Transcription of Episode 109 The Ideal Counterparty

Participants:
Adam B. Levine (AL) Host
Robby Dermody (RD) Co-fonder of Conterparty
!teven Levine (!L) C"# of Let$s %a&' Bitcoin( fonder of BitcoinPac'a)in).com
(ad)
Adam B. Levine: %oday is *ay +,
t-
./+0( and t-is is episode +/1. %-is pro)ramme
is intended for informationa& and edcationa& prposes on&y. Cryptocrrency is a
ne2 3e&d of stdy. Cons&t yor &oca& ftrist( &a2yer and investment advisor
before ma'in) any decisions( 2-atsoever( for yorse&f.
4e&come to Let$s %a&' Bitcoin( a t2ice-2ee'&y s-o2 abot t-e ideas( peop&e and
pro5ects bi&din) t-e di)ita& economy and t-e ftre of money. *y name is Adam
B. Levine. 6n t-e past( 2e$ve ta&'ed abot *etacoins( or ne2 coins 2-ose prpose
is to enab&e t-e bi&din) of even ne2er coins on top of t-em. %oday on Let$s %a&'
Bitcoin( 2e$re 5oined by Robby( one of t-e deve&opers on t-e Conterparty team.
Robby( t-an's for ta'in) t-e time 7to ta&'8 2it- s.
Robby Dermody: 9o prob&em( )ood to ta&' to yo.
AL: !o( 6$m brand ne2 -ere. 4-at$s Conterparty:
RD: Conterparty is a pro5ect t-at introdces severa& pretty coo&( and pretty
po2erf&( peer-to-peer 3nancia& too&s &ayered on top of Bitcoin itse&f. 6t is t-e 3rst
f&&y fnctiona& decentra&ised e;c-an)e and 7bettin) and -ed)in):8 p&atform
ever. 6t 2as re&eased on <anary . of t-is year. Code$s ot= it$s avai&ab&e( and it$s
a&& 2or'in) today. !o Conterparty is 'no2n as an embedded consenss system.
%-is means t-at eac- Conterparty transaction is embedded into a Bitcoin
transaction and t-en broadcast on t-e Bitcoin net2or'. !o( by doin) t-is(
Conterparty )ains t-e secrity and decentra&isation of bitcoins and t-e Bitcoin
b&oc'c-ain. Bt rea&&y( or )oa& 2it- Conterparty is to create an open
tec-no&o)y p&atform t-at$s free for bsinesses( deve&opers( entrepeners et
cetera to bi&d on. !o or 7top &eve&:8 princip&es arond t-e pro5ect -ave rea&&y
been arond openness and sstainabi&ity. !o( for instance( t-e code is open-
sorce= t-e t-ree fonders( of 2-ic- 6$m one( as 2e&& as most ot-er members on
t-e team( are essentia&&y se&f-s>cient vo&nteers. %o t-at point( 2e 2ent to
)reat &en)t-s to -ave a c&ean and fair &anc-. 4e mode&&ed t-e movement after
sccessf& open sorce e?orts sc- as Lin; and Bitcoin itse&f. 6 )ess 2e 2ere
t-e cra@y bitcoin brnin) )ys. 6 t-in' t-at$s a )ood -i)--&eve& overvie2 of
Conterparty. 6$d &i'e to )et into 2-at t-e acta& featres of Conterparty are. 4e
spent a &ot of time ta&'in) to peop&e abot Conterparty for instance( 6 2as in
Ca&ifornia &ast 2ee'( 5st doin) a &ot of 7spea'in)8. 6 spo'e at a fe2 meetps= 6
spo'e at a !tanford cryptocrrency c&ass( t-at 2as )reat and 6 5st )ot some
ser feedbac' ta&'in) abot t-ese 3nancia& featres( and 2-at peop&e sa2( as
2e&& as 5st ta&'in) to severa& entrepeners and deve&opers t-at are a&ready
bi&din) on top of t-e p&atform. !o 2e rea&&y redce t-at do2n to( yo 'no2(
2-en yo ta&' to somebody abot Conterparty( yo$re rea&&y )ettin) it do2n to
t-ree main se cases t-at 2e$re at &east seein) 2it- t-e commnity today. Bt
before 6 )et started ta&'in) abot t-ose( 6 2ant to ma'e t-e &isteners a2are t-at
Conterparty is a )&oba& tec-no&o)y( and as it -as t-ese featres( &isteners
s-o&d 5st be edcated abot t-e &a2s in t-eir 5risdiction and se t-e
tec-no&o)y in a 2ay t-at$s &a2f& and responsib&e for 2-erever t-ey reside. 9o2(
2it- t-at ot of t-e 2ay
AL: 4e&&( -an) on a second -ere. (laughs) Let me 5mp in t-ere for a second.
4-at 'ind of a statement is t-at to ma'e in t-is crrent environment: Becase(
&i'e( 6$m very interested in t-ese types of tec-no&o)ies( bt t-e &e)a& sitation is
at best rea&&y nc&ear. !o t-is is 5st yor )enera& disc&aimer t-at yo don$t
'no2 2-at$s )oin) on( and so peop&e s-o&dn$t b&ame yo if somet-in) -appens(
ri)-t:
RD: %o a point( bt 6 t-in' yo rea&&y 5st ec-oed a &ot of 2-at it is. Rea&&y( 5st
tec-no&o)y in )enera& 2-at -appens is t-at t-e tec-no&o)y 2i&& come ot
Bitcoin is a perfect e;amp&e of t-is it comes ot( and rea&&y( t-e &e)a&
precedence -asn$t rea&&y been set( becase t-e &a2s -ave not -ad time to ad5st
and ta'e t-is 'ind of tec-no&o)y into accont. Ao -ad Bitcoin rise p and be 'ind
of &i'e decentra&ised( peer-to-peer money if yo 2i&&= Conterparty( and a &ot of
t-ese 7ninte&&i)ib&e8 p&atforms &i'e it are essentia&&y ta&'in) abot decentra&ised
mar'ets( decentra&ised &a2 yo 'no2( 2it- t-ese atonomos contracts(
"renc- for instance t-ere$s so mc- potentia& to rea&&y move society a&on) and
-e&p ot society= rea&&y create a &ot of innovation( e;pand t-e economy( create
more 5obs= t-ere$s a &ot of potentia& 2it- a&& of t-is tec-no&o)y. Bt at t-e same
time( it$s not f&&y c&ear( +//B( -o2 it 2i&& 2or' ot( especia&&y 7in contries sc-
as8 t-e Cnited !tates. !o it$s not rea&&y somet-in) meant to scare peop&e= it$s
more for peop&e to be a2are of t-is( and...
AL: t-is is n'no2n terrain.
RD: %o a point. 6 t-in' t-ere are severa&... 6 t-in' t-at re)&ators 2i&& try to ti&ise
e;istin) &a2s on t-e boo's to t-e ma;imm e;tent possib&e( bt( for instance( a
&ot of t-ose &a2s it$s not c&ear t-at t-ey app&y to peer-to-peer tec-no&o)y.
AL: 4e&&( &et me as' t-is a di?erent 2ay. Do yo fee& comfortab&e sin) yor
tec-no&o)y( )iven t-e crrent &e)a& environment:
RD: Aea-. 6 persona&&y do. 4e$re sin) it today for creatin) assets and tradin)
t-ose( t-in)s &i'e t-at. Ao can do t-in)s sc- as -ed)in) as 2e&&. %-ere are
certain featres( sc- as 2-en yo -ave instrments( and 6$&& )et into t-is a
&itt&e bit( sc- as binary options and contracts for di?erence( if yo 2ere to form
a company arond t-at -o2 do yo &a2f&&y condct bsiness -- especia&&y in a
contry &i'e Cnited !tates( for instance in a 2ay t-at is pfront and stayin) ot
of any )rey areas( so to say: !o( 6 t-in' rea&&y t-is is 2-at Conterparty is itse&f. 6t
is a tec-no&o)y p&atform an open tec-no&o)y p&atform and it$s a&so a )&oba&
tec-no&o)y( 2-ic- means t-at 2e co&dn$t 5st say Do-( -ere$s t-ese featres( bt
2e$re )onna 2rite in t-e code t-at 7adio cts8 if &ocation Cnited !tates disab&ed
t-ese featres becase someone 2o&d 5st for' it( and t-ey 2o&d remove t-at
featreset. %-e responsibi&ity rea&&y fa&&s on t-e end-ser to 5st ma'e sre t-at
t-ey$re condctin) t-eir bsienss ri)-t for t-em( and in t-e )ronds of t-e &a2s.
AL: 9o2( t-at$s in contrast to t-e !atos-iDice so&tion( 2-ic- is to ban t-e 6P
addresses of certain contries so t-at sers from( say( t-e Cnited !tates( can$t
visit t-e site. Bt in practice( 2-at -appens is t-at since t-e service( as yo say(
is a )&oba& decentra&ised net2or'( yo can$t acta&&y censor t-e service( yo can
on&y censor t-e information abot it on certain 2ebsites. Becase t-ere are some
ot-er attempts to se t-is( and probab&y Aet-er 2i&& 2ind p sin) t-is for t-eir
cro2dsa&e. Ao$re sayin) t-at t-is is rea&&y a 3)&eaf.
RD: !atos-iDice is a &itt&e di?erent mode&. %-ey are essentia&&y a centra&ised
Bitcoin )amb&in) site. !o 2-en yo do t-at( yo$re essentia&&y yo -ave a sin)&e
point.
AL: 6t 2asn$t t-e 2ebsite t-at 2as t-e )amin) part. 6t 2as t-e Bitcoin addresses.
Peop&e send bitcoin to t-ese addresses( and eac- address -as a di?erent set of
odds( so re)ard&ess of 2-ere yo are( if yo 'no2 t-e Bitcoin address and -ave
access to a Bitcoin c&ient yo co&d do it( 2-et-er or not yo co&d visit t-e
2ebpa)e. %-at$s basica&&y 2-at$s -appenin) -ere( ri)-t:
RD: Aea-( to a point( bt on top of t-at it$s a &itt&e bit di?erent becase yo -ave
t-e protoco& itse&f doin) t-e escro2 of bets and t-in's &i'e t-at( so t-ere$s not
acta&&y a !atos-iDice centra&ised entity t-at$s doin) t-is escro2 and determinin)
t-ese bets( and doin) t-e e;c-an)es. 6t$s even more centra&ised. !atos-iDice
bi&t on top of Bitcoin= it 2as ne2 )rond( becase yo 2eren$t doin) yo 'no2(
yo$re not settin) p a bettin) site( for instance( 2-ere yo$re ta'in) C! do&&ars(
2-ic- c&ear&y -as isses yo$re 2or'in) 2it- Bitcoin( and 6$m not a &a2yer( bt
t-ere seem to be even some 'ind of ambi)ities 2it- t-at( ta'in) Bitcoin. %-ere
are sti&& e&ements of centra&isation arond it. %-is is ta'in) t-at 'ind of
tec-no&o)y even fart-er. Eenera& 3nancia& too&s tec-no&o)y. Conterparty is not
abot creatin) a bettin) site( bt it$s 5st abot creatin) t-ese )enera& 3nancia&
too&s t-at 2e pt ot t-ere( open sorce( to sers( to deve&opers( and t-en &ettin)
t-em bi&d p 2-atever t-ey 2ant to bi&d p arond it. 4-et-er t-at be a
company t-at -e&ps ot-er )rops ma'e t-eir o2n coins( for brand promotion= or
2-et-er t-at be a company 2-ere peop&e can -ed)e t-eir ris' e;posre= or
2-et-er t-at be somet-in) &i'e !atos-iDice( 2-ere somebody$s doin) t-at. 9one
of t-at st? is t-in)s t-at 2e can$t stop= 2e$re simp&y ma'in) t-e sorce code
and pttin) it ot t-ere for peop&e to se.
!o from a featres perspective( t-e too&s t-at Conterparty provides( sa&&y(
ser-created to'ens( 7incompre-ensib&e8 options( contract for di?erence( too&s
simi&ar to t-at( are ab&e to be sed in many 2ays. Ho2ever( t-e t-ree most
common se cases t-at 2e$re seein)( at &east( today( are: Create A Coin so(
2it- t-is( yo can create yor o2n coin( or to'en( or asset( for yor company or
yor pro5ect. And yo can do it in &ess t-an t-irty seconds sin) Conter2a&&et(
2-ic- is t-e )rap-ica& interface. 6t$s a 2eb 2a&&et( essentia&&y( for Conterparty.
Ao can se t-is to'en t-at yo create for brand promotion and retention( cro2d
se&& based fndraisin)( and more. And( of corse( Adam( yo are a2are of t-at
becase yo$re &anc-in) L%BCoin -ere s-ort&y.
AL: AepF Eettin) pretty c&oseF
RD: %-e second case is( essentia&&y( to trade anyt-in). !o Conterparty -as a
bi&t in peer-to-peer e;c-an)e( or decentra&ised e;c-an)e( 2-ic- a&&o2s for fo&'s
to easi&y trade t-ese to'ens( t-at can represent virta&&y anyt-in) 2it- anyone
2it-ot t-e midd&e man invo&ved. 6 t-in' t-at$s probab&y t-e one 6$m persona&&y
most e;cited abot. %-e t-ird one is essentia&&y -ed)e( or bet( on anyt-in). !o(
t-e p&atform a&&o2s for peer-to-peer -ed)in) and bettin)( to bot- enab&e
spec&ation and for ris' mana)ement.
AL: 4e are )ettin) ready to &anc- L%BCoin on t-e Conterparty p&atform( and 6
-ave been p&ayin) arond 2it- t-e interface. Let$s ta&' abot t-e 2a&&et for a
second( and( 6 )ess( ta&' abot assets in )enera&. %-is 2as t-e 3rst time t-at 6
-ave ever acta&&y created a cryptocoin. 6$d &oo'ed at Coin)en before( 2-ic- 2as
t-is 2ebsite t-at &ets create a !crypt c&one very easi&y( bt it never rea&&y 2as
anyt-in) t-at 6 2anted to do. Bt once Conter2a&&et &anc-ed on %estnet( 6
started p&ayin) arond 2it- it and sa2 -o2 easy it 2as( and sa2 t-e dividend
featre= t-at 2as t-e rea&&y rea&&y coo& featre( and t-e pa)e t-at s-o2s yo a&& of
t-e di?erent addresses t-at -o&d &i'e( t-e s-are-o&der pa)e t-ose are rea&&y
coo& featres t-at 6 -aven$t seen on to'ens. %a&' to me abot t-ese ser-created
assets.
RD: 6 t-in' t-e 2-o&e concept of t-e ser-created assets is rea&&y a po2erf& one(
becase it$s( so... it$s( overa&&( a pretty )enera& concept t-at yo can se in a
variety of 2ays. Ao 'no2( brand promotion... t-ey can si)nify varios properties(
&i'e: t-ere$s t-is one company t-at$s sin) Conterparty ca&&ed Di)ita& %an)ib&e
%rst( and t-ey essentia&&y -ave a to'en t-at represents a )o&d coin. Ao can by
a )o&d coin( t-ey store t-at )o&d coin 2it- a t-ird-party cstodia& company( and
yo essentia&&y trade t-is to'en arond as a pro;y for t-at )o&d coin. Gssentia&&y(
2-enever yo 2anna ta'e t-e )o&d coin ot( yo send t-at to'en bac' and t-en
t-ey$&& s-ip yo t-e )o&d coin. %-ose are 5st a fe2 ses of t-is to'en tec-no&o)y.
!o especia&&y 2-en yo$re ta&'in) abot distribtions or dividends.
AL: 6s t-is smart property:
RD: %-is is anot-er rea&&y interestin) t-in) abot t-is 3e&d( t-at t-ere$s a &ot of
termino&o)y )oin) arond( and even interna&&y( to be -onest 2it- yo( 2e$re sti&&
2rest&in): Ddo 2e ca&& t-em assets: Do 2e ca&& t-em to'ens:H 6 2as ta&'in) to
*att G&ias( over at Coda( 2-ic- is 'ind of a nascent indstry )rop arond t-ese
t2o 7dato:8 movements sc- as Gt-erim and *astercoin and Conterparty=
Co&ored Coins( for instance. 6 t-in' t-ere$s an interest 2it- a&& of s 'ind of
)ettin) to)et-er( and rea&&y determinin)( D#I( 2-at is t-e e;act vocab&ary t-at
2e se -ere:H so t-at 2e$re a&& on t-e same pa)e. %o t-at point( smart property
itse&f( 6 persona&&y t-in' t-e term is sed inaccrate&y( at &east 2it- its initia&
meanin)( as 6 nderstood it.
AL: !o( rede3ne it for me t-en. 4-at$s t-e correct term for smart property:
RD: 4-en yo -ave a to'en( and yo acta&&y -ave more of a p-ysica& device(
sc- as an A%* mac-ine. %-is A%* mac-ine can essentia&&y read t-e b&oc'c-ain(
7and8 from t-at( t-e A%* mac-ine says t-at Dt-ere$s t-is di)ita& to'en on t-e
Conterparty net2or' t-at represents me= and ri)-t no2( 6$m o2ned by t-is
address= and( o-( 6 2as transferred o? to t-is addressH( for instance. !o it can
'no2 t-in)s sc- as 2-o it$s o2ned by= di?erent featre enab&ement= t-in)s &i'e
t-at. !o it$s essentia&&y )ettin) t-at inte&&i)ence t-ro)- some 'ind of B&oc'c-ain
tec-no&o)y( for instance.
AL: !o t-e inte&&i)ence is an important part( and t-e inte&&i)ence is 2-at$s &ac'in)
-ere:
RD: 6 mean( 2-at 2e$re ta&'in) abot -ere are di)ita& to'ens. 6 t-in' t-at smart
property seems to be more of a speci3c term( and as far as 6 'no2( t-ere$s no
devices t-at can do t-is today. 6 t-in' t-e concept of smart property is rea&&y
e;citin)( 2-ere yo can essentia&&y -ave t-e p-ysica& 2or&d and t-is tec-no&o)y(
bt it$s not somet-in) t-at e;ists( &i'e, right at t-is present moment. Rea&&y( yo
need t-ese -ard2are manfactrers to add t-at 'ind of spport into t-eir
prodcts.
AL: 6$ve described cryptocrrencies( to t-is point( as "#RGJ mar'ets( and 2-at$s
comin) 2it- t-e to'ens bi&t on top of t-in)s &i'e Conterparty is more &i'e a
stoc' mar'et. 6s t-at a )ood ana&o)y: Am 6 missin) somet-in):
RD: %o me( at &east( 6 t-in' of Bitcoin as t-is peer-to-peer money system( and
t-en on top of t-at( 2-en yo &ayer on Conterparty( for instance( yo rea&&y )et
t-ese decentra&ised mar'ets. !o yea-( Conterparty can be &i'e a decentra&ised
asset mar'et( 2-ere yo can -ave t-ese assets t-at represent... 2-et-er it be
some 'ind of cro2dse&&( or t-ere 2as one company on Conterparty t-at made a
forma& 3&in) 2it- t-e C! !ecrities and G;c-an)e Commission( and -e 2as
performin) -is 6P# on top of Conterparty. !o t-ey can even represent t-e
-andin) ot of eKity s-ares. 6t seemed &i'e -e 2ent t-ro)- a&& t-e correct
c-anne&s for t-at( at &east for 2-ere -e 2as -eadKartered.
AL: Ao$re sayin) t-at it seems &i'e becase yo )ys don$t do any vettin)
2-atsoever( becase a)ain( yo$re 5st pttin) t-e p&atform ot t-ere.
RD: Aea-( 2e 5st pt t-e p&atform ot t-ere( so -e can say D-ey &isten )ys( 6
2anna do t-isH and 6 can say D2e&&( )reatH( bt 6 can$t stop -im( or 6 can$t... it$s
rea&&y t-at -e co&d do it 2-et-er 2e 2anted -im to or not( and t-at$s rea&&y t-e
natre of t-is tec-no&o)y. Bt 6 t-in' t-at$s 2-at ma'es t-is so po2erf&( as 2e&&=
yo$re ta&'in) abot decentra&isin) t-ese 'inds of t-in)s( and t-en essentia&&y a&&
t-e innovations t-at can come ot of t-at 2-en t-in)s deve&op at t-e speed of
t-e peop&e t-at are sin) it( instead of at t-e speed of some 'ind of centra&ised
entity t-at can )ro2 &ar)e and b&oated and -as to mana&&y approve t-in)s( or
2-atnot. 4e$ve seen t-at 2it- t-e internet( 2it- -o2 t-e internet -as matred
and -o2 content can be pb&is-ed= t-ere$s no centra& c&earin) -ose for it=
t-ere$s no &ar)e cab&e companies( or ne2spaper companies( t-at yo -ave to
convince to pt yor information ot t-ere. Ao can simp&y pb&is- it. %-e best
information tends to rise to t-e top( or at &east )et attention( so a&& of t-ese
commnities t-at form ot of t-ese di?erent interests t-at peop&e -ave( and -o2
peop&e can 3nd t-eir o2n interests( rea&&y form t-ese socia& net2or's 2it- one
anot-er and s-are content and deve&op based o? of t-at. !o 6 t-in' t-at doin)
t-is simi&ar 'ind of t-in)s 2it- t-e concept of 3nance( moneys( mar'ets( &a2= yo
can -ave some very interestin) 'inds of t-in)s( and 5st rea&&y speed p t-e
pace of innovation.
AL: #ne of my favorite featres abot Conterparty$s ser created assets is t-e
dividend featre( 2-ic- basica&&y &ets yo send an amont t-at is sp&it bet2een
a&& of t-e to'ens so( -o2ever many to'ens yo -ave ot t-ere yo essentia&&y
isse an eKa& amont( in a sin)&e transaction( 2-ic- is very coo&( becase if yo
2ere doin) t-at 5st 2it- Bitcoin( it 2o&d ta'e a di?erent transaction for eac-
one( or at &east a di?erent otpt( ri)-t:
RD: Aea-( e;act&y. Becase if yo$re doin) on Conterparty( 2e acta&&y ca&&
t-em DdistribtionsH no2 so if yo$re doin) a distribtion( yo can -ave one
'ind of asset or to'en t-at yo se. !o say yo -ave L%BCoin( and yo 2anna do
a distribtion( yo can -ave anot-er asset yo acta&&y do t-e distribtion in. !o
yo -ave a&& t-e o2ners of L%BCoin( 72-o8 2i&& )et some s-are of t-is L%B contest
to'en.
AL: !o 2e 2o&d ma'e a di?erent asset( and 2e 2o&d )ive t-at as a distribtion
no2: #I( so( 6 -ave to comment on t-is. Ao$ve c-an)ed t-e name. 6t 2as
DdividendsH( and no2 it$s DdistribtionH. 6s t-is 5st tryin) to postre as best
possib&e to not -ave any nnecessary conLicts:
RD: Aea-( 6 t-in' t-at$s part of it. %-is is somet-in) t-at so( for instance( 2e
2ere meetin) 2it- some !i&icon Ma&&ey attorneys -ere &ast 2ee'( and it 2as 'ind
of fnny to &isten to t-em( becase t-ey 2ere so e;cited abot t-is tec-no&o)y(
and t-ey 2ere a&most 'ind of )iddy abot it. 6t 2as rea&&y neat( 5st becase t-ey
do a &ot of ventre capita&ist st?( and t-is is somet-in) t-at$s rea&&y di?erent
and rea&&y ne2. 6 t-in' part of 2-at comes ot of t-ese 'inds of coversations( is
yo -ave certain terms t-at -ave( 'ind of( a &e)a& 2ei)-t( at &east in t-e Cnited
!tates for e;amp&e and t-ese inc&de t-in)s sc- as D6P#H( sc- as Dstoc'sH(
sc- as Ds-aresH - DdividendsH is anot-er one and so part of t-is is-- 6 t-in' t-at
t-is tec-no&o)y is rea&&y somet-in) t-at$s di?erent. %-ere are some fndamenta&
di?ferences( 2it- t-is tec-no&o)y( bet2een it and t-e crrent conventiona&( or
mainstream systems. 6 t-in' a &ot of t-is is rea&&y 5st e;pressin) t-at and ma'in)
it c&ear t-at 2e adopt t-ese di?erent terms( and t-ey$re terms more appropriate
2it- t-e tec-no&o)y itse&f( and -o2 2e$re sin) t-e tec-no&o)y( 2-ic- is not to
create an e;act ana&o)e of 2-at$s a&ready ot t-ere( bt it$s fndamenta&&y
di?erent tec-no&o)y. !o it$s 'ind of( &i'e( to not confse matters= and 6 t-in' t-is
is rea&&y a common movement 2it- a&& of t-ese companies( or or)anisations sc-
as *astercoin and Gt-erim( and 6 t-in' it$s part of t-e reason 2-y 2e$re &oo'in)
to 2or' to)et-er to rea&&y deve&op a common vocab&ary t-at 2e can ti&ise for
t-is tec-no&o)y.
(Intermission advertisements)
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(End intermission)
AL: C&ear&y( t-is is a )rey area( -ere( bt t-ere is some positive momentm as far
as c&arifyin) terms 6 t-in' 2ords rea&&y do matter in t-is space( and so it$s nice
to see t-at t-ere$s a cross-p&atform e?ort )oin) on t-ere. Ao 'no2( 2-en it
comes to t-ese potentia&&y &e)a&&y controversia& isses( 6 sort of t-o)-t t-at t-at
2as 2-y t-e Conterparty deve&opers yorse&f inc&ded initia&&y 2ent on&y by
psedonyms. 6 initia&&y 'ne2 yo as ;nova( and it 2as on&y 2it- in t-e &ast 2ee'
or t2o t-at 6$ve come to 'no2 yo as Robby. !o can yo ta&' abot t-e pro5ect in
t-e ear&y days( and t-e decisions to be anonymos( and t-en fran'&y t-e
decisions no2( t-at it$s time to )o &ive( to noit:
RD: 6 t-in'( initia&&y( 2-en Conterparty started 2e re&eased on main net( 2e
-ad t-e reference c&ient re&eased <anary .
nd
of t-is year 2-en 2e did t-at( 2e
did so 2it- a&iases( and 2e 2ere anonymos= P-antomP-rea'( ;nova 2-ic- 2as
me and t-en CityE&t( 2-ic- 2as Gvan P-antom is Adam. !o( 2-en 2e did
t-at( t-e t2o main reasons 2ere 5st to ma'e it more abot t-e tec-no&o)y(
rat-er t-an s as individa&s= 2e 2anted peop&e to rea&&y focs on t-e tec-no&o)y
itse&f( eva&ate t-e tec-no&o)y on its o2n merits( and t-en decide 2-et-er it
stood p on its o2n t2o feet. 6 t-in' t-e second isse 2as( yea-( as yo stated:
t-e &e)a& c&imate de3nite&y -as )rey areas( 2-ere it$s not &i'e Do-( t-is tec-no&o)y
t-is c&ear&y i&&e)ta&H= it$s more &i'e( t-ere$s rea&&y no precedence for t-is
tec-no&o)y. 6t$s somet-in) t-at$s tota&&y ne2. And it 2as 'ind of fnny( becase 6
2as 2atc-in) t-e !enate -earin)s 6 t-in' &ast 9ovember varios fo&'s
testifyin) as far as Bitcoin( 2-at it is and a&& t-e conversation 2as on Bitcoin as
a payment tec-no&o)y( yo 'no2( t-e Bitcoin Dto'enH concept. %-at a&one 2as
5st so ne2 to t-ese 'inds of &e)a& at-orities= 5st sin) t-is di)ita& cas- t-at yo
can transfer t-in)s arond( t-at$s decentra&ised. %-ere$s no &iberty reserve or
eEo&d company to )o after( and assets to sei@e( for instance. Bt t-en( 6 don$t
'no2 f&&y t-e 2-o&e idea of t-e 2-o&e b&oc'c-ain concept -as rea&&y even
da2ned on 4as-in)ton yet. %-at$s )onna be very interestin)( and (co)-s) 6
don$t 2anna se t-e p-rase De;citin)H( bt 6$&& se t-e p-rase Dinterestin)HF
AL: (&a)-s)
RD: %-ere$s so mc- more possib&e 2it- t-at tec-no&o)y. Ao 'no2( 2-at is
Bitcoin: 6s it a net2or' t-at e;ists to carry arond t-is di)ita& to'en ca&&ed &itt&e-b
bitcoin t-at peop&e can e;c-an)e( and s-ops can ta'e it( and it can be sed for e-
commerce app&ications: 6s it t-e b&oc'c-ain tec-no&o)y itse&f( 2-ere t-is di)ita&
bitcoin to'en -appens to be one aspect of t-at( bt on t-e b&oc'c-ain yo can
essentia&&y ti&ise it in a&& sorts of 2ays: Ao can embed data in it( yo can e;tend
it( t-ro)- e;tendin) scripts( side c-ains( tree c-ains a&& t-is di?erent
tec-no&o)y rea&&y becomes 'ind of &i'e t-e prototypica& or t-e initia& app&ication
p&atform t-at can be sed for decentra&ised crypto-3nancia& app&ications. %-at$s
rea&&y 2-at it rea&&y 2or'in) its 2ay ot= 6 persona&&y see as t-e &atter( bt 6 t-in'
it 2as %ony Ea&ippi( -e mentioned as far as yo can -ave to'ens t-at represent
-oses -- t-ere 2as some p-rase -e -ad 6n t-ere and 6 t-in' it 5st 2ent ri)-t
over everyone$s -eads 2-o 2ere t-ere on t-e pane&. Ao$re )oin) to be seein) a
&ot more of t-at. %-at$s rea&&y )onna be ta'in) centre-sta)e( and &i'e D2oa-( yo
can do more t-an 5st transferrin) arond for payments= yo can -ave t-ese
to'ens t-at represent t-in)s( yo can--
AL: --2e&&( so( 2-at does t-is mean for Bitcoin: 6 mean( &et$s )et into it( becase
t-is is a bi) Kestion. A &ot of peop&e &oo' at t-ese ne2 to'ens t-at are comin)
ot and t-ey say Dt-is is competin) 2it- Bitcoin becase va&e is )oin) into it
t-at 2o&d ot-er2ise -ave )one into BitcoinH.
RD: !o 2-en yo &oo' at Conterparty itse&f( yo -ave t-ese Done dot o-H (+./)
a&t c-ains( 6$d ca&& $em( sc- as( &i'e( Litecoin and Do)ecoin and *a;coin and
2-atever e&se. Ao &oo' at Conterparty itse&f( and-- conterparty acta&&y rides
on top of Bitcoin( and 2it- Conterparty( 2e try to ma'e Bitcoin as mc- of a
3rst-c&ass citi@en to'en as possib&e. !o 2-at t-at means( for instance: yo can
trade( from Bitcoin( into any Conterparty asset( 2-et-er t-at be L%BCoin or
2-atnot. 4e don$t force peop&e to )o t-ro)- JCP (2-ic- is a native
Conterparty crrency). 4e rea&&y 2ant to 'eep Bitcoin re&evant in it. %-ese
7../:8 to'ens t-at are bi&t on top of or Conterparty decentra&ised
mar'etp&ace( t-ey can be e;c-an)e direct&y for Bitcoin( t-ey bi&d on top of
Bitcoin( t-ey ti&ise t-e secrity of t-e Bitcoin net2or'( 2-ic- is rea&&y important.
Ao -ave a&& t-ese a&t coins( for instance( t-at 5st -ave very mar)ina& -as-rates.
%-eir secrity is very &o2. !omeone co&d 5st point a m&ti-poo& at it( or
2-atever( and if t-ey 2anted to be ma&icios( t-ey co&d 5st crs- t-e coin. And
2e$re seein) t-at 2it- severa& of t-em. %-is rea&&y 'ind of ta'es t-at ot of t-e
eKation. !o instead of -avin) t-ese for'ed e?orts( yo can -ave t-ese to'ens
t-at acta&&y e;ist on top of Bitcoin( and can add va&e to t-e Bitcoin ecosystem.
%o t-at point: t-ere are rea&&y t2o p-i&osop-ica& camps -ere in re)ards to a&tcoins(
for instance. %-e vie2 of( maybe( Adam Bac'( for instance( 2-ic- is t-e di)ita&
scarcity concept= 2-ic- is 7t-at8 t-ere$s no reason for t-ese a&ternative to'ens to
e;ist( everyone can 5st se Bitcoin( and yo -ave side c-ains( and peop&e move
t-eir bitcoin arond= and rea&&y( Bitcoin is t-e main to'en. %-en yo -ave anot-er
concept 6 3rst -eard t-is 2it- a video t-at Andreas did( 6 t-in' it 2as at t-e
conference t-ey -ad p in %oronto 2-ere -e 2as ta&'in) abot money as a
&an)a)e of va&e( and 'ind of comparin) t-e rise of t-ese a&tcoins( rea&&y( to be
an ear&y sta)e( tempor-- &i'e( for instance( at one point it sed to be 5st
inconceivab&e: 2-y 2o&d yo need yor o2n 2ebsite for yor o2n persona&
st?: 4-y 2o&d yo need yor o2n 2ebsite( startin) a company( startin) a
2ebsite( or startin) a 2ebsite even for who you are t-e 2-o&e concept of a
"aceboo' pa)e 2-y do 2e need a&& t-ese 2ebsites: Bt peop&e do t-em
any-o2. !o yo can rea&&y see t-is concept of ta'in) t-at 'ind of ana&o)y over to
t-ese to'ens( 2-ere 5st &i'e yo -ave a 2ebsite maybe not as many 2ebsites
bt yo start a ne2 e?ort p( and t-at e?ort can se somet-in) 2-ere t-ere$s a
cro2dse&& type ana&o)y to it( or yo 2ant to bi&d p some 'ind of eKity or
increase retention 2it-in yor commnity t-at can be sed as a met-od of
sayin) Dt-is is a commnityH and t-en peop&e can e;c-an)e va&e and se t-ese
to'ens to commnicate va&e 2it- one anot-er. !o yo can see t-e point 2-ere
t-ese to'ens are very( 5st( nmeros= and yo don$t -ave to 2orry abot a&& t-is
tec-nica& )ee' st?( sc- as Do- )od( 6 )otta )et t-e -as-po2er( 6 -ave to -ave
peop&e mine my coinH= it rea&&y ta'es it do2n to 5st a t-irty second t-in)( 6 5st
create my to'en and t-en 6 can )et to sin) t-e to'en( promotin) my to'en=
rea&&y( t-e tec-no&o)y is ta'en care of for me. !o yo essentia&&y -ave t-ese t2o
camps. 6 tend to sbscribe more to t-e second one. 6 t-in' t-at is more in &ine
2it- -o2 -man natre( and -o2 -mans -ave -istorica&&y sed money. 6t$s a
very interestin) concept( becase it 'ind of ti&ises t-is internet 2ebsite idea as
2e&& as movin) money bac' to 2-at it sed to be( 2-ere yo$d -ave t-is
representative crrencies( or t-ese commodity crrencies( 2-ere yo co&d )o
into one commnity( t-e money t-at 2o&d be bein) sed 2o&d be di?erent
from one commnity or one civi&isation to anot-er. <st( 2-atever t-ey sa2 as
-avin) va&e.
AL: 6t sort of ma'es me t-in' of re)iona& dia&ects( too= 6 mean( &i'e( yo can -ave
t-e same &an)a)e. %-at$s sort of 2-at it seems &i'e Conterparty( or *astercoin(
2o&d be= t-ey$re bi&t on t-e bi))est &an)a)e (Bitcoin or Gn)&is-)( t-ey a&&o2
yo to persona&ise and cstomise as needed (so it$s &i'e s&an)( a&most).
RD: 6t$s a &an)a)e for creatin) more &an)a)es( yo 'no2:
AL: Aea-.
RD: !o yo can -ave t-ese crrencies as t-ese nation-state to'ens. 6 mean( of
corse( 2e$&& -ave t-e 3at crrencies( bt yo can a&so -ave t-is t-in) 2-ere
peop&e can create t-eir o2n to'ens( for t-eir commnities( for 2-atever...
AL: Ao 'no2( t-e 2a&&et is fascinatin)( becase it$s t-e 3rst time t-at 6$ve rea&&y
seen m&tip&e to'ens -e&d in t-e same insta&&ation. %-at$s( of corse( t-e ot-er
t-in): t-e 2eb 2a&&et is so necessary for t-is pro5ect( becase if yo 2anna insta&&
a f&& node c&ient( it$s not 5st as simp&e as do2n&oadin) and insta&&in) a ne2
c&ient= yo acta&&y -ave to re-inde; t-e c&ient. !o can yo ta&' to me abot t-e
2eb 2a&&et: %-is is one of t-e 3rst m&ti-asset 2a&&ets t-at 6$ve seen( and it
seems &i'e if yo t-in' t-at 2e$re )onna -ave mi&&ions of to'ens arond( or
-ndreds of t-osands of di?erent types of to'ens arond( t-is a prob&em t-at$s
)onna need to be so&ved: 2i&& t-is sca&e: 6s t-is 5st t-e start:
RD: 6 t-in' it$s 5st t-e start. 6 t-in' t-e 2eb 2a&&et( if yo &oo' at t-e ser
interface( for instance yo -ave an address( and in t-at address yo can -ave
one or more of t-ese 'inds of to'ens. Ri)-t no2( t-e address is 'ind of &i'e a bo;(
and t-en t-ese to'ens are &i'e &itt&e bo;es 2it-in t-at bo;. !o it$s 'ind of &i'e yo
open p a bo; and t-en yo -ave t-ese varios to'ens &ayin) 2it-in t-e bo;. 6
t-in' t-at yo may -ave a mi&&ion assets( or to'ens( on t-e net2or'( bt -o2
many of t-ose is yor avera)e ser rea&&y )onna -ave in a )iven address: %-ey
co&d -ave ten( t2enty( t-irty( 3ve= 6 don$t t-in' most sers are )onna -ave more
t-an +O or ./ in a )iven address( bt t-at co&d be t-e same as D2-o needs
more t-an P0/' of memory:H statement.
AL: Ri)-t.
RD: !o( 6 don$t 2anna say it( bt at t-e same point( 6 t-in' t-ere$s a &ot of t-in)s
t-at yo can do arond t-e C6 to s-o2 t-e most common&y sed assets if
somebody -as a &ot of to'ens or assets sittin) in a )iven address. %-ere$s a &ot of
t2ea's( and t-is is initia&&y 2-ere 2e 5st s-o2 it a&&( and 6 t-in' if t-is 'ind of
tec-no&o)y )ains a foot-o&d( 2e can contine to iterate on t-at= contine to
ma'e t2ea's( 5st to 'eep it a very ser-friend&y e;perience. %-at$s rea&&y t-e
)oa& 2it- Conter2a&&et( becase as yo said( 6 t-in' it$s set a &ot of 3rsts. 6t$s not
on&y t-at( 2-ere yo can -ave a&& t-ese m&tip&e assets= it trades on-c-ain( so it$s
on t-e b&oc'c-ain. 4it- t-e centra&ised e;c-an)e e;perience t-at most peop&e
are sed to( yo$&& send fnds to a deposit address( t-en yo$&& trade on t-is
centra&ised e;c-an)e( and t-ose trades -appen very Kic'&y becase it$s ti&isin)
t-e e;c-an)e$s o2n trade en)ine to do it o? of t-e b&oc'c-ain and t-en yo cas-
ot. Bt 2it- Conter2a&&et( 2-en yo trade on t-e decentra&ised e;c-an)e(
yo$re tradin) on t-e b&oc'c-ain( so for instance 6$&& )o create an accont( 6$&&
send coins to my 2a&&et bitcoins and t-en say 6 2ant to do a trade from
bitcoin and by some JCP 2it- my bitcoins 6$m )oin) to create an order( and
it$s )onna ta'e a con3rmation for t-at order to acta&&y s-o2 p on t-e
e;c-an)e. !o t-e order 2i&& be sent( essentia&&y( to t-e Bitcoin peer-to-peer
net2or'= some miner$s )onna pic' it p( pac'a)e it into a b&oc' t-at sa&&y
-appens 2it-in 5st one b&oc' a&& of or Conterparty transactions pay a
miner$s fee( so t-ey norma&&y pic' it p re&ative&y Kic'&y. 6t ends p into a b&oc'.
#nce it ends p into a b&oc'( t-e protoco& t-e Conterparty de-reference c&ient(
rnnin) on one -ndred( t2o -ndred( 3ve -ndred t-osand mac-ines(
2-atever 2i&& eventa&&y see t-is order( and t-en it 2i&& )o t-ro)-( &oo' at a&& of
t-e ot-er open orders( and it 2i&& say D#I( do 6 -ave any orders t-at 2i&& matc-
t-is order:H. 4-en yo created t-e order( it acta&&y escro2ed t-e fnds a2ay( so
it is acta&&y -o&din) onto t-ose fnds t-ey 2ere removed from yor ba&ance( so
for instance yo -ave a ban'in) accont( and &et$s say yo may -ave t2enty
do&&ars( bt yo can acta&&y on&y se ten of t-ose do&&ars( it$s simi&ar to t-at 'ind
of concept so t-e fnds 2ere escro2ed( and t-en t-e protoco& 2i&& atomatica&&y
matc- open orders( and t-en 2-en it does t-at( it creates t-ese order matc-es(
e;c-an)es of fnds( and t-en n-escro2s t-em. !o t-at$s essentia&&y -o2 it
2or's. 4it- Bitcoin t-ere$s one e;tra step( ca&&ed t-e B%CPay
AL: Ao said one of t-e t-ree primary t-in)s t-at Conterparty aims to do is
ma'e it so yo can trade anyt-in). Ho2 does t-is enab&e t-at: 6 can see t-at it
2o&d enab&e yo to trade anyt-in) t-at$s on t-e Conterparty p&atform( and 6
can see t-at it enab&es yo to trade anyt-in) on Bitcoin( bt does it enab&e yo
to trade anyt-in) on anot-er coin( &i'e Do)ecoin( or somet-in) &i'e t-at: Can 6
trade Do)ecoin on t-is p&atform:
RD: !o far( 2e -ave e;p&ored t-e decentra&ised e;c-an)e from t-e 7concept:8 of
t-ese native to'ens sc- as L%BCoin( sc- as JCP. Bt 2e$ve a&so been 2or'in)
on introdcin) t-e concept of pro;y to'ens( 2-ic- is a to'en on t-e Conterparty
net2or'( t-at represents somet-in) e&se. "or instance( 2e -ave t-is tec-no&o)y
t-at 2-at$s acta&&y even more e;citin) abot t-is tec-no&o)y is t-at it comes
ot of a member of t-e Conterparty commnity t-at$s acta&&y startin) a
bsiness arond it( and t-at$s so coo&( to start to see t-ese bsinesses comin)
ot of t-is bt t-e tec-no&o)y is ca&&ed Mend. 4-at Mend is: yo can rea&&y t-in'
of it as a di)ita& vendin) mac-ine. !o 6 can -ave a vendin) mac-ine for L%C( for
Litecoin( for instance= 6$&& )o to t-e 2ebpa)e for t-is vendin) mac-ine( and 6$&& say
D#I( 6 2ant to )et JL%C or CryptsyL%C or 2-atever t-is Conterparty pro;y to'en
is named( sent to t-is Conterparty address 6$&& type in my Conterparty
address. And it$&& say( D#I( send yor Litecoin to t-is Litecoin addressH. And so 6$&&
send my Litecoin to t-e Litecoin address( and t-e vendin) mac-ine 2i&&
essentia&&y create some say if Cryptsy ran t-e vendin) mac-ine( t-ey may
2anna ca&& it CryptsyL%C so it$&& create some CryptsyL%C( and it$&& pt it into my
Conter2a&&et address. And t-en 6 can essentia&&y trade t-at CryptsyL%C as a one-
to-one pro;y to'en for Litecoin on top of Bitcoin on t-e conterparty
decentra&ised e;c-an)e. 4-en 6 trade it 2it- some ot-er )y( t-is )y )oes to
t-e Cryptsy vendin) mac-ine 2ebpa)e and -e says D-ey( 6 2anna cas- otH.
7%-e vendin) mac-ine8 says D#I( 2-at$s yor Litecoin address:H. He pts -is
Litecoin address in( sends t-e CryptsyL%C to t-e vendin) mac-ine( and it
reverses t-e process and cas-es -im ot of it.
AL: !o it$s &i'e atomated e;c-an)e:
RD: Aea-( so it$s &i'e a micro-e;c-an)e. 4-at comes ot of t-is concept is yo
essentia&&y -ave t-is it$s 'inda simi&ar to ripp&e on some re)ards( 2-ere yo
essentia&&y -ave t-e decentra&ised e;c-an)e in t-e midd&e it$s &i'e a circ&e( yo
-ave a decentra&ised e;c-an)e in t-e midd&e and t-en yo -ave t-e semi-
centra&ised vendin) mac-ines arond it( and t-en t-ro)- t-ese pro;y to'ens(
peop&e can come in and come ot of it. !o Conterparty( or decentra&ised
e;c-an)e( rea&&y becomes a meta-e;c-an)e( 2-ere yo can trade any 'ind of
a&tcoin t-at yo 2i&& -ave a vendin) mac-ine for on top of Bitcoin( and no &on)er
do yo need to rn a centra&ised e;c-an)e( 7bt8 yo can 5st do t-is 2it- t-e
decentra&ised e;c-an)e tec-no&o)y. !o no *tEo; t-at can )o do2n and ta'e a&&
yor money. Ao 5st -ave t-e vendin) mac-ine operator. And t-e vendin)
mac-ine operator can c-ar)e a sma&& fee( so t-ere$s a pro3t motive( so Cryptsy
co&d start p a fe2 vendin) mac-ines for t-eir t-in)s( for instance( and c-ar)e a
fee on t-eir vendin) mac-ines= it$s anot-er &ine of bsiness for t-em.
AL: !o t-e advanta)e of t-is 2o&d be t-at by sin) a vendin) mac-ine( peop&e
2o&d be ab&e to ta'e rea& Litecoin and convert it into Litecoin t-at can be traded
on t-is e;c-an)e a)ainst a&& of t-e ot-er to'ens t-at are a&so traded on t-e
e;c-an)e. 6s t-at ri)-t:
RD: G;act&y.
AL: And so t-at ma'es t-e Litecoin more sef&( 2-ic- is 2-y someone 2o&d be
2i&&in) to pay a fee 6$m tryin) to 2or' ot t-e &o)ic on t-is( bt 6 t-in' t-at
ma'es sense. Ri)-t:
RD: Aea-. Gssentia&&y. !o yo enab&e tradin) of t-ese a&tcoins( essentia&&y( on t-e
decentra&ised e;c-an)e on top of Bitcoin.
AL: Ao 'no2( t-e reason 2-y a &ot of peop&e trade is becase t-ey &i'e t-e idea
of tradin) in a s-ort-term( responsive 'ind of day-trader-y sort of 2ay. 6 don$t
rea&&y t-in' t-at$s possib&e 2it- decentra&ised e;c-an)es. 4-at do yo t-in' t-e
va&e of decentra&ised e;c-an)es are:
RD: Let me bac' p and &oo' at t-e second se case of t-ese pro;y to'ens( and
t-en t-at may -e&p s-ed some more &i)-t on t-at Kestion. %-e second se case
is t-at not on&y can yo do t-is 2it- t-ese a&t c-ains( yo can a&so -ave pro;y
to'ens for t-in)s &i'e C! do&&ar( ero( commodities &i'e corn( soy and 2-eat= so 6
t-in' t-ere$s some interest t-ere$s been interest 2it- a fe2 si)ni3cant p&ayers
in t-is space potentia&&y doin) somet-in) &i'e a C!D coin( 2-ere 2-at -appens is
t-at yo may -ave a company 6$m )onna se Coinbase in t-is e;amp&e( it$s not
Coinbase bt 6$m 5st )onna se t-em for t-e e;amp&e yo -ave a company &i'e
Coinbase t-at 2i&& -ave a Coinbase C!D pro;y to'en. And t-ey$re f&&y comp&iant
2it- "inCG9 and a&& of t-at. %-ey -ave a&& t-e A*L and IAC st? ot of t-e 2ay(
and so yo can )o to t-e Coinbase site( and yo can essentia&&y )ive t-em 3ve
t-osand C! do&&ars( yo by 3ve t-osand Coinbase C!D to'ens. And t-en yo
can -o&d onto t-ose to'ens( and yo can trade t-ose to'ens on t-e decentra&ised
e;c-an)e( and &i'e2ise( someone can cas- bac' ot. %-e to'en 2o&d -ave
Coinbase$s name ri)-t in it. %-ey can ti&ise t-eir reptation( and t-en t-ey can
a&so t-ere$s a pro3t mode& for t-em( 2-ere t-ey essentia&&y 2i&& co&&ect fees(
t-ey can co&&ect a sma&& e;c-an)e fee( on eit-er comin) into t-e to'en( or
e;itin)( or bot-. !o it rea&&y opens t-e door p to not on&y tradin) native ../
to'ens on top of Conterparty( not on&y tradin) t-e a&tcoins( t-e +./ a&tcoins( on
top of conterparty( bt a&so tradin) virta&&y anyt-in) t-at yo can create a
pro;y to'en 2it-. 6 can 5st -o&d onto t-ese C!D coins. 6 -ave fnds t-at 6 can
easi&y trade into Bitcoin( bt 6 don$t -ave to -o&d onto bitcoins and e;pose myse&f
to t-e bitcoin vo&ati&ity if 6 don$t mean to. !o it can be some2-at of a &on)
-ed)in) mec-anism( and t-ere$s a variety of ot-er sef& 'inds of t-in)s t-at yo
can do 2it- t-is 2-o&e privacy to'en tec-no&o)y( as 2e&& as estab&is-in) mar'ets
bet2een( yo 'no2: Dpic' a crrencyFH #ne 'ind of 3at crrency( and some 'ind
of a&tcoin. !o 2it- Conterparty( any t2o assets yo can -ave a pair form
t-ro)- t-em and a mar'et form arond t-em. Ao 5st trade one for t-e ot-er(
and if ot-er peop&e are tradin)( it 2i&& estab&is- a mar'et bet2een t-ose t2o
'inds of assets or to'ens.
AL: %-o)- rat-er t-an mar'et ris'( it$s more &i'e individa& isser ris'.
RD: G;act&y( so t-e ris' 2it- t-at( and t-at$s 2-y 2e ca&& it semi-centra&ised( is
t-at becase yo$re essentia&&y -o&din) onto t-ese Coinbase C!Ds. 6f Coinbase
2ent do2n( 2-at t-ey co&d do is 5st -ave a t-in) 2-ere if t-ey -ad isses( or if
t-ey 2ere )onna stop 2it- t-is o?erin)( t-ey co&d -ave somet-in) 2-ere 7t-ey
say8 Dsend a&& yor Coinbase C!D bac' in and 2e can cas- t-em bac' otH. #r(
&i'e any 'ind of centra&ised e;c-an)e( if yo -ad Coinbase C!Ds and t-ey 5st
2ent totally ot of bsiness( yo co&d -ave an isse 5st &i'e yo 2o&d 2it- a
centra&ised e;c-an)e. !o it$s not a perfect&y decentra&ised concept( bt it$s a
)ood 2ay for yo 'no2( especia&&y 2-en yo$re ta&'in) abot t-in)s &i'e
enab&in) t-e trade of 3at commodities( and t-ere are varios 'inds of Kote-
nKote Drea& 2or&dH assets on top of t-is decentra&ised b&oc'c-ain tec-no&o)y(
it$s a pretty neat 2ay to do t-at( and a pretty simp&e 2ay to do it.
(Intermission advertisements)
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descendants( to t-rive and )ro2 into t-e safe( free and fair invention t-at !atos-i
2rote abot. 6n my spare time( 6$m a&so t-e president of Bitcoin Pac'a)in).
BitcoinPac'a)in).com ma'es it easy to se yor crrency of c-oice to prc-ase
mndane prodcts. 4e empo2er yo to c-an)e t-e 3nancia& 2or&d by spendin)
yor bitcoin. 4-en yo by a prodct from BitcoinPac'a)in).com 2it- bitcoin( 2e
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BitcoinPac'a)in).com.
(End intermission)
AL: !o( Robby( 2e$re rnnin) ot of time( bt it$s been rea&&y interestin) 2atc-in)
Conterparty in comparison to some of t-e ot-er pro5ects ot t-ere( becase yo
)ys &i'e yo said 5st came ot in ear&y <anary. %-e pro5ect formed( 6 t-in'(
in 9ovember or December( ri)-t: Ao -aven$t been arond too &on) at a&&.
RD: 9o( yea-( it 2as. 4e rea&&y )ot a start crac'in) on t-e code for t-e reference
c&ient in mid-9ovember( and t-en t-e Conter2a&&et deve&opment started in mid-
to &ate- <anary. !o 2e rea&&y 5st )ot in t-ere( and 2e sa2 need to rea&&y simp&ify
and optimise t-in)s arond t-e concept of 3nance( 2-ic- is a nic-e( bt it$s a
-)e nic-e( and re&ease st? Kic'&y( re&ease 2or'in) code( iterate rapid&y and
)et t-is open p&atform concept ot to peop&e and &et t-em bi&d.
AL: 6t$s a )reat p&atform. 6$ve been testin) it ot since( basica&&y( it -it %estnet(
and 6$ve no2 -ad to move my 2a&&ets( 6 t-in'( t-ree or for times. 6$m 2onderin)
if yo can en&i)-ten me 6 'no2 t-at t-ere -ave been some secrity isses(
2-at$s )oin) on 2it- t-at: 6s t-is somet-in) t-at 6 need to be concerned abot:
Am 6 )onna need to move my 2a&&et t2enty more times: Becase it$s a &itt&e bit
time consmin).
RD: %o t-at point( 6 t-in' anyone 2-o$s been a Conterparty ser from t-e start
2e -ad one secrity isse 2it- Conterpartyd bac'- it 2as a nmber of mont-s
a)o and t-ere 2as 5st a certain v&nerabi&ity 2it- t-e se of m&ti-si) inpts.
!o any-o2( ot of t-at 2-at came ot of t-at is t-at 2e rea&&y )ave a 2-o&e
&oo' do2n t-ro)- t-e 2-o&e code. 4e bro)-t on !er)io Lerner( 2-o is a
reco)nised Bitcoin secrity researc-er -e -as fond and 3;ed a nmber of
La2s in Bitcoin itse&f -e did a f&& adit of t-e Conterpartyd reference c&ient(
)ave it a t-mbs p( 2e identi3ed a fe2 minor isses t-at 2o&d 5st case it to
cras-. %-ere 2as no &oss of fnds isses t-at 2e identi3ed. 6t passed t-at adit
pretty 2e&&. 4e a&so are 2or'in) 2it- Peter %odd( -e$s )onna be doin) a second
secrity adit of t-e reference c&ient s-ort&y. !o t-at$s t-e reference c&ient. %-e
conterpartyd reference c&ient( as far as 2e see it( is rea&&y stab&e= it$s -ad a
nmber of rea&&y Ka&i3ed eyes &oo'in) at it. !o( for instance( if yo$re )onna
bi&d a bsiness arond Conterpartyd( it -as a f&& AP6 and 2e recommend t-at
peop&e se a Conterpartyd reference c&ient direct&y. !o t-e ot-er t-in) yo
bro)-t p 2as Conter2a&&et( t-e 2eb 2a&&et. %o ans2er yor Kestion: no( 6
don$t anticipate (&a)-s) t-ere$s )onna be any more 2a&&et moves. Rea&&y( t-e
reason for t-at 2as t-at 2e initia&&y started p 2it- t-is Bitcoin 5avascript &ibrary
ca&&ed Bitcoin5s&ib. %-e &ibrary 2as 6 t-in' it came to)et-er initia&&y( some peop&e
in t-e commnity 5st started -ac'in) arond 2it- t-e <avascript &ibrary( and t-is
is 2-at came ot of it. %-ere$s been a nmber of peop&e t-at -ave toc-ed it( bt
it$s been 'ind of &i'e an or)anic deve&opment process arond it. 4e -ad a
nmber of prob&ems t-ey -ad 5st added on t-e deterministic( or HD4a&&et
spport to it. %-ere$s basica&&y( Bitcoin5s&ib( t-ere$s a )reat( rea&&y smart )y(
Danie& Cosens( 2-o$s rea&&y doin) a &ot of deve&opment arond it to rea&&y brin)
it p into s-ape and )et it rea&&y -i)- Ka&ity= pt in a &ot of testers arond it( to
test some t-in)s &i'e t-at. Bt 2e 2ere 'ind of ca)-t in t-at 2-ir&2ind. And so(
2-at 2e did as a response to t-at( is 2e essentia&&y moved from Bitcoin5s&ib 5st
t-is past 2ee' 2e moved to Bitcore( 2-ic- is BitPay$s <avascript Bitcoin &ibrary
t-at 6$m sre many peop&e &istenin) to t-is are fami&iar 2it-. !o 2e$re sin)
Bitcore today. 4e$ve -ad t-e Bitcore deve&opment team t-emse&ves ta'e a &oo'
at or imp&ementation. %-ey$ve )iven it a t-mbs p. 4e$ve -ad a fe2 ot-er
Bitcoin 7and8 <avascript e;perts &oo'in) at it. 4e$ve -ad a 2eb secrity
researc-er t-at a&so specia&ises in Bitcoin -e$s doin) a secrity adit and doin)
penetration tests in t-e 2a&&et. 74e are8 C!P( or content secrity po&icy(
comp&iant no2. 4e$ve rea&&y moved to as stab&e a p&atform as possib&e arond
t-is( and imp&emented a&& t-ese secrity standards and -eaders to rea&&y ma'e
t-e 2a&&et as secre as possib&e. !o( from t-e 2a&&et standpoint( to ans2er yor
Kestion: t-ere s-o&d not be anymore address c-an)es. %-e secrity of t-e
2a&&et$s &oo'in) rea&&y )ood no2( and 2e$re 5st continin) to deve&op t-in)s( bt
6$m fee&in) pretty )ood abot t-e 2a&&et itse&f no2 and fee&in) rea&&y )ood abot
t-e Conterpartyd reference c&ient itse&f.
AL: !o( t-e one aspect t-at 2e -aven$t rea&&y toc-ed on yet is acta&&y t-e to'en
t-at is t-e native crrency of Conterparty( and it is JCP. %-e times t-at 6$ve sed
it disc&osre( 6 -ave some... yo 'no2( )enera&&y( disc&osre: 6 -ave a&&
crytocrrencies( so 5st assme t-at t-e on&y t-in) t-at 6$ve sed JCP for so far
-as been to create ne2 assets( to test t-e featres and st? &i'e t-at. 6 don$t
t-in' t-at t-ose payments are )oin) to anybody. 4-at -appens to t-e .O JCP
t-at 6 DspendH Kote-nKote to create a ne2 asset:
RD: Aea-( so 2-en yo create a ne2 asset( t-at JCP is essentia&&y destroyed= t-e
tota& spp&y is &o2ered by t-at .O amont. !o 2e don$t -ave anyt-in) in t-e
protoco& t-at 2-en yo create an asset( or do somet-in) e&se( it sends money to
somebody. %-ere$s no pro3t mode& or pro3t motive any2-ere 2it-in
Conterparty( and as t-e Conterparty fonders( or &one economic incentive
2it- t-is is t-at 2e$re 5st investors in JCP itse&f.
AL: Besides creatin) an asset( e;p&ain to me: 2-at is t-e va&e of -avin) a
crrency &i'e JCP: 4-at does it enab&e yo to do t-at yo can$t do 2it- a pro5ect
&i'e Co&ored Coins:
RD: Ao 'no2( Conterparty -as a&& t-is fnctiona&ity 2it- it( and t-e prob&em by
-avin) an embedded consenss system is yo can$t escro2 bitcoins yo 'no2(
arbitrari&y escro2. %-ere are t-in)s &i'e m&ti-si)( bt yo rea&&y need to 'no2 t-e
peop&e before-and and create t-at m&ti-si) transaction( and t-ro2 t-e bitcoin
p into it and dea& 2it- t-at. %-e 2ay 2e se it( yo essentia&&y can$t escro2
t-ese bitcoins. !o 2e -ave JCP 2e$re not fans of -avin) somet-in) 2-ere yo
-ave to se JCP for some arbitrary reason( 2-ere t-ere$s no tec-nica& reason
nder it( so rea&&y( ri)-t no2( yo se JCP for a fe2 t-in)s. 6t$s sed for t-e asset
creation= it$s sed for ca&&ab&e assets( 2-en yo 2ant to ca&& an asset bac' so
yo -ave an asset ot t-ere( yo say Dafter t-is date( 6 -ave t-e option to ca&&
t-is asset bac'( or some percenta)e of t-e otstandin) asset t-at$s ot t-ere on
t-e mar'et( to ca&& it bac' for t-is priceH. !o it$s an option. Ca&&ab&e assets aren$t
reKired 2-en yo create an asset( bt yo can do t-at. !o t-at price is paid in
JCP( and t-en a&so( JCP is most si)ni3cant&y sed 2it- -ed)in) and bettin). 6t$s
sed for t-e bettin) itse&f as 2e&& as t-e bettin) fees( so 2-en yo create a bet
2it- somebody( or yo open p a C"D to do -ed)in) becase 2e need an
app&es to app&es comparison( and yo can$t escro2 bitcoin JCP is sed on bot-
sides of t-e bet( or t-e -ed)e. %-at$s rea&&y 2-ere JCP is of se.
AL: Robby( 6 t-in' 2e$re de3nite&y )onna -ave to -ave yo bac'( t-ere are more
topics t-at 2e did not -ave time to )et to. Let$s )et 'ind of bi)-pictre and
visionary -ere for a second. Can yo ta&' to me abot 2-at -appens if yo )ys
scceed 2it- 2-at yo$re attemptin) to do -ere:
RD: 6 t-in' t-e fnctiona&ity -ere de3nite&y -as bi) aspirations of app&ications
-ere. 6$m an entreprener( 6 -ave a t2enty-some tec-no&o)y company bac' -ere
in 9ort- Caro&ina. "or me( persona&&y( 6 t-in' t-e bi) e;citin) part of Conterparty
is t-e fact t-at 2e$re creatin) t-is open p&atform( 2-ere yo essentia&&y 5st pt it
ot t-ere and t-en yo can -ave t-ese bsinesses and deve&opers 5st do
2-atever 2it- it. Gvery time 6 -ear of a ne2 bsiness( or a ne2 e?ort( comin) on
Conterparty and t-ere$s been severa& ones( and 2e$re ta&'in) to a nmber of
t-ese fo&'s it$s rea&&y rea&&y e;citin)( becase t-at$s rea&&y t-e 2-o&e prpose of
t-e p&atform. 4e 5st 2ant to create t-is open and nencmbered tec-no&o)y
2-ere peop&e can 5st ti&ise it and add va&e to it &i'e( rea& va&e( not pmp-
and-dmp( bt va&e t-at )ro2s over time and -opef&&y it on&y )ets bi))er.
%-at$s rea&&y 2-ere t-e rbber -its t-e road. 6 t-in'( over time( 5st -avin) t-is
or)anic process as more peop&e bi&d on top of t-e p&atform( t-e most e;citin)
app&ications to me are t-e ones t-at 2e -aven$t t-o)-t of. %-ere -ave been
some t-in)s &i'e Di)ita& %an)ib&e %rst( )ood e;amp&e( t-at$s a rea&&y coo& and
innovative 2ay -o2 t-ey$re sin) t-ese di)ita& to'ens to represent )o&d coins.
And t-ere$s been a nmber of ones( &i'e t-e fact t-at Mend came ot of t-e
commnity. <st rea&&y &oo'in) for2ard to more of t-at( 2or'in) 2it- t-e
commnity. 4e be&ieve( at &east in t-e 3nance space( 7t-at8 t-ese are t-e
pioneers( t-ese are t-e ear&y adopters t-at are rea&&y de3nin) 2-at decentra&ised
crypto3nance is( -o2 it 2i&& 2or'( and 2-at it 2i&& &oo' &i'e. And so it$s rea&&y
e;citin) for s to be a part of t-is( and to be 2or'in) 2it- t-ese fo&'s on t-is
tec-no&o)y.
AL: !o( if somebody 2o&d &i'e to &earn more abot Conterparty( or )et invo&ved(
-o2 do t-ey do t-at:
RD: Ao can )o to conterparty.co t-e Conter2a&&et 2ebsite( yo can )et
started 2it- a 2a&&et rea&&y Kic'&y( is conter2a&&et.co.
AL: Robby t-an' yo very mc- for yor time.
RD: A&& ri)-t( t-an' yoF
AL: %-an's for &istenin) to episode +/1 of Let$s %a&' Bitcoin. Content for t-is
episode 2as provided by Robby and Adam. %-is episode 2as edited by Adam B.
Levine. *sic for t-is episode 2as provided by <ared Rbens and Eenera&"@@.
Any Kestions or comments: Gmai& adamQ&etsta&'bitcoin.com. Have a )ood oneF