« The Joe Rogan Experience

#581 - Andreas Antonopoulos

2014-12-01 | 🔗
Andreas Antonopoulos is a bitcoin entrepreneur, he also serves on the advisory boards of several bitcoin startups and serves as the Chief Security Officer of Blockchain.
This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
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brilliant guy, who always inspires and opens up my mind as to what is possible with digital currency. So listen learn and I hope you enjoy the Joe Rogan experience back she's, my favorite mister aunt, Annapolis now We prefer to not go buy Bitcoin Jesus. Is that correct? I do I don't like the ending of that story doesn't turn out so good. For comes back, that's one version. Does the problem the Jesus story right? He comes back and then you don't hear from again. I quit him what the fuck happened there. Guy comes back from dead after three days and then nothing. You know I even so the torture to death part for for pokey just steak at the big bad bear of the roman empire is about enough story as it is. I don't want to emulate any part of that. Thank you. I agree with you also the misuse of MAGIC
to have like all that power, and it just like work on wine. You know turning. Why bring wine and walking on water and stuff like that, like seems like some other things could have been done, perhaps combining those two walking on wine. They got like inverting the entire sea of Galilee into wine. I would have been much pretty awesome that would have been rude as fuck to all those. Fish that live in there, though I just marinate them. They could be thrown onto the grill right away. I guess Delicious didn't know, refrigeration back then so we're getting way off topic way or For those of you don't know. Mister Antonopoulos is an expert in bit coin in digital currencies in what is most likely going to be, in my opinion, the future of economics. I I really do believe that this is not just. I think what we're seeing right now is not just a trend. I think what we're seeing right now is the beginnings of what will eventually
be a realization of what I think. People people need this third party system. They don't need banks, they don't need. What we need is if we need to figure out some sort of a way to exchange goods and services with each other and to keep track of like what things costs and bright now we're doing it with money right now we're doing with money, that's like somehow or another being controlled by the World Bank being controlled by the national or the Federal Reserve, and most people agree that that sucks, but that that system is not a it's, not a fair or equitable system and you're working very hard to try to alert people about a bit coin and spread the word, and I think, you've done a pretty good job of it. I think that the word is getting out there
I don't think I really need to do much. That's the wonderful thing about marketing or trying to talk about something. That's actually useful like if I was selling hydraulic fracturing I'd, have to really try hard to persuade people that it's not fucking up the environment, but, with coin. It's really useful money. It can solve a lot of problems. All I have to do is introduce the concept and young p. You know the idea Hayward put money on the internet. What of course we're going to put money on the internet? Gram makes perfect sense and we're going to make it global and it's going to work without borders, and it's going to be instantaneous. Well, of course you know how come we haven't done that yet. So it's an easy idea to sell. Well, there system for folks who haven't heard your earlier podcasts that we did I'm not familiar with what Bitcoin is just give him a brief description of how the Bitcoin system works,
so the very basic level. But Quinn is internet money. It's money that you can send like an email. It's like Skype for money. You can create an account if you like it's kind of like an account, but it's basically and application that you download onto your phone or your desktop, and once you do that you have a Quinn address and you can send and receive. Bitcoin is a currency works like a foreign currency, and you can convert dollars to Bitcoin and Bitcoin to dollars in back, but the the really cool thing is that you can send Bitcoin to anybody else in the world in a matter. Seconds for almost Sophie's at all, and if you do have to pay a fee. It's like usually something like one slash three of a penny, and it has nothing to do with how much you're sending and in a few seconds cheaply securely all around the world instantaneous money. So it it takes money from a technology of the 50s and it drags it into
the twenty first century kicking and screaming it would just so we can get past. This just explain how it's created and explain like how it's how it's controlled like how the the number of bit coins is generated and how old this is not something that can be with the same way. Money is with today, where they can just print money and because dad and create a lot of problems, explain that so Bitcoin is a decentralized peer to peer network of and and that's a lot of fancy words but I'll related to things that people are familiar with, especially for younger generation. Things like bit Torrent or Napster, or things like that, where you were on a piece of software, your pewter and that's simultaneously using resources, but also sharing resources for others, and the network is made up of everybody running a bit of software. Computer and coming together in a collaborative way, a bitcoin is money done that way, so
everybody runs some software and with a collab patient of everybody on the network, too run this software to secure and verify all of the transactions that is happening that also produces the currency and the currency is produced at a predictable rate. So every ten minutes, twenty five bitcoins are created and that created on the network by the network ends they're created through this side kind of like a competition that happens online with computing power. Hello go into too much of that detail. But the point is every twice: every ten minutes: twenty five, you back quite a credit, and then that happens for about four years and then, after four years, the rate of new back when this cop by half. So when it first started, it was fifty back when every ten minutes now is twenty five. In the year twenty, sixteen it's gonna drop to twelve and a half. Then it's going to go to six and a quarter and it keeps reducing by half until eventually, no more back when it created.
And if you do the math and you add up the year, isn't you keep dividing by two you end up with about twenty one million Bitcoin and Muslim will be done in the first decade, but Send that last small percentage takes a very long time, This is the last one is in the year two thousand one hundred and forty one. If you just project out by that point, of course the world has changed, but if you just run that equate and so twenty one million bitcoin- that's all you can ever have the interesting thing about that is that it changes people's behavior. If you know how much money is going to exist in the system, you value it differently like right now, if the Federal Reserve in a meeting on Friday, no one in the world, except for the people on the Federal Reserve Committee, know what's going to happen with money. The Monday after you have no visibility, they might say- we're not going to print another trillion dollars and all of the money you have in your pocket is now worth a tenth of a percentage. Last.
Or they might say, we're not going to print anything next year and suddenly you're out if the value for money is going to change. But with big point I can tell you exactly how much big point is going to be around two decades from now now, since you got involved with good point, what, if any change in perception, have you seen in the public like the the the initial idea of bit coin for a lot of people's like wait, a minute? What do you guys gonna? Do you have digital like people like, but now you're seeing more and more people use it Tigerdirect uses it, you could buy computers from them. Does Dell use it now as well and, more importantly, the most recent announcements to about a month and a half or two months ago with Paypal? Our Paypal is now going full back when the going to offer back. When is a payment mechanism for pay pal, that's pretty intense, which is a pretty huge is. I did not expect that was going to happen. I I was, I was thinking, maybe in a year or two, I have
a lot faster than I expect that's pretty intense, so Paypal and square. Of course. What is square square is the little thing you stick on top of an Iphone to swipe a card with, and they have square markets. They've been doing Bitcoin now for six months and that six pending, so in terms of retail shopping, it's moving pretty well, but you know, as you probably remember from our previous discussions, retail shopping isn't where I think it's really powerful, but it's great to see these advancements a lot of Things are happening. The perception is also shifting at first You know, Bitcoin was so obscure that the only people who talked about it were the complete lunatic fringe, like the geeks, the nerds, the people. No one understands that the party, in any case they don't talk to us. So so that's there was a lunatic French. Now we've upgraded now. People think that Bitcoin is all about drug dealers, terrorists and pornographers. So making some progress here. How did that happen?
You know I mean what do you think the media is going to focus on? Do you think they're going to focus on the fact that most big in his charitable giving donations and tipping something you experience to with with the donations to the address you showed to the last show a lot of that's going on, but then also what's going on? Is things like so crowded in the media really loves that kind of story, I'm going to say well, people are raising charitable, don't missions on the internet now they're going to say people buying cocaine on the internet and that's a much better headline, so we went from Obscur to mostly negative press and now now you're beginning to see people say yeah. You know there's more to it than that, and I think the public perception is gradually changing because primer they hear about it more and more. In a better context. Yeah
we one of sending thousands of dollars to Justin ran, who is he's got this charity that it does fighting for the forgotten and it's all about pygmies in the Congo. He he lives in the Congo most of the year and all that came from big coin. I just took the money from the from bit coin. I doubled it. You know I I, whatever the people sent in from the the donations from the address that we posted on the web, so in the web show I took that and whatever they came up with, I added the exact same amount and we sent it to Justin. So I mean that money from bit coin donations want to deal with watery
use that they have digging wells all sorts of things and he's going to be on the podcast next week. So he'll explain to us, but that's Bitcoin, in action right there yeah I've already done two or three fundraisers with Bitcoin there's a couple of favorite charities that I support in a number of ways, and I found that the fact that it makes it so easy for people to give and so instantaneous, and it's a way for them to demonstrate why they love this technology. A lot of people will do it so and- and a lot of people have been bugging me to get you to take the coin on the stores and and take, but quite on various activities or maybe even put a tip jar up for your new comedy show. I heard I actually saw a trailer of that
yeah. It's all comedy central would have to ask comedy central to do that 'cause. I did it through them. This latest one but yeah I'd, be interested in doing something like that. I'm just right! Now, I'm just super busy. That's of course it stops me from getting fully involved with this, but I'm always fascinated- and I love watching other people adopted as well like Shooter Jennings, just had a big ad online where he was taking Bitcoin for all of his new cd's and he was selling not old ones as well selling them all through Bitcoin yeah. I've been talking to shooter about doing some some other activities with Bitcoin two, so we'll see where that goes shooter loves it he. You know he thinks big coins a future, and you know him even how to post the other day was talking about, and people saying that bit coin you know hold on your. Like people. Have this idea of hold on your bit coin: one day: you'll cassman for a million dollars and he's like no on your bit coin. One day, you'll have Bitcoin like you are need yeah. You won't need the million dollars you're right it won't. It won't be valid, like
well, it will be valid me. I'm sure money is not going to go away, but it will also be just as valid, and you know what you saying about Paypal, we're starting to see that yeah, I think so, and you know you've got to think also about many countries in the world where their own currency is really bad, and this represents a global currency. May end up being more stable, more valuable than their own currency. So is it going to be for valuable and more stable than the US dollar? Probably not, for you know at the best case decades, if then, if ever, but there is one hundred and ninety three car he's out there, can it be more stable and more valuable, and thirty of those probably is today fifty of those within a few years. So you're, basically seeing this revolution in international currencies, were not going to displace the most success
full currency that the world has ever seen overnight with something that at five years old, is a toddler technology, but we can offer opportunities around the world where their own currencies are really really poor and not very good for trends. National and cross border transactions at all. Now what has been going on as far as like the shift 'cause, I know that there's been a lot of volatility issues where the prices gone up and down things have moved around not like has that in any way stabilized it stabilized. If I stabilized, we could say that it's gone down quite a bit and then it's kind of stuck two around the three hundred and fifty to four hundred dollars. Us dollar left
for a while now, but no it it depends what you do with Bitcoin. Really, the the volatility really affects you. If you're looking for an investment, especially for day trading, but one which is about the stupidest thing you can do, because it behaves like a penny stock on steroids right. So a lot of people get into a bit coin because they hear about the price and they they get. This idea that this is a get rich, quick scheme which it's not and they try their head to day trading with disastrous
consequences because you're talking about a very volatile market with exchanges that are not regulated and and in various countries around the world which very very little liquidity and some pretty big professional traders who are like sharks in the water or like playing the market quite effectively and and taking all the newbies for a ride? And so that's not, I don't think that's a valuable activity in Bitcoin. I think if you use it too, as a payment network accept Bitcoin, then converted to your national currency to restrict your exposure so, for example, acslt shirt for ten dollars, a price it at ten dollars I'll get ten dollars worth of Bitcoin and I'll, convert it to ten dollars right away. Now, if next week,
price changes? Doesn't matter, I've already sold a t shirt. I've already got dollars in return, I'm good. I've opened up a completely new payment channel without any of the risk. So so you can kind of get around that and and find ways to use it. I don't really, you know, for some people, Bitcoin can be a long term investment, but it's really dumb today, trade, it and that's where you get exposed to most of that price wallet It's not an issue, though, if you're selling things, and because of your selling things online like would you sell it like say if you're selling mugs went the screw her mug him your if you were selling them, for you know ten dollars american. What would you we would say ten dollars worth of Bitcoin? Is that how you factor it in yeah. So let's say today: Bitcoin is, I actually don't know what the price is right now, but I can look it up,
and so I can say what is ten dollars worth the in in Bitcoin ands. Once I do that calculation, I can figure out what the prices and I can price the the sale. So, for example, I would say receive I would pick in amounts in dollar. Say, ten dollars or ten dollars at the moment: zero dot, twenty six Bitcoin or twenty six dot. Eighteen bitcoins, thousands of a bitcoin, so I would just so. The customer wouldn't see this and the web's, will do this automatically. So I put my mug obute click. It would say: ok ten dollars, you put it in your cart. You say check out and it would just present you with a qr code like this now, this is actually asking for ten US dollars worth twenty six Milla bytes. So if you try to click on this with your wallet, it's going to tell you to pay the amount of one thousand and ten US dollars equivalent in Bitcoin.
So this the store does the calculation automatically and then, when the Bitcoin comes in, it gets bundled in at the end of the day it gets converted to dollars, or sooner You have a lot of volume, and so you don't see any fluctuation price goes up. Price goes down, it doesn't matter 'cause, you price it you're in it. You convert it. Now, when you do that, though, like if you're, if you're a person that has bit coin in your buying things, you would wait until it's worth more before you bought something right, yeah So you wait until your big coins more valuable, which I'm thinking about buying something, but I want to hold on until because that's like that's a used to be a bit of an issue right yeah, that's called a deflationary effect, which means that if you have a currency that is deflating where the value of the currency is increasing overtime, then people will tend to hoard that currency hold onto it and not spend it right away, because they hope that it's going to be worth more in the
sure now, in the case of big, when we've had periods where it's climbed in values the hoarding and think it's strong we've had periods where drops in value, so we want to get rid of it. All currencies. Have that big one. Has it a bit more the moment because it's volatile the hoarding inst instinct? You know it is funny because in the US we call it the hoarding instant in Asia that what they call this savings, which is inconceivable concept composed America's, like the saving rates, for example in Asia, exceeds twenty percent in some countries and in the US it's a negative point, two percent, or something like that. So I actually people increase their debt every month, instead of saving. So it's also cultural thing. I think hoarding is seen as a bad thing in a very, very strong,
consumer society, where you're supposed to take your paycheck and convert it directly into plastic crap from China as quickly as possible and not keep any of it for the future. That makes for a really good black Friday right, that's the altitude. So if you don't spend that seen as a bad thing I'll tell you once I started using Bitcoin I ended up saving more money. I did become more frugal with my purchases, but honestly when I saw something that was priced correctly and I wanted something to buy, I'd buy it. I wouldn't wait another week for the price to go up or down and start 'cause, then again at that point: you're back Day trading right well, since it's gone with Paypal, you could pretty much by there's a lot of things you so I mean I wouldn't say everything, but many things when you go to buy things online, give you that Paypal option to check out,
and and not told Paypal, vendors will turn on the bit coin. Option kept right, not all, but they will have the option to turn it on. You know over time as paper rolls this out. They just started. It is a trial basis. It's probably gonna. Take you know. Six months, Goodyear before they roll it out fully and then, if something would be, nineteen countries or have a many Paypal service and the merchants will have to go and turn it on. But you know it gives them the sales channel. So the other nice thing about that is that if you have a web store Paypal integration usually with it. So turning on in your Paypal merchant account that Bitcoin option make your existing web store, Bitcoin capable without you having to change any of the code and that's a pretty big deal. That is a very big deal. Now, are you the? U surfing totally unrelated over? There is a now it's trying to recover my big yeah while it we we were talking about that before the show. Was He he got a new phone and his bitcoin
on, for whatever reason didn't transfer yeah. I I mean I backed up all that you know you get your phone, you back up, all your programs and stuff before I I sent you know. I sold my old phone and I don't even think about re downloaded all my my apps on media automatically open it up and it's like. Oh, you know, sign up your used existing user and in try to put in it's really hard to figure out that I was just trying to do. Is going online, try to reset my password, but it won't let you reset your password ever because they don't keep passwords on the web sites. So it looks like I might have just pretty much lost my wallet right. It depends. I think, if you use the application that we installed last time, which was blockchain info, that create did a web account that went with it and if you put your email address in there, you can reset it fairly effectively, so you can send them a support message and they can
lever cover your wallet yeah. That's what it looks like that's what I was doing just now, where I I found out the email address I use not at all, but now I have to like fill out like this question here with my Skype name and stuff, like that. Look like they might when even interview me to see if it's it's actually going to take few days. In the reason it's going to take a few days, and I used to advise the company from a security perspective is because what we would do is we'd have hackers who compromise people's G mail account. They found the fact that they signed up for for a big one wallet and they use the fact that they use their email address. They troll and find their wallets name and a bunch of other information, and then they go to this website. Try to do a reset and try to steal their money. So we make it a bit harder. We had you have to get a confirmation through email, so the people can't be easy.
Social engineering fish for your account, but it seems like it's possible which is good to hear, because I I lately possible on you, you should be able to recover your funds and then all you have to do is then connected the application back the website and that's the advantage of this hybrid model where you well. It is on your phone and you have complete control. The website doesn't have access to it at all, but its stores and cryptid backup online so that, as you see, if you lose your phone or or you try your phone in the toilet right exactly if you have like a million dollars with Bitcoin you're following it falls in the toilet. That's that would be bad. You shouldn't keep that much money on your phone anyway, just like I mean you have to treat your phone wallet the same way. You treat your wallet, which is I don't carrying my entire net worth in here. I have a bit of petty cash in here and the rest of my bitcoin. Just like the rest of my US dollars, I keep offline. I keep it in another,
but what, if you like, one them, Floyd Mayweather type, ballers flex to walk around with a big briefcase full of Bitcoin? Well, then, you can some pretty cool demonstrations. There's this investor in Argentina who gather the bond services, investment friends at a golf outing and set the down at the tables. Six six people who had to you know just some of them had just met the with the other people and had never done backward before he said hey. Let me show you how pick one works download this application to your phone They all did that and he said. Ok, we're going to do is we're going to I'm going to send you some money and we play hot potato. So you receive it, you wait and you send it to the person next to you and then the person next to you and the person. Next to you and like all great we're going to move some bitcoin around see how this works. So since the first batch and the first person looks at their phone and that received a quarter of a million dollars, what quarter of a million dollars cents in a matter of seconds for one slash three of a penny and then
there like their hand shaking and they just swipe across, send it the next person quarter million dollars, quarter million dollars. Six times around the table, now you've done one half one million dollars worth of wire transfers for a total cost of less than zero dollars and ten cents, and it's back at the original owner and the per most of this demonstration was the is no payment system on the planet. That could do what we just did yeah. But in the future going to get screwed like the IRS. It's like hey. It says here you shared a half million dollars. We need half a million of well yeah. That pence I mean like. What's the IRS is
gone, and now the some unique take on what bit coin actually is they're not treating him as if it's the regular money they're treating it. Sir Mmhm for taxation purposes, the way that we treat a tradable commodity, which means that if you buy Pat Quinn and the price goes up- and you sell pick when you make a game, you have to pay capital gains tax, and if you earn bit going by selling products and services, then you have to pay income tax which to me is a very reasonable and sensible way to treat it. So, for example, if I do a gig and Europe and I charge my clients in euros, I'm going to pay income tax on those euros, but if I hold those euros for three months and then I sell them and the prices gone up in the mean time, I'm going to pay capital gains on the difference between the price I bought them or in the math and the prices sold them. So it works exactly the same way and the IRS doesn't go around really tracking everybody's bank account
doing the sums in checking against your tax return. That's not how it works. The way it works is you make a the burden, is on Hugh to make an honest, truthful and complete return, and when you make an honest, truthful and complete return. Quite honestly, don't check it. If we have reason to suspect where they randomly sample, that they do statistical analysis. They they see. Things don't add up, then Wanna come and say: okay, you said x, prove it right and they should they flip the And now you have to show that this is exactly what happened or they treat book. In the same way. You know I make an honest, truthful and complete tax return to the best of my, but let's see- and I calculate my income based on my invoices and things that which I receive in bitcoin- and I calculate my capital gains and I pay my taxes. I mean it's really not complicated for me and it's not complicate for the IRS and if they come out at me, they're going to ask me show
I swear this bitcoin came from aware when so I can show them. Is there anyway? I don't know if this is possible, but is there anyway to simplify what dollars to Bitcoin actually dance for 'cause. When you say that one Bitcoin is, you know x amount of US dollars. One dollar is Bob out. You know in the digital points, a bit coin, that conversion is confusing to people yeah. It's it's, it's a really confuse Yeah. That and I think, that's an issue. Sorry, that's an issue with some folks when you talk about like gay, involved in Bitcoin and they see the numbers and they see the the differentiation? It's it's problematic. It gets in their head. They like what is how much is zero dot one? It's it's it's hard enough to go to ITALY, order and
espresso and pay one thousand five hundred lira and in your head you're, trying to figure out how much is one thousand five hundred layer in dollars? That's already confusing enough for most people because it involves higher order, mathematics of division, which you know I can't do in my head. I use a calculator and when it comes which one is worse Becaus when we use Bitcoin as the units, because it's worth a lot more than one dollar all of the denominations end up being fractions, so it's zero dot. Twenty six, for example, is ten dollars right and that's even worse, because most people can't do fractional mathematics, save their life. So one solution to that is to switch the unit of value. So, instead of talking about Bitcoin, you talk about the middle bits. So it's easier to say it's. Twenty six megabits, two thousand six hundred and twenty six. Four
t shirt. I can understand that that makes a lot of stuff right and when Pat Quinn was at about a thousand dollars, then a little bit was a dollar. So it was a lot easier because then it would have been ten delegates for a ten dollar tee shirt, and that makes a lot of sense. Other people have proposed bits which takes you more to the italian lira side, which is one hundred thousand of of coin, and so at that point you're, looking at you know, five thousand or ten thousand for a t, shirt. So it feels more like clearer, where you have bigger numbers for smaller things like italian money, but still better to do. You know. Five thousand bits, which is a fraction of a bitcoin for a coffee then tried to two zero dot. Thirteen, no one can do that kind of math. So really it's what units do you use for everyday conversation, yeah
and can and no one wants to. No one wants to know like we want like a dollar. Is this yes, you know I mean that's what people want and I have the following simple rule of thumb, which is that in any currency, if you want to make it easy for people- and you can pick the currency unit, you want then a a meal simple meal of sandwich fast food meal, a cup of coffee and a pastry should cost between one and one hundred of your unit of currency pick whatever unit makes it fall into the want. One hundred range people are comfortable with the idea of spending. You know one thousand and fifty six thousand and fifteen for a meal. Coffee and pastry
they're, not comfortable with fractions they're, not comfortable with very high numbers, either like spending. Five thousand for a coffee doesn't make sense, but you know spending twenty five, all of your units for coffee. That makes sense. That's my rule of thumb between one in a hundred pick the unit, the makes a fall in that range. You why one bit Quinn was created. Was it established that way were one bitcoin to be such a large amount of dollars? Well, it wasn't to eight here's the thing when it was just at first of all for the ' first year and a half of Bitcoin had no dollar price at all 'cause no one was there was no markets where it was being actively traded, so you could establish a price point. The price of the moment say three hundred and fifty dollars comes from the fact. That recently, someone was willing to give someone three hundred fifty dollars for their pick one. So it's a market based system. When the court was launched, you could buy a thousand pick one or even ten thousand backward for a dollar.
Right, yes, should have bought something clean fuck, so we have. We have. One of the most famous thinks is the pizza event, and this was in a in the first year and a half when nobody really had a price for bitcoin users. Last loaf online suggested buying pizza for Bitcoin, and this was like crazy talk like I want to find a way to use my bitcoin to buy something: I walked in the will know, markets that was no one who is taking it and I'm gonna buy pizza. So I'm gonna give big point to someone who's going to order pizza with a credit card online and have it delivered to my state. To my should to my house. I believe we talked about this on the process, so he got ten thousand dollars pizza now or something like that. It was a ten thousand bitcoin pizza. That's a three dot: five million dollar pizza. He bought two of them that seven million dollars for two pizzas. So the point is the price.
Has varied. A lot. Bequin used to be fractions of a penny, and now it's three hundred and fifty dollars. So we don't know where the price is going on. The creator couldn't know. What's the creator And and those who are participating in the early days, thought was, it's probably gonna be worth very little now, but over time. If people adopt it's because there's a limited quantity, it's valley is going to go up, so we're gonna need to have more units to break it down into so we can start talking about tens of big points and hundreds of big ones. That we'll talk about big points, then we'll talk about tense, thousands, millions and it goes down to a hundred millions, the smallest unit. This call this a Toshi. It's a hundred millionth of a bit quite eight decimal place. This. That seems ridiculous. It's not hate pennies. I have a pen, I hate pennies. I don't know I don't even really like Nichols yeah fucking nickel. Everything should be dimes or nothing
to bust order. Succubi quarters- and this is the difference between digital currency, because this doesn't have value right now. So if you don't use it in conversation, if it did have value in the future, so it was worth a quote. Right then you'd use that and just give me a satoshi, and I give you a cup of coffee, yes, and if right at which point a bit coin will be worth a lot of money now you were just in New Zealand, I did a tour Australia and New Zealand series of talks about Bitcoin is also conference, they're called Bitcoin South in New Zealand in Queenstown now when you fly over there are you paying for your airline tickets with Bitcoin indirectly, yes into that, first of all, when I was flying to new
once. My my cost was covered by the conference organizer. The conference organized was paying both me and for all of the expenses and big going all of the suppliers. The entire conference was paid for and pick one where they can pay directly in Brooklyn the pain pick one where they can't they sell it, get New Zealand dollars and they pay New Zealand dollars. I also got spa search to do a couple of talks in Australia. I got paid in Bitcoin for that when you were when you over in New Zealand, did you look into the Kim dot com situation? Are you you're smiling? So you must be well aware. What's going on with him over there? I think I mean Kim dot com, Is a such a really great person? see I mean he's he's larger than life, and he just has this tendency to poke a stick in the I have governments and he often gets away with it, because governments tend to uh react and break their own laws going after him which
hilarious right they they. They ran through just rush over their own judicial system to confiscate his servers, and then he fought them in court and he won because they lost court. They had to return his servers to him after three years because they had illegally confiscated them and Kim dot com who was allegedly accused of copyright infringement. They raided his house with about one hundred paramilitary style police officers in the peaceful islands of New Zealand forgot, saying and helicopters and rip falling down from helicopters in the middle of the night to serve a warrant for copyright infringement. So I mean, if that doesn't say overreach, it's ridiculous, yeah, that's clear that they're trying to send some sort of a message and not just send a message, but to scare 'em they're trying to bully him they're trying to right and bully anybody else who would
brazen enough to have similar resistance, and this wasn't in NZ operation alone. This was in conjunction with the FBI and other organizations from around the world. Ah it was a massive overreach and they broke their own laws to do it and he turned around and grabbed it and rub their face in it. Because they'd broken the law, they ended up being the criminals first. So yeah, I don't know where the state prosecution is going on that, but as with many, This is like this there's a lot of up front. You know big talk about how they're bringing down this great criminal and then all of the charges fall apart when they tried to present them in court yeah and there confiscating all his money to write all the trying to they have I mean he's. He's actually said that he's broke now. He's in some precarious situation because he spent ten million dollars in legal fees and he actually
underrated some insane amount of money since they released him generate like forty million dollars with them, I mean he's a money making machine that dude knows how to make money right, but his that whole mega upload well site and all that stuff. It's all, that's all in some serious trouble right now. Yes, it is so yeah. He always has nothing to do with with just just to be great, let's think it's already in SAR. Well, I wanted to bring that up that you know here's a guy who maybe could possibly benefit from moving his money at least a big chunk of it in the Bitcoin. Well, I mean if what he's doing is, in fact, legal and if what the government is doing is, in fact
bullying him outside the parameters of laws, and that might be a perfectly justified stance. I mean I wouldn't recommend using for quite for criminal activities. I don't think that's a good advice for anyone, hello, how legal noble of you in the center I wouldn't recommend, or I I don't. I don't think I don't think it's it's right to sit here at and encourage. You know illegal acts, but you know what to talk about copyright infringement resulting in a helicopter rate and armed paramilitary rate on someone's house in the middle of the night. I think I think we have to really question where the the justice in that time, what exactly is going on? I case well, copyright infringer for folks who are not completely informed on what what the whole upload situation ends. What was it with Kim dot com's website? What he was accused of essentially, is that people would upload
illegal downloads of movies, of songs, things, line, so he wasn't even doing copyright infringement himself. He was facilitating it allegedly for others, which is even one. Step removed from a crime, that is a civil crime against property, and I mean really talk about an overreaction If that's the standard of justice, I have to ask what kind of armed helicopter responds descend on Aig for fucking over a million homeowners and stealing billions of dollars during the mortgage crisis right how many, how many helicopters should go down on that case, where you have actual victims- and this is the real issue here, which is her crimes that result in mega victims, millions of people put out their homes losing generations worth of savings, and no one goes to jail. Yeah, it's a huge point. It's a monster
point and there's sanctioned thievery in that sense, did you get to see the thing that came out today in Iraq that there's fifty thousand ghost troops? There's fifty thousand groups that are receiving checks that are human beings that don't even exist yeah? They don't exist and they're getting checks, hello, where war has always been the most profitable rack get available. Yeah I mean there's plenty of instant. This is of people well, they're, obviously doing something: that's illegal and getting away with and somehow or another it becomes okay because it's sanctioned or because it fall falls into some sort of an area where you're not allowed look into it like this, but the Megaupload tuition is very fascinating to me because I've always been. I've always the opinion when it comes to digital
downloads and things like movies and songs that it is a completely new area and all all our laws like r piracy laws and property laws. They are very vague when it comes to Digital, copies, 'cause, digital copies people you can call it piracy all day. I had Paul Stanley from kiss on and he kept in listing that stealing that it's stealing and my take on is it's only stealing if the person who originally had it doesn't have it anymore right. If I take her muffin, you don't have any muffin to eat exactly. If I take your song, you still have that song. And so does everybody else exactly so it becomes an issue of what is the song, But what is it? Where does it go? It's not stuck pull in. Someone may have illegal illegally, copied it and put it up so that other people can take it down,
and then it becomes sort of almost like a matter of ethics like if you appreciate the artist and you want to support the art, there should be some way. You can do that, and I also have always said that if someone can't afford to buy your songs like if there a fan of your band, but they have no money but they and they can download your music and then one day pay to see you in concert like you gained a fan right or that fan stayed supporting you with, but they didn't have money to buy your shit in the first place. They would not have purchased it, but now they, of it and they get to enjoy it, and there was one more person to tell other people and I think statistics have shown that, like artists are making the majority of their money now like music artist through live performances, because this well
look at historically what happened with music piracy, music piracy at a time when music was incredibly expensive and inconvenient to get was thriving and what stopped the vast majority of me. Piracy was not crackdowns, it wasn't lawsuits, it was the availability of things like Apple Itunes, that made music easy when convenient and accessible to people, and then the rain change of music that people started consuming expanded massively so from an artistic perspective. Music is now thriving from a money perspective. However, a lot of that profit is being concentrated, an apple. Here's. The thing, though, and I hate to drag us back- and you know this my my thing all I'll find a way to introduce
the everything that everything annoy everyone around me. But one of the things I think that is magical about Bitcoin is because it allows micro payments. You can pay five pennies and you can pay five pennies in such a way that the person receiving the five pennies still gets five pennies. It doesn't get chewed up in fees and transaction costs, and things like that, and you can do that instantaneously. It offers on the inter a completely new business model for content and artistic creation. So this means that artists canal sell a listen of a song rather than you know the eternal perpetual rights of reproduction.
The song, which is very expensive, a single listen for a penny for tenth of a penny and actually do that without most of that money going to apple or visa or some of the intermediaries, but go directly to the artist we're already seeing that artists are beginning to use Bitcoin to make a direct connection between themselves in the consumer. Get most of the money come to them instead of the intermediaries and it creates a new funding model for content creators, and this also applies to news and media and bloggers and people who write and make music and make Youtube videos for a living So until now it was really difficult to earn money on the internet, and the reason for that is because you are delivering
a very small amount of value to each one of your consumers, but there was no payment mechanism by which they could pay you for a very small amount of they could only pay you for five dollars or more and there's very it's very hard to bundle. So as a result, You end up doing two things. You either sell the consumer themselves by taking all their private information and turning them into a profile and selling the crap out of that marketing companies or you cram advertising down their eyeballs until they hate what they're seeing and now we have a third way, which is they actually pay for the content they consume and that's revolutionary. I mean it really is you could do some amazing things with music and publishing it's incredibly difficult to get people to pay for anything online, though it's always been the rub. The rub is that the internet is so available, there's so much. It's essentially just this open ocean of content that really coming along saying. I want you to pay to read my blog fuck off
Now. I've seen that before I've seen people say you know they have to pay to read their blog. I'm going to be out of your fucking mind, going to pay to read your blog people have actually sent me links to web. Websites that have paid subscription like a link like on Twitter. It's like really like kind of a scam like you're, sending me a link so that hoping I retweet it and I'll click the and then I'll say to read more. You know subscribe and like fuck yeah. Well, how much does it cost to subscribe, though, like five dollars or something like that or something along those lines? What if it was a penny wise? I think he wanted to hear most. If it's, I think you want to hear yes, if it's a movie, you want to watch a documentary and watch, but for allow of things it's just people are going to find something similar. That's free! You just going to go towards that and if so, if there's something like like reading something like reading someone's blog, that's a perfect example, most blogs,
the vast majority of blogs are free and that's how people read them in the first place 'cause, it doesn't cost me any step that take even a one click Amazon step where it's so so people? Amazon, one click is just the most simple thing of all time. I love it get Bang hit that button, it's on its way to you, you already have your address in there. It's a super easy to get. Even that, like people like why do I have to pay for this when I can just go to his blog, and and read it for free or her blog and read it for free. Why would I? Why would I give you money for something that is available for free? so when you get something like like a likable
augur a newspaper online or a website. It's it's kind of already been clearly established that that's a free service. I think, to a certain extent it has been, and the reason is that previously, if you were representing the cost of production and then with the internet, the cost of production fell to zero right the value. What you're delivering is a bit more than zero, but it's not high enough to charge your credit card or to differentiate it from all the other free things that are out there and there's no payment mechanism that fills that gap between zero and five dollars right. So your cost dropped to zero. Your minimum charges, five dollars and there's nothing in between, and that means that a lot of things that may be worth a dollar or zero dollars, and twenty five cents for zero dollars and seventy five cents that people would actually pay, because you can only charge five or zero, So you end up going for zero and you say that because of bank fees, that's why you can only charge five, because because, yes, absolutely because credit card
Minimum transactions online cannot go below five and the inconvenience and the information, the identity information you provide, and all of that so we haven't explored the. Range of zero to five dollars, and so, if I could say for example. Right now, the New York Times wants me to pay ten bucks a month to read more than ten articles. But then, if I want to read the Washington Post, I have to pay another ten bucks a month to read more than ten of their articles and the LOS Angeles Times is experiment with something the same. What if I could put down two dollars a month and read twenty five articles from all for the newspapers that I want to and just put that into my browser and say I want to allocate two dollars a month to newspaper articles, I'm going to give them a penny or half a penny. Each I'm going to read two thousand five hundred and fifty one hundred articles,
all of the newspapers now they're generating an actual revenue stream, anime scene, tiny when I'm paying just a you know a fraction of a penny per article. You multiply that by a million consumers, and you got some real money coming in more than they're making with these pay walls. So you start exploring that range between zero and five four zero to ten dollars. I would pay for quality news content without Todd for Tyson. We know people will pay for things that are free every and proves that apple. I tunes proves that when I can go out and tore into song, but it's more to and for me to pay one dollar and ninety nine cents and just by its high quality. If you deliver high quality content and you lower the barrier for paying enough, people will pay for high quality content and what we can do with Bitcoin is lower that barrier enough, that a whole range of content that you could never charge for before. There was forced to free because there's no intermediate step,
can now make the artist and the creator income directly without intermediaries without them taking a giant caught. I think that's exciting, it is exciting. Is there a way? I was thinking this like you member, old days of Dawson the early versions of windows like with the command line, prompt and the people who knew how to use and people did- and it was very prohibitive, for people who are uneducated in code, then came along the modern Graphic user interface and essentially, what you're doing is you're, hiding all that secret shit behind it and you're, creating something that's much more simplistic. Is there a way to do that with Bitcoin to take away all these weird? you, fucking numbers and zeros and ones and point this point that an break it down to something Would it have to be stabilized first, where
the the actual, the the the the price of bit coin of the value of bit coin, would be stabilized to the point where something like that would be applicable. I think you, you nailed it. We are in the dos days of digital money and a lot of things need to change. So what you have here, three things that are happening simultaneously. One is the evolution of the user, interface and user experience. The other one is user adoption how many people are using it and how many new people are using it every day and the third one is the price volatility. Those three are tied together. You can't really get one before the other. You can't really design beautiful user in
faces, if you have no user, isn't no value in the money. You can get users if you have no beautiful interfaces and the monies to follow tile and the money will become more stable until you have more users using easier and faces all three of these move together and all you need to get to. That is time so over time. If you look at big win today versus pick one five years ago, enormous progress on the user and faces enormous progress on the adoption, an enormous progress on the stability and, if and if you send say well, it's a five year old now, what will become in looks like five years from now. I think you're going to see the big winner dresses are gonna disappear, just like ip addresses. We don't see them on the internet anymore right. The user interfaces of Q, R codes and barcode to going to disappear were already seen. Protocols that allow you to do tap to pain, swiped paid, like apple pay with Bitcoin quite easily, and that's already happened. Yes, absolutely you can
nfc as it's called near field communications. Like apple pay, you can to top to pay with pick one, but here's what you can do with Apple the account with the quote. I can do top to pay between two phones, like I could say, to pay issue with Bitcoin and with two phones now do I need to do without you being a merchant right. You need a cell service to do that, or can the phones communicate on which I can communicate with each other off line yeah? So you can be on the North pole right with no self service, and you could swap that corn right and for that, playing ping pong, yes, and all I'm doing is the same thing I'm doing by scanning a barcode, only I'm using the NFC Protocol to do it. So so you can. You can see how this technology is going to get smoother and easier to use, as we have more adoption and at the same time, the price stabilizes it in all three of those metrics. If you like, will move in parallel and all gradually get easier- I remember a time of the internet with ip addresses. I remember a time with dos and Unix command line. I remember
when sending an email, if you needed to have those skills- and you know you just watch that progression of the technology The most important thing is: not only will these things happen, but the companies that build these things are building billion dollar industries. So the company that figured out how to find things on the internet became Google. Some company is going to figure out how to make Bitcoin easier to use for addresses some companies going to find out how to make bitcoin easy to use for retail, for music payments for social media for international remittances and each one of those companies is going to build a billion dollar industry. Yeah it seems like that, is really the next step figuring out a way to do you The irc chat clients. You know like that's like uber geek man. You know I used to use those when I was in my quake playing days. We don't meet on irc channels and we all compete completely dorks yeah that the thing that would do that wrong. Sound
there's things like that, where only the uber geeks adopt them, they just stay that way like IRC map, client. Still to this day, you bring up Irish there's people that are on IRC right now. The entire bitcoin developments happens in collaboration over IRC and there's a reason for that, because it's global, it's open, it's true it's parent, it's free and it's scaleable, and so no one has built a better chat which it yet yeah. Oh my yeah, there really hasn't been. I mean a google hang out those things that I mean they were trying to come. It was something along those lines right, but it didn't really take. Her is the still around that Google plus sort of kind of I mean it. It is, but I don't think I don't know anyone that really uses it. It's hiding behind all the other Google products, because it's now used as the main account and profile page. I have a friend who spoken. She works at Google, she's, an executive and
bring it up and she should have millions of people use. Google hang out and millions of people or on Google plus right now, this 'cause they force you to sign up every time you go to Youtube and shit like that. Exactly in that way, it's very similar to Sirius Satellite Radio subscription numbers 'cause. You know how, when you buy a new car, it comes with a car radio that has serious on it annually Describe for ninety days, like we added fifty thousand new subscribers right, but how many we're giving you any money at all? I guess how many of them are just getting their subscription as a ninety day free trial from you know, buying a chevy or whatever it's even worse than that, because then they say we got millions of subscribers on Google plus a year, or billion user company. So that means only one in a thousand is using it. I don't even think that many I mean go on. Google plus every now and then an it's like a fucking it.
Like one of those buildings that they build in China, where no one actually moves into them. You ever see those the empty megacities that goes towns. That's what Google plus is like I mean. Maybe I'm wrong- maybe I'm just tap it in the wrong Google, communities and I'm just missing a whole vein of interaction. That's incredible enriching and amazing and magical, but I'm not seeing it now, no everyone's trying to come up with something like the the irc like something let some or other social media platform any any other place where people can communicate and and make it easy and make it less forbidding and I think they something about IRC that, like to some people, it's like. Oh it's just too fucking crazy. I think the new, where they take like at least with
Apple and MAC or they they now have like chat on your phone like now. If you get a phone call, it will ring on your computer and I will ring on your phone and you can yours rings on your feet. Yeah set it up now with the? U semi or whatever. The new operating system is the hot sun knowing it is that it is in line, but it's great when your phone is dead and you just want to like answer phone call. Real quick on you know: hey, what's up wait a minute, so if your phone is dead, your cuter will ring your computer will ring or your Ipad will ring, set it up for anything but with, but that that thing I use the most is. The chat now is on all of them. So you can. I can like chat on my computer, like I or CMU, like sending you files and and videos and stuff like that, I'll get as a text message yeah and you get as a text message and then I'll just go on my own. Yet the bad thing also with that is a yeah. You go to work and then you leave your Ipad open and your girlfriend can see every single thing. You always your girlfriend. What about
your mom, your mom senior Dick Picture, Dick PICS yeah. Exactly now, if that's the case like? Can you use your computer to make phone calls if there's an internet connection, but there's no, is no cellular connections early you can and, and certain like t mobile does where you can be on your phone at your house on wifi and then leave your house and we'll just jump to sell your service. So you're, not using your minutes when you're at your house, but any of those right, your cell service right when you leave your house said handing off for Wi Fi to Lte or whatever you right. That's amazing that they can do that because remember how it used to drop off when you so does that on on some networks, really yeah, because you're driving on the highway, it still disconnects when you and you have signal is just switching from Tower tower. Had a handoff technology is still pretty shitty in a lot of cities
it's crazy- that they can use that technology to go from your cellular connection to your internet connection seamlessly, but they can't figure that out yet right right. Google voice does that for a number of customers and that it's a product they've, never really advertised I've been a Google voice. Customer now six years is a free service. I have a phone number that school rings, my cell phone rings, my desktop rings every device on there. I can forward it to all kinds of interesting things: here's what happened there! You took a telephone call which used to be a network and you turned it into a content type the rights on top of the internet. So now I can ride on any network right, so you separate the medium for the message you separate the content type from the thing that's running. On top of it, and now you can take that same thing, a telephone call into it. Independent of telephone networks can be on the land line, cellular or wifi any internet
action anywhere. You have t c p. I p, and the argument I be making about the queen recently has been this: the what we're just doing that from only for the first time so up to now, money has had networks and the type of money you use and how you use it and what it can do depends on the network. So if you want to do consumer to business, you can use Visa Mastercard or Bear can express, is going to come with a certain specific fee. It's going to work only in some countries. You can only move a certain amount of money. If you want to move money between bank, so you're going to use swift worldwide, interbank fund transfer. If you want to move money but checking accounts, you can use a ch, the clearing house here us. So that's how you move money between checking accounts. If you want to move money, Bitch tween one of these things, then it gets complicated so like. If you want to move using a visa card to a consumer, you can't really do it. You'll have to use a check and things get really hairy. So you have
these islands networks that can support small payments. Only or large payments only can do fast money or slow money that can do government money, business, more consumer money and none of them makes so you can't switch between them when does small and large fast and slow government and consumer, and it spans all of these networks exactly like the internet, took photography and moved it across all of the networks took video and now there's no difference between Cinema tv. You know all of these different formats and took telephone calls and move them outside of their own network. Now it's with doing that to money as a pretty weird thing, because when you turn money into a form of communication it on shackles it from a with these restrictions. You can now do any amount most any country you can send money to a person and not have any
mediary, you not have any third party that third parties gotta get pretty fucking nervous what has been the reaction as far as like banks or gander or any negative, and negative reaction from the powers that be about this possible technology? For the most part, it kind of depends what kind of bank we're talking about, because there are different types of banks. Like there are banks that are primarily focused on consumer services. Checking savings payment systems, Then there are banks that are mostly about playing the market right. Some of the big six banks, they've, actually pulled out of doing consumer checking city, for example, recently pulled out of twelve different countries. No longer do consume banking at all. It's too complicated has too many people involved who cause. Problems, whereas if you delay tiens like what is it well now, I'm
it's not a very profitable business because you have to deal with customers and they're fickle, but instead, if you're only customers, the federal reserve- and they give you free money, why on earth would you do consumer chat with her? It's not profitable, so some banks will look at Pat Quinn and either think it's a threat, but most likely at this point still think it's a joke like they can't possibly imagine anyway, that this little experiment could ever threaten serious banking right. So now, they're looking at like little kids that are trading marbles or something right. It's what I called the the idea that a lemonade stand is going to threaten Walmart. If that's what it appears to be to them, then you've got bank deal with consumer checking and talk to a lot of banks that look at this and say. For example, I talked to a bank in Brazil. And they have about eighty
one million people who have very little access to banking and the reason they have very little access to banking is because the nearest bank Change to their location is one hundred miles up river on a canoe right in the Amazon Basics, the opposite of Bitcoin, this is one of the most sparsely populated countries in the wall. So it's Brazil is an enormous country, its third of the continent of South America, and and some of the places are really really very remote. But even though the bank branches, one hundred miles downriver by canoe, there's a cell phone tower in the in the Bush, there's a self, tower in the middle of nowhere. Why? Because so you can airlifted in you can plant it. You can put a microwave link that goes two thousand and thirty one hundred files and you can power with solar, so they've actually planted cell phone towers. Now, if you could so they look at Bitcoin and they think you know what
the villages have a cell phone tower and they already have an kill one thousand that does text messaging. Can I use big point to turn that into a bank terminal? Now I can get eighty million new customers and give them banking that they've never had before so some banks, the thinking that way right back, it's in South Africa and Brazil, in India, in China, in Indonesia, in in places where you have very sparse remote populations and then there's other banks here in the US, the smaller ones. They can't compete on marketing. They can compete on market size and economies of scale and they can compete on buying politicians faster than the big banks. So they need a secret weapon and they look a bit coin and they think. Well, you know what this is a settlement and clearing House network and there's these companies that do settlements the charge of three percent. Could we take him out of business? Could we disinter
He ate them, so they look. There is all of these companies that are private, but effectively have monopoly positions that do all of the clearing. The only banks know about them: the Depository Trust Corporation, Trust Corporation Clearinghouse Corporation, which basically clears all equity settlement. So when you my stocks on the stock market, you buy the stock in three days later. That goes through a batch process that clears that stock changes the money and gives you ownership. That's run by a company called Dtcc that company charges a lot of to do something very slowly and efficiently, and the banks look at that and say hey. Could we use Bitcoin to take Dtcc out of business to take switch? out of business to build our own networks that are the have a middleman to uh you The bank is a third party but to a bank there's another third party right and they can take them out.
That's fascinating so, in a sense what these bay thanks can use, and even the people in Brazil that are setting up these towers can use bitcoin for is it almost like ability to send an exchange money without using the money itself, they do it through Bitcoin. And then that money can be transferred back and forth from Bitcoin to money or to what their local currency is or not either that or use the underlying technology for Bitcoin to build there on parallel networks, so just like, for example, in the first few years, the big phone companies with terrified of the internet and things like Skype, because it threatened their long distance market. The smaller companies that didn't really have a lot of revenue from long distance saw this as an opportunity to link together calling card.
Parts in long distance offers and things like that and run back by backbones over TCP Ip to cut their costs. So here they had a more efficient transportation network for transporting voice data. So now they could compete against a TNT So, even though the big companies see may see it as a threat, the smaller company see it as a weapon they can use in competition. It's fascinating that when you have, companies that are worried about their business is becoming obsolete. When Techno g renders almost anything that's not up to snuff, obsolete, remember when they used to have calling cards. These two get a calling card used to have to punch in the number when you would go somewhere and you would use theirs, though the local pay phone and that's how I used don't- is a calling card anymore. Is anybody you? What is it even of one percent of the population the users will and in the US yeah, but in the Philippines, and into an easy in Africa? There's a lot of calling cards because it because the main phone company
We still maintain monopolies, but gradually the internet has been breaking down those barriers and Brenda ring even calling cards obsolete. Here's the interesting thing: the companies that are sub merged in their existing technology paradigm. There submersion this technology, that's becoming obsolete that blind to it. They cannot possibly imagine a time when this enormous edifice that they've built will come collapsing down. Kodak, not imagine the fact that film photography would become obsolete because of phones because of phones and the funny thing- Is it wasn't a smart move by Fujifilm or Nikon, or one of their existing competitors? One day they were king of the hill and here later, a little company from Finland, they'd never heard of became the largest camera manufacture in the world's Nokia and started pulling out more
cameras than any camera manufacturer in the world in a year with. How was the transition in nineteen? Ninety five in Kodak suddenly got competition from a completely unexpected thing, and what did they do? They ridiculed it. They said well that grainy there she key you'll, never get a real quality camera photo out of that people. Still love their crisp, clear. Twenty four exposures of film there's artistic value to it, blah blah blah and three years later they're facing bankruptcy. Now, that's incredible after that happened They went back, they went back, I mean three years three years, after the ascendancy of Nokia, they were facing bankruptcy and eventually, despite all of their efforts to go digital and all of that crashed and burned,
using- and this has happened throughout history. The companies that are best positioned, like you would think that Kodak could do digital photography better than anybody else. I mean they understood photography, they had the brand, they had the market recognition photographers love them, so why couldn't they make a play in this space? And history shows that the companies can't they can't turn around fast enough? They they underestimate the ask they overestimate the value of the old technology, and we see this again and again remember Tower Records mp3 we're never going to replace vinyl, because vinyl has this step than richness of sounds and people will always go for quality over this cheap metallic crappy digital music. Will bye bye tower records right, bye bye, and this happened like buster video, blockbuster video, and if you go further back you know it's like people will not drive these internal combustion horseless carriages
because they're dangerous their noisy there. Break the roads. There's no roads, there's no gasoline! Only crazy people would use them trust the horse. It's always worked for you. It's worked for thousands of years, and the interesting thing is even though the companies that made horse buggies had all of the manufacturing to make buggies and could theoretically just pivots slightly stick an internal combustion engine. They already had all of the relationships with the wheel makers with the spring makers, with they understood how to build a vehicle worthy wrote at road worthy vehicles. All of them went out of business, except for one Studebaker was the only after less than two decades. Studebaker was the only: U S horse buggy manufacturer that survive
the transition into the automobile hi there. I wonder if it's possible at this point in time for bank manufacturers, if, if, if you mean you know people who are creating banks, you know people, city, bank and the Bank of America to to look all that it is it possible to look at all that that history and see that you've got something coming up just like the Nokia camera. You've got something coming up like it might take a few years to settle in, but once people realize that you can do pretty much anything right now, you can't, but once you can see buying cars and homes vacations paying for all these things with Bitcoin how much? How much money are people going to want to put in banks? How are they going to want to deal with the idea of these third parties and if that starts to happen, how about the fucking federal reserve? That's where things get really Squirrelly Caswell, that weirdo fucking institution that Jekyll Island
can strange institution that we've been relying on for so long. Well. To your first point is the people who involved in the present day model of banking, the three to five business days to clear your check, the fees, the banking hours, the slow, obsolete, an inefficient they're, never going to change that to the recent there they're going to take up all the way to to a boss of the reason for that is because they can't possibly see a world where the alternative really die, win and it won't happen gradually. It won't be like oh well, you know big ones getting closer or digital cards to getting closer taking our business. Maybe we should now start changing things. It happens like with most technologies, nothing happens for awhile in the intro builds up and then one day something clicks. Some
and changes and the entire industry flips. You know for Kodak. This happened in about a year and a half, so the first camera phone came out and you cross the mega pixel barrier and booms, the entire industry flipped and nobody bought film anymore and so, especially with banking. The crazy thing is that there's four billion people out there who have never had banking and that's great because they don't ever have to, xperience that mess they can go directly to a digital currency just like they never had landlines. They went directly to cellular telephony, and so you see this leapfrogging of technology. Now as to the Federal Reserve and most people don't even know what this is and how it works. You know the Federal Reserve Bank, it's the name, is on the door, or bill. So it's a government organization rights, it's a government institution. No, it's not! It's a private company run by the banks that has the right to cry
get money out of nothing and then sell that to the Us Gov in exchange for debt and if that doesn't sound crazy to you, I mean what does that? That is insanity, and that organization has the ability to create an infinite amount of money, set the interest rates between bank lending and is completely independent of government control, and that was considered a good thing, because government manipulated money money, manipulates government, that's incredible! Isn't it it's in and they were allowed to use the word federal, I'm going to I'm going to call. My comedy federal comedy the government approved comedy. But it's not it's federal, comedy right This is a federal podcast like what the fuck is federal is supposed to mean the federal government. That's what everybody automatically assumes right, the time
I'm in which the Federal Reserve was created. It is a very strange time in the history of this country. All of this is an experiment. That's less than one hundred years old and I think in retrospect will appear it's most people to be a failed experiments. That was made no sense very beginning. Well, to hustle I mean that's really what it is: it's a money grab on a large scale and incredibly large scale that includes the politicians, involved in allowing it to form people that are that are allowing it to continue the one of money, that's being it's changed over between these thanks the amount of influence these banks have the disk that have been made directly because of the influence of these banks that have not benefited the american people in any way shape or form all those things when that's taken into consideration in history, we're going to look back and go. These were mad times these recruiting people and
thing is: there's this illusion of stability. There's the solution that, because the system is so big, it can't possibly be fragile, but the truth is exactly the opposite: it has become incredibly fragile. It is extr only overextended and extremely fragile, and you see the the federal for the moment has been pumping money into the economy like crazy for five years and as they do, that you get diminishing returns so every here they put the same amount of money in and they they move the economy. They move the stock market a bit less and then they but more money, and then it moves a bit lesson until the pudding money in just to keep it stable. Now I've seen that pattern before I mean that looks like a cocaine habit right and go grab it in the first year right. The coke ad, snorting a lot of the Federal Reserve money in the stock market is getting really high. Indeed, by by here five it takes. It takes a big
fat line of Federal Reserve money just just to keep the stock market from crashing in the morning and then one day which happy in MID October, the Federal Reserve turned off the tap a month ago. Federal Reserve stopped giving out free money to the banks. We haven't seen the effect that will have in the stock market, but if you follow your cocaine addict analysis right now. That addict is jonesing for a hit and is really really cranky. So some bad things could happen. Yeah there about seven to eight months away from sucking trucker dicks, and that's really what's going on. I mean there about their about that far away, but the amount of power that the bank has that's the federal bank, the World Bank, the amount of power all of them have is really incredible and should have never taken place. I mean the power is always supposed to been something that was you're supposed to have
people who choose a representative. The representative looks after the will of the people, the people talk, they have discord, there's debates and discussions, and we take into counts, social welfare and education, and all these things that you would like your money to be distributed to an instead, what you have is the money itself having massive amount of power and the people who print the money having this massive amount of power and Jen creating printing the money generating incredible sums of money, because the fact they print the money which is when you see fuckers these Wall Street fuckers, they are living in these Hampton these, these houses in the hamptons that are they're. Not they don't even look real if you ever seen some of those guys that they have these blah thous, fucking acres or hundreds of acres, giant, fucking, palatial compounds- and you find a way this guy do all you just move in numbers or no you.
I realize that they're, not rich, bye world stand they're, not rich the part of the people who are really rich, they own islands and countries, and they don't even mingle with these little small time, bankers. Here's the thing. Some I'm in the twentieth century the this idea of governments being able to print unlimited money was considered the scientific approach to money that, if somehow we could control things a bit better in terms of tweaking interest rates and pouncing on employment and inflation, we could use the scientific method in terms of monetary policy, because gold was too inefficient and you have to ship it across the waters and big barges and things like that. You, if we could use the scientific method for economics, we would see prosperity and we would see growth
and things like that. Instead, what happens? Governments had the ability to print unlimited money, so now they could go to war without raising taxes and what they did is they went to war again and again and again and again and again, and a lot of the money in the twentieth century was pumped directly into war, a war on scale with it never happened before in spending for the scale. This had never happened before and now you end up with the commies like the US, the US is addicted to war. We've been at war continuously, since nineteen through three hundred and thirty eight pretty much continuously in dozens and dozens of countries, and it is machine that creates stimulus so anytime, the economy starts. You know weakening a bit. We started another war and we get another enormous amount of stimulus money. In fact, we saw recently the third quarter, an fourth quarter. Results for GDP are presumably
bit better in the US, and that happened to coincide with a massive influx of money to fight ISIS. You know the latest bogeyman by yes. This is the same organization. We funded against half Selah, said just a year ago, so ally enemy, very quick transition and now all of this money going into fighting a new enemy on a new battlefront, but none
That money is going to improve schools, roads, healthcare or other things in this country, all of the government gets to print money, they use it for war every time throughout history, and so the fact that governments were freed from sound monetary policy and were given the ability to print infinite money has ended up being a scourge on humanity. It's ended up, creating or just for profit, because you don't need to tax people to go to war, and now you don't need to conscript people, you can make it just the only employment opportunity that exists in some states and bingo you've got remote, controlled, highly profitable war that doesn't affect the vast majority of the population.
And and that has become the new form of economic activity. That's one of the reasons why I think that the the same reason why states can be trusted with religion, and you need separation of church and state, because when they take religion, the use it as a form of power to be down people for the very same reason you need separation of state and money when state and money became one only bad things have happened and we need- go back to some of the earlier times. In fact, that's the weird thing about Bitcoin. Is this tremendously futuristic technology, one that neither STAR Trek or STAR wars know the jetsons predicted, like all of these were truly disruptive technologies- it wasn't even imagine than Sci FI, but its origins in its basis is actually pretty conservative and traditional. It's the idea of money by the people and for the p
but without it being nationalized state money, Ben Franklin's, one of the founding partners by founding fathers, was a printer right, his main business. Outside of you know, being a revolutionary one of the founding fathers was he he ran a print shop. He printed stuff, he run the whole empire of print shops all across the the United States and one of the things he printed was much because at the time money was made by banks and by states, so it wasn't made by the federal government. The federal government didn't have one money right, every state had it Virginia money? That was, you know, New Hampshire money. That was main money. That was Rhode, Island's money, that was New York money and there was also corporate money being print printed by companies, and that was one. The main reasons that the british crown was pissed off was because all of these little free state money,
Printing operations were were sucking taxes out of out of her queens money, big part of why the war started right, Ben Franklin was: was the original peer to peer money? Printer, that's funny, and now Bitcoin is sing that again only in a digital form and and governments tell us that can possibly work. What I would say, the evidence is the opposite. Back. That worked pretty well for many many centuries, and this car model that's less than one hundred years old and has resulted in perpetual war and terrible inflation, unemployment and depression that World can't work well that model not only cannot work the the people that are a part of that model actively campaign against it. I mean everybody that runs for president talks about how they want to stop war. We're going to pull out of Afghanistan we're going to close down Guantanamo Bay. We're going to do don't do that, we're going to bring back peace but mean
the very machine that puts them into place is machine that that's that relies on more. It needs war, it's one of those things where you have a path that is so deeply carved into the ground that it's almost impossible if you're traveling neck. Do it not the slide into it. It becomes Just this, this there's money, it gets generated, this is a way to get that money. This is a way to figure out a way to put it all together and it just it's a pattern. It's a pattern. That's repeated itself over and over and over again to the point where saw nothing. Disruptive has to be introduced into the system. In order to stop that pattern and create something new, and we begin to see that, because in the past even the very communications of political campaigns and elections were channeled through a few very now in our channels like tv, right and radio and
Those gave the gatekeepers a hell of a lot of power, because if they didn't like political candidate, they could just silence them what the internet did not successfully yet, but what it started doing is changing that equation and allowing candidates who otherwise wouldn't have a voice to have a voice. So, for example, the the Rnc broke their own rule at the convention in order to keep RON Paul from speaking back in two thousand and eight, but they couldn't stop him from speaking and raising a lot of advocates and followers. On the internet. They could keep him off tv. They could keep him out of the debates. They could keep him out the convention by breaking their own rules, but they couldn't keep him off the internet
and so the internet allowed candidates communicate directly with our constituents. Well now, with internet money, you have the ability of those constituents to fund the campaigns directly, and I guarantee you it's going to be a tiny, tiny, tiny amount at first, just like initially internet communication since were negligible trivial compared to tv spent right, and then a couple of candidates started changing that Howard Dean started running an internet based campaign from Paul Run, an internet based campaign and even a bomb himself eventually ended up using the internet to to run his own campaign and you're good, and suddenly the internet had influence in communications and we start seeing some politicians taking Bitcoin and other digital currencies for the campaign finance and at first were going to laugh at it right. It's going to be ridiculous, is going to be like a lemonade, stand taken on Walmart and then give it a decade and you could see
significant shift in the source of my for campaign contributions? I think that's kind of interesting. What could happen there if you shift both the power of communication and the power of fundraising for it, actions to the people. Well, whenever you have new variables that people started adopting and they get thrown in the system and become a part of the system and then become commonplace. It shake things up. I mean just like the cameras that Nokia created just like the internet itself. Essentially one thousand nine hundred and ninety. What four fish people started adopting it. Let me when was like what was that back then as Compu Serve and AOL Zurich, just a few companies with the Netscape, followed by Yahoo and Alta Easter weekend, Artid creating things that were interesting and twenty that's twenty years since we've blink blink in time in the world has changed so incredibly much so much different than one thousand nine hundred and ninety four, when
comes to access to information, it's impossible for some, who is grown up. You talk to a twenty year old kid today and plane to them what it was like to be a twenty year old kid in nineteen, eighty, five and they'll laughing. They think it's in the world. How could they? How could they try to explain what it was like for me to be twenty, and I was like a monkey. I was like some dummy with books that was that was where you got your information from books and from like thing that you would see on television that were on television, but you couldn't stop them, you couldn't rewind them. You couldn't dv, are them like the idea of the access to information. The idea of information. Shifted so radically to Google on your phone mean that is so jets, it's so beyond anything, anybody comprehend did. But jetsons
Never imagine that that's the interesting thing about it is that if you look at some of these disruptive technologies, things like the jetsons in STAR Trek and star wars and things like that. They anticipate the current Technology and they just extrapolate some linearly and if, if the person is really a visionary who comes up with it, sometimes they take a slight twist and amplify one side of it and create something exciting, and then they missed the simple things they missed. The really obvious things like they figured out mobile communicators, but they didn't figure out or social media How can someone who is saying they? They wrote a book on the Jetsons, Jeffrey Tucker from Liberty, dot me he was. He was saying that you're one of the fascinating things about the chat, since is that they would have flying cars and pneumatic, choose and robots, and all of these things? But when the kid took a note from school back to his parents would be written on paper,
yeah, because it's so true they couldn't imagine email. Where is it seems obvious to us. Now it wasn't sim. The continuation of the past that didn't have. It was completely new and all of the really interesting. Technologies are ones that don't just take what you have now and extrapolated. They break that mold completely, and you see like look at STAR Trek right. They just gave up on money. They just gave up they just Don't talk about it at all. There is no money in STAR Trek, so true they just finally fighting so much. What are the klingons looking for like crystals right so I mean there's enerji, there's all kinds of things, but you know they kind of gloss. So money, money and and that's because money is a different, difficult technology to imagine where it's going and and the same thing in a lot of Sci FI. You know
You don't see social media, you don't see email, then you certainly don't see digital money as much or if people see digital money, it's effectively apple pay right. You have a thing and you go bloop and it pays in Glock, click credits, but that's not very imaginative. That's just our current money on a phone right, yeah they're, just using placeholders right, but the truly intra technology start happening when you break that mold and you create forms of money that didn't exist before and and ways to use money that that didn't exist before so. The ability for example, one of the really revolutionary things about Bitcoin that I find fascinating is the ability for me means to own money. So up to now only people can own money or through legal fictions, like corporations groups of Pocono money, but machines cannot own operate. Operating exchange money on their own software systems cannot
own money on their own. They have to have a human paying for things right so thing. About this concept, which has been discussed a lot in the Bitcoin community called the distributed autonomous corporation or Decentralized autonomous, corporation or Organization Da Odac, Imagine a software agent that is able to maintain a bitcoin balance and uses that to pay for its own hosting on, say a web server, so you so it runs its own computer power, see essentially in power the the the software company in the. U you server you write software so that it can manipulate a bit coin account and then use that Bitcoin account to buy hosting, to copy piece of itself onto that hosting is now the normal son is an auto pay. Similar hang on a second now imagine taking that a step. Further now imagine
is that software system could create two varieties of itself like by making a small change and run virus of the software. It gets hosted here in one fair and gets hosted there and say it does an activity like it creates content on blocks by Ghagra sing news and sells advertising for Bitcoin, and if this one successful it buys more hosting for itself, and if this one isn't successful, it shrinks the amount of hosting. So now, you've got almost a fitness function missionary effect going on so now the most successful versions of the software grow in size and fund more of themselves. Now I could go out on Craigslist and hire some software developers to make it software better you've essentially got an autonomous agent, that's acting with money to propagate its own existence. That's never happened before and I don't know what you could do with that. Probably some very weird, some very bad, some very good things all mixed together, but it opens a door
to something that is completely crazy, Sci FI level and when you take that and connected to I'm sure you've been paying attention to the Elon Musk statements that he's made recently about artificial technology that it's you're summoning the demon. You know, and he believes that within five years I mean this is ordinarily. I would things like that and go out some crazy few. This guys really not doesn't have his finger on the pulse of the actual technology itself, but when he got a guy like Elon Musk, who obviously is a fucking super genius and he starts saying it's like that, you might take any consideration hey. Maybe this guy is thinking about some Possib some variables that other people- just going to ignore because we ignore a lot of variables automatically. We ignore the variable that we're going to die. We like to ignore that we sort of know it exists, but we try to put it away. We ignore the very bold at the earth. It's uh. If it doesn't have a very long life mean in terms of cosmic viability. It's
we. We got a. We got another billion years. We can't support life anymore because the sun's going to be too hot it'll immensely supernova the whole you you mean with theirs. It's only certain amount of time for everything right now, you're, creating intelligent life forms and you are in creating Essentia Lee some sort of autonomous physical thing that is going to be able to think for itself you're going to have some sort of thing that can mimic thinking or or or actually has, the ability to think propagate ideas push forth its own agenda. And do that on its own and Bitcoin. It has money, it can think, and it has a bank account and it could think how to generate income. It could think of what it could do with that income to ensure that it keeps its existence. Oh
Well, there are ways you can think about it and you know, for the time being, the amount of action such an entity could take in the physical world is very limited. It needs people to act as its Asian, so so some of the applications you can put it to a really interesting, for example, you can create a distributed charity organization that has charitable members and builds an endowment fund. And then can you use a vote among its members to execute charitable act so you can essentially have a corporation that is programmable where it doesn't depend on what a board of directors does, but instead it has a code basis and all of the shareholders get to vote directly on what the does and all of the members say. Oh, there was an earthquake in this place in the world. Seventy five percent of the member
voted to sends send part of the endowment for charitable contributions, and now you have a charitable organization that acts directly in the interests of its members and contributors without any influence by a board that's kind of an interesting concept. You can do some very. You can use transparency and accountability and governance in interesting ways if you do that as a whole section of development here called Bitcoin two dot twenty, the two dot o version of Bitcoin, and I hate the term two dot out because you know so overused it over use. We had a web two dot with social media was kind of a a a a deviation from the standard pattern of making publication centric sites to making people centric sites. So big pointed auto is moving from currency, centric applications to contract, centric applications,
or instead of running a currency on the network. What you're running is a contract is basically a piece of code that can execute contracts such as agreements between two people to buy and sell a house, and you can now take that and run that there's a contract on the network and it can handle not just the payment but also the registration of title, the escrow things like that you could have a contract. Here's one of the application as a company called airlock, which makes a digital lock for Airbnb locations at brand. New company based on the Bitcoin two dot zero technology, and the idea here is that you put a digital lock on the door And when you sign the contract to rent an air, BB location or something that acts like air Bnb, you send a payment of Bitcoin and the payment itself authorizes the pay, to unlock the door. So the same
keys you used to make the payment now authorize you to open the door to that property. So you can go and enjoy your stay for as long as you've paid. So you've combines a a smart currency with a smart contract and a smart asset which is the the door locks. So now you can open anything. Another company has built a fluid dispenser, so it's a fluid dispenser aware for a fixed price. You by certain number of gallons of something and then dispense them simply by sending a bitcoin payments to that pump, essentially economy, In this for a gas pump of water pump a hydrogen pump, you know whatever you want anything that you can pump oil high, fructose corn syrup coffee, whatever, and it's regulated by the amount of Bitcoin that you've spent yeah. So there's a ratio of Middle EAST,
there's leaders, gallons fluid ounces or whatever you want the unit to be Anna Price, for that particular substance in that particular value. And you pay for the volume and you then put a cop or car or buckets underneath and dispense. Have any gas stations adopted Bitcoin yet know that would be fast but you can see where the possibilities go. Finally, there's there's this concept of smart property, which I think we touched on- for now in June, skier. I sold my car for Bitcoin and that and self was a very instructive transaction, because if you want to sell a car, you have a couple of really bisque big risk areas. If you're the buyer you're going to a transaction with a whole bundle of cash with you right, and that means you can get
and so it's pretty dangerous when you're buying a car. You don't just randomly pick up an ad a go to a remote parking lot with a bundle of cash. That's that's how people get killed right if you're a seller. If you don't, if you receive cash, how to make sure it's not counterfeit and most people can't tell the difference so there's a big risk that you're going to receive a bunch of, funny, but that money isn't going to be real. You give your car away. You have fake money, you're in trouble now or if, instead of taking cash, you want to take a check that check could bounce. If it's a bank draft, it could be forged. If it's a money order, it could be, so what you now need to do is arrange to meet the car buyer near bank branch go in with the car buyer, have them deposit the check or bank draft. Have the bank validated have the bank confirmed the amount? Now you can only do this between nine hundred and four hundred and thirty in the afternoon Monday.
Friday. I sold my car at eleven p dot m on a Wednesday night sold it to someone who wasn't in the same state as I was buying the current behalf of his brother, who was a student in the state where I was California, I meet the brother, they do a test. Ride they call up there brother and say yeah. I really want to buy this. Can you send the Bitcoin I send the Bitcoin address or in a parking lot in the middle of the right, they're, not worried, I'm going to rob them because they don't have any cash on them. I'm not worried the cheat me because I'm going to see a bit coin payments so easy Peasy really late at night, the brother does the transfer of big queen. I told okay wait here, I'm gonna go grab a sandwich, I'm gonna be back in about forty five minutes once the Bitcoin transaction is confirmed fully and settled can be reversed. Nothing I'll be back. Forty five minutes later sandwich done, I'm back. I give them title and key and
drive away. Transaction was safe. It happened outside of banking hours. Here's a twist bitcoin to all. You know a lot of cars today have digital ignition systems electronic in systems, so your key isn't just a metal key, it's
so a radio transmitter that has a special chip inside it to identify itself to your car. So if you just you know, break the lock with a screwdriver you're not going to start the car, because the electronic ignition system is not going to recognize your key and it's going to say no sorry right. So the key itself is a digital key. Imagine if you could do the following. If I make a transaction that transfers money bitcoin to the owner of the car and the owner of the car in the same transaction transfers a digital token back to me and that digital token unlock the car. So now I I execute the transaction the owner receives Bitcoin, I receive the digital token I get into the car. I push the start button and because it can recognize that I have that digital token the car says: oh you're, my new owner welcome drive away from getting hacked. Well, that's the beauty of
the security isn't in the phone right! That's what the Bitcoin network does it offers completely centralized security. So, in order for the Bitcoin to be received by the owner and the token to be transferred to me, that transaction has to be verified by the Bitcoin Network and that Bitcoin Network puts an enormous amount of Computa behind it to make sure it's secure who's running that network. All of the participants so like right now, when you do this car thing. Yes, how long does does this was injured arm? You said: take about forty five minutes for everything to It took forty five minutes to settle. I saw the transaction instant scenes seconds and, and I need to make sure that it can it be referred so this that, like, for example, you deposit a check that your balance updates immediately, but it takes three to five days to settle in big coin. It takes six confirmations, which is sixty minutes on average. In my case, it took about forty five is running
network is running a bit fast that day. So when that happens, you say every the one on the networks. Are you talking about all the people that are mining Bitcoin, all the people that are mining bitcoin of participating in securing it and everybody else in the network also independently verifies it. So, after sixty minutes, everyone on global Bitcoin Network NEWS that topic when for the car was now mine, and that is done how what? What is the the actual process? What is it that goes through? So you you get the bit coin. It goes on to your phone, then it gets verified what's happening. How is it getting very so what the network verifies? Is it verifies that Bitcoin was transferred to an address that I control and in that transaction? There's a signature
by the original owner, and that signature transfer is an existing chain, a fake one and the network. Fair fights that the big coin that they're transferring to me exists and has not been spent and has already been recognized by the network. So it's basically building it's a backwards chain. My big Quinn exists because those properly signs from a piece of big queen that feat person sent to meet existed, which was probably signed by the previous owner, which was probably signed by the previous owner, which probably signed by the previous owner. You go back in time
back to the point where that Bitcoin was mind for the first time and because the network validates that entire chain, once it's validated it now, I can spend it because I can sign it over to someone else and they can trust that that pick one is good wow and it's some complex math. But you know here's the point. If I tried to explain to you how web page loads on your browser, I would have to spend twenty minutes describing the border gateway protocol routing algorithm that takes the TCP Ip packet that your browser sends uses the ip address to recognize the global route, also known as an autonomous system and based on subnet of that autonomous system sends that packet to there is routing system, a routing table routes it to the next router, etc until it arrives at the web server the points, be you don't see any of that, not only that
I would still not get it and I would just nod and pretend I understood what you're saying like a dog you showing card tricks to it's the difference queen using the technology and understanding exactly how it works. The truth is, most people don't even know how to grow a cucumber, let alone how website even if they know how to grow cucumber, they probably have no idea what is going on inside the cucumber, that's turning a seed into a piece of vegetable, but you can still eat it and you we use a web browser and you can still know the simple rule which is this after six confirmations of my bitcoin transaction. I can trust that I've got that money in my in my account. So at that point I can give the key over even better. If you take that to the bitcoin to it, auto smart property, my car can recognize that it has a new owner after six confirmations, the car itself can in dependently calculate and say this transaction. The transferred my title as a car to a new owner has had six confirmations. Therefore I
have a new owner and if that owner shows up with a key, I will drive them away, will start my engine for them, and now the property itself of the asset is smart enough to track its owners through a chain, and that means it's much much harder to steal that, is this something that the car owners are the car dealers are? Creators of the cars would have to implement their own operating system or, with with this be using the same big coin operating system inside the actual car for a direct nice, you would yeah, you would be using the you would replace the part where the car recognizes a specific key. Hang on a second yeah. I have a key that when I get my nose, we've got this kind of this key actually has an RFID chip or some other challenge response mechanism in it. So in
of the ignition system interrogating. This key. The ignition system would interrogate and ownership record on the Bitcoin blockchain when we see something like apple pay, with the thumb print, a security and stuff like that. Do you see in the future big coin, a opting some of those kind of Bitcoin can do NFC already, so it can already do the same thing as apple pay. The big difference is you're, not pudding, three hundred million credit cards into the ownership of a single company that Jennifer Lawrence Butt pictures right, yeah so exactly, I mean that's, that represents a systemic risk and that risk has nothing to do with whether apple is good at what they do or not. It has to do with the fact that credit cards are broken by design. The fact that the number on a credit card that you give to every merchant allows them to go back into your account, or anybody who grabs that can go back into your account. That's a broken design, essentially what you're doing
is think of your credit card. Is a password and you're telling the password to everyone when you buy something you giving people a key yeah exactly to give him a key to your house right, whereas Bitcoin is fundamentally different, because when you sign the transaction, if they You can't change that transaction and all they can do is take that amount for that payment. Well, those were the issue of, banking online or doing anything online was a huge deal just a decade ago, like anybody would talk about buying like I should buy things online in the early 2000s and people would look at me like. I was crazy, like I'd, buy a t, shirt online use your credit card online. But because it depends on a centralized model of trust where you have to trust each intermediary in the chain. That's one of them
check things here, which is that on a credit card, if I transmit my credit card from here to there at that has to be encrypted, then that system transmits it to merchant processing system that connection has to be encrypted. Then the motion Proserve transmitted to the originate Ng Bank that has to be encrypted. Everybody keeps a copy of that credit card number on a database that has to be encrypted, surrounded by firewall Semana to twenty four slash: seven, because otherwise targets home Depot Jpmorgan Chase. You know again and again and again we see these hacks. When I transmit a bitcoin transaction, there's nothing secret in it. I can transmit it over on encrypted WI fi can send it over Bluetooth. I can play it as a music tone. I can send it to as a series of Skype Smiley's. That's my lady example. I can encode a bitcoin transaction. Is fifteen a multi cons in Skype and send it it doesn't. Why
anyone can it's just send it as a song like you could send someone one million dollars in Bitcoin through a song. Yes, so that's end of pink Floyd's money and have Bitcoin one million dollars in Bitcoin encoded. It's just a message: and the message will self can't be stolen so so that that's the beauty of it now? There's a protocol for phones called chirp which converts data into a sound, and you can go into a store that supports chirping their implementations of big win for chirp, where you go up to the merchant and you press a button on your a fake one wallet and caused and that's your payment. It should always go to don't don't don't don't I have a cat sound, it's a little modem. It's like a modem right, you remember the old, modems, screeching yeah, exactly so fourteen one thousand four hundred and fourteen dot four bought. I had one of those bitches
school son, sending money where you don't need to encrypt the money means that you can transmit it over anything. So you've got you've, opened up all of communication media. When the merger receives it, they don't need to protect it, because if they have a bunch of bitcoin transactions in the database, those are the same back when transactions that are on the public ledger, I don't need to go to March. I could look him up on the public lecture, there's nothing secret of Everybody knows what they are, and so you don't have to hide them. They can't be forged, they can't be stolen. There's no information by the consumer transmitted actually becomes. I mean correct me if I'm wrong, a man might might be thinking about this incorrect. But if someone sends you like say like you know that U2 album that got stuffed into everybody's Iphone. If somebody sends you an album, those songs themselves, you can have
of those songs have the actual value of the song embedded as Bitcoin like it could be. A thing that you have an instead of it being something you can copy. Money is content, but yet I'm saying yes, if it's completely embedded intertwined if their symbiotic, if something that cannot be copied. Like you can't take like say. The big e with digital downloads, is that you make an album and someone rips, your album puts it online and anybody can make infinite copies, but if it's digital money incorporated into the actual song itself- and that cannot be done well- no use individual one would be something that is unique and into it. Well is that does that make any sense, possibly, although you could probably just strip out the music and then copy, just. The music sound like drm right, yeah, exactly yeah, it's like DRM so they are it's not really useful for DRM, but it, but it is,
but you can now in bed, money is a content. Type so people who say you know we're going to stop. Bitcoin transactions from being transmitted. Bitcoin transaction is two hundred and fifty bytes of information. Skype has one hundred and twenty eight smiley emoticons. That means I can convert a bitcoin transaction and sixteen smileys, and as long as you have the same code on the other end to convert them back to a bitcoin transaction and you have access to a Bitcoin network. I can send you the fifteen Smiley's. You can take them, turn them into transaction, put them on the network and that transaction will go through. So it's a kind could be living it's a code. I could be living in the most oppressive country in the world. And as long as I can transmit fifteen smileys across my border or or twenty four words in English or or some pixels in a picture or a slight modification
of the red coloration of the Mona LISA in a jpeg I can transmit money. Whoa porn can be money, any information can be any information you can put a song in a picture. You can put a picture in a song. You can put a video in she said. I mean right now you it's so much now. Money is one more type of information that can be transmitted across any communication medium. The second support, the transmission of and because that was an issue that we were having with uploading things to Itunes and including the image of the actual part, the podcast image itself right. We have an issue with that: yeah older MP three players, didn't understand, extra information right now, I understand, the digital information of the photograph of cover cover right, which is a matter of simply being able to having the right, encoding and decoding on the two ends of the transaction, but.
Yeah here here's another really cool one. You can now create a bitcoin wallets as represented by either twelve or twenty four words from an an english dictionary, specific dictionary. It has, I remember how many words it has. I think it's side as several thousand words. The specific dictionary of words were each word, has a specific number and without the kitchen or if you have that dictionary, which you can download the pdf and it exists online. Twelve words create a bitcoin wallet. So it's not just a matter of transmitting a single transaction you can transfer the entire contents of your wallet or black ops, your wallet as twelve english words. So now, potato asparagus army, our van door, carpets screw drive, for lemon right now to fill in the blank. Ficus is a wallet and if I
say those twelve words to someone who knows that it's a wallet they can take that to recreate not just one transaction but all of the transaction. All of the addresses all of the money. That's in that wallet I can transfer the entire count or millions of accounts under the same system. In twelve words, that's fucking insane, but where can I put those twelve words I could spray paint them on the wall. I could put them on a poster. I could transmit the now see, that's a secret, you don't want to tell everybody, but but I could just simply send you a book And then send you a series of coordinates page thirty. Five. Second word. First paragraph and now you have a bit coin: it's in the form of a book. I just think incredibly, you could send me a photograph like you could be vacation and send me a photograph and Bitcoin money could be embedded in that the information of that photograph being sent to someone else's in in just a slight hue.
Variation in the red coloration of photo, yes, that some or any of the color you could just modify a couple over the pixel. You could do that with anything, though. If you have the code just like Morse Code, it's called steganography its secret writing with in some other form, and it's been done for actually for a very long time for centuries. Well, that was an issue with supposedly with Osama Bin Laden and how they were transferring information online that they were doing it through jpegs right. Wasn't that, like one of the big wave tour. Yes, I'm uh, others I think they use the. I see that the first people to do this were franciscan monks who who would write back. You know copies of the Bible and they they try to so that the first letter of each sentence vertically spelt something else, so they put a hidden message within the Bible, so it goes. It goes back a bit further. Some of Bin Laden, I'm like some part of what the Davinci Code is based on yeah secret writing
This is an old art. Well I mean that's essentially how they got away with transferring information. During the world war. One world war, two era right when they really do do do do do do do do better. They had a d code, a lot of with their Morse code was with. They were actually sent yeah. All that I knew, but for what reason this is blow me away this idea of taking information and bedding in either a song or photograph and that becoming a bit coin. Transaction yeah that entry to me now- and you could put it anywhere- you could put a big quite transaction in two, the thing I'm so, for example, imagine if you have an oppressive governments and they're trying to block all external internet, how bout? How bout a massive you don't is there? Is there a government that is in a of anymore? Okay, you know
everyone's a manager, an oppressive government. Imagine one that's completely banned! All internet's! Writing you've shut down the internet, and you want to do big coin transactions in that country, you're from really motivated right. You you, you want to buy spray cans to spray revolutionary message on the Wall Wall. Let's use a non violent example. So now what you can do is as long as you have a country next door. It has a shortwave receiver with someone willing to messages on the Bitcoin blockchain. You could transmit a bitcoin transaction over Shortwave with like Morse with the radio and you could do it in a matter of seconds. So you could make your entire transmission in twenty five seconds. So now you start going into. They did this in France during the night, calculation. The allies dropped 10s of thousands of shortwave radios with parachutes to the partisan resistance, the french resistance and the parts Pennswood, you know, go out into in the middle of the woods hook up their radio on,
send it to a rail line, a railroad line law, a piece of steel that acts as an antenna. Burr is the short way transmission transmit for a few minutes, disconnect disappearance the woods and there's no way and find them or stop them, or do that then I could do that with money wow that is fucking wild. That's boy, that's something I never even took into consideration and that's something once money starts being adopted by more and more companies and more more people start using it for more more transactions, that's something that could be real paradigm shifting! there's a lot I mean that's. This is the idea of the rabbit You know, Bitcoin is at first. It strikes you as something very simplistic. It's a series of digital information and some numbers, and you send them in you and you make a transaction. So it's money's email, ok, fine, but then, if you go deeper and you see
the way it's structured without no intermediaries. The way it works is a decentralized network. The way it turns money into information, the more you think about it, the more you go down a rabbit hole, the more you realize that structures, an constraints that exist today are wiped away or blow go away by this thing and opens up these possibilities and the really interesting ones are the ones we can't imagine the Is there not an extension of what we do today, but are completely novel? Have never in a sense that it parallels the internet itself in that regard right and that's the main argument, I'm trying to make that this is not money for the internet. This is the internet of money whoa. It is a plan form on top of which you can build applications. Currency is just the first app. There will be more apps they'll, be stock, option, bond, apps and smart property apps. So to use the internet is an analogy like what year are we in in the nineteen? Ninety five of the internet, I my estimate, has been
This is over the last year I've been talking about this being the nineteen ninety two to nineteen. Ninety four period, the interface is a pretty rough. The major paradigm, shifting companies and innovations haven't happened yet the White House and happened where the we're still on ipa this instead of DNS names, that's why Bitcoin is real. Dramatic user interface hasn't been developed. Yet right, it's gnarly, it's weird! It's esoteric, it's kiki! Most people haven't heard about it with a big money doesn't come in, but all of the technology potential is already there and the adoption has already reached technology, critical mass meaning that. As someone said recently at the conference were not the early adopters, where the lunatic French, the early adopters come later, but forward beginning right, I gotta turn higherprimate dot com bitcoin. I'm writing a note right now. Paypal, you
yeah, maybe everything you might be able to just do it by turning on Paypal. Now I I don't know if they're beta program is ready for that, but it's not the full compared it sons of bitches and I'm going to get on on it as well get on it to start going. I can't do anything about comedy central about my new special, but those things I can do something. I don't know man you have you have as a content creator. I think you'll find that pub features are open to new, exciting and out their ideas. I think you have the opportunity to go. With was some of them and say: hey. You want to try something. You are definitely have the opportunity to chat to them, and then they there's that fucking pothead each fighting commentator Idiot was covered in tattoos. Let's just not listen to him and keep making millions get outta here kid then I'm going to listen to Maine.
That's certainly a consumer sentiment for me because I felt that before you can now pump gas for bit coin in the rock amounts: powerful rocky mountains. Where is this that's happening which the Colorado in Greeley CO, of course called the cosmic market? Well, you know it's interesting. Greeley co is one of those towns that doesn't want marijuana. Those fucking dummies there One of the towns is trying to keep marijuana out. What is this yeah? Well, you know the they're worried the it's going to be a bunch of hooligans and near do wells. Meanwhile, that has changed Colorado in a God. Damn dramatic way, it was beautiful being back there and seeing all the businesses that are spawning out of this. This legalized marijuana movement and again it's another. It's another example of what happens when you give people freedom. You know, can you buy pot with Bitcoin Goddamnit Revolutionary, really absolutely does lsp we'd use bit
one. You know I don't know. Chino needs to get on the ship. You could buy gas cards. Also coin fuel dot com you can buy any ask card, said yeah any kind of gas card with bit coin. Look at the! Do you know about the yeah, so the real question now is: can you buy acts with Bitcoin directly more? Can you buy axe with that Quinn Fire an intermediary? That's the only difference, because I can pretty much by anything with the queen. Now. The question is: how many conversions do you do? Do you need to convert back, went to a currency or a gift? heart or a report point miles or something else system or some kind of customer loyalty program or does someone else by the product for you? you give them Bitcoin an intermediary, or can you give Bic went to the merchant directly So there's all of these shades, but in terms of Kenya, I Ex was Bitcoin when the answer is yes, there's an escort for Bitcoin sign. Still not open yet escort for
window trying to figure it out? Meanwhile, there's a some digital servers. Shading hey! You know you can trust on there's. You know those are under cover copies like. Why would they go through the Exter like a we're going to get all the big point gap because they're trying to crash Gamersgate? This is the they'll be the first day. Stds that you get get in your bitcoin wallet and funk it all up. I think it's amazing. I mean, since you started coming on here, which is over a year ago, some of the very first parents, we've seen quite a shift in the accessibility of bit coin. The ability to buy things a bit coined the the people are accepting Bitcoin acceptability and the discussion. A bit coin is ask waited it's it's elevated. I think the discussion is less about. I think, there's less ignorance unless just blatant misrepresentation, so uh was having these discussions of people were asking questions like. Why can Satoshi Nakamoto just come in and take all the bitcoin and
You know want this only be used by terrorists and pornographers, my people, you know that was that was the conversation. Now we've elevated a bear. So the funny thing is that people are beginning to recognize that they can't simply dismiss Bitcoin out of hand. So what they do is they tried to split hairs that, like yeah well, so the technology of the blockchain is really fascinating, but Bitcoin the currency will obvious, obviously failed. So the splitting hairs now give him another year we're going to come around. Of course, those of us who have been in this for a while on the stand that the technology in the currency, our goal like hand in hand, you can't have a successful technology without a valuable currency and vice versa, but you're beginning to see the naysayers try to split hairs because they can now
longer say, there's nothing there. They were no longer say this is just a joke, because many, many very you know smart, intelligent, well, educated, well, informed people are saying, hang on, this isn't a joke. There is something interesting about this technology. There is something disruptive about this technology and we, looking into it seriously and after you see a bunch of we shouldn't do a PO box This should stand on its own. It either is or it isn't, but the truth is that in our culture we do appeal by authority when Paypal comes along and says, there's something here and we're going to invest in it. Overstock Del Tigerdirect one after the other, the companies turn around it? You say: well, you know these are not dumb people. These are not people who don't understand money. These are not the lunatic fringe anymore. There are the early adopters and the conversation has changed
We did. Our first show Apple banned, Bitcoin applications. Yes now they reverted that four months ago five months ago, how to change their stance, and now there are dozens of Bitcoin. And I predicted that they would switch- did predict that. But I read that the reason why they did was because there was some fuckery involved in the actual coding of the software itself and that they weren't be. Entirely accurate about what the software was capable of doing. Oh, there was a and when they were being very difficult about Bitcoin applications, a lot of the Bitcoin applications were kind of trying to find loopholes here and there one of the funny so I saw, was that apple had a whole different set of rules. If you have a co op. So if you have a co op, you can distribute software to your co. Op members, without putting it through the Apple Itunes,
or so someone set up a bitcoin wallet. That's you sign up by email to become a member of the coop, and then they send you the app by email, so people doing all kinds of shenanigans like that. But the real reason for this- and we said that six months ago was apple- was going to launch apple pay and they didn't need a whole much of insurgent little weirdo applications burning their announcement so until the last moment they resisted, they wanted to keep control of her payments, both in store payments where they make a very healthy thirty percent cuts on every app and every in store purchase and they wanted to introduce their own payment and wallet technology, and so they did that. So now Apple has created Compuserve and we still have the internet. Now we can play on a level playing for Let's see who wins, I have my bets on the internet, not compuserve of money out. That's what apple po! That's what apple pay does right. They have a number of three
one hundred million credit cards subscribers who have the sterile? Well, curated, walled garden control, experience, and then there is Bitcoin that works internationally. That is wide open. That does do all of that. What do you got there? I have my credit cards in my wallet. I used it the other day for my first time. Just this is the apple pay phone bill pay thing Jamie. Can you get some whiskey and ice? I'm trying to like do something my voice here in the microwave hello? No, no! I don't want. I want a cold, that's why I had ice fuck put in the microwave yeah, it's good for you through. Warm will melt the ice cream. Who are you so then, when you, when you use this, did it to do anything? It was just you just kind of swiped it over the thing, and it just you only certain vendors. It works on you can't you can't do it everywhere, it's any of
credit card machines were usually swipe. Your own card, most of the newer ones, have a little symbol on it. That means it has the local wifi yeah. Yes, that remote control and I s or whatever it's called right- that's NFC, and is that a way system, our top and pay? Now here's the interesting thing apple launched Apple Pay and Google, which has good wallet had seen very few subscribers and as soon as Apple P, launched Google Subscriber numbers shot through the roof, because you can do the same thing on Android and I'm really banking. On that a fact, because apple, will make people familiar with mobile, wallets the idea of tap and pay with their thing, but they still have me. We have the same problems. Apple has all of these credit cards that are vulnerable. They track all of your purchases and everything you do and they're going to impose restrictions on what things you can
in what merchants you can pay and you've still got all of the old players. Visa. Mastercard American Express all of the problematic payment networks that are restrictive. They have five dollars, minimums they're, very expensive for merchants. You can have fraud all of these things but what they're doing is they're familiarizing people with pay and NFC, and we can do that with Bitcoin to only we can give them the full experience from micro payments to cross border transactions to countries they've never heard of two do you know the the full back? When experience, I thought you might say it's Compu serve versus the internet for it, you know well, Compu, serve an AOL internet copied anybody once the once means. Once you lose got. People
used to the idea of email in a safe kind of curated environment like a sand box and once they did what they really wanted was the full internet email, because the open technology innovate faster. It has broader scale, is less fragile and it has more participation and so same thing applies to pick. What do you think Iphone is going to be the platform of choice voice for the four to six billion unbanked people in Indonesia, in the Philippines, in Sub Sahara, in Africa and South Africa and Latin America hell. No, it's going to be Android with Bitcoin, it's not going to be apple pay and then, because apple pay has a role to play. Amil familiar for people with this technology will get people to start thinking of money as a purely digital thing, and then we come along and we deploy Bitcoin on twenty dollars, Android phones and saturate the rest of the war
and give them that experience with such passion. I say that was Pasha rate. There is the world, but you five billion people having international banking for the first time in history. I mean that gives me shivers. It is it is that is the it's revolutionary aspect of this technology. It's not making like right now. Instead of swiping my card, I can wait, give my phone I've saved one hundred and fifty calories, in my consumer spending experience, that's bullshit that doesn't do anything for anyone, no, but you allow someone who's, never done banking before to send money internationally to get loans from anywhere in the world, to start a company and sell a product anywhere in the world, and to do that for four billion people, five billion people, six billion people that stuff changes the world. It's not going to be about. No, no! It's going to be about getting rid of the existing system that
fine, but they don't have an existing system press. If but I mean in in this- you Know- and it will in the in the third world sharks in the in the second there were also this, according to the World Bank, this two and a half billion people who are on bank. That means they have no banking facilities. What so ever and no money in the account deposits- no not true. They live in cash. They live in cash and bar based societies. They do have money, they exchange labor products and services with each other, all the time, eggs chickens being farming carrying water, whatever it may be, post apocalyptic type money and they have an enormous productive potential, but barter makes it very difficult to trade barter if the other person wants chickens and you have a goat yeah. You gotta give it a lot of fucking chicken.
We've got to find someone who wants a goat and so, and so what that tells is you have a very high friction economy and it reduces everybody's productivity. To do anything, you have to walk one thousand and twenty miles to transact. Now these people have productive cup saying that's a two one, slash two billion then there's another three one slash two billion people who have banking, but it's very basic banking, which means it's in their own currency, only know international markets, no credit, all equity, no credit history, no ability to wire money and are you there, nearest bank branches usually far far away, so we primarily use it for savings. They don't use it to do. You know point of sale fees, a swiping debit cards and things like that ends together in fees to constituencies these two populations. Many of them have cellphones. They have text messaging cell phones. So would you bring to
for those who technologies and you can create essentially a revolution and financial economic inclusion in international trade in productivity. Where, instead of now walking fifteen miles the market, you can do a Trans action on your cellphone. Well, especially since all that money is interchangeable, international and yes, it's all so all the same. This happened in Kenya and Kenny in two thousand and one at local phone company Safaricom one of the telcos in that space. Dated a program where people could exchange cell phone minutes with each other, and so that system initially started being used informally. As money, so people would be like give me Thanks I'll give you two cell phone minutes, because it was equivalent to money. People couldn't afford to have a bank account, but they could afford to have a cell phone contract. This is how messed up the bag
system. Is it around the world, and so they would exchange minutes for products and services. Eventually, the phone company a couple of years later recognized that they call this thing M pesah from Mobile pay so which is the currency of Kenya and they started broadening it. It now spends three or four countries in the Here's what happens eleven years later and peso is forty percent of the GDP of Kenya, zero percent forty- and this is not GDP that got converted from Payson to M Pesa. Most of this is completely new economic activity. The previously existed as grain markets, barter markets cash, only societies and was inefficient and slow so that she generated growth and economic activity. We've seen this happen in one country, you can't transfer and paste outside the country. You can't use it for a minute, since it has its specific to one currency.
And it's still heavily tax, and then, if you waited now imagine what we could do with that quite now, a few months back, there was some controversy online and you made a statement that you were resigning from some sort of organ station yeah. What was that all about? well. There's there's an organization which is kind of like a membership association called Bitcoin Foundation, and it sounds a lot of peop so this organization has some kind of role or authoritie. They really It is just a member association right. They don't control Bitcoin. They don't have any role to play in the code. They'd to collect money from members and they use that money to.
Pay some of the main developers so that they can focus full time on, but quite like a foundation, for example Mozilla that makes Firefox they have foundation, they pay a lot of developers. Lennix the operating system has a foundation, pays a lot of developers, so it is kind of like science, but they don't have any control over anything to just collect member Jews, and they do some lobbying. They do some public as the pace and developers. I had some problems with the transparency of the way the organization was being run. I I eat this. I participated in the early days in the election process. I helped with that. I was one of the people moderating. The debates between ferris candidates was hoping to see some rofe from some of the original members and some of the charter, and the rules were such that it was highly highly compromised from the beginning and, for example, one of the founding members is Mark walls mark Karpeles, the guy who owns and crash.
The empty box, he was one of those that guy founders and the bigger the big fat face. So when you have like two or three of the directores in that facing massive lawsuits or indictments, or does that guy still alive, I seems like some. I mean didn't like a lot of money vanished with that guy. Words of billions of dollars and he like running around by noodles at a market right. He can go anywhere. He wants I'll put that down to the fact that Japan has very very effective gun control, uh Is that the reason why so you know I mean I'm a pacifist I would like to think that what should happen to him as we should have a full and proper accounting of what happens, and then he should pay the appropriate price through the judicial system, I mean the amount of money that you would mean he would have to generate some ungodly. He never know people are never going to get paid back for the money they lossed, but at least you could see at first truth then,
Just some form. You need truth. First, like let's at least find out what actually happened, people need to know that somehow or another for folks who don't understand the situation or not aware of it, Mount Gax was about so it was an exchange. It would buy and sell Bitcoin. For US dollars, japanese yen in heroes, and it was the first exchange. So it was the first place where you could trade your bitcoins for something else, but it was originally. It was established from a website that was about magic. The gathering right, correct. It was for trading playing car. Because they have they already had the market based trading mechanism right. So you just converted it's a bit coin, which was a very smart move, but it wasn't up to the to the job of What is it a scenario? Sorry to interrupt you, but it was. It was a scenario where the landscape, change so quickly, so so radically that they couldn't keep up and couldn't possibly forcing it when they started training trading Bitcoin. And then it just got out of hand among other things. Yes, so how were
That's what would a person be in that sort of scenario? Well, there's more than gross incompetence there and I for a long time, thought it was just an incredible amount of incompetence and lack of due diligence boatswain under the sink there is. There is evidence, well there's the classic evidence where a mistake in certain problems, cause money to be lossed and then, instead of coming clean about that, but we know now know that karpeles continued to run the operation where he would pay old customers out from the money coming in from new customers. That's the definition of a pool. This game and most ponzi schemes. Don't start because someone says: let me run a ponzi scheme. They start because they start trading customers money they lose is too much and they don't want to admit, though, he lost the money? So they stay we're using the new customers money to pay off the old customers. The lies get bigger, the numbers get bigger until one day the lies and the numbers get too big to hide. It all comes out in the open and collapses
That's exactly what happened. The lesson to learn from empty is when you have a a decentralized secure solution like Bitcoin and and you give all of the keys to one person. What happens is exactly what has happened for the last several thousand years of history, That person takes the money and runs yeah. You said on the podcast previously that you think it's probably a good thing that this crashed and it it's a good lesson for the rest of the Bitcoin community. It's a very painful lesson. I wish people had been able to learn it I mean a lot of people, were blowing the whistle long before it collapsed and saying, including myself, saying, do not put your money in this system. And in many ways highlights the positive attributes at Bitcoin shared peer to peer, the way it's being done now, so you know expression. Possession is nine slash. Ten of the law and big possession is ten tenths of the law. If you have the keys, it's your money, if you don't have the keys, it's not your money, yeah and people did not control the keys at they gave them to our policy anyway. So we will do this just just to wrap this.
Ok, I resigned from that. Association saying I wanted to. I try to make it. You know I do make a big deal out of it. I just said that I disagree with the way this is being managed to, like the transparency hasn't been reformed enough. I'm out it was turned into a very biggest news story, I'm hoping that nothing bad happens within the foundation, but I still have concerns that because of a lack of transparency because of a lack of reform There could be opportunities there for shenanigans. One is the best resource. Besides listening to you on podcast, which is excellent for peep, go to research bitcoin to find out where they could get more information where they can assimilate into maybe community and message board where they can exchange ideas. So there's a couple of really good
sites where you can go and see. Lauren things about Bitcoin, Bitcoin dot. Org is one of those it has information about how to get into Bitcoin what it is. That's wrong again by an association of users is a non profit style thing. It's one of the things that the core foundation does relatively well and you can find information about the claim their. There is various online communities massive can getting on Facebook. I'm really really very excited about the meet up: Communitymeetup, dot, com, local grassroots meetups all around the world. So when I go speaking like I went to Australia, I went to the Sydney, meetup group, and said tell all your members: let's have a meet up I'll, come talk about Bitcoin and they gathered they sold out two hundred and fifty seats in a room like instant.
So these things didn't exist a year ago that there weren't enough Bitcoin is in one place to get together. Now there are in hundreds of places around the world, so meetup dot com go and meet. People. Lauren to pick claimed and learn about it. They're also meet ups for big point developers to learn how to do software development. I started one of those in San Francisco with the second of that type, and one of the most success Well now has more than six hundred members. I believe- and I'm going to do a very brief but shameless plug. How dare you on December, twenty seventh, a right wing media, which is a software and developments publisher, technical publishers, publishing my book is called mastering pick queen and it's a book for software developers to learn how to use back. When I spent a year and a half working on that and just finished, I got email this morning that final copy went to print. So does it actually gonna be a book book or soldiers? It'll look as well. It's a digital book. It's a printed book because I will have her
I I'm I I should be I'm trying to get Morgan Freeman to read no use it. If read it, how dare you I'll read it with my weird greek british x and you're, going to read it right, you're not going to. I don't know, I don't know. If there's going to be an audio, it's a technical book, it's got ahold segments in it. It's not exactly here to be an audio book, but ok, we'll see ebook prints. It's also under an open source license, I'm a huge believe in open source. I use the creative commons licensing system, so it's creative commons with attribution share alike. It's available online. The entire book was developed online with contributions from hundreds of people who corrected things in the book. All of the editing process was public. You can do loaded for free, so it's for free or is there no it's published by a mainstream software and technical publisher with a lot of clouds who are taking it to a mainstream audience, because we needed that in this case and that's coming out,
print Amazon, Barnes and Noble O'Reilly's common and every other book. Publisher and book distributor out there will have a copy of this book. You can buy it. It's three thousand two hundred and thirty five dollars retail approximate twenty. I think on Amazon you can buy an e bach for about twenty five dollars and but it's also available for free on as a pdf or as a source code kind of crazy, you're selling it and you're, giving it away at the same time. Yes, and they will tell you that has many have discovered in this space open source,
Contents does not diminish retail sales. In fact it grows them really. Yes, the people who can afford to buy the book we'll buy it to put it on their bookshelf and have a paper reference to put it on their kindle than a nicely formatted convenient way. It's easy! It's convenient one click. If there is value people will pay for convenience and packaging and and just kind of the quality of of it's colored paper. Honestly, they will that's why you're drinking a bottle of water when you can get free water from the tap? No, because the government, fluoride, black helicopters, okay, but people pay for quality in packaging and convenience right and so at the same time, people who couldn't afford to buy the book will download it and use it. As a resource to learn the skills and to me that's the most important thing, because if you want and fast and big coin, is you don't invest in the currency? You invest in the skills. This,
like learning. How to make a website in two thousand is like learning how to make an Ios app in two thousand and five. This is a skill that will give you a job and so the skill that will give you a job yeah like what kind of job is. It were hiring thousands of people in this industry in order to do the software development. What software development, and we talking about there are now some eight hundred startups being tracked by. I think it's called venture scan, which is a company that tracks funded venture capital funded startups. There more than eight hundred companies in the space doing startups around Bitcoin building applications, user interfaces, new financial services, exchanges wallets. You know I met someone's building something this is, and you industry, the blossoming and creating thousands of jobs and
industry is now hiring thousands of people in the US, especially with skills around software development, accounting, finance, um marketing, public relations operations, management's, the entire spectrum of thing you need to start up wow, and so this book that you wrote has a lot of coding and coding instruction in it. So first two actors are accessible to anyone. They explain how but quite works at a level that someone who is not too, who is a bit technical but not. I can understand the other. Eight chapters are how Bitcoin works in detail for a programmer to get a complete soup to nuts overview of how the entire system not just big point, but the blockchain technology and all of the other currencies that are based on that model, how it works, how to write software to it, how all the data structures work, help the
protocols work and to get a complete understanding of it. So so it's really for programmers, so you on in our schools, you've immersed yourself in this over the period of x amount of years. How many, how three years, three years and what what knowledge base of coding did you have you got into it? I started coding when I was ten years old, so I've been doing so I'm not a professional programmer. I am. I am passionate ammeter. If you like I've, I I've been paid a few times writing code, but I'm not as productive and disciplined as a professional coder. Who only does coding I code for fun, like I code because I'm fascinated by it and when I started this, I knew quite a lot about coding and a bit about Bitcoin and I started writing a book honestly. The best way to teach yourself a technology is to try to teach it to someone else, and I learned more about Bitcoin by writing. The book
and you know when I started- I knew a bit now. I know a lot more because I had to find ways to explain this technology in simple terms: so fascinating that you say that, because that's a truism that is often expressed in martial arts, one of The ways that I got really good at martial arts is, I taught from the time I was fifteen years old. I taught I taught at Boston, versity I taught at my own school I was I used to teach all of the price lessons at mine and because of that, my technique got very clean and sharp right, and I think that that often thought about doing that with even with stand up comedy, although I don't think you really can teach stand up comedy, you can kind. Exchange information and go over the facts of it or the building block yes of it. So I find I really amazing that you say that about Koning as well, so you could beach improv right
I'm not really well, you can teach people, they never do it again. Okay, fork and I need a genre well, I would sign up yeah it device decoding. It applies to book. Writing positive replies in public speaking, I'm learning how to be a pilot now. So I love flying planes. So it's one of the things I'm really into an as soon as I'm complete with my training, which should be in the next month or so, I'm going to start the next stage to become an instructor, because if I want to get really good at that, I need to start teaching. People how to do it, while it's a truism across, if you want to learn something well, teach it, and maybe at first it's hard because you you in in teaching it you realize how how much you need to learn in order to be more crisp into the to be able to create explanations that are simple to understand. You first have to understand it in depth yourself, yes, but it folks
as you, and so that's that was part of how I wrote the book was, I I understood it, but I understood it at a relatively superficial level, just to use it in trying to explain it. I had learn it deeper. That's that is so true and so interesting about knowledge about information. Is that a lot of people develop cursory or a working knowledge of something, but in order to re, explain it. You have to have a full foundation. You have to have you know every you have to have the foundation the blocks, the structure. You have to the whole thing in order to explain what the houses you know and then that's it's really amazing thing about information. It's it really fascinates me how the mind works and how just IBS is or Bing information and the depth of that absorption. Like there's some people that I could talk to sure that node Bitcoin but don't know, Bitcoin like you and I can have a car,
station with them and come away with some misconceptions, perhaps, but then talking and talking to you, especially since you teach it so much and mean essential you doing, we do podcasts you're teaching us what what the but little or the future applications for Bitcoin can be, and in doing so. You know I get a much deeper sense of what it is because you're so used to teaching it yeah and I have to say you've gotta, realize there's a lot of people who know Bitcoin a hell of a lot better than I do and know how to apply it to the fuck. Are these people there must be weirdos there? All the time call geniuses who spend most of the time, making the Bitcoin code better and building applications around it? I'm not a professional coder. An I don't spend most of my time doing that it's important to realize what they do is orders of magnitude D.
Isn't what I do and understand about that quote, but I have are on sale list. Yes, I have one skill. I think that skill is necessary and valuable, and this is what I do. I took my skill, which is explaining and teaching in public speaking and applied it to bit coin. I'm not the most knowledgeable, I'm not not even close to being the most knowledgeable. What are you missing? What are you missing A lot of noise have well, first of all, all the focus on on code and developing I mean I don't write code. You know twenty four, today? I don't write code all the time they write code, all the time, the algorithms issues of scalability and optimization understanding the
really subtle technical nuances of the protocol and developing a consensus protocol. Those are really subtle. I mean you can find tiny, tiny bugs in Bitcoin which, under certain conditions, if you write a transaction with certain script operators, it can cause this to happen and that to happen and you've got people who are way out ahead. Who are finding these things figuring, here's something that could go wrong in a transaction and here's some code that ensures that we check for that. From now on yeah I mean I don't have that depth. I can understand what they're talking about, but I wouldn't have figured that out by myself, because I don't spend the time analyzing the code like they do. Well, that's one of the weird things about being a human being. Just it's. Ok, all that there are so many different people and the spectrum is so
broad right that there are some just very bizarre people that are just sitting in front of a computer just banging out numbers and staring at lines of code. Those are super important if those born here we wouldn't be doing that. We wouldn't be doing this. There's no question about it when we online, when I do know online right. What I do by comparison is a is a after thought: it's a layer that only happens because other people did this work at first. That's what what really amazes me about working in this space. Over the last three years, I have met some of the sharpest smartest most intelligent, most incredibly complicated thinkers in terms of coding, technology databases, protocols, finance Economics, Monet, Paula, see some of the best thinkers of our generation have fixated on this little project and are doing things that are incredible and I meet these.
People and I say there's a reason why, when smart people figure out what this is, they get fixated they get really really obsessed about this technology, so you go from skeptic my first reaction when I came across Bitcoin List, Nerd money like just completely ignored it Most later I read the paper. Light bulbs are going off in my head, I'm like oh, distributed control system security model. This is not just the currency hang on a second. This is contents. Now it has these implications and you just go straight down the rabbit hole. I went down that rabbit hole. So far. Four months later, I had lost more than twenty, because I was getting eighteen hours a day. Reading everything I could about it writing code for to eat communicating I forgot to eat. This is how it took me three or four times in my life that
to kill a personality quirk. Yes, Michael, it's a state, a few! My first few f! U g e! F! U g! U e it's this association with reality and you can go all the way, pathological and just run into serious trouble. I did it on a relatively heavy basis for most people, but still survivable, my first computer when I got my first computer it just it's completely transformed my life. It's it's opened up a space of a man, a nation that I didn't know existed and I started programming and I realize what you could do with programming and my find, is a ten year old just went so what year was? This was one thousand nine hundred and eighty two, so you got in way early. It was one of the first like before the Atari like this was
X. Eighty one Sinclair Micro Computer from Britain, you connected it to your tv, but you could program this thing and you could write basic software and you could even writes assembly code on it and within next months by the time I was eleven. I was writing assembly code on this thing and and I didn't even understand the mathematics behind it. I learned those mathematics in high school, but I already was practicing that stuff when I got my first modem and I connected to Bulletin Board Systems LOS Angelus, in fact, from Greece over long distance phone calls. My family was not happy about that phone bill and I can-
indicated with geeks on another continent. For the first time it blew my mind to I opened the door to an entire reality. That was impossible for greek teen to experience and when I got my first internet connection again, Bitcoin is would like one of those events and when I first started, I dismissed it, but when I, when I took a slightly deeper glimpse- and I saw where it what it was- straight down the rabbit hole forgot to eat for four months lost, a ton of weight, just became completely obsessed completely. I mean you know you go out for dinner with your friends and you bring up Bitcoin in every single conversation before long you're, not in, but after that,
so I managed to find the more healthy balance. I'm still absolutely fascinated about this technology. I don't forget to eat anymore, I'm still fascinated by this technology and every day I learn something that opens up even more the possibilities, and now I'm not longer thinking what can we do in two years? And now I'm thinking this is still going to be changing things two decades from now, three decades from now, wow will listen to guys, like you are very important, really crazy, fucks that will not eat for months at a time and lose eighteen pounds, because you find viability in the potential and something like this. It's very important. The world didn't change, because someone who was already an established researcher in an established space made a tiny, incremental change. The world has change numerous times, because someone from the lunatic fringe refused to occur
app that their idea was stupid and crazy and would never work and persevered regardless ended up changing an entire industry. When einstein- there's a patent worker in the austrian patent Office or swiss patent, I don't remember. Even he wasn't part of the physics community. He was the lunatic fringe and he came up with an idea that was ridiculed for a good decade before anybody figured out the it was something there right and we see the same thing in history again and again we rewrite and white wash the history of innovation to say and then forward create the car and everyone went good job Ford will all by model tees. Now they didn't what they said. Was you car? Yes, you're insane? This is crazy. It's
thirty, it's noisy, it will destroy our roads. It will never work when Edison discovered and created all of these wonderful things around electricity people do say, that's amazing. Let's all electrify everything the media said, anybody who puts electricity in their house will burn it down and only the rich and crazy with dabbling technology and it will soon go away and passes a fad. Why don't you use traditional good working? Kerosene? well that's what they said about everything. That's what they said about everything it takes. It takes the people who refuse to accept the the vision there. Seeing is crazy. Now, Carl Sagan, it's something very important. He says. Yes, they laughed at Christopher Columbus. Yes, they laughed at Edison, but they also laughed at bozo. The clown
you have to you have to be fairly confident. There is there's a fair, a fair, because you might end up just being Bozo the clown, in which case the right to be laughing at you. It's a matter of subtlety. I think there's that they are there and I'm every day I meet more's Thomas and Lee intelligent people who have Run down the same rabbit hole is me in exactly the same way and have come out of the other side transformed and have decided to dedicate their life or part of their career, at least their focus, their energies, their passion that work to see how far we can take this, will experiment, because we all realize the simple equation underneath it in with the wrong. I lose some money and some of my time, if I'm right we're going to change the world.
It's as simple as that and if I'm wrong, nobody gets hurt the people who got into this. They understand the risks. This is fringy stuff. This is out there. You invest all of your retirement savings in Bitcoin you're, an idiot you're going. It was a lot of money, that's not how you do it, but the people investing there, blood, sweat, tears and knowledge and passion and enthusiasm into this if they lose they have fun ride, I'm enjoying this, but if there right we're changing the world. Well, I don't the question of whether or not there's a there there. I don't think that's a valid question. There's unquestionably there there that's already there. We can say that now a year ago it was really hard to even make that argument. Well now you can say it Now you can say it now. You've got Paypal naked by a Dell computer. If you can use Bitcoin, you said off and then you get a laptop and then your online with this laptop, you got this laptop from Bitcoin there's a there. There, that's uh,
there. It doesn't matter how many Ph Ds in economics right very long papers telling me it's not money. If I get a laptop in the mail, it's money. It's a there yeah, there's no question about. If you use Bitcoin to get an escort that escort soon website is up and available right now, it's not Brian refresh all day when that website comes online, Brian will be one of your biggest evangelists Oh, come on right now, I'm sure you look at Brian, like this crazy fuck that Joe hangs out with you will have new found, respect for him and his ability to spread the knowledge and power of Bitcoin. Once these escort sites go up, because then things will change like rub maps, forty percent of all rubmaps customers go to rub maps because of Brian because I found out about Brian. I have a serious point to make about that, and I don't want to minimize what you're saying please do, and I wouldn't. I would never imagine
to to control your money in a way that is entirely personal. The fact that you can memorize a bit quite a dress, the fact that you can control that money. The fact that no one can take it from you in that industry is an incredibly empowering process. Because it would actually allow the women who are in that industry, to get the value what they are doing, instead of being exploited mostly by and mostly through violence. So, a surprisingly enough, you can make a very strong argument that the the self determination and control aspects of Bitcoin, has a very significant empowering effect in that space. You, you can't robbed at knifepoint, for money, that's sitting on your wallet with a pin number or that's being transferred to uh service that you don't have access to end. Your pimp can't steal your money. It's a very good point. It's a very good point. You
not getting deep down into the rabbit hole of so social norms, and while I, exist in the first place and what is and not empowering to any person takes on any job. Sarah societal constructs that make it illegal in the first place manage a woman should be able to do whatever she wants. Building giving massages or kicking men in the calls for money. I mean there's, there's women that do that. I mean there's a valid fucking job to that there's an occupation dominatrix this they there's, there's not just one of them. I mean there's thousands of them all across the country, maybe even more than that I mean I don't know how many dominatrix there are, but I've met a bunch of them. You like this story. The idea of money is not an idea that just exists in humans, in fact, money eggs
this in every culture and is created by every culture even by children. Toddlers create money spontaneously as a cultural expression. When they don't know what money is: they'll, trade, rubber bands and wooden blocks and things like that. But in fact it's an idea that even goes beyond humans, you can teach primates. What money is you can teach them the idea that the abstract token can be exchanged for value sofa example they've done studies where they teach in my act, two thousand and nine talking monkeys in space at a whole bit about chimps chatted. They taught reminder Ranga Tang. The first thing they did. The female trump chips took the mail tips, money and fuck them right. So the two most trade well, I would say, the three most traded commodities in the world are food, sex and recreational narcotics. They have been the three most traded commodities in the world since the big-
king of time, the accusations that Bitcoin is used to buy drugs or by sex is a ridiculous accusation on its face. If it couldn't be used to buy those things. Arguably it's not. Money, yes you're right and I think that cannot be used to buy the three most traded commodities in the world is now. The point is that money represents the buying habits of the population, Hugh sing it. If you want to see Maine new values in Bitcoin, wait until Bitcoin becomes mainstream and then you will see mainstream values in Bitcoin. It's as simple as that. You know. Well, it's about personal freedom when it comes to any form of pleasure with people enjoy. Whether it's the pleasure of having someone cook your meal for you, the pleasure Having someone give you a back rub mean all those things are legal because it's a skill, These are these. Are these are so services that people provide to people? We just had this weird idea of deciding what is and isn't acceptable as far as a service and as far
so I'm concerned, everything should be legal if it's not harming someone If sex is legal free, if it's legal for a woman- and it should be for woman to go into any bar and choose a man that she desires to have sex with ass the guy you want to fuck and the guy goes yeah, and then she takes him home and have sex with them. That's totally legal, but if money is exchange somehow that woman is a criminal that we live in a crazy world living and we were insane and we're only insane because of these echoes of the puritanical values of the dip shits that were dressed up like pilgrims, have gone. Fucking rafts floated over here from Europe. It's an even crazier idea to say that you're going to control social interaction and behavior, not by controlling the act or by making the active legal, but by making the track. Section of money itself. Illegal controlling the money, is a very dangerous road down which, if we go, people will use it to control all kinds of other behaviors that perhaps
shouldn't. That's their lies, totalitarianism. Here's the point in the fact that Bitcoin can be used for these kinds of activities is not something special about Bitcoin. All money can be used for these kinds of activities. What is special about Bitcoin is that you can remove violence from the equation. In many ways the reason people buy drugs online is because you can't get stabbed over TCP Ip, and that is a very callous and throwaway equipped quip to make, but it is true fundamentally if you remove violence from the equation, that increases the value, and so that's why people use this. That's. What's special about Bitcoin is that it allows individuals to retain control and it removes the possibility of violence. I think that's a that's a good feature. Huge feature, listen man we're out of time! Thank you once again for illuminating us, and you know it's funny. You said that
first time, you came on that will be on in three months or four months, and things have changed so much and I keep saying at point time is it going to not change, but this it changed more in this one than the last one. So come back in a few months again and we'll figure out what the fuck is happening, then I don't know what you foresee taking place on the horizon, but I'm in March, two thousand and fifteen. Ok sure Rogan experience turn around four I'm in I'm in I'm in I'm full in on Bitcoin. I believe in it. So shooter Jennings so fuck, it so does Tigerdirect and Dell Computers and Paypal and bright, I'm still unconvinced, but once that fucking escort site is up he's in Asia and Tonop on Twitter, that's the at sign, AAN Op, that's very confusing! It's my first
initial in my last name, will you part of your life yeah? That's all! I could fit there's a lot you get along! That's true because you don't want that, use that at sign it eats up a lot of one hundred and forty characters Thank you very much thanks, I'm always having brilliant talking to you all. We always enjoy it very much so alright will be back tomorrow. You fucks so enjoy go, get yourself some bitcoin and be cool to each other. See you soon thanks everybody tune into the podcasts and thanks to our sponsors, thanks to square space, go to squarespace dot com enter in the code for Joe for a free trial and ten percent off your first purchase. Once you have designed a website tweet your website to hashtag, JRE Square Space and the winner one each month will risk leave a free year of the Square space business level plan thanks all so to me, undies the best fitting best showing underwear on the mother fucking Planet, ladies and gentlemen, go to
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Transcript generated on 2019-10-05.