Bitcoin in 2019: An Interview with Samson Mow

SFOX
Aug 15 · 28 min read

The SFOX team was honored to interview Samson Mow, current CSO of Blockstream, former COO of BTCC, and one fourth of the Magical Crypto Friends.

Known by many as one of the “crypto OGs,” Mow is an outspoken proponent of Bitcoin and is constantly working on ways to improve it and bring it to the masses — whether that’s through single-chain atomic swaps on Liquid Network or through a satellite beaming you the Bitcoin blockchain from space. We sat down with Mow to get his take on everything from the good, bad, and ugly of crypto exchanges, to the role of Blockstream (and its spies!) in the Bitcoin ecosystem, to what it will take to reach a crypto-centric universe in the future.

If you’d rather watch this interview than read it, find it on the SFOX YouTube channel.


SFOX: Welcome to SFOX’s interview with Samson Mow, who is the CSO of Blockstream and formerly the COO of BTCC. Samson, thank you so much for joining us today — we’re really excited to have you here.

Samson Mow: Thanks for having me.

SFOX: What first got you interested in Bitcoin and crypto?

Samson Mow: I got interested, I think, in 2012 or 2013, when I was reading about Bitcoin. I’m from the gaming industry originally, and we built online games with economies that you managed and such, and it was really interesting reading about Bitcoin because it’s something that exists on its own but can still be used as a currency and traded.

SFOX: You previously served as the Chief Operations Officer of BTCC, which was one of the first, if not the very first, exchange in Asia for cryptocurrencies. In light of your experience on the exchange side, how do you see crypto as having evolved over the years? What was it like to be there at the beginning of BTCC and watch it grow?

Samson Mow: BTCC is one of the oldest exchanges… but one that could be older is The Rock Trading. It’s a European exchange. But the difference in age is maybe one month, and we never did settle which one was older. But BTCC got to be the biggest exchange worldwide, after Mt. Gox imploded. Everyone started going to BTCC to start trading. So, for a time, it was Number One and on top of the world, but it’s an experience that you have to take with a grain of salt: if you’re Number One today, it doesn’t mean you’ll be Number One tomorrow. So it’s good to be a bit more humble in how you operate.

SFOX: That’s a good point. I feel like that’s the lesson and a message worth repeating in the crypto sector, where even the “oldest” companies in the space haven’t been around for that long and we’ve seen a lot of turning of the wheel of fortune, so to speak.

Samson Mow: Yeah, but the time when you are big and Number One, that’s the interesting time. Back then, when Vitalik was trying to launch Ethereum, they came to visit us and pitch us on Ethereum to get listed. At that time, BTCC only listed Bitcoin and Litecoin with a Chinese yuan pair, and Ethereum was trying to get listed. I read a bit about it for the meeting and I thought it wasn’t really a good idea, and I actually walked out of the meeting halfway through when they were pitching.

SFOX: Oh my gosh, they must not have loved that reception!

Samson Mow: Probably not; probably not.

SFOX: I want to get your perspective more broadly on exchanges listing and de-listing assets. Earlier this year, one of the big stories was Binance de-listing Bitcoin SV (BSV). In your mind, especially given your exchange experience, what are the responsibilities of exchanges are in terms of how they list and de-list assets?

Samson Mow: Well, I think every exchange has its own criteria, but it’s not a regulated space, so it’s hard to say if everyone is even following their own criteria. With the number of exchanges, it’s kind of hard to have any solid standard. So some exchanges may de-list something, some may not de-list something; it may not meet some requirement, or some level of trading volume needed. But, overall, I would say exchanges should be careful about what they do list because a lot of these projects are pretty scammy and backed by pretty questionable people, as we’ve seen. So, it would have been better to have not listed them in the first place than to have needed to de-list them — I guess that’s my position. And it does have a big impact. Both listing and de-listing have a big impact on any project. The process can be improved overall, I think, but there’s also a big learning curve to understand how things work.

I think BCash (BCH) is probably the first one that kind of snuck themselves in, saying, “We’re splitting,” and causing a lot of confusion about what was going to happen. So exchanges listed them by default because they weren’t sure what was going to happen. And I guess BSV kind of had the same thing happen because they’re also very loud and noisy and caused a lot of confusion: because it’s a Bitcoin fork, people kind of thought, “Maybe we have to list them.” But that’s not really a way that is sustainable for any exchange to operate. You could fork Bitcoin; I could fork Bitcoin… Is the exchange going to support every single one? Is the code secure? Is the chain secure? It probably isn’t resistant to 51-percent attacks. There’s a huge ton of customer support overhead to deal with, too, when things like this happen.

So I guess it’s overall a big learning curve: people have to learn that Bitcoin is Bitcoin. Someone can fork it and make a copy, but you should probably have a policy against forks — otherwise, you’ll never be able to keep up.

SFOX: We previously spoke with Jimmy Nguyen from the BSV community about this, and one of the things that he mentioned was the difference between quantitative and qualitative criteria for an exchange listing or de-listing an asset. One of the things that Binance talked about when they published their de-listing criteria after-the-fact with BSV was the degree to which a project might be helpful or harmful to the overall crypto ecosystem. Do you believe that qualitative criteria, which might be harder to measure, have a place in whether an exchange decides to list or de-list assets?

Samson Mow: It’s been a long time since I’ve run an exchange, so I haven’t thought that much about policies. Quantitative criteria are tricky, too, because, as you know, numbers can be manipulated. If you say, “You have to have X volume,” someone will go and make the volume because it’ll cost them a couple $K per month to pay a market maker, but they’re going to make a lot more by having that asset listed and trading it. It’s probably a mix of the two: I would look at market depth, and at some qualitative measurements too.

SFOX: A project like Bitcoin, at least in the first instance, is all about decentralization: no third-party control over the network, and so forth. And then you have these very centralized exchanges that seem to be the arbiters of people buying and selling those decentralized assets. Do you think there’s some kind of paradox or problem that needs to be solved regarding centralized exchanges for decentralized assets, or do you not see that as an issue?

Samson Mow: It’s a tricky one because you need centralized exchanges for high-volume trading. For real decentralized exchanges, trading is very low-velocity. For example, there’s Bisq. They’ve been around for a long time. I would say they’re a real decentralized exchange: you download the client and run it yourself. But the problem has always been velocity: you don’t have large orders, you don’t have a large amount of people trading, and you can’t execute quickly. So there is a need for a centralized exchange to allow for that rapid trading.

But I think, moving forward, we’ll have a bit more trustless trading and trustless exchanges because we can do things like atomic swaps. So, large blocks of trading can happen between individuals through single-chain atomic swap transactions, or something like that. But I think there are different segments that different things fill, and centralized exchanges do fill an important segment for trading lots of things, leveraged trading, and things like that.

SFOX: As you said a couple of minutes ago, you haven’t been running an exchange for a while: now, you’re at Blockstream, which has its hand in so many things in the Bitcoin ecosystem. Why did you decide to leave BTCC for Blockstream?

Samson Mow: Well, part of it may have been creative differences with Bobby — like what direction the company should move in. And part of it is just that I find the stuff that Blockstream is working on very interesting. BTCC was actually one of the first entities to sign up for Liquid, and I think that was due to me, basically, because I thought it was really interesting tech: it has large implications for the industry as a whole, and it can address a lot of issues like liquidity and moving into things like trustless trading down the road. Single-chain atomic swaps are things that you can do in Liquid’s blockchain.

I decided to jump on to Blockstream because I wanted to launch Liquid. I signed up, I think, in 2015, and things were moving a bit slower, so I thought, “Okay, maybe I should join and help them launch this baby.”

SFOX: What do you see as the most exciting use cases of Liquid? Why did you love it so much that you felt like you needed to jump into Blockstream to make it move faster?

Samson Mow: So, the elevator pitch is that Liquid is an inter-exchange settlement network. It’s a sidechain, so it’s pegged to the Bitcoin blockchain. Essentially, you lock up Bitcoin on the main chain and unlock it in Liquid to give it unique properties: you can move it faster, and you can do interesting stuff within Liquid like issue assets — tokens, security tokens, stablecoins, anything like that. Assets within Liquid can also have their own Lightning Network. So, if you issued an “SFOX Token” in Liquid, you could eventually power that through an SFOX Token Lightning Network.

But the main thing about the network is letting people move Bitcoin quickly — that’s the primary focus. There are large spreads on different exchanges; we think that having Liquid and being able to connect to different exchanges and move Bitcoin rapidly should help with that. Also, if there’s congestion on the Bitcoin network, like we saw in 2017, Liquid should help. I think some of it is manufactured, but some of it is real, too: a lot of people are transacting inefficiently. Liquid is a single-purpose chain: it’s just for financial transactions. Now there are companies out there that spam the Bitcoin blockchain, like Veriblock: they’re just dumping transactions into Bitcoin, and they’re making up like 20%-30% percent of all transactions just to anchor their data to Bitcoin. I don’t think someone would do that in Liquid — it wouldn’t make as much sense — but, definitely, it’s a single-purpose chain, so you won’t be as congested. And if you do tokenize something in Liquid, you won’t run into the same problems as something like, say, Ethereum, where, if one project is successful, like CryptoKitties, then everything else grinds to a halt because all the blocks are full.

SFOX: And you avoid that problem that Ethereum has because Liquid is a single-purpose chain as opposed to Ethereum, which is multi-purpose?

Samson Mow: Yeah. We’re just about financial transactions: settlement of anything from Bitcoin to tokens, or whatnot. There’s no computing on the blockchain, which Ethereum is trying to do — and that’s their biggest problem.

SFOX: In my mind, the computing problem that Ethereum has comes with an analogous marketing problem: because Ethereum has so many use cases, it can be difficult to explain to someone exactly what Ethereum itself is. You mentioned that Liquid has a number of different use cases; do you worry that it will be similarly challenging to explain to people and institutions exactly what Liquid is? How would you explain Liquid, for example, to an exchange?

Samson Mow: So, for exchanges, we just tell them Liquid is inter-exchange settlement with asset issuance, it is high performance, and it doesn’t require a lot of resources — you can run a Liquid node on an old laptop, actually; it’s very lightweight.

Let’s keep picking on Ethereum: a lot of exchanges are having trouble keeping up with running an Ethereum full node, and the Ethereum guys keep changing the definition of what a full node is. But from an exchange perspective, a full node means that you can validate everything, and that is hard to keep in sync. So they keep adding more RAM, trying to optimize and do a lot of things, but it is getting more and more difficult. Eventually, you have to offload it to someone else to keep in a data center.

But for Liquid, it’s really lightweight. You can run it on a laptop — you probably wouldn’t, you’d want it on your server or something — but just by running the Liquid client, you can accept any token issuance in Liquid, in this one machine, and it is very lightweight. Because you’re not computing and stuffing all this smart contract stuff into the blockchain, it won’t get to become terabytes of data or become unwieldy.

SFOX: That’s pretty cool — and the notion of connecting all these different exchanges sounds not unfamiliar, coming from SFOX, since that’s a core part of our value proposition, too.

Let’s zoom out from Liquid and consider Blockstream more broadly. It seems, at a high level, that Blockstream’s projects and enterprises fit into one of two categories: those that are potentially revenue-generating and those that are more “pro bono” or simply for the sake of the ecosystem — with, on the one hand, projects like Satellite or Liquid, and then, on the other hand, things like Bitcoin Core development or c-lightning. How do you decide which projects to pursue in each of those categories, and what incentivizes Blockstream to be investing so much energy in the ecosystem that doesn’t directly return revenue to them?

Samson Mow: Okay, so maybe I’ll correct one thing first: Satellite is not a revenue-generating project. We can broadcast for fees, but that’s negligible compared to the cost. We do have some ideas that we want to do with Satellite later, but they’re still in the works. But Satellite is what we classify as a “halo project.” So we classify priorities like “Priority A,” “Priority B,” “Priority Halo.” And it’s just a coincidence that those are the letters for “Adam Back’s Hashcash.”

Satellite is a halo project. It’s just to make Bitcoin more interesting for everybody because people love satellites — they like sending up their receivers. It also makes Bitcoin more resilient. So there is a practical element to that: because we’re building everything on top of Bitcoin, we also need to make Bitcoin more robust. Liquid is anchored to Bitcoin, so we don’t want Bitcoin to have problems. Let’s say a network split: Blockstream Satellite can avert a network split. Say an undersea cable is cut to some country like Malaysia: they could potentially fall out of sync with the rest of the network. But if anybody in that country is running Blocksteam Satellite, they’ll keep the country in sync with the rest of Bitcoin, even if the internet is cut off. I think that without this redundancy, it’s hard to build the future of the financial system. If Bitcoin is the future of the financial system, it needs to have these redundancies and fallbacks.

Our main projects are Liquid, as you know, and we also have Cryptocurrency Data Feed. These are the two things that we want to be building on as the primary focus, and we will monetize them in various ways. We’re building products on top of Liquid that will be monetized — Liquid itself is all open source, and it’s a federation of members. So it’s not something we monetize directly — we charge fees to support the network, like customer service or customer support. But we have the ICE Data Feed, which we actually do monetize. That was developed in partnership with ICE, the owner of the New York Stock Exchange and Bakkt. So we aggregate data from crypto exchanges. I think we’re at 200 million trading quotes per day in the system. We’ve got 30 different exchanges in the feed and 60 cryptoassets. That is sold through ICE’s network and we have a share in it, but everything else we build makes Bitcoin better, and we have a use for it, too.

For example, we acquired GreenAddress, which was founded by Lawrence Nahum. That’s a popular Bitcoin wallet that’s multi-sig and highly secure. We’re also working to integrate it with the rest of things we need to integrate it with — say, supporting Liquid or other things down the road. So, everything fits together for what we’re trying to build.

SFOX: Blockstream is a cool enterprise because there seem to be so many big players in Bitcoin who are involved in it or have been involved in it over its existence so far. It seems like the one big departure that you guys have had so far was Greg Maxwell. Why did he decide to leave and work independently of the company, as supposed to staying with Blockstream?

Samson Mow: Greg was always half-time: his time was split between working on Bitcoin open-source projects and on Blockstream as CTO. So, he was helping build up the company, and I think he felt it was time to focus solely on Bitcoin — that’s his passion.

The interesting thing about open-source development is that we can still work together with him on a lot of stuff that we need to work together on, whether it is Liquid or Satellite — these are all open-source projects. So, despite him not being CTO by title, we still actually have a lot of communication with him, and he still helps out on a lot of things, too. If it were a traditional company building something closed-source, it would be a bit different, but for us, everything we’re building is basically open-source, so it’s still very collaborative.

Blockstream Satellite is Greg’s baby. It was something he thought up originally. So, of course, he’s still very invested in advising and keeping it on-track.

SFOX: There’s this interesting notion out there — maybe a joke notion to some, maybe a serious notion to others — of “The Blockstream Spy” — for instance, Jihan Wu saying that maybe Craig Wright is a Blockstream spy. What are your views on this? How someone can prove they’re not a Blockstream spy?

Samson Mow: So that example you gave is interesting because there were people on the BSV side who were saying Jihan was a Blockstream spy, too. So that’s kind of why I decided to make had to poke fun at the silliness. So, everyone is a Blockstream spy.

So, to answer your question, you can’t tell who is or who isn’t a spy. Someone who is wearing the “Blockstream Spy” hat could be a Blockstream spy and is wearing the hat to convince you otherwise — like, “Why would a spy wear a hat saying he’s a spy?” See, that’s the brilliance of the hat.

SFOX: I love the silliness of that, but I do feel like there’s something more serious there that’s related to the openness of the ecosystem, as we were just discussing. On the one hand, you do have that open-source, collaborative nature. On the other hand — especially in the last few years, with some contentious forks — it seems that, in various pockets of the ecosystem, there is a lot of distrust and animosity between different factions. You’re one of the biggest people on “Crypto Twitter,” so I know you’re familiar with this firsthand.

How do you view that other side of the crypto ecosystem and community? Do you have any recommendations to ordinary people in the cryptoverse regarding how to communicate with each other in a productive way and move the ecosystem forward?

Samson Mow: That’s a very salient point.

I mean, there are a lot of conspiracy theories out there. I think I’ve seen I’ve seen them, all pretty much. You know, there are theories that say Bilderberg controls Blockstream because, I think, someone from the Bilderberg Group was the chairman of AXA and AXA’s venture arm invested in Blockstream. Therefore, you know, we’re trying to destroy Bitcoin because the Bilderberg Group doesn’t like Bitcoin.

I guess the easiest way to cut through it is to understand open-source development — that is the root of all of the problems, misunderstandings, and conspiracy theories, I think. When Blockstream was founded, a lot of its founders were contributors to Bitcoin. So people said, “Okay, all these guys got together and made a company: now Blockstream controls Bitcoin.” But that’s really not how it works; open-source development doesn’t work that way. You still have to develop in public, discuss things in public… There is a committee to go through everything, and then things that are built and done go through a maintainer, which will merge them, and the maintainer cannot maliciously merge it. Bitcoin is not the repo. There’s a lot of things like that. It all comes down to this misunderstanding.

If you’re a developer, and you work on Bitcoin, and you fix a bug today, does that mean you’re always a Bitcoin developer — if you didn’t work on it for five years? But people kind of think, “Oh, those guys are Bitcoin developers.” But they’re really just developers: they may contribute; they might stop contributing. I think one example is Peter Todd, who calls himself a former Bitcoin contributor. I don’t think he does anything anymore, but he’s still associated with the project, and the things that he says have weight because he’s a smart guy and he’s influential. But he doesn’t control anything. So I think the biggest misunderstanding still stems from all of that.

So, for the regular people: Just look up ‘open-source development’ and try to get a grasp of how it works. I think that will help frame a lot of the understanding and clear up a lot of the FUD.

SFOX: Let’s push that a little further. In addition to these forks and various factions forming over the last couple of years, there’s been a lot of discussion about the original intent behind Bitcoin — culminating in the naming of BSV, literally calling it “Satoshi’s Vision.” From your perspective, what, if anything, do you think is the role of the original intention with which Bitcoin was created? Is that something to which developers are beholden now or should look to as they continue to develop Bitcoin, or do you think that’s just an artifact of the past — or something else entirely?

Samson Mow: It’s interesting you brought that up. I actually wrote an article for CoinDesk, for the January 3rd Bitcoin tenth birthday, about why the white paper is not the Bible. If you go and check the article — it’s on samsonmow.com, that’s my personal blog — I outline how Bitcoin came to be. Satoshi wrote the code first — then he wrote the white paper. So, the white paper is more of a summary of the code than anything. The code is really what matters. It’s not about the white paper; the white paper it papers describing simply what the code does. And that description will change as the code evolves over time.

There are a lot of things that are not in white paper, like mining pools. Mining pools are something that happened after. Does that mean we should get rid of mining pools or see them as a bad thing? Not really. A lot of things have changed since the white paper. It’s just a document that was written 10 years ago, and Bitcoin evolves. It’s software: software has to evolve. And if you are a developer or are aware of how development works, you understand that things keep changing: there are bugs; there are dependencies on other things like libraries that may have security holes in them that need to be patched later on. It has to keep evolving over time.

I guess the most concrete example is that people are worried now about quantum computing. Well, eventually, something will be done to minimize the threat of quantum computing breaking certain parts of Bitcoin — but that’s not going to be in the white paper either, right? Ultimately, Bitcoin is a piece of software we run because we choose to run it. You can always opt out, and that’s what some people do when they go and follow BCash (BCH) or BSV and want to follow some original vision — and it’s totally okay that they choose to do that.

But the bulk of the people? You know, if you look at the price, Bitcoin (BTC) is 95% bigger than BCash (BCH). The bulk of the people are following Bitcoin, and they understand what Bitcoin is, and they don’t really care what the title of the white paper is, or even who Satoshi is or isn’t.

SFOX: So it sounds like your philosophy, in a nutshell, would be: “Code first, ideology second.”

Samson Mow: Yeah. Even Satoshi said, “I’m better with code than with words.” So if you want to follow ideology, then read what Satoshi wrote, and follow that.

SFOX: You say that people can opt out of something like Bitcoin, but it also still controls so much of the overall market cap of crypto, and Blockstream is pretty squarely focused on Bitcoin as opposed to crypto more broadly. Given all that, what do you see as the relationship between Bitcoin and all of the altcoins out there — both in terms of what the relationship is now, and what you think the relationship ought to be going forward?

Samson Mow: Well, I think Bitcoin is in a class of its own. Every altcoin is created by a person or a company that is backing it, actively marketing it, and actively controlling development. But for Bitcoin, Satoshi put it out there and then disappeared, and has still disappeared, and the developers are all working on it and making it better. So it’s kind of taken on a life of its own.

Someone coined the phrase “Bitcoin had a virgin birth.” None of the altcoins have that. They’re all copies of Bitcoin’s concept. But without that kind of virgin birth, you can’t really compete because someone is able to assert authority over the network and control the roadmap or have influence over that. So I think Bitcoin is in its own class, and then there’s everything else. And in the “everything else,” there are also different classes, too: there’s really scammy stuff and there are real legitimate projects.

SFOX: Do you have any advice to people out there who are reading this about how to discern the scammy projects from the legitimate projects?

Samson Mow: That’s really tricky. You know, being in this space for a long time, you understand, but for someone new, it’s very hard because a lot of the scammier projects look very shiny and pretty. That’s why they’re scammy, right? People say Bitcoiners are really mean and toxic because they tell you the truth that you don’t want to hear, whereas the conmen are very nice, and they say very nice things, and they make you feel really good, and it’s a different experience.

So I guess the simplest way to tell people would be to say: If someone’s trying to sell you on a project, or sell a coin to you, it’s probably not a good coin. With Bitcoin, there’s no marketing behind it: it’s just that people decide to have it, own it, and use it. If there’s no marketing, then it’s probably a legitimate project. But if there’s a marketing team and you’re seeing ads on Facebook or on Twitter, then maybe you should think twice.

SFOX: How do you use Bitcoin in your everyday life?

Samson Mow: I don’t — I use credit cards!

SFOX: Okay, so you don’t really have an everyday use case for it at all yet?

Samson Mow: No.

SFOX: I guess that’s why you’re investing so much in the infrastructure still?

Samson Mow: Well, Bitcoin does have a use. It’s more of a store of value and a medium of wealth transfer. It’s not something you would use every day in payments. I’ve said this before, and people have twisted around and said I hate Bitcoin, but Bitcoin is bad for payments.

You don’t design a payment system that takes 10 minutes to settle on average. It’s not 10 minutes: it’s on average 10 minutes, so it could take three hours sometimes. If you’re a trader, this is why people want to use Liquid for two-minute full settlement: it’s one-minute block times and about two minutes for settlement. So if I’m wiring money to an exchange, I know, “Okay, I’m going to have my confirmation in a minute, and it’s going to settle in two.” That’s way better if you’re trying to arb or trade than sending it and waiting for six confirmations, which could be an hour or maybe more.

But yeah, going back to the point, it’s not good for everyday use because you shouldn’t be making payments with it: you should be making payments over the Lightning Network because that is instantaneous and almost free. That’s what it was designed for. Everything is designed for a different purpose. Bitcoin was designed for settlement and wealth transfer. Litecoin — ah, sorry, Lightning; Charlie’s going to like that one! — Lightning was designed for fast payments and cheap payments.

SFOX: And, in fact, one of the things that you’ve said before is that Bitcoin is really just, at bottom, information: it’s information that a lot of people see as money. How do you see the ways in which the world will ultimately use and see this information that is Bitcoin?

Samson Mow: Well, we generally use things however we want, right? We use a metal, which is gold, for storing wealth and value transfer. We use paper for money, too. Why do we use paper? It’s not really good: you can burn it or shred it. But in general, we just use things how we want to use them. Just because Bitcoin is information, it doesn’t really change that.

So we ended up using information as money too, which is kind of what we do, right? But it is different because it changes the dynamic of how people have control over their money. With gold and fiat, it’s not really under your control now. I think before digital money — like, dollars in your bank account that you see online — people did have their own cash. They would stuff it in a mattress or a bank vault or whatever, but that’s not really good. Gold is also not really good because you have to pay people to secure it. You have to make sure it’s not fake, and how do you do that? You have to melt it and reforge it. Bitcoin is superior in all these aspects, so it makes sense why we decided to treat this certain information as if it were money because it’s really better in every single way.

You can use it for payments too, with Lightning, and that changes the whole dynamic. The bulk of our transactions today are on credit. And it is costly because the credit card processors take 3 to 4 percent — I think they’re trying to go up to 5 now. So it is getting expensive. But now if you’re transacting bitcoin over Lightning, you’re not doing it on credit and the fees are almost zero. So it does change the whole equation a lot.

SFOX: In terms of upcoming protocol changes in Bitcoin, Samson, I know you’re excited about Schnorr and about L2 — are there any other ones that really have you excited going forward about changing Bitcoin or impacting the future of crypto?

Samson Mow: I like privacy; I like confidential transactions. We have those in Liquid, but I think it would be beneficial for Bitcoin to have confidentiality at the base layer. I think that’s what Bitcoin is missing to become the best money. And it’s not that we can’t have privacy on Bitcoin today. You can do it, but it’s not widely distributed. You have to know, first of all, that every transaction is visible in the Bitcoin blockchain, susceptible to analysis, and then you have to know that you can have better privacy if you take certain measures, and then you also have to know that you can use a mixer or some software to make your transactions more confidential.

This information is not widely distributed, so some people will know how to get a better level of privacy and others won’t. So it is better overall if privacy is a default — at least, that’s my opinion. It’s a pretty hot topic: Should we have privacy at Bitcoin’s base layer? Some people see it the other way and say that it’s going to be contentious, so we shouldn’t do it — Lightning, according to them, will be good enough. But I think it’s important for the base layer as well.

SFOX: In terms of the various projects that are out there and potentially interactive with Bitcoin in the future — things like stablecoins, or Lightning Network, or Facebook’s Project Libra — do you see them as all in a competitive marketplace with one another, or do you think ultimately complement one another?

Samson Mow: I don’t think Libra competes with anything in the crypto space. It might be a crypto token, but since it’s coming from Facebook, there is no way that they’ll be able to let just anybody freely transact it. They’re going to have to control who can send to whom in various amounts, because it’s a company: they have to follow the same rules for money transfers as PayPal or any of those competing in the payments and money transfer space.

That’s the problem with a lot of these projects: people think they compete with Bitcoin, but they actually compete with other centralized payment systems that are already in existence. And it’s good for them because they get some buzz — you know, it’s like adding ‘blockchain’ to your company name on the stock market. It’s good for you, but it doesn’t really change anything. So, I think Bitcoin and Lightning are kind of their own class, and then all these other projects like Libra are just different dresses on the same pig.

SFOX: One of our team members had been wondering whether Facebook’s Project Libra could potentially help Lightning Network better handle offline payments through improved mobile wallets, but if Libra is “a different dress on the same pig,” it sounds like you would say that Facebook is not the way to help Lightning Network.

Samson Mow: Yeah, it doesn’t sound like they’re going in a direction that will help Bitcoin payments. I think that what Square is doing is helping a lot more. They’re selling Bitcoin in the Cash app and allowing people to transact there. And I believe they also invested in Lightning Labs, and I know that Jack has spoken highly of Bitcoin. So, I would bet money that Square will do something to advance the usability of Lightning much faster than anything Facebook does.

I think they also started that program where they’re going to have Bitcoin developers — I think they said “crypto developers,” but developers for Bitcoin — and they have one position for a user experience designer, which is interesting, too, because that’s something that a lot of people who are working in Bitcoin don’t really think about — it’s very engineering-heavy. That’s also part of the blockchain culture, but the usability and user interface part is a massive area that needs a lot of attention.

Yeah, I think Square is going to do more for Bitcoin than Facebook is going to do.

SFOX: Besides Blockstream, you’re also one of the Magical Crypto Friends. How did that get started? What was its inspiration, and what is its goal?

Samson Mow: I think it was started by a tweet — I forgot who tweeted it; I don’t think it was the four of us — but Charlie, WhalePanda, Riccardo, and I were talking in some thread, and I think someone commented on the thread saying, “You guys should do a show.” So after that, we made a group on Twitter, and talked, and said, “Should we do it?” And we decided, “Yes.” So it’s kind of like everything we do: on a whim. So we said. “Okay, let’s do a show,” and then we did a show. We didn’t know if we would keep on doing it, but it’s, like, a year-plus later and we’re still doing it. So, obviously, we did.

We did the Magical Crypto Conference this year in New York on May 11th and 12th, which was also on a whim. I think we were at Consensus last year, and we said, “We can do a better conference — let’s do one next year,” and then we did it. The four of us like to have fun and not take ourselves too seriously. That’s kind of the underlying tone of Magical Crypto, and that kind of applies to everything we do.

SFOX: That’s a pretty big difference from a lot of people in the crypto space, especially on Twitter, who seem to take themselves so seriously.

Samson Mow: Yes, I think so. But it doesn’t help, I think, in the long run, because everything is changing, and everyone is learning as they go.

SFOX: What do you see as some of the biggest opportunities and challenges for the crypto space right now?

Samson Mow: From talking to a lot of people, there is an interest in tokenized securities, or security tokens, and that’s something we’re interested in, too, because that’s something that can be done on Liquid. And it does make sense because, as I talked about before, you can have a single-chain atomic swap. So, say you have a stablecoin and all these tokenized securities and L-BTC, which is Liquid Bitcoin. Then, you can start trading in large blocks in a more decentralized way. So, if you want to trade a thousand shares of SFOX for some bitcoin, we can do that atomically. That means the trade executes at exactly the same time — there’s no counterparty risk.

But there are also interesting things that you can do, too, like trust-minimized derivatives or peer-to-peer derivatives, too, which is kind of along the same line. We did a test recently with our partner, Crypto Garage, where we did a Bitcoin forward contract. We went long, they went short, and we lost two hundred bucks, but it was all done in a way that we only had to trust the outside oracle that we chose, not each other.

SFOX: And what about the challenges that the crypto space most needs to overcome right now in order to continue advancing?

Samson Mow: I would say understanding what cryptocurrencies are. I think, in general, the general population looks at a lot of this stuff and they think they’re stocks: they have a ticker symbol, a nice logo, and a nice-sounding name. But they’re not stocks: anybody could make a cryptocurrency or a token, and there is a lot of confusion about that. There’s a lot of cross-confusion. People look at it like it’s the stock market, too: they look at the market cap; they don’t look at how many units are issued. So, you know, there’s how many billions of XRP out there, right? And people look at the price of an individual XRP and say, “It’s very cheap” — but there’s several billion of them, and people don’t account for that.

But there are some new sites coming up — I think Messari has one, OnChainFX, and I think there are a few others, like CoinMarketBook.cc — and they’re trying to show things in a more accurate way that reflects total issuance or factoring market depth, or other things like that. But if you’re looking at just the price and volume, you’re missing the forest for the trees; you’re just looking at the wrong thing.


Thanks to Samson Mow for sharing his thoughts on Bitcoin, the politics of software development, and the state of innovation in the blockchain sector.

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The above references an opinion and is for informational purposes only. It is not intended as and does not constitute investment advice, and is not an offer to buy or sell or a solicitation of an offer to buy or sell any cryptocurrency, security, product, service or investment. Seek a duly licensed professional for investment advice. The information provided here or in any communication containing a link to this site is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject SFOX, Inc. or its affiliates to any registration requirement within such jurisdiction or country. Neither the information, nor any opinion contained in this site constitutes a solicitation or offer by SFOX, Inc. or its affiliates to buy or sell any cryptocurrencies, securities, futures, options or other financial instruments or provide any investment advice or service.

SFOX Edge

Crypto analysis from SFOX, the primier crypto trading venue.

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SFOX Edge

Crypto analysis from SFOX, the primier crypto trading venue.

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