Welcome to The Bitcoin Street Journal Bitcoin Market Update, Episode 4, Week 21, Tuesday May 31st, 2023 Headline News Edition. Stay ahead of the game and subscribe to our podcast for daily live bitcoin market updates, bitcoin technical analysis, BTC price movements, market capitalization and market supply news. Don’t wait for the government and central banks to interfere with your bitcoin holdings – take control and tune in to The Bitcoin Street Journal. In today’s episode, we’ll cover the rise of Nostr, an open, censorship-resistant social media network that allows users to take their profiles to any competitor with the same protocol; the background and development of Nostr’s creator, @Fiatjaf, and the support he has received from industry leaders, including Jack Dorsey; Nostr’s expansion to include bitcoin rewards in video games; Dorsey’s investments in Nostr and his donations to support its development; and the challenges facing Nostr developers, including monetization without centralized advertisers and threats to centralization and lack of payment.
The Bitcoin Street Journal has published an article that takes a deep dive into Pac-Man, bitcoin, and a recent Forbes article about the origins of a developer known only as @Fiatjaf. The editors of The Bitcoin Street Journal have extensive experience with Pac-Man and have been shadow banned by social media platforms for being pro sound money, known as bitcoin, which led to the creation of this episode.
The developer @Fiatjaf, who is reclusive and disenfranchised with social media options like Twitter, tells Forbes how he created his chat-and-payment service for people who dislike corporate control. Welsh software developer Ben Arc first met @Fiatjaf in 2019 while hacking a Pac-Man arcade game to make it accept bitcoin. After having difficulty using software designed to simplify the process, Arc sent a message to a mailing list for bitcoin developers. “The only person who wrote back to me was @Fiatjaf.”
Their most notable effort is a protocol called Nostr, which lets users take their profiles and followers to any competitor using the same protocol – a network of interoperable networks. That concept has been gaining traction, with at least a dozen decentralized social-media alternatives accumulating millions of users in recent months, spurred in part by dissatisfaction with Twitter’s policies regarding privacy censorship and civility.
Nostr, short for Notes and Other Stuff Transmitted by Relays, initially generated interest among people savvy enough to know how to interact with it. But with only a few hundred thousand users, it caught the attention of Jack Dorsey, co-founder and former CEO of Twitter, who donated 14 bitcoin to @Fiatjaf, worth about $200,000 at the time, who is now distributing the proceeds to developers working on additions to Nostr.
More recently, Dorsey donated $5 million to Nostr, even though he invested $13 million in a similar decentralized social-media project, Bluesky. Meanwhile, Nostr improvements have made the network easier to access, and it has developed the ability to transfer bitcoin among users. Already 500,000 daily Nostr users have sent each other 792,000 tiny bitcoin transactions.
This article is based on multiple interviews with @Fiatjaf and people around the world who have joined him in what many consider a social movement. Forbes agreed to honor his request for anonymity because he fear for his safety. Some of his personal details were impossible to verify, but whatever could be corroborated checked out.
Let’s talk about @Fiatjaf, who was born in Brazil in 1991, and how he became one of the pioneers of cryptocurrency. Raised by entrepreneurial parents, he was from an early age aware of the negative impact taxes and regulations had on businesses. One day, while on a field trip to a local Fiat auto factory, he received a hat with the company’s logo. This would later play a role in his online identity.
Fast forward to his university days, where @Fiatjaf studied economics and fell in love with the Austrian school of economics. He stumbled upon bitcoin in 2011 on a website dedicated to Ludwig von Mises, one of the founders of the Austrian school, when the cryptocurrency was worth only $15. Immediately, he began mining it on his computer. Despite spending all night mining, he only ended up with 5,000 Satoshis, the smallest unit of bitcoin, now worth $0.0003.
@Fiatjaf started writing software that merged bitcoin with other decentralized technologies, resulting in his 2018 creation called Piln, which allowed servers to charge bitcoin for storing files on a decentralized database. This eventually led to his breakthrough in June 2019, when he started working on his own version of Diagon Alley, an idea that could let virtual shop owners move their store from Amazon to the dark web and back.
After months of hard work and dedication, @Fiatjaf’s ideas matured into what he calls the Nostr Manifesto. Nostr is a global social network that operates on a series of instructions on how to build interoperable applications. Instead of the public key identifying a token like bitcoin, it defines a user, and there is no underlying blockchain. “A lot of things people wanted to see built on bitcoin,” says Arc, “could actually be built on Nostr.”
Interestingly, a month after @Fiatjaf published his manifesto, Twitter CEO Dorsey proposed a similar idea called Bluesky. Though they came up with the same idea independently, it goes to show the significant impact @Fiatjaf has made in the world of cryptocurrency.
Have you heard of Nostr? It’s a fascinating protocol for creating decentralized, interoperable identities. And the founding of Nostr was accelerated by a perfect storm of controversial Twitter events. In January 2021, Jack Dorsey banned Donald Trump from the social media platform. Then, Elon Musk bought the company and quickly alienated many of its most loyal users by charging for services they considered vital. Though Nostr had been in development since 2019, founder @Fiatjaf was taking a deliberately unorthodox path. “There’s no company. There was nothing,” he says. Not even an intellectual property license. Instead, @Fiatjaf opted for an ambiguous disclosure putting the software in the public domain, potentially opening himself up to legal attack. Since anyone can build using the Nostr standards, it’s hard to say for sure when the first users of an app built on Nostr signed up. But in April 2022, a slow trickle of new users became a downpour. Bitcoin engineer, William Casarin, launched Vancouver-based Damus on the Nostr protocol. And shortly thereafter, @Fiatjaf added Casarin’s upgrade to the Nostr protocol, letting anyone build to the same specifications.
We’ve got some interesting news regarding the intersection of social media and payments. It turns out that Block, a payment-processing company founded by Twitter’s former CEO Jack Dorsey, is now supporting a social media platform called Nostr. And let me tell you, Nostr is really making some waves in the world of decentralized social media. They’ve been cultivating a grassroots movement, and now they’ve got the attention of some big players.
It all started when a Serbian-born developer, known as Rockstar, got a little annoyed that Nostr hadn’t been mentioned in a detailed analysis of decentralized social media ecosystems. So, he took matters into his own hands and privately messaged Jack Dorsey on Twitter, suggesting he take a closer look. And to Rockstar’s surprise, Dorsey actually got back to him.
A few days later, Arnold Jun, a Twitter corporate development strategist, reached out to Rockstar with interest in Nostr. Jun said he had read Rockstar’s write-up on Nostr and really liked the simplicity of their approach. But not everyone was thrilled about this new attention. In fact, @Fiatjaf, one of the key players behind Nostr, wasn’t pleased at all. He thought that talking to Jack Dorsey, who runs both Block and Twitter, was too dangerous for their grassroots movement.
Rockstar, however, urged @Fiatjaf to take the call, saying that the big players had too many talkers and not enough coders. Though skeptical, @Fiatjaf decided to take the call and find out more about what Block could offer to help Nostr continue its momentum.
And it seems that Nostr is not the only one benefiting from this new partnership. Block has become a serious bitcoin investor, with a pile of cryptocurrency worth $220 million as of December 31, 2022. And now, with an eye on the burgeoning social commerce industry, Block is hoping to continue its growth by exploring new ways to leverage the intersection of payments and social media. According to Accenture, the social commerce industry is expected to reach a whopping $1.2 trillion by 2025.
So, you’ve heard of social media platforms like Twitter and Facebook, but have you heard of Nostr? It’s a new social network built atop the bitcoin blockchain, meaning there is no central authority and users own their own data. Jack Dorsey, the billionaire CEO of Twitter, has already shown support for Nostr by giving the founders a whopping 14 bitcoin, about $10,000 at the time. This May, he also donated $5 million to a non-profit dedicated to supporting bitcoin efforts, specifically to fund Nostr development.
But as Nostr grows, developers are struggling to find a sustainable business model. Traditional social networks generate revenue by charging for ads, and blockchain social networks pay users in crypto to avoid centralization. However, Nostr developers are looking for a different way to keep the lights on. For example, Zebedee and Arc’s LNBits are building products that let users charge bitcoin to host their own servers. Meanwhile, Damus is experimenting with a tool that lets users directly support the company.
But centralization risks are also a concern for Nostr. Only a limited number of insiders have the right to add features to the Github repository. An internal document shared with Forbes shows that @Fiatjaf has given seven people the power, but few use it. Nonetheless, developers are still flocking to build on Nostr, with 7,500 building 26 relays to support the network and developing decentralized clones of Twitter and Reddit. One group even plans to create a “geolocated service” for decentralized taxis, like Uber without a corporation.
Despite the challenges, this new kind of social network is gaining attention, even from experts like @Fiatjaf, who’s latest project uses the bitcoin blockchain to let experts place bets on future events, with the goal of providing investors more accurate forecasts. So, let’s see where this interesting experiment takes us.
On today’s episode, we learned about the rise of Nostr, an open-source network for bitcoin rewards in video games, and its creator @Fiatjaf’s continued efforts to build an interoperable, decentralized social media ecosystem supported by investors like Jack Dorsey and Bitcoin engineer William Casarin. Thanks for listening to today’s episode, I’ll see you guys at the next one and don’t forget to subscribe!