Let's Talk Bitcoin, episode 18 - "It's Not That Simple!"

8/13/2019 Let's Talk Bitcoin, episode 18 - "It's Not That Simple!"

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Episode 18 of Let's Talk Bitcoin, It's Not That Simple!

Paticipants"dam B# Le$ine %"dam& (ost

Stephanie )*ph+ %S)& o-host"ndeas )# "ntonopo*los - o-host.oseph /a$id E0 of "ite2Stanisla$ Shal*no$ T0 of 0pen 3aden

4Into )*sic Pla+s5

"dam omin6 *p on toda+'s sho7, Bitcoin, )PES", and en+a - co*tes+ of3enesisBlock#com# 9hat is )icolendin6, and does it 7ok: It;s Not That Simple - Life as theLa6est anadian E2chan6e 7ith .oseph /a$id, E0 of "ite2# 1< Bi=es a month Is

o*ption >*st /e$elopin6-7old tippin6: )*t*all+-Beneficial )esh Net7okin6 on +o*Smatphone, 7ith Stanisla$ Shal*no$ T0 of 0pen 3aden, and the oi6ins of )-Pesa, and7hat ae =itcoins chances in en+a, eall+:

"dam If +o*'e ne7 to Bitcoin, check o*t 777#letstalk=itcoin#com?lean to =e diected to theBitcoin Ed*cation Po>ect# If +o* like 7hat 7e'e doin6, please e$ie7 *s on iT*nes o +o*pefeed podcast platfom#

4)*sic Beak5

"dam This helps othe find the sho7 =*t, >*st 6eneall+, 7e eall+ appeciate it# 9e do an ho*-

lon6 sho7 e$e+ 7eek and it can =e o$e7helmin6 to o* ne7 listenes# I'm e2cited to anno*ncea =and ne7 tool to help shae the sho7 called 3i$epodcast#com# @sin6 +o* phone, >*st take asceen-shot of +o* podcast pla+e at the time +o* 7ant to shae, email the ima6e toclipA6i$epodcast#com 7ith the desciption in the s*=>ect and the email addess of the fiend+o*'d like to send it to# The se$ice 6a=s a 1-min*te clip of the sho7 statin6 at the timeindicated =+ the sceen-shot, hosts it, and emails it to +o* fiend in a nice clean fomat# This isan e2peiment# Please 6i$e it a t+ and tell *s 7hat +o* think#

4)*sic Cades5

"dam (i, and 7elcome to Let's Talk Bitcoin a t7ice-7eekl+ sho7 foc*sed on the ideas,po>ects, and people =*ildin6 the ne7 di6ital econom+ and the f*t*e of mone+# )+ name is"dam B# Le$ine and I'm a 7ite and speake 7ho likes to talk a=o*t complicated topics in*ndestanda=le tems# .oinin6 me in o* t7ice-7eekl+ seach fo clait+, "ndeas )#"ntonopo*los is an e2pet in disti=*ted s+stems and decentaliDed net7oks#

"ndeas (ello#

"dam /# Stephanie )*ph+ is a scientist and s+ndicated adio host#
http://www.thegenesisblock.com/guest-post-kenya-primed-for-wide-scale-bitcoin-adoption/http://www.cavirtex.com/http://www.thegenesisblock.com/guest-post-kenya-primed-for-wide-scale-bitcoin-adoption/http://www.cavirtex.com/


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Stephanie (ello#

"ndeas The potential of c+ptoc*encies s*ch as Bitcoin in "fica is an iss*e 7e'$e talkeda=o*t on this sho7 *ite a =it, and in fact, I'$e coined the tem, Bitcoin is fo the othe *st like +o* can make af*nd, and it's eall+ eas+ to send pa+ments to people, and pa+ it =ack#

"ndeas 9hen +o* sa+ micolendin6, let's act*all+ talk a=o*t that fo a second# 9hat does thatmean in a n*tshell:

Stephanie )icolendin6 is =asicall+ the iss*ance of small loans to indi$id*als o 6o*ps of=oo7es in the de$elopin6 7old# T+picall+, most =eneficiaies of micolendin6 ae act*all+7omen o 6o*ps of 7omen that ae lookin6 to stat thei o7n small =*sinesses# Those loans can=e =acked =+, fo instance, people in the de$eloped 7old, and thee ae man+ diffeent$aiations and t7ists on it# 3eneall+ consideed the fist micolendin6 instit*tion 7as this =ankcalled 3ameen Bank, and that 7as )*hammad *n*s, I 7anna sa+ - 4he5 6ot the No=el PeacePiDe fo 3ameen Bank =eca*se the+ 7ee doin6 these small loans, and that's the thin6 in thede$elopin6 7old, =eca*se people don't *s*all+ ha$e collateal the+ don't *s*all+ ha$e 7a+s to6et cedit, the+ don't ha$e a cedit histo+# -"nd so it's eall+ challen6in6 to think a=o*t iss*in6them a loan, =*t micolendin6 is specificall+ fo those t+pes of =oo7es# -"nd as fa as ha$in6those loans =ein6 paid =ack 7itho*t cedit histo+ o 7itho*t collateal, 7hich these people oftendon't ha$e, lendin6 to 6o*ps ena=les sot of like a social pess*e kind of incenti$e to pa+ it=ack, o a 6o*p ass*ance that the loan 7ill =e epaid# -So, it's eall+ helped a lot of people inthe de$elopin6 7old, I mean thee's definitel+ citics of it too, 7ho sa+ thin6s like a=*si$eh*s=ands 7ill *se thei 7i$es to 6et cedit, essentiall+# -0 like if the+ can't pa+ it =ack,sometimes people 7ill commit s*icide and thin6s like that# -So, it's 6ot a co*ple of citics, =*t


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o$eall, I think a lot of people eco6niDe it has act*all+ helped sp* economic de$elopment insome places in the 7old 7ee thee 7een't those options =efoe micolendin6 came a=o*t#

"dam /o +o* kno7 if an+=odies doin6 this in the Bitcoin space +et: Beca*se, I mean +o*'etotall+ i6ht, it seems like a $e+ nat*al $en*e#

"ndeas I'm in$ol$ed in micolendin6 *ite a =it, I'$e *sed t7o se$ices, one is moe oientedto7ads pee-to-pee lendin6 7hich is moe the 7esten o de$eloped 7old and +o* can findse$ices like that on Lendin6 l*= and pospe#com etc# In tems of mico lendin6, one of these$ices I *se e2tensi$el+ fo a =i6 ch*nk of m+ sa$in6s is I", i$a#o6#

Stephanie )e, too#

"ndeas o*'ll like this# I'$e stated an effot to pes*ade I" to *se Bitcoin and I'$e sent thema n*m=e of emails - I ha$en't ecei$ed a esponse =ack - I'm t+in6 to ceate a little petition,pehaps on one of those petition sites, to pes*ade them to stat acceptin6 =itcoin# Thee ae some

o=$io*sl+-si6nificant ad$anta6es to *sin6 =itcoin in that en$ionment, incl*din6 the fact that a=i6 ch*nk of thei cost is the a66e6ation and tansfe of the f*nds o$eseas 7ith 7ie tansfesand thin6s like that#

Stephanie The+ ha$e to patne 7ith these local intemediaies# Basicall+, I" is not pee-to-pee lendin6 - it's =asicall+ the+ =oke, as I *ndestand it, a loan that's 6i$en =+ a local =ank, =*tis f*nded o 6*aanteed =+ donos to I"#

"ndeas eah, e2actl+# It's not necessail+ a=o*t c*ttin6 o*t the intemediaies, =eca*se theselocal o6aniDations, man+ of them chaita=le o6aniDations as 7ell, ae esponsi=le fodisti=*tion, fo findin6 the =oo7es, fo helpin6 the =oo7es ceatin6 a pofile and tell theisto+, and tanslatin6 thei sto+, etc, =*t also collectin6 the pa+ments and =ein6 a=le to keep thes+stem s*staina=le# (ee's one $e+ inteestin6 thin6# 0n Lendin6 l*=, I'm mostl+ lendin6 to"meicans# 0n I", I'm mostl+ lendin6 to people in de$elopin6 co*nties 7ho ae m*ch, m*chpooe# 3*ess 7ho defa*lts moe:

Stephanie The "meicans:

"ndeas ep# The defa*lt ate on m+ I" loans is a=o*t half of the ate on Lendin6 l*= - =+the 7a+, e$en the Lendin6 l*= defa*lt ate is *ite lo7 and still 6i$es me a fantastic et*n#I", I don't 6et a et*n, it 6ets f*nneled =ack into chait+, so +o* don't make mone+ off it, =*tit's eall+ inteestin6 - the defa*lt ate is m*ch lo7e# That's an impessi$e testament to the factthat, 7hen +o* 6i$e oppot*nities like this, to people 7ho don't ha$e the oppot*nities# To6ethe7ith the pee pess*e of comm*nit+ loans and thin6s like that it's act*all+ a $e+ effecti$e 7a+to disti=*te and 6et mone+ to 7hee it's needed#

Stephanie o*ld Gipple =e a medi*m fo Bitcoin micolendin6, o do +o* 6*+s kno7 of an+specific 7e=sites that ae onl+ fo Bicoin micolendin6 at this point and time:

"ndeas I'$e seen at least diffeent sites that do Bitcoin pee-to-pee lendin6, =*t I think the


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=i6 challen6e thee is the matte of ha$in6 infast*ct*e patnes that ae a=le to disti=*te theseloans, 7hich is 7h+ I'm essentiall+ t+in6 to 6et I"#o6 to adopt =itcoin# Beca*se the+ alead+ha$e the infast*ct*e the connections and tho*sands and tho*sands of need+ =oo7es, it'sm*ch =ette to con$et that#

"dam I'm eal c*io*s hee# I do not paticipate in mico lendin6, "ndeas, 7hat t+pe ofamo*nts ae +o* talkin6 a=o*t on a pe-loan =asis: 9hen +o*'e talkin6 a=o*t I", ae 7etalkin6 a=o*t fift+ =*cks, co*ple h*nded dollas, co*ple tho*sand dollas:

"ndeas The loans an6e fom a=o*t t7o-h*nded dollas to a=o*t thee o fo* tho*sanddollas, and *s*all+ the la6e loans in$ol$e 6o*ps of =oo7es# The *ses of the loans an6e - atfist +o* ma+ =e a =it s*pised - people ma+ think these ae kind of in$estments loans, like,Hhelp (*ssein =*+ a ta2i so he can incease his ta2i =*sinessH o Hhelp .imm+ 6et a motoc+cle sohe can disti=*te cell phones to his c*stomes o 7hate$e# -B*t a lot of it is >*st plain-oldcons*me loans# If +o* think a=o*t it, cons*me loans ae >*st as impotant in this en$ionment=eca*se it ceates li*idit+# So sometimes it's Hhelp so and so =*+ a ne7 T,H and that's fine, too#

Stephanie Indi$id*al lendes o f*ndes can conti=*te as lo7 as, I think, OF incements onI":

"ndeas eah, I do all of m+ loans - I ha$e a limit of OF is the ma2im*m allotted to an+ onelende, and then it's =asicall+ co7d-so*ced, so +o* ha$e eno*6h people conti=*tin6 OF thatthe loans 6et f*nded pett+ *ickl+, in fact#

Stephanie I did some eseach on this eal *ick, and I seached fo Bitcoin micolendin6#Thee's act*all+ a 7e=site called BT.am#com that is pee-to-pee =itcoin mico lendin6# -"ndso =asicall+, +o* can =e a =oo7e o in$esto the =oo7es can define like =asicall+ thepaametes of the loan, like the inteest ate the+'e 7illin6 to pa+, thee's an optional soft ceditcheck, and a pee-to-pee ep*tation s+stem that 6oes alon6 7ith this# In$estos 6et some peks as7ell, so that mi6ht =e somethin6 that's comin6 o*t, =*t I ha$en't head a=o*t it, +et#

"ndeas I'$e *sed it# I *nfot*natel+ ha$e some =ad ne7s to offe thee# I ha$e *sed BT.amand I find that the concept and pi--

Stephanie /id +o* 6et +o* self in a .am: %la*6hs&

"ndeas I 6ot m+self in a =it of a >am# I think the concept is =illiant, I think the e2ec*tion is not*ite thee +et# So, m+ defa*lt ate on BT.am 7as MFJ#

Stepahine 9o7#

"ndeas That compaes to MJ on Lendin6 l*= and a=o*t J on I"# (ee's the po=lem it'san anon+mo*s c*enc+, thee'e a soft cedit check as +o* said, man+ of the acco*nts ae linkedonl+ =+ mea6e infomation, so ca$eat empto, fo s*e =*t at the same time, hee's thepo=lem# 9hen one of those loans 7ent defa*lt, thee 7as a=sol*tel+ nothin6 in tems ofeco*se# BT.am didn't e$en espond to emails# In fact, +o* can't p*t a ne6ati$e e$ie7 a6ainst


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one of the =oo7es *nless +o* ha$e s*fficient e$ie7s +o*self as a =oo7e# 9ell, I'm not a=oo7e, I 7as a lende# I had no e$ie7s a6ainst m+ acco*nt, so I co*ldn't essentiall+ p*t ane6ati$e e$ie7 a6ainst the people 7ho had defa*lted, and the+ 7ent o*t and took moe loans#So, 7hoops - =adl+-st*ct*ed#

Stephanie 9ell, thank +o* fo shain6 that e2peience, I think it's eall+ impotant fo people tokno7#

"ndeas I think I didn't ha$e the 6eat e2peience =eca*se it's $e+ m*ch a =eta attempt# -"nd I7ish them all the l*ck in the 7old if the+ can lean fom those e2peiences and impo$e them# I7as $e+ m*ch 7illin6 to lose that mone+# I po=a=l+ p*t in thee o fo* =itcoins, not a h*6eamo*nt, >*st to t+ it o*t# I'm not *pset a=o*t it# -"nd in fact, I hope the+'e a=le to impo$e these$ice =eca*se it's s*ch a =illiant se$ice that's a=sol*tel+ needed in Bitcoin#

Stephanie It's like 7hen +o* make a loan to +o* co*sin# /on't loan them an+thin6 that +o*7o*ldn't conside a 6ift#

"ndeas 9ell, I can al7a+s tack m+ co*sin do7n and kick him in the n*ts#

Stephanie That's t*e# o* can't do that 7ith a Bitcoin addess#

4)*sic Beak5

"dam .oinin6 me this monin6 is .oseph /a$id, E0 of "ite2, a anadian e2chan6e and+o*'e act*all+ the la6est pla+e in the anadian space these da+s, i6ht:

.oseph es, 7e ae the sin6le la6est in anada 7ith t7ent+-million dollas taded sinceinception# 0f co*se, a ma>oit+ of that has =een in o* second +ea, 7hen Bitcoin eall+ statedtakin6 off# B*t +es, 7e'e the onl+ ones in anada#

"dam 9e talk a lot a=o*t the e6*lato+ sit*ation in the @S, and I had a con$esation 7ith ackfom the Lamass* Bitcoin $endin6 machine# The+'e kind of in the same sit*ation 7hee theeae diffeent e6*lations in the @nited States than thee ae in anada# (e said it's act*all+ m*ch=ette in anada - the+'e takin6 a li6hte to*ch 7ith the e6*lato+ side# Paint *s a pict*e of7hat it's like opeatin6 an e2chan6e in anada these da+s#

.oseph I'm 6lad +o*'e 6ettin6 this diectl+ fom me, =eca*se it's a little =it inacc*ate 7henpeople make comments like that# 9hat eall+ hit *s in the media latel+ has =een the aticle thathas =een cic*latin6 the 7e=, 7hee the+ impl+ that anada is a safe ha$en fo Bitcoine2chan6es, and the anadian e6*lato+ a*thoities don't eall+ $ie7 it the same 7a+# "nd 7hat'seall+ act*all+ happenin6 is CINTG", the e6*lato+ =od+ in anada that monitos mone+tansfes of an+ kinds, and deals 7ith anti-mone+ la*ndein6 e6*lations, as 7ell as , no7o* *stome, e6*lations - the+ ha$e *led that Bitcoin is a =ate inst*ment and that Bitcoine2chan6es do not ha$e to =e e6isteed as a mone+ se$ice =*siness# (o7e$e, the =anks %7hichis 7hat eall+ mattes hee& do not take diection fom CINTG"# That's e2temel+ impotant to*ndestand# 9hen 7e'e t+in6 to opeate in anada, 7e ha$e to satisf+ the =ankin6


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e*iements, and as fa as the =anks ae concened, and the 7old is concened 7hen it comes toBitcoin, e$e+one is $e+ ne7 to it# The+ don't kno7 7hat it is, it's a =i6 h*6e 6e+ aea# It's a =i6lon6 sto+, thee's not simple e2planations to 6i$e them of e2actl+ 7hat a Bitcoin is# -So, 7hatthe+ see i6ht a7a+ 7hen +o* look at =itcoin and anadian dollas =ein6 deposited and7ithda7n, is the+ >*st see isk# The+ >*st see an *nkno7n, and =eca*se of that *nkno7n the+

sa+ no =efoe the+ sa+ +es# Basicall+, 7e ha$e to appoach the =ank in a poacti$e stance#9e ha$e to appoach the =ank and =*ild those elationships fom the =e6innin6, like 7e ha$e, =+sa+in6 thin6s like 7e ha$e a le6al team, 7e'e poacti$e 7ith e6*lato+ font# 9e act*all+ 7antthe anadian 6o$enment to eco6niDe *s and ta2 *s# Please ta2 *s! 3ST is a =i6 one foe2ample# In anada 7e ha$e a 3oods and Se$ices Ta2, and thee's these =i6 lon6 in$esti6ationsthat 6o on# /oes +o* =*siness need to =e e6isteed 7ith the 3ST: /o +o* need to pa+ ta2es tothe 6o$enment like a 3oods and Se$ices Ta2: Instead of 7aitin6 fo a *lin6, 7e collect it andemit it no7! -So it's thin6s like that 7e'e doin6 that's sho7in6 the =ank that 7e ae seio*sa=o*t =ein6 poacti$e# 9e'e sa+in6 no to c*stomes, =+ the 7a+, that 7ant to deposit la6eamo*nts of cash and =+pass all these mechanisms# This is 7hee it 6ets tick+# E$en tho*6hCINTG" sa+s no po=lem, +o* don't need to follo7 these *les, 7e ae follo7in6 them and

7e'e sa+in6 no to c*stomes and act*all+ t*nin6 c*stomes a7a+ that 7ant to =+pass the *lesand e6*lations# -So, e2plainin6 all this to the =anks 6i$es *s that ed6e and lets *s opeate# and ofco*se# the main eason 7e'e in opeation 7ith the =anks is =eca*se 7e act*all+ ha$e that mone+se$ice =*siness license tho*6h o* in$esto and =*siness patne, T"PE Intenational, so the+ae a e6isteed mone+ se$ice =*siness# The+ ae collectin6 o* pa+ments and emittin6 o*pa+ments to c*stomes and satisf+in6 all CINTG" and ")C e*iements#

"dam Essentiall+, +o*'e compl+in6 7ith e6*lations 7ith e6*lations +o* don't need to compl+to--

.oseph That's coect#

"dam -not to satisf+ the e6*latos, =*t to satisf+ the =anks, =eca*se othe7ise, the+ don't 7antto do =*siness 7ith +o*# Is that i6ht:

.oseph That's e2actl+ 7hat is happenin6 hee in anada#

"dam See, that's eall+ inteestin6, =eca*se that act*all+ stikes me as almost =ein6 a complete -like it's the same sit*ation in the @S, =eca*se so, I had a con$esation 7ith .aed enna ofTadehill, 7hich kind of takes it the othe 7a+# The+ sa+, 0ka+, =eca*se 7e'e so concened7ith compliance and 7e'e so concened the *les ae 6oin6 to chan6e f*the o*t, 7e'e t*nin6a7a+ c*stomes that ha$e less than ten-tho*sand dollas that the+ 7ant to spend on this# -So,+o*'e act*all+ takin6 the opposite appoach, and a6ain, thei concen isn't the =ank =*t theiconcen is the e6*lato+ st*ct*e, 7hee the+'e concened the e6*lations ae 6oin6 to chan6eand =ecome hashe in a late point, and in doin6 so, essentiall+ etoacti$el+ make thei actionsin the past not 7ok# @nless the+ do this poacti$e - ae +o* concened a=o*t the e6*lato+s+stem chan6in6, o is this >*st a=o*t the =anks fo +o*:

.oseph 9ell a6ain, =eca*se 7e'e poacti$e, 7e 7ant the e6*lato+ s+stem to chan6e# 9e 7antthe e6*lato+ =od+ to =e fomed in anada# 9e ha$e the am=itio*s 6oal of =ein6 pat of that


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0f co*se, +o* can't do that 7ith Bitcoin# -So, it has similaities to Bitcoin in that it can =etansmitted di6itall+ online, =*t I think that's 7hee the similaities end#

"dam Paint me a pict*e hee# 9hat's the 7innin6 scenaio, +o* kno7, if +o*'e s*ccessf*l 7ith+o* am=itio*s plans, 7hat does the landscape look like in a +ea o t7o +eas:

.oseph The 7innin6 scenaio is to =e officiall+ eco6niDed =+ the anadian 6o$enment, to ha$ea license to opeate, to e*ie a license to ha$e opeation, =eca*se i6ht no7 7e ha$e a lot of9ild 9est co7=o+-t+pe opeations that think the+ co*ld >*st stat a Bitcoin e2chan6e, open *pcopoate acco*nts, don't e$en 7o+ a=o*t mone+ se$ice =*siness licenses, and acceptpa+ments tho*6h all kinds of foms# That act*all+ make the ind*st+ and make the e2chan6espace in anada look =ad# Ideall+, I'd 7ant an opeatin6 en$ionment 7hee a license is e*iedto opeate, 6*idelines ha$e to =e follo7ed, 6o$enment e6*lations ae satisfied 7hen it comes tomone+-in and mone+-o*t, official eco6nition, and a license 7o*ld =e ideal opeatin6 stat*s#

"dam In this 7innin6 scenaio, 7hat this 6i$es +o* is the 7illin6ness and the t*st of not onl+

=anks, =*t of =i6 =*siness to paticipate in the s+stem and to accept this s+stem, =eca*se this t+peof scenaio, 7hee +o* ha$e a e6*lato+ st*ct*e and a licensin6 st*ct*e, lends le6itimac+ to itin the e+es of the 6o$enment# Is that i6ht:

.oseph It does, and it also makes o* =ankin6 elationships a lot easie# "nothe =i6 headlinene7s and =i6 de$elopment in anada hee has =een the =ank sh*tdo7n# E$e+one's foc*sin6 on=ank sh*tdo7ns# The =ankin6 net7ok in anada is $e+ diffeent then in the States# 9e ha$e si2ma>o, ma>o =anks, then 7e ha$e cedit *nions that ae pat of one ma>o net7ok# -B*t 7e don'tha$e these pi$ate =anks and these thid pat+ =anks like the @S does# So in anda 7hen 7estated +o* onl+ choices fo ma>o =anks ae T/, Scotia Bank, Bank of )onteal, IB, Go+al=ank# -So I >*st listed to +o* some of the ma>o =anks# 9e ha$e (SB, and IN3 and othe ones,=*t those fi$e ones ae pett+ m*ch the ma>o =anks# -So, the thin6 7ith those =anks 7ee, 7hen7e stated 7ith them 7e stated acceptin6 cash deposits at those =anks# Then those =anks statedsh*ttin6 *s do7n, one =+ one# E$e+ sin6le =ank I >*st listed to +o* had sh*t *s do7n fo cashdeposits# 0ka+:

"dam Gi6ht#

.oseph -"nd that's =eca*se, a6ain, of thei concen o$e ")L, not o$e fa*d, =eca*se +o* can'tcommit fa*d =+ depositin6 cash, and then, fi$e min*tes late, 6oin6 to the telle and sa+in6 Ididn't deposit that cash# -So thei concen 7as not the fa*d aspect, it 7as the ")L aspect andthe , no7 o* *stome, aspect# No7 in the @S, look at the landscape# It's m*ch m*chdiffeent +o* ha$e a compan+ like Bitinstant that allo7s cash deposits acoss the @S atsomethin6 like M diffeent =anks# -So that's $e+ s*pisin6 and shockin6 to me, that that kindof acti$it+ is allo7ed in the @S, =*t not allo7ed in anada# -"nd the eason it's not allo7ed inanada, a6ain =ack to m+ oi6inal point, is =anks think it's a =i6 6e+ aea, the+ don't ha$e aneas+ ans7e to cash, so the+ sh*t cash do7n# -So the point to m+ 7hole statement hee is that+o* don't ha$e to deal 7ith *s in cash, thee ae othe 7a+s to deal 7ith *s# The ma>o 7a+, i6htno7, is online =ill pa+ments, and diect deposit ,and diect 7ithda7 to +o* o7n anadian =ankacco*nt# No7 that is somethin6 the =ank does allo7 *nde a mone+ se$ice =*siness license, so


9/21

that is 7hat 7e'e doin6 no7# 9e ha$e m*ltiple 7a+s that 7e'e 6oin6 to incease that# 9e mi6hte$en act*all+ 6et =ack into cash, =*t the ke+ messa6e hee, of co*se, is +o* need to satisf+e6*lations on one hand =*t at the same time +o* ha$e to ed*cate the =anks and not p*sh it toofa# The+'e lettin6 *s do online =ill pa+ments and diect deposit, diect 7ithda7, =*t the+'estoppin6 *s and c*ttin6 *s off 7ith the cash#

"dam o* said ")L, anti-mone+ la*ndein6, i6ht:

.oseph eah#

"dam The *estion 7e keep comin6 =ack to 7ith the =anks is 7hethe o not it's i6noance, +o*kno7 - the+ >*st don't *ndestand this and so thee's no incenti$e fo them to take it, o if it'sfea: Beca*se a lot of people feel like the f*ndamental technolo6ies and some of the f*ndamentalthin6s that Bitcoin does and ena=les sot of o=soletes =ankin6# )o$in6 fo7ad, do +o* thinkthis is somethin6 that's 6oin6 to chan6e =ankin6 and thee's esistance to it fom that an6le, o do+o* think it's simpl+ a kno7led6e 6ap:

.oseph Let's fist *ndestand a6ain that the =anks - =ack to +o* *estion a=o*t fea - the =anksdon't kno7 7hat this is, so it's not kno7in6 pl*s a com=ination of fea# Banks ae $e+ isk-a$ese, i6ht: The+'e e2temel+ isk-a$ese, especiall+ hee in anada 7hee 7e ha$e the6o$enment - the+'e called co7n copoationsQ copoations *n =+ the 6o$enment of anada -the+'e *nde specific mandates to not take on an+ kinds of isk+ =*siness 7hatsoe$e# 9hen +o*7alk into a anadian =ank, thee's act*all+ a sheet the+ 6i$e +o* that sa+s if +o*'e this t+pe of=*siness, and the+ act*all+ list them, don't e$en =othe appl+in6 fo a =ank acco*nt# The+'eeall+ isk-a$ese# It's 6oin6 to take a lon6 time, I think, to ha$e the =anks in anada to comeao*nd and ed*cate on the pa+ment method of cash# B*t lets not fo6et hee 7hat the+'e doin6,the+'e alead+ allo7in6 c*ent state, and c*ent state is as lon6 as the mone+ flo7s tho*6h amone+ se$ice =*siness that is licensed, and as lon6 as pope d*e dili6ence is pefomed, and aslon6 as the elationship, the pesonal elationship the+ ha$e 7ith me and m+ le6al team and m+la7+es, and that is all solid and in tact, the+ allo7 *s to opeate# -So it's 6oin6 to take the6o$enment of anada, I think, to step in and sa+, +o* kno7, 7e'e 6oin6 to eco6niDe theBitcoin, and 7e'e 6oin6 to 6i$e them a license, and then I can take that license to the =ank, and7ith this license, I can add on cash, and I 7ant to add on this, and I 7ant to add on that# It's6oin6 to take the 6o$enment and the licensin6 a6encies to make the =anks chan6e thei minds, Ithink# The anadian Ge$en*e "6enc+, G", did act*all+ *le that an+ capital 6ains on Bitcointansactions m*st =e epoted, and that is a *lin6, and 7e'e follo7in6 that intenall+ as acompan+, and 7e'e ans7ein6 that to an+ c*stome that asks that *estion#

"dam It seems like the a=ilit+ to contol and e2et e6*lato+ foce o$e c+ptoc*enc+ is kindof diffic*lt =eca*se of >*st the 7a+ it's =*ilt# 0*tside of these limited e2chan6es - =eca*se +o*'eone of the ma>o e2chan6es, +o* ae the ma>o e2chan6e left in anada, and thee ae a fe7 othesmall ones, and +o* can co*nt them on t7o hands - I'm t+in6 to fi6*e o*t ho7 possi=le it is toe6*late Bitcoin o*tside of the e2chan6es, =eca*se the e2chan6es ae the choke points#

.oseph I think it's $e+ possi=le# I think it's $e+ possi=le =eca*se this act*all+ elates pefectl+to the comments I 7ant to make hee# This is an e2temel+ impotant point in an+ co*nt+ and


10/21

that's 7h+ I'm $e+ inteested in 7hat happened in Ital+# I eall+ sho*ld ead *p =ack on that, =*tfom 7hat I emem=e on 7hat happened, eithe Ital+ o Cance, =*t I think it 7as Ital+, tied tosh*t do7n Bitcoin e2chan6es $e+ eal+ in Bitcoin 7old, 7ee +o* a7ae of this:

"dam I 7as not, no#

.oseph This is >*st fom m+ memo+ lon6 a6o =ack in +ea one, act*all+ po=a=l+ in monthse$en of the Bitcoin lim=, 7hen Bitcoin passed ao*nd the t7ent+ =*cks aea# -So the Italian6o$enment tied to sh*t Bitcoin e2chan6es do7n# The+ s*cceeded# " co*ple months 7ent =+,somethin6 6ot appealed, the e2chan6e o7nes 7ent to the s*peme co*t, and appealed thedecision, and then that 6ot o$et*ned, and the+ 7ee allo7ed to opeate# That 7as a lon6 timea6o, tho*6h, so thin6s ma+ ha$e chan6ed no7# -B*t that =in6s me to m+ point# The+ co*ld $e+simpl+ and $e+ easil+ decide that the+ >*st 7ant to sh*t the e2chan6es do7n# The+ can simpl+phone *p the =anks and sa+ 7hoe$e is doin6 the =itcoin e2chan6e, sh*t them do7n# It'sille6al, 7e'e 6oin6 to >*st make it ille6al - the 6o$enment can do that# That's one a$en*e the6o$enment can 6o# The second, of co*se, is e$e+thin6 7e ha$e >*st =een disc*ssin6 -

le6aliDin6 it, 6ettin6 e6*lated, eco6niDin6 it, ta2in6 it# That's a$en*e t7o# -B*t if 7e >*st talka=o*t a$en*e one hee fo a second### The 6o$enment can >*st step in and p*ll the pl*6# If thatdoes happen, anadians 7o*ld ha$e no choice then to 6o offshoe and 6o deal 7ith diffeentco*nties, take thei mone+ offshoe someho7# 9hat 7o*ld o* action plan =e: That's somethin6I st*66le 7ith e$e+ da+# 9o*ld 7e take o* se$es offshoe as 7ell, and contin*e 7ith o*c*stome =ase and t+ to se$ice anadians: 9ell, of co*se, 7e can't do that# The 6o$enmentmakes it ille6al and the 6o$enment =e6ins seiDin6 ph+sical locations# That's eall+ ho7 the6o$enment co*ld step in hee, and that eall+ is a concen fo me in the Bitcoin space - not >*stfo anada, =*t fo the 7old# o* ha$e @S politicians and senatos that ae a6ainst it and ae onecod p*=licl+ sa+in6 this is not 6ood# Bitcoin has an ima6e po=lem# -"nd that's anothe thin6 I7ant to addess, is Bitcoin's ima6e po=lem, and ho7 +o* can =*+ d*6s, and 6*ns, and se2, andall this st*ff 7ith Bitcoins# o* can do the same thin6 7ith cash, =+ the 7a+# That's 7hat peoplelea$e o*t, is that >*st like Bitcoin has an ima6e po=lem, it has the e2act same iss*e that cashdoes# That's 7h+, to a lot of people, I e2plain that =itcoins ae like di6ital cash# That's a $e+ eas+e2planation of 7hat a Bitcoin is - it's like di6ital cash# -So that's sot of m+ on6oin6 concen - the6o$enment co*ld >*st sa+ 7e'e sh*ttin6 +o* do7n# That's 7hee it co*ld 6o#

"dam o*'e act*all+ kind of in the mi2 7ith this, so 7hat do +o* think the chances ae, elati$e- I mean, o=$io*sl+, this is totall+ off the c*ff - 7hat do +o* think the chances ae of a$en*e " $sa$en*e B:

.oseph Gi6ht no7, toda+, =eca*se 7e'e so eal+ - =eca*se 7e'e so eal+ in Bitcoin, thee$ol*tion is >*st =e6innin6 hee# 9e'e $e+ eal+ in it# The chance of a$en*e ", the 6o$enmentsh*ttin6 *s do7n, I think is $e+, $e+ lo7# "6ain, $e+ fe7 people e$en kno7 7e'e o*t thee#-B*t as thin6s po6ess hee in the ne2t +ea, as 7e 6et the mechant si6n *ps happenin6 and 7estat ed*catin6 =*siness o7nes a=o*t ho7 Bitcoin is eall+ a 7a+-=ette pa+ment method thatthe+'$e eall+ e$e seen, that's 7hen the 6o$enment mi6ht take notice# -B*t, if +o* 7ant m+pesonal pediction, I eall+ hesitate to 6i$e pedictions, especiall+ =ein6 E0 and e$e+one=ein6 a=le to 6o =ack in time, and listenin6 to m+ comments, and sa+in6 he's makin6 all thesepedictions, I'm al7a+s ca*tioned =+ m+ ad$ises not to make pedictions, =*t I ma+ make an


11/21

e2ception and make a pediction in this case# 9hat do +o* think:

"dam I think that if +o* 7ant to, that's fine# The ealit+ of this is, this is s*ch a complicatedtopic# I think that pedictions ae >*st 6*esses# So, +o* kno7, that's ho7 7e teat em# 9e makepedictions all the time#

.oseph E2actl+# The+'e >*st h*nches and 6*esses# I'll 6i$e +o* mine if +o* 7ant it# -So, I think7e ae 6oin6 to 6o to a$en*e B# I think the 6o$enments ae 6oin6 to eco6niDe that 7e need to=e ta2ed, 7e need to =e e6*lated - that if the+ t+ to make it ille6al, that it'll >*st ceate a lotmoe po=lems then it'll sol$e# If one 7old 6o$enment steps do7n, and p*ts the 6a$el do7n,and sa+s Bitcoins ae ille6al in this co*nt+, othe co*nties ma+ eithe follo7 s*it - the+ ma+ha$e thei o7n *les# -So then, of co*se, citiDens 7ill flock to the othe co*nt+# -B*t, lon6-sto+-shot, m+ h*nch and m+ pesonal 6*ess is that 6o$enments aen't 6oin6 to make it ille6al,=*t ae simpl+ 6oin6 to ta2 it hea$il+ and t+ to e6*late it hea$il+#

"dam I'm on-ecod fo sa+in6 that, =+ the end of the +ea, 7e'e 6oin6 to see con6essional

heain6s on this 7ithin the @nited States, talkin6 a=o*t specificall+ Bitcoin and c+ptoc*enciesas 7ell# /o +o* think thee's a timeline like that fo anada, o do +o* think that it's >*st*npedicta=le at this point:

.oseph No7hee nea it# I 7o*ldn't e$en $ent*e to sa+ 7ithin the +ea# "6ain, =eca*se it's sone7, =eca*se the+ hadl+ kno7 a=o*t it, I don't think it's e$en a topic of con$esation# Theemi6ht =e a co*ple of )L"'s in anada, mem=es of le6islati$e assem=l+, that e$en kno7 thatBitcoin e2ists, and 7e act*all+ contacted them# -"nd thei esponse has =een, 7o7, this so*ndslike a ne7 inteestin6 thin6, and then the+ >*st take 7eeks to 6et thei head 7apped ao*nd itand don't et*n o* phone calls# It's so ne7 hee I don't think it'll happen this +ea#

"dam .oseph /a$id, "ete2# Thank +o* $e+ m*ch#

.oseph Thank +o* fo the inte$ie7#

"dam Let's Talk Bitcoin is head each 7eek =+ tho*sands of people 7ho ae paticipatin6 in thene7 di6ital econom+# 0* listene =ase of Bitcoin o7nes, mines, in$estos, technolo6ists andmechants is 6o7in6 fast# 9e offe a limited n*m=e of shot ad$etisin6 slots in each sho7 tokeep o* listenes en6a6ed and po$ide a ma2im*m impact fo o* sponsos# If +o*'d like to talkto *s a=o*t Let's Talk Bitcoin, send *s an email at sponsosAletstalk=itcoin#com

4"/5 Stephanie If I sho7ed +o* a 7e=site 7hee +o* co*ld easil+ p*chase electonics fom the7olds la6est disti=*to 7ith =itcoins at J mak*p, 7o*ld +o* think it 7as too 6ood to =et*e: 3ood ne7s, it's eal and it's at =itcoinstoe#com choose fom half a million items, sa$emone+ o$e "maDon and Ne7e66, and con$et +o* =itcoins to eal 7old items# o* can e$en=*+ 7ith pi$ac+# "ll the+ need is a shippin6 addess# B*t, don't take m+ 7od fo it, see fo+o*self at =itcoinstoe#com

4)*sic Cades5


12/21

"dam Lets 6et =ack to the aticle, /espite ha$in6 a o=*st mo=ile pa+ment net7ok 7ith )-PES", en+a is still s*=>ect to a sle7 of economic iss*es s*ch as co*ption, inflation, andemittance costs# en+a faces hi6h co*ption costin6 moe than O1 =illion dollas pe +ea%appo2imatel+ J of 3/P&, 7ith indi$id*al en+ans pa+in6 an estimated 1< =i=es pe month#)-PES" has not a$oided this tend, 7ith 11R casesof fa*d in 11 alone, es*ltin6 in millions

lost# " potocol like Bitcoin, 7hich emo$es $*lnea=ilit+ to h*man co*ption, 7o*ld likel+ =e a7elcome entant into the 7old of mo=ile pa+ments# )-PES" also comes at a cost to it;s *ses#9ith Safaicom;s fees an6in6 fom 1-1Jfo mone+ tansfes, *ses ae losin6 $al*e to acentaliDed entit+ 7ith e$e+ tansaction# 0n top of that, the en+an 6o$enment ecentl+ =e6anta2in6 )-PES"tansfes, 7hich 7ill f*the incease costs =+ 1J# "nothe s*=stantial =enefitthat Bitcoin has o$e )-PES" is 7ith e6ads to inflation# 0nl+ in the last +ea, en+a hassome7hat stemmed inflation afte eachin6 peak ates a=o$e J in 8# Tho*6h concenslin6e 7ith e6ads to =itcoin;s $olatilit+ compaed to de$eloped maket c*encies, the elati$econsistenc+ of =itcoin co*ld =e a 7elcomed chan6e in less sta=le e6ions#

"ndeas I think thee's a dan6eo*s tendenc+ fo 6eeks to t+ to ass*me technolo6ical sol*tions

to social po=lems# o*ption is not a technolo6+ iss*e, it's an instit*tional and political iss*e,and it occ*s =eca*se of 7idespead po=lems in a societ+ and the lack of instit*tional contol tosol$e those po=lems, I'$e li$ed in co*pt societies, I kno7 7hat it's like to pa+ =i=es# -"nd, thepo=lem is that 7hen it =ecomes so entenched into the c*lt*e it's $e+ diffic*lt to esist e$en if+o* a=sol*tel+ 7ant to# o* can't 6et +o* di$e's license e$en if +o* can pass the test and candi$e 7ell, =eca*se the =i=e is e*ied# So, +o* kno7, +o* ha$e to# o* can't 6et a docto'sappointment *nless +o* =i=e the docto# o* can't 6et +o* pape7ok done *nless +o* =i=e the=*ea*cat# So, essentiall+ +o* s*cc*m= to this pess*e# Technolo6+ 7on't chan6e that# o*'ll>*st =i=e people 7ith Bitcoin and in fact, if an+thin6 it mi6ht make it easie =eca*se fictionlesscommece means fictionless =i=es i6ht: I'm not necessail+ con$inced that technolo6+ is thesol*tion hee, =*t at the same time, I think that Bitcoin 7o*ld =e a fantastic fit in man+de$elopin6 co*nties# .*st like )-PES" it offes immediate peson to peson tansactions 7ith$e+ little technolo6+ pehaps, especiall+ if 7e can adapt it to *sin6 S)S, the standad sho*ld =e,can it 7ok on a Nokia 1, a phone fom 1 +eas a6o, =eca*se that's eall+ the technolo6+=ase in these co*nties#

"dam 1< =i=es pe month, tho*6h, pe peson - I mean like, is that small: I ha$e no concept ofthis# I'm alifonia-=on and aised# This is not somethin6 I ha$e an+ e2peience 7ith# That's asmall amo*nt fo a co*nt+ like this:

"ndeas 0h +eah, a=sol*tel+# 1< =i=es a month is nothin6, if +o* 6o to India it's po=a=l+ 1ect to m+ *les, and +o* ha$e to 6i$e me a =i=e as 7ell#

"ndeas -So, I think the onl+ compaison +o* ha$e 7ith a tip - of co*se, coecion is an iss*e#B*t the compaison +o* ha$e 7ith a tip is that it's em=edded in the c*lt*e and all economictansactions# -"nd +o* ha$e to ealiDe that these =i=es ae not >*st paid to the police, o to the=*ea*cat that's appo$in6 +o* application, the+'e paid to e$e+ peson in$ol$ed in e$e+tansaction +o* make# o* 6et +o* efi6eato epai peson to come in, +o* meat s*pplie,+o* ophthalmolo6ist, +o* kid's teache, +o* kid's socce coach - 7hate$e it mi6ht =e - andthe+ all take =i=es, and in fact, =i=es ae ho7 +o* do it# It's almost ine$ita=le =eca*se peopleaen't 6ettin6 paid an+ othe 7a+# The =ottom line hee is that 47allet:5 is completel+ coosi$e=+ pe$etin6 all of the economic incenti$es and feed=ack loops fo pice, and it's also soem=edded in c*lt*e +o* can't eall+ sol$e it 7ith technolo6+# People ha$e tied# etainl+,thee's entie mo$ements in co*nties like India to fi6ht co*ption, and it's so diffic*lt, that e$enthe people 7ho 7ant to fi6ht it and ae $e+ m*ch a6ainst it and ae committed to not pa+in6=i=es - 7eas +o* do7n, e$ent*all+# o* kno7, +o* can't >*st f*nction in that societ+ 7itho*ts*cc*m=in6#

"dam -So anothe thin6 is, of co*se, the fees# Thee's the 1 to 1J fee that's applied =+Safaicom 7hich o7ns the technolo6+ and that ena=led )-PES", and that ena=led )-PES", and=asicall+ is )-PES"# In addition to that, thee's a 1J ta2 that's =een p*t on these tansactions=+ the en+an 6o$enment, and also the en+an 6o$enment o*tinel+ inflates thei c*enc+=eca*se, if I'm coect hee, )-PES" is not a c*enc+ onto itself, =*t it's athe a tansmissionmechanism and a kind of 7allet fo the local c*enc+# Is that i6ht:

"ndeas eah, that's m+ *ndestandin6#

Stephanie If I *ndestand 7hee +o*'e 6oin6 7ith that, then, Bitcoin 7o*ld at least po$ide atechnolo6ical sol*tion to the iss*e of inflation#


14/21

"dam 9ell, +eah, thee's that pat of it, =*t act*all+ I'm lookin6 at it fom a diffeentpespecti$e# 0n this sho7, 7e spend a lot of time foc*sin6 on 7hat the @S 6o$enment is 6oin6to do a=o*t Bitcoin, =*t lookin6 at a sit*ation like en+a, doesn't it seem like the en+an6o$enment is 6oin6 to eall+, eall+, eall+, hate Bitcoin: Beca*se it po$ides competition, it's

$e+ diffic*lt fo them to ta2 - a6ain it 6oes =ack to the competition thin6, =eca*se =+ offein6 analtenati$e to a c*enc+ that's inflatin6 at a s*=stantial ate, it means people ae moe likel+ tos7itch to a c*enc+ that's losin6 $al*e to the c*enc+ that's 6ainin6 $al*e and is cheape to *seo$eall# /on't +o* think thee'd =e some a66ession fom the en+an 6o$enment if a chan6e likethis 7ee made:

"ndeas "=sol*tel+, =*t I don't think that chan6e 7o*ld =e $e+ eas+# Thee's anothe iss*e7e'$e kind of skited, 7hich is )-PES" o s+stems like that co*ld =e implemented tho*6ho*ts*=-sahaan "fica, tho*6ho*t So*thEast "sia# Thee's cetainl+ a need fo them# So 7h+ ha$en'tthe+ =een: That's an inteestin6 *estion# 9h+ isn't )-PES" =ein6 *sed moe =oadl+: 9h+aen't simila s+stems =ein6 *sed moe =oadl+ tho*6ho*t S*=-Sahaan "fica and So*thEast

"sia: -"nd the ans7e, I think, is athe inst*cti$e hee - it has to do 7ith t7o factos# 0ne isthat Safaicom had a $e+ massi$e deplo+ed =ase of *ses and theefoe 7as a=le to intod*cethis sim*ltaneo*sl+ to a $ol*me of *ses that 7ee s*fficient to s*stain a paallel econom+ fomthe 6et-6o# -So +o* ha$e mass adoption at a le$el that ceates, sim*ltaneo*sl+, eno*6h =*+es andselles to la*nch a maket# It's $e+ diffic*lt to do that chicken-and-e66 sol*tion, 7hee +o*sim*ltaneo*sl+ ha$e eno*6h =*+es and selles 7ithin the localit+ to make the c*enc+ $ia=le#-"nd that's one of the easons 7h+ )-PES" hasn't taken off in othe co*nties, o as similas+stems ha$en't taken off despite effots to do so# -"nd it's also one of the easons 7h+ I thinkBitcoin adoption is not that eas+ o 7ill happen that fast in some of these co*nties# Thee's a lotof pe-e*isites that 6o into Bitcoin adoption =e+ond >*st he+, it's *sef*l and I can p*t it on m+cell phone#

"dam It's almost like +o* need mass a7aeness =efoe +o* can e$en appoach the *estion ofadoption, =eca*se if people don't kno7 a=o*t it, then it almost doesn't matte fo the initial *ses=eca*se it's not *sef*l to them, >*st like a lan6*a6e isn't *sef*l if +o*'e the onl+ one that speaksit in +o* co*nt+#

"ndeas The net7ok effect c*ts =oth 7a+s, 7hich is if the net7ok is too small, thee's no $al*ethat's added 7hen +o* >oin it, and especiall+ in the case of c*enc+# The $al*e of the c*enc+ isonl+ =ased on the e2pectation that someone else 7ill =e 7illin6 to accept it in a tansaction# Thate*ies t7o thin6s# It eithe e*ies a mass adoption, 7hee +o*'e almost 6*aanteed that othepaties 7ill accept +o* tansaction, o it e*ies +o* to adopt the c*enc+ fo easons othethan tansactin6# -"nd so 7ith Bitcoin, 7hat 7e sa7 is the fist thee +eas the people 7hoadopted Bitcoin 7ee not eall+ into it fo tansactions pe se, o fo the $al*e pe se, =*t moefo the ideolo6ical easons# -"nd that ceated s*fficient $ol*me and s*fficient maket 6o7th sothen it co*ld stat attactin6 people 7ho ae inteested in *sin6 it as a c*enc+# It's essentiall+ anideolo6ical political mo$ement that t*ned into a c*enc+# an't eall+ =ootstap it like that in ade$elopin6 co*nt+, =eca*se thee ae m*ch moe pa6matic consideations#

4)*sic Pla+s5 4R5


15/21

Stanisla$ 3ood aftenoon# Stanisla$ Shal*no$ - +o* can call me Stas# I'm the T0 of 0pen3aden# " fe7 of the thin6s I'$e done in the past 7as tanspot potocol 7ok and S 7ok atIntenet, too, and the desi6n of a ne7 con6estion contol in Bittoent, 7hich c*entl+ isesponsi=le fo some7hee a=o*t 1 in < =+tes on the Intenet, a=o*t 1FJ ma+=e#

"dam So +o*'e =ack6o*nd is eall+ all a=o*t decentaliDed s+stems then:

Stanisla$ 9ell, +o* co*ld sa+ that, +es#

"dam So ho7 did +o* find +o*self 6oin6 into mesh net7oks ceated m+ cell phones:

Stanisla$ I 7as inteested in ceatin6 mesh net7oks =efoe thee 7as the tem mesh net7ok# I7as inteested in makin6 =ette 4o*tin6:5, =*t thee 7as not eall+ +et a technolo6+ that 7o*ldallo7 to connect de$ices in an ad-hoc manne in sa+, to ina*di=le# 9hat +o* need ae de$icesae heteo6eneo*s 7ieless capa=ilities, and smat phones ae the platfom that allo7s to do that#

"dam 9hen +o* sa+ heteo6eneo*s 7ieless capa=ilit+, can +o* e2plain that:

Stanisla$ 0n a phone, +o* ha$e m*ltiple 7ieless technolo6ies# o* ha$e +o* 3, o R3, +o*ha$e 9iCi, +o* ha$e ma+=e 9iCi /iect, Bl*etooth, +o* ha$e ma+=e NC# and all of thesethin6s can =e *sed to inteconnect de$ices, and +o* can =e *sin6, sim*ltaneo*sl+, m*ltiplenet7oks at the same time# -"nd that's 7hat allo7s to =*ild this additional capa=ilit+, that thephone ma+ =e on R3, =*t if thee is anothe phone nea=+ that's also on it's o7n caie'snet7ok, +o* mi6ht connect them locall+ *sin6 9iCi diect and ceate ne7 capacit+# These aeo* phones, and I am pehaps *sin6 m+ phone less than 1J of the time fo data tansmission#Same fo +o*# -So 7hen I'm 6ettin6 somethin6 fom the Intenet, I can 6et it faste if I can 6et itfom =oth e2its and moe elia=l+#

"dam o*'e sa+in6 that e$en tho*6h +o* mi6ht =e connected in one capacit+ 7ith one of thosetechnolo6ies, since each phone has m*ltiple comm*nication means and has the a=ilit+ to *seeach one independentl+, +o* can ha$e inteconnections that ae completel+ sepaate fom the*psteam o do7nsteam to the Intenet in this case# Is that i6ht:

Stanisla$ E2actl+, so 7hat 0pen 3aden does - 7e ceate all sots of 7ieless connections - 7es*ppot Bl*etooth, 9iCi diect - 7e'e patic*lal+ concened 7ith the specific *ndel+in6technolo6ies# -So, 7e'e ceatin6 those connections 7ith those de$ices - 7hene$e the+'e nea=+,7ielessl+, seamlessl+ fo the *se# The *se doesn't need to 7o+ a=o*t esta=lishin6 them# The*se doesn't need to open the app# 0nce connected, de$ices 7ill access the Intenet collecti$el+*sin6 7hate$e Intenet capacit+ the+ to6ethe ha$e# This pod*ces =ette statistical m*ltiple2#This 6i$es e$e+one faste speed, =ette co$ea6e#

"dam That's eall+ inteestin6# (a$e +o* to*ched the o*te space at all, o is it entiel+ a=o*tphones:

Stanisla$ 9e le$ea6e e2istin6 infast*ct*e and thin6s that alead+ e2ist and can =e *sed# 9e


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addess the mass maket, so 7e 7ant the kind of adoption that s*ccessf*l pee-to-peeapplications ha$e# Not >*st addessin6 small a*diences of people 7ho ae 7illin6 to flash a ne7G0) to thei Links+s, =*t people 7ho can install a mo=ile app, and thee ae a lot moe people7ho can install a mo=ile app# 9e c*entl+ s*ppot "ndoid, 9indo7s, and )ac# The comp*tesalso ha$e a=ilit+ to *se m*ltiple net7oks at once these da+s# 9e ha$e d*al 9iCi adios in man+

comp*tes and additionall+, 7e ha$e Bl*etooth#

"dam Lets take a step =ack fo a second# 0pen 3aden - ho7 did this come a=o*t: o* said+o*'$e =een inteested in mesh net7oks =efoe the+ 7ee called mesh net7oks, and =efoe thetechnolo6+ 7as thee to do it# 9hat occ*ed to insi6ht the ceation of 0pen 3aden:

Stanisla$ )icha and I 6ot to6ethe a=o*t 1, and the ena=lin6 technolo6+ fo 0pen 3aden isthe smat phone, the comp*te inside e$e+=od+'s pocket 7ith m*ltiple adio intefaces thatmakes 0pen 3aden possi=le and inteestin6# Befoe the smatphone, the densit+ of mo=ilelaptops, fo e2ample, 7as not s*fficient to make a diffeence fo Intenet access, fo othede$ices# -"nd 7hen +o* ae at home o at the office and +o*'e laptop is on local 9iCi, the need

fo Intenet access is less ac*te# The need fo Intenet access is the most ac*te the 7ose +o*Intenet connection is# -"nd 6eneall+, mo=ile sit*ations, ta$el, =ein6 on mo=ile net7oks is7hee +o* need fo =ette Intenet access, faste and in moe places is the most $isi=le#

"dam -So +o* stated in 1# 9hat has the >o*ne+ =een, ae +o* o*t in the 7ild 7ith this i6htno7:

Stanisla$ 9hen 7e stated, 7e 7anted to fist test the 7ates as a minimal $ia=le pod*ct# 9hat7e did 7as eleased an app that simpl+ po$ided tethein6 - >*st let +o* t*n +o* phone into amo=ile hotspot# 9e 7anted to see 7hat 7o*ld =e the *ptake# 9e didn't do an+thin6 to pomotethis app, and it e*ied +o* to oot +o* andoid phone so it 7as addessed to a small a*dienceof people capa=le of ootin6 thei phone, and thee 7as no maketin6# B+ the time 7e had thehalf-million, 7e kne7 that 7e 7ee onto somethin6# 9e tho*6ht that people 7ant this, so 7estated f*ll-time 7ok 7ith 3e6 (aDel and )icha Benoliel on makin6 this c*ent app# The eal0pen 3aden mesh net7okin app# 9e la*nched at Tech*nch /is*pt in Ne7 ok in 1#4In5 the fist thee 7eeks, 7e 6ot a h*nded-tho*sand do7nloads# B+ no7, the t7o apps to6etheha$e moe than t7o and a half million do7nloads# 9e like to elease o* soft7ae eal+ so that7e can see ho7 it =eha$es in the 7ild# In 6eneal, de$elopment fo andoid is made diffic*lt =+the di$esit+ of the andoid ecos+stem# 0* soft7ae *ns on de$ices that 7e'$e ne$e seen andne$e 7ill, so it's impotant to ha$e a *se =ase to e$en de$elop this soft7ae#

"dam o*'$e 6ot t7o and a half million do7nloads, 7hat does the *se look like, I mean, is this7okin6, is this =ein6 *sed, ae thee an+ 6eo6aphies specificall+ 7hee it's *sed o is it moe oflike an ad-hoc as needed people 7ill 6et it, and then the+'ll tho7 *p the tempoa+ net 7hee$ethe+ ae# 0 is it somethin6 people 7alk ao*nd 7ith on thei phones and ae >*st *sin6 in da+ toda+ e$ents: "e 7e to that point:

Stanisla$ 4The5 patic*la sit*ation 7hee 0pen 3aden toda+ makes po=a=l+ the =i66estdiffeence is ta=lets - patic*lal+ M' ta=lets# People on Ne2*s M o a Sams*n6 3ala2+ Ta= 7itho*ta 3 connection, and a hi6hl+ pota=le ta=let ae in a stan6e position# o* ha$e this de$ice, it


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can 6o in +o* coat pocket, it can 6o if +o* ca+ a p*se, it's $e+ pota=le, =*t it's pacticall+*seless 7itho*t an Intenet connection, and it doesn't ha$e a 3 modem# -"nd e$en if it did, it7o*ld cost O1 po=a=l+ e2ta and +o*'d need to pa+ O pe month to =e a=le to *se theIntenet fom it# 9hat 0pen 3aden does is =asicall+ 6i$e +o* the =enefit of ha$in6 a 3connection on +o* ta=let fo fee# Beca*se if +o* ha$e an "ndoid ta=let, chances ae +o* also

ha$e an andoid phone, and +o* po=a=l+ ca+ it 7ith +o* at least as m*ch as +o* ca+ +o*ta=let#

"dam The andoid phone po$ides the connecti$it+ to the ta=let, and +o* onl+ need to ca+ oneIntenet-connected de$ice to =enefit fom =oth#

Stanisla$ oect#

"dam So, e$en tho*6h this is a mesh net7ok =*ildin6 tool, 7hat it's =ein6 *sed fo no7 is to=*ild little pesonal - it's not e$en eall+ mesh - it's moe like a 7ieless tethe o somethin6#

Stanisla$ The e2peience is fa =ette than *sin6 7ieless tethein6# The e2peience of *sin67ieless tethein6 e*ies +o* to take o*t +o* phone, 6o into settin6s, tap moe, 6o intotethein6, t*n it on, 6o to +o* ta=let no7, connect to the i6ht net7ok, and 7hen +o*'e done,emem=e to t*n off the tethein6 hotspot on +o* phone othe7ise +o* =atte+ 7ill =e dead int7o ho*s# 9ith 0pen 3aden, +o* *se the Intenet like +o* *s*all+ do# o* take +o* ta=let and+o* *se it fo 7hate$e it 7as +o* 7ee 6oin6 to *se it, instead of fiddlin6 7ith settin6s on +o*phone#

"dam /oes it ha$e an impact on =atte+ life in the same 7a+ a 7ieless tethe 7o*ld:

Stanisla$ Lo7e than 7ieless tethein6#

"dam The name 0pen 3aden - +o* 6*+s ae not an open so*ce soft7ae po>ect ae +o*:

Stanisla$ 0* main app is c*entl+ not open so*ce, =*t I see 7hee +o* --

"dam 9ell, +eah it 7as conf*sin6 to me 7hen I fist stated talkin6 to Pai6e a=o*t 0pen3aden, I ass*med it 7as open so*ce# /o +o* ha$e intentions to make it open so*ce, o is thisaimed to =e a popieta+ platfom:

Stanisla$ 3e6 and I ha$e ceated open so*ce soft7ae c*entl+ *sed =+ a *ate-=illionpeople in the fom of the BitToent tanspot li=a+# 9e'e inteested in makin6 open so*cesoft7ae 7idel+ a$aila=le and s*ccessf*l# 9e'$e also ceated open potocols, se$eal =et7een thet7o of *s, =+ no7 standadiDed# The application 0pen 3aden is not open so*ce# It's open in thesense of an+one =ein6 a=le to >oin the net7ok - it's a 6aden an+=od+ can 7alk into# (opef*ll+,open 7indo7s don't conf*se people similal+, and e2pect them to =e a=le to 6et the so*ce fo the7indo7# -B*t 7e ae inteested in open so*ce in 6eneal and ho7 7e can make 0pen 3adenmoe s*ccessf*l *sin6 it# 9e'e not +et pepaed to disc*ss an+thin6 a=o*t o* f*t*e mo$es 7ithopen so*ce and 0pen 3aden#


18/21

"dam Cai eno*6h# 0n the sho7, 7e ha$e a foc*s on Bitcoin and +ptoc*encies - not >*stBitcoin =*t it's c+ptoc*encies and kind of the thin6s the+ ena=le - and one of the thin6s 7e'$e=een talkin6 a=o*t on and off 7ith e6ads to mesh net7oks o To nodes, o - thee's a $aiet+of sit*ations - in +o* ta=let phone scenaio, that's one peson 7ho's 6ainin6 =enefit fom*tiliDin6 one se$ice, that 7o*ld nomall+ =e a$aila=le on one de$ice, on t7o de$ices# I see the

$al*e of it thee, =*t 7ith c+ptoc*encies and a*tomated contacts, =asicall+, +o* can set it *pso that indi$id*al nodes that po$ide an Intenet connection, o se$ice 7ithin one of these meshnet7oks ae compensated on a, as *sed =asis# -"nd I'm 7ondein6 ha$e +o* looked intoc+ptoc*encies and Bitcoin into doin6 thin6s like this, o is it o*tside the scope of +o* po>ect:

Stanisla$ 9e ae inteested in e2ploin6 7a+s to limit fee-idin6 on the s+stem# The s+stem is atits most efficient 7hen it doesn't den+ people its se$ice# It ceates the ma2im*m amo*nt of$al*e - that's 6eneall+ 6ood, that's 6eneall+ ho7 thin6s sho*ld =e# If +o* look at the desi6n ofBittoent, patl+ it 7as s*ccessf*l =eca*se +o* can do7nload e$en =efoe +o*'$e *ploaded# Ifthee 7ee moe stops to *sin6 the s+stem then fe7e people 7o*ld =enefit fom it# The po=lem,to the e2tent that it e2ists hee, is pe$entin6 people 7ho pepet*all+ fee-ide fom doin6 so, and

fo no7 ,the main mechanism =+ ho7 that is accomplished is =+ need of ph+sical po2imit+# If+o* install 0pen 3aden to =e a=le to 6et connecti$it+ fom othes, +o* also conti=*te =+ nat*eof the soft7ae if +o*'e Intenet connected at all, so thee's a contact of m*t*al help =+ $it*e ofinstallin6 0pen 3aden# 9e'$e also tho*6ht a=o*t makin6 cedit ecos+stem# It mi6ht con$et toeal c*enc+ o mi6ht not, and 7hethe eal c*enc+ is a c+ptoc*enc+ o anothe fom ofdisti=*ti$e c*enc+ o dollas is not eall+ the inteestin6 pat# on$esion to eal c*enc+ is,ho7e$e, diffeent fom simpl+ 4=+te acco*ntin6:5, and 4=+te acco*ntin6:5 can 7ell =e s*fficient,so 7e'e not +et s*e ho7 7e'd appoach this po=lem in the f*t*e# -B*t fo no7, in pactice, 7edon't ha$e that po=lem# If +o* install 0pen 3aden toda+, no=od+ 7ill follo7 +o* ao*nd t+in6to *se +o* Intenet constantl+#

"dam So if someone 7ants to 6et in$ol$ed 7ith 0pen 3aden o do7nload the application, do+o* ha$e a 7e=site:

Stanisla$ es, of co*se# 9e ae a$aila=le fom http??0pen 3aden#com?and the app is alsoa$aila=le in the 3oo6le Pla+ stoe 7hee it's called 0pen 3aden, >*st like +o*'d e2pect#

"dam /o +o* ha$e an+ intentions to ollin6 o*t to i0S de$ices o 7ill this =e a stictl+-"ndoidpo>ect

Stanisla$ 9e don't ha$e c*ent plans that 7e can disclose a=o*t i0S# 0=$io*sl+, 7e'einteested in all platfoms, not >*st andoid, and 7e alead+ ha$e s*ppot fo t7o desktopopeatin6 s+stems, =*t 7e ha$e to foc*s o* effots some7hee, and that's 7hee 7e'$e chosen tofoc*s fo no7#

"dam Stas, thank +o* fo +o* time#

Stanisla$ Thank +o*#

4)*sic *es5
http://opengarden.com/http://opengarden.com/


19/21

"/ "dam E$e+one kno7s that offline stoa6e is the onl+ safe 7a+ to stoe +o* Bitcoins# No7thee's an eas+, con$enient and sec*e 7a+ to make =itcoin 7allets fo safe offline stoa6e# 9iththe safe pape 7allet kit, +o* 6et e$e+thin6 +o* need to pint Bitcoin 7allets *sin6 +o* o7nP# Stoe them in a safe deposit =o2, +o* home safe, e$en +o* sock da7e - an+thin6's moe

sec*e than keepin6 them online# 3et +o* kit no7 at safepape7allet#com#

Stephanie o*'e listenin6 to Let's Talk Bitcoin, the pemie a*diocast po$idin6 ne7s andinsi6hts that co$e the apidl+ e$ol$in6 7old of di6ital mone+# 0* t7ice-7eekl+ sho7s incl*deanal+sis of late =eakin6 ne7s, *pdates on ke+ technical, =*siness and e6*lato+ iss*es and in-depth inte$ie7s 7ith the ke+ people di$in6 the ne7 di6ital econom+# Let's Talk Bitcoin offessponsos an attacti$e 7a+ to each a ta6eted and sa$$+ a*dience# Co moe infomation, emailsponsosAletstalk=itcoin#com

"dam -So to finish *p, 7e et*n to The 3enesis Block aticle# Sho*ld 7idescale adoptionact*all+ occ* 7ithin en+a, the effects co*ld =e temendo*s not >*st fo en+ans, =*t fo the

=itcoin maket as 7ell# In 11, en+a;s 3/P clim=ed o$e OB 7ith mo=ile pa+mentscompisin6 some O1B of that fi6*e# Bitcoin;s c*ent tansaction $ol*me is o*6hl+ O) peda+, o >*st o$e OMB pe +ea# If =itcoin 7ee to eplace en+a;s mo=ile tansactions, BTmaket li*idit+ 7o*ld moe than do*=le# To date, en+a;s =itcoin adoption has =een m*ted,7ith appo2imatel+ 1, do7nloads in a co*nt+ 7ith R1 million people total, =*t 7ith all thepieces set ali6n o$e the ne2t fe7 +eas, it is onl+ a matte of time =efoe Bitcoin and en+a findone anothe# So, do 7e think this is ine$ita=le: Pett+ cleal+ thee ae ad$anta6es hee, theeae h*dles hee### the concl*sion hee is this is 6onna happen, 7hat do +o* think a=o*t that:

"ndeas I do*=t it $e+ m*ch# 9hile en+a is $e+ pomisin6, I'$e often e2pessed the fact thatthee ae m*ltiple peconditions fo =*stl+ adoption of =itcoin - +o* need technolo6+, electicit+,+o* need *tilit+ of the c*enc+ o$e local c*enc+, and +o* also ha$e to not ha$e fea of =ein6aested o shot fo holdin6 Bitcoin# -"nd all of those thin6s eall+ =ecome a =i6 e*ation, 7heeat some point, it eaches a tippin6 point and +o* ha$e mass adoption# I think it's fa moe likel+that +o* mi6ht see localities 7ithin places like +p*s and "6entina ha$in6 =*stl+ adoption,7hee the technolo6+ infast*ct*e is moe de$eloped, thee's moe consistent electicit+ and it'smoe compati=le 7ith people's adoption of technolo6+ in 6eneal# -So, I don't see en+a =ein6the fist place to do it despite )-PES"# The model, I think, is i6ht#

Stephanie /id an+one see )-PES" comin6 o*t in en+a: That so*nds like somethin6 that sotof came o*t of the =l*e pehaps, so ma+=e it co*ld happen in en+a, I'm not s*e# I think it'sinteestin6 to think a=o*t 7hat 7o*ld happen if Bitcoin's maket li*idit+ do*=led# I mean, that'spett+ h*6e and it eall+ p*ts it in pespecti$e >*st ho7 man+ people ae tansactin6 and tadin6=itcoins, o co*ld =e, potentiall+, in en+a, e$e+ da+# I think that 7o*ld incease the $al*e ofBitcoin *ite a =it, pehaps enich people in the de$elopin6 7old if the+ had 6otten them eal+eno*6h

"ndeas I think that's a 6eat s*66estion, =*t the act*al adoption of )-PES" 7as an+thin6 =*to6anic o 6ass oots# It 7as a planned adoption fom the caie that alead+ had MFJ of themaket of mo=ile telephon+ of the co*nt+# The+ 7ee a=le to essentiall+ t*n on a MFJ maket


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shae into a c*enc+ in one mo$e# I think that 7o*ld =e a 6eat model fo adoption fo otheplaces, o e$en en+a, if some copoation alead+ has an esta=lished *se =ase ceates aBitcoin-dei$ed c*enc+ o =itcoin itself as eithe a e7ads cad, o an in app c*enc+, o an in-stoe c*enc+, o a lo+alt+ cad, o somethin6 like that# Then, fom that =asis, =ootstaps it as a6eneal tansactional c*enc+# I think that's a 6ood chance of happenin6# I eall+ don't see ho7

that kind of planned intod*ction compaes to the 6assoots of o6anic adoption 7e'$e seen ofBitcoin#

"dam The n*m=e I keep lookin6 at is this KJ of en+an ho*seholds o7nin6 mo=ile phones# Ithink that +o*'e i6ht a=o*t it =ein6 a planned oll-o*t, and a=o*t the people 7ho ha$e the a=ilit+to implement and oll o*t somethin6 simila in Bitcoin ha$e almost no incenti$es to do it, and Ithink that's kind of the coe po=lem 7e'e 6oin6 to come to in most of these places# "n+7heethee's a monopol+ on technolo6+ like thee is hee, 7hee a $ast ma>oit+ of people ae on thissame Safaicom net7ok, then that =asicall+ means that *ntil thee's an act*al eason to chan6e -that it inceases the pofita=ilit+ o offes some ad$anta6e to the compan+ athe than the *ses -it's $e+ *nlikel+ it'll act*all+ happen#

"ndeas That's the othe =i6 ad$anta6e fo Safaicom is the+ can cha6e a tansactional fee, so7h+ 7o*ld the+ 6o to Bitcoin 7hich 7o*ld essentiall+ emo$e thei a=ilit+ to tap into that flo7of mone+:

Stephanie Thee is potentiall+ a pofit incenti$e fo some=od+ if the+ can enco*a6e people toadopt this technolo6+, that co*ld eall+ 7ok o*t fo them, as 7ell# Not onl+ 7o*ld it po$ide analtenati$e to )-PES" 7hich so*nds kind of monopolistic act*all+# B*t it 7o*ld also inceasethe maket li*idit+ and theefoe I think the $al*e of Bitcoin, so Bitcoines ha$e an incenti$e tohelp this happen 7hethe it's 6oin6 to "fica and doin6 some acti$ismn o t+in6 to 6et peopleinteested in it, o make some kind of app that can someho7 *n on olde phones# I'm not e2actl+s*e, =*t ma+=e someone 7ill take *p the mantle on that#

"dam 9ell thee ae apps that *n on olde phones# Thee ae a co*ple of se$ices o*t thee# 0neof them, I =elie$e, is Phoneoin, and thee ha$e =een a fe7 moe that ha$e come o*t, that=asicall+ le$ea6e S)S messa6in6, te2t messa6in6#

Stephanie oinap*lt does that, too - can send oin =+ S)S#

"dam eah, e2actl+, so I think +o*'e i6ht if 7e li$ed in a pefect 7old, =*t =eca*se 7e li$e ina 7old, I mean cleal+, Safaicom doesn't ha$e this monopol+ thee on these technolo6ies=eca*se the 6o$enment hates them, i6ht: The+ ha$e it =eca*se the+'$e patneed 7ith the6o$enment and the+'$e ena=led them to essentiall+ ta2 these tansactions in a 7a+#

Stephanie Bi=es###

"dam It doesn't eall+ matte 7hat +o* call it# The point is, an+time +o* 6o into a sit*ation7hee thee's an entenched po7e st*ct*e like, fo e2ample, monopolies, =e the 6o$enment,=e the technolo6+, +o* sa+, he+, 7hat +o*'e doin6 is 6eat, =*t 7o*ldn't it =e =ette fo +o*c*stomes if +o* cha6ed them less =+ *sin6 this moe efficient technolo6+: I =et +o*'d 6et


21/21

ma>o p*sh-=ack# In some t+pes of c*lt*es, thee ma+ =e $iolent epec*ssions fo +o*# -So, it's>*st somethin6 to keep in mind, that chan6e is 6eat if it's chan6e that =enefits +o* =*t a lot oftimes if it's =enefitin6 +o* it's at the e2pense of someone else that's hi6he *p in the food chainand that's not somethin6 that's too pop*la# -So thee's hope#

4)*sic Pla+s5

"dam Thanks fo t*nin6 into episode 18 of Let's Talk Bitcoin, 7hethe +o* liked, lo$ed, ohated the sho7, 7e 7ant to kno7 7hat +o* think# Please send all listene mail tomailAletstalk=itcoin#com# ontent fo this episode 7as po$ided =+ Stephanie )*ph+, "ndeas)# "ntonopo*los, Stanisla$ Shal*no$, and .oseph /a$id# )*sic fo this episode 7as po$idedm+ .aed G*=ins, fo links to his 7ok $isit letstalk=itcoin#com?m*sic if +o*'e an open so*cem*sician and think +o* 7ok 7o*ld fit in 7ell 7ith the sho7, please emailadamAletstalk=itcoin#com if +o* like 7hat 7e'e doin6 and 7ant to s*ppot *s 7ith =itcoin olitecoin donations please $isit letstalk=itcoin#com fo episode specific addesses# If +o* ha$e*estions +o*'d like ans7eed on ai, call *s at 1-8FF-9eTalkBitcoin# B+ the 7a+, if +o*'e still

listenin6, +o* sho*ld kno7 that Let's Talk Bitcoin is 6o7in6 *p, and I'm *ietl+ lookin6 fopotential patnes 7ho ae on the same pa6e 7ith a=o*t t*th and media and ed*cation# If +o*like 7hat 7e'e doin6, o lookin6 fo a po>ect, and ha$e skills on the technical o =*siness sideof thin6s, +o* ma+ contact me at adamAletstalk=itcoin#com Sta+ t*ned#

Let's Talk Bitcoin, episode 18 - "It's Not That Simple!"

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