Transcription of Episode 59 - Bitcoin s Center of Gravity

Participants: Adam.B.Levine (ABL), Host from LetsTalkBitcoin.com Andreas Antonopoulos (AS), Co Host from LetsTalkBitcoin.com !r. Step"anie #urp"$ (S#), Co "ost from LetsTalkBitcoin.com !aniel Larimer (!L), founder of %nvictus %nnovations and CT& of Bits"ares Scott 'o(inson (S'), Plu) and Pla$ Tec" Center *+po or)ani,er

ABL: Hi, and welcome to Episode 59 of Lets Talk Bitcoin, a twice-weekly show abo t the ideas, people, and p!o"ects b ildin# the di#ital economy and the f t !e of money$ %isit s at LetsTalkBitcoin$com fo! o ! daily # est blo#, all o ! past episodes, and, of co !se, tippin# add!esses$ &y name is Adam B$ Le'ine, and today we!e talkin# (&oney, &oney, &oney$) Bitf nde! is dead, lon# li'e* +h wait, the!es nothin# !eplacin# Bitf nde!$ ,m "oined by And!eas and -tephanie to talk abo t the ea!ly demise of the b ddin# Bitcoin nlicensed sec !ities ma!ket, the !each of the -E., the pcomin# .on#!essional hea!in#s, and Bitcoins new cente! of #!a'ity$ Then, /!oto-ha!es is a new altcoin f!om ,n'ict s ,nno'ations claimin# to be a c!ypto-ET0 on e'e!ythin# p!od ced by the %i!#inia-based company$ Afte! la nchin# last week, thin#s 1 ickly went e2ponential and mo!e than 3 months wo!th of blocks we!e mined in less than a week$ 4aniel La!ime! !e"oins s at the end of todays show fo! a 1 ick post-mo!tem on what happened, what went w!on#, and if anythin# abo t thei! plan has chan#ed in li#ht of the !ecent e'ents B t fi!st, we!e talkin# of Bitcoin and sta!t ps in the -ilicon %alley with -cott 5obinson$ Lets not keep him waitin# 6 en"oy the show7 89::;<

ABL: ,f the!e=s one thin# mo!e pop la! than Bitcoin, it=s sta!t ps, and the!e isn=t any othe! place 1 ite like the -ilicon %alley fo! sta!t ps$ Today, ,=m "oined by -cott 5obinson, one of the o!#ani>e!s of the Bitcoin -ilicon %alley &eet?p @!o p$ ABL: -cott, thanks fo! "oinin# s7 How a!e thin#sA -5: @oin# #!eat, thanks fo! ha'in# me, Adam7 ABL: Beah, absol tely7 , like to talk with Cohn &ohan whene'e! , can, beca se he ! ns a !eally e2citin# #!o p o t of Dew Bo!k that has a lot of acti'ity #oin# on$ ,t seems like -ilicon %alley sho ld !eally be a hotbed fo! this b t ,'e ne'e! act ally been to that &eet?p$ .an yo kind of #i'e me a tasteA 89:5;< -5 : Absol tely 7 Ee=!e holdin# the &eet?p e'e!y T esday F to Gpm at /l # and /lay Tech .ente!$ This was handed to me by 5o#e! 8%e!< afte! he=d mo'ed to Capan$$$ we sta!ted back in -eptembe! and the!e a!e p!obably abo t :; o! 3; people showin# p, b t its been #!owin# 1 ickly$ Dothin# like Cohn=s in Dew Bo!k which , belie'e has o'e! 5;; attendees, o! at least people !e#iste!ed fo! the &eet?p$ B t we=!e p shin# 3;; and it=s 5; people pl s consistently so its kind of been #!owin# in si>e, in both moment m and e2citement down he!e in the %alley$ -o yeah, we='e been doin# it e'e!y T esday fo! abo t$$$ , # ess what is that$$$a little o'e! : months now$ 8:::F< ABL: -o thats awesome how$$$$and 3;; is nothin# to be$$$ , mean thats no p!oblem at all, thats a #ood n mbe!$ , think thats like one of the, yo # ys a!e p!obably in the top fi'e with that$ 4iffe!ent &eet?ps do thin#s kind of diffe!ently, so what is it that yo # ys do the!eA 4o yo do p!esentations, is it mo!e " st like a netwo!kin# info!mal thin# o! like whats the, what wo ld somebody see if they went the!eA 8:: HI< -5 : Eell, the typical fo!mat is we in'ite speake!s both locally and ab!oad$ Ee='e had people f!om Hashfast, .oinbase$ Ee had Eddy f!om -eed.oin, who=s th!owin# the Bitcoin .onfe!ence 8at the< end of this week, T!a'is f!om .oin&a!ket, Ca!on f!om .oin-ette!$ Ee had @ y, the @lasspay # y$

Beah, the typical fo!mat=s maybe two to th!ee speake!s$$$ they kick off f!om F:3;F:H5$ They each ha'e abo t :; min tes " st to talk abo t how they=!e in'ol'ed in the Bitcoin space, what they=!e doin#, how they came to know Bitcoin, and then at the end, we " st kind of ha'e an open netwo!kin# session and typically its not an endin# point at Gpm, it s ally p shes to 9$ E'e!y once in a while, we='e had that act ally #o p to maybe : o! 3 in the mo!nin#, dependin# on how e2cited people we!e talkin# abo t thin#s$ 83:3:< ABL: The!e was a time when it seemed like " st abo t e'e!y sta!t p comin# o t of the Bitcoin space was like foc sed a!o nd this idea of t!yin# to sol'e the e2chan#e p!oblem$ And it !eally seems like in the past $$$ it seems like thats #oin# to be less of what we=!e seein#, b t , !eally dont know whats comin# ne2t as fa! as sta!t ps a!e conce!ned$ A!e yo # ys seein# any t!endsA 83:5;< -5: Absol tely7 +ne of the cool aspects to my wo!kin# with the Bitcoin &eet?p he!e is, /l # and /lay Tech .ente! is an inc bato! he!e at - nny'ale, and yo ='e #ot abo t 3;; sta!t ps in the b ildin#$ -o, its two f!onts , wo ld say we a!e seein# new t!ends$ +ne is act al established sta!t ps that ha'e nothin# to do with Bitcoin lookin# at it as eithe! a /latfo!m o! a -calin# A'en e$ +ne e2ample , wo ld #i'e is .ityBliss - they=!e kind of a hi#h-end fashion desi#n #!o p that allow desi#ne!s to basically sell to the masses - c t o t the middleman o! !etaile!s$ -o, they #i'e a 1 ick p!esentation, they we!e able to do a JKA, kind of ask the Bitcoin .omm nity, Lwhat do yo # ys thinkA Eo ld this be somethin# yo =d be lookin# atAL And of co !s,e its this ste!eotypical ,T sta!t p kind of L9;M &ale, 9;M 0emaleL en'i!onment so$$$$NABL: 5i#htO it looked like it was a 'e!y inte!estin# way to maybe en!oll # ys to b y !eally nice clothes fo! thei! #i!ls, and thats p!etty inte!estin#7 -o, thats one way we=!e seein# people adoptin# Bitcoin$ And the othe! side of thin#s is a little bit mo!e established with the e2chan#es and platfo!ms$$$ and as the !e# lato!y p!oblems a!e hashed o t we=!e seein# a lot mo!e people kind of be p!e-empti'e in dealin# with that$ They=!e acco ntin# fo! ta2,

wo!kin# with diffe!ent le#al entities to make s !e they ha'e thei! bases co'e!ed$ -o, the!e=s a little bit mo!e of an a##!essi'e stance as ente!in# into Bitcoin has become as mo!e adopted wo!ldwide$ And , think the 'al e add is well$$$ yo can scale on a #lobal en'i!onment with sin# Bitcoin, which is somethin# yo cant always se elsewhe!e$ , think its p!etty e2citin# " st to see people f!om diffe!ent 'e!ticals lookin# at Bitcoin as an oppo!t nity to take thei! b siness #lobally$ 85: 35< ABL: ,f /l # and /lay Tech has 3;; sta!t ps in the b ildin#, then ,=m especially c !io s$ How is Bitcoin compa!ed to othe! thin#s that people a!e c!eatin# sta!t ps a!o ndA And yo said that e2istin# sta!t ps a!e lookin# at it as an a'en e to e2pand into$$$ that seems like a !eally bi# deal to me7 4o yo think that in the non-Bitcoin sta!t p scene, this co ld !eally be seen as a way to b!oaden yo ! optionsA 85:5G < Absol tely - the!e is an inte!'iew with And!esen back in mid-+ctobe! on /ando4aily, and the t!end that he noticed is not only a!e the!e mo!e sta!t ps ente!in# the space, b t e2pe!ienced and 'e!y talented de'elopment teams a!e lookin# at it fa! mo!e se!io sly$ , think that indicates " st a #!owin# kind of e2citement abo t what Bitcoin can do, the implications of the p!otocol and " st the a'ailability, , # ess, to mo'e yo ! b siness anywhe!e yo want$ -o, its inte!estin# on two f!onts$ the fi!st f!ont, , wo ld say, is domestically the !e# lato!y en'i!onment in the ?- is ha!d to nde!stand$ ,ts 'e!y sca!y fo! somebody to taken on a liability of ente!in# into a non-!e# lated space$ +b'io sly, the!e=s a lot at stake if yo =!e doin# somethin# like that and its 'e!y e2pensi'e to #et the specialty kind of insi#ht of an atto!ney$ Ee see a lot of sta!t ps ab!oad that a!e adoptin# this m ch faste!, so thats the one e2citin# !elationship that we ha'e at /l # and /lay is they ha'e a n mbe! of inte!national accele!ato!s f!om Co!dan, /oland, @e!man, -in#apo!e - , mean, yo name it, we=!e kind of all o'e! the place$ Ee='e noticed that the!e=s a co ple of sta!t ps, in -in#apo!e especially, that a!e lookin# 'e!y ha!d at Bitcoin$ Then on the othe! f!ont, yo see

this #!owin# t! stwo!thiness of Bitcoin in and of itself$ The ma!ket cap=s now p shin# o'e! PHbillion and, while still 'olatile, people a!e comin# p with !easons to inco!po!ate it$ , think in the lon# te!m, yes, yo =!e seein# bette! de' teams, bette! ideas e2pandin# beyond " st the act al accessibility to Bitcoin$ , think a lot of people nde!stand this p!otocol is 'e!y simila! to T./Q,/ when it fi!st came o t and yo saw thin#s like Detscape, and this has kind of been said befo!e, b t the!e=s a lot of diffe!ent platfo!ms that can be b ilt pon this pee!-to-pee! system, so , think thats !eally e2citin#$ 8I:HG< ABL: Lets !eal 1 ickly talk abo t the ?- in that conte2t$ Bo =!e an inc bato! - , dont think that yo deal with Bitcoin sta!t ps yet, specifically, b t yo do deal with sta!t ps$ ,f yo we!e #oin# to deal with Bitcoin sta!t ps, is the !e# lato!y en'i!onment somethin# that #i'es yo pa seA +! is that " st the oppo!t nity beca se nobody knows what its #oin# to be, so yo may as well b ild it now while we=!e fi# !in# it o tA 8G:;G< -5 : - !e, yeah, ,=d say both$ +n the one hand, the 'e!tical is inc!edible - the le'el of !isk may o twei#h, c !!ently, the le'el of !et !n, b t the potentiality of a ma"o! shift in the economy in the #lobal scale is possible$ , think f!om the !iskie! side of thin#s - yes, its a 'e!y e2citin# 'e!tical and the!e co ld be a lot of oppo!t nity the!e$ +n the flip side of that, , think a lot of the %.s in the %alley a!e skeptical, in the sense of in'estin# st!ai#ht to sta!t ps$ ,ts almost as tho #h yo =!e seein# a lot mo!e bein# p t into the o'e!all ecosystem of Bitcoin$ -o, entities like -econd&a!ket, that a!e b!in#in# in t! st to most t!ade!s, o! what the Einkle'oss twins a!e doin# with thei! compa!able p!od ct, is somethin# that , think people a!e sta!tin# to 'ent !e into$ The!es not as m ch, lets say, ma"o! mo'ement in the sta!t p in'estment side of thin#s, b t f!om a /l # and /lay pe!specti'e, we=!e 'e!y e2cited$ , mean, we='e #ot kind of a hope to b ild the enti!e f ll line, f!om hostin# Bitcoin mine!s in a data cente! to in'estin# in ten Bitcoin sta!t ps o'e! the ne2t 9: months$ Ee=!e " st emb!acin# it f!om the #et-#o$$$ , think we=!e a little bit late to the #ame$ The!e=s anothe! #!o p, Boost%. with Adam 4!ape!, " st little bit Do!th of s

in -an &ateo, and they='e #one th!o #h a second batch now al!eady$ They='e #ot some e2citin# companies comin# o t of the!e, b t , think we=!e !eady to mo'e, and we sho ld ha'e some e2citin# anno ncements comin# late! this week at the confe!ence in -in#apo!e$ 89:35< ABL: Bo # ys a!e act ally a little bit late to the pa!ty$ , think that the!e a!e act ally two othe! inc bato!s, altho #h they=!e not in .alifo!nia, besides Boost%.$ B t , think that this is act ally a 'e!y inte!estin# 1 estion : Ehy now is /l # and /lay #ettin# into bein# an inc bato! o! wo!kin# and bein# hi#hly inte!ested in BitcoinA Ehat chan#ed, and when did that chan#eA 89;:;;< -5 : - !e - well to be honest, o ! fo nde! K .E+ did not see the 'al e in Bitcoin$ , think, a lot of people, when they look at Bitcoin, they say its a /on>i scheme, o! its too 'olatile, o! the!es !eally no 'al eR its not backed by anythin#$ Thats kind of the L" d#ment of the book befo!e it=s openL kind of pe!specti'e$ ,t took o ! fo nde! to come into one of o ! &eet?ps, and meetin# .ha!lie Lee f!om .oinbase, to !eally nde!stand the e2citement and the implications of ha'in# a pee!-to-pee!, decent!ali>ed moneta!y system$ ,'e been talkin# abo t it since, ,d say, at least Ap!il$ ,='e been a fan since well into :;99-:;9:$ -o, fo! me, it was initially an enth siast kind of pe!specti'e, b t it be#an to #!ow as the economy #!ew with it and it wasnt ntil mid to late -eptembe! afte! a few of these meetin#s that o ! fo nde! stepped in$ -aeed came down to one of the &eet?ps, met a lot of the people the!e, and saw " st all the e2citin# ene!#y thats comin# o t$ ,=d say - s !e$ we=!e not the fi!st, we=!e not the fla#ship entity mo'in# the needle at this point$ B t, , think we=!e a lot mo!e comfo!table in knowin#, afte! meetin# all these people comin# to the &eet?p, and c!eatin# the comm nity he!e at /l # and /lay, , think we ha'e a mo!e !ob st en'i!onment that will allow s to na'i#ate a little bit mo!e acc !ately and specifically, !emo'e the liability of p!oblem down the !oad$ -o, we=!e a little bit mo!e confident of whe!e Bitcoin is #oin#, and , think that wa!!ants a lot mo!e ene!#y and e2citement f!om o ! sides of thin#s, beca se Bitcoin co ld be a ma"o! dis! ption to the wo!ld economy$ Ee=!e payin# attention$

899:3F< ABL: ,ts inte!estin# that we=!e talkin# abo t Bitcoin he!e, and .ha!lie Lee is the # y who helped yo # ys tip o'e! into Bitcoin$ He=s act ally the lead de'elope! of Litecoin$ N-5 : Absol telyO Ee='e been talkin# to him ea!ly abo t Bitcoin$ A!e yo # ys lookin# at any othe! altcoins, o! is it p!ima!ily, o! enti!ely, the foc s is on BitcoinA 899: 53< -5: , think all 'i!t al c !!encies$ Ee='e been talkin# to a few diffe!ent of these t!adin# platfo!ms$ The e2citin# side of one of them is - all se'en altcoins - that they ha'e on thei! t!adin# platfo!m$ , wo ldnt say its a hed#e, b t the!e is the 1 estion: with Bitcoin bein# a!o nd the lon#est and bein# adopted the fastest, we see that its maybe like , said ea!lie!, its a Detscape - kind of pa!allel$ They=!e not the dominant b!owse!, b t f!om what they did came &o>illa, and all these othe! b!owse!s that we know today$ These diffe!ent platfo!ms that we!e b ilt on the p!otocol - we='e fi!st kind of na'i#ated th!o #h an entity like Detscape$ /e!haps Bitcoin is not the LEnd-All--ay-AllL :;-3; yea!s f!om now, b t its ce!tainly leadin# the cha!#e and to say that the!e wont be anothe! 'i!t al c !!ency that=ll be " st as competiti'e o! f nctionally mo!e impo!tant$$$, co ldnt say$ , dont think we a!e ! lin# anythin# else o t, b t Bitcoin is the p!ima!y foc s " st beca se we see a lot people mo'in# in that space, and the!es a lot mo!e ene!#y bein# p t into the de'elopment of diffe!ent platfo!ms on the p!otocol$ -o yeah, we a!e stickin# mostly with Bitcoin sta!t ps at this point$ 893:;;< ABL: Bo =!e p ttin# on a Bitcoin &ini-.onfe!ence and -ta!t p /itch e'ent, that ,=ll be a panelist on, in ea!ly 4ecembe!$ Ehat=s the #oal with this and how do these thin#s wo!kA 893:;F< -5 : /l # and /lay Tech .ente! p ts on a 1 a!te!ly e2po, and the whole point is to basically p!esent p to 3; sta!t ps to o ! netwo!k, and the comm nity, and the p blic, which is basically a th!ee-min te !apid fi!e pitch session$ /eople #et on,

show the!e, e2plain what they=!e doin#, e2plain how they=ll make money etc$$$ and its a way fo! s to deli'e! the p!od ct that we de'eloped$ ,n o ! b ildin#, we in'est in only abo t 5M of the 3;; sta!t ps that a!e he!e and its a ni1 e way of lookin# at thin#s beca se , feel it allows o ! nets to !each f !the! and it #i'es s mo!e of an insi#ht as to whe!e the t!ends a!e #oin#$ ,f yo look at B .ombinato!, they only basically p t th!o #h thei! p!o#!am companies that they ha'e in'ested in, simila! with 5;; -ta!t ps, !emembe!, the othe! inc bato!s in the a!ea$ Beca se we ha'e so many diffe!ent b!ick-and-mo!ta! facilities ab!oad and diffe!ent b!id#e p!o#!ams between A2el -p!in#e! in Be!lin, and some of the othe!s like Bose .apital p in .anada, we feel the e2po allows s to pick and choose f!om the la!#e! net and nde!stand which a!e the act al t!ends which a!e !eally pickin# p t!action$ This 4ecembe! 5th, sta!tin# at 9pm, we=ll ha'e abo t 3; diffe!ent sta!t ps, 95 of which will be inte!national sta!t ps f!om one of o ! command p!o#!ams, and some of them will be !elated to fin-tech, and the !emainin# 95 will be Bitcoin and c!yptoc !!ency-!elated sta!t ps$ Ee=ll " st be basically allowin# them to #o p on sta#e, #i'e thei! pitch to abo t 5;; to 9;;; people that show p$ The!e=ll be abo t 9;; in'esto!s o! mo!e in the act al a dience, and then they=ll ha'e thei! demo tables at which they can netwo!k afte!wa!d$ -o, its a #!eat oppo!t nity fo! s to allow people to see whats #oin# on he!e 6 /l # and /lay, see the sta!t ps that we=!e wo!kin# with and some of the new t!ends that a!e comin# o t on the sta!t p side of thin#s$ 89H :5;< ABL: Ee=!e !eco!din# this p!obably a co ple of days befo!e its #oin# to ai!$ A!e yo # ys still lookin# fo! sta!t psA 89H:55< -5 : Absol tely7 Ee a!e lookin# fo! sta!t ps p th!o #h abo t a week and a half p!io! to e2po$ -o, if yo =!e a Bitcoin o! fin-tech sta!t p lookin# fo! f ndin#, and yo =!e a!o nd o! willin# to come down to - nny'ale, .alifo!nia, we=d absol tely lo'e yo to apply at pl #andplaytechcente!$comQe2po

Bo can see some of the info!mation abo t what its abo t, how to apply, the date, !e#ist!ation, etc$$ Ee=d lo'e to ha'e mo!e people - the mo!e the me!!ie!7 ,=m s !e we can always fit an e2t!a one if we need to$ 895::;< ABL: Bo mentioned that yo ='e #ot an anno ncement comin# p on this 0!iday, thats act ally when the show is #oin# to ai!$ 4o yo think that yo can tell s what $$$ 895:35< -5: Absol tely, yes7 Ee=!e 'e!y e2cited he!e at /l # and /lay to anno nce a new f nd, specific to Bitcoin sta!t ps$ Ee='e made it a #oal to in'est in at least ten sta!t ps in the ne2t 9: months$ Ee=ll also ha'e an accele!ato! p!o#!am he!e at /l # And /lay specific to Bitcoin$ ,f yo ha'e any 1 estions o! wo ld like to lea!n mo!e abo t the p!o#!am, feel f!ee to shoot me an email at scottSpl #andplaytechcente!$com ,=m also the webmaste! he!e at /l # and /lay, so , #ot to finish p the Bitcoin website befo!e , t!a'el$ ,=m 'e!y e2cited to f lly emb!ace the whole Bitcoin ecosystem, and we=!e lookin# to make a splash with a n mbe! of new sta!t ps in the a!ea$ 89F:9;< ABL: ,s it no!mal fo! yo to ha'e a specific f nd set aside to a diffe!ent niche that yo =!e attackin# with sta!t psA 89F:95< -5 : Bes$ Ee ha'e ce!tain f nds that a!e made fo! o ! accele!ato! p!o#!ams - a n mbe! of the b!id#e p!o#!ams like o ! %olkswa#en E5L Accele!ato!s is specific to any a tomoti'e technolo#y$ That b!id#es with a n mbe! of a tomoti'e entities like Toyota, &e!cedes$ The idea is we t!y and c!eate a ma!ket o! a 'e!tical-specific accele!ato! p!o#!am that allow s to le'e!a#e o ! co!po!ate !elationships by int!od cin# to them a deal flow to some of the sta!t ps we ha'e in the p!o#!am$

,n this case, with Bitcoin o! 'i!t al c !!ency, we=ll ha'e diffe!ent !elationships that we=!e le'e!a#in# " st f!om the ecosystem we=!e b ildin# he!e - between the immediate comm nity and the data cente! thin#s we=!e doin#, and a n mbe! of the !elationships we ha'e a!e with financial instit tions, so it #i'es s ni1 e offe!in# in c!eatin# these accele!ation p!o#!ams$ ,n this case, it=ll be specific to anyone thats in Bitcoin, o! is !elated to financial tech$ Eith 'i!t al c !!ency, this=ll be a #!eat oppo!t nity to see whe!e yo can #o and se o ! s ppo!t system as it al!eady e2ists he!e$ 89I::;< ABL: -cott 5obinson, Bitcoin -ilicon %alley and L/l # and /lay Bitcoin,L thanks 'e!y m ch fo! "oinin# s today7 89I::5< -5: Thank yo , Adam7 89I:H5< 8ads< ABL: Hi Listene!7 He!e at Let=s Talk Bitcoin, we=!e b ildin# a #lobal netwo!k of co!!espondents able to cont!ib te on-the-#!o nd pe!specti'e of c!ypto c !!ency !elated info!mation that comes ac!oss thei! filte!s$ ,f yo =d like to "oin o ! #lobal con'e!sation, send an email with yo ! name and #eo#!aphical o! c lt !al niche to apply at letstalkbitcoin$com C st like Bitcoin, the only ba!!ie! to ent!y is yo ! time and #ood wo!k$ Thanks fo! listenin#7 89G:9:< -&: Easy4D- is the -wiss A!my Tnife fo! yo ! domain names, helpin# meet thei! c stome!=s needs since 999G$ Easy4D- has been an o tspoken c!itic of -+/A K .,-/A$ Easy4D- was an ea!ly s ppo!t of Bitcoinm, and now they a!e p!o d to sponso! this show$ 4o b siness with a company that sha!es yo ! 'al es$ @et a 93M disco nt when yo pay with Bitcoin$

@o to bitcoin$easydns$com and be s !e to se disco nt code LTB$ 8Qads< 89G:H:< ABL: -o , hate to say , told yo so$$$$b t , !eally, !eally, !eally did see this one comin#7 ,ts not often that , act ally #et o t too fa! in f!ont of these, b t when T!endon -ha'e!s, ATA /i!ateSH;, was cha!#ed by the -E. essentially with sec !ities f!a d$ That sent o t a (bat si#nal,) that maybe the!e was a p!oblem$ Lets back p a second - Bitcoin is a c !!ency, b t people also like to denominate stock in it and to this point$ ,ts been done on nlicensed and n!e# lated e2chan#es, and in a 'e!y Lea!ly &t@o2, no compliance whatsoe'e!L fashion$ This is a p!oblem, of co !se, beca se sec !ities, !e#a!dless of what they a!e t!aded in, as fa! as the -E. is conce!ned, fall nde! thei! p !'iew$ By not s bmittin# to !e# lation, it seems like they had a p!oblem the!e, and lo-andbehold, Bitf nde! is act ally closin#$ ,=m wonde!in#, # ys, do yo think the!e is any so!t of f t !e fo! this type of dist!ib ted e1 ity mechanism, p! a!e e2chan#es that a!e cent!ali>ed like this " st impossibleA 899:H;< -&: &aybe if its o tside the ?-$$$ -la #hte!- , dont know7 899:H3< A-: , think dist!ib ted e1 ity e2chan#es a!e not only possible, b t they can be implemented witho t co nte!-pa!ty !isk, enti!ely on the blockchain, witho t a co!po!ation, witho t a cent!al anythin#$ Ehat we sho ld be lookin# at is how we implement dist!ib ted e1 ity e2chan#es as blockchain feat !es, as blockchain applications$ Dot as companies$ 8:;:;;< ABL: Then a!e we " st too ea!ly fo! thisA A#ain, yo can see how with Bitcoin, the!e=s a path thats followed with a lot of these companies$ The!e a!e a lot of these concepts - its not necessa!ily companies - beca se m ltiple companies will come and #o t!yin# to do the same thin#$ As one dies, the othe! one t!ies to sol'e that

p!oblem, and if they s cceed, then they contin e on, and if not, then they fail and somebody else t!ies to sol'e the p!oblem$ How fa! away a!e we f!om that blockchain-like sol tionA

8:;:3;< A-: At the moment, , think we=!e still li'in# in the e!a of Lthe!es nothin# in finance , don=t think we can sol'e with a c!appily-desi#ned /H/ website$L That=s the e!a we=!e in$ And so, pick a p!oblem in finance - someone thinks they can sol'e it by w!itin# a few lines of /H/$ , think its #oin# to take a bit mo!e than that$ , think we=!e still 1 ite fa! f!om the le'el of mat !ity in the t!ansactional lan# a#e that we wo ld need to b ild those o'e!lays$ B t they=!e comin#7 Ee=!e al!eady seein# some of the e2amples, with thin#s like &aste!coin, and 'a!io s othe! o'e!lay p!otocols that a!e comin# alon#$ 8:9:;;< ABL: Bo know, this is not the fi!st time that this has happened$ Ee='e seen thin#s like - , think the fi!st one that came o t - this wo ld='e been, #osh, : yea!s a#o wo ld='e been the @LB-E$ , dont !emembe! what that stands fo!, b t it was basically --&: @lobal Bitcoin -tock E2chan#e, , tho #ht, !i#htA ABL: @lobal Bitcoin -tock E2chan#e - that so nds !i#ht7 Beah$ The cha!acte! who !an that fo! a while was Defa!io$ He was li'in# in .hina at the time, and its so!t of inte!estin# to see that fi!st e2chan#e come o t of .hina$ By p ttin# thin#s onto the blockchain, essentially yo !emo'e the company, and by !emo'in# the company, yo !emo'e the !isk$ Beca se the company is the !isk !athe! than anythin# that its act ally doin#, !i#htA 8:9:3G< A-: Eell, no$ ,f that company we!e to p!esent co nte!pa!ty to the t!ansaction - so instead of #oin# to A to B, yo =!e #oin# A to B to . and now, yo ha'e !isk in that B

may not complete the t!ansaction$ -o A K . a!e not yo ! only !isks anymo!e$ Thats the iss e, that yo =!e addin# anothe! laye! to the t!ansaction$ ,f the t!ansaction can be encoded in s ch a way that the two pa!ties that a!e, fo! e2ample, sellin# e1 ity sha!es to each othe!, dont ha'e to #o th!o #h any clea!in# ho se - and the !ecipient of those sha!es can 'alidate that they ha'e !ecei'ed them on the blockchain, and can 'e!ify that t!ansaction then that t!ansaction is i!!e'ocably !edeemable$ That means that, at any moment of time, the owne! of the necessa!y keys can #o and !edeem that t!ansaction to #et thei! e1 ity$ The!e is no othe! co nte!pa!ty in'ol'ed, o! othe! co nte!pa!ty who can mess p the inte!action$ Thats the ad'anta#e of the blockchain$ +nce yo ha'e that t!ansaction on the blockchain, it is a # a!antee that in the f t !e, at any point in time, yo will be able to !edeem that$ Do one can take away that ability f!om yo $ ,f yo in'est that t! st in a thi!d pa!ty, then the le#al system sta!ts #ettin# in'ol'ed, and its no lon#e! a matte! of Ldo yo ha'e a 'e!ifiable, spendable o tp t that yo can i!!e'ocably !edeem and appoint in the f t !eAL it is L.an yo enfo!ce a cont!act with a thi!d pa!tyAL Thats in the le#al !ealm, and that opens a whole othe! ba!!el of !isk$ 8:3:;;< ABL: ,f we a!e talkin# abo t this in the conte2t of a blockchain-like sol tion, does that !emo'e le#al !iskA 0!om a technical standpoint, it seems like it sho ldn=t necessa!ily matte! what yo ! denominatin# in, it sho ld only matte! whats act ally happenin#, like ba!te! is still ta2able$ 8:3:99< A-: ,ts not a matte! of ta2ation, its simply a matte! of$$$ if , can see the t!ansaction on the blockchain, and , ha'e the necessa!y tokens to 'e!ify that t!ansaction, eithe! keys o!, in the case of a sha!e, some othe! p!oof of owne!ship which will 'e!ify that t!ansaction - that means , can 'e!ify it anytime in the f t !e to !edeem that money$ Do one can stop me at that point$ -o, the le#al !isk is not whethe! , can !edeem the t!ansaction, its not in'ol'ed in the t!ansaction at all$ , can basically do that whene'e! , want$ That !emo'es any

co nte!-pa!ty !isk beca se the only inp t thats !e1 i!ed into the blockchain in o!de! to e2ec te my t!ansaction is the inp t , ha'e and nothin# else$ 8:3: 5F< -&: +b'io sly, the!e=s co nte!pa!ty !isk in'ol'ed in the analo#o s type of t!ansaction thats in the le#acy bankin# system NABL: &mhmO, !i#htA -o, people a!e willin# to accept it, o! maybe at least p t p with it in o!de! to do this kind of t!adin#$ B t, sho ld they ha'e to p t p with that same kind of !isk when dealin# with BitcoinA 8:H:9F< A-: They sho ld not7 , mean, thats one of the main benefits to this system - it takes thin#s that, p to now, a!e only sol'able in the le#al !ealm, and it makes them sol'able in the mathematical !ealm$ Bo don=t ha'e to s e to #et yo ! money - yo ha'e to p!o'ide the answe! to the p >>le thats locked it in the blockchain$ Thats the only !e1 i!ement, and it is f lly s fficient to !edeem yo ! !es lt$ /eople a!e not yet sed to that, and also, they don=t nde!stand the powe! of it$ 5emo'in# the !isk of a le#al in'ol'ement with a thi!d pa!ty, co nte!-pa!ty, is a H?@E pa!t of the cost of doin# b siness$ ,f yo !emo'e that !isk and st!eamline it, then a lot of the assets that yo hold don=t ha'e to face a p!emi m which !ep!esents the !isk of the co nte!pa!ty defa ltin# o! messin# p the t!ansaction$ 8:5:;G< ABL: -o, And!eas, is this what &aste!coin and Bitsha!es a!e attemptin# to doA 8:5:9H< A-: Bes, both &aste!coin and Bitsha!es c!eate e1 ity t!ansactions on the blockchain that a!e i!!e'ocably !edeemable7 Bo can p!o'e that yo can take yo ! sha!es and #o anytime$ The companies can #o awayR the companies can be completely nin'ol'ed$ All the necessa!y !e1 i!ements to !edeem yo ! e1 ity is within yo ! own keys$ 8:5:39<

ABL: ,f the &aste!coin 0o ndation winds p dissol'in# afte! they ha'e c!eated the p!otocol, then it doesnt !eally matte!, so lon# as the p!otocol is o t the!e and it doesn=t act ally b!eak$ 8:5:H5< A-: E2actly - thats eno!mo sly powe!f l7 ,ts eno!mo sly powe!f l beca se now yo ='e !emo'ed all of the nce!tainty thats c!eated by a le#al p!oceedin# and t !ned it into p !e mathematics$ 8:5:55< ABL: How will the !e# lato!y en'i!onment deal with somethin# like thatA , can see that the!e isn=t - a#ain, " st like Bitcoin - the!e " st isn=t too m ch that act ally can be done$ B t, at the same time, that doesnt mean that people won=t want to do somethin#$ 8:F:;G< A-: Eell, in some ways, it is wo!se fo! !e# lato!s beca se it will #i'e them a #limpse into the fact that this is a p!o#!ammable, dist!ib ted, asset led#e!, and c !!ency is " st the fi!st application$ -o, if they we!e wo!!ied abo t that fact that yo can pse donymo s t!ansfe! c !!ency anywhe!e to anywhe!e witho t any inte!mediate stops, o! any possibility of cont!ol of !e# lation, they=ll be 9; times mo!e wo!!ied once they !eali>e that this applies to any fo!m of assets, incl din# stocks, bonds, bea!e! bonds, e1 ities, and thin#s that a!en=t e'en !e#iste!ed in a stock ma!ket o! t!aditional co!po!ation c!owd-f ndin# sha!es, o! whate'e! the hell else yo want to p t on the blockchain$ All of these f lfill the basic !e1 i!ement that they can be !edeemed pon demand simply by p!o'idin# p!oof that is acceptable to the 'e!ification al#o!ithm of the blockchain$ Dothin# else is needed, that is the only and necessa!y condition$ +nce yo think it th!o #h and nde!stand how fa! this applies - yes, it co ld be a te!!ifyin# p!ospect fo! !e# lato!s$ B t at the same time, this is not somethin# that is #ood o! somethin# that is bad$ As is the in'ention of Bitcoin, this is somethin# that simply is$ 8:I:9I<

ABL: ,t seems like the e2chan#es, like Bitf nde!, that ha'e sh tdown o! that ha'e been sh tdown, ha'e all been n!e# lated$ B t, in the sit ation that yo a!e desc!ibin#, e'en tho #h these a!ent !e# lated by the same system they act ally a!e !e# lated, if yo think abo t it$ Beca se of, as yo said, the fact that the ! les a!e enfo!ced, that is, in fact, the !e# lation, isn=t itA 4o we " st not need the old !e# lato!sA Ee ha'e the new !e# lato!s and its all a tomated$ 8:I:H;< A-: /!etty m ch, yes$ Bo ha'e the new !e# lato!s and its all a tomated$ The p!oblem is that the !e# latin# al#o!ithm is net-ne t!al$ ,t doesnt ca!e abo t the content, and it doesnt ca!e abo t the so !ce o! the destination of the t!ansaction$ All it ca!es abo t is can the !ecipient, who=s t!yin# to spend these t!ansactions o! t!ansfe! them fo!wa!d, p!o'e the 'e!ifiable !e1 i!ement fo! that t!ansactionA Ehich is, whate'e! it mi#ht be - it mi#ht be a p!i'ate key in the fo!m of si#nat !e, it mi#ht be a sol tion to a p >>le, it mi#ht be whate'e! - it mi#ht be encoded on the blockchain$ ,n te!ms of !e# lation, yes, this is new a tomated !e# lation, b t at the same time, its not !eally !e# latin#$ ,ts simply - yo know - can yo pass the !e1 i!ements of the al#o!ithm, and those !e1 i!ements a!e e2t!emely low, and they a!e completely i!!ele'ant to the so !ce o! destination of the t!ansaction$ -o, if the only !e# lation yo can #et is that, then , wo ld ass me the !e# lato!s wo ld think, Lthat=s not !eally !e# lation7L 8:G:H;< ABL: Eell, the !e# lation is that yo can=t cheat the system, !i#htA The !e# lation is that, if yo don=t ha'e it, is that its 'e!y diffic lt to commit f!a d with$$$$ 8:G:H5< A-: E2actly$ ,ts i!!e'ocably !edeemable, !i#htA ,t # a!antees yo ! sec !ity a#ainst that t!ansaction and the sec !ity and t! stwo!thiness that yo cant do ble-spend o! do ble-!edeem to the enti!e netwo!k$ 8:G:55<

-&: B t, thats not !eally the kind of !e# lation that the le#al !e# lato!s a!e lookin# fo! Nla #hsO$ 8:9:;3< A-: Nla #hsO 5i#ht7 E2actly, e2actly7 This will lea'e them fa! dissatisfied fo! what they a!e t!yin# to do$ And what they a!e t!yin# to do is impose political cont!ols o'e! the t!ansactionsR cont!ols that ha'e nothin# to do with whethe! the assets a!e owned by, and who a!e owned by$ The!e a!e meta-!e# lations that ha'e to do with the politics of it all, and those they cant apply7 Beca se those meta-!e# lations that deal with the political aspect of money a!e all thi!d-pa!tyQco nte!-pa!ty !isk - thats what it means to ha'e co nte!-pa!ty !isk$ ,ts that the !e# lato!s can s ddenly tell yo that the asset yo own, yo don=t own$ +! that an asset that yo own, yo can=t t!ansfe!$ And that kind of !isk, the blockchain completely oblite!ates7 ,t #i'es yo 'e!y little in !et !n - it #i'es yo 'e!ifiable t!ansactions Nla #hsO and thats it7 8:9:5;< ABL: , mean, thats a !eally inte!estin# point$ , don=t know whats #oin# to be sca!ie! to the !e# lato!s - the c !!ency side o! the sec !ity side$ B t one way o! the othe!, it seems like we=!e kind of #oin# to ha'e a bette! pict !e of whats #oin# to happen within a co ple of months$ Beca se - , don=t know if yo # ys if yo saw this, b t the!e a!e a n mbe! of hea!in#s planned$ , belie'e that the!e a!e two c !!ently sched led - #oin# to takin# a look at this p!oblem of (c!yptoc !!encyL and p llin# in$$$ ,m s !e, a Lwho=s whoL of names to talk abo t it$ This clea!ly was ine'itable, b t do yo think that this is #ood o! badA 83;::;< -&: Eell it definitely seems like they=!e sta!tin# o t with some concl sions al!eady d!awn$ ,sn=t the title somethin# like Nin a d!amatic toneO LThe 5isk of %i!t al . !!encies)A They='e made it so nd !eally sca!y$ , mean, that !eally shows what mindset they=!e kind of #oin# into it with$ 4espite all the claims by the Bitcoin 0o ndation and othe! people sayin# that Lthey='e been talkin# with !e# lato!s, and it was all positi'e, and it seemed like they had !eached some nde!standin#,L it

seems like the!e a!e definitely still a lot of people in the #o'e!nment who a!e comin# at 'i!t al c !!ency, and at Bitcoin, with a 'e!y ne#ati'e 'iew to sta!t o t with$ And f!ankly, that=s a bias, !i#htA 83;:5G< A-: E2actly !i#ht$ , think this will be a #ood oppo!t nity to ed cate, b t we won=t !each any concl sions$ As yo point o t, Adam, this whole se!ies of in'esti#ations, hea!in#s, whate'e! yo want to call them, ha'e come at it with some 'e!y specific f!amin#$ And this f!amin# is both e2t!emely na!!ow, it sees Bitcoin as a c !!ency$ and it completely misses Bitcoin as a payment netwo!k, Bitcoin as a p!otocol, Bitcoin as a means fo! a dist!ib ted asset led#e! that can be laye!ed with othe! p!otocols$ and enable all kinds of a tomated and t!ansactional t!ade$ -o, its 'e!y na!!owly foc sed to Bitcoin as a c !!ency, and 'e!y na!!owly foc sed to Bitcoin as a c !!ency p!esentin# !isks to the le#acy systems$ -o, these hea!in#s will completely miss the point$ They will completely fail to both nde!stand the !isks that this poses to the le#acy systems, so in one way they a!e nde!-estimatin# how bad this is fo! le#acy bankin# and le#acy financial systems in te!ms of thei! cont!ol$ And at the same time, they a!e #oin# in with s ch bias that they will be completely nable to see the positi'e aspects of !emo'in# an enti!e laye! of !isk and how m ch that can add to the 'al e of t!ansactions and !emo'e costs f!om economic t!ade$ -o yeah, these hea!in#s will !es lt in absol tely nothin#7 They a!e show, they=!e maybe #oin# to ed cate a few lawmake!s in the 'e!y, 'e!y na!!ow aspect of Bitcoin that they ha'e chosen to talk abo t$ 83::39< ABL: -o then, we!e we w!on#A , think that the 0o ndation, p!etty ea!ly on, said flato t that they we!e inte!ested in inte!facin# with Eashin#ton, and the!e was money that was planned to be th!own at hi!in# a lobbyist, o! lobbyists to make that happen$ 4o we think that if they had #one fo!wa!d and done that, instead of " st ha'in# membe!s and 'ol ntee!s and thin#s like that, #oin# to inte!face with !e# lato!s - do we think that that mi#ht='e helped the sit ationA

&aybe the f!amin# wo ld be a little bit mo!e f!iendly if the!e had al!eady been lobbyin# #oin# onA 833:;G< A-: Do, absol tely not, beca se this f!amin# is comin# f!om 'e!y, 'e!y specific inte!ests, and a 'e!y specific and 'e!y na!!ow wo!ld 'iew$ And that wo!ld 'iew is =whats #ood fo! the banks is #ood fo! Ame!ica$ Ehats #ood fo! the Dew Bo!k -tock E2chan#e is #ood fo! Ame!ica= and when the banks and the stock e2chan#e and 'a!io s othe! pa!ties come to s with millions and millions of dolla!s of lobbyin# and tell s LThis is somethin# we sho ld fea!,L we will fea! it, and we will fea! it befo!e we listen f!om any of these little lobbyists who a!e comin# alon#$ -o, its not #oin# to wo!k f!om that pe!specti'e, b t , # ess its bette! to t!y to ed cate them than to step away f!om the con'e!sation enti!ely$ ,n the end, it !eally doesn=t make a diffe!ence$ The blockchain will contin e to e2ist !e#a!dless$ 833:5;< -&: ,=m not s !e if its e'en bette! to t!y to ed cate them, beca se , think what , see happenin# is the!e a!e #oin# to be some people claimin#, yo know, a tho!ity o'e! e'e!ybody and the way that they se Bitcoin, the way that they se money - who belie'e that they nde!stand and they know a lot abo t Bitcoin$ B t they !eally dont, !i#htA B t they=!e #oin# to !e# late it anyway$ -o, , dont know how m ch 'al e , see in t!yin# to Led cateL them beca se, yo know, , " st dont see anythin# #ood becomin# o t of it fo! the end se!$ 83H::3< A-: Eell, it keeps them b sy fo! a while - which may dist!act them f!om passin# immediate !e# lations beca se they dont nde!stand it$ B t , wo ld a#!ee -tephanieR if the!e is a 'al e the!e it mi#ht be ma!#inal$ ,n the end they a!e #oin# to t!y to !e# late and cont!ol somethin# that inhe!ently they cant cont!ol7 83H:3F< ABL: And f!ankly don=t ha'e the !i#hts to cont!ol - , mean, that the othe! thin# of it is that !e#a!dless of what happens in these hea!in#s, ltimately, this is a 'e!y, 'e!y small p!opo!tion of the pop lation that will e'ent ally se it$ , think that the stall

tactic is p!obably the best possible scena!io he!e !i#htA NA-: 5i#htO beca se if we can " st wait, then the p!oblem is sol'in# itself$ The fact that the p!ice is doin# this - that=s all of the ad'e!tisement that c!yptoc !!ency needs$ /eople a!e lookin# at this beca se its somethin# that=s ope!atin# in an en'i!onment whe!e ha!dly anythin# is ope!atin#$ E2cept fo!, of co !se, stocks - if yo want to in'est in stocks$ 835:9;< -&: Let=s be honest - the ?- #o'e!nment thinks that they can cont!ol way o tside of the sphe!e of the bo!de!s of the ?nited -tates, b t Bitcoin is a #lobal phenomenon - , mean it is t! ly #lobal7 And they !eally can=t cont!ol what #oes on o tside of the ?nited -tates, o! maybe e'en most of what #oes on within the ?nited -tates - !elated to Bitcoin$ -o, that=s #oin# to be a ! de awakenin# f!om some people, , think$ 835:3I< A-: , think its hila!io s that we=!e sittin# he!e, talkin# abo t this$$$$essentially, two decades afte! the fall of the Be!lin Eall and the end of the .old Ea!$ Ee=!e now talkin# abo t whethe! the ?- #o'e!nment sho ld adopt a f lly cent!al plannin# app!oach towa!ds the !e# lation of c !!ency and economic t!ade, o! whethe! they sho ld ha'e a mo!e sli#htly hands-off app!oach$ -o the shee! h b!is NA-: Ula #hsU Beah, , a#!ee$O that=s !e1 i!ed fo! the Ame!ican @o'e!nment to ass me that it can maintain !e# lato!y cont!ol o'e! the enti!e ?economy, o! that e'en that a desi!able #oal$ ,t seems to be the completely opposite o tcome of what one mi#ht e2pect we='e lea!ned f!om the end of the .old Ea!$ 83F:9G< ABL: ,t seems like that is, a#ain, the Lconcent!ation of powe!L thin#, !i#htA NA-: Absol tely7O ,t seems like that the places whe!e the ?nited -tates has the ability to ha'e most impact a!e the places whe!e financial cont!ib tions to a select few, yo know, to a ! lin# class, !eally can ha'e an o tsi>ed impact on what they wo ld be if yo instead had to act ally con'ince the people of a co nt!y to 'ote fo! somethin#$ Bo know, if yo can instead " st pay off the leade!s then that m ch

easie!7 -o maybe, a#ain, this is maybe the place whe!e Bitcoin has to th!i'e is on the f!in#e - is at these decent!ali>ed a!eas whe!e the!e is no concent!ation of powe! to essentially co-opt in o!de! to #et to that point, !i#htA 83I:;;< A-: Beah, absol tely7 Ehat we=!e seein# he!e is the fact that, p to now, a lot of what we tho #ht was eithe! !est!aint by the @o'e!nment, o! !espect of libe!ty and f!eedom, was !eally simply technolo#ical const!aints$ +nce it became possible fo! them to do an e2pansi'e, he#emonic, holistic cont!ol of the economy, of o ! telecomm nications, of o ! p!i'ate info!mation etc$$$ they ha'e done what is possible - not what they sho ld do, o! const!ained by any othe! conside!ations othe! than what is possible$ ,f it can be done, the ?- #o'e!nment will t!y to do it$ -o, Bitcoin is one of the fi!st cases whe!e what we=!e takin# back is not political cont!ol, it=s technolo#ical cont!ol$ Ee=!e makin# it not possible to do the thin#s they want to do, and this may come as a s !p!ise to them$ 83I:5:< -&: Thats why , think, inhe!ently, thats what Bitcoin is desi#ned to do$ ,ts desi#ned to find a way a!o nd these Nla #hsO !e# lato!y cont!ols and these !est!ictions that the ! lin# class places on people$ , think that is what -atoshi intended, and thats what the point of Bitcoin is, and the nat !e of Bitcoin bein# so decent!ali>ed$ -o, thats why , kind of do bt how f! itf l a lot of these app!oaches to Lmake Bitcoin le#it,L o! ha'e it L#!ow p,L o! make it compliant with all these !e# lations that it !eally " st cannot comply with beca se they=!e not desi#ned fo! it and Bitcoin is not desi#ned fo! it 7 Thats not the point$ 83G:3;< ABL: This is the key thin#, that we li'e in a wo!ld !i#ht now whe!e fo! a 'a!iety of !easonsR the oppo!t nities that a!e p!esented to most people o t the!e a!e 'e!y low$ -o a#ain, yo ha'e somethin# like this thats o tside of the system that s ally winds p e2t!actin# all of that oppo!t nity$ ,nstead, yo ha'e a system that doesn=t

ca!e what yo do with it, doesn=t ca!e who yo a!e, doesn=t ca!e how many yo ha'e$ They=ll t!eat yo the same$ -o, that !i#ht the!e, at its co!e - thats the thin#$ 83G:5I< A-: Thats the most powe!f l aspect of it, and we ha'e to stop fo! a moment now and conside! the othe! 999 #o'e!nments o t the!e$ B t !e#a!dless of what we think abo t whethe! the ?- sho ld !e# late Bitcoin, yo ha'e to take this tho #ht to its nat !al concl sion and say, Lwell, if the ?- has the means, and the political will, and the le#al basis to !e# late Bitcoin, that also means that e'e!y othe! #o'e!nment o t the!e sho ld and does ha'e those means,) and , wo ld posit that fo! many of those #o'e!nments, we dont want that$ E'en if ha'e yo accept that the Ame!ican #o'e!nment is bene'olent, beca se yo a!e wholly b!ainwashed and idiotically naV'e, the!e a!e 999 othe! #o'e!nments that a!e so ob'io sly not bene'olent, that yo wo ldn=t to #i'e them cont!ol o'e! the c !!ency$ Ehat we sho ld be thinkin# abo t is the b!oade! pe!specti'e - which is what happens when yo !emo'e cont!ol o'e! a c !!ency and o'e! economic t!ade f!om the 999 co nt!ies whe!e, pe!haps, the!e is little democ!acy, less a'ailability of economic f!eedoms, etc$$$ , think thats how we sho ld position BitcoinR it libe!ates the !est of the wo!ld$ +ne of the 'e!y impo!tant chan#es that has happened in the last few weeks that is becomin# 'e!y ob'io s, now, is the shift in the #eo#!aphic cente! of the demo#!aphics of Bitcoin$ Ee a!e now mo'in# East at a 'e!y !apid pace, and the cente! has now mo'ed f!om somewhe!e in the &id-Atlantic, between Eeste!n E !ope and the ?nited -tates ,to now fi!mly planted in the -o th East and East Asia, whe!e the 'ast ma"o!ity of h manity li'es, and that is the nat !al #eo#!aphic cente! of Bitcoin$ This is a 'e!y impo!tant news beca se ha'in# an enti!e pop lation that has nothin# to do with the Eeste!n de'eloped co nt!ies and thei! #o'e!nments, inc!easin#ly this is the middle class, the eme!#in# middle class in .hina, who a!e t!emendo s sa'e!s, and who ha'e an appetite fo! fo!ei#n c !!ency$ Ha'in# that pop lation " mp on the bandwa#on chan#es thin#s d!amatically$

Ee a!e now in a completely new e!a of this di#ital c !!ency and in this e!a, the most impo!tant thin# thats happenin# is not En#lish, its not in the de'eloped nations of the Eest$ -o ni hao ma 8En#lish: how a!e yo <, Bitcoine!sA 8H9:;I< ABL: Nla #hsO Beah, Let=s Talk Bit.oin &ada!in, comin# soon$ -&: Bo =!e not kiddin#7 8H9:3;< Ad'e!tisement: ,s the Bitcoin p!ice in a b bbleA +nly time will tell, b t one thin#s fo! s !eR Bitcoin 'ideo passes a!e on sale7 Do!mally PI5 fo! those payin# in ?- f nds, 'isit Bitcoin%ideo/ass$com and spend only ;$9 to ;$: bitcoins - ;$9: bitcoins at the time this was !eco!ded, to access all the talks and panels f!om the +ctobe! .!ypto. !!ency .onfe!ence$ -ee how easy b yin# with bitcoins can be, and e2pe!ience instant access as soon as yo ='e paid, witho t e'en !eloadin# the pa#e7 .heck it o t at Bitcoin'ideopass$com 8H::;H< Hi, this is Cason Tin#, 0o nde! of -eans+ tpost, and yo a!e listenin# to Let=s Talk Bitcoin$ -eans+ tpost is a homeless o t!each in /ensacola, 0lo!ida and we a!e p!o dly powe!ed by Bitcoin$ To date, o'e! 93;;; meals ha'e been fed to the homeless in o ! a!ea - all p !chased with Bitcoin and th!o #h the #ene!osity of the .!yptoc !!ency comm nity$ 5ead mo!e abo t s at -eans+ tpost$com 0ood, shelte!, bitcoin, e'e!ybodyR -eans+ tpost$com 8H::33< ABL: Afte! a wild week, , ca #ht p with 4an La!ime!, .E+ of ,n'ict s ,nno'ations, which !ecently la nched /!oto-ha!es$ 4aniel, thanks fo! "oinin# s7

8H::3F< 4L: Hi Adam, thanks fo! ha'in# me a#ain7 8H::H:< ABL: As sched led, /!oto-ha!es la nched b t thin#s did not seem to #o as planned$ .an yo b!in# s p to speed on what happenedA 8H::HG< 4L: The la nch of /!oto-ha!es has been a wild !ide7 The !esponse has been ama>in#, with se'e!al o!de!s of ma#nit de mo!e people showin# p to mine than we had anticipated$ -o m ch hashpowe! has been th!own at the netwo!k, that despite a ha!d-fo!ked inc!eased diffic lty, we still mined o'e! one-thi!d of the /!oto-ha!e s pply in the fi!st week and a half$ As blocks that we!e s pposed to take 5 min tes to sol'e we!e bein# fo nd e'e!y :; seconds$ The diffic lty has #one p to 9F; times the initial diffic lty, and by the time this is ai!ed, we=ll ha'e #one p 9F;; times the initial diffic lty$ Ee attempted to set the initial diffic lty so that the a'e!a#e se! co ld find abo t 9 block pe! day pe! comp te!, b t demand was so hi#h that the diffic lty co ldn=t ad" st fast eno #h$ + ! fo! ms ha'e #!own to o'e! FI; people and the!e a!e a 9;;; .hinese in o ! JJ #!o p$ Last time , checked, /!oto-ha!es we!e t!adin# at o'e! PF each, with an estimated ma!ket cap of o'e! PH$5 million$ Eithin the fi!st HG ho !s, the!e we!e at least th!ee minin# pools acti'e and the!e a!e at least two e2chan#es t!adin# in /!oto-ha!es$ +ne in .hina is t!adin# B an fo! /!oto-ha!es, and anothe! new e2chan#e, called .oin@!o nds, is t!adin# /!oto-ha!es a#ainst Bitcoin$ Ee e2pect /!oto-ha!es to be listed on some ma"o! Bitcoin e2chan#es in the ne2t co ple of weeks$ 8HH:;9< ABL: -o was this a #ood thin# o! a bad thin#A 8HH:93< 4L: +'e!all, , wo ld ha'e to concl de that this is an ama>in#ly #ood !es lt7 + ! plans with Bitsha!es and othe! 4A.=s wo ld #et nowhe!e witho t a la!#e comm nity

behind them$ And since we='e la nched /!oto-ha!es, a la!#e comm nity has sp! n# o t of nowhe!e$ /eople ha'e c!eated block e2plo!e!s, .h!ome pl #-ins, esc!ow se!'ices, minin# pools, and enhanced mine!s$ E'e!y one of these people now has a 'ested inte!est in the s ccess of Bitsha!es and ,n'ict s ,nno'ations$ +n the downside, we=!e nable to mine as many /!oto-ha!es as we wo ld ha'e liked beca se most of o ! mine!s didn=t show p on time$ -o, we had to mine in the clo d like e'e!yone else$ -ome people ha'e a!# ed that the sha!es we!e mined too 1 ickly$ B t f!om o ! pe!specti'e, it doesn=t !eally matte! how 1 ickly they we!e mined$ ,t was all a lotte!y #i'eaway system anyway$ Ehat matte!s now is that /!oto-ha!es a!e o t the!e and can be t!aded$ 8H5:;;< ABL: +ne of the aspi!ations was a ./?-minable p!oof-of-wo!k that wo ld make the dist!ib tion mo!e fai!$ 4o yo think that was accomplished and whyA 8H5:;9< 4L: , think we s cceeded in c!eatin# a p!oof-of-wo!k that is ha!de! to mi#!ate to a @/?, o! e'en an A-,.$ B t we !ecently fo nd some weaknesses, thanks to a bo nty and p blicity that indicate that, while bette! than -c!ypt, its not 1 ite #ood eno #h$ This b!in#s p a mo!e impo!tant topic - how sho ld sha!es in 4A. be dist!ib tedA ,f yo p!e-mine, one #!o p will hate yo $ ,f yo make it ./?-only, othe!s will complain abo t botnets$ ,f yo make it @/?-f!iendly, someone else will benefit, and if yo make it A-,.-f!iendly, yo will ha'e cent!ali>ation p!oblems$ The!e is !eally no #ood sol tion that will make e'e!yone happy$ 8H5:HI< ABL: Based on the e2pe!ience so fa!, what wo ld yo do diffe!ently if yo had to do it o'e! a#ainA 8H5:53<

4L: ,n the f t !e, , wo ld need to set the initial diffic lty like an ,/+ p!ice$ .onside!in# the fi!st t!ade fo! /!oto-ha!es was at a p!ice of P:, the initial p!ofit of minin# was m ch hi#he! than the cost of minin#$ As a !es lt, minin# powe!s added to the netwo!k ntil the cost of minin# app!oached the p!ofit$ As a !es lt, new comp te!s a!e th!own at the netwo!k ntil the cost of minin# e1 als the p!ofit that can be ea!ned f!om minin#$ 8HF:3:< ABL: The!e ha'e been acc sations that this was intentional and that ,n'ict s di!ectly p!ofited f!om this happenin#$ 0!om what yo ='e told me, , don=t belie'e thats t! e$ , don=t know if yo talk abo t company finances, b t can add!ess this p bliclyA 8HF:H:< 4L: ,n'ict s had planned on minin# like e'e!yone else and tho #ht that we=d be able to le#itimately mine abo t 3;M of the money s pply o'e! F months$ Ee had planned to se clo d minin# combined with some of o ! own ha!dwa!e$ ?nfo!t nately fo! s, e'e!yone else had the same idea, and as a !es lt, ,n'ict s was able to mine only a co ple of pe!cent of the money s pply$ Ee had to ea!n the !est of o ! s pplies th!o #h se!'ices s ch as minin# pools and di!ect p !chases on the ma!ket$ The!e a!e othe! mine!s who we!e able to mine fa! mo!e than we did$ Thei! minin# was fai!, with no p!emine, as s pe!3 at bitsha!estalk can testify, that he mined the second block$ ,n'ict s was on a le'el playin# field with e'e!yone else$ -ome people ha'e acc sed s ha'in# a sec!et, hi#h-pe!fo!mance mine!$ B t within days of la nch, B/ool had !eleased a mine! with fi'e times the pe!fo!mance of o ! mine!$ And e'en still, we ha'e not been able to !eplicate thei! pe!fo!mance$ The!e will always be c!itics, b t o'e!all, , think most people a!e happy with how thin#s ha'e #one and a!e #lad that they #et to be a pa!t of what we a!e doin#$ 8HI:HG< ABL: +n the last episode, we talked abo t a plan fo! mo!e p!od cts that wo ld be fo!ked f!om /!oto-ha!es$ Has anythin# abo t this la nch chan#ed anythin# abo t that planA

8HI:5I< 4L: /!oto-ha!es a!e desi#ned to #i'e people a c t of most of o ! f t !e 4A. offe!in#s, eithe! di!ectly o! indi!ectly$ Dothin# has chan#ed f!om these plans$ 8HG:;I< ABL: And finally, this seemed insanely fast in the way that thin#s de'eloped$ 4o yo think that this is a s stainable model that yo wo ld !ecommend to othe! companiesA +! does it need f !the! tweakin# befo!e !eally anybody sho ld be sin# thisA 8HG:95< 4L: , think that /!oto-ha!es has p!o'en a new type of .!owd-0 ndin# and &a!ketin#$ +the! companies co ld benefit f!om applyin# the lessons lea!ned$ , wo ld ca tion them that it is not easy, and it !e1 i!es the !i#ht incenti'es to be in place$ 8HG:3:< ABL: 4aniel La!ime!, .E+ of ,n'ict s ,nno'ations - thanks fo! bein# on the show7 8HG:3F< 4L: Thank yo 'e!y m ch fo! ha'in# me, Adam7 8HG:HH< 4L: Thanks fo! listenin# to Episode 59 of LetsTalkBitcoin$ LBitcoin and -ta!t psL was p!od ced and edited by Adam B$ Le'ine and feat !ed -cott 5obinson and Adam B$ Le'ine LBitf nde! and the .ente! of @!a'ity) was p!od ced and edited by Adam B$ Le'ine and feat !ed And!eas Antonopo los, -tephanie & !phy, and Adam$B$Le'ine L/!oto-ha!es /ostmo!temL was p!od ced and edited by Adam B$ Le'ine, and feat !ed 4aniel La!ime! and, yo # essed it, Adam B$ Le'ine$ & sic was p!o'ided by Ca!ed 5 bens$

J estions o! .ommentsA Email adamSletstalkbitcoin$com Ha'e a #ood one 7