avbpod

bitcoin

What I've learned from going to conferences in 2024

Divi


Is Relai, app the Herbalife of the bitcoin space?

The social MLM dynamics of Relai app

Relai app, is a  Bitcoin savings app, has gained popularity for its user-friendly interface and convenient features. 

However, its referral system, reminiscent of multi-level marketing (MLM), has raised some red flags and general concerns about potential user exploitation and negative impact on the bitcoin space in general. 
In this piece, I’ll go over the reasons why.

First of all, the Relai's Referral system works as follows:
Relai's referral system is designed to incentivize users to bring in new members.
The more users a person refers, the lower their own transaction fees become. This structure creates a tiered system where early adopters can significantly reduce their fees by recruiting a large network. In its core, they let users save or buy a scarce asset like hard money bitcoin, by incentivizing the marketing of the Relay app itself. 

Most traditional MLM schemes offer products that are nearly worthless. While Bitcoin itself is far from worthless—being considered "hard money"—Relai’s service is essentially just a way to access Bitcoin. However, Bitcoin can also be purchased through various other channels, not just Relai.  They’ve put themselves, and their social scheme between the potential buyers and bitcoin, with a social incentive.
Unlike some MLM companies that exclusively sell their own branded products, Relai’s "product" is its marketing and app, which facilitate buying Bitcoin through their platform. In reality, you can easily buy Bitcoin through exchanges, peer-to-peer transactions, or other direct sellers, bypassing the need for Relai altogether.

MLMs leverage a social proof principle, where they encourage people to join based on the decisions of their peers. This tactic exploits people’s natural tendency to follow what others do, creating a false sense of consensus around the scheme's effectiveness. Obviously this a counter-incentive to everything where bitcoin stands for.

The company itself is different from their “marketing” squad of course, however, even there they seem to recruit their next employees from this pool of Relai Squad members. For many, a bitcoin job in itself is a goal in life. So this incentive, to maybe be the chosen one to work at their company, is an extra social dynamic to take into account. If you behave well enough, you just might get picked.


The Drawbacks of Relai's MLM-like Approach are plenty.

 * Time & Effort investment. Users are required to actively promote the app to friends and family, which can lead to strained relationships. Constant recruitment efforts often result in friction and, in some cases, lasting damage to personal connections.

 * Over time, users come to trust the Relai app to set their transaction fees, even when cheaper and more convenient alternatives are available. This creates an environment of irrational groupthink, where many members continue to guide newly onboarded users into the MLM scheme without questioning its value or impact. 

 * Disproportionate Rewards: The rewards are concentrated at the top of the referral pyramid, leaving the majority of users with minimal benefits, clamoring for better fees by promoting their referral codes.

* The so-called “Relai Squad” members primarily focus on disseminating their referral links to obtain kickbacks on transaction fees. Their engagement often lacks the depth of knowledge and philosophical alignment with Bitcoin principles required for meaningful onboarding. Instead, their efforts are predominantly motivated by the short-term incentive of reduced fees. In essence, making them the bitcoin-users level alternative of someone selling sets of “Amway” Beauty and Personal Care products.

 * Undermining Bitcoin's Ethos: Bitcoin is designed to empower individuals, but Relai's system creates a dependency on the platform and its fee structure.

 * Psychological Manipulation: Users may feel pressured to recruit others to avoid higher fees, leading to feelings of inadequacy or exclusion. While also feeling the pressure to belong to their local Relai Squad groups, where people in similar situations and mindsets flock together in order to get rewards.

* Participation in the Relai scheme (Squad members) often puts strain on personal relationships, as individuals may become overly eager to recruit new users to secure lower transaction fees for themselves. This can lead to forming less desirable social connections solely to spread referral links. Participants may feel socially pressured to promote Relai's products and bring others into the scheme, which can ultimately result in social isolation and the erosion of their natural support network. 

Broader implications for the Bitcoin space:

Specifically, the Relai app approach highlights a trend of businesses  adopting Amway and Tupperware like models to advance their marketing reach. 
This can have significant consequences:

 * Reinforcing Negative Perceptions: Such practices reinforce negative stereotypes about Bitcoin as a space filled with scams and Ponzi schemes.

 * Gatekeeping is also a key part of this scheme, turning access to “cheaper” transfer fees into a privilege that's mostly reserved for those willing to navigate through their network of local referral-link promoters.

Ethical innovation
To ensure the long-term health of the Bitcoin ecosystem, it's crucial for businesses to adopt ethical business models. An MLM scheme is not the way to go for this, certainly with the negative social impact of referral links chilling. 

Transparent fee structures, fair reward systems and a user-centric approach are essential to foster trust and encourage wider adoption.

Conclusion


Relai's MLM-like referral system raises serious concerns about user exploitation on a social level and undermines the core principles of Bitcoin of consensus and getting rid of middlemen. 

As Bitcoin continues to evolve and continues its reach, it's imperative that the community prioritizes practices that don’t promote middleman products in a “fiat way”. 

In my opinion, a centralized company using MLM tactics has no place here. Their real-life impact on local communities is harmful, driven by the pursuit of dopamine hits from promoting referral links—no different from shitcoiners shilling kickback links for shady exchanges.

When it comes to Relai, those who willingly participate in this MLM scheme seem either uninformed or focused solely on short-term gains, missing the broader principles of Bitcoin. We can and should do better.

In short, in my opinion Relai app, and certainly their marketing tactics, makes them little different from Bitcoin-versions of Amway, Tupperware or Herbalife.

Deadeyes 
For AVB


Is Relai, app the Herbalife of the bitcoin space?

Why the Digital Euro is a threat to your financial Freedom

The European Central Bank (ECB) is pushing forward with the idea of a Central Bank Digital Currency (CBDC), commonly referred to as the "digital euro." At first glance, this might seem like a logical step in our increasingly digital world. After all, we’ve already gone cashless in many respects, with online banking, contactless payments, and mobile apps making the handling of physical money seem outdated. But the introduction of a digital euro is not just a technological upgrade. It brings with it a host of dangers that threaten to undermine the very essence of financial freedom.

Programmability: The Digital Euro’s Trojan Horse

A core feature of the digital euro, as proposed by the ECB, is its programmability. By definition, this means that the currency could come with built-in restrictions or rules, dictated by the authorities. In theory, it might seem harmless—imagine a government program that sends digital euros to citizens with conditions on how they are spent, such as only allowing them to be used for basic necessities.

But let’s face the harsh reality. Programmability is a slippery slope. Once a government or central bank can dictate how money is spent, they hold unprecedented control over citizens' financial autonomy. What happens if these restrictions are expanded? Will you be barred from using your digital euros for things that don’t align with government policies? Could your money be programmed to expire, forcing you to spend it within a certain time frame or lose it entirely? These aren’t far-fetched questions, because it’s exactly the kind of control that a programmable currency makes possible.

Limits and Expiry: The End of Economic Freedom

Cash is versatile. You can save it, store it, and spend it as you see fit. But the digital euro would come with limits—both on how much you can hold and possibly on how long you can hold it. The ECB has hinted that individual holdings of the digital euro could be capped to prevent “excessive” use. Essentially, this would mean that the state could decide how much money is “too much” for an individual to possess.

What’s more, with the programmability feature, which the ECB marketeers systematically deny or even shrug of as "no issue", the ECB or other governing bodies could impose expiry dates on your digital euros. Imagine being unable to save your money for the long term, as your digital balance shrinks or vanishes after a specific period. This is the opposite of financial security. It's financial control.

A Currency Tied to Your Identity

Unlike physical cash, which provides a certain degree of anonymity, a digital euro will be linked to your ID through the metadata embedded in every transaction. Authorities will have complete visibility of how, where, and when you spend your money. While this might be sold as a tool for combating fraud or tax evasion, it also opens the door to surveillance and control.

The idea that the government could have unfettered access to your financial activity is deeply unsettling. Every transaction could be monitored and analyzed, creating a financial surveillance state where the authorities wield immense power over your economic life. The concept of financial privacy would become a thing of the past.

An Endless Supply: Inflation’s Silent Thief

Another fundamental problem with the digital euro is that it will have no fixed supply. The ECB could create as much of it as they see fit, which is the very definition of inflationary monetary policy. In the long term, this endless creation of digital euros will erode the purchasing power of the currency, robbing savers of their wealth.

Unlike Bitcoin, which has a fixed supply of 21 million coins, the digital euro would be subject to the whims of central bankers. Whenever they decide to print more, the value of the currency in your digital wallet will decrease. This inflationary risk is another way that citizens would lose out in the long run.

 A True Digital Equivalent for Cash? Put It in the Constitution

If the ECB genuinely wants to convince the public that the digital euro can be trusted as a real digital equivalent for cash, they must do more than offer assurances. They should enshrine its fundamental characteristics in the European Constitution, ensuring that no entity—not even the ECB itself—can ever program, limit, seize, or impose expiry dates on digital euros. These principles should be protected by law, ensuring that the digital euro retains the essential freedoms of physical cash.

Unfortunately, this is unlikely to happen because programmable control, limits, and surveillance are not just theoretical concerns—they are central to the ECB’s plans. The ECB is moving towards a system that benefits central banks and governments at the expense of ordinary citizens.

Conclusion: A Digital Euro We Cannot Trust

The introduction of the digital euro represents a threat to financial freedom. It is programmable by nature, tied to your personal identity, and subject to limits and inflationary risks. If the ECB truly wants to establish a digital currency that citizens can trust, they must constitutionally guarantee that it will never be subject to control, manipulation, or expiration.

Until such guarantees are made, the digital euro will remain a tool for potential financial control—one that every European citizen should view with extreme caution.

(this was written as a distillation from my previous blogposts in Dutch, and compressed by an AI because of time constraints).

@AVBpodcast



Digital Euro : a Threat to Financial Freedom

The Hardware Wallet Supply Chain: A Ticking Time Bomb?

Let’s face it: we all want the peace of mind that comes with securing our Bitcoin, and most of us, myself included, have succumbed to the allure of hardware wallets. They offer that warm, fuzzy feeling of "security." But, have we ever stopped to think about where that fancy little gadget comes from? Who made it? And what devilish surprises might be lurking under its sleek, polished shell?

We Bitcoiners love to talk about decentralization, personal responsibility, and trustlessness. Yet, when it comes to our hardware wallets, we willingly place an enormous amount of trust in supply chains we know absolutely nothing about. Were the chips made in Switzerland? Is the lay-out of the PCB (printed circuit board) made in Nigeria, Belgium, South-Korea or Texas?
What do we really know about the secure element chip that supposedly keeps our funds safe? And generates a seed phrase?
Is it really secure? Or are we, in fact, trusting the very people who might just have a backdoor key to our vaults? Or even worse; are out to get more and more people to use hardware wallets (lots of ads these days for that) in order to lock as much supply in Bitcoin as possible on "their" devices.

The Paranoia is Real

If you think the idea of someone tampering with your hardware wallet in the supply chain sounds far-fetched, let me remind you of a little-known historical nugget: government agencies have been infiltrating hardware manufacturing for decades. 
In recent examples, in Libanon, the walkie-talkies, and even beepers were fitted by "some entity" with explosives. Sometimes hundreds of thousands of units were compromised with live explosives — so don’t think for a second that the same couldn’t happen to hardware wallets in some other way! 

Devices were disassembled, tampered with, and then neatly reassembled, ready to be shipped out to unwitting customers. All of this was done at a grand scale by people with a lot more patience, time, and resources than we can imagine. If a government can pull off infiltrating something as benign as a walkie-talkie, why wouldn’t they do the same with hardware wallets, especially when the stakes are so much higher?
It's a LOT more cheap to sabotage our bitcoin network through hardware device sabotage than through trying to control mining.

But My Wallet Is “Secure”

Ah yes, the famous *secure element* chip in your hardware wallet. It’s the centerpiece of every hardware wallet marketing pitch. Supposedly, this little marvel of engineering ensures that your Bitcoin keys are generated in a way that’s tamper-proof. But do you know who made that chip? How do you know it hasn’t been compromised somewhere along the supply chain? The truth is: you don’t. It could’ve been swapped out for a less secure version, one that’s designed to generate seed phrases that fall within a specific, predictable range of possibilities. Or, why not leak your data whenever possible, or brick your device.

Imagine, for a moment, that an attacker has knowledge of these “less secure” seed phrases. They don't need to brute force the entire possible range of seed phrases, just the compromised range. In this scenario, your private keys aren’t all that private anymore, are they? And the worst part? You wouldn’t even know it.
One day, the attacker decides they have enough percentage to do damage and they pull the trigger, like it's a series of beepers in the Middle-East.

You may argue that such an attack is improbable or that hardware wallet manufacturers are doing a bang-up job ensuring supply chain security. But, if we can’t even figure out where most of our everyday electronics come from, how can we possibly be certain about something as niche and as specialized as a hardware wallet? 

The One-Shot Attack: Nightmare Fuel

But let’s get a bit more creative. What if attackers didn’t need to swap out the chip to exploit you? What if they could wait until your shiny, trustworthy hardware wallet is finally connected to your computer? It’s not like you’ve *never* done that, right? You just wanted to move some coins around, so you plugged it in for "a quick transaction." (I’ll be the first to admit, I’ve done it too—it’s just so convenient, and more easy than to write signed transactions on an SD card and importing them elsewhere.)

Now, imagine this: the minute your wallet connects, it executes a pre-programmed, one-shot attack. Maybe it wipes your seed phrase from the wallet, performs unauthorized transactions, or sends your private keys over the internet to some shady entity watching your every move. Poof! Your Bitcoin is gone, and you’re left wondering what on earth happened. And you'll be left with a backup of a worthless seed phrase.

Sure, you might argue that “true” cold storage means never connecting your hardware wallet to the internet. In theory, you’d be right. But come on. Most of us plug it in because, let’s face it, we’re lazy or just want the convenience of managing our funds without feeling like we're in a Tom Clancy novel.

Transparency is a Pipe Dream

So, what’s the solution? Transparent, auditable hardware wallets? 
In an ideal world, that sounds fantastic. Unfortunately, in today’s reality, it’s a fantasy. As long as manufacturing is outsourced to various obscure factories, and components are produced across multiple countries, full transparency will remain an unattainable goal. Setting up our own Bitcoin-exclusive chip manufacturing plants? Good luck with that. I’m sure the some three-letter agencies and a handful of other interested parties will be more than happy to leave us alone while we build the Bitcoin hardware utopia.

Until then, we’re left with opaque supply chains, and each of us is basically hoping we’re not the one who gets the compromised hardware.

Low-Tech is the New High-Tech

So what’s the answer? 
Honestly, it might just be ditching hardware wallets entirely. Maybe the ultimate security isn’t in relying on some fancy gadget but in going completely analog. Write your seed phrase on a piece of paper or engrave it into a metal plate. Tuck it away somewhere safe and trust no one. No supply chains, no chips, no fancy tech. Just you, your seed, and cold, hard metal. Sure, it’s not as flashy as that shiny Coldcard or Ledger, but you can rest assured that your seed phrase won’t magically disappear in some one-shot attack or become vulnerable to compromised supply chain espionage. 
We need more investment in Shamir Shared Secret in my opinion, a fairly low tech way to secure seed phrases that don't depend on hardware in essence (but that's a different subject, where we should rely on open-source code only and NO hardware).

It may seem inconvenient or outdated to go fully low-tech, but is it any more absurd than trusting a global supply chain we can’t monitor or verify? 
Don't trust, verify... we all do it. Except for hardware wallets.

Conclusion: Let’s Not Kid Ourselves

The supply chain for hardware wallets is mostly a black box, and anyone who tells you otherwise is selling you a dream or handy marketing gimmick. ("Hi there, coinkite") .
Governments and malicious actors have been infiltrating supply chains for decades, and there’s no reason to think that hardware wallets are immune, the recent explosions in the Middle East, can be a rather grim reminder of that.

Until we get transparent and auditable hardware (don’t hold your breath), the safest bet is to go back to basics. The paranoid might just be the last ones standing when the hardware supply chain bomb finally ticks down to zero.

So next time you reach for that wallet, ask yourself: "Do I really trust this thing?"

@avbpodcast @deadeyes 

The Hardware Wallet Supply Chain: A Ticking Time Bomb?

How bitcoin helped beat coffee addiction

lightning

The first lightning try-outs and development efforts began in early 2015.

The first testnet efforts, the first eclair wallet and the real life lightning payments went in test phase around that same time. 

The public real live network use started in 2017.

On December 28, 2017 a user (Alex Bosworth) made a payment online with lightning. Other sources claim that the first lightning payment happened in Berlin, in the famous Room 77. 

Whatever the real first LN payment was and where it exactly too place,  is not relevant for what I want to say. Fact is that lighting is almost 9 years old now (counting from dev tests to today). And still the market hasn't decided yet what the go-to wallet should be. That alone, is rather telling.In any market (browsers, gaming consoles, phones, fast-food restaurants,…) you get a market leader after a few years. 

You would have expected a clear top dog by now. A company or project who’s excellence jumps out from user perspective and usability, stability and technical compatibility.

We're actually far from that moment. 

Wallet of f’ing

There’s a token “winner” however. That’s “Wallet of Satoshi”, which we all know is an accident waiting to happen. It’s not really a LN wallet, but a service absorbing liquidity while faking a wallet on a front-end. It works though… for now.

The other wallets are all having issues. They’re either close to unusable by an average user, slow, incompatible, buggy, unstable, custodial garbage and if they work fine, they usually ask a high fee (defeating the purpose of using LN in the first place) or have other drawbacks (like having the most rotten interface ever).

One example of the state of the lighting network is the recent encounter with the fine technical wallet called “Mutiny wallet”, which I foolishly tried to use as a vehicle for “onboarding” a new user. What a mistake to make.

The on-screen messages are a disaster, the opening of a channel is not announced properly, the fee is not calculated (from user perspective) and the handling of the wallet is absolute s*** for non-tech users. (As bitcoiners WE know that a channel needs to be funded and opened, and that will take some time). The user doesn’t know this, and has no clue. There’s not even a message indicating that this is a one-time-only event! (crucial for onboarding!).This is just one example from a wallet I actually like myself. That’s why I tried it.I also attempted to onboard people with about every wallet under the sun (including eclair !) and it ALWAYS fails (except for Blink and Wallet of Satoshi).

Layer No thanks

The main issue is not that we don’t have good devs or the designers suck (although some of them … ) … no, much has to do with how difficult and complex lighting itself actually is to maintain in the background.

Talk to anyone who’s maintaining a LN node for longer than a few months and you’ll notice a rather deep rabbit hole they’ve found themselves in after a while. On top of this complexity they are hardly getting a break even on lighting fees.

The challenges are many : no earnings model, routing problems, close to no redundancy is possible (you can’t put two identical nodes online and have one play backup for the other that would be breaking the setup), liquidity balancing, baby sitting channels, watchtowers, forced closes of channels, scummy nodes and taking the hit when something goes wrong on the still in development network… 

The flip side is a growing demand for LN payments (anyone wants to instantly pay with bitcoin at close to free transaction cost).

The main challenge remains onboarding users in my opinion. After 9 years, we should have something better then 20 wallets and only one fake one that “works”. If you talk to a new user, who’s even willing to listen to “a bitcoiner doing his thing” you don’t have much time to get them onboared. The elevator pitch is usually about 30 seconds to 1 minute. (not 10 minutes, dear Aqua wallet:) When you have one shot at a user installing an app on their phone, you don’t have much choice.

You go for Wallet of f’ing Satoshi. Because you know the only way that this lightning network can show it’s magic, is when a dodgy company with rarely seen devs, does their front-end magic trick and pays your lighting channel, fees, liquidity and such up front with an easy to understand interface.

It completely, and utterly defeats the purpose. And it sucks.

AND… We all know it!!!

And yet, we’re still loving the idea of the layer 2 solution so much, that we give that option to users, and save the custodial vs. non-custodial talk for later. (if there is a “later”)

The other options are Blink and Muun wallet of course (with the latter showing very good progress).

On-chain wins

In the end, the layer 2 on bitcoin becomes more and more of a problem in my opinion.

The liquid sidechain is another topic I’m not going to tackle here, but met me say it’s not an alternative to LN yet, far from it. 

The people running their own lightning node, are a rare breed: willing to invest money and time into running a node for this purpose. That’s awesome. But still, after 9 years of lightning I conclude that this project is in the process of failing, compared to on-chain transactions (which aren’t affordable in the long run, I know).

The bottom line is that it’s far to difficult to run such a node and maintaining it, while it’s even more difficult to let non-tech users try a “real” LN wallet in a non-custodial capacity.Even when I’m using another node + service to get my lightning payments in on a lightning address,… even then I get confronted with time-outs, failed transactions or users that don’t even bother anymore. (I understand)

I’ll even dare to say that it’s impossible to onboard people with the current set of lighting tools without help. 

Don’t bother

Every , and I mean e-ve-ry person I’ve ever onboarded into a non-custodial lightning wallet needed more person-to-person help afterwards, as the online help was impossible to find, wrong, outdated or clickbait for shitcoins. These users might be labeled as “stupid” or “dumb” by many in the community, but that’s exactly what your problem is: alienating the once that DO listen. If someone listens, installs an app, and can’t use it on their own, they you didn’t onboard anyone. You just wasted their time and they’ll uninstall the app and move on. This not theory: this is practice.Your hobby-grade apps fail and you shoot your own layer two in the foot by doing so.

The user interface is another impossible problem on many of these apps by the way : putting ‘sats’ first (like 90% of the wallets do) is nice from a bitcoiner perspective of course, but an average user wants to see the payment option in dollars or euros by default (less clicks). Once a user needs to click on “setting” (if they find the option at all:) , the game is usually over.

The lightning wallets are absolute trash when it comes to UX and design as well… most of them are so bad, I even didn’t manage to let people make a LN transaction with MY OWN wallet that was preloaded with some sats.  I give them MY phone and make them use it, and even that fails :) it’s miserable.‘How do I pay’‘How do I scan’‘Where is the euro amount?’’oops I clicked something’’screen goes blank’‘What’s the red error for “routing” about?”And don’t get me started on compatibility. One out of 4 lightning payments fail on my part. : routing issues, pending, not enough liquidity (while there is) and the occasional forced closing of a channel. The devs and admins mostly acting like their system and lighting itself is a beacon of light (pun intended) while on the other hand labeling any user who runs into problems as dumb, is also a big problem. 

One of my first tests on lightning was the eclair wallet in 2018. ( https://medium.com/@kim0raku/cash-in-hand-but-no-sale-179c730ff9d7 ) . And I find it sad to say, but we didn’t come a long way since.

Maybe another Layer 2 solution needs to come along and sweep this whole lighting channel stuff away. I’m actually looking forward to that moment. 

And I might be willing to run a node for such a system when it comes along.

As for now, I try to use on-chain transactions as much as I can; and stick to Muun wallet out of necessity if it’s opportune, although their backup code system is also an issue I don’t really like. 

But hey, beggars can’t be choosers. 

@deadeyes  

https://allesvoorbitcoin.be 

on chain: bc1qc5nlkn3xw9prr55wrlkfejq4y3r2vz696vxdpj

The state of Lightning after 9 years

@avbpod's bio

We're still far behind. But it's slowly improving with local meetups and our podcast of course: https://allesvoorbitcoin.be 

Host of the AVBpodcast (alles voor bitcoin podcast), a Belgian/Dutch podcast purely on bitcoin. We interview bitcoiners since early 2022 and the host is a long-time bitcoiner sharing his insights.
https://allesvoorbitcoin.be 

The Fiat Brain drain - a look at the bitcoin impact on the fiat job market

Article on the job market effects of bitcoin, and the things to come for traditional old fiat companies.
The effects of bitcoin on companies losing their "best fiat slaves".