Let's Talk Bitcoin! - Episode 06: Cyprus & Serendipity

8/13/2019 Let's Talk Bitcoin! - Episode 06: Cyprus & Serendipity

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Lets Talk Bitcoin! - Episode 06: Cyprus & Serendipity

Participants:

Adam B. Levine (ABL) - HostAndreas M. Antonopoulos (AMA) - Co-Host

Stephanie R. Murphy (SRM) - Co-HostMichael Hill (MH) - Guest. Bitcoin Cyprus Project. Segment starts at 15:21.Jeffrey Tucker (JT) - Guest. Laissez Faire Books. Segment starts at 44:00.

ABL: Hi and welcome to Lets Talk Bitcoin. A show for anyone interested in Crypto-Currencies and thefuture of money.

Coming up on todays show:

*We have the San Francisco Forbes meetup report.*Theres always money in the banana stand, also teeny tiny ASICMiners, are you a buyer?*I check in with Michael Hall on bitcoins and the Cypriot calamity.*Making history. We talk Satoshi square and the cafe meetup origins of modern stock markets.*Bad stuff on the block chain. We separate fact from fiction and hopefully lay the issue to rest.*And finally, an extra long interview with Jeffrey Tucker of Laissez Faire Books, on the Serendipity ofBitcoin and his journey from skeptic to enthusiast.

Looking to educate yourself on the future of money? Check out LetsTalkBitcoin.com/learn for yourconnection to the Bitcoin Education Project. My name is Adam B. Levine. I am a writer and speaker wholikes to explain complicated topics in understandable terms. Thats really what we are doing here, takingthe complicated topic of cryptographically secured money and helping people see what it can do in theirown lives. Joining me in our ongoing quest for clarity are: Andreas M. Antonopoulos, an expert indecentralized networks and secure systems,

AMA: Hi

ABL: and Dr. Stephanie Murphy, a scientist and syndicated radio host.

SRM: Hello

ABL: Thanks for joining me again on another episode of Lets Talk Bitcoin.

AMA: With all of this talk of technology, it's sometimes easy to get caught up in it and forget about all thepeople behind all the technology, and really forget about what wonderful people these are. So yesterday Iwent to a San Francisco meetup organized by a Forbes contributor, Kashmir Hill, who is doing anexperiment to live on Bitcoin for a week, and this was her grand finale. She invited everyone to Sake


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Zone, which is a local sushi and sake bar in San Francisco, next to the Internet Archive - quite a nicecoincidence, or a great arrangement - and she invited people to dinner. I thought you know maybe buyfour or five people dinner, and set up a request for people to show up. So I arrived at the restaurant at7pm and I looked inside and I was trying to figure out which table was the Bitcoin table, so I walked up tothe people who looked geekiest and said, Is this the Bitcoin table?. And they looked at me funny ... turnsout all of the tables were Bitcoin tables, the overflow outside on the sidewalk was Bitcoin tables. Theentire restaurant was taken over, probably 40 - 50 people were there, and boy what an amazing evening itwas. Got to meet some incredible people. Some of the movers and shakers of the Bitcoin Industry there. Idont want to mention names. They probably didnt want to attract that much attention, but there were acouple of founders and CEOs from major Bitcoin Businesses there. There were lots and lots of users,interesting people, developers, new business owners, all kinds of people, as well as of course a wholebunch of journalist/press/media people. And it was a fantastic evening, lots of great conversations. Its soeasy to forget about all the inspirational people out there, all of the great ideas, and what really brings ustogether [is] this shared purpose that we all feel. So I left this meeting completely buzzed, with dozens ofbusiness cards and connections which led to actually several conversations and follow-ups today. If youdont do meetups, start doing them. This is a great reason to do them. Bitcoin is a great way to get into themeetup space, and meeting people who are interested in Bitcoin is really a lot of fun, so Im going to bedoing a lot of these from now on.

SRM: Im totally jealous, that sounds awesome.

ABL: You mean I have to leave my house?

AMA: Well no, actually you dont Adam. Whats really easy is you go to Meetup.com and you start one atyour house, and then you watch the 40 people come there. Seriously why not? A picnic one would beabsolutely awesome. I would come. Im actually signed up for 3 other meetups this week, and in effect itsa way to keep meeting people. Also if you are interested in doing this as a living, right? If you areinterested in earning bitcoin for work, becoming a bitcoin professional, starting a business, getting hired inbitcoin, oh these are great places. I mean, yesterday the place was literally full of both business peoplehiring people who were offering services - developers, graphic designers, various other areas ofexpertise, as well as a couple of VCs who were trying not to look like VCs. Investors, rather, I shouldsay, who were casually listening in on conversations, and then making contacts. I wouldnt be surprised ifa lot of Bitcoin projects get funded through this type of serendipitous meeting.

SRM: That is so cool, you know even little New Hampshire, here where Im from, has bitcoin meetups

once a week. Theres a pretty active bitcoin community here. Mostly libertarians and people who areinvolved in the Free State project in some way or friends of them, and its called the Free State BitcoinConsortium, they have weekly meetups. Maybe the ones in the bay area are a little more filled with peoplefrom the tech sector. A little more high class. I heard great things about them. But yeah, I mean therespretty much bitcoin communities all over the place. And not only do I think it would be a great place to getjobs and to network professionally, but also perhaps to meet friends, and to meet people to go intopotentially future businesses with or projects with, or even to meet significant others, did you see any ofthat happening?

AMA: I am happily married and blind to all of that.

ABL: Well actually that is a decent question. What was the gender ratio like, if you could tell?


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AMA: Thats a great question, actually I would say it was a perfect representation of the bitcoincommunity. Every walk of life, every age, every ethnicity, country of origin, language spoken. weirdaccent, weird look, and gender was represented equally.

SRM: Wow, thats awesome.

ABL: That is pretty awesome actually. I think its great that you guys have active communities, but I thinkthat, even you Stephanie in New Hampshire theres a really big liberty oriented community, so I thinktheres a lot of bitcoin awareness because of that. Im about an hour and a half north of San Francisco andtheres nothing. I have about three towns, four towns around me and there are no meetups. So thequestion for me has not been do I want to go to a meetup, its been do I either A) want to drive a long wayto go to a meetup, or B) do I just start something myself and take that on as an additional project. So Ithink ultimately thats whats going to happening is that Im just going to start a meetup and then its kindagoing to grow from there. But I think thats something that: if you are listening to this podcast, chances are

very good that you are way ahead of the curve of 90% of the people that you know. You kind of are theforefront of this, and if your local town or local area doesnt have a bitcoin meetup, its real easy to startone and once you do start one, they kind of become contagious. Its all about education, thats what weare doing here with the show, but thats what these meetups are about, too. Its about networking and itsabout education and sharing that information.

SRM: Yeah, I wonder if we can put something up on our website, LetsTalkBitcoin.com, about starting alocal meetup and maybe listeners could post their meetups and find people to attend that way.

ABL: Again, we gotta do this forum thing. its on my list to do, it really is. Well thanks for that update aboutthe San Francisco meetup Andreas, thats really great to hear. Im glad that theres so much excitement,and San Francisco is kind of a specific place for that, and even so weve been hearing this sort of thingeverywhere. I was talking with John Waller maybe two weeks ago, and he was telling me about how theyhad in Japan a local Bitcoin meetup that he had been attending, had exploded like 90% in terms ofattendance over the course of a couple of weeks and there have been other stories there too, coming upall over the place. So I really think its the time and its the way people are interacting with each other.

==== Music ====

SRM: Im just looking at this thread here from the BitcoinTalk forum. And its called, the headline is:Announcement: Block Erupter USB, and apparently theres a company called BitFountain and they havean experimental batch of these USB powered ASICMiners that have passed their initial tests, they havepictures of them online, and each one mines at about 300 mh/s. Now thats not as much as the otherASICs that for instance Butterflylabs is talking about, or this Jupiter thing that we talked about, which maybe just as figmentary as going to Jupiter itself, that supposedly mines at 250 gh/s, so that would be like1,000 times faster than this little USB thing. But you can plug it into USB, its entirely powered by the USBport, one of the pictures here shows a heat sink so you can potentially cool it in a bunch of different ways.And its opened to the air, you can see all the circuitry, it has a little LED in it that flashes while its mining,when a share gets accepted. They have a picture here where they have a ten USB strip and theyveplugged in seven in a row of these devices and they said theyve ran them overnight and they are all verystable. This looks really promising, this is like the first physical evidence with good pictures weve seen.And these are about the size of a quarter, I guess, of a small coin. Actually they are showing a Japanese


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coin, so Im not sure what kind of coin it is. But theyre pretty small, I would say like the size of your thumband small enough that you can have a USB drive that powers them. Theyre saying they are going to beavailable for order in batches. Each one is going to cost two bitcoins, 1.99 bitcoins, and you have to orderat least 300 devices, so this is going to be, the first batch is going to be for group-buys and retailers whoare going to sell them to other people. So what do you guys think about this?

AMA: I think its a great idea, really exciting. Its a great opportunity to get into and experiment a bit.

SRM: It looks like people are really really excited about this on the bitcointalk thread. Smaller USBASICMiners that are a little bit more affordable for the average person are probably going to make thenetwork bigger, they are going to make it more distributed which is always a great thing. You couldprobably get ten of these, like they said, and run them off a USB strip, and you could be having somepretty good hashing power, so I think this would be a great thing for Bitcoin in general, and I would love toget my hands on one.

AMA: Make that two please, Stephanie. Id like one too.

ABL: So there are two angles that I think that I have a little bit of differences with you on. I agree with youthat this is good for Bitcoin, but from the perspective of someone who might actually want to buy one - Idont really know. Because, again, what youre doing, what youre trading, I think they cost like 1 bitcoin or1.3 bitcoin each, you said?

SRM: No they actually cost two bitcoins each.

ABL: They cost two bitcoins each. Okay, so they cost two bitcoins each, and youre buying them now,youll probably receive them now - but isnt there a problem with the ASIC saturation thing going tohappen? Didnt Butterflylabs just announce that they are releasing, they are finally going to be releasing allof the pre-orders they took? So that would be my concern with this. You would buy this now, and by thetime you got it, the network would have adjusted. So even though, yeah its 300 mh/s, which looks goodright now, probably when the network goes up 20 times I just wonder what the return is going to be. Thatwould be my primary concern, really with getting into any kind of mining right now. Is just that movingforward - especially if you are talking about stepping into Bitcoin, application-integrated specific circuit,

those can only be used for Bitcoin. So 300 mh/s is good now, and certainly the power consumption isgood. I just wonder if in three months if it is really going to be anything. If the network goes up 20 times,then suddenly you are talking about the equivalent of 15 mh/s.

SRM: Yeah, absolutely. There are a lot of people saying this on the bitcoin forums. And I mean, theyactually have been saying this about every single mining technology that comes out. There will be at leastone naysayer that says, Oh its not going to be profitable with this technology in a couple of months, sodon't waste your time anyway. And even though people have been saying that for a long time, there havebeen some unseen things like the delay with ASICs being introduced into the market. The price of Bitcoinis also another factor. We dont know what the price is going to be in a couple months, so even if youreonly mining a few Satoshis a day, that could be eventually really profitable.

ABL: Right, and I think thats the wildcard there; but, again, anytime that we start talking thesetechnologies, I think its really important that people keep in mind that what they mean now does not


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necessarily translate to what they are going to mean in the future. You know what I mean? At the sametime, if for whatever reason all the technologies that are out there start to fail, then this could be even morevaluable. I just think that the case is more likely that it will be less valuable. But youre right, it is all relativebased on the price of bitcoin, because earning 0.01 BTC when its worth $100 is not so great, but earning0.01 BTC when its worth $10,000 is obviously a slightly different value equation.

SRM: Right. Maybe its time to go to mbits [mBTC], like weve talked about before.

ABL: Yeah.

SRM: Its not 0.1 bitcoin, its 100 mbits [mBTC]. I think the other factor is that these are going to beshipping from China, so who knows what could happen: shipping delays, manufacturing delays, customdelays, theres all kinds of different factors. When it comes to taking an idea and then getting a prototypebuilt and then getting that mass produced and then getting that actually shipped. So all kinds of things

could happen, and theres still a lot of risk involved in this, but I can see why some people are excited andI can see why some people are really skeptical.

===== Music =====

ABL: Were here with Michael Hill.

MH: Im a Greek citizen and an American citizen living in Cyprus. I was born in [unintelligible], my motheris Greek, I moved to Athens, initially. Five years ago I moved to Cyprus.

ABL: So with everything that has been happening in Cyprus over the last couple months, is thatsomething that has affected you and people you knew directly?

MH: Yes, absolutely. I consider Cyprus to be my permanent place of residence, so obviously, yeah, itaffected me and pretty much everyone I know.

ABL: In the political situation leading up to it, was this the sort of thing where there was any warningwhatsoever, as far as most people are concerned?

MH: I think the general sense in Cyprus is that there wasnt a specific warning of what the final solutionwould be, but there were definitely dark clouds forming since the past year. Especially at the PSI deal with

Greece which inflicted very heavy losses on Cypriot banks. Well, in Cyprus they call it the pre-memorandum - memorandum being the agreements that each individual country makes with theEurogroup to implement certain reforms and policies. The previous government, of Demetris Christofias,signed a pre-memorandum last summer to implement certain reforms. Apparently one of those reformswas restructuring the two major banks of the nation. The previous government didnt take any specific


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action. They basically just washed their hands on the whole matter and left it up to the new governmentthat was elected in February to deal with the whole crisis. Basically the bomb kind of exploded in thehands of the new president. Two weeks after he was elected, he was basically ambushed at [the]Eurogroup conference.

ABL: So what you are saying is that the old government had made this agreement with the Eurozoneprior to leaving, and then when the new government came in there was pretty much nothing they could do

about it.

MH: Pretty much. And now politically the situation in Cyprus is that these two parties are trying to shiftblame on each other. The citizens really dont know who to trust anymore.

ABL: So for people who have been under a rock, can you give us a rundown of what has been going onin Cyprus?

MH: The decision of March 15th was to shut-down and liquidate the nation's second largest bank,popular bank - Laiki Bank as it is called - and for it to be split into a good bank and a bad bank. The badbank will take all the unsecured deposits and outstanding loans that werent being honored or up-to-dateso to speak. That bank would be liquidated, which means they would go after assets that are tied to theloans, such as property or other assets. The good bank- which would be constituted of good loans andinvestments that are still in the black - it was essentially bought out by the nations largest bank: the Bankof Cyprus. So the current situation right now is that you have the Bank of Cyprus, which has basicallyconfiscated all of the uninsured deposits, which is deposits above 100,000 euros, theyre negotiating theamount of the haircut that will be imposed on these deposits. A couple of days ago there was a decisionthat this amount would be close to 90%. So basically, any amount over 100,000 will be taken away frompeople and businesses and investors.

ABL: We originally started talking because you were posting on Reddit about wanting to go back toCyprus and basically educating people about Bitcoin. Can you tell us about your plan?

MH: What Im experiencing as a citizen, what Im seeing is that there is a severe cash shortage in the

economy. People simply do not have cash to make transactions. Those that do have cash are holding onto it and only buying the bare essentials. So the economy has come to a standstill and this is in turn will ofcourse lead to an even bigger economic downturn, and will affect the debt to GDP ratio, which isestimated to be -8.7% this year alone. Thats a very generous estimate. Cyprus is going through the samecycle that Greece experienced three years ago and is still experiencing. I believe that Bitcoin could be asolution, if it is introduced to the economy as a competing currency to the Euro, youll basically have anadditional currency to perform transactions. This of course is something very new. Im no expert on it. Ijust want to organize a bitcoin forum to get other people who understand economics better than me, whounderstand Bitcoin better than me, and discuss possible solutions to this crisis.

ABL: So if somebody wants to help you in your task, is there a way they can get in touch with you?

MH: Absolutely. I am very active on Reddit and try to update as much as possible. Im just getting startedso, right now I am really not in a position to ask for specific help because I do not have anything specific.Anyone who is interested in tracking progress of this project, they can follow us on our Facebook page:


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Reboot Cyprus With Bitcoin. Also on Reddit, keep an eye on the Bitcoin subreddit.

ABL: How has the reaction been to bitcoin in Cyprus? Have you spoke with people about this yet?

MH: I do kind of have an approach I like to use. Whenever I go to a cafeteria or a bar or a shop, and

when I ask for the bill, I just tell them, do you accept bitcoin? Everybody invariably says, Well whatsbitcoin. I tell them, Well its a digital currency used all over the world, youve heard of it? He says, No!.So we start a small discussion, and I tell him, Look you want to know more about this, I started aFacebook page, look it up. Im also trying to organize a forum for anyone interested to come and talk.Maybe we can do this on a monthly basis and start finding solutions to this economic crisis. Thereception has been very good. I was surprised, some people are definitely coming, other people reallywanted to know more about this. Right now Im in the process of taking in a lot of information and writing itout in Greek, because there is not a lot of information in Greek out there. Itll really help in communicatingabout Bitcoin.

ABL: Have you run into anybody yet who is already working with the currency?

MH: I havent run into anybody in Cyprus who is working with it. I did get a response on Reddit fromsomeone who said hes been living in Cyprus and hes been tracking Bitcoin since 2010. I wrote a replyand I told him, Great, why dont you come to the forum? Lets meet. Lets talk. I hope to see you there.

ABL: You said youre planning to do it as a monthly thing. What is the date of your first event?

MH: It will be May 25th, tentatively of course. When I return to Cyprus and I start using my connectionsthere, I have a friend who works at the largest daily newspaper there [unintelligible]. Get some pressreleases and some articles to start getting the word out. I also have some friends from some advertisingagencies that I used to work for, that can help me organize book venues, print some leaflets and put upposters. Im going to do all of these things a couple of weeks leading up to May 25th. There will be a lot ofwork waiting for me when I get back to Cyprus but Im very excited to do this. I really believe in the idea ofBitcoin as an alternative currency helping out Cyprus at this time. Maybe people outside of Cyprus needto get a better understanding of the social situation in Cyprus. The media in Cyprus have been pretty

much using scare tactics, and the politicians of course. People of Cyprus have been presented with twougly options. One is: stay in the euro, push through these reforms, go through five or six years ofdepression, and then at the end of the tunnel will be development. Thats what theyre saying. They aresaying if we dont do this and we pull out of the euro and we print our own currency, the currency will bedevalued by 70%-80%. You will lose everything. It will be disaster, it will be chaos. People are scared intosubmission, basically. I believe in a message that is more positive. A message that there is anindependent currency that is not controlled by any central bank. It doesnt require the use of commercialbanks. All it requires is your faith in using it. All it requires is individual initiative. Thats something thatreally runs against Cypriot mentality. Individualism is not really the value that it is in American society, forinstance. Or in British or in Western society. Cyprus is a bit more different. Its a more closed,conservative society.

ABL: It seems like something where even if people were aware of the possibility that it could happen, Idont think that anybody thought that it would happen in real life, right?


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MH: There have been reports about politicians and relatives of politicians, pulling out their deposits fromCypriot banks just days before the Eurogroup decision. Theres a lot of anger in Cyprus, as you canunderstand.

ABL: I think it is a similar situation elsewhere in the world, where you start talking about these concepts,

but people dont really have the context to appreciate or understand it. Really to conceptualize that thingscould be different from the ways that they are now, but here we have an example of exactly thathappening - a really drastic change happening with very little notice.

MH: Yeah, and in a sense, Cyprus is in a unique situation to really test the limits of Bitcoin. To see whereit can go, and I think that the Bitcoin community really wants to see this happen in a country, in the sensethat, so far bitcoin has been seen more as a speculative investment. Something that you can buy todayand sell short, in a month or something. The price crash last month was something that a lot of peopleexpected, but perhaps not to such extremes. Bitcoin has volatility issues, it has some regulatory issues. I

believe that these will smooth out if a country like Cyprus actually starts using it as a currency. It is in theinterest of the international bitcoin community to see Cyprus to successfully start using bitcoin, and ofcourse it would be in the interest of Cyprus itself.

ABL: So lets play this out. Everything works. Everything goes to plan. Were a year in from now, andyouve had several of these symposiums or meetings. What does it look like?

MH: Well I envision kind of like an economy of competing currencies. The choice of which currency touse at any given transaction is up to the individual. In this scenario, any price volatility in bitcoin, or evenin euro, would mitigate any loss to the individual, if he or she would have an amount in both currencies.

ABL: So essentially, not putting all your eggs in one basket. Youre hedging your exposure to your givencurrency, even though its your local currency.

MH: Yeah, as opposed to the system we have now, where we have basically a monopoly in currency.

We have a euro monopoly in each country. This concept of each country must have an official currency,pretty much a twentieth century concept. The world has moved on. The world has become moreglobalized, more interconnected at an individual level. The concept of Nation-State no longer can satisfythe individuals need. Perhaps we are moving into a future where we will have only digital currencies, inthe distant future I mean. I think its already started. I think were already moving into that direction. Thefirst country to begin accepting this new reality thats forming, will be in a very good position in the longrun. I can still see a role for the euro, in a sense that we can still pay taxes in euros, still pay forgovernment services in euros, start paying off national debt in euros. Bitcoin can mostly serve as acurrency for everyday transactions. The smaller transactions and for international transaction, obviously,because Cyprus has basically been cut off and isolated. In a sense, Cyprus doesnt belong in theEurozone. They use the euro, but they dont belong in the Eurozone, because there is no free movementof capital. Like I said, Cyprus is in a very unique position to start using bitcoin, and digital currencies ingeneral. Im not a shill for bitcoin, I mean litecoin, terracoin, maybe we create a Cyprus coin. Im justsaying the concept of a digital currency, a currency that is not printed by a central bank that belongs tothe global financial system, is the way to go.


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ABL: MIchael Hill. Bitcoin Cyprus Project. I appreciate your time.

MH: Thank you Adam. And I hope we can talk again.

==== Music ====

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ABL: Lets Talk Bitcoin is funded by your donations, with a per episode support goal of 1 BTC per show.

Episode 5, so far, has received a total 0.64666 BTC, so far from a total of 12 donors. Thank you verymuch! Please remember even if the amount you would donate is small, with bitcoin and a growingaudience it adds up fast. If you are new to bitcoin and would like to learn how it works in more detail,please visit LetsTalkBitcoin.com/learn/ to be directed to the bitcoin education project, which I highlyrecommend. If you are wondering what the hosts look like, want to correspond directly, or want to learnmore about the team behind Lets Talk Bitcoin, check out the meet the team section on the site. Hostshave individual tip jars on their pages, so if you would like to make sure you are rewarding the rightindividual, thats your destination. Lets Talk Bitcoin is also seeking sponsors whose bitcoin relatedproducts or services would be useful to our listeners. Please contact [email protected] to startthe conversation. And of course our show would be nothing without an audience. Please share Lets TalkBitcoin with anyone you think would or should be interesting in the future of money. Lets Talk Bitcoin is

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SRM: A couple of weeks ago, I was in New York City for an event called Anarchy in the NYC, and while Iwas there I went out to dinner with a group of people, and one of the people there was the person whoruns the New York City bitcoin meetup, and he gave me a business card. Then a couple of weeks later Iconnected with him on Facebook and he shared this article with me: Theres a bitcoin meetup going on in

New York square in New York City, and its an actual literal marketplace for buying and selling bitcoins. Ithink it could be potentially later on for selling actual things - like objects, physical objects for bitcoin - butthis first meetup there was just bitcoins and legacy currency changing hands and it was actually verysuccessful. The New York Times has a piece about this meetup and its called A Push for BitcoinButtonwood. Theyre saying, Just feet from the park statue of George Washington in Union Square, acrowd of young men gathered on Monday afternoon to buy and sell the digital cryptocurrency. They werebrought together from an online posting from this guy Josh Rossi, bitcoin aficionado who works intechnology at the World Trade Financial Group. Then the go on and talk a little bit about bitcoins and theydescribe some of the transactions that went on. The first one is that somebody bought $20 worth ofbitcoin at the rate of $120 per bitcoin. Once the first transaction went through, that was followed by manyother transactions. I think this is really exciting. They are basically taking local bitcoins to the next level.Once they get some traction and start meeting regularly, people are going to know that they are there and

this is where you can go to get bitcoins and people may be hearing this and thinking, Oh this is somesketchy, meet some dude in the park and hand him some cash, get some bitcoins, you might getmugged. But no, that doesnt sound like what it was at all. I mean it sounded like it was going on in broaddaylight, there was a lot of documentation, lots of people around making sure everything stays safe andabove board. I think its really cool, Im excited about it. What do you guys think?
mailto:[email protected]


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AMA: San Francisco is the place where farmers markets gained early acceptance and actually becamehuge. I am literally and honestly embarrassed that we didnt think of this first, so either Ive missed onethat was already happening or we need to get our act together. I mean come on, we should have a bitcoinfarmers market or a bitcoin open air market. There are so many awesome locations right here in SanFrancisco, and in the bay area in general. Across the bay in Berkeley for sure, and many other placeswhere this model would work beautifully. Either weve missed it or this should definitely be happening andI think this would be a huge success here. Its a great idea.

SRM: You know the origin of the term Buttonwood which was the title of this article: its a reference tothe start of the New York Stock Exchange, which was some meeting where they were trading stocks orsomething like that, so I think that was cute.

ABL: What it sounds like happened is something close to a prototype for an old style trading pit, whereyouve got buyers and sellers offering and competing for each other basically for price, and then once an

agreement is made, the interested parties step aside and do their transaction, and then go right back intothe pit. Does it sound like, do we think, this can go in that way?

SRM: Yeah, absolutely. If you look at some of the transactions, there was actually another article thatdetailed every transaction that was made, and there was a pretty good price spread from people buying at$120 a bitcoin, down to like $104-$108, and it changed over the course of the afternoon. So, that wassuper interesting to me.

AMA: The historical references here are tremendous. I mean I often have the feeling when Im dealingwith bitcoin and bitcoiners that we are making history. Its a very very strong feeling and I think a lot ofbitcoiners feel like that. This is unprecedented. Its unchartered territory. And the historical referencesback to the 1600s, when one of the most major changes in human economic condition happened.Essentially, the 3,000 years before 1600 were all zero-growth years. And then from 1600 until moderndays, weve had this exponential growth in economies. Before 1600 it really wasnt happening. Whathappened at that time was lots of different things converging: Renaissance, Enlightenment and all of theother things, including the modern corporation - East India Company, etcetra etcetra. And one of theinteresting things is that it was also the beginning of stock exchanges in London cafes. It was meetupsthat started and in fact very near to the locations of the first cafes in London where those meetups startedfor merchants to buy into things, like the East India Company, is where the London Stock Exchange sits

today. We are definitely making history, and were doing a lot of the same grass roots things that they didback then.

ABL: I really appreciate that historical context. I was not that up to date on the history of stock markets,but ya it sounds like thats exactly what we are doing, just transpose us a couple hundred years.

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ABL: Theres been a story going around about kiddie porn in the block chain. I think this is another one ofthose stories where the headline sounds a lot different than the actual facts are and I thought it wasimportant that we address this as quickly as possible. The original way I came across it was actually from


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AMA: Yes, absolutely. These are URLs, thats all thats in there. Its URLs to a couple of sites, and in factmost of the people looking at this didnt follow these links, they just looked at the titles and thought,Whoops, thats nasty. Yeah, its links. The Wikileaks cables that are in there? Theyre links to theWikileaks cables. These are links to those sites. In fact, all of these links exist in an other really, reallynefarious organization called Google.

ABL: [Laughter] So youre saying you can search for all of these things and they can come up, basically.

AMA: Oh of course, absolutely. And in fact, if youre searching for other things, sometimes they cancome up, as you can imagine, and they get buried under miles and miles of relevant results so you dontsee them. You really have to go to extremes to even find these things on the block chain, to even knowthat theyre there, and when you do, all youve achieved is what you could have achieved with a Googlesearch, if you were so perverted. Most of the time the text field in transactions is not used. Occasionally, Iput a little note in a transaction to remind someone why Im sending them money, but for the most part thatfield remains unused. I dont know. Stephanie, Adam, have you ever put in a text comment in atransaction?

ABL: Ahh, Ive put.. Ive labeled things but I dont think thats what youre talking about. I think youretalking about actually a message that gets sent, right?

AMA: Yes, thats the optional message you have a little text area underneath your transaction. You cantdo it on the main wallet, really, the mobile wallet for sure doesnt bring that to the front of the user interface.On Blockchain if you do a custom send, you can add a message to the bottom, but the quick senddoesnt do that. So the easy answer, [how] people found this was simply that 99.9% of all transactionsdont have any text. The ones that do have a little text. So its very easy to find the ones that have a lot oftext. Or to search for link patterns and URLs, and those have various weird things in them.

ABL: So from a worst case scenario standpoint, I mean trying to look at this from the perspective fromthe people who are actually legitimately concerned about this, or at least saying that they are legitimatelyconcerned about this, whats the scary pitch? Cause I mean, clearly the putting child porn in the blockchain is not really an accurate assessment, so what is an accurate assessment? That you can just put alink, and then that could like - but then, its not like youre hosting - its not like you can look at it there. Itjust - if it lives on the internet, I dont understand how its even a thing, you know?. If it lives on the internet

and you can find a link to it - because obviously you have to be able to find a link in order to get to it - so ifyou can find a link to visit it, doesnt that mean you can take it down?

AMA: Well yeah. Thats the main point. I think the main concern is this. The block chain is forever. Onceits on there, its forever. In fact we depend on it being forever. We also depend on the block chain beingeverywhere. Everywhere plus forever means that when youre running a full node client, you have the 7-8gigs worth of block chain on your hard drive. You possess that. So the scary part was, well if peoplecould put, not links, but the actual bad stuff in these 256 bytes, then you would be in possession of thatstuff just by having a full node client. Thats a very tenuous argument, both legally and philosophically.The fact that some bytes are on your computer, and theyre links, you cant really put images or thingslike that in there. So I think its an overblown concern. In the future, we may have to think a bit moreclearly about what happens if certain blocks so objectionable that you need to recalculate the block chainfrom that point over. But I really dont think you can do anything in text that isnt protected by firstamendment speech, or could be used, really, for a possession charge, when you have absolutely noknowledge whats in the block chain.


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==== Music ====

ABL: Today I am honored to be joined by Jeffrey Tucker. Hes is the executive editor of Laissez Fairebooks and a scholar of new economics. Jeffrey, weve been talking about the serendipity of

cryptocurrencies, like Bitcoin, gaining exposure and popularity, during this time when the money we alluse isnt doing so hot. Is this an equal and opposite reaction, or is something else happening here?

JT: I dont think its a coincidence at all that we saw the rise of Bitcoin at the time that weve seen it: rightafter the currency crisis of 2008. That really put everybody on notice: something is not working about thesystem. Its exactly that period the regulators, the Fed, the Treasury and everything - they sent the wholesystem into a gigantic upheaval thats fundamentally changed its workability. Banks today dont workanything like what they worked like ten years ago; its a completely different operation. They make moneyin a different way their reserves are handled in a completely different way. The Federal Reserve is totallydedicated to [hampering] down interest [rates] to zero, to negative. Money and the financial system just

isn't working the way it used to work, so Satoshis invention, Bitcoin, comes along really at exactly theright time. Its kind of the perfect storm in many ways.

ABL: The monetary system has already moved to kind of the future of money, except for all the peoplelike us, who are still stuck here using the money that weve been using all along. Its just not the same thatit used to be.

JT: Well one of the exciting things about using digital currencies, alternative currencies, is that you gain arealization of something that you can read about in books, but it really comes home to you once you startactually engaging in real transactions with alternative private currencies - like Bitcoin. You suddenlyrealize that the dollar system, that the world money system in many ways is nationalized and has been forabout a hundred years at least. Something fundamental changed in 1913 with the advent of central banks.It basically meant that a kind of cartelized government structure nationalized our money, and the results ahundred years later are not pretty to see. Weve seen massive depreciation, of course, take place. Butalso continuing levels of business cycles and it worsened at every stage. Whether it was in the 1930s orwhen Nixon finally closed the gold window after the collapse of Bretton Woods. Weve been on kind of thislong run experiment, where money has been basically managed by government and its connected powerstructure, within a very stagnant and ancient sort of aging institution called conventional banks. This fullydawns on you once you first kind of get engaged in making bitcoin transactions. You suddenly realize, ohthis is the way money could be working in the digital age. I see it essentially as an unstoppable force. Thedigitization of money is coming - if its not already here - and its just going to grow more and more as theyears go on and the government structures are just going to continue to fail. I mean there [are] certainanalogies out in the world. You can look at the way mails have gone from being purely monopolized frompublic policy, essentially from the early days of the republic up until the invention of email. And then thewhole system kind of blew apart. And we saw the invention of a totally new way of doing things, that blewour minds, that were new ways that were unimaginable in, say, the 1960s. Now we take them for granted,but the same kind of thing, you know - it also happened in education, it's happened in healthcare, it'shappened to a lot of sectors. Well now the same force of innovation and digitization, choice is affectingmoney and finance. And I think thats going to be our future.

ABL: Ive heard this argument before, that we are essentially going to see essentially government moneyor legacy currencies as I like to call them, become kind of obsolete. But there seems to be an inherentconflict in there, because while the mail analogy works to a certain extent, governments dont transactmail in order to fund government. But they do do that with currency. So isnt there kind of a clash thats


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inevitable here?

JT: Well, yeah. You can make it a clash. I think its really up to public policy, and the regulators. If theywant to make it a clash thats fine. I dont think they can win if they want to make it that. But its also verypossible that during the rest of our lifetimes were going to be operating with parallel systems. And manypeople around the world are used to this, in the world of money and banking. Dollar users and thedeveloped world arent usually used to that sort of thing. Where youre juggling several different

currencies, you are keeping various exchange rates in your mind all the time, but people of the developingworld with exchange controls and fixed relationships between their kind of cruddy local currency and thedollar, are used to this. They sort of grow up with this system and this is what they live with. So theresnothing wrong with parallel systems. Competing currencies is if they had to call it (???).

ABL: The third world to the US Dollar analogy is an interesting one, because I think that its good but itsalso brings up, again it brings us back to these issues. The reason that people in a third world country usethe dollar as a parallel system is because their currency that they use on a local basis is not veryvaluable in certain contexts. So isnt that where we are now with bitcoin? Before you have the

cryptocurrencies, pretty much any currency thats out there is a currency created by fiat, created bygovernments and backed essentially by those governments that created them. Bitcoin presents a newtype of competition entering the market, as far as I can tell there hasnt really been anything like it that hasthis decentralized no real control structure for any particular organization or group. It just feels that theother currencies become sort of secondary in nature if you play out this logic to its logical conclusion.

JT: Well I think that thats right. Theres also a very interesting thing that happened with Satoshisinvention here. He kind of looked at the operation of the gold standard and built into bitcoin, what peoplesort of put down as the deflationary tendency. I like to look at it as a relentlessly rising in purchasingpower. Thats possible just because of these very strict limits on mining and then the ultimate final limit onwhat can be created. You have within bitcoin as an unusually sound currency. Its even radically sound.Its even sounder than a 19th century gold standard. Its kind of severe and strict in some ways. So themarket will tell, and I think that from my reading of monetary theory and monetary history that the soundcurrency will eventually prevail. On the other hand, what you call legacy currencies will continue to be,obviously will be in demand for the conduct of public policy and that sort of thing, and I think those canexist side-by-side. My reference to the developing world is very much shaped by an experience I hadsome years ago when I traveled to Nicaragua, and at the time the government had very strict exchangecontrols on the local currency as it relates to the dollar. They hit you at the airport, and they would hit youat the official money exchanges. You got on the street and there were kids that were 7 and 8 years old upand down the block that were exchanges currency with tourists. They keep up with the rates. They knewa lot of math. They knew a lot more than the tourists themselves and the rates were constantly changing

because it was a highly inflated currency at the time. They were just masterful at it. I had to laugh at itbecause I thought well here you have these poor peasants in some poor country actually doing morecomplex financial transactions than most American school kids could ever do. Its a so so verycomplicated system but they managed to - I think its the kind of thing we are going to see in the future. Imsure you have been through this too but, if you go through an entire day or two where youre usingbitcoins for your financial transactions, for retail purchases and things, you do begin to experience a kindof mental shift taking place, even with your own mind. You begin to price things in terms of bitcoins. Youcan see this bit of emergent sociology of what its like to use this new currency. That was very exciting forme. Its a mind opening experience. I think that in the future were all going to get used to this more andmore.

ABL: On this show weve had the luxury of being able to kind of operate in an entirely bitcoin ecosystem,where our listeners donate and our advertisers pay in bitcoin, and we are able to use those bitcoins to payour contractors. I actually just kind handed off a business card creation project for 0.2 bitcoins tosomeone who, I have no idea where they are, it doesnt really matter where they are, it just matters their


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quality of work. Its a really really interesting process and it lets us work with new people very quicklyinstead of having to go through some sort of payment processing system.

JT: Yeah that is so thrilling, thats so exciting. I felt it - I have to tell you that I felt it the very first time. Wellsomebody donated a bitcoin to me at some point, not a full - I mean it was some small fraction, so I beganto sell off some of the goods that I brought with me to a particular conference for bitcoins because peoplewere buying them. But I had enough actually to use one online. My first purchase was so exciting - easier

than Amazon 1-Click - you just feel like you are transported to this future world. Actually you almost feellike an idiot that you bought into the old system. Actually, the first time you use bitcoin you see that thelegacy currency system, or what I call the government currency system, is just so old fashioned bycomparison. I felt a sense of flight: what it must have been like to be in the Kiddie Hawk for the first time.Its just such an incredible kick, and you cant really go back. I think this is why people get so dedicated tobitcoin after using it just a little bit. You begin to realize the possibilities and it just changes your wholeoutlook on life. I think we need to realize, too, that the emergence of this as a currency, and even as apayment system, presents a lot of challenges to sort of the intellectual elite who hadnt really entirely -youll notice theres sort of a dearth of academic papers on the subject, right? They are just now emergingand people are trying to catch up, trying to figure out what the heck is going on. We are living in a real timeexperiment here in which the real buying and selling of individuals, the real innovations playing

themselves out, the digital age market-economy, are serving as a kind of institutionalized philosopher-kingteaching governments and intellectuals something about the world that they didnt know before. Its goingto cause of a revision of a lot of monetary thinking and a lot of thinking about the world. This is not apolitical thing, really. The Left is challenged by this, the Right is challenged by this. All the old assumptionsare being blown up by real-time market experience. I was thinking about this last night - with Satoshisinvention. The usual path is that you propose an idea, throw it out to the academic journals, it gets peerreviewed, all the old tenured professors knock the idea around, kill the young guy or whatever, and thentwenty years later, maybe you start to see it emerge. But, thats not what happened in this case. Satoshiproposed the idea and then threw it out there, discussed it for awhile and then disappeared again. Thething is playing itself out in real time market conditions. The peer review process is the market itself. Andthe intellectuals are just scrambling to keep up. Its a very intriguing process to watch. I know that in myown thinking has began to shift that faithful day, when I acquired bitcoin and then began to use it, itshocked me and now Im realizing [that] Ive carried around a lot of errors in my head for many years, youknow? I think a lot of people are going to start seeing this.

ABL: On the subject of new economics in the Austrian School - as its grown in popularity over the lastcouple of years, kind of alongside and on top of bitcoin actually - theres been a lot of skepticism comingfrom that community. I know youre a relatively new convert to the cryptocurrency thought. Why do youthink that is and whats the journey?

JT: You know its interesting that you would ask me that question because it has been quite a journey, alittle bit of a private journey actually. Because I have been steeped in monetary thought for a very longtime - I wrote my undergraduate thesis on the gold standard, had long been a gold standard advocate,fought all the monetary wars between the Austrians and the Keynesians and the Monarchists and so on.Youre embedded in this world long enough you think you kind of know everything there is to know. Iguess Ive heard some jabbering about bitcoin, a year or so ago, maybe a couple of years ago, but I didntpay much attention to it because it seemed to me that it obviously contradicted everything I thought Iknew. I believed that I knew that a money had to emerge out of a real commodity used in the real world.First as a barter and then as a kind of speculative venture, as indirect exchange, and the whole processthat people normally assume with the Regression Theorem. So bitcoin comes out of nowhere and my first

thought was well this is obviously untrue, it cant be the case. But as I began to look at it, I think whatshappening here is that we sort of fail to understand that we are living in a time where code - really wellwritten code - is extremely valuable. Its obviously a commodity, its been the driving force of the worldseconomy for the last 30 years. So its not necessarily a contradiction to the Austrian version to seecryptography used to create a currency that has all the properties of the definition of a currency in everysingle respect that emerges essentially out of a commodified code. You would expect that, I think, in a


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digital age. I think we need to realize that the world changed dramatically over the last 20 years -essentially migrated from the physical to the digital world - so it makes sense that money would take thatsame trajectory. But even then I still wasnt convinced because the real beauty of the digital sphere is itscapacity for infinite reproducibility of everything. I mean thats been the source of its economic magic in somany ways. Well in the money world you dont want infinite reproducibility. You want strict scarcity andyou want strict title ownership. You dont want commons and you dont want all those sort of infinitefeatures of digital media pertaining to money. I think it was from reading a Wired magazine article orsomething, I began to realize that Satoshi understood the same thing, and built into the structure of theprotocol [is] the strict assignment of title and owner, sort of tricked digital media into replicating perfectlyand even improving on the best monetary system you could ever hope to develop in the physical word. Iwas so dazzled by the brilliance of the innovation that it just knocked me off my chair, I just couldntbelieve what I was seeing. Thats when it clicked for me, suddenly, and then I sort of realized its viabilityand its compatibility from what I knew before, although I had to adapt my own thinking. I always urgepeople that are skeptical of bitcoin just to look a little more in depth at it - not just read the whatever pressstory that happens to be in the Wall Street Journal - but to look at the more detailed work on it: examinethe code, where it came from, the thinking that was behind it, the operation of the system. The more youlook at it the more you realize, Oh my goodness. Okay, Im beginning to understand how this works andwhy this works.

ABL: I have it in my head that if a nation were to issue their currency backed by bitcoin reserves: a nationlike Cyprus or Greece or some place where they are having a lot of trouble with not only stability but alsowith corruption in the government and [unintelligible], specifically. If they were able to leave the Euro,issue a currency backed by bitcoin reserves kept in one or many transparent wallets, it could kind ofoperate like a modern gold standard yet not be subject to the games that can be played when thereserves are locked in a vault hidden from sight. Am I missing something here?

JT: Thats very interesting. Youre sort of touching into some of my own intellectual trajectory here, inthinking about the relationship between bitcoin and the gold standard. One of its advantages is preciselythat it doesnt have to be locked away. That it can be held by users. The corruption of the currentmonetary system really begins half a millenium ago when bankers first persuaded users to let them keeptheir gold for safekeeping and then began to develop loan markets based on kind of fractional system.Within bitcoin thats essentially impossible. I mean you can have loan markets but theres a very strictownership to everything. Plus there is no need for the warehousing function traditionally understoodbecause obviously bitcoins are not heavy and you can carry them around and the individual can keepthem in cold storage. You dont have that potential for corruption there. In so many ways its animprovement. Im intrigued by the possibility that bitcoin might have a strange effect that none of usunderstand and I think we have to prepare ourselves for surprises. You and I could talk for 48 hoursabout this subject and brainstorm and still miss the thing that will ultimately happen here, but I do think itsinteresting to imagine the possibility that bitcoin will end up improving government systems of money, just

in the same way that all competition improves every good and every service. Central banks might bediscouraged from egregious haircuts that they attempted in Cyprus in the future. We could seegovernments firming up the quality of the money to prevent a run out from the currency into digitalcurrency. We could see dramatic changes in monetary policy, in which bitcoin becomes a kind of ateacher to governments and fiscal banks about how to run a sound monetary system. That could happen,but I think the worlds population would be better served by sound money than the current system, sohowever we get there Im all for it.

ABL: Jeffrey I noticed that Laissez Faire Books, LFB.org, does not accept bitcoin for membership. Are

there any plans to make a move in that direction?

JT: Yeah, theyre big plans and everybody is working like crazy to make it happen. LFB is a subsidiary ofAgora Financial which is in turn a subsidiary of Agora Inc., which is a big global corporation with about


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6,000 employees internationally and a unified accounting system.

ABL: Not as simple as just throwing up a button on the website.

JT: Yeah, you know its funny how it is, its actually not a surprise to you at all, it wouldnt be a surprise toanybody who works in web commerce but its a lot easier for small institutions to innovate in these edgy

areas than it is for large old institutions. I will tell you that everybody at my office - including the accountantteam and the legal team - that everybody is super fired up about this and working really hard to thinkthrough all the implications and implement the solutions. That makes me happy. As long as we are makingprogress, then thats good, but anybody else - thanks to so many of the innovations, really over the last 6months - its so easy for small companies and blogs and anybody to accept bitcoin and everybody shouldjust immediately do that. I dont know why anybody would be waiting at all.

ABL: How long have you actually been interested in bitcoin, because you said you were aware of itbefore, but when did that shift happen?

JT: Thats a fascinating thing because when I was an editor of Mises.Org, I used to get these bitcoinsubmissions and I used to think, Oh my goodness. Ive always loved code geeks and the code worldand I wrote a ton of articles about it and really adored this sector of life. The thing about being an editor ofa publication: the publication can only be as smart and good as its editors, really, because editors dontwant to run anything they dont fully understand. So all throughout 2011, really - I guess I moved toLaissez Faire in Nov. 2011 - but all throughout that year I was getting lots of submissions of articles onthe topic. I just couldnt wrap my brain around them. I didnt know how to evaluate their judgement on thematter. It became very frustrating for me as an editor because I just couldnt really - I was learning as Iwas reviewing the articles, you see what I mean? Its very difficult to make those kind of judgements.Mises.Org itself never said a word about the subject during that entire year. I moved to Laissez Faire[and] that was on my list of things to finally discover. Finally it happened to me when I went up to NewHampshire for a conference that several merchants, bitcoin associated merchants, surrounded me anddragged me to lunch and made me an owner right there on the spot, and thats what changed everything.Its one thing to sort of think about a subject abstractly, but once you possess it, and Adam I think youknow what I mean here. Theres something funny about bitcoin in particular, that it does have thepsychology of a physical thing. You do have the experience of having acquired something real when youget it. I mean its true that its all digital and all the rest of it, but you do get swept up in this sense ofownership when you first get your first bitcoin. So that was the beginning of the process and that wasonly, I think now, maybe two months ago. Yeah, so I threw myself into it big time, because when I was theadministrator and editor of Mises.Org, all my professional experience is that you need to follow the

innovators, you need to see what they are doing, because that is the future. And the people that put downthe innovations, thats sort of sociological cultural impulse to disparage the edgy new thing is almostalways wrong. Eventually yesterdays crazy radical idea becomes todays conventions that everybodyjust assumes are normal. Ive lived through the cycle again and again. I mean I saw it with email. The firsttime someone tried to persuade me to get email, I was like, Why do I even need that? Ive got modemand a phone attached to my wall here. I could just hook up to someone directly. I couldn't see the needfor it. Well I was wrong and then the same thing on the World Wide Web. When I first looked at it I thought,Well this is just a whole series of bill boards. No different than driving down the highway. Whats theadvantage of driving down this highway? That was my first thought. Well I was wrong. I began to learnover time that theres kind of an unfolding process with new technology. First its edgy, its buggy, itdoesnt seem particularly useful. It doesnt seem like you really need it, so you have these early adopters

that go into it and try to improve it and make it more accessible and make it more useful. By the time itbecomes mainstream, everybody just accepts it as a normal thing and they forget that it wascontroversial. I remember when Amazon first began, people were putting it down. This is ridiculous. Thisis a stupid idea. This is not a business model. This will never go anywhere. David Broder for theWashington Post wrote a column, I remember, that just put down Amazon that said, This is not a stockthat I would have anything to do with. This is a disaster. This company thinks it can buy and sell products


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using the internet? Well what makes them think they can do this better than anybody else? Anybody cando this, so it has no particular advantage. Hes putting it down. And then the bust of 1999 seemed toconfirm all the skeptics and their attitudes and their sort of the luddite attitudes. But of course over thefollowing ten years, retail web commerce shaped the world. We are seeing the whole world justcompletely revolutionize fundamentally. Massive global upheavals as a result of technology and all theskeptics have been proven wrong. I think that the same thing is happening with Bitcoin. Ive seen thisprocess play itself out too many times to not take this subject extremely seriously. I think its going tosurprise us and amaze us, how the world is going to change in the future thanks to this fundamentalradical innovation that goes to the heart of economic life of people and nations.

ABL: One of the reasons that people are getting into it is because the price has gone up quite a bit. Nowyou said that you got involved about two months ago. To some people the price is important, some peoplenot so much. Where do you stand on the issue?

JT: Yeah. Well, its funny. Newbies are always focused on the price, right? Once you get a little moresophisticated you realize what matters is functionality more than anything else. Its not a commodity that

you just want to treat as a speculative investment. Its purpose is to emerge as a real means of payment.Its an emergent money, not just a speculative venture. But yes, I lived through the soaring up to $266 andthen back down again right at the sort of dawn of my enthusiasm for this sort of thing. So for me to watchwas extremely intriguing and it caused me to go back in history and see how those played themselves outin real time. I looked at the railroad industry as a good example of this. Railroads were subject to wildspeculative frenzies at the time because they were entered into real market conditions. And people had,at the time - Im talking in the 1870s - had a hard time distinguishing between railroads as a technologyand seeing what that technology would do for civilization. The sort of unrelenting upheavals that wouldcome about from the stock prices of particular railroad companies. Its hard to separate those two things.Theres always a crowd of people out there going, Well the railroad stock I bought at $30 is now $3, soclearly there is no future to railroads. I think there is an impulse to do that with bitcoin. Or the reverse,The railroad stock got bought at $3, is now $30, so clearly theres a future to railroads. The truth is wehave to separate these things in our minds. We have to separate out the speculative aspect ofcryptocurrencies from the technological usefulness. Its not always easy to do, but in the real world allgreat technologies come of age, develop, and mature within real world market conditions. The wise peoplewill understand the difference and superficial people will just follow prices up and down. Im doing my bestto detach myself a little bit from its exchange rate, because I realize thats something of a distraction fromthe larger issue, and yet at the same time, Im as bad as about anyway. If I wake up at 2am for noapparent reason and my smartphone is by my nightstand, I pick it up and yes, I dont check my email, Icheck the exchange rate. [Laughter]. Its bad. Its a disease, I tell ya.

ABL: It took me about 6 months. After about 6 months, I was able to - I never check the price anymore,its really great, and its been really freeing to me because it means that I can. I think that the railroadanalogy is a really good one there, because youre totally right. Railroads changed the world not becauseof their stock price but because of what they offered and what they could do. For me thats the mostexciting part about bitcoin is that it enables all of these things that you just cant do in othercircumstances.

JT: Yeah, thats true, and its true with every technology is this way. Markets tend to - because greattechnologies enter the real world market conditions, they are subject to this unrelenting valuation based

on the potential for speculative profits. One thing I am trying to get better about is Im not spending a wholelot of time engaging in debates about people on the internet. Someones wrong on the internet, Ill go todinner later, right? But people who just focus solely on the exchange rate and its potential for profits. Ithink early investors of bitcoin are going to do very well in the future. What happens between now and thatfuture we just dont really know. We are kind of in a funny situation. Im sure you looked at the data too,weve seen massive increases in just public interest in bitcoin ever since the price ran up. In a way that


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price run up did a lot of good in terms of -

ABL: Its a beacon, yeah.

JT: Yeah. But at the same time its kind of harmful because it distracts people from the core issue. Bitcoin

is funny because I think all of us have wishes of what we think we want to happen with it. About a monthago, I had this kind of wish in my mind that it would stabilize around $100 and stay there for the nextquarter. The best thing about bitcoin is that none of us controls it. It really is a merchant order that is anorganic product of the social order itself. With all the great combinations of the division of labor,merchants, intellectuals, code-slingers, everybody cooperating together in this vast global system thatsso progressive and so innovative and so exciting. Its a beautiful thing that none of us get our - none of ourwishes come true, in a way. I could wish for a certain exchange rate, I could wish for it to stay that wayfor a certain amount of time, but Im totally prepared to see bitcoin take its own path. I see myself less asa prognosticator or prophet of the thing. I enjoy thinking of myself as a student more than anything else.Theres a lot that all of us can learn just from watching and investigating and examining closely theemergence of this technology. We have to remember just how fortunate we are as a generation to be

watching all of this take place in real time. This hasnt happened to any other people in the history ofhumanity - to watch something like this happen. This is a great, if you believe in this sort of thing its ablessing really. Its a teachable moment. Were going to learn a lot about the way the world works and canwork in the future just by watching the emergence of bitcoin and seeing the developing sophistication ofthe merchants and its price and its trajectories and the response from the regulators. Bitcoin is a kind ofsociological microcosm of how reality unfolds before our eyes. Were seeing it all happening so fast andhappening so many magical and beautiful ways. Its just a great time to be alive. I consider it a beautifulpresent in my own life to be able to have this presented to me at my feet and I can unwrap it and watch itand play with it. Its a beautiful thing.

ABL: Jeffrey Tucker. Laissez Faire Books. LFB.Org. Thank you for your time.

JT: Thank you, Adam.

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Let's Talk Bitcoin! - Episode 06: Cyprus & Serendipity

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