Bitcoin Rails | Isabel Foxen Duke

There are few people as close to the frontlines of Bitcoin privacy as Cake Wallet COO Seth for Privacy. After cutting his teeth building for Monero, Seth turned his focus to Bitcoin in 2022, with the view that making Bitcoin more private would ultimately help more people than focusing on a smaller niche target group alone.

“I would love for Monero not to need to exist,” says Seth, as we examine the technical hurdles of bringing true privacy to Bitcoin.

Although he believes that the ability to easily verify transactions on-chain is widely credited with helping Bitcoin gain early traction, Seth argues that its transparent design presents challenges that fundamentally challenge Bitcoin privacy, often making Bitcoin less private than the existing fiat system.

That said, Seth sees potential for key technical advancements in Bitcoin privacy — especially “Silent Payments,” developed by Ruben Somsen and Josie Baker — as having potential to move the needle on Bitcoin Privacy.

We dive into these developments and other key privacy technologies for Bitcoin in this episode, as well reviewing the regulatory and cultural hurdles faced by developers and users alike.

TIMESTAMPS:

🍰 01:15 The origins of Cake Wallet and early use for Monero before Bitcoin

⛏️ 07:22 How Monero's RandomX algorithm defends against ASIC-fueled centralization

🛡️ 15:15 The importance of default privacy and fungibility for blockchains

🕰️ 32:10 The early days of Bitcoin privacy: CoinJoin, Samurai, and Wasabi

🕵️ 39:47 Exploring the limitations of stealth addresses and BIP47

🤫 45:54 Silent Payments and friction with “handshake” transactions

🛠️ 55:00 Overcoming developer hurdles with Silent Payments

🪙 1:05:33 Managing UTXOs and the necessity of intuitive Coin Control

⛓️ 1:16:40 Evaluating Layer 2 privacy, covenants, and custody trade-offs

🔍 1:26:40 The core tension between supply auditability and privacy blinding

⚖️ 1:32:07 The chilling effect of the Samurai Wallet and Tornado Cash indictments

This interview is brought to you by:

LayerTwo Labs — developing research, software, and technologies for scaling Bitcoin via the integration of Drivechains (BIP 300/301)

Hashi on Sui Network — a primitive for executing Bitcoin DeFi transactions, without having to trust a federated bridge or other centralized entity

BitBox — an open-source Bitcoin-only hardware wallet, with smooth UX and no compromises on security. Check out Bitbox [dot] swiss and use code BITCOINRAILS to get a discount

Isabel Foxen Duke sits down with [[alloc] init] co-founder Misha Komarov and Head of Protocol Research Clara Shikhelman to examine PIPEs, a cryptographic framework that utilizes witness encryption—a primitive long dismissed as purely theoretical—to unlock advanced Bitcoin programming without a soft fork.

Breaking away from consensus bottlenecks, PIPEs aims to emulate native Bitcoin covenants and enable fully trustless, pessimistic single-transaction proofs. The episode unpacks the technical evolution from functional encryption to witness encryption in PIPEs v2, detailing how executing a specific computation correctly can cryptographically unlock a signature.

Although the underlying cryptographic assumptions remain experimental and unhardened, Komarov and Shikhelman believe PIPEs could potentially render optimistic bridges obsolete.

This episode of Bitcoin Rails is brought to you by:

LayerTwo Labs — developing research, software, and technologies for scaling Bitcoin via the integration of Drivechains (BIP 300/301)

Hashi on Sui Network — a primitive for executing Bitcoin DeFi transactions, without having to trust a federated bridge or other centralized entity

BitBox — an open-source Bitcoin-only hardware wallet, with smooth UX and no compromises on security. Check out Bitbox [dot] swiss and use code BITCOINRAILS to get a discount

TIMESTAMPS:

🎙️ 01:42 Tying PIPEs to the mission at [[alloc] init]

🔓 08:31 Defining witness encryption and conditional decryption

🛠️ 23:59 Shifting from functional encryption (PIPEs v1) to witness encryption

📜 26:17 Outlining pre-covenants vs. post-covenants on Bitcoin

🏎️ 39:37 Why PIPEs v2 is far from the end of the road

🌐 56:57 Building meta-protocols and avoiding external sequencer risks

👀 1:05:00 Implementing optional compliant privacy via viewing keys

⚡ 1:15:33 Comparing PIPEs to BitVM and rendering BIPs obsolete

🎲 1:23:07 Evaluating the min-rank hardness assumption

The first fully specified post-quantum signature scheme for Bitcoin has been proposed to the Bitcoin mailing list.

The proposal introduces a full specification for “SHRINCS,” a hash-based signature scheme initially conceived by Jonas Nick and Mikhail Kudinov of Blockstream Research — with specification details added by new co-authors Conduition, Remix7531 and BIP 360 co-author Ethan Heilman.

Today, I’m honored to share a full whiteboard explanation of the scheme by its co-author Conduition, as well as thorough discussion of the scheme’s key tradeoffs when compared to Bitcoin’s existing elliptic-curve signatures and competing post-quantum alternatives.

In more detail, this interview includes:

— A full whiteboard walkthrough of the scheme’s key components and its relationship to the NIST-standardized scheme SPHINCS+

— SHRINCs’ introduction of a compact stateful path - yes, I said stateful 🌶️

— Whiteboard explanations of all relevant cryptographic subschemes, including FORS, WOTS+C, and XMSS

— Thorough discussion of the scheme’s tradeoffs and implications for Bitcoin’s existing functionality

If you have a vested interest in understanding what may be the future signature scheme protecting Bitcoin transactions in a post-quantum world, this episode is a must-watch.

WARNING: this episode is fairly technical — don't beat yourself up if you don't catch everything, or need to watch it a few times to grok the details.

This episode of Bitcoin Rails is brought to you by:

LayerTwo Labs @LayerTwoLabs — developing research, software, and technologies for scaling Bitcoin via the integration of Drivechains (BIP 300/301)

Hashi on @SuiNetwork — a primitive for executing Bitcoin DeFi transactions, without having to trust a federated bridge or other centralized entity

BitBox @BitBoxSwiss — an open-source Bitcoin-only hardware wallet, with smooth UX and no compromises on security. Check out Bitbox [dot] swiss and use code BITCOINRAILS to get a discount

To date, post-quantum Bitcoin discussions have largely centered on which digital signature schemes offer the strongest cryptographic security against a quantum adversary.

But cryptographic assumptions are only one dimension of security.

Different signature schemes introduce different implementation and operational risks. How should Bitcoin weigh cryptographic conservatism against the complexity required to deploy that cryptography safely?

While hash-based signatures are often favored for their conservative assumptions, CTO of Ledger, Charles Guillemet argues that evaluating primitives in isolation can obscure consequential risks at the systems level.

Stateful hash-based schemes, in particular, introduce state-management requirements where operational or user error can have catastrophic consequences —despite their conservative cryptographic foundations.

In this interview, Charles and I examine the tradeoffs of hash-based signatures and his case for greater consideration of lattice-based alternatives, i.e. ML-DSA.

A very juicy episode for anyone seriously assessing Bitcoin's post-quantum design landscape.

This episode of Bitcoin Rails is brought to you by:

LayerTwo Labs — developing research, software, and technologies for scaling Bitcoin via the integration of Drivechains (BIP 300/301)

Hashi on Sui Network — a primitive for executing Bitcoin DeFi transactions, without having to trust a federated bridge or other centralized entity

BitBox — an open-source Bitcoin-only hardware wallet, with smooth UX and no compromises on security. Check out Bitbox [dot] swiss and use code BITCOINRAILS to get a discount

Paul Sztorc founder and CEO of LayerTwo Labs and author of Bitcoin Improvement Proposals 300 and 301 (Drivechains), has been one of Bitcoin's most persistent—and controversial—thinkers, advocating for merge-mined sidechains as a way to dramatically expand Bitcoin's functionality while preserving the security of the base layer.

Following our previous episode introducing his proposed Bitcoin hard fork, eCash, we discuss how the project has evolved in recent months, what to expect when the fork launches on mainnet, and Paul's perspectives on today's Layer 2 landscape and the soon-to-activate BIP 110 soft fork.

An entertaining, popcorn-style conversation with one of Bitcoin's most unconventional thinkers, this episode offers diverse—and at times irreverent—commentary on some of the most important technical debates shaping Bitcoin's future.

This episode of Bitcoin Rails is brought to you by:

LayerTwo Labs — developing research, software, and technologies for scaling Bitcoin via the integration of Drivechains (BIP 300/301)

Hashi on Sui Network — a primitive for executing Bitcoin DeFi transactions, without having to trust a federated bridge or other centralized entity

BitBox — an open-source Bitcoin-only hardware wallet, with smooth UX and no compromises on security. Check out Bitbox [dot] swiss and use code BITCOINRAILS to get a discount

I first came across River during the 2020 bull market. At the time, it felt like one of the quieter players in the space—not as visible as Coinbase or Kraken, and less talked about than its Bitcoin-only competitor, Swan, which was dominating Bitcoin Twitter and investing heavily in KOL marketing at the time.

My impression was that River had made a different bet: prioritizing product and security over rapid customer acquisition. In hindsight, that strategy paid off. As exchange and custody failures shook the industry during the 2022 bear market, River emerged as one of the most trusted names in Bitcoin.

River CEO Alex Leishman joins me to discuss the technical, operational, and commercial decisions that have differentiated the company—and why many of those decisions have influenced the way the industry thinks about Bitcoin custody today.

In more detail, we discuss:

This episode of Bitcoin Rails is brought to you by:

LayerTwo Labs — developing research, software, and technologies for scaling Bitcoin via the integration of Drivechains (BIP 300/301)

Hashi on Sui Network — a primitive for executing Bitcoin DeFi transactions, without having to trust a federated bridge or other centralized entity

BitBox — an open-source Bitcoin-only hardware wallet, with smooth UX and no compromises on security. Check out Bitbox [dot] swiss and use code BITCOINRAILS to get a discount

While many Bitcoiners remain hopeful the network will embrace zero-knowledge proofs for protocol-level use cases, practical adoption has remained limited outside of BitVM and a handful of experimental proposals.

Most of the world’s ZKP research has circled around Ethereum and other ecosystems, where significant resources have been dedicated to advancing these systems, particularly for scaling and privacy applications.

One of the most notable contributors to this research is Benedikt Bünz — professor of cryptography at NYU and collaborator of Dan Boneh, who together inarguably form one of the strongest blockchain-applied cryptography teams in the world.

The pair recently announced they’ll be leading the new post-quantum cryptography unit localhost research — the first dedicated PQ research effort within a major Bitcoin development organization.

With Benedikt leading the charge on the use of zero-knowledge proofs for post-quantum mitigation, the question emerges: will the post-quantum transition be the catalyst to finally bring zero-knowledge proofs to Bitcoin's core protocol?

In more details, Benedikt and I discuss:

This episode of Bitcoin Rails is brought to you by:

LayerTwo Labs — developing research, software, and technologies for scaling Bitcoin via the integration of Drivechains (BIP 300/301)

Hashi on Sui Network — a primitive for executing Bitcoin DeFi transactions, without having to trust a federated bridge or other centralized entity

BitBox — an open-source Bitcoin-only hardware wallet, with smooth UX and no compromises on security. Check out Bitbox [dot] swiss and use code BITCOINRAILS to get a discount

The first public player to deploy Bitcoin miners at oil and gas production sites, Stephen Barbour is broadly credited for popularizing the idea that stranded natural gas could be used to power Bitcoin mining.

By converting methane that would otherwise be vented or flared into productive economic value, this approach became a prominent counterargument to claims that Bitcoin mining is inherently harmful to the environment—challenging one of the most pervasive anti-Bitcoin narratives of the 2020 bull run.

More broadly, bringing miners directly to the source of energy helped redefine Bitcoin mining as a flexible energy consumer—positioning miners as load-balancing tools and creating new economic opportunities for one of the most essential industries in the world: Oil & Gas.

This episode of Bitcoin Rails is brought to you by:

LayerTwo Labs — developing research, software, and technologies for scaling Bitcoin via the integration of Drivechains (BIP 300/301)

Hashi on Sui Network — a primitive for executing Bitcoin DeFi transactions, without having to trust a federated bridge or other centralized entity

BitBox — an open-source Bitcoin-only hardware wallet, with smooth UX and no compromises on security. Check out Bitbox [dot] swiss and use code BITCOINRAILS to get a discount

Less than nine months ago, investor and researcher Nic Carter sparked one of the most heated debates in Bitcoin's recent history — when he published a series of essays arguing that the network should prepare for its post-quantum transition sooner rather than later.

While the essays broadly persuaded investors and institutions, many of Bitcoin's technical leaders dismissed them as alarmist — that is, until Google's quantum resource estimates were updated just a few months later.

Crediting Google's paper with "shifting the Overton Window" on quantum and strengthening the case for post-quantum preparation, Nic shares his thoughts on the delicate politics surrounding this transition — and how he believes a quantum attack, and response, could potentially play out in practice.

In more detail, this special episode of Bitcoin Rails X MARA Foundation TV covers:

•⁠ ⁠How a quantum attack against Bitcoin, and Bitcoin's response, could unfold in practice

•⁠ ⁠Whether a state actor could facilitate "benevolent" quantum recovery without requiring a contentious fork

•⁠ ⁠The constitutional tradeoffs posed by abandoned quantum-vulnerable coins, including Satoshi's Coins

•⁠ ⁠How Bitcoin's post-quantum transition could permanently reshape the network's governance culture

As language models evolve into extensions of memory, judgment, and decision-making—questions of ownership, privacy, and autonomy become increasingly difficult to ignore.

In this interview, Vora founders Erik Cason and Jesse Posner share why the future of AI will look very different depending on our ability to do one thing: maintain self-custody of our personal data—with private keys, just like Bitcoin.

A conversation about who controls the systems shaping human cognition, and how we can protect ourselves with the same ethos we protect our Bitcoin—this interview covers:

This episode of Bitcoin Rails is brought to you by my sponsors:

LayerTwo Labs — developing research, software, and technologies for scaling Bitcoin via the integration of Drivechains (BIP 300/301)

Hashi on Sui Network — a primitive for executing Bitcoin DeFi transactions, without having to trust a federated bridge or other centralized entity

BitBox — an open-source Bitcoin-only hardware wallet, with smooth UX and no compromises on security. Check out Bitbox [dot] swiss and use code BITCOINRAILS to get a discount