's one synonym and the tags and kind of affiliate with the Tether ecosystem. And they just did their keep hole punch release announcement a couple of days ago. That's another approach. They're making some different architectural decisions in the Web5 folks. There are some important overlaps. That's another approach. There's a group, I think the LNBP Foundation or association, whatever they've got RGB that they're working on, and I haven't looked at it too closely, but a couple of weeks ago they put out some Storm, some protocol for doing encrypted messaging and using Lightning as a transport layer. And then you've got Nostr, which is the fourth one. And most interesting to me is that the first three that I mentioned kind of have these larger organizations backing them. And Nostr is, from what I can tell, an entirely grassroots phenomenon led by developers. The founder Fiat Joff involved with the LN-URL spec. You just got a lot of the kind of like Lightning hackers and Lightning builders who've settled on this dirt simple protocol for getting data passed around in a decentralized way, but not, quote unquote, PeerToPeer way. And that's one of the things that I've been wrapping my head around, is like the difference between decentralized and peer to peer. For example, for something like a ride sharing app, do we need every transaction to be entirely peer to peer, as in having devices talk directly to each other or using some of the more arcane protocols for peer to peer communication? Or is it fine to have them both connect to a relay, which could be like a really lightweight server that could be run by the guild. Leader or the local organizer, the local tech person or some company will run our own relays, but give them the choice of like if you're in Iran, for example, you should have some local relay that you could connect to and not need to worry about app Store regulations banning you or whatever. Nonstop works for all of that. And I love your chat with William talking about the Chinese dissidents who are using Nostr. Yes, the vision of peer to peer connectivity for services and communication and should not be limited to spoiled US. Consumers. We do not want to be transportation option number ten for people in Silicon Valley or even Austin. I care a lot more about the developing world. Have lugs launching in the Philippines. Our biggest interested market is in Brazil. These are areas that may have been, and particularly across Latin America and Africa, these are areas that may have been ignored or overlooked by larger corporations where now it's as flexible as, hey, one of your people can spin up a Nostal relay or use ours to start here's. The app, it's open source. You can download from the App Store or use it on the Web app if it's not available in your country. And everyone is now able to compete, participate on the level playing field. Everyone's already able to participate in the open monetary network of Bitcoin. So all of these kind of increasing number of applications that are kind of speaking the same language built in interoperability around payments. Well, now, thanks to protocols like Nostr, we can now also start speaking the same language of data. So, for example, williams application. Thomas I've been building the sort of Nostr version of Arcade, not even building our own backend, just entirely throwing our request to the Damas relay, which means they show up. The messages that people send from the Arcade app show up in Dominic and vice versa. Really powerful interoperability. I'll pause here for a breath, and you can ask me a question.

Kevin Rooke - 00:33:04:

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. That's really fascinating. Yeah, I think you got those four messaging apps that are kind of like peer to peer or decentralized. One other one is Sphinx as well. But it's interesting that you've chosen to go with Nostr, and I want to make sure I have an understanding of how the overall app works now. Right. Like it's payments on Lightning when you're paying a driver for a ride it's communicating with that driver through Nostr. And what's the discoverability like when I go to one of the benefits you get from a centralized app is when I show up on Uber, all the drivers are there and I don't have to find them, I don't have to discover them. They're all in this one hub. How do you solve for that in a decentralized system?

Christopher David - 00:34:24:

Yeah. So in the beginning and this is a little bit kind of challenges that we're wrestling within the next few weeks in preparation for our launch in August. But our answer to that for the August launch is we're going to maintain one kind of fat Arcade relay that all client apps, all the apps downloaded from the Arcade app store are going to start by connecting to our relay. And so we know that all of the requests will be sort of exposed in that one relay. We want to enable people to kind of add other relays. But the initial experience, we want to start by optimizing for the first user who's non technical, doesn't want to have to even learn about what a relay is. All it's going to do is you're going to share your location to the app, as any ride share app would, and we can show you a list of any requests that are near you. So it's very simple to do that via geolocation. There are some interesting security considerations given that we're talking about people's user locations and how do we send them out to an open network in a way that is secure and not leaking user data. And there's a couple of different answers there around encrypting certain of that data. As well as. For example. One of the conversations in the Nostal Telegram channel where we're kind of brainstorming some of the stuff over the last couple of days. Someone noted that there is this geohashing algorithm that Uber developed and has then been open sourced for representing user locations at whatever Zoom level as a hash. So if you want to share someone's approximate location so let's say that someone wants to put out a public ride request, it's intended for people close to you, but it's on the public network, so maybe it's accessible to a bunch of people, but you can give very approximate locations. And then maybe once there's like an exchange of rider chooses driver, there's an exchange of keys. Kind of like in Nostr, we already have the protocol for encrypted DMs in which some of the more precise locations can be shared at that time. And so we've got sort of parallel development going on right now where I'm focused on kind of the ride share app us, and we've got a super test net. One of the Nostr developers. Part of what kind of gave us the kick in the ass to integrate with Nostr sooner than later was super. He was another kind of Austin area bitcoin Lightning developer. He just on a hackathon style lark a week ago was like, hey, I wonder if I can do a proof of concept for rideshare with Nostr? And he built this thing called Bull Run, basically a basic protocol for how to tie in Lightning payments and just like an initial flow for how this all can and should use Nostr with this new Nostr event type. He wrote that into a spec, and he sent it to me. He was like, hey, do you want to fold us into Arcade City? I said, yes, let's do it right now. And so over the last week, and people can follow the progress as we're building in public on sharing all our stuff on Twitter. But I've been able to show, like, the ride requests that this demo app that super built a week ago, he has those being sent. Like, he didn't write a back end. He's sending those all to the Dominice Relay. And so I'm able to very quickly write a client that connects via WebSockets. The Damas Relay pulls all of those ride requests into the Arcade app, which we can visualize in cool ways. The demo I put out yesterday kind of showed our beautiful 3D map, kind of zooming from the start to finish location CLightning through a bunch of these requests from Nostr. But we now have this basically this universal request feed where any client app can pull in requests and do interesting things with. So now it's basically just about what is the business logic to answer your questions about Discoverability, the idea is that the UI UX should feel as similar to people that are accustomed to using Uber and Lyft. We want to offer them almost the exact same experience where you just open the app, you put in your ride request that gets sent to drivers near you, and it's still an open question as to what the exact flow should be. That's going to work in the beginning before we have larger driver networks built up and we'll be able to do some beta testing in Austin with our existing driver base. But one idea is to just let people kind of bid, and so you can attach sats to a ride request, and then if someone cares enough to respond, they can just see it. So the discoverability, I think, is pretty easily answered by, we're able to set really whatever business logic we want. There's nothing really opinionated about Nostr. It's got this philosophy of dumb relays smart clients. So the relay is just going to kind of be a way for data to be accessible to clients who want it, and the clients can kind of specify their own logic for what events, what type of data they want to store, and then how they want to retrieve it.

Kevin Rooke - 00:39:53:

Makes sense. Okay, so I want to get into the specifics of the app right now. I think you mentioned there's 100 or 150 drivers using the app today? Are they using this relay system now? Are they using auster? And are they using Lightning payments today, those 150 no.

Christopher David - 00:40:10:

The Austin drivers that have been active have been always on our facebook group, and it's been fascinating to watch as we've released successive app versions over the last few years. We've always kind of beta tested with the austin network, and they've never adopted it in mass. This is in part we realized after the fact, and talking to people is like what actually makes the austin network tick is heavy reliance on messaging. And so, for example, the Austin network, there's the 30,000 person public or semi public group, which is like sort of the main request feed. There's a private group of the drivers, 100 to 150 drivers in there. There's a bunch of private messenger, facebook messenger chains where, for example, all of the drivers who are in north Austin will be in one chain. And so if there's a request that comes in that one person can't take, they'll tag each other. There's all sorts of just this organic grassroots organization that relies on really low friction messaging and the network effect of all of the drivers just being on that one messenger. And so this was like an important lesson to us as the apps that we've put out, we've modeled them on Uber and lyft's UX, and that's just not how our austin network has worked. And so this is one thing that I've been my lesson that I really internalized about a year ago was before we do all sorts of cool things at the level of the ride requests to actually have the network work in practice, we actually have to solve decentralized social first as well. I did a hackathon in December in Houston, and I gave a whole presentation about the potential of bitcoin and Lightning as applied to social networks. I'm very familiar with sphinx chat like you mentioned. But actually in that presentation. Which online people can look for is I contrasted the sphinx model to the Nostr model and argued that if you're requiring I don't know what sphinx's current plans are. But I know at the time it was sort of every user had to have their own LND node. And I thought that was a bit of a barrier. And if you have to charge people for that, the ideal situation is that someone can just join and participate immediately and not need to worry about that. I think that there's really cool possibilities by leveraging some of the sort of custodial or semi custodial tooling that's out there. L and hub being one example. What powers Blue Wallet and LNBit is kind of an example of this, where you could have one sort of more savvy operator, or it's a company run a node, run a multi user account system, and so people are able to transact easily via Lightning just to skip forward. That's what we're launching with right now is our Lightning integration. We use Voltage. Voltage has a new kind of dashboard or integration that they launched recently with LM bits. So we just very easily spun up an LND instance. And so one of the beta builds we tested a few weeks ago was just basically people transacting back and forth easily in the app via Lnbit, able to withdraw to their own networks, to their own wallets if they want to. But in that kind of social presentation, I made the argument that Nostr actually makes a lot of sense if you're talking about a protocol that can power something like decentralized social media. And one of my arguments is that you want the interoperability to be as lightweight as possible so that different people with different financial incentives can provide relays. And not that all relays also need to speak the exact same language. The example I gave was the key app. For example, they use a peer to peer software protocol called HyperCore. It's kind of a competitor to IPFS, so you can kind of think of it in that way. But it's a very different idea than Nostr, where a Nostr, the relays do not talk to each other, whereas people running hypercar, they do talk to each other. And my argument is that, look, you can have both architectures coexist in the same model. There could be a set of node operators that maybe they want to run some servers that speak Nostr and they speak the Nostr protocol, but maybe they also speak to there's like a cluster of nodes that they work together. There's some for example, unique data persistence that they want to do so instead of relying on one. Or maybe there's an impervious node impervious. I know they're now doing their browser, but at the time it was like they've got this anode JS wrapper on top of LND that exposes certain functionality and all of these can be united in one marketplace. My argument there was that if we're talking about decentralized social, we should not be thinking in terms of these massive single monolithic layer on chain. I started that presentation kind of making fun of this decentralized social like shit coin chain that just raised a bunch of money from Andreessen and Horowitz and they were going to build the layer that's going to store all this social data on this chain. And I'm just not convinced of the technical necessity of any of those chains when we are able to solve a lot of that by just having appropriate market incentives and having node operators. There could be a Nostr node type that specializes in media handling. And if you want to, maybe they charge you five sats per x number of kilobytes to store media and maybe they have certain persistence guarantees. But we need to be thinking about things like decentralized social as kind of joint projects that the Bitcoin community can reason about as its own sort of layer so I think there should be a social layer that multiple projects connect to. On top of that social layer should be decentralized services. And so it's just been really amazing to see from essentially day one how easy it is to have multiple apps speak the same language. In this case, Nostr. It will be interesting to see to what extent others of these sort of competing architectures, whether it's Web five or the Synonyms stuff or RGB, are able to also kind of talk with each other. And hopefully we're not all building these own siloed architectures. But I'm hopeful that there's going to be at least some degree of convergence between these architectures where we can really be kind of putting our heads together collectively about what does it mean, what should the Bitcoin social layer look like, what should the bitcoin services layer look like, but with a real eye toward focusing on use cases. Ours in this case is decentralized Uber, decentralized ride share, and largely just because that's where I've got six years of experience with. That's what we're best positioned to lead on in terms of a use case. But I'm really excited about the potential to solve problems around whether it's identity or authentication payments and then to make it easy for other projects to use those same solutions. So for example, in New Hampshire when we were first starting out, I had one guy saying, hey, I love this idea. I would love to do a project that is like peer to peer snow plow reservation and use the same concept so there could be a little market and people transact each other peer to peer. Now what would a shit coin or tell him to do? Oh cool man, make peer to peer snowplow coin and do an ICO. He's not going to raise venture money to build a platform for an idea that is regional and seasonal. So that's that sort of Uber for X model that got everyone excited years ago. I think we're going to increasingly see that be replaced by one overarching network of networks that solves these problems and then as kind of like a lower base layer and then less application developers who want to say. Look. I'm going to build the peer to peer snowplow interface and spin up a website in a day and focus on the use case. Focus on the value proposition to the customer and know that they can plug into Bitcoin and Lightning for payments and Nostr or whatever else for data. And maybe there's something that Arcade provides that makes it easier in terms of reputation or social things that we're solving, but not having everyone replicate their own L one chain like that just doesn't.

Kevin Rooke - 00:49:39:

Make any sense, right? Yeah, I think Bitcoin is that have taken the right approach. They've taken the high road on building the store value layer, the payments layer. Now we're seeing social layer and application layer and sometimes these things take longer than we expect, and sometimes they don't get the adoption that we think they might. I think the common criticism you'd hear from the crypto folks to play devil's advocate is like, well, this stuff hasn't been adopted as quickly. And I see that point. I see both sides of the issue here. I want to play devil's advocate, though, on the idea of scaling this up to the point where it is Uber or Lyft competitor. Like, we can use Arcade City as an example. How do we get to the point where people are transacting on Lightning and using this decentralized social system to interact with each other at a time where we already have the full global distribution of Uber and Lyft, and we have the full global distribution of social apps? I think it's going to be a lot harder to sell the idea of decentralized social when there are already existing social platforms, right? They've already got a market share. And so how do we then get to the point where we have to be ten x better on some level, right? In order to disrupt this group of social apps and ride sharing apps, we need to have a system that is clearly better for everyone. What's your pitch to the person walking down the street who asks, why do I need this? Why can't I just use Uber? Why can't I just use Facebook to chat with my friends?

Christopher David - 00:51:29:

I'll start with rideshare. If the person is walking down the streets of Manila in the Philippines, which has the densest traffic in the world, Uber is not available there. Uber sold their entire Southeast Asian operation to the local competitor called Grab. And Grab for years has had essentially monopoly with all of these insane supply caps from the government that they have to deal with. There have been people trying to sign up that couldn't all sorts of BS regulations and hoops. So there's a level of, like, if we're just providing a service, particularly forget even Philippines for a second, go to an area like Uber is not everywhere. Uber does not at all serve many rural areas. In fact, one of the first people who started an Arcade network in the US. Was in rural Iowa. And he asked us early on, he was like, hey, can I print out business cards and put our case to the Iowa on it? Absolutely. And with no marketing support, no support of any kind aside from us cheering them on. Went into bars, drummed up local business, asked people if they needed rides home, built up a clientele, got so busy that he recruited seven other drivers, got on the local news, and a newspaper headline wrote the headline was, Arcade City brings ride share to the Cedar Valley before Uber. That's priceless. And here's the cool thing. I guarantee you there is one of that person, that type of person in every city, in every rural area around the world. So I would want to start by and even if it's let's just say for example, we're focusing on the bottom billion or bottom 2 billion of folks empowering people where they actually like this kind of thing would make a lot of difference for them. And look, it might look way different in different areas. It might not be, oh, I need a grub, I need someone to give me a cup of coffee from the street down the road. It might be like, take this set of farm goods from one area to the next. There's areas like Puerto Rico, for example, where Uber is really big in San Juan, and you can get from San Juan to other places on the island. But you got an island of 3 million people, a lot of them in the countryside, who cannot reliably get from the countryside to the city. Or we did a survey a couple of years ago just asking people on the island what were their complaints about transportation and reliable city to city transportation outside of San Juan was a big thing. So just by being there and having the same things kind of available is going to make a big difference on the user experience side. First of all, for the driver, our drivers in Austin have built their own recurring customer base. They make some of them two to three times the money that they made with the other services. It's all on their own terms. No one can fire them. Three years after I had that experience of not having my own customer base, I've talked with one of our Austin drivers and he's got his next two weeks booked of prescheduled rides of his regulars who pay him better anyways. It's a level of job security and stability. No rideshare company in the world is even structurally capable of matching. You add to that some of the friction in the last couple of years with the COVID limitations. As an example, I got into a car in Miami, the lift driver, as I'm getting in, I didn't wear a mask, but as I'm getting in the car, he starts putting on a mask and I'm like, hey man, I don't care. Don't put one on because of me. He says, oh no. The lift app will take screenshots of him every so often, and if he's not wearing a mask, he'll get penalized and potentially deactivated. I think that's completely fucked up for a company to be basically intervening in health decisions like that. Now, the answer to that is not no one can wear masks. The answer is you empower drivers to make their own decisions. There might be a driver who wants to wear a hazmat suit and require all of his riders to wear a hazmat suit. And he should have the ability to market that as its own service and let it compete on the open market. And if people want to do fit bumps and hugs when you get into the car. People should be able to specialize in that. We've seen in Austin, when you empower people to be entrepreneurial, you get levels of service provided that the corporates don't do. Early on in Arcade, one of the team leaders, the kind of driver leaders earlier on, she had the idea to create what we then called pod, like her own kind of sub team of drivers, all female drivers. And now in the intervening years, there have been other startups that have been tried to portray that as a new idea. And we're going to have people be able to choose the gender of their drivers, but completely organically without any corporate involvement. We're able to now solve a use case called a young lady getting out of the club at 02:00. A.m. Doesn't want to roll the dice to see if Uber's algorithm pairs her with a creeper who now knows where she lives, which is something that Uber and lyft have had trouble with. Just empowering people to make decisions like that. We've had people say, hey, I've got access to a military base. I'd like to provide custom service for military members. We've had people say they want to provide custom support to a handicapped. We've had a visually impaired rider stand up at one of our early rider driver meetups and say it makes all the difference for him to be able to specify in his request that he's visually impaired. He has a service animal, whereas with lyft, maybe they changed it in the last few years, but he couldn't specify that. And so he would face the possibility of a lift driver pulling up, not wanting a dog in the car and pulling off. He doesn't have to face that with Arcade because people are able to accept him on terms that he can set. So I would say there's all sorts of examples of where our service model is a dramatic improvement over urban lift. And just by the fact that we are able to participate and compete globally, that's more than enough to establish, like, a successful business. And once we get some more real funding and revenue flowing, I think we'll be able to bulk out our operation and start to compete more head to head with Uber. And look, one of my goals is pushing them out of Austin entirely. We'll see.

Kevin Rooke - 00:58:11:

That's fascinating. In my experience, I'm living in a city. I think Uber and lyft are everywhere. And when you say this, I go, you're right. There's a lot of instances where it doesn't work. It may only be useful in cities today. There are restrictions. There are top down controls set by those two platforms. And I do see that there is an opportunity. It seems like we can unlock a next level of ride sharing. I want to learn more about the roadmap for you guys to unlocking that and what your steps are along the way for getting people paying with Lightning, getting people on boarded, getting people sending messages on Nostr. What does that process look like in the next 612 months?

Christopher David - 00:58:57:

Sure. So the main name of the game for us now is putting out a mobile app. And iterating it as much as needed till we get product market fit. And we'll sort of know it when we get there, when there's a bunch of inbound interests. Right now, there's a lot of people loving the fact that we're doing Lightning and helping to kind of test and kick the tires. But this has to be useful for the driver who wants to make a living. It has to be useful for the rider who wants a ride home. And so the name of the game for us is finding markets, or not even markets, but just people for whom when there's the Arcade product that they install and use makes a massive difference for them. We're happy to use our Austin network as sort of beta testing, but we're kind of going to be basing our launch plans on where there is the most inbound demand. The largest inbound demand by far has been Brazil. And they've got all sorts of interesting large country of 200 million people. Interestingly ride sharing is still a massive growth industry in Latin America and Southeast Asia. Brazil is Uber's number two country by volume behind the US. Sao Paulo is their number one city by volume as well. Brazil has historically a strong tradition of cooperatives, and so there's like a real familiarity with that which is sort of unique to our model. And then you've got areas like the middle of the Amazon. There are all sorts of areas around Brazil, again, where Uber is underserved. And so we've made a point to translate our mobile app into Spanish and Portuguese. The app right now is about 80% translated into both of those, but we're launching next month with support for these three languages. I think Latin America is going to be our biggest growth area. We don't yet know how to model kind of what we, as a company that intends to make money, can sort of benefit from Lightning transactions, can't model that. We can model taking a fair percentage on in app credit card transactions. So we have an integration with Stripe. We are going to be and I'm excited to see kind of what the usage patterns look like. Offering these two side by side and setting the percentages such that if a driver. For example. Has an option of keeping 85% of a credit card transaction or 99% of a Lightning transaction. Hopefully that incentivizes drivers to then become their own sort of salespeople for oh. You're not on Bitcoin yet. Let me help set you up with that. I love this idea of drivers or service providers as mobile sales people. I was in Uber in New York a few months ago, and the driver handed me this card for. This premium olive oil that his friend sells. And I was like, Are you getting commission for this? You should get commission for this. And it's a huge opportunity to have a driver in a trusted relationship with a captive audience. The potential there for Bitcoin adoption, if we can kind of gamify it, make it fun, give the driver an incentive. One thing I'm really excited about is our somewhat standard referral commission based referral program. And we're not the only Bitcoin company to offer this. Basically, if you sign someone up, you can get 1% of their inact transactions. But I've had drivers tell me over the years that one driver in Hawaii, for example, he said, when you get that 1% referral thing solid, I will go and sign up every Uber driver in Hawaii and then I will travel the world signing up drivers for you. I'm excited about this idea of having drivers sort of graduate from being drivers to being more organizers if they're helping to build their network. Particularly if they're taking a leading role in building their own local network or what we call guilds. Basically doing the same kinds of things that otherwise a corporate city office like Ubers would do. Like what our Austin network has done doing handling all this driver vetting and rider complaints and all sorts of things themselves. I think they should be paid for what they're doing. It's amazing that they're doing it on sort of a volunteer basis because they have an incentive to keep the network going. But I want to see them paid to do this. And one of the amazing things about Lightning is that it makes revenue share splits really easy. And so you can imagine a gill that says, look, we're going to be taking a 2% into the guild treasury. 1% is going to go here, 1% is going to go there, and we're still dramatically outperforming the Uber. They take sometimes 25 or 30% per ride. And that was back when you can actually tell consistently. Sometimes it's way more than that. They take it's completely disconnected. They've got all their algorithm stuff and this lack of transparency really pisses drivers off. So I think once we get certain of these processes solid where we're able to provide a UI UX that is similar to what people expect from Uber and Lyft, that sort of incentivizes people to kind of build up their local networks. I think it's going to be a little bit tricky getting past the kind of chicken and egg problem of, look, how do you build up a two sided marketplace, particularly on a relatively low budget? One thing that we've noticed so far is that when you properly incentivize drivers, particularly with our Austin network as the best example, that, look, here's a way for you to build your own recurring customer base, make more money in a way that's truly on your own terms. I think the network is going to grow pretty fast. Our objective is to grow, sustainably it's to generate revenue. We've got like, a really low burn operation. We don't have much of a budget now, but look, we've raised and spent a few hundred thousand dollars over the years building out an absolutely gorgeous mobile app. I'm able to go in and kind of connect it to Lightning as is needed. And so when we put this out, if we're able to say, look, we're going to take the drivers that we've talked to have been comfortable with us taking 10% on in app credit card transactions, say, look, we're going to take 10% on in that credit card transactions, we're going to take 1% on in-app Lightning transactions. And you always have the option of transacting 100% peer to peer if you want to. I think that's enough to kind of, like, get us really going and have some of these networks start to form and past that, we'll see. And it's hard to predict because no one's ever done this before like we're doing. So we'll see. Stay tuned.

Kevin Rooke - 01:06:08:

I see this as a sustainable revenue stream on the credit card side and the Lightning side. I like that you can opt out and say, hey, I'm just going to continue doing peer to peer stuff over time, and I'm going to build this, like, customer base, and that'll be my base that I use and never have to then interface with any company, and you can just directly go to your customers. I really like that. Is that going to be a sustainable do you think those two, the fees on credit cards and the fees on Lightning payments will provide enough funding for the company to allow it to expand globally? Do you think these scale up over time and basically people will choose to use versus individual peer to peer payments?

Christopher David - 01:06:56:

Yeah. So, for example, we launched in the Philippines in 20 17, 20 18. We kind of took advantage of a similar situation. Uber got suspended for a couple of weeks, and so the press was talking about it. We spent about $5,000 on a press release and some Facebook ads. We built a massive network. We got about 20,000 sign ups in a couple of weeks. I got on CNN Philippines on a live televised panel, like, arguing with the head of the Philippine National Transportation regulator. We just got, like, so much demand, it dramatically overwhelmed us. And unfortunately, we weren't able to kind of monetize that. But we're absolutely able to see that you don't need a lot of capital to launch, at least with the model that we have. It's just sort of like, interesting enough. And we're able to. Thanks to our model. Which is more flexible than Uber and Lyft. We're able to offer really clear contrast where there's enough curiosity that I think all we really need to do is provide a really clear kind of ladder for how person number one in their network who has the motive to whether it's print out business cards or do the equivalent of. Hey. Here's my custom branded Arcade sign up page because I'm building Arcade City. Manaus, Brazil. Get the first few people involved, get a few success stories. And one thing that we've seen is if you start a network, I say on average, like our Austin drivers, it depends on the level, because some are parttime, some are full time, but I'd say two to three times the money that they can make compared to Uber and Lyft. Well, the guy who started that Iowa network, he reported at the height of that he was making five times the money. So it's just like, if we can get from one person to a few people making way better money than Uber and Lyft, word gets out, network starts building the network in Austin, it's hard to know exactly. But we've calculated it's done probably about 500,000 rides with 100 drivers on a budget of essentially nothing. We don't spend anything to maintain that. And so I think that if we can multiply that model of creating these teams of drivers. A few hundred thousand rides here. There. And everywhere per year. Just able to do that on a kind of a bootstrapped budget. I would say fundamentally there's a larger narrative about people seem to think that Uber and Lyft are these like they're definitely dominant players. But if you look at their financials and the performance of their stock and the dramatically unsustainable unit economics that they have. I think if there's any real competitor that's able to compete with sustainable unit economics. I think they're fucked. Some people kind of like, skepticism is always great, but people sometimes don't like that. I talk shit as much as I do about Uber and Lyft, but I really think we have the power to supplant them. And it's not even so much about this specific technology that we're using because a competitor can always adopt your technology. I think the magic is around network structure. And so one thing that we kind of studied and kind of like, viewed through some of the intellectual lens, reading some of these academic reports that had been written about our Austin network and doing some research, realizing that people talk a lot about peer to peer networks, and they're all excited about peer to peer networks. Well, peer to peer networks are actually not the most advanced type of network. People cite Metcalfe's law around peer to peer network. Well, there was another academic in the last few years, David Reid. He put forward this theory called the law of group forming networks. I would encourage people to Google this, because this, I think, is actually quite relevant also to Bitcoin adoption. And Reed's point is that if according to Metcalfe's law, the value of a peer to peer network, like the abstract kind of network value of a peer to peer network is N squared. Where N is the number of nodes contrasted with like a hierarchical organization, where the network value was closer to N. So hierarchical organization, N, peer to peer network, N squared. He says that the highest form of network is actually a group forming network, which is when you start with a PeerToPeer network. So you start with everyone can connect PeerToPeer however they want, but it has the added property of making it as easy as possible for groups to form, so for individuals to join or leave groups. So that the value of a group forming network is as high as two to the Nth power. Now, where are Uber and Lyft on that scale? I would say that they're somewhere between hierarchical and peer to peer. They're definitely not peer to peer. But I would put the network value of Uber and Lyft at somewhere between N and N squared. And I would say that when you look forward five years and you think about Arcade City as one participant in a global network anchored to Bitcoin with shared social layers. Shared service layers. In which we've carved out for ourselves some sort of niche providing certain experience for rideshare, delivery and other gig services. I would say that that network is going to have a network value of somewhere between N squared and two to the Nth power. And if you're talking about, let's say, a million people, the difference between N squared and two to the Nth power is a lot. So I think collectively we as Bitcoin and I don't see this coalescence happening on other chains that are focused on the shit coinery. I think it's going to happen on Bitcoin, and I think that we building Bitcoin Uber as a team effort. We're going to knock Uber on their ass. And if we can push Uber on their ass, Uber, which has had so much success bullying governments, I mean, it's going to get really interesting.

Kevin Rooke - 01:13:26:

That is an interesting way of framing the different networks and how they might form. One thing I want to touch on is Uber has historically been a big capital consumer. They just eat up money and they blow it all on marketing and trying to grow their user base, hoping to build up a network effect and then extract value from it. How do you compete with them in a capital light manner without the billions of dollars they have? Is it because word of mouth marketing is able to replace the kind of like paid ads then that they're doing? What's the biggest hole or money sync for them that you guys will not have?

Christopher David - 01:14:10:

So part of it is Uber and Lyft have massive driver turnover, and our numbers are the exact inverse of theirs, for example. And people have not been able to come up with an exactly accurate number because they don't want to share this information. But there have been some serious ride sharing analysts who have analyzed what they can of what's public and interviews and such. Uber and Lyft, and they said their annual driver turnover rate is somewhere between 50 and 90%. We all know that Uber and Lyft have high driver churn, so let's just say it's somewhere between 50 and 90%. Can you guess what our churn number annually is? In our case in Austin, it's 8%. Half of that is just people kind of deciding to do other things. But for the people that want to be participating as drivers, if you give them a way to do that in integrity, to be entrepreneur, to basically deliver on the promises of Uber and Lyft, be your own boss, we actually only people actually enabling that. The retention is insane. I already mentioned the driver earnings piece and the cost efficiency to us as a company. I mean, we spent some percentage of 100 grand seat investment launching the Austin network, and we spent some money in that first nine months period or so. But since then, the annual expenditure to keep this network going is me taking the driver leaders out to dinner once a year. And if you look at the numbers of what it produces and again, we don't have firm numbers, but we've estimated that somewhere between eight to 10,000 rides per month are done by this network of 150 drivers. Average transaction size of you're talking about two to $2 million per year in peer to peer bookings revenue. Now, if you're talking about a company, if we're saying, look, we're going to take 10% on rise pay through the app and all of that transactions thus far has been peer to peer, we haven't got anything from that. But everyone is comfortable with the 10% number. If for every 100 drivers, 150 drivers in a given year, we're taking 100 grand, those numbers work out really freaking great. We'll need to bulk up and build a team and there will need to be more done. But the name of the game and the bet that we're making is that by continuing to empower the edges of networks, like how you build a peer to peer network is you empower the edges of the networks, like the individuals with as much agency as possible. So everything that we can do around decentralized decision making rides, like terms of the ride, like if I'm going to take you, how much I'm going to charge you, empowering individuals with as much agency as possible. And then kind of the thing that not many people, when they talk about decentralized ride share, think about is to provide some level of agency collectively or to like the level of the guild where people can the guild is empowered to make their own decisions about driver vetting and people can choose to transact with them whether or not they want. I think that when we're able to have all the success that we've had in our office network has been from basically one guild, but let's imagine that there's a competitive marketplace with these guilds that maybe differentiate themselves on. We have a certain bitcoin treasury with certain referral program things, or we specialize in a certain type of service, or we specialize in people that are completely new and we give free rides to our certain customers. We have drivers in Austin that will give rides on credit. Some people will post and be like, I don't get my paycheck till Friday. Can I give ride? And some drivers, they decide to do that. There's levels of service that are possible that when you give people at the level of the individual the power to be truly entrepreneurial and to give them a support structure that's community driven, I think that that's a magic formula, I want to say. Lastly, there's only two projects that I'm aware of that are actually doing anything meaningful in terms of providing actual service, being sort of decentralized. It's Arcade City and there's a project called Eva based, I think in Montreal, and they have some nominal integration with the EOS chain. I haven't looked at it in like a year, but they got some press cover. They built a network in Montreal somewhat similar to what we built in Austin with ambitions of going global and stuff. Their model is a bit different than ours, but it's pretty telling that of all of the people that have talked about building decentralized ride sharing, only two projects that you can mention, both have one important thing in common, an emphasis on cooperative. They also have they call it a cooperative. They want to build cooperatives. So it's really like I want to see a network of these bitcoin powered cooperatives able to set their own rules and be able to have Lightning payments go be routed however they want, but to do it not in a way that's top down, but as grassroots as possible. And look, this is a massive fucking thing that we're not going to be able to do all of by ourselves. In part why we've recently made the decision to push all our code into the public domain. We're starting to get some more people wanting to contribute in a more open way and help turn this into a protocol. So it's going to be a team effort, but I'm insanely bullish on the opportunity generally.

Kevin Rooke - 01:19:59:

Yeah, I'm really excited. This conversation has been illuminating for me. I didn't recognize all the interesting stuff that you're working on, all the opportunities that are available. So I'm really glad we got to do this discussion. At the end of every show, I do something called the Lightning Round for some rapid fire questions. Are you ready for the Lightning round?

Christopher David - 01:20:16:


Kevin Rooke - 01:20:17:

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, in the year 2030, what will be the largest market for Arcade City?

Christopher David - 01:20:59:

Largest market will be powering infrastructure for 1 million startup society like Micro Cities.

Kevin Rooke - 01:21:13:

Okay, that's an interesting answer.

Christopher David - 01:21:15:

Arcade City. It's not Arcade Rise. Arcade City. You can have me back for part two. I'll go into more of that plan.

Kevin Rooke - 01:21:22:

Okay, all right. What percentage of payments again in 2030? What percentage of payments will be credit card payments and what percentage will be Lightning payments?

Christopher David - 01:21:33:

2030? Well, I'm a fan of the 8020 principle. Let's say 20% Lightning and then 80% fiat, and then ten years after that, we'll flip it the other way.

Kevin Rooke - 01:21:50:

Interesting. If you could change one thing about bitcoin, what would you change?

Christopher David - 01:22:04:

We need more toxic maximalists.

Kevin Rooke - 01:22:08:

I like it if you had one book that you were to recommend a listener on this conversation reads. What's that book?

Christopher David - 01:22:20:

Swarm wise subtitle the tactical manual to changing the world. Actually, the author Rick Faufinger, sent our Austin network a box of them early on. We've used it as sort of our operating manual. It's basically how you build what he calls swarm organization, or like a grassroots organization in a way that can just beat the crap out of entrenched established corporations or governments or whatever political parties. And it's been a real source of ideas and inspiration for us, and I hope to have more people familiar with its tactics and help contribute some of those thoughts to Arcade City.

Kevin Rooke - 01:22:58:

Interesting, I haven't heard of that one, but I appreciate the recommendation. Final question. Michael Sailor likes to say that bitcoin is hope. What are you hopeful for when you think about the impact bitcoin could have on the world?

Christopher David - 01:23:16:

I'm hopeful that bitcoin can serve as a foundation of integrity. That all human systems can be rebuilt on top of in layers or anchored to bitcoin in the right ways. And sort of like delivering on the initial line of shit coiners talking about applying the technology behind bitcoin to all of the things. Doing that for real. But on a foundation that kind of rules out the ponzi nomics and Cantillon effect of so much of fiat society. Just a stable basis for Civilization 2.0.

Kevin Rooke - 01:24:00:

I like it. Where can people go to learn more about you and the work you're doing?

Christopher David - 01:24:05:

Best thing is follow us on Twitter at Arcade City hall. We're tweeting every day about, like, can follow app updates and stuff. We're constantly releasing new beta bills about once per week, and then you can sign up also on our email list on our website, Arcade City. But Twitter is where most of the accident until we move people to the Arcade City app. But stay tuned in a few months for that.

Kevin Rooke - 01:24:29:

Thanks so much for taking the time. This was a great conversation, and I hope we can do it again sometime soon.

Christopher David - 01:24:35:

Absolutely. Kevin, thank you so much.

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