Lets Talk Bitcoin!

Episode 2 Transcription

Participants: Adam B. Levine Host (ABL) Andreas M. Antonopoulos Co-Host (AA) Stephanie Murph Co-Host (SM) !ar l "# da -trader at Bit$loor (!)% relevant to second se&ment at '(:') !avid Perr *ournalist at Codin&inm sleep.com (!P) relevant to +i+th se&ment at ,-:'' Peter !ushens.i !e-&ee.i+ in& Cr pto (P!) relevant to seventh se&ment at /0:/-

ABL: Hi% and 1elcome to Let2s 3al. Bitcoin% a sho1 +or users ne1 and old o+ cr ptocurrencies and the current .in& o+ them all% Bitcoin. Comin& up on toda 2s sho1: Pro4ect 3al.5 Listener !ar l ta.es the +irst Horri6le 7arnin& o+ the 7ee. A1ard 1ith his stor a6out Bit+loor 3he Anti-8o# 1e tal. a6out ever thin& Buttercoin Promises promises: Pa pal 1ei&hs in on Cr pto and the latest &reat miner &ear does an 6od 6u the h pe9 : sit do1n 1ith !avid Perr o+ Codin&inm sleep.com +or a heart-to-heart on Butter+l La6s :s Bitcoin the 1a out o+ &overnment corruption +or third 1orld countries9 Mesh ;et1or.s +or rural cr ptocurrenc use +act or +iction9 $inall % Correspondent Peter !ushens.i chec.s in on !e-8ee.i+ in& Cr pto&raph .

3o su6scri6e +or +ree to our t1ice-1ee.l sho1% please visit us at Letstal.6itcoin.com. 7e haven2t reall tal.ed a6out this et% 6ut Let2s 3al. Bitcoin runs entirel on donations and m out-o+-poc.et e#penses. 7e have started acceptin& advertisers 6ut that2s not reall a place% 6ased on listener num6ers% that2s 6rin&in& in an mone . :+ 1e can hit one 6itcoin o+ listener support per sho1% 1e2ll 6e a6le to 6rin& on a +ulltime associate 1ho 1ill 4oin me in m tas. o+ huntin& stories and conductin& intervie1s% 1hich means more and 6etter content% and more +re<uent releases o+ e#tra intervie1s on o++-sho1 da s. So +ar% 1e2ve received '.) 6itcoins +rom a total o+ si# donors +or "pisode =. 3han. ou ver much. 3hese lar&er donations are &reat% 6ut it 1ould 6e 6etter i+ 1e had ='' listeners donatin& '.'= 6itcoin% than =' listeners donatin& '.= 6itcoin. So even i+ the amount ou donate is onl a little% please remem6er that 1ith Bitcoin there2s no such thin& as >too small to matter.> 7e2re also loo.in& at a mem6ership or su6scription model +or e#tra and earl content. 3he Saturda ?3uesda sho1 1ill al1a s 6e +ree% 6ut 1e2re loo.in& +or others 1a s to help the sho1 support itsel+ 1hilst &ivin& listeners value +or their value. :+ ou have ideas or su&&estions a6out this% please email adam@letstal.6itcoin.com. $inall % i+ ou can2t support the sho1 +inanciall % ou could still help us out <uite a 6it 6 sharin& 1ith an one ou thin. 1ould or should 6e interested in the +uture o+ mone . Let2s 3al. Bitcoin is released under an open-source license% 1hich allo1s +or the non-commercial clippin&% remi#in&% and postin& in an +ormat and to an site ou 1ant so lon& as ou include a lin. to our site% letstal.6itcoin.com. 7e2re also activel recruitin& 6oth on and o++-air talent +or this and other sho1s to come. Ance a&ain% i+ ou2re interested% please contact me at adam@letstal.6itcoin.com. ABL: M name is Adam B. Levine. : am a 1riter and spea.er 1ho li.es to e#plain complicated topics in understanda6le terms. 3hat2s reall 1hat 1e2re doin& here ta.in& the complicated topic o+ cr pto&raphicall -secured mone % and helpin& people see 1hat it could mean in their o1n lives. *oinin& me in our <uest +or clarit are Andreas M. Antonopoulos an e#pert in centraliBed net1or.s and secure s stems. AA: Hi. ABL: And !r Stephanie Murph % a scientist and radio host. SM: Hi. ABL: 3han.s +or ta.in& the time out o+ our Saturda % ever 6od . Let2s tal. Bitcoin. Ane thin& that : have de+initel seen as 1e2ve &otten to .no1 the Bitcoin communit more is that ever 6od has a pro4ect. 3his is not somethin& 1here people &et involved and the 2re li.e Coh &reat% :2ve &ot a couple o+ 6itcoins no1 so :2m done 1ith it2 - most people 1ho have 6een vie1in& this as an opportunit are 6uildin& services and have reall neat thin&s that the 2re doin&. : 1anted to set up a per-sho1 instance o+ us tal.in& a6out the pro4ects that 1e2re involved 1ith% 6oth +or disclosure purposes and so that people can +i&ure out the other stu++ that 1e2re 1or.in& on. Stephanie% : .no1 ou2ve &ot some pro4ects: 1hat2s hot on our list ri&ht no19

SM: Deah% : have a ton o+ di++erent pro4ects% 6ut the one : 1anted to +ocus on toda is EthatF :2m a host o+ a nationall -s ndicated radio sho1 called $ree3al.Live% and :2m hostin& the sho1 on Sunda ni&hts% 6ut it>s heard actuall on ever sin&le ni&ht o+ the 1ee.. :t2s on terrestrial radio as 1ell as GM and on the :nternet. Dou can chec. that out at $reetal.live.com. 3he tal. <uite a 6it a6out Bitcoin actuall % especiall 1hen :2m on the sho1. ABL: And Andreas% ou2ve had a couple o+ open-source that have opened in the last couple o+ 1ee.s. 7hich one do ou thin. is our +avorite ri&ht no19 AA: 3he one that2s &ettin& a lot o+ traction is Apen Bitcoin Store% 1hich is on Apen6itcoinstore.com. 3hat2s a communit e++ort to help people create retail stores that 6u and sell products and services in Bitcoin. Since it2s a technicall -di++icult area to 1or. in% 1hat 1e2ve done is created a simple store launch 1iBard% 1here ou 4ust &ive a store name% an email address% and a pass1ord and that2s all no credit cards% no personal in+ormation. Dou hit HlaunchI and t1ent seconds later E ou haveF a +ull e-commerce store that ta.es Bitcoin. Dou can 4ust use it and its hosted +or +ree and has technical support online +or volunteers. 3hat sounds li.e a prett &ood proposition and in +act 1e &ot si#t store launches in 4ust the +irst 1ee. and more than =-' applications so +ar% and a6out =' stores are launched ever da on that plat+orm. :2m ver e#cited 1ith the &ro1th. SM: 3hat sounds &reat to me% Andreas. :2d li.e to ma.e one5 Elau&hterF ABL: : actuall alread did. M pro4ect this 1ee. is actuall Bitcoin pac.a&in&. M 6ac.&round 6e+ore : &ot into this space 1as in the sale o+ industrial and institutional pac.a&in& supplies% 1hich is not a super se# topic% 6ut as +ar as meetin& the needs o+ 6usinesses% that2s somethin& that2s &onna need to pop up. : have relationships 1ith 6ro.ers and thin&s li.e that% so 1e2re &onna 6e o++erin& all .inds o+ pac.a&in& +or 6usiness needs% e#clusivel +or Bitcoin. And at 6elo1 mar.et prices% 6ecause 1e2re 6ro.ers so 1e have the a6ilit to &et <uite lo1 prices. SM: 3hat2s e#citin&% and it could 6e se# i+ ou thin. a6out some o+ the dresses that Lad 8a&a 1ears. Elau&hterF ABL: 3han. ou% Stephanie% +or tr in& to help 1ith the pac.a&in& pitch. : don2t thin. that ever 6od 1as plannin& on &oin&% 6ut : .no1 that no1 1e2re all plannin& on &oin& to the Bitcoin con+erence comin& up in San *ose ne#t month. :2m &ivin& a 6rie+ tal. called >Dou3u6e is Bro.en%> rethin.in& content monetiBation 1ith Bitcoin. : .no1 that ou &u s are doin& some thin&s too. SM: Deah% :2m &oin& to 6e there and as : mentioned :2m involved 1ith $ree3al.Live the 2re &onna 6e castin& live +rom the con+erence and :2ll 6e doin& a live 6roadcast 1ith $ree3al.Live on Sunda ni&ht% almost as the con+erence is endin&. :2m also moderatin& a panel discussion a6out non-pro+its and the Bitcoin 1orld. 3here2s

&onna 6e several non-pro+it or&aniBations tal.in& a6out the intersection 6et1een cr ptocurrencies and ho1 the can 6ene+it charities and non-pro+it or&aniBations% and ho1 non-pro+its can 6ene+it the Bitcoin communit and the Bitcoin 1orld. 3here 1as recentl a surve a6out Bitcoin users% and the said that the most common use o+ 6itcoins 1as actuall +or donations. But et% there2s this reputation that people are 4ust 6u in& dru&s online and o6viousl that2s not true% so 1e 1ant to reall pla up the donation an&le and tal. a6out it some more. AA: 3hat sounds super6% Stephanie. : 1ould a&ree 1ith our premise that this is a &i+t econom more so than an thin& else and that2s an interestin& topic% perhaps +or another discussion. :2ll also 6e at the sho1% and :2ll 6e tal.in& a6out Bitcoin neutralit - one o+ the prere<uisites and necessar conditions +or Bitcoin to 6e read % 1hen that event happens. :2ll 6e tal.in& a6out 1hat that means 6ecause : 6elieve there 1ill 6e several precipitatin& events that 1ill lead to sudden and massive adoption o+ Bitcoin% at least in certain &eo&raphies. And so the topic is: ho1 do ou prepare +or that9 Ho1 do ou ma.e sure that Bitcoin is read to 6e adopted in an culture% and an economic s stem% and in an &eo&raph an 1here in the 1orld9 ABL: So i+ ou2re &oin& to 6e at the San *ose con+erence and ou 1ant to tal. 1ith us% a6solutel send us an email at adam@letstal.6itcoin.com.

ABL: A+ter last 1ee.2s Bit$loor closin&% !ar l reached out to me. ;ot trustin& Mt. 8o#% he had moved his tradin& to Bit$loor% and 1hen thin&s +ell apart% he 1as cau&ht in an a1.1ard situation. He told me a6out it this mornin&. !: Basicall % : moved to Bit$loor 6ecause o+ the pro6lems 1ith Mt. 8o# and : 1anted to +ind a more domestic place to trade. Jn+ortunatel % : made the mista.e a lot o+ nerds do as the 2re &ettin& into Bitcoin in thin.in& EthatF suddenl : can 6e a da trader% 1hich actuall .ind o+ 1or.ed out +airl 1ell initiall . 3he pro6lem 1as EthatF : had done a sell and : 1as 1aitin& +or the 6u order to +ill% and 4ust as it 1as a6out to +ill% Bit$loor 1ent do1n +or a6out three-and-a-hal+ hours and 1hen it come 6ac. online it instantl shot up E6 F t1ent dollars 1hich suc.ed. : started &ettin& a little &un-sh a6out the idea o+ da -tradin&. Ane success and multiple +ailures 1ere not ma.in& me happ % so 1hat : did 1as : put in a limited order that 1as +airl hi&h at the time it 1as a6out ten dollars over 1hat it 1as actuall tradin& at. So% 1hat m thou&ht 1as - i+ it spi.es up and +ills that order% then spi.es 6ac. do1n (6ecause it had 6een ver volatile) : could 4ust turn around and 6u it 6ac.. 3hen% as : 1as 1atchin& it% suddenl the order +illed and then tradin& stopped% 1hich 1as 1eird. :t turns out the reason that the order +illed is 6ecause some o+ Bit$loor2s customers had 6een emailed% indicatin& that the 1ere &oin& to shut do1n. ;ot me% 6ut others had E6een emailedF. So 1hat happened is the people 1ho &ot the email immediatel turned 1hatever cash the had at Bit$loor into 6itcoin% sailin& throu&h m sell-order% 6ecause the can ta.e Bitcoin and move it 1ithout an 6od else2s intervention. $or m part% : 1ound up 1ith a lot o+ cash that : can2t do an thin& 1ith. 3he 6an. shut do1n Bit$loor2s accountABL: And no1 it2s 4ust .ind o+ +roBen there. Have the &iven ou an sort o+ timeline on 1hen that2s &oin& to chan&e9

!: 7hat the have announced is that the 6an. has mailed them a chec.. 3he pro6lem% is i+ the can2t +ind 6an.in& services to open an account 1ith% deposit the chec.% and then turn around and disperse +unds% : don2t .no1 1hen or ho1 :2m &oin& to &et an o+ m mone 6ac. - or i+. ;o1% +rom all accounts% the person runnin& Bit$loor is an honest operator% and : 1ill pro6a6l &et m mone 6ac. 6ut : don2t .no1 1hen 6ecause the 6an.in& s stem has decided to ma.e that ver % ver di++icult +or him. $or me% this underscores that :2m li.el to &et m +unds 6ac. sometime% 6ut the pro6lem is that 6ecause the mailed the chec. to Bit$loor% Bit$loor has to +ind a 1a to deposit the chec. 6ecause presuma6l the chec. is 1ritten out to Bit$loor and ou can2t deposit or use a chec. to a compan 1ithout openin& an account under that compan 2s name. :+ he can2t open an account an 1here in that compan 2s name% ho1 can he do an thin& 1ith it9 3he last thin& : heard 1as +rom April ,' th% 1here% on the pu6licl -displa ed 1e6site% 1as a messa&e sa in& that the 2ve mailed the chec. and e#pect it 1ithin ten da s% then 1e2ll +i&ure out ho1 to &et the mone to ou. At that point% hope+ull he can open an account some1here 1ait +or that chec. deposit to clear% presuma6l it2s certi+ied +unds E1hichF 1on2t ta.e lon& and then +ind a 1a to &et the mone 6ac. to all the student 6an.in& s stem. 3hat 1ill ta.e 0-/ da s to clear 6ac. into m account% and then another 0-/ da s +or me to &et it to% sa % !1olla% and then another 0-/ da s +rom !1olla to some e#chan&e rate account 1here : can actuall use it. All-in-all% it2s 6asicall meant that : have no access to m mone +or (6 the time this is done% sa ) a month. ABL: Assumin& ever thin& &oes 1ell and to plan% as the have it ri&ht no1. : mean% i+ thin&s chan&e then that could even stretch out lon&er. !: Ki&ht. Mean1hile% ever 6od 1ho had converted their +unds to Bitcoin has them no1. 3he 2re immediatel li<uid. 3o me% EthisF is 4ust a stor that underscores t1o or three times ho1 Bitcoin is so much 6etter than our current 6an.in& s stem. ABL: Ane o+ the thin&s that2s 6een a theme% and : thin. is &oin& to 6e a theme movin& +or1ard% is that in this unre&ulated environment and 6 unre&ulated : mean the rules are su64ect to chan&e at an time% not o+ the currenc itsel+ 6ut ho1 the currenc is 6ein& handled and ho1 the 6usinesses are handlin& it and thin&s li.e that i+ ou can2t 6e a shinin& e#ample% at least 6e a horri6le 1arnin&. Elau&hterF ABL: So 1hat do ou thin. the ta.e-a1a is +or some6od 1ho is hearin& this and 1hat mista.es 1ould ou do di++erentl ne#t time .no1in& 1hat ou .no1 no19 !: 7ell% m plan &oin& +or1ard is to ta.e 1hat +unds that : have +rom this% 1hat : can recover% and pro6a6l move them to an e#chan&e 1here : can turn it 6ac. into 6itcoin% or possi6l 4ust use LocalBitcoins to do it althou&h the prices there tend to 6e 1ildl varied +rom actual mar.et price. 3a.e m Bitcoins home and hold them. : don2t see much o+ a reason to trust either e#chan&es or the 6an.in& s stems% in 6et1een us and the e#chan&es at this point. ABL: !o ou thin. that da -tradin& is somethin& that ou2ll do a&ain in Bitcoin9

!: ;o% no. :t2s the common nerd mista.e to thin. that ou2re &ood thin&s intellectual and da -tradin& is sort o+ an intellectual e#ercise in some respects% 6ut :2ve +ound that it doesn2t...:2ve +ound that :2m not &ood at it. ABL: Deah% it 4ust doesn2t translate that 1ell. :2m +amiliar 1ith this% too. !: :2ve spo.en to other people in similar situations% li.e > eah :2ve tried da -tradin& a little 6it and +ound out ver <uic.l that...it2s not &ood +or me.> ABL: : thin. a lot o+ the time people tr to loo. at it the tr to appl lo&ical standards to the mar.ets% and : thin. that2s 1here at least :2ve run into pro6lems% personall . : da -traded ver 6rie+l ma 6e a ear a&o in Bitcoin and that 1as the pro6lem : had that i+ ou have an unpredicta6le mar.et then it2s ver di++icult to predict the mar.et. Dou can predict volatilit 6ut that2s a dan&erous &ame to pla i+ it &oes a&ainst ou. !: "#actl % e#actl . M a6ilit to predict ho1 code 1or.s and ho1 s stems 1or. does not translate 1ell to ho1 mar.ets 1or.. ABL: Ki&ht. !ar l than.s +or ta.in& the time to sit do1n 1ith us and share our e#perience 1ith this Bit$loor mess. : reall appreciate it. !: 3han.s +or listenin&. -A!L"K3:S"M";3FEMALE VOICE: If I showed you a website where you could easily purchase electronics from the worlds lar est distributor with bitcoins at !" mar#$up% would you thin# it was too ood to be true& 'ood news: its real% and its at (itcoinstore)com) Choose from half a million items% sa*e money o*er Ama+on and ,ewE % and con*ert your (itcoins to real$world items) -ou can e*en buy with pri*acy . all they need is a shippin address) (ut dont ta#e my word for it: see for yourself at (itcoinstore)com)

AA: Ane o+ the thin&s : +ind +ascinatin& a6out Bitcoin is a lot o+ the people 1ho 4oin are reall idealists% and sometimes the have this naive audacit . 3he tr to solve pro6lems that people 6elieve are not solva6le% and that2s ho1 ou succeed. Ane o+ the latest pro4ects that e#hi6ited that .ind o+ attitude that : reall &ot e#cited a6out is Buttercoin. Buttercoin is an attempt to 6uild an e#chan&e that per+orms a ton 6etter than the e#istin& e#chan&es% that is completel open-source% and that can handle an order 6oo. and order capacit volume in the tens o+ thousands o+ operations per second% rather than the current tens o+ transactions per minute 1hich seems to 6e the ceilin&. 3his is an e++ort reall to ri&ht the stoc. e#chan&e it started 1ith an individual sa in& C:2ve had enou&h o+ all o+ these pro6lems% meet me in m apartment tomorro12 and 4ust 1aited to see 1ho came. Lots o+ people sho1ed up. 3hat started a pro4ect 1here teams o+ people 1or.in& ,--hours a da round the cloc.% s1appin& +rom &eo&raph +rom &eo&raph as people 1ere +inished here% people +rom 8erman 1ere 1a.in& up and then people in *apan 1ere 1a.in& up a+ter that. 7or. has continued +or almost t1o 1ee.s non-stop. 3he results are prett impressive% and

1e2re &oin& to 6e doin& some intervie1s in +ollo1in& sho1s to tal. a6out per+ormance% results% and 1here this pro4ect is headin&. :t2s a ver % ver e#citin& pro4ect. SM: Andreas% can : as. ou a <uestion9 : made a post a6out Buttercoin in one o+ the Bitcoin &roups that :2m a part o+ online% and some6od responded C:s that 1hen ou see a 1oman that ou2re interested in and ou thin. ever thin& a6out her is attractive e#cept her coin that she -I Elau&hterF ABL: 3hat2s terri6le5 SM: :t 1as5 But :2m seriousl 1onderin& 1h is it called Buttercoin9 AA: 3he transactions +lo1 smooth as 6utter. 3he idea is to ma.e it +rictionless% ri&ht +rictionless commerce% +rictionless transactions and to have an e#chan&e that 4ust +lo1s. So so+t% sil. % smooth and no +riction. ABL: "ven this earl in the pro4ect% the 2ve had prett incredi6le results in terms o+ 4ust the amount o+ trades that the 2ve 6een a6le to e#ecute in their test mar.ets. 3he rate% li.e ou said 1e2re tal.in& hundreds o+% thousands o+ transactions per second versus tens o+ transactions per second 1ith the current status-<uo s stem. E!oF ou thin. that Mt. 8o# is &oin& to survive this i+ an open-source architecture is released that ma.es them loo. li.e a horse-dra1n carria&e compared to this ne1 +iat9 AA: : thin. the 1ill survive% in +act three da s a+ter the initiation o+ this pro4ect : do1nloaded the sample code and ran it on m Mac Air laptop and achieved a6out three hundred thousand transactions a minuteABL: 7o1. AA: -on m laptop. A6viousl that2s not the 1hole s stem 6ut it2s an indication that the started on the ri&ht +oot 1ith no optimiBation 4ust +rom the architecture ou have an emer&ent scale that is ,-0 orders o+ ma&nitude hi&her than that o+ the e#istin& e#chan&e. 7hat2s e#citin& a6out Buttercoin is not the idea that someone 1ill ta.e this and 6uild one e#chan&e. 7hat2s e#citin& a6out it is that% 1ith this% a hundred e#chan&es can 6e 6uilt in a hundred di++erent countries and that 1ill create a 6road 6ase o+ hi&h volume% capa6le% resilient e#chan&es. So% people 1ill move on to solvin& the pro6lems o+ re&ulator compliance and 6an.in& la1s% instead o+ tr in& to 6uild an e#chan&e on PHP and M SML 1e .no1 ho1 that is. SM: So :2m 1onderin& 1hat +eatures% i+ an % are 6uilt into Buttercoin to provide securit or to protect a&ainst !!oS attac.s9 AA: 3he main concept 6ehind it is to create a resilient architecture 1hich scales out horiBontall . 7here di++erent components can 6e separated% there2s a ver 6i& e++ort to do a separation o+ concerns that means that i+ ou attac. the +ront ends% ou2re reall ta.in& do1n the +ront ends. :t2s not related to the e#chan&e-tradin& en&ine or

the order matchin& en&ine o+ 1hich o+ course there are man colla6oratin& instances. So the 1hole idea is that ou have an architecture 1here% sure% ou could ta.e out on piece o+ the s stem 1ith a !!oS 6ut it 1ould 4ust spa1n another. :t2s appl in& 1hac.-a-mole +rom the mole2s perspective.

ABL: So% there2s 6een a lot o+ tal. in the Bitcoin communit recentl a6out comments made 6 the C"A over at Pa pal. 3he 2ve said the 2re loo.in& at Bitcoin and it2s ver interestin& and so people have ta.en this as >1ell that means the 2re &oin& to adopt it.> And that2s not reall ho1 : read the situation Andreas 1hat do ou thin. a6out the Pa pal comment9 AA: :2m not too sure 1hat to ma.e o+ it at the moment. 3he 1ere reall tal.in& a6out usin& it as a +undin& mechanism more so than an thin& else. :t 1ould 6e interestin& to see i+ the e#chan&e Bitcoin +or +iat 1ithin that +undin& e<uation% 6ecause that 1ould ma.e them an e#chan&e and a ro6ust one 1hich 1ould 6e an interestin& entr into the mar.et% 6ut a&ain% : don2t thin. that2s 1hat the 1ere tal.in& a6out. : thin. reall it2s 4ust Che this is interestin&% 1e heard a6out it% 1e ma loo. into it2 and 6e ond that% 1ho .no1s. 3he other part o+ this that2s interestin& is that 1e2re loo.in& at Pa pal no1 as a le&ac 6an.in& institution even thou&h it2s onl =/ ears old. SM: So man people 1ho use Bitcoin EareF e#cited a6out it 6ecause it allo1s them to &et around some o+ the 1orst thin&s a6out somethin& li.e Pa pal. Pa pal 1as 1onder+ul =/ ears a&o 1hen it came outN it>s a 1a to send pa ments online and is relativel secure - people use it. But 1ith Bitcoin% ou don2t have to pa these hi&h +ees that Pa pal has% no6od 2s &oin& to loc. do1n our account or con+iscate it 1hich can happen 1ith Pa pal% and ou don2t have the ris. o+ char&e-6ac.s 1hich is also a 6i& pro6lem +or people 1ho sell 1ith Pa pal. So% i+ Pa pal inte&rates Bitcoin% are the &oin& to inte&rate all those +eatures that people don2t li.e a6out Pa pal into Bitcoin9 !oes it .ind o+ de+eat the purpose9 Althou&h% : &uess :2m a little 6it mi#ed on this 6ecause : .no1 that i+ Pa pal adopts Bitcoin% it 1ill pro6a6l 6e a &reat promotion +or Bitcoin and it 1ill &et people more com+orta6le 1ith usin& Bitcoin that 1eren2t 6e+ore. ABL: : thin. the advanta&e that Pa pal 6rin&s to the ta6le 1hen it comes to online pa ments is that it2s an online pa ment s stem that inter+aces 1ell 1ith the JS !ollar% and it inter+aces 1ell 1ith a couple o+ other currencies too. Bitcoin is% on its +ace% a competitor to Pa pal not somethin& that2s complimentar 6ecause ever thin& that Pa pal does% Bitcoin does 6etter e#cept that inter+ace 1ith the JS !ollar. 7hen : see an 6od tal.in& a6out somethin& li.e this% E: sa F Hput oursel+ in their perspective - clearl it 1ould 6e a 6ad thin& +or Pa pal i+ adoption o+ Bitcoin 6ecame pervasive around the 1orld.I : have to thin. that this somethin& 1here the 2re ac.no1led&in& it so that at a later point the can sa C1e loo.ed into that and it2s 4ust not +or us% it2s 4ust not sa+e +or us2. Ho1ever the 1ant to portra it% i+ ou thin. a6out it strate&icall % that2s the 1a : thin. that ou 1ould 1ant to approach this i+ ou 1ere a competitor o+ Bitcoin. AA: : thin. that the have 0 or - ears durin& 1hich the could continue to sa that% 6ut in the end% : thin. this announcement is actuall more a.in to Bloc.6uster &ettin&

into the 6usiness o+ di&ital video distri6ution the had to 6ecause the had no choice and in the end it made no di++erence. B e-6 e Bloc.6uster5 SM: B e-6 e Pa pal. ABL: So ,/' &i&ahashes per second is the ne1 &old standard +or minin& speeds. !o ou &u s even thin. this e#ists9 : mean% 1e2re still 1aitin& on the / &i&ahash ones to come out +rom Butter+l La6s. AA: :2m coinin& a ne1 term called >+an1are.> 3hat2s 1here ou have a 6o# o+ +ans% nothin& much more let2s see i+ it2s +an1are or not. SM: 3here2s a compan called OnCMiner. 3he 2ve announced that the have these units that are called the Mars and the Lenus or somethin& li.e that the 2re named a+ter planets% Emi&ht 6eF *upiter9 Mars and *upiter9 3he *upiter one &oes up to ,/' &i&ahash per second. 3hat 1ould 6lo1 the current technolo&ies even the AS:Cs 1hich haven2t et shipped out o+ the 1ater. But the <uestion is% is this real and 1ill it 6e a6le to live up to their promise9 Ar are the 4ust tal.in& 6i&9 : am super% super s.eptical ever AS:C that 1e2ve seen come out so +ar has 6een di++erent than ori&inall planned. :t seems li.e there are a lot o+ un+oreseen thin&s% 6ut 1ho .no1s9 Ma 6e OnCMiner has alread done some testin&% the 4ust aren2t tal.in& a6out it and the reall do have the a6ilit to deliver this. ABL: : 4ust hope that people can ta.e a1a some lessons +rom the people 1ho are stuc. in B$L products and ma.e sure that i+ ou 1ant to 6u somethin&% ou don2t pre-order it 1ith 6itcoin. :+ ou2re &oin& to pre-order it% pre-order it 1ith dollarsN i+ ou 4ust 1ant to 1ait to pa 1ith 6itcoin until it2s actuall availa6le then do that. Preorderin& is a 6ad idea 6ecause in a volatile currenc ou2re &oin& to 1ind up +eelin& reall stupid either 1a . AA: Let2s loo. at 1hat Moore2s la1 tells us a6out this situation. :+ ou assume that people 1ho are 6uildin& AS:C2s .no1 ho1 to 6uild the al&orithms and the 2ve s<ueeBed out most o+ the optimiBation the can &et out o+ that% then essentiall 1e2re tied to Moore2s la1. So% i+ ou2re 6uildin& P-=' &i&ahash per second ri&s toda % in =) months 1e should e#pect the same level o+ chip technolo& to have either decreased in price 6 hal+ or dou6led the capacit +or transistors. "ssentiall % 1e are at =,-,' &i&ahashes per second. : don2t see a P-,/' rise in that period o+ time% so 1hat that tells us is either the 2ve +ound a 6etter 1a to implement the al&orithm in an AS:C it2s a revolutionar technolo& up&rade rather than a simple capacit up&rade% due to Moore2s la1. SM: 3here hasn2t 6een too much detail a6out these *upiter units% onl that the cost Q(%''' on the pre-order. People are reall puttin& a lot o+ +aith into these thin&s. : can understand :2m .ind o+ tempted to +all pre to 1ish+ul thin.in& essentiall and not appl the proper s.epticism% 6ecause the evidence 1e2ve seen so +ar 1ith Butter+l and other companies is that the 4ust haven2t shipped. : can see ho1 a lot o+ people are &oin& to &et reall e#cited a6out these miners% 6ut the proo+ is in the puddin& and the don2t have it et.

ABL: :t2s these pain+ul e#periences that are &oin& to teach the communit 1ho2s real and 1ho2s not. :t2s a ver pain+ul e#perience that has to teach us 1hat2s &oin& on. :t2s a &ood thin& and a 6ad thin& a6out Bitcoin. : actuall tal.ed 1ith !avid Perr the +irst &u to &et his hands on one o+ the B$L units 1ho did not pre-order one% incidentall . 3he sent it to him 6ecause he had 6een un6iased in his covera&e o+ them 1hich : thou&ht 1as reall interestin&. 7e had a &ood conversation a6out this. Emusical interludeF ABL: 7e2re here 1ith !avid Perr - the +irst man on "arth to have his hands on a B$L unit. !avid% 1hat do ou thin.9 !P: : thin.% technicall % the people inside B$L had their hands on it 6e+ore me% 6ut to m .no1led&e the onl ones that have ever 6een seen outside o+ B$L are the ones that the shipped EtoF *e++ to 1rite B$8Miner around. : don2t .no1% : thin. he mi&ht have actuall &one into their +acilities to do that% so ou mi&ht 6e ri&ht. :t2s 6een hashin& alon& 4ust +ine /-/./ &i&ahash on avera&e. :t2s not nearl as nois as the video made it out to 6e. : 4ust have a cheap camera and it pic.s up certain +re<uencies more than others. ABL: Let2s tal. Ea6outF a 6it o+ 6ac.&round +or a second. Ho1 lon& have ou 6een minin&% not on AS:Cs9 !P: M e#tremel patient 1i+e allo1ed me to have a mid to lar&e scale...it 1as =Kadeon /)0'2sEappreciative 1histle +rom ALF !P: -6ac. 1hen Bitcoin 1as clim6in& up to Q0'. 7e .ind o+ 1iped out in the crash and : ended up sellin& m 8PJs o++ to &et an $P8A unit 4ust 6ecause... at that point it 1asn2t necessaril the most intelli&ent move &oin& to $P8A% :2m ver &lad : did it in retrospect% 6ut that 1as still 1hen ever one 1as sa in& >no $P8As aren2t reall 1orth it unless our electricit is ver e#pensive.> : live in Las Le&as% 1e2ve &ot Hoover !am the electricit is ver cheap here. But : 1ent to $P8A 4ust to appease m 1i+e and :2m ver &lad that : did 6ecause that2s the 1a that ever thin& 1ent. ;o1 ever thin&2s &oin& AS:C. :2m ver surprised at this point to actuall hear m 1i+e sa in& Cso 1hen is Butter+l La6s &oin& to ship ou the ne#t one92 Elau&hterF ABL: So 1hen 1e2re tal.in& a6out the crash% ou2re tal.in& a6out not this latest ad4ustment or crash!P: ;o% the crash +rom Q0'. ABL: Ki&ht% the crash +rom Q0'. So 1e2re tal.in& a6out last ear last ear ou sold all our units and converted to $P8A% is that ri&ht9 !P: 3hat is correct.

ABL: :n the amount o+ time ou2ve 6een minin&% do ou have an idea o+ ho1 man coins ou2ve mined9 !P: : 6ounced around a little 6it here and there 6ut :2m seein& a6out =-' or so. ABL: AO that2s prett &ood. Dou mined +or a ear% ear and a hal+9 !P: : did% : mined +or a6out that. ABL: ;o1 that ou2ve &ot this AS:C unit AS:Cs are supposedl the pinnacle o+ computin& po1er that2s tar&eted to1ards the minin& process. :s that a6out ri&ht9 !P: 3hat sounds a6out ri&ht. Basicall 1hat 1e2re tal.in& a6out is 1e2re movin& +rom the least specialiBed to the most specialiBed hard1are. :n the ver 6e&innin&% it 1as all CPJs it 1as 4ust our computer processor that2s 6uilt to do thin&s% 1e 1ent to 8PJs that are 6uilt to do sli&htl +e1er thin&s% then $P8As that are li.e a chip that ou can pro&ram to pretend to 6e an other .ind o+ chip. 7e pro&rammed them to pretend to 6e Bitcoin AS:Cs essentiall % 6ut the 1ere never even close to 6ein& as e++icient as an actual AS:C% and no1 1e2ve moved on to actual AS:Cs. 3he more ou specialiBe% the more e++icient ou &et% and this is as specialiBed as it &ets. :t2s a chip that does t1o rounds o+ SHA-,/P hashin& and that2s all it does- that2s all it 1ill ever do. :+ somethin& happened to Bitcoin : could pro6a6l tear them o++ the 6oard and repurpose them +or real-time video e++ects or somethin&% 6ut that AS:C2s onl &ood +or the one thin& 6ut it is reall % reall &ood at it. ABL: 7ith that in mind% has it 6een di++erent minin& 1ith the AS:C versus minin& 1ith our conventional e<uipment li.e the &eneral purpose stu++9 :s there a di++erence in process9 !P: ;ot +rom the $P8A. Movin& +rom $P8A to AS:C% it>s 6asicall identical. Movin& +rom 8PJ to $P8A EisF a little 6it di++erent i+ not other reason EthanF 4ust 6ecause a lot o+ the super user-+riendl &raphical inter+ace-t pe so+t1are doesn2t support $P8As and AS:Cs et. : 1ould suspect that in the near +uture the 1ould% 6ut a lot o+ the prett +ront-ends that ne1er users 1ho are 4ust minin& on &raphics cards ma 6e on a computer the alread o1ned are com+orta6le 1ith...6ut i+ ou2re &oin& +rom $P8A to AS:C% it is Bero-+riction. :t is the e#act same process +rom the so+t1are side% it2s the e#act same process +rom the hard1are drivers - the e#act same JSB serial port drivers that 1ere in use on the $P8A are also in use on the AS:C. ABL: 7hat a6out the di++erence +rom someone 1ho isn2t minin& at all &oin& in9 : thou&ht that part o+ the advanta&e o+ the AS:C% as o++ered 6 B$L% 1as that the 1ere plu&-and-pla units. :s that an inaccurate assessment that :2ve made9 !P: M understandin& is that in the e#treme near +uture% there2s &oin& to 6e plu&and-pla units. Butter+l La6s% 1hen the sent me this AS:C at the time% the version o+ B$8Miner that supports this particular piece o+ hard1are 1as so 6rand ne1 that the had e#plicitl send me an e#perimental 6uild. And that so+t1are is the 6ac. end o+ a lot o+ the +riendlier pieces o+ so+t1are. Ance that so+t1are is per+ected% it should 6e a prett trivial process +or them to roll it into thin&s li.e "as Miner and C8Miner and all the prett % +riendl % &raphical +ront ends that the ne16ies 1ill 6e more

com+orta6le 1ith. A lot o+ this stu++ is pro6a6l &oin& to 6e a little more di++icult than 1as intended 6ut : thin. a lot o+ that is 4ust the incredi6le ne1ness o+ all o+ it. Aside +rom Avalon% no-one2s reall done this 6e+ore% so there are a lot o+ stum6lin& 6loc.s that ou 1on2t .no1 ou2re &oin& to hit until ou hit them. ABL: ;o1 ou said that ou 1ent +rom our conventional minin& 1hich is to sa &eneral purpose computers to $P8As. !id ou pre-order an Butter+l La6s products9 !P: Actuall % : 1as too +lat 6ro.e to pre-order an products +rom an one. : 1ould have i+ : had had the mone and : pro6a6l 1ould have pre-ordered +rom Avalon as 1ell% i+ : had the mone . : 1ould have pre-ordered +rom ever 6od % i+ : had the mone . :2m 4ust in the process o+ 6u in& a house no1 and 1hen ou 6u a house all o+ our +ree mone disappears. ABL: Deah% : .no1 ho1 that &oes. So ou didn2t order an product +rom B$L 6ut ou2re one o+ the +irst people out there 1ith an actual 1or.in& unit. Ho1 did ou 1ran&le that9 !P: Honestl % at this point% the pro6a6l +eel li.e the o1e me a little 6it +or all o+ the +la. that :2ve ta.en +or the crime o+ +air and 6alanced reportin&. Elau&hterF !P: :2ve 1ritten a +e1 pieces on them over the last ear or t1o. Speci+icall % there 1as one : 1rote a6out Sonn Lleisides 1ho is one o+ the people on the 6oard he2s not the head &u % 6ut he2s up there. :t came out that he had a little 6it o+ a chec.ered past and : 4ust did an intervie1 1ith him. : tried to .eep the intervie1 +air and 6alanced and : posted ever thin& that he &ave me permission to e#actl as it happened in conte#t 1ith the <uestions. An amaBin& +lame-+est ensued. :2ve 6een accused o+ 6ein& Sonn % :2ve 6een accused o+ 6ein& a shill :2ve 6een called all .inds o+ lovel names and it a6solutel has not stopped since. 3o this da % : am still accused o+ these thin&s and : +eel li.e it2s a com6ination o+ EButter+l La6sF +eelEin&F 6ad +or me and also the .no1 that : am &oin& to &ive a +air and 6alanced stor no matter 1hat happens in the comments section a+ter1ard. ABL: :t seems li.e ou2re on the sidelines on this one. Dou have the advanta&e o+ not 6ein& involved 1ith it 6ecause li.e ou said ou couldn2t a++ord to pre-order at the time. Let me as. ou this: i+ ou had pre-ordered% 1ould ou still +eel the same 1a a6out B$L that ou do no19 !P: : don2t .no1. As a 4ournalist : .eep ever thin& as compartmentaliBed as : can. : don2t let an thin& a++ect m 1ritin& at the ver least. M +eelin&s are a more personal matter : don2t .no1 i+ : 1ould +eel the same 1a i+ : had had a do& in this +i&ht. :2d pro6a6l 6e a lot more upset a6out the dela s than : am% :2ll totall admit to that i+ : 1ere actuall 1aitin& this 1hole time +or an AS:C% and especiall 1atchin& the price o+ 6itcoin rise this 1hole time% :2d pro6a6l 6e a lot more upset a6out the dela s than : am. 3hat2s purel an emotional thin& : reall tr not to let that 6leed into an thin& pro+essional.

ABL: Havin& seen ho1 this has &one% : thin. that there2s a lar&er lesson to ta.e +rom this the advisa6ilit o+ pre-orders 1ith re&ards to 6itcoin purchases :2m 1onderin& 1hether ou have an thou&hts on that. !P: : thin. it depends on the mindset o+ the person 1ho is placin& the pre-order. :+ ou2re the .ind o+ person li.e me 1ho Etries theirF 6est to thin. o+ the contents o+ m 1allet in terms o+ the coins themselves and not necessaril in terms o+ their JS dollar% or "uro% or 1hatever value 6ecause that helps actuall spend it li.e mone . :+ ou al1a s thin. C1hat could happen tomorro1% the price mi&ht &o up2 then ou2ll never spend our coins% ou2ll 4ust end up hoardin& in this 6i& e#periment that 1e2re all participatin& in - +rom our perspective% at least% ou2ll +ail% 6ecause ou2ll 4ust have this store o+ value that ou never actuall use. 3hat said% : thin. e<uall % Eit isF 4ust as plausi6le that ou could spend 6itcoins on a pre-order and then their value could tan.. :t can &o 6oth 1a s. :+ ou2re the .ind o+ person 1ho is &oin& to spend a 6unch o+ coins on somethin& no1% and then i+ the price dou6les 6e+ore ou actuall &et the thin&% ou2re &oin& to +eel 6ad a6out it and +eel li.e ou spent t1ice as much EonF the thin& eah% don2t pre-order% ou2re 4ust &oin& to ma.e oursel+ craB . ABL: :sn2t it .ind o+ a lose-lose situation thou&h% 6ecause li.e ou said% i+ the price tan.s the customer 1on2t 6e upset 6ut the vendor mi&ht not 6e a6le to do their pro4ect. : mean% i+ the 1ere rel in& on a certain amount unless the 2re literall cashin& them out as soon as the receive them it 4ust seems li.e ou2re settin& oursel+ up to lose in so man situations especiall since ou2re tal.in& a6out somethin& that ou don2t reall .no1 the release date o+. : understand 1hat ou>re sa in& a6out Eho1F ou need to spend 6itcoins li.e mone % 6ut at the same time% : thin. there2s a di++erentiation 6et1een spendin& mone on somethin& ou2re &oin& to use prett immediatel 1ith 6itcoin. 3hat ma.es sense to me 6ecause then the value that ou are receivin& is tied to the value that ou are &ivin& at the time that it2s happenin&. But 1hen ou tal. a6out pre-orders% ou2re tal.in& a6out value &iven in advance that mi&ht 6e 1orth somethin& later or mi&ht 6e 1orth somethin& completel di++erent. And the lon&er out that is% the more certain ou are that 1hatever ou2re &ettin&% ou2re either &ettin& 1a too &ood o+ a deal or not &ood enou&h o+ a deal. 3here are all these reasons to not ever accept pre-orders unless ou a6solutel one million percent .no1 e#actl the da it2s &oin& to release. !P: : thin. that mi&ht 6e a prett valid lesson. : 1ill sa thou&ht that on the 6usiness side o+ the +ence% ou have to 6e a little more pra&matic and &uarded than on the client side. M advice 4ust then 1as more +or the end-users. : totall understand 6usinesses needin& to avoid that volatilit and cashin& out the moment the coins come in. 3here2s a reason that2s 6asicall the de+ault option in Bitpa . ABL: :n Acto6er o+ last ear% B$L% 1hen it 1as 6ecomin& clear that the 1eren2t &oin& to hit their release date% made a statement sa in& that the 1ere &oin& to donate =''' 6itcoins to charit i+% 1hen the +inall did release% the didn2t hit their po1er &oals. : 1atched our video and it loo.ed li.e the didn2t hit their po1er &oals. !o ou thin. that it2s even +air +or the communit to hold them to that standard9 !P: : don2t reall .no1 that much a6out this entire thin&. : .no1 that a 6et 1as made-

ABL: 7ell% it 1asn2t a 6et. :t 1asn2t a 6et. :t 1as that the said >1e2re sorr % 1e +ailed% so 1hat 1e2re &oin& to do is this.> :t 1asn2t a 6etN it 1as more li.e a statement that the volunteered. !P: So it 1as more li.e a pled&e than a 6et9 ABL: Deah% it 1as more li.e a pled&e than a 6et% that2s correct. !P: :+ ou ma.e a statement li.e that ou should pro6a6l o1n up to it. : don2t .no1 all the details surroundin& it% 6ut i+ those 1ere the actual 1ords as the 1ere uttered% then eah% : thin. the should 6e held to that. !on>t ma.e promises that ou 1on2t .eep. ABL: !o ou thin. that true even i+ it comes at the cost o+ them 6ein& a6le to do 6usiness9 :2m 4ust tr in& to +i&ure out 1here the 1innin& scenario is in an o+ these relationships that B$L has started up. :t seems li.e the .eep doin& thin&s that are shootin& them in the +oot the lon&er that the &o. !P: : thin. 1hat 1e2re seein& 1ith B$L is - it2s the same sort o+ curve at each release% 6ut it &ets a little 6it steeper each time. 3his is 4ust round ,% : don2t .no1 i+ ou 1ere around +or the $P8A release +or their ori&inal product. :t 1as a ver similar stor the sho1ed up and ever one% includin& the people 1ho 1ere currentl ma.in& the then ver e#perimental $P8A miners% said all the same sort o+ thin&s that the said a6out the AS:CsN Cthis stu++ doesn2t e#ist2 Cit2s &oin& to 6e vapor-a1are2 Cit 6rea.s the la1s o+ thermod namics2 (that2s m +avorite 6 the 1a ). *ust people sa in& it 1ould never 6e a product. Basicall the e#act same thin& happened. 3he missed their release date% the oversold a 6it% the underdelivered a 6it% and in the end% once the &ot past all those little stum6lin& 6loc.s and shortcomin&s% the had a decent product that a lot o+ people 6ou&ht and 1ere totall happ 1ith. : see that as the +uture +or the AS:C : thin. Butter+l La6s ma.es their mone % .eeps their customers happ % and has a decent pu6lic ima&e in between product releases. EABL: lau&hterF !P: 3he have reall &ood products that ever 6od loves% and 6u s% and en4o s. :t 4ust seems to 6e somethin& a6out that initial release process that there2s somethin& in there that the haven2t <uite nailed do1n et. ABL: :+ there2s one thin& that people can ta.e a1a +rom the Butter+l La6s e#perience it 1ould 6e that e#pectation mana&ement is super-duper important. Dou2re ri&ht% Butter+l La6s has succeeded in releasin& product and the pro6a6l 1ill release these AS:Cs. : mean% ou2ve &ot one in hand so ou2ve &ot to ima&ine that the 2re &oin& to 6e releasin& them some time soon. 3he have a success - the 2re the +irst ones out 1ith a user-tar&eted product that is to spec as the 2ve said% and et it2s .ind o+ vie1ed as a +ailure 6 a lot o+ people 4ust 6ecause the 2ve 6lo1n the deadline that the set +or themselves so man times. So a&ain% ou shoot oursel+ in the +oot. 7hat do ou thin. a6out the rush o+ pre-orders 6ecause the pre-order process has no1 &one on +or almost a ear% the amount o+ units that are &oin& to 6e &oin& out

that have alread 6een paid +or is a prett hu&e amount. 3he estimates that :2m seein& put the initial run at somethin& li.e ='-,'# 1hat the net1or. hashrate is ri&ht no1. 3hat2s o6viousl a hu&e increase. :t seems to me that i+ the had stopped acceptin& pre-orders or released on-time% and then sold units a+ter that% then this 1ouldn2t have 6een that 6i& o+ a deal 6ecause people 1ho 6ou&ht in earl 1ould 6e &ettin& their units and the 2d 6e a6le to mine +or1ard 1ith them and the di++icult 1ould &o up 6ut it 1ouldn2t 6e that 6ad the situation 1e have no1 1here there are almost =' months or == months 1orth o+ pre-orders stac.ed up% doesn2t that mean that as soon as the mass release happens% prett much ever 6od is &oin& to have terri6le returns 6ecause the hash rate 1ill &o up so much9 !P: : have al1a s said that the sa+est vie1 to ta.e in an investment ou2re &oin& to ma.e is the most pessimistic one. 3he missin& lin. that .eeps the real% most pessimistic vie1 +rom <uite meshin& E1ithF 1hat ou 4ust descri6ed is that Butter+l La6s does not have in+inite production capacit . ABL: Ki&ht. !P: :+ the 1ere a6le to &et all si# 1a+ers that the 6urned in and ship out si# 1a+ers 1orth o+ products the ne#t da all at once% ou2re a6solutel ri&ht it 1ould 4ust crash ever thin& and ever one 1ould 6e scre1ed 1ho ordered their products. 3he don2t have that .ind o+ production capacit . 3he can churn out a lot o+ these thin&s% 6ut not at that rate. :t2s &oin& to ta.e <uite a 1hile +or them to actuall reach people% &et plu&&ed in% start hashin&% EandF saturate the net1or.. : e#pect that 1e2re in +or a prett dramatic increase in hash rate in the near +uture% 6ut : don2t thin. it2s &oin& to 6e <uite as +ast as ever one ima&ined. : .no1 1e2re &oin& to ma# out the +actor o+ +our that the net1or. can ad4ust +or an one retar&et : .no1 1e2re &oin& to see a lot o+ those +actor o+ +our retar&ets. ABL: : didn2t realise there 1as a +actor o+ +our limitation in there% : thou&ht it 1as 4ust the di++icult divided 6 the amount o+ po1er% ri&ht9 !P: :t is that in most circumstances% 6ut there is an upper and lo1er 6ound that the client 1on2t 6rea.. :t 1on2t ad4ust up1ards or do1n1ards 6 more than a +actor o+ +our so ou can2t do an thin& more than multipl the current di++icult 6 +our or divide it 6 +our. ABL: Ah% 1ell% that2s an interestin& chec.. !P: :+ ou dou6le the hash po1er that also means that 6loc.s are happenin& ever +ive minutes instead o+ ten% so that ,'=P 6loc.s 6et1een retar&ets is &oin& to +l 6 in a 1ee. instead o+ t1o. ABL: ;o1 that ou2ve had the unit +or a 1ee.% do ou have an idea o+ 1hat our dail rate is% in terms o+ ho1 man 6itcoins ou2re &eneratin& 1ith it9 !P: 3here2s a little 6it o+ variance% there al1a s is 1ith 6itcoin minin&% 6ut it seems to 6e 6et1een '.,/ and '.0 coins a da .

ABL: '.,/ and '.0 6itcoins a da . 7e2re &oin& to chec. 6ac. 1ith ou% t1o 1ee.s a+ter B$L releases% and 1e2re &oin& to see 1hat that rate is then5 !P: : +ull e#pect it to nosedive% and :2mABL: : e#pect it to nosedive too% 6ut the <uestion is does it &o +rom '.,/-'.0 to '.',/'.'0 : don2t .no1 1hat the multiple is &oin& to 1ind up 6ein& 6 the time all o+ this sorts out 6ut :2m super curious to see. 3his is totall an e#periment and as more o+ this minin& e<uipment &ets out there% 1e2re distri6utin& the hashin& po1er out more into the net1or.s so there are more pla ers. $rom an in+rastructure standpoint it2s actuall reall e#citin&N it2s 4ust +rom an individual miner re1ard standpoint% that>s 1hat :2m 1onderin& - ho1 much people are actuall &oin& to 6e ma.in& &iven the role out o+ AS:C. : &uess 1e2re 4ust &oin& to have to 1ait and see. !P: : 1ill ma.e one minor prediction thou&h ever time 1e s1itch technolo& there seems to 6e somethin& ver much resem6lin& a 6u66le 1ith that hash rate. Dou see it clim6 at a ridiculous unsustaina6le rate% it &ets to a certain point% it crashes% overcorrects% dips% a 6unch o+ people pac. up and &o home% and it resta6iliBes to an actuall reasona6le hash rate. ABL: 7ell% that ma.es senseN that2s 4ust the net1or. doin& 1hat it does. People &et e#cited and then realiBe Coh% man% there2s not enou&h re1ard in this% 1hat the hec. am : doin&2 and then the <uit and it &oes 6ac. up. :t2s a &reat s stem% : love it. 3o see more o+ !avid Perr 2s 1or.% visit him at Codin&inm sleep.com. -A!L"K3:S"M";3$"MAL" LA:C": Fo/ycart)com is a better chec#$out e/perience% empowerin de*elopers to create fle/ible% powerful% custom e$commerce in less time% while e0uippin merchants with the fastest chec#$out flow a*ailable to their customers) Fo/ycart is built for web professionals: it can ser*e as a foundation for ad*anced custom e$commerce deployments or for 0uic# and easy sin le product online stores) And of course% Fo/ycart supports (itcoin) Visit Fo/ycart)com to learn more) SM: So &u s% the other da on $ace6oo.% : sa1 that some6od : .ne1 o+ in a Bitcoin &roup 1as postin& a6out a li6ert and entrepreneurship camp that2s &oin& to 6e &oin& on in A+rica% and the &oal is to teach people a6out entrepreneurship and tr to &et some economic upli+tin& &oin& on throu&h teachin& people to start their o1n 6usinesses. :n a lot o+ parts o+ A+rica ri&ht no1 there is this reall popular pa ment s stem that 1or.s on cellphones called M-Pesa% and it 1or.s 6 te#t messa&in&% : thin.. :t doesn2t re<uire smartphones or an thin& 6ut it2s super common 6ecause ever 6od has access to these cellphones and the o+ten use it to ma.e small pa ments. So :2m reall 1onderin& i+ Bitcoin could catch on in A+rica% and i+ it could 6e a 1a to help people &et out o+ povert % to develop their 6usinesses and i+ this 1ould 6e somethin& that is totall ripe +or Bitcoin. ABL: : thin.% especiall in a third-1orld situation% there2s a lot o+ opportunit there 6ecause the pro6lem 1ith small currencies in a lot o+ these A+rican countries ou have small currencies is that the are easil controlled. Mostl % the are 6ac.ed

a&ainst the JS dollar% 6ut ultimatel % i+ the &overnment decides that the 1ant to do somethin& then ou have a situation emer&e li.e Rim6a61e 1here the 4ust sa >AO 1ell rather than control our +inances 1e2re 4ust &oin& to start printin& and devalue the mone .> :n that circumstance% : thin. that Bitcoin o++ers +reedom +rom that sort o+ +inancial t rann 1here it doesn2t reall matter 1hat our local &overnment does% it doesn2t reall matter i+ the 2re in trou6le% and so the thin. it2s important to devalue the currenc ultimatel no6od can devalue the currenc . : thin. that there2s a lot o+ room there 6ut 1e have to &et to a point 1here the usa6ilit is a simple as 6ein& a6le to operate on an old-st le cellphone% and have it 4ust 6e eas . SM: :+ M-Pesa is 1or.in& +or a lot o+ people in places li.e A+rica% then ma 6e the 1ill .eep on usin& it unless the are persuaded that Bitcoin is someho1 6etter% and ma 6e that comes in 6ecause it2s not o+ et a currenc and it2s not controlled 6 these centraliBed &overnments that are o+ten corrupt and a hu&e 6arrier to people &ettin& out o+ povert . 3here2s also this idea o+ mesh net1or.s : don2t .no1 i+ ou &u s have ever heard o+ this% 6ut it2s the technolo& E1hereF ou can create a local :nternetN the nodes are connected to one-another and the are not necessaril connected to the &reater :nternet. 3his could 6e reall use+ul in areas 1here access is not ver 1idespread and so that could 6e a means o+ tradin& 6itcoin or e#chan&in& 6itcoins in areas that are ver rural 1ithout much :nternet access. :2m picturin& people do1nloadin& the 6loc.chain +rom the Bitcoin-Mt client in a place in A+rica 1here their :nternet is reall spott or non-e#istent% and it 4ust doesn2t seem to 1or. to me - 6ut ma 6e mesh net1or.s could ta.e care o+ some o+ that or other solutions E1e don2tF .no1 a6out et. : thin. it2s reall important +or us% as people 1ho are interested in Bitcoin in places li.e the JS% to tr to help other people around the 1orld see the value in Bitcoin. 3he could even use it +or their o1n empo1erment. AA: Several ears a&o% : heard ;icolas ;e&roponte +rom M:32s Media La6 discussin& mesh net1or.s% and he provided a reall nice visual% 1hich 1as EthatF these operate in the 1a a lil operates in a lil pond. "ssentiall % i+ ou loo. at the lil pond ou have a that2s covered 1ith these leaves o+ the lilies and 1hat ou don2t see underneath is that onl a +e1 o+ those actuall have stal.s that &o do1n and &et nutrients +rom the 6ottom. Dou could traverse the entire sur+ace o+ that pond 4ust 4umpin& +rom lil pad to lil pad. 3he same thin& applies here i+ ou had a mesh net1or. to support Bitcoin% ou 1ould onl a couple o+ strate&ic points that sin. 6ac. into the 6loc. chain that ena6le +ull-node clients% and the rest o+ the net1or. in that closed econom could operate on li&ht1ei&ht clients. : thin. that the mesh net1or.in& idea has a lot to o++er. SM: 3hat2s a reall &reat analo& . : can understand it 6etter actuall 4ust +rom hearin& that. ABL: Mesh net1or.s have 6een a hot topic +or the last t1o or three ears. 7hat made a lot o+ people thin. a6out them 1as the Ara6 Sprin& 1here :nternet 1as shut do1n in a variet o+ areas% and so there 1as no 1a to coordinate on social media 6ecause there 1as no social media connection. :t situations li.e that 1here ou have no other option% mesh net1or.in& ma.es a ton o+ sense. 7hat :2ve seen in &eneral is that 1hen people tr to enact these situations and create these circumstances +or mesh net1or.in& in the +irst-1orld scenario% people 4ust aren2t that interested% and so it tends to not happen. : 1atched the $reedomBo# Pro4ect +or a num6er o+ ears and

the 1ere all a6out 6uildin& a simple 6o# ou could 4ust plu& into a 1all and it 1ould 6e its o1n little 6ase station and it 1ould connect to all other 6ase stations 1ithin its ran&e and create this ad hoc mesh net1or.. But thin&s +all apart the idea is there 6ut the technolo& to ena6le it +or 1hatever reason is apparentl hard to achieve 6ecause : don2t thin. it2s 6een done success+ull et in an sort o+ pervasive +ashion. SM: : 1onder i+ an o+ these alt-coins could 6e more appropriate +or certain situations. :2m thin.in& o+ one in particular% :2ve 6een loo.in& into a lot o+ the alt-coins 6ecause : thin. it2s interestin&% 6ut a lot o+ them have these 6uilt-in economic principles that : don2t necessaril a&ree 1ith. $or instance% there2s one 1hich is a demurra&e currenc 1hich means there2s a +ee i+ ou don2t spend it% and so it2s meant to Hprevent hoardin&%I 6ut 1hat that means is that it discoura&es savin&. 3he people 1ho made this coin are associated 1ith the Accup movement and the seem to have these e#plicitl Mar#ist economic ideas. Ma 6e somethin& li.e that mi&ht suit certain places 6etter% ma 6e another alt-coin could solve some o+ the pro6lems that mi&ht 6e inherent 1ith Bitcoin li.e the lar&er 6loc.s or the con+irmation time on somethin& li.e a mesh net1or.. : &uess 1e2re 4ust &oin& to have to see% and 1e2re &oin& to have to see 1hich coins emer&e and 1hich ones meet the need o+ people the 6est. ABL: : thin. that2s a reall &ood point. 7e haven2t tal.ed a6out alt-coins% et% 6ut : thin. that 1e2re &oin& to +or 3uesda 2s episode i+ ou &u s are into that. 7e2ve 6een &ettin& a lot o+ re<uests to tal. a6out them. Basicall % i+ ou don2t .no1 1hat an altcoin is% 6itcoin is a cr ptocurrenc EandF there is a 1hole 6unch o+ other cr ptocurrencies. 3he di++erence is that each one has its o1n set o+ rules and its o1n 6loc. chain a&ain% the 6loc. chain is 4ust this lon& led&er essentiall that .eeps trac. o+ 1ho o1ns 1hat +or ever 6od . "ach t pe o+ cr ptocurrenc has its o1n 6loc. chain and 6ecause o+ that 1e call them alt-chains or alt-coins. SM: 3he alt-coins are all 6ased on the Bitcoin source code 6ecause its open-source and an 6od can chec. it out. Jsuall % some6od chan&es somethin& or t1ea.s somethin& to create a di++erence in 1hatever alt-coin the 2re interested in creatin& that 1ill ma 6e add somethin& or have a di++erent characteristic than Bitcoin. A lot o+ the alt-coins ma 6e have di++erent siBes o+ 6loc.s or the 6loc.s are &enerated more +re<uentl or less +re<uentl or the di++icult o+ the net1or. ad4usts more +re<uentl than Bitcoin or the have some other +eature 6uilt in% li.e this demurra&e +ee 1ith the coins that : 1as tal.in& a6out 6e+ore. 3here2s even a coin 1here the net1or. is created 6ased on proo+-o+-sta.e rather than proo+-o+-1or.% so instead o+ doin& these calculations to create the net1or. li.e Bitcoin does% the people 1ho hold the most coins are creatin& the net1or.. 3here are all .inds o+ di++erent chan&es. Honestl % at this point% not man o+ them have seen a lot o+ 1idespread interest and adoption. : thin. there are a lot o+ people 1ho are re&ret+ul that the missed the 6oat on Bitcoins and the didn2t &et into Bitcoin soon enou&hN the 1ish the had invested more ener& and perhaps capital into Bitcoin 1hen it 1as +irst comin& out and the 1ere reall cheap - so the are loo.in& +or an alternative li.e the ne#t Bitcoin essentiall . Ma 6e there are also some people 1ho are open to the idea even that Bitcoin is not ideal% ma 6e there is another coin that has 6etter characteristics that 1ould ma.e it more 1idel usa6le and people 1ould li.e that coin more than Bitcoin. 3hat remains to 6e seen% 6ecause so +ar% Bitcoin is de+initel the most popular% 6ut : thin. it2s

somethin& that the mar.et has to 1or. out no6od reall .no1s the ans1er to that% 1e2ll 4ust see as time &oes on. ABL: So 1hen some6od creates a ne1 cr ptocurrenc % 6asicall 1hat the 2re doin& is the 2re sa in& >AO 1ell : li.e the concept 6ehind Bitcoin e#cept +or this one thin&.> Are there currencies out there ri&ht no1 that are chan&in& a 1hole 6unch o+ thin&s or is it in &eneral that the identi+ the one thin& that the don2t li.e a6out Bitcoin and chan&e that9 SM: :n &eneral : thin. there are a +e1 thin&s 6ut there2s one ma4or thin& that2s di++erent 1ith each o+ these coins. A+ten% the 2ll pla 1ith the num6er o+ coinsN there2s ,= million 6itcoins and there mi&ht 6e ='# as man coins on one o+ the alt-chains or one o+ the alt-coins. Sometimes% the pla 1ith the 6loc. siBe or the time to ad4ust the di++icult . Jsuall there2s one 6i& de+inin& +eature that2s ho1 : loo. at it% an 1a . AA: Ane o+ the thin&s : love a6out alt-coins is that the represent essentiall an ecos stem% and that ecos stem is evolvin&. :t2s evolvin& to certain +itness +unctions. Ki&ht no1% the +itness +unction is alternative currencies that are more popular or as Stephanie said solve a speci+ic pro6lem. 7hat 1ould 6e reall interestin& is i+ the +itness +unction chan&ed and it 6ecame surviva6ilit +rom &overnment shut do1n or surviva6ilit +or &overnment intrusion that +itness +unction 1as applied ver e++ectivel over the last decade in the &radual evolution o+ P,P. As each service 1as slapped do1n or .noc.ed do1n% the ne#t service solved e#actl the pro6lem that allo1ed the previous service to 6e shut do1n. Jntil% o+ course% Bit3orrent 1hich no1 is prett much unstoppa6le. : love that 6ecause 1hat it means is that% ever time ou cut o+ the head o++ o+ one part o+ these o+ these solutions% somethin& else pops up% so ou have this real-time evolution that is driven essentiall 6 a +itness +unction that could 6e &overnment intrusion. 3hat ma.es alt-coins the most resilient aspect o+ the Bitcoin ecos stem. SM: 3he e#istence o+ so man alt-coins that utiliBe this P,P +unction that% li.e ou2re sa in&% Andreas% protects a&ainst &overnment shut do1n and intrusion : thin. that2s an indication that the Bitcoin concept handles that prett 1ell. ;o6od 2s reall chan&in& that particular +eature. AA: 3here2s no need. :n times o+ crisis% thin&s 1or. di++erentl . Bac. to the discussion 1e 1ere havin& a6out mesh net1or.in&% it2s ver di++icult to appl that in the +irst 1orld until ou have a hurricane situation or somethin& li.e that. 7e2ve seen ver success+ul implementations o+ mesh net1or. cellphone services 1ith the lil pad phenomenon a&ain% ou have most o+ them 4umpin& 6et1een to1ers and onl a +e1 o+ the to1ers are actuall connected 6ecause o+ a crisis. A crisis al1a s precipitates rapid evolution and innovation to overcome it% and that2s 1here ou have opportunit +or ne1 thin&s to arise. ABL: 7ell% : loo. +or1ard to continuin& our conversation on the ne#t episode a6out the alt-coins. : thin. that 1e should de+initel ma.e some time in 3uesda 2s episode to tal. a6out that. :+ ou as a listener have ideas or a +avorite alt-coin that ou thin. that 1e should tal. a6out% de+initel email us at adam@letstal.6itcoin.com.

ABL: So : thin. that a6out 1raps up the time 1e have +or toda . 3han.s +or 4oinin& me and 6oth Stephanie and Andreas. SM: 3han. ou% this 1as so much +un. AA: 3han. ou. ABL: So a ne1 correspondent to Let2s 3al. Bitcoin% Peter !ushens.i% 4oins me. 7hen ou tal. a6out de-&ee.i+ in& cr pto% are ou tal.in& a6out 6rea.in& do1n the terminolo& or are ou tal.in& a6out ho1 1e need to ta.e the so+t1are side% the side that people interact 1ith ever da to use it% and add usa6ilit 9 P!: :t2s 6othN it2s 6oth o+ those - de-&ee.i+ in& cr pto as 1e enter Phase , o+ Bitcoin% the Cpost &ee.2 era% ou mi&ht call it. :t2s a6out user e#perience and it2s also a6out communication. 3he popular acceptance thin& is ultimatel 1hat2s &oin& to drive the re&ulator thin&. 3hese pieces are all interconnected so as much as 1e need to en&a&e 1ith securit and e#chan&e commission and our elect representatives% the are ultimatel responsi6le to and ultimatel in+luenced 6 the &eneral pu6lic. 3he &eneral pu6lic needs to have this communicated to them in a clear and concise 1a as 1e 6rin& this +or1ard. 3hat 1ill come to 6e a matter o+ +amiliarit as Bitcoin continues to 6uild momentum as the media e#posure increases. : thin. that this can onl &o +or1ard 6ut it can &o +or1ard in man di++erent 1a s it can &o +or1ard 1ith a real sense o+ +ear. 7e have an opportunit and responsi6ilit to clari+ the messa&e. 3a.in& this ver comple#% ver amaBin&% ver incredi6le% revolutionar idea and ma.in& it so that our =0 ear old niece and )' ear old &randmother can &et their heads around it% 1ithout sittin& do1n and 1atchin& a lecture series in a universit lecture theater. 3his can 6e made to 6e simple and accessi6le ho1 do 1e ma.e our cellphones eas to use and +eel sa+e9 :+ our cellphones are essentiall &oin& to 6e our 1allets and our 6an.s% ho1 do 1e .eep our 6itcoins sa+e9 Ho1 do 1e .eep our cr ptocurrencies secure9 de+initel an avenue that needs to 6e pursued and e#plored as 1ell. ABL: 3han.s +or tunin& in to "pisode , o+ Let2s 3al. Bitcoin. 7hether ou li.ed% loved% or hated the sho1% 1e 1ant to hear 1hat ou thin.. Please send all listener +eed6ac.% comments% or <uestions to adam@letstal.6itcoin.com. :+ ou2re li.e me and 4ust can2t &et enou&h in+ormation and perspective on Bitcoin% chec. out our dail ne1spaper at !ail 6itcoin.com 1here ou2ll +ind the 6est ne1s and articles presentin& ar&uments +rom all sides o+ the issue. Sta tuned +or "pisode 0 o+ Let2s 3al. Bitcoin% releasin& late 3uesda % the 0'th April) 1han#s to 2aul 3u hes% Andreas M) Antonopoulos% 4r) 5tephanie Murphy% 4a*id 2erry% and 2eter 4ushens#i for pro*idin the content for this show) Music for this episode was pro*ided by 6ared 7ubens% ,athanial Castro% and Owlsley) -oull be able to find lin#s to their wor# once we built the site a little bit more . should be ne/t wee#) 8ell see you ne/t time on Lets 1al# (itcoin) Emusical interludeF