Cedric Youngelman | The Bitcoin Matrix #102: Samson Mow on Nation-State Adoption, Volcano Mining, Atomic Swaps & the Liquid Network

Link to the YouTube (the timestamps are based on this):

Cedric Youngelman: Samson Mow is the CEO of Pixelmatic — the creator of Infinite Fleet, the architect of the Bitcoin bonds, and the outgoing CSO of Blockstream. Samson is also the world-renowned inventor of the Proof of Hat consensus mechanism. Samson, welcome to The Bitcoin Matrix! How are you?

Samson Mow: Thanks, Cedric! It’s great to be here, and I’m doing well.

Cedric Youngelman: Yeah it’s great to meet you — this has been a long time in the works! I think we got in touch maybe last July or June or August or something like that. I kind of think of Blockstream as the A-Team of Bitcoin: it’s a little mysterious, there’s a lot of different skill sets, and a lot going on. And you seemed to have a really interesting career! I hesitate to even call it a career — it seems bigger than that: like a journey, or an adventure. Maybe you could tell me a little bit about your background? Maybe what you were doing before Bitcoin? What were you up to before that?

Samson Mow [1:33]: So by trade, I’m a game developer — I’ve been making games for quite some time. I’m actually still a game developer, so there’s a blurry line between prior career and Bitcoin because I never gave up the game development track. I kind of have been working two jobs for the last 7-some-odd years, I’d say! So I guess my foray into Bitcoin officially was with BTC China: I was the COO at BTC China, and I was running the exchange business and the mining pool. And during that time I got to meet Adam Back, the CEO of Blockstream, during the Blocksize War — or the Scaling War — and I decided to join Blockstream after BTC China. So that was in 2017. And then I spent about 5 years at Blockstream working with Adam to do a number of things like: sidechains, the Liquid network, pivoting the company into mining, launching Bitcoin satellites, and a number of other things.

Cedric Youngelman: Yeah, that’s a lot to unpack. Tell me a little bit more about BTC China? How large was that? Those kind of businesses in and of itself are really interesting! And did you start on the ground with that company? Or did you join them as COO?

Samson Mow [3:05]: I joined as an advisor at first — so I was advising them on their mobile app and trying to build a team around their mobile product suite. And then later on the CEO, Bobby, asked me to join full-time as the COO because the prior COO had just left — and I took that job on. And my game company, Pixelmatic, was actually next door, almost, to BTC China so I kind of just moved the entire company into that same office building, so I was just walking between the two offices on the same floor and running both of them at the same time! But BTC China was one of the biggest exchanges in the world for some time — and also one of the biggest mining pools — so right after Mt. Gox was hacked, everyone went over to BTC China. And that’s when it blew up and became the biggest exchange for a good time. And then I think we launched our mining pool in 2016 or late 2015 — I can’t remember now — but that grew to be about 20% of network hashrate at the peak. So back in the day, I think a lot of people don’t know it, but BTC China was a major player.

Cedric Youngelman: Right. So here you are working for a major player, and around this time is the Blocksize War. What was your take on that? And what kind of role did you play? I mean the book, the Blocksize War, by Jonathan Bier — you’re in it at a particular meetup in Asia, as far as I’ve read so far! So what was your take on the Blocksize War?

Samson Mow [4:40]: Well the war was started rather innocuously: it was two devs — Gavin Andresen and Mike Hearn — and they were just saying we need to upgrade the software now and you, as the mining pool, have to change to Bitcoin XT. So they were kind of framing it as a regular update, but then the other developers chimed in and said, No that’s not the case! And if you ran that one there would be a hard fork and the network could be split — and then everything escalated from that point. But because I was working at the mining pool, I was one of the parties that they reached out to to try to “upgrade the network.” And I guess my role has been on the small block camp, advocating for immutability and not changing the protocol for a tiny bit of a scalability increase. But I think in the early stages of that war, I was actually briefly on the big block side. So I thought, It makes sense — and that was the danger with the whole argument, which is: on the surface it’s really innocuous! It looks very boring and it’s not a big deal changing the blocksize from 1 megabyte to 2 megabytes — it would be good for an exchange that the fees are lower so we don’t drive people away for the cost of transacting. But when you drill down more and you really try to understand how Bitcoin works, that’s when you start unraveling the whole narrative and figuring out that it’s a big change and it leads you down a very slippery slope. Because if you can change the blocksize from 1 to 2 megabytes, you can pretty much do anything: you can increase the number of coins to 42 million or 84 million, and from there it would just make Bitcoin meaningless — it would become Ethereum, or something that’s completely malleable and controlled by a small group of people.

Cedric Youngelman: Do you think that battle could have gone a different way?

Samson Mow [6:47]: I think it went pretty well, considering! I would say Bitcoin won: it came out of that battle unscathed and everything else forked off like Bcash and BSV and all the other ones — and they’re all trending towards zero now. Bitcoin won, so we’re all fortunate. And I think we were lucky to have had that war when we did — when Bitcoin was in the hundreds of dollars, sub-$1,000 range — because that would have been far more damaging at the current price range, and it would be harmful to investor confidence to have that play out today. So I kind of look at it as a period of growing pains for Bitcoin — it was important that we went through that and we fought it out and it demonstrated that Bitcoin is unchangeable! And this is why you can invest in it, because it’s not going to disappear and the rules are not going to shift under your legs. And Michael Saylor also pointed that out: that the war was the reason why he decided to invest, because he saw that nobody controls Bitcoin — it’s the users that control Bitcoin! Not the companies or the miners or anybody.

Cedric Youngelman: Right. Yeah I mean I came into Bitcoin in late 2017 — and I don’t know when the war officially ended — but I still felt like it was the fog of war there in terms of the release of Bitcoin Cash and that sort of network attack. And my being an early user, it was confusing and there were arguments made. And in the long run, I think it was a good thing because it made me investigate and do my own research and understand the properties that were most important to me, but yeah. What was it like in some of those meetups? So you remember — was it very emotional for you? Because from what I’m gathering from the research I’m doing in the book, it’s a long-fought effort that was incremental and discussions and back and forth and give and take and at times it looked like there might be compromise or more compromise or less. And so what was your thinking throughout? Did you have a lot of patience for this? Did you see this sort of like existential?

Samson Mow [9:12]: I would say Yes it was existential, and that’s why everyone fought very hard! If no one was going to stand up and fight, then obviously the companies could change the protocol. But I don’t think I was that stressed about it — but I know a lot of people were very stressed about it — I was trying to run two companies as well as also fighting the war, so I think I had a bit more grounding than the people that were 100% focused on developing Bitcoin, that they were very much not thinking about anything else but dealing with the attacks as well. But I think the meetings were important, and I guess you’re right that there was some degree of stress there. So probably the most well-known one was the Hong Kong meeting, where the Hong Kong Agreement was released. And that actually — even though it was a beneficial meeting and it held off the conflict for some time — a lot of people at the meeting got a lot of blowback from developers that did not attend the meeting saying, You should not be going there to negotiate. And some of them were quite high profile, too! So it’s interesting to see how people look at different situations and how they want to deal with different situations. I think going to the meeting and engaging was a better strategy than conflict avoidance and hoping everything would go away. And even though it’s not right to negotiate, the thing is: we can’t really negotiate because Bitcoin doesn’t negotiate! But for the opposition, they thought we were negotiating, so it was an okay tactic to get SegWit and avoid a split at that time.

Cedric Youngelman: Right, yeah — crazy! I think that’s just a wild scene in itself. I’d love to turn to Blockstream: How does Blockstream think about where to turn their attention? As the outgoing CSO, maybe what were the frameworks or models or dilemmas that over the years you were contemplating or trying to turn the company towards? Or maybe there were things you didn’t go towards? How do you decide where to turn your attention to, and the talent there?

Samson Mow [11:40]: So I would say Blockstream’s mission is to augment Bitcoin, and that’s why the company is working on sidechains and scaling tech like the Lightning Network — everything is to make Bitcoin more robust, more scalable. And I would say one direction that we pivoted in was towards mining. So after I joined, we started on that road to set up our mining operations and now the Blockstream mining business is actually very significant in terms of revenue. And there’s a lot of opportunities for the company because we have the Blockstream Mining Note — which is a security token on top of Liquid — which is a Luxembourg securitization vehicle that’s wrapping up the hashrate that Blockstream has. So I think going in that direction was very beneficial as a whole because you can have this vertically-integrated Bitcoin company which is doing protocol development, second layer tech, and mining — and wrapping up that mining in the second layer tech! So I think it’s an interesting mix and a very virtuous, reinforcing cycle to promote more building on top of Bitcoin.

Cedric Youngelman: Right. Speaking of mining: is volcano mining a thing? Can we extract the geothermal energy? I think I saw you in a helicopter with Max Keiser and Stacy Herbert in a tweet of yours. Were you just visiting a volcano? Can you mine a volcano?

Samson Mow [13:17]: Well volcanoes are really just geothermal energy and you don’t need a volcano, technically, in the vicinity to tap into geothermal reserves. But they can also be near volcanoes so you can also have a volcano mine! The site that El Salvador is mining at now is called Berlin. It is near a volcano but that volcano does not have a name, but the district is Berlin — but they are mining with the geothermal for volcanic energy. So you can tap into a volcano and extract energy to get Bitcoin — so volcano mines are a thing! And that helicopter was actually to take us over the future site of Bitcoin City. So the guys at LaGeo — the geothermal company — they wanted to bring us there to show us where Bitcoin City will be so they wanted to fly over and show us where the downtown will be, where it will overlook, and then we flew to Berlin to give Max and Stacy the tour of the geothermal plant and mining facility.

Cedric Youngelman: Oh wow that sounds awesome! That sounds really wild. So I get the mining thing — maybe we could touch on satellites for a bit. What is that venture about?

Samson Mow [14:34]: So Blockstream operates a network of satellites — a constellation of satellites — it’s called the Blockstream Satellite Network or the Bitcoin Satellite Network, whichever you like. But these are satellites in geosynchronous orbit around the planet, and they’re broadcasting the Bitcoin blockchain back down. So it’s a way to ensure that we don’t have network splits. Because if there is a heavy concentration of mining in a particular region — maybe Russia or Kazakhstan or something — and Internet is cut off for whatever reason, and recently we’re seeing more of these reasons, as long as one person in that area is running a Blockstream satellite dish, they’re still getting the Bitcoin blockchain and they’re able to keep the split-off Internet or Intranet in that region in sync with the rest of the Bitcoin network. So it’s a very important service for a number of reasons: one of them is that you can mine in areas without Internet — you just need to have a cell phone 3G signal to broadcast blocks found, but you can actually maintain your mining operation just using the blockchain data from Blockstream Satellite. And then the other benefit is it keeps network in sync. So if you’re building everything on top of Bitcoin — if you’re building the Liquid network, you’re building the Lightning Network — then you definitely want the base layer to be intact! And that’s why I like to say Blockstream is augmenting Bitcoin, because it’s trying to make sure that everything runs smoothly — that the base layer protocol is functioning flawlessly.

Cedric Youngelman: Sure. Is that sort of an altruistic business venture?

Samson Mow [16:17]: Well you could say that, but it’s also for profit too because Blockstream can use that satellite service to mine in areas without Internet! You could set up in the desert next to a solar farm and be mining Bitcoin.

Cedric Youngelman: Right, fair enough. Yeah that sounds awesome. What about Liquid? Can you tell me a bit about the Liquid sidechain and maybe how it works at a high level and compare it a little bit to Lightning?

Samson Mow [17:48]: Right. So there’s often a lot of confusion between Liquid and Lightning, and people think that the two are competing when they’re actually very much complementary. Liquid is a Bitcoin sidechain, and what a sidechain is is a blockchain that is anchored to another blockchain — so Liquid is anchored to Bitcoin. And Liquid does not have its own token there that you use for fuel or gas or whatever. The fuel and the native currency of Liquid is still Bitcoin — very much like in Lightning: when you open a Lightning channel you’re using Bitcoin still. So when you have assets in Liquid like stablecoins and you want to transact with those stablecoins, you’re paying with Liquid Bitcoin — which is Bitcoin pegged in from the Bitcoin network. So in a way, everything is still anchored to Bitcoin in this sidechain, but you gain some unique properties. So for Liquid, it has 1-minute block times — so, faster confirmations — it’s deterministic so there is no possibility of a reorg past one block. So after 2 minutes, everything is settled permanently. You also have confidential transactions, which people are starting to see the value of that these days because you want that privacy and you want to be able to transact unimpeded. So I think Liquid does a lot of interesting things! I would say it’s a base layer of a future financial system built on Bitcoin, because in Liquid you can do stablecoins, you can do issued assets, game currencies, you can do NFTs — which some Bitcoiners might think is a dirty word, but really it’s just a certificate of ownership — and then you can have securities too, or even volcano bonds issued on this sidechain. And having all these different assets in there means that you can trade them all in a trust-minimized fashion using atomic swaps. So if you construct a transaction for 1 Liquid Bitcoin and $38,000 USDT [the price of 1 BTC at this time], you can just do that swap atomically, so there’s no counterparty risk! I’m not sending you the Bitcoin first, you’re not sending me the stablecoin first — we just have that instant, trustless swap. And I think that’s a benefit that people haven’t really wrapped their heads around yet, but it’s a big benefit to be able to trade with someone that you don’t necessarily trust.

Cedric Youngelman: Right. And with that atomic swap, I guess you can get confidential settlement between two different tokens.

Samson Mow [19:26]: Yes. So when I make a Liquid transaction — if I send you something in Liquid — someone looking at the blockchain can’t tell if I sent you Liquid Bitcoin or a stablecoin or an NFT or a game token or a volcano bond! So it offers a great deal of privacy. And between the two parties transacting, they can unblind that transaction if they need to prove something. So let’s say if you’re doing something on HodlHodl where you’re lending and there’s some contested trade there where the other guy says, You didn’t fulfill your part — then you can unblind that transaction to HodlHodl and they can arbitrate on that dispute. So it’s kind of the best of both worlds: you can unblind to show what happened, but to everyone else looking in, everything is private and nobody knows what anyone else is doing.

Cedric Youngelman: Yeah it seems like the functionality and the utility of this sidechain are not being talked about enough! I noticed Heavily Armed Clown even noted that on Twitter the other day. What’s the governance like? Or is it a federation?

Samson Mow [20:36]: Yeah it’s a federation. So Liquid is about 60-some-odd members now, and there’s a subset of those members that are what we call functionaries, which are the guys that are running the 1U rack server that is generating blocks on the Liquid chain. So the block signers — they’re just signing off on transactions. They have no way to censor a transaction — all they can do is stop signing, and that’s it. And some Bitcoins don’t really like this model because they need to rely on the federation, but if the federation were to misbehave, you could technically replace all the block signers and just take the blockchain and spin up a new federation around that. So it’s not like you’re stuck forever, and you can always fire the block signers if they refuse to work. Sort of like: back in the Blocksize War, we talked about firing the miners if they misbehave — it’s similar in some ways! But there’s another cool thing you can do with Liquid, which is: spin up a Lightning Network on top of a Liquid asset. So you could have a stablecoin, and if enough people have that stablecoin, you can actually transact it over a Lightning Network in Liquid. So that’s why I was saying earlier that they’re very complementary. Lightning has some limitations — like sending large amounts of Bitcoin to someone else. Routing is still an issue for large amounts. But for Liquid, routing is easy! It’s just like sending Bitcoin: if you have 1,000 Bitcoin you can just peg it into Liquid and send someone 1,000 Liquid Bitcoin and that transaction will always go through flawlessly. So I think it’s different use cases — Lightning is more for payments, Liquid is more for traders and people trying to trade different things and move large amounts of assets confidentially. So they can kind of work together, and you can also have Lightning on top of Liquid, which is still yet to come. But I think once all these things come out and you have a wallet that can integrate them and make them very accessible to an ordinary person, that’s when people will really start to see the potential of Liquid. But the challenge for Liquid has always been that there there is no shitcoin token that is driving people to use it or to integrate it or for exchanges to add it, because there’s nothing they can directly derive value from. So what we have is a very organic ecosystem of people trying to build real things on top of Liquid like SideSwap, Bitmatrix, TDEX, and a number of others — these are people trying to actually take the technology and build real products and services for real customers. It’s not about a quick pumping and dumping of Liquid token or something.

Cedric Youngelman: Right, that sounds incredible. So do we even know what may be some of the benefits that would come of Lightning sitting on top of Liquid? It seems like that’s inevitable. What are your thoughts there?

Samson Mow [23:44]: Well I think the biggest boon would be towards stablecoins. Bitcoin is still volatile and we see the need — and this is why El Salvador has Chivo: if you’re a merchant and you’re selling products and your suppliers are supplying you and taking dollars, you would be taking on risk if you’re accepting Bitcoin. You can take Bitcoin, but it’s more about accepting Bitcoin as a savings savings account right now, rather than your business account. But if you can take a stablecoin and that stablecoin transaction can be free and instantaneous, then you eliminate the need for all the different things out there like Venmo or TransferWise or you name it — you just transact stables over Lightning, and it’s a big game-changer.

Cedric Youngelman: Yeah, wow. Do you see Lightning as a proof of stake network?

Samson Mow [24:41]: I’ve seen people say that and I think there is something to that — if you have Bitcoin then you have Bitcoin on Lightning, and it’s a proof of stake that would make sense, right?

Cedric Youngelman: Yeah. I’d love to hear a little bit more about your experience in El Salvador using Bitcoin or just getting to know the country or the politics or anything that you might want to share? Maybe visiting the country and moving about during these last two years and exploring the implementation of the Bitcoin network as legal tender?

Samson Mow [25:30]: Sure. So I think I’ve made three trips now and I’ll have a fourth coming up soon, but there’s just a lot of things to accomplish in El Salvador so I just keep finding myself going back again and again! I think for a lot of people, there is this preconception that El Salvador is not that safe, but it is actually quite safe — I would find it safer than a lot of big American cities. So it’s a testament to how well Nayib Bukele and his government have been at managing that and reducing the crime rate. And I think in places like Bitcoin Beach, you can see kids running around and people go there with their families and their kids are running around too, so I would say it’s not really a big concern. Of course there are dangerous places, probably, out in the countryside. But in every country there are even cities there’s dangerous spots that you want to avoid, and I don’t think it’s a big barrier for entry. And with the Bitcoin law they’ve actually seen a big uptake in tourism, so a lot more people are going to El Salvador: they’re bringing their families, they’re spending money, so they’re seeing a big uptick in revenues from tourism, which is new for them. And I think it’s a big opportunity, given that the country is very beautiful: you have the volcanoes, you have the beaches, and the city as well. And I’d say if they can keep things going the way they are, it’ll become a big destination I think, just because you can go from the mountain to the sea in a couple of hours and the views are just spectacular — I highly recommend visiting El Salvador.

Cedric Youngelman: Yeah that sounds awesome — I’d love to visit soon. Do you think El Salvador would be the financial capital of the world if Bitcoin hit $1 million per Bitcoin?

Samson Mow [27:24]: Well I think Bitcoin will hit $1 million per Bitcoin — it’s just a matter of when! And with all the things that they’re working on there — especially with the new digital securities laws — I think they’ll start drawing more and more businesses. So it’s inevitable that it ends up a financial center like Singapore or Switzerland, and in some ways they have a big advantage because those other financial centers — they’re already very well-grounded and they’re not open to new things and adopting new technologies. I remember some people were discussing about Singapore adopting Bitcoin — it’s not impossible but it’s also less likely, because when countries develop they become more rigid and it’s harder to effect change. I would say El Salvador is a big outlier in the fact they’re so nimble and they can move so quickly to roll out things like the Bitcoin law and the digital securities laws and just decide that we’re going to do a volcano bond — this is not standard, I would say! But Switzerland has also shown that some of these more established places can move quickly — and maybe it’s going to be at the city-level. So in Switzerland, Paolo Ardoino — the CTO of Bitfinex and Tether — he worked with the mayor there to roll out their Plan B. So Bitcoin is not legal tender in Lugano, but it’s a de facto legal tender you can use it — and Tether — to pay for any government service, and they’re encouraging businesses to accept Bitcoin too. And we’re hearing rumblings now of other cities in Switzerland looking at it as well! So you kind of have the El Salvador domino falling over and then hitting Lugano, and now in Lugano it’s rolling out to the other cities. So it’s just a matter of time before we see hyperbitcoinization. And in the meantime, I would just say: Enjoy the low Bitcoin prices and stack as much as you can.

Cedric Youngelman: Right, I hear you on that. How does a bond work on Liquid from just a high level? If I want to make a bond and put it on Liquid, how does that work?

Samson Mow [29:38]: Right. So Liquid can support the issuance of tokens, but most of those tokens are permissionless in their default form. So, like a stablecoin, I can send it to you — no one else can stop that transaction — but what Blockstream did was they built a service called Blockstream AMP which is a way to permission tokens on the Liquid Network using Bitcoin multisig. So if you’ve tried the Blockstream Green wallet, it has a two-factor authentication on transactions. And that’s because those are multisig shield wallets where the Blockstream service has one key and you have one key, and you have to enter the two-factor code to tell Blockstream to sign off on that transaction. And then it signs off on the two signatures and the transaction will go through. But with Blockstream AMP, it’s a similar model: so these tokens are also part of a 2-of-2 multisig and there’s a policy server which updates with different criteria for investors like whitelisting or blacklisting. And if you’re on the whitelist then you can receive the bond. So what would happen is: an exchange would go through and look at their users — or a service like STOKR — and they would add you to the whitelist. So if you and I are both on the whitelist then we can transact that security token. So in a way, it’s replicating some of the shitcoin smart contract functionality where you have to pay to make a transaction on the shitcoin chain base layer to whitelist someone. And that doesn’t really make a lot of sense because you’re paying like $100! So I remember talking with Arnab [CEO of STOKR] early on when I was pushing them to adopt Liquid and adopt Blockstream AMP and he was saying, We’re spending $100 to whitelist every user! So if an investor is investing $100, it’s basically a wash — there’s just nothing for anybody! So it makes more sense to do it with this policy server that is off-chain and enforcement is done on-chain, but the rules and updating that — it’s all free, because it’s a centralized database.

Cedric Youngelman: Right. Yeah it’s just a fascinating mechanism and again I think that Liquid is just underlooked at right now and it’s going to be a really interesting piece of layered technology going forward. Tell me a little bit about Pixelmatic and your role there and what you guys are up to?

Samson Mow [32:07]: Sure. So Pixelmatic is a game company. I founded it in 2011 initially to do social mobile games. So before Pixelmatic I was at Ubisoft and I did a lot of mobile and social games for them in the Asia region — helping them expand to Asia — and I decided I wanted to start my own company. So I booted up Pixelmatic and we developed a couple games and licensed some games, and then I think in 2016 we started exploring building our own big title: an MMO strategy game called Infinite Fleet. And we started concepting and working on ideas of how it could play, and then we decided to do a security token for it later on and we raised some capital. And the game is currently in alpha — it is in a playable state. The beta will come out June/July. I think we’re slipping a little bit — it might be July — but we’re still aiming and directing the team to hit it out of the park by June. So we’ll see how that works out, but I try to leverage a lot of Blockstream’s technology in Infinite Fleet: so the game currency is a token on the Liquid Network, and the similarity is like WoW gold. So imagine WoW gold — not in a database but freely transactable — and the players, when they create their account for Infinite Fleet, they will create their own non-custodial wallet. So when they’re earning the game currency it actually goes directly to their wallet. And the ships in Infinite Fleet are NFTs and we try not to oversell that fact and say, You own your own ship forever and it’s immutable, it’ll never change — but that’s not true so we just say it’s like the key to your ship. But again, going back to what we talked about earlier: having those two components on Liquid — the game currency and the ship — you can conduct those atomic swaps. So if you remember playing a lot of online games, you get scammed a lot! Someone will say, Send me the gold first — I’ll send you the armor later. So that’s what we’re trying to avoid: to construct a market where it’s mostly peer-to-peer and people cannot have their accounts frozen and their assets frozen. And it is an NFT, but an NFT is really just a token and we don’t represent that as anything more than that. The other important thing is: the game currency — we’re not selling that currency, so it’s purely earned! You could think of it like airline reward miles — you’re just earning the miles when you fly. So I think it’s not scammy — I don’t think it’s a shitcoin because we’re not selling it. It’s just using this new tokenized format on the Liquid chain and seeing if it’s beneficial to players. We’re not going to force them — we don’t want to cram it in their face and use it as a central marketing for the game. We don’t even talk about the NFTs that much! So we’re trying to really see and experiment to determine if there is a benefit to doing this for players — I think there is, because as a gamer myself I’ve encountered a lot of problems with games and account freezing and scams and things like that. So we’ll see how it plays out, but I would say it’s still an experiment and a way to see if a lot of this tech that’s being built by Blockstream has applications in other places.

Cedric Youngelman: Yeah I love it. What is MMO? What is the age range of the game? And maybe tell me a little bit more about the objective of the game or what the experience is like?

Samson Mow [35:52]: Right. So an MMO is a massively multiplayer online game. I think the most famous ones are World of Warcraft or WoW and then you have EVE: Online which is a sci-fi MMO where you’re flying one ship. Infinite Fleet is about you commanding a fleet of ships and going into battle against an alien threat. So at first the game is going to be PVE which is player versus environment, and the plan is after that is we’ll roll out PVP where you can fight against other people. But you’re collecting and building your fleet of ships, mining resources, upgrading them, and going into combat to get more glory and participate in what we call a directed narrative. So, unlike games like World of Warcraft where you’re playing through pre-scripted quests over and over and over again, we’re setting objectives for players and it’s up to the players to decide which objectives to take and in which sequence. But we’ll be writing the story around the players themselves and letting them become a legend, effectively. So you’ll be written into the story or the lore of the game, and the story will follow what the players are doing. So I think it’s an approach that has not really been done before, and it’s an area that we are actively trying to innovate in.

Cedric Youngelman: Yeah. How much do you think your passion for game development has impacted your views on Bitcoin? Maybe Bitcoin the network, understanding the protocol — especially the Blocksize War and thinking about where Bitcoin’s going?

Samson Mow [37:30]: I think my experience in games had more of an impact on my interest in Bitcoin, because working as a game developer — doing online games — you’re always dealing with the economics of it: you’re trying to manage the game currency and prevent hyperinflation in the game and create the proper syncs for people to spend their currency to avoid that situation. But when I read about Bitcoin for the first time, I didn’t think too much of it! I thought it was just a digital money someone made. But then eventually I read an article about Bitcoin mining and I studied how you mine and then I realized there’s nobody behind this! There’s no company behind this! And that was when I was really interested, because everything else is centralized. Everything else — especially in games: it’s run by the game company. So in my mind it clicked that this is like a game currency that’s not controlled by the game — it’s just a protocol and it has its own life, almost. So I would say it’s more about my experience in games affecting my interest in Bitcoin. But maybe there’s some backflow, too, because for the Infinite Fleet game currency — the one on Liquid — we’re trying to also set a cap to it, so there’s a finite amount in the game and it’ll be disinflationary and it’ll become deflationary at some point. And that’s an experiment I want to see on my own, because most games — there is a limit! So what happens when you introduce a hard cap game currency into the game and you’re not in control of it? So we’ll see how it plays out, but I’m very interested to see where it goes and what the players do.

Cedric Youngelman: Yeah I love it! That sounds great. So why now? Why turn to nation-state adoption? What about this moment in time as an inflection point?

Samson Mow [39:26]: Well I found my time was just being pulled more and more in this direction. So with everything that’s happened in El Salvador, a lot more people have reached out and have started talking to me about how they could get a Bitcoin law in their country — or there’s a number of different things that they could do. Not just Bitcoin law, but nation-state Bitcoin mining — so I decided that this is the opportune time to focus on that, because Blockstream is in a very good place: Blockstream finished their Series B round, it’s well capitalized, it has a very strong mining operation, the products are in a good place, and I think if I don’t pursue this nation-state Bitcoin opportunity now, it just might pass! And I think if I did pursue it more or less full-time, I can try to accelerate that hyperbitcoinization curve and see if we can get there faster. So I think it’s the right time to do it, and I would have always been wondering about what things would have been like if I didn’t do it! So I’d rather just go for it and see where it takes me.

Cedric Youngelman: Yeah I think it’s just an interesting moment in time in terms of what you just said, but also what’s going on in the world — what we just saw in Canada. I mean you made a tweet a few weeks ago about Not your Keys, Not your Coins and how that’s real in Canada now whether it’s shitcoins or not, or probably Bitcoin — if you don’t have your own keys, it’s definitely not yours. What was your reaction to that move in Canada?

Samson Mow [41:12]: Well I don’t think too highly of the Trudeau government or Trudeau himself. I think what he did was very cowardly: freezing the accounts and going after people’s livelihood just because of a protest! And they’re trying to frame it as a violent protest, too. And everything that’s happening is really unbelievable — this is such a big disconnect from the reality of the protest and how it’s portrayed and how they’re talking about it, but it does serve a purpose in which it illustrates that Not your Cash, Not your Canadian Dollars: if you’re relying on the rule of law, the rule of law can change! And that I think is a lesson that a lot of Canadians took home. I don’t know if it’s being understood in other countries, but here in Canada there is a shortage of hundred-dollars right now. If you go to some of the banks and you try to take out a thousand dollars and you say, I want hundreds — they don’t have hundreds! So I think something is happening, at least in Canada, where people are understanding: you cannot depend on the banks and depend on the good will of the government, because that can change very rapidly. And the danger with these things is when they try to go into witch-hunt mode — they’re trying to find people that were associated with the protest and they’re going not to the first order but the second order like your relatives or your family and freezing their accounts. And then you just have collateral damage. So the lessons are clear in Canada: you need to have cash — or even better: have Bitcoin. But now we’re seeing the same thing play out in a different fashion — but the same story — which is trying to de-platform Russians. I think if there is a wealthy Russian that is supporting Putin directly and backing him for the conflict, it makes sense to sanction those individuals. Because, as very wealthy individuals, they’ll come out of this fine — they’re not going to starve. But where it goes too far I think is when people want to feel like they’re helping out, so they want to de-platform Russians and cut them off from their bank accounts or cut them off from a number of different things. And I think that just goes too far, because ordinary people really don’t have any control over the situation. And if you were in Canada you would understand that, because if Trudeau were to go to war and Canadians start being sanctioned and deplatformed — we can’t do anything! It was martial law, effectively — it was the Emergency Act. So you can get thrown in jail for suspicion. Your bank account can be shut down and you have no recourse — you can’t even sue the bank for shutting down your account! So I think people don’t understand the vulnerability they are in because of the money, and hopefully people can start to understand that. But there is a big problem in the world — and it’s a cliche, but Bitcoin fixes this.

Cedric Youngelman: Yeah and I agree with everything you said there. And I think that this de-platforming is going to lead to a fracturing of not just the banking system, the dollar system, but the Internet. And I think the blowback in value — so you devalue or you de-platform Russian wealth or anybody’s wealth? Well they’re going to pay back those loans and maybe those loans are lent out in Western countries, and so their balance sheet’s not going to be as strong. There’s going to be tremendous blowback I think in bonds, real estate, supply chains from all these things. And yeah like what you were getting at is the everyday people can get hurt, not the people who are making these decisions. Yeah but not getting into the Russian-Ukraine thing specifically unless you have more to add there and I appreciate what you add, but I’m kind of curious more about Bitcoin and just energy independence in general. Because I think Russia and Ukraine, the reason I brought it up, but not specifically — it demonstrates that energy independence is going to be key. But how does Bitcoin play into that as well?

Samson Mow [45:37]: So if a nation-state is adopting Bitcoin, I think one of the best things they can do is to mine Bitcoin. And if they want to be mining Bitcoin then they want to have their own energy production capabilities. And in theory, the Bitcoin mining should incentivize more capacity being built out. And the net effect of that, or the second order benefit of that, is that in times of crisis they’ll have energy to fall back on — they can mine less Bitcoin and they can still heat their homes! What you’re seeing a lot of in Europe is reliance on Russia. And even though a lot of the European nations want to do something, they can’t because if they stop taking Russian fossil fuels like gas and coal, they’re going to freeze! And they’re in this tenuous situation because of well-meaning idiots that have been shutting down their nuclear plants. There’s so many parallels to the dumb things that people do in general and the dumb things people say about Bitcoin like, Bitcoin is taking too much energy. Well energy is abundant! And it’s the same thing: they’re shutting down nuclear plants because they think it’s not green, but it’s also not green when you’re taking Russian oil and coal, but that’s what you’re going to need to do if you don’t have enough energy to meet the needs of the population. So I think the long and short of it is: Bitcoin will incentivize more energy production. And the benefit will be that they will be more sovereign because they have their own energy production capabilities, and they won’t be as reliant on another nation-state.

Cedric Youngelman: Yeah it’s really important, as these times are demonstrating. What about touching a little bit on the Blocksize War again: what was the Proof of Hat mechanism?

Samson Mow [47:44]: So that was just making hats that people could take pictures of themselves wearing and show which side they’re on. And I think it was an effective way. Because talking about something is one way, but having mostly an online community, people can at least show a picture of themselves with something physical that represents what they’re thinking about. So I think it was a just a way for people to express what they’re thinking and their beliefs, and it was a useful mechanism. People would say, I’m for small blocks, and here’s a picture with a UASF hat or a NO2X hat.

Cedric Youngelman: Awesome and what is the meaning behind your Twitter moniker?

Samson Mow: Excellion was actually my game handle from playing Lineage 2. So the server I was playing on was called Liona and I’m pretty good with using Excel spreadsheets so I just like made it up with those two words!

Cedric Youngelman: Awesome. And my final question for you is: are you gonna run for mayor of Bitcoin City?

Samson Mow [49:00]: Definitely! First we need to build the city and then I will run for mayor of the city.

Cedric Youngelman: Fair enough. This has been so dope, Samson. I really appreciate it! I’m really excited for your new adventure, or the new step in your journey. I marvel at the things you’ve been a part of and I really do think that Liquid is unleashing so much here, and just the things that we’ve touched on can go in so many directions that I do think are kind of under-appreciated or mocked in the shitcoin world, but have real meaning and purpose, or at least should be explored more and built on Bitcoin. And I think Liquid is also confused a lot with Lightning and people think of it as interchangeable or just one or the other. So I’m really excited for that as well. I know you’re still gonna be a Blockstream spy so that’s pretty cool. I really appreciate it. I’ll leave it to you for any parting words and definitely let people know where they can find you and your work.

Samson Mow: Sure. Thank you for having me on again, Cedric. My Twitter is @Excellion and that’s usually where I am. I’m also on like Facebook and other stuff but I don’t think we want to connect there! And yeah I think a lot of people are interested in nation-state adoption, so if you want to help: start trying to orange pill your politicians and see if you can get any inroads there! And you never know what’s going to happen — a lot of it is really about education and explaining things, because everyone listening to this podcast is probably very early and at a very advanced stage of understanding Bitcoin relative to normal people, so it’s kind of your job to go and spread the word and tell them what Bitcoin is about and think of ways that you could incorporate Bitcoin into your city or your state.

Cedric Youngelman: Yeah man thank you so much, it’s been so awesome.

Samson Mow: Thank you.

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