Video transcript
Jullian Duran he's a product lead at Marathon Digital he leads Anduro an Innovative unit building layer 2 Chain
and apps to accelerate Bitcoin adoption formerly he led an education NGO in
Latin America worked in US politics and built fintech products in Southeast
Asia
We have to his left Andruo contas he is a business developer and
strategist with a background in Marine Electronics tell telec energy markets and Bitcoin for the last eight years and
Also welcome to Scott Miller he is the CEO of sesap and I got his bio like
yesterday so I didn't have much more to say but I uh yeah I'm confident we get
to know him better in the panel
Last but not least tobas zidle he is the co-founder of STOKR a service that helps
issue security token on bitcoin for example STOKR works together with blockstream to offer so-called mining
nodes and I'm really curious to he about those um to participate in yields
generated by Bitcoin mining and I'm sure that's quite interesting
All right let's get into it why should we scale Bitcoin
and know curious about all of your opinions maybe start with you Julian
yeah absolutely so I obviously work for
a very large mining company and one that holds a lot of Bitcoin and so for us
what scaling Bitcoin is all about is let's drive more value to the asset that we hold so much of let's also Drive New
forms of Revenue which the miner business model is all based on the Block reward and so if there are more people
using Bitcoin there are more people transacting it then we make more money from it and so fundamentally for us
scaling Bitcoin nothing to do with token values nothing to do with press everything to do with transacting volume
and activity
yeah for for me um I mean I believe uh blockchain have blockchain have trade-offs right which means that
the uh if you can if you want to improve some feature it will always be at the
expense of uh making another one worse right so since the security of the main
token is kind of sacred nobody wants wants to mess with it so the way to
scale it to enable faster transaction cheaper ones and advanced functionalities is not to have
conflicting interests on on the same chains but but with a layer approach instead so that's why we believe that
with a layer two we can enable faster cheaper uh confidential transactions
digital asset issu on and all these uh more fancy features that don't compromise the security of the main
token you want to go ahead uh so on our part we view Bitcoin as the main Reserve
asset out there uh all the other chains um so Bitcoin is the main chain so so if
you want to scale Bitcoin so it becomes like part of it you know Capal Market infrastructure Etc since Bitcoin is a
one asset only chain it needs different scaling Solutions so that you can issue everything from Securities and build
Capital markets and know other tools around it and doing so you need uh side
chains around Bitcoin much like central banks have commercial Banks which issue
their own uh cash uh Bitcoin needs side chains for asset issuance uh and then you can
settle on the main chain uh at the end of the day or whatever cycle
so I think um side chains are the crucial component in terms of scaling Bitcoin uh so that it can be used for
areas other than just pure Bitcoin payments between users all
right as we are like tokenizing actually um financial instruments on bitcoin or
better to say like on on a layer two solution like liquid um all for here from blockstream they are crucial in
developing like this kind of Technology we see actually Bitcoin is like the backbone the future backbone of the
financial industry um and um and that's why um we we believe scaling um will be essential
right because obviously like the transactions speed is like to low like the costs are too um too high um when
you have like um a layer two solution or maybe like then even like layer three solutions how we um see our platform
then obviously um you can um build on bitcoin and why is it important from
from my perspective it's very important because like Bitcoin is like the only I consider like the only
decentralized um blockchain um truly decentralized and is using proof of work
instead of proof of stake and uh when we want to build something for the
financial industry you know to replace the financial industry how it is right
now um you also need to to to replace actually the way of um how like the
whole backbone is actually built and when you when you do proof of stake for example then you just like mirror
actually what's happening right now in the in the in the in the Legacy Financial world right so because like
then you have like still like the agglomeration of power and so on so in in this sense we believe it's it's
essential to have a proof of work protocol um for for the financial industry and that's why scaling is
important proof of work is a good segue you work for Marathon Marathon makes a
revenue on onchain transaction now I learned that you also developing a second layer solution aren't you
stealing your own Revenue why why would you do that that's a good question so as
a lot of the other panelists have noted the Bitcoin main chain is designed to be
simple you know this is really what I believe drives a lot of the value behind Bitcoin the fact that it has this
limited Supply the fact that you have proof of work at the heart of it and the fact that you don't have very complex
logic trying to operate at that base chain that then creates security vulnerabilities I think there's a lot of
debates within Bitcoin about trying to make it look more like eth make it look more like salana uh my personal opinion
is I don't think that makes a lot of sense um there's there's you know halfhazard changing such a valuable
protocol could really just you know throw the baby out with the bath water as they say in the US um so when I think
of like Layer Two and with Marathon obviously we're doing you know we've launched slipstream we have Mara pool
that's getting every single day you know we have a lot of things that are trying to drive us more transaction fees on the
main chain but fundamentally the main chain was not designed to do things like
tokenizing financial instruments at scale or solving crossb payment problems for people in emerging markets that are
sending what $50 $100 um across borders you know these are the sort of problems
you need a scalable piece of software a scalable Ledger a more flexible ledger to do and so it made sense that we
should go with the second layer to create not cannibalizing um transaction
fee Revenue but rather additive so have two sources of revenue as opposed to one or three or four or five
Etc and that's a more famous scaling solution liquid um I'm really curious to
hear about liquid in general what's the idea behind it what can it do yeah
liquid uh yeah as um as um Julian was saying um basically my opinion the
the main layer of Bitcoin is I'm a great fan of Nick Sabo right this Cipher Punk
and I've read everything from him and one of the things he's been the focus of his work has been basically creating
institutions in cyberspace right and to to enable trust in cyber in cyers space
you need to do either replacing existing institutions that don't work and one of
those institutions is laws and laws don't work in cyers space but the other
one is extending the reach of existing reputed institutions and that's what
liquid does in an nutshell it it does it with all the let's say philosophical
underpinnings of Bitcoin because it uses the otxo model it uses the Bitcoin
codebase it uses a number of features that enable financial markets in in a
way more efficient and secure way than uh current ones and the problem that in
my opinion this solves is that many assets are loged in emerging countries
where laws also don't work as well you know as in cyers Space the the the rule of law is poor in those countries so if
you want to unlock those assets and connect them with global liquidity you need a a blockchain that is able to
substitute the the work of many uh traditional institutions such as National stock exchanges right the the
Clearing Houses sorry depositaries even central banks if you have the financial layer on top which is Bitcoin so the the
the whole IDE a of replacing many uh federations many uh traditional
institutions which are federations for just one computer network that H adds all this logic to the assets it's is
fascinating for me and and that's what I see liquid performing and liquid is also used by
Sid Swap and stalker um maybe you guys could more get into how you use Liquid
maybe Scott you want to start well well from our perspective we've built a wallet as well as a swap
Market built into the wallet where we have something we call a swap limit order book so that anyone can trade
peer-to-peer with each other uh since there's more than one asset on the uh liquid network uh users are able to swap
assets between themselves without having to trust any third party custodian but what what this also does is it allows uh
users to build an order book in any asset that they hold within their wallet and any other user can come and pick up
that order uh so it's a fully peer-to-peer def I mean it depending on
your definition of peerto peer but it's effectively a peer to Pure marketplace where we host the order book where we have utxo commitments where users can
trade with each other uh and this includes also um Securities that can be
issued on liquid so any Securities that are issued by the issuer uh they're able
to create instantaneous liquidity without having to go to an exchange and pay listing fees Etc so that there
actually Securities are held by the end users and can be traded peer-to-peer between them uh just for free basically
we have a small very small fee of 0.1% on every
swap um but but that's effectively what we've built and uh we're you have a
fairly dominant position on the liquid Network so all the securities issued on liquid we have them listed in our
Marketplace uh I think 70% of the volume that goes in between Bitcoin and liquid
goes via the Sid swap function where we help users um move between the two different
chains so we have uh an actual Bitcoin side chain with actual businesses up and
running uh which work uh and we have functioning swap markets so that we can Envision a a and different type of
financial system where users actually hold the assets themselves they're able to treat between themselves without
having third party custody and most of our volumes in that regard is actually between tether and um
liquid Bitcoin how that's traded between users so that's what we've built uh and
yeah so it enables these type of peer-to-peer markets since you have these multi-asset chains and you don't
there's no custodian involved so users can swap directly between themselves and that's how we see things moving forward
and with assets if you want to go to an exchange and have them listed you're free to do so you can list your asset at
multiple different exchanges but users should also have the ability to swap these assets between themselves without
having to go to a centralized custodian to rely on them and that's the infrastructure that we're building and
hey it's up and running I mean we're continuously developing we're not doing much marketing but everything works so I
mean it's an actual live a bit more than proof of concept it's actually in the market we've even issued our own equity
and found the legal structures to do so and so we very strongly believe that blockstream is on the right way and
hopefully Marathon soon as well uh once they go live but we strongly strongly believe in the concept of side chains
around Bitcoin and that's the scaling solution for Bitcoin and that's how we move
forward thank you Scott um so basically maybe I will just quickly explain how
this tokenization is working on the on the liquid um um blockchain so basically
what tokenization means like from PR financial instruments is actually that you have um a investor register which is
um held by like the the issue of the financial instrument can be like any um SPV can can be any company right so it's
held actually at the the company's office still and what um what the blockchain solution is doing like liquid
is doing and it's very beautiful solution is actually constantly updating the investor register 247 right then you
might say okay then might also any other blockchain solution do um but liquid has
actually built with like the M asset ready made use case for um Financial to
financial instrument tokenization so you can really block it in and you tokenize
and you and you're like compliant um with for example we are operating out of Luxembourg with Luxemburg with
Luxembourg corporate law right um then there's like then there are options like
to to to to freeze like the assets um to do Force transactions and the like so
you don't have like to always build like your own smart contract you can um immediately use it and I think another
beautiful feature of um of liquid is um obviously is it's a little bit complex I will not explain it the homomorphic uh
you know it's a confidential transaction so it's very important I think for the financial markets that you cannot see um
directly everybody cannot really see there are they can see that there are transactions but they cannot see like their amounts um which are actually
transferred so this is like an essential tool um for for financial markets um we
believe and um yeah and then it's obviously um for us it's a it's a it's a
link to to to bitcoin and um we are building also Bitcoin related um
products right like so everybody loves it um and to use it um because it's sometimes pretty hard when you have a
Bitcoin maximalist um to use like an evm chain right but that's how we that's how
we do it it seems to be the case that liquid is more of an Institutional sort
of side chain is that correct or is it also for retail I mean there are uh
several use cases uh one of them of course is simply people that find uh
fees very expensive on the main chain and we frequently see uh people that
when the fees go up in on the main chain because of some uh I don't know ordinals
or something like that then we see a wave of companies joining liquid simply because they want to save on fees and
then they want faster and cheaper transactions and that's it but the the
other use case probably the one I'm most excited about is capital markets the one I just mentioned and liquid has a number
of in fact I may add that the total value loged on liquid already exceeded
the 1.8 billion recently so and most of it is actually Securities and and most
of them are actually H the assets that are loged in some emerging countries
where H you know these sometimes non-banking financial institutions have issues have problems to access liquidity
so with a secure and Trust minimized blockchain we're enabling the connection between those assets and and Global
Investors Global lenders so I find that probably the most interesting use cases
but but then of course um liquid is since it uses the utxo model is
compatible with lightning Network and we have a solution uh for that to enable as well uh fast and cheap transactions for
any liquid asset so that's another use case that uh is in the is not still as
big as capital markets but I expect a lot we're going to talk about lightning as well later but I'm curious to hear
about andur um is it more retail oriented or institutional that's a great
question so when we first started with the whole Enduro project the thesis we
approached with that with a year and a half two years ago when it began was the
the world of Bitcoin layer 2 is getting completely beat out by the ethereum and
the salana worlds and that's Still Remains my conviction and I remember when I started this project and i' go
out to the market and talk you know to people that oh and I'm thinking of maybe like investing in a Bitcoin layer 2 that
marathon's thinking about it and everybody told me no no no no no the scaling world for Bitcoin is all saturated that's a complete lie and I
think now that we've seen there's 100 plus Bitcoin layer twos that have come out in the past 7 months most of these
things are just blatantly fraudulent and they are getting a killing amount of Bitcoin from from East Asian companies
from wealth Managers from Miners And so going back to your question we need to
attack on all fronts there needs to be a retail solution there needs to be an Institutional solution and the way that
we designed Enduro is to be multi-chain from the from the get-go we said there's no one development standard there's no
one approach to programmability developers there are many different types of developers just like there are
many different types of use cases and so we need to provide a technical stack that's flexible to those things we also
designed Enduro to kind of take Bitcoin scaling in a New Direction because the lightning narrative has been very often
played and having now built and we're building tokenization platforms payment
Platforms in Emerging Markets I'm finding that a lot of people a lot of banks a lot of exchanges in these parts
of the world feel underserved by the existing array of Bitcoin scaling Solutions and they're literally just
going to salana point blank that's the thing and so I think what's at stake for Bitcoin is kind of taking a macro
approach and saying all right we are falling behind on the scaling debate from these other ecosystems let's try to
create new and Innovative Tech that kind of lets go of these old narratives tries to focus on new ones and most
importantly Do Better Business Development because I genuinely believe that's the biggest inhibitor to what is
keeping Bitcoin from literally taking out all these other chains I mean it's it's the sleeping Dragon right it's
China in the 1970s and we we just need a dung shell ping to come and like open this thing up so yeah anyway that that's
kind of how I see it that's interesting let's talk about
lightning um you are a bearish on Lightning did I get that right what I'm bearish on is on focusing on the same
solutions that have not demonstrated traction so I wouldn't say I'm bearish on Lightning because like as most other
people that are using payments that are trying to make payments on blockchains most of them find the user of experience
of lightning so difficult that they're going to other chains and so because of that my view on it isn't so much hey lightning doesn't work my view when it
is there is no traction behind that and when people talk about oh there's a lot of Bitcoin locked in it that people are
using it I've talked to the exchanges in Emerging Market country i' I've went and spoken to these different fexs nobody is
taking that solution seriously and so that to me I don't know what the failures due to I don't know why that
adoption isn't winning but when you hear about companies like Visa adopting salana for usdc stable coin pilots in
kyrgistan I was just inflamed by that like why are why would they use salon
for an Emerging Market Banks US dollar settlement that that is a failure on so
many fronts and we need to beat them at that yeah um um I mean to to say uh yeah
Bitcoin is definitely the dragon the China of the 90s I love that but I also have the opinion that the way the
incentives have worked in the crypto industry have totally been a distraction with regards to bitcoin so for us uh you
probably have faced this H when when we want to talk to our cust custodian an
exchange an issuer and and sometimes developers as well we've noticed that
the you know there's a dynamic in the industry that many blockchains have raised money with their native token and
with that money is that the way they raise their ecosystems right it is a totally inorganic way of of growing so
bit we in Bitcoin don't have that right so we we have really had to focus on solving problems at this point I I used
to think it was a disadvantage some years ago but now I think it's an an actual Advantage because it has forced
us to really understand what this technology is actually solving huge
problems right and and then with regards to H lightning yeah I I I like to find
explanations right and and to why it hasn't worked with regard to bitcoin and well I I don't have metrics I know it
has been stagnating and lightning again is not my expertise but lightning faces
many issues the first one is that it it has been used to pay a very unstable
asset so if you're expecting the asset to rise in price you're unlikely to be
willing to pay with it if you're expecting to sell something for Bitcoin you're and the price to go down you are
unlikely to expect somebody you you are very unwilling to you know to collect money on on with Bitcoin if if that's
the case so but there's also other challenges we have been which have been like uh Channel management of liquidity
things like the note management and that's why I think that the and also
when the fees are high on the main chain the the translation or the the moving of
onchain Bitcoin to lightning is very expensive so it to totally defeats the purpose of of lightning in the first
place so I think that the that is why I actually think that liquid is the solution because liquid is so cheap and
this utxo model that if you want to pay with Bitcoin you will be better off with
liquid but still think it will be an issue to pay H with Bitcoin because of this volatility so for a long time at
least so I think that's why I'm very excited about the projects we have with stable coins because with stable coins
you don't have that issue and and the the the way to translate between liquid Bitcoin and lightning network is super
cheap so you don't have the issues that we face when there are the fees are very high on the main chain and so uh but
there are other assets other than for payments that require fast and and large throughput but there are other ways as
well because liquid is an implementation of the elements codebase it's basically an open source project so anyone can
actually go to the website and start their own elements like implementation so we have projects as well that instead
of using lighting yet H you just you you can just change the parameters of of
liquid and have faster blocks uh for for payments and and other use cases again
because it has trade-offs again but these side chains can be again connected to liquid and to bitcoin itself so so
you can you know solve for different trade-offs whenever there's a need for it so two lightning Bears what about you
Scot I think I understand it but I haven't really heard a coherent argument
to for it to work from end to end and I don't think anyone's managed to implement anything yet that could
actually scale and um so so the very positive thing about it is that it's Bitcoin native and has all the security
aspects which people love and which we should support which side chains do have tradeoffs uh so
lightning is very tantalizing in that regard but I I don't think it's been made to work yet and it's not built for
asset issuance it's not built for many other things and as soon as Network fees goes up it kind of goes out the window
when you need to rebalance and uh so that's why I think it hasn't taken off
because it looks fairly good on paper except for the last bit and
uh and no one's managed to implement it properly yet may I add something I
forgot to mention that the note management and liquidity thing is is we have created a solution which is called
green light and it basically like it's like um lightning Network as a service
but noncustodial so it enables what I just described this payment with stable coins without the need to understand the
protocol itself so that's what I had forgotten to say yeah go ahead so for
you saved it right I did not want to further it on lightning um I think like
lightning is um has a lot of issues right like the chaning is complex but I think like it's good for smaller
transactions um for us as we do asset tokenization um and we have um
definitely larger amounts um it's it's not really useful we recently paid out
um more than 1,200 um Bitcoin um to our to our investors on the on the platform
and I think we would not use lightning um solution um for this one right so I think this is like something to consider
and and um and then also like yeah I think um that's probably the one of the main the main points I would I would say
about um light lightning for for our our our use case for asset tokenization
right are you still bullish on bitcoin being like a transaction medium I'm not
sure this was too pessimistic I'm really curious to hear hear your opinion whoever wants to take this definitely
very very bullish on that because so taking a step back like you mentioned it in my intro I've worked in fintech
before I know the payments landscape and Emerging Markets the most important thing to try to innovate Financial
systems in different parts of the world is everyday people need trust in the currency that you're using that full stop that
security uh block times wallet U none of that matters the thing that matters is
do fundamentally the people believe in the asset that they're being used to get paid in the asset that they're paying
others in to people believe and I think no other blockchain has anything that comes close to that even people talk you
know usdt and how you know everybody's using that in the emerging world like okay I I come from the emerging world not everybody is using that usct is
still a novel phenomenon there are some people that are using it there are some businesses that are into it but I would not say it's mainstream yet so the way
that I see it is the only cryptocurrency out there that is mainstream something that if I went to talk to a villager in
a random country in the global South and went to talk to a Manhattan investment banker the only crypto curency that if
i' mention that both of them would recognize or at least have some opinion over it'd be Bitcoin and so Bitcoin
that's why I say the sleeping Dragon because everybody knows that thing is going to wake up at some point salana and all these other you know chains I
completely agree with Al I think you have to grow organically and all these other chains are not doing that they're
terrified of what's going to happen when the dragon wakes up but I really think that Bitcoin is it's the only one that can be a payment uh a method of payment
in these parts of the world because you need a you need an apple Microsoft level brand value in order to be a global
payment system and Bitcoin already has that but it's just a matter of the scaling right the fees have to be lower
it has to be more stable I don't even think block times is to a certain degree matter people in most parts of the world are used to getting their paychecks
after like a week of waiting but it has to be it has to be cheap right it has to that's the that's the number one thing
and stable like he mentioned you can't can't be an appreciating asset no one's going to want to pay to be
us I mean I mean how how we see how we how we see actually like um I mean the
angle here for for for Bitcoin Bitcoin again I'm I'm I'm going like to do like a little advertisement for the block
stream mining not because like this is like a project um we were um working together so we so we so we so we also
like introduce like different so I think like the idea what what is really important for the financial industries
that you also create like a surplus return actually also on bit coin right
because like Bitcoin is like something you you mainly huddle right and um and that's what we are trying to provide is
like that we say okay we actually buil like a financial instrument where you can actually make money on um Bitcoin
and I think we have launched now um the block stream mining note to in the last 21 days it made already more than 9 9%
right in total I think on bitcoin return for the block stre mining no note it was more than 35% on bitcoin um average but
when you have been early in the in the game you know you you invested like like four Bitcoin and you get like 7.9
Bitcoin back so it's like really R return products I think it's very important also for the Bitcoin world so
is so so you to make it also like sort of lively right so the adoption will be more and more also like for the
financial industry in my opinion when you create products on top of it and
this where we see also the future and then I think things fall into place when you also use um actually the underlying
blockchain Bitcoin right um for for for the for the tokenization um as we say
yeah all right last five minutes give me your short version of your vision of Bitcoin in the next 10 years global
settlement layer payment layer shoot one minute each yeah I think and and in my
world and what we try to focus on endur is how can Bitcoin be the technology to revolutionize fintech because Financial
technology in today's for is not really te techology it's navigating regulatory
parameters it's negotiating with existing Banks you talk to most fintech unicorns they're not tech companies they
just have a good preferential deal with Standard Charter to HSBC and so really for me I think the vision for Bitcoin in
the next 5 10 years is it solves billion dollar payment problems it solves billion- dollar Financial technology
problems and these fintechs that are out there engaging with businesses providing banking services in places that don't
have them that those fintechs take Bitcoin seriously or at least find it simple enough to integrate and Empower
themselves because that is right now something that I don't think exists and that that's what we're trying to do so
whether that's layer 2 technology whether that's more interfaces whether that's liquid whether that's coordinate
whether that's whatever whether it's even lightning the most important thing I think for Bitcoin is to focus on those billion dooll technology problems and
focus Less on trying to copy what's going on in these other ecosystems we don't need more degens we need more mainstream
work yeah I I again I'm a follower a hardcore follower of the NX Sao School
of economics and for me H Bitcoin has always been the institution of wealth
transfer or in general terms you could call it the institution of private property that means that it can be used
as a means of exchange but whether it will be accepted generally as as a means
of exchange which would make it turn it into money that's an entirely different
H question what is undeniable at this point is that it is that is institution of wealth transfer so for me that means
it is an ideal settlement layer just simply as as a any registry handled by
any you know law or or current traditional institution in Western countries so for me the problem it
solves is that when you have poor rule of law you need to know you own something regardless of whatever the
dictator around you is going to say right and that censorship will not work that it will be you as long as you keep
your secrets properly etc etc and then the the the the other layers will solve
other problems that with with the different trade-offs with regards to Capital markets payments etc etc right
and that's that's the way I see it h moving forward thanks thanks I very much agree uh
Bitcoin is the settlement layer it's the main chain against which everyone eventually settles around it we will
have many different side chains being built where you have all the other issuance where you have all the other
payment layers uh where everything else is built around it and you at certain
intervals or periods all of these chains will settle against the main settlement layer which will be uh the Bitcoin layer
and that's how we build Capital markets around Bitcoin uh if you imagine in the
financial system today any payment you make never goes through the Central Bank it always goes through the Commercial
Bank layers and then the commercial Banks sess some periodic interval within
the central banks and it will very much work the same way with Bitcoin and
Bitcoin being the main settlement layer since it has that trust security open access all of these attributes which um
make it into the reserved currency basically so the task now is building a full Financial ecosystem around it and I
think it's possible and that we will succeed thank
you yeah I think we live like in a world is getting more and more controlled right um that's at
least like um my point of view and I think like I have I've seen like just like a panel on cbdcs and everybody was
so super exciting about it I'm I'm a little bit more skeptical right you know because like um it's programmable money
and it they can take it always away from you when you do like something wrong you don't pay your taxes you have reached
like your CO2 quarter um and the like nobody T talked about this at this panels that's why I said it and Bitcoin
is um and Bitcoin is like the opposite right so so Bitcoin allows you really like to store your own um um value like
you like everything what you have earned over over time and um and it's independent from outside control right
so I think um this is like what I said in the beginning also like considering the financial markets right um You have
proof of proof of stake um proof of work um here we see with Bitcoin Bitcoin has
everything what like The Current financial system um is not actually currently providing it's intransparent
right there's an aeration of power right um and um and and there's a lot of
control also over um your assets and um and and and on the opposite side um
Bitcoin um will be like the the future money but also like the holder of the or
like the backbone of the financial industry um my believe in 10 years maybe
not in every um country but um I I see I see it definitely
coming thanks toia Scott Ado Julian for your insights thanks for the audience to
stick around for the last panel I hope you learned a lot I certainly did and I
would say enjoy the rest of the conference thanks
