The latest installment of NostrWorld’s unconference series was held last week in the charming city of Riga, Latvia, uniting advocates and developers of the Nostr protocol. Led by Block CEO and Twitter co-founder Jack Dorsey, these free gatherings serve as a platform for open-source enthusiasts to share insights, promote collaboration, and launch initiatives aimed at creating a freer and more decentralized internet.
Bitcoin Magazine was present in Riga to examine how the advancement of the Nostr protocol could impact Bitcoin’s future. While the emerging Nostr community has attracted noteworthy Bitcoin supporters, the third NostrWorld conference, termed Nostriga, provided a novel perspective on the increasing synergies between these two technologies. Engaging discussions with participants and keen observations over the two-day event highlighted a notable trend: Bitcoin’s trajectory appears set to converge with Nostr’s innovative social networking technology.
What is Nostr?
Nostr is an open-source protocol designed to establish a decentralized, censorship-resistant social network. Unlike conventional platforms that depend on centralized servers, Nostr functions through a network of relays where users can send and receive messages. Nostr is rapidly gaining popularity as a social layer for Bitcoin, enabling functionalities like micropayments and digital identity management. Beyond its role in social media, Nostr offers a chance to construct a new internet architecture that liberates users from dependence on centralized platforms. This framework empowers individuals by eliminating the necessity for intermediaries that typically control user data, profit from attention, and regulate or censor accessibility.
Micropayments Market Fit
A memorable moment from the conference occurred when Strike CEO Jack Mallers recounted a personal experience with an acquaintance he had long tried to persuade of Bitcoin’s potential. It wasn’t until she engaged with Nostr and received Zaps to her account that the true power of the technology became clear to her.
Zaps are small Bitcoin payments, typically given as tips or rewards on Nostr, allowing users to directly support content creators via the Lightning Network. This micro-payment capability has evolved into a popular way to showcase Bitcoin’s utility and value within a social framework.
The idea of micropayments has existed long before Bitcoin, yet Nostr supporters believe Zaps represent the first significant large-scale realization of this concept. During a panel featuring Primal CEO Miljan Braticevic, Jack Mallers stressed the importance of this milestone:
“I think that’s very underappreciated. Something that has been desired on the web for many decades. From anonymous cypherpunks to the most powerful people in the world, all have aspired to this use case and we seem to have achieved that.”
Micropayments via Nostr introduce a new way to bootstrap the traditional Bitcoin onboarding process. People who may not be convinced by Bitcoin’s economic or political narrative might discover its unique value through casual internet tipping and microtransactions. This transformation broadens Bitcoin’s appeal by embedding it into everyday social interactions familiar to online users.
Setting the stage for the Ecash economy
Ecash, a promising Bitcoin technology, emerged as a recurring theme throughout the event. Cashu protocol developer CalleBTC passionately argued for the vital role Nostr could have in a future ecash-driven economy.
Proposed as a methodology for private, scalable payments utilizing blind signatures, ecash allows users to transact without disclosing their identities, safeguarding financial privacy. However, this privacy comes at a cost: ecash introduces trusted entities known as mints, which hold users’ Bitcoin deposits in return for tokens, often referred to as notes. For ecash to work efficiently, a robust market of mints is essential to give users choices regarding whom to trust. As this notion gains traction, the reliance on multiple mints presents various coordination and discovery challenges—issues that developers believe are best addressed by Nostr’s social capabilities.
Examples include bitcoinmints.com and cashumints.space, two Nostr-based websites offering Yelp-like interfaces for users to find new mint providers and for mints to promote their services and establish reputations. Although initial implementations are relatively basic, the potential integration of Nostr’s social graph could empower users to make informed decisions about which mints to trust. By leveraging connections within their networks and relying on trusted recommendations from friends, users could confidently select mints based on shared experiences and relationships. Eventually, it’s anticipated that similar Nostr-based services will be directly integrated into Bitcoin ecash wallets, providing users with a streamlined onboarding process while avoiding imposed trusted defaults.
Moreover, Nostr’s infrastructure offers various avenues to enhance the resilience of ecash mints, allowing future implementations to operate independently of the centralized DNS services of the internet. This would enable users to form direct connections with mints, minimizing exposure to third-party interferences and bolstering the overarching security and decentralization of the ecash ecosystem.
Another intriguing idea emerging from the merger of ecash and Nostr communities is the concept of “nutsack.” Introduced by Nostr developer PabloF7z, Nutsack, or NIP-60, permits users to store ecash notes on Nostr relays, effectively dispersing them throughout the network and associating them with the user’s identity. This mechanism allows universal access to a user’s ecash balance across any Nostr client that supports the feature. This means that, in the future, users could log into any website or online service and seamlessly carry their ecash balance with them, facilitating effortless spending across various platforms.
Communities and Web-Of-Trust
One of the most significant opportunities—and potentially the largest obstacle—for Nostr is its ability to engage new online communities beyond the Bitcoin-focused groups that presently dominate the platform. Announcements like developer Alex Gleason’s Ditto, revealed last week, hold the promise of extending Nostr’s influence into a broader spectrum of existing online communities, such as Mastodon, paving the path for greater acceptance.
“With Ditto, people find websites they want to join because of a community and then they discover Nostr as an incidental benefit, which allows them to learn about what it is and why it matters,” Gleason explained during his presentation.
This amplification of Nostr’s network effect could have far-reaching ramifications for Bitcoin adoption. By incorporating features like Zaps, Nostr presents a unique chance to introduce non-technical users to the capabilities of an internet-native currency, rendering Bitcoin more accessible and relatable in everyday digital exchanges.
“Bitcoin is revolutionary and I believe it is key to Nostr’s success, but social media requires communities.”
Looking forward, the establishment of communities and the embrace of Nostr as an identity framework could facilitate digital economies rooted in the web-of-trust principle. By constructing social graphs founded on cryptographically signed messages, users can carry their reputation across the internet, laying the groundwork for secure, decentralized commerce that operates independently of traditional laws, contracts, and enforcement measures—with Bitcoin at its core.
