Key Takeaways


Amboss co-founder Jesse Shrader makes the case that Bitcoin's Lightning Network is positioned to absorb the $9.7 trillion daily foreign exchange market through Taproot Assets, a new capability that allows tokens like stablecoins to be issued on Bitcoin and transacted over Lightning with extreme capital efficiency. Lightning currently processes an estimated $10 billion annually with just $500 million in channel capacity, meaning the entire balance cycles twice per month. Amboss has built Rails X, which Shrader calls "the first DEX without its own token," enabling peer-to-peer trading across assets on Lightning while maintaining self-custody. The introduction of stablecoins via Taproot Assets won't require existing Lightning users to change anything, all new asset channels are private, but it will dramatically increase transaction volume and routing yields. On adoption, Shrader sees Lightning following a "flat, flat, flat, then vertical" trajectory, with iGaming as the first major use case due to the industry's banking problems and high chargeback rates. Privacy is another underappreciated advantage: individual Lightning transactions never touch the blockchain and Lightning Labs is building tools to erase channel history entirely.

Best Quotes

"They do $9.7 trillion dollars every single day. It's the whole market. And that means that Bitcoin is going to take that sector."

"It's going to be flat, flat, flat, flat, and then it's going to be vertical. This is a gradually then suddenly type of adoption."

"This is going to be the first DEX without its own token. The token is Bitcoin."

"We're estimating at over $10 billion annually is flowing through Lightning. That means that the entire balance that's locked in Lightning is cycling twice monthly."

"Lightning can do 40 million transactions per second while any of these other chains like Solana is going to cap out at 70,000 transactions per second."

"28% of all retailers can accept Lightning. So, it really has immersed itself in the digital economy and in a scalable way."

"If you have good judgment, you now have rocket fuel added to your ability to execute. If you have poor judgment, now you become a slop cannon."

"I'm less terrified of CBDCs if they're on Bitcoin itself because you don't have that censorship ability on Bitcoin itself."

"Any of the individual transactions within that lightning channel, they don't exist on the blockchain, nor will they ever."

"Bitcoin can become the medium of exchange and not just a store of value."

"I just heard that Twitter is now a team of 30. 30 people are running X. That tells me that there's incredibly lean teams that are able to take on the world."

Conclusion

Shrader paints a picture of Bitcoin's Lightning Network as the inevitable settlement layer for global commerce, not through hype, but through five years of quiet infrastructure building that has produced a network handling $10 billion in annual volume with remarkable capital efficiency. The combination of Taproot Assets enabling stablecoins, Rails X providing decentralized exchange without a new token, and Lightning's inherent transaction privacy creates a stack that solves real problems the legacy financial system and competing blockchains cannot. The "gradually then suddenly" thesis for Lightning adoption looks increasingly credible as iGaming, agentic payments, and the broader foreign exchange market begin to discover what Bitcoin builders have been constructing in the background.

Timestamps

0:00 - Intro

1:27 - Amboss history

4:20 - LN innovation lessons

9:55 - Capital management

12:44 - Taproot assets

14:35 - Is this the casino?

20:07 - Origins of Tether

23:04 - RailsX

29:05 - Broad effect on the network

34:55 - Awareness

39:24 - Ideal adopter & AI agents

46:02 - Agent training & slop cannons

49:33 - Hopes for the future

55:20 - Simple truths & privacy

Transcript

(00:00) They do $9.7 trillion dollars every single day. It's the whole market. And that means that Bitcoin is going to take that sector. It's going to be flat, flat, flat, flat, and then it's \[music\] going to be vertical. This is a gradually then suddenly type of adoption. The first DEX without its own token.

(00:24) \[music\] Before we get into the show, I just want to send a heartfelt thank you. Thank you for joining us and ask for one quick thing. Could you like this episode? Subscribe to the channel and if you like the conversation, join us in the comment section. Jesse Shrader Bitcoin just passed $69,000. But it's back down below.

(00:41) How are you, sir? >> Doing great, Marty. Uh despite the Bitcoin price, uh we should be higher, but uh in due in due time. >> Well, as they say, building happens in the bare markets. That's what we're here to talk about today. You guys have been building at Ambos. >> Yeah. Uh non-stop building. I think it's five years in the making.

(01:01) It really has all built up to this to this moment where Bitcoin can become the medium of exchange. >> Before we talk about Rails X and sort of MCP server plugin you guys have built for the Agentic economy, let's uh let's talk about the history of Ambos like why did you start the company? What was the initial idea? How's it evolved over the last 5 years? And on top of that, what has Bitcoin done in parallel that has enabled you to to build out Ambos? >> Kind of what what got me into Bitcoin was that it was an alternative to to the

(01:35) banking system where the customers of the banks, you know, aren't beholden to the banking policies anymore. Instead, we have Bitcoin, which is freedom. But then I went to go use Bitcoin to actually pay for something and it was a horrible experience. Um, I ended up paying $60 in transaction fees and I was using overdraft.

(02:01) com which was like one of the few places where you could spend Bitcoin at the time. This was like late 2017. and my transaction didn't arrive in the in the 10 to 15 minutes that they had allotted um simply because a block didn't come in and the transaction got rejected. So, they ended up refunding my money and had to make me send it again.

(02:25) So, pay another $60 transaction fee. And I was listening to a ton of Andreas Antonopoulos at the time. So, he was talking about something called the Lightning Network. So I started experimenting um and in that process I got connected with Anthony Pot Devvin who created Thunderhub which was like one of the first UIs that you had on for running a lightning node and we got chatting in a telegram group like as two anonymous plebs that were building the space and he saw that like I was help I was customer support for Thunderhub. Um

(03:07) and so he reached out to you know explore starting a company and building out lightning network tools. So that was really the genesis of it. >> And so I imagine this around like 2018 when the lightning network was just launched and very rudimentary at that stage. >> Yeah. This was like the only thing that you could spend lightning on was feeding chickens with poo feed.com.

(03:33) >> Oh, I remember that. I remember that. I fed that chicken this chicken lay well. \[laughter\] >> They did. Um, so that was like that was the major retailer on Lightning uh proving the microp payments uh point from from day one, but it's it's evolved so much since then. Um, and really it was like command line tools.

(03:54) The Lightning torch had just happened. Um, folks were running Raspberry Pies. They were blowing up. But things have matured so so much more. And now like now like the protocol development things have like matured through like the ordinals explosion and now we've got tap routt assets that that are coming to the lightning network.

(04:18) >> Yeah. Well, before we get into tapered assets, what you guys have built at Rails X, I think it's important too to since you've been along for this journey of the maturation of the lightning network and Ambos playing a role in making \[clears throat\] it easier to use a lightning network. I I think that's one thing and I I just um was talking to a Bitcoiner earlier today.

(04:44) is like we we do a bad job of setting expectations and I think the lightning network is one of the prime examples where it launched and everybody's like yeah we have instant settlement with very low fee transactions and the medium exchange use case has been solved after the lightning network has launched. This was in 2018 and we all came to learn that um the lightning network is a distributed protocol built on top of another distributed protocol and Rome is not built in a day.

(05:13) So what um with that in mind like in terms of the maturation and the development of the protocol uh what has been what has happened that has enabled things like tapered assets and now what we're seeing with this uh sort of flurry of other second layer protocols that are using lightning as this connective tissue.

(05:37) Yeah, I think um kind of like SegWit for one was was the the soft fork that kind of made lightning network possible by fixing transaction malleability and then the next one was Tap Routt. Um, and so getting consensus around that piece and getting a successful soft fork into Bitcoin was one of those pieces. Um, and the Lighting Labs team really did some technical wizardry to be able to figure out how you could contain UTXOs within UTXOs and introduce additional assets that are minted on Bitcoin in a extremely chain

(06:26) efficient way. So, this isn't going to be spamming the blockchain because these assets are meant for lightning. They are onchain assets, but the purpose of them is so that they are lightning compatible, which we know is extremely chain efficient because and we're seeing it toda