Episode 59 - Bitcoin’ s Center of Gravity

8/13/2019 Episode 59 - Bitcoin s Center of Gravity

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Transcription of Episode 59 - Bitcoin s Center of Gravity

Participants:

Adam.B.Levine (AB): Host from LetsTalkBitcoin.com

Andreas Antonopoulos (AS): Co-Host from LetsTalkBitcoin.com

r. Step!anie "urp!# (S"): Co-!ost from LetsTalkBitcoin.com

aniel Larimer (L)

Scott $o%inson (S$)

Hi & Welcome to Episode 59 of Lets Talk Bitcoin- a twice weekly show ao!t theideas" people and p#o$ects !ildin% the di%ital economy and the f!t!#e of money

'isit !s at LetsTalkBitcoincom fo# o!# daily %!est lo%" all o!# past episodes and of

co!#se tippin% add#esses (y name is )damBLe*ine and today we+#e talkin%

(oney" (oney" (oney

Bitf!nde# is dead" lon% li*e, h wait" the#es nothin% #eplacin% Bitf!nde# .m $oined

y )nd#eas and /tephanie to talk ao!t the ea#ly demise of the !ddin% Bitcoin

0nlicensed /ec!#ities ma#ket" the #each of the /E1" the !pcomin% 1on%#essional

hea#in%s and Bitcoin s new cente# of %#a*ity

Then" 2#oto/ha#es is a new altcoin f#om .n*ict!s .nno*ations claimin% to e a

c#ypto-ET3 on e*e#ythin% p#od!ced y the 'i#%inia ased company )fte# la!nchin%

last week" thin%s 4!ickly went eponential and mo#e than 6 months wo#th of locks

we#e mined in less than a week 7aniel La#ime# #e$oins !s at the end of todays

show fo# a 4!ick post-mo#tem on what happened" what went w#on%" and if anythin%

ao!t thei# plan has chan%ed in li%ht of the #ecent e*ents

B!t fi#st" we#e talkin% of Bitcoin and /ta#t!ps in the /ilicon 'alley with /cott8oinson" lets not keep him waitin% En$oy the show:

;?@


2/27

)B= .f the#e+s one thin% mo#e pop!la# than Bitcoin its /ta#t!ps" and the#e isn+t any

othe# place 4!ite like the /ilicon 'alley fo# /ta#t!ps Today .+m $oined y /cott

8oinson" one of the o#%aniAe#s of the Bitcoin /ilicon 'alley (eet!p #o!p

)B= /cott thanks fo# $oinin% !s: How a#e thin%sC

/8= oin% %#eat" thanks fo# ha*in% me )dam:

)B= Deah asol!tely: . like to talk with ohn (oynihan FCCCG whene*e# . can

eca!se he #!ns a #eally ecitin% %#o!p o!t of ew Do#k that has a lot of acti*ity

%oin% on .t seems like /ilicon 'alley sho!ld #eally e a hoted fo# this !t .*e

ne*e# act!ally een to that meet!p 1an yo! kind of %i*e me a taste C

;? o# 6? people

showin% !p !t its een %#owin% 4!ickly othin% like ohn+s in ew Do#k which .

elie*e has o*e# 5?? attendees o# at least people #e%iste#ed fo# the meet!p B!t

we+#e p!shin% 6?? and its 5? people pl!s consistently so its kind of een %#owin%

in siAe" in oth moment!m and ecitement down he#e in the 'alley /o yeah we+*e

een doin% it e*e#y T!esday fo# ao!t . %!ess what is thata little o*e# > months

now

;>=>I@

)B = /o thats awesome howand 6?? is nothin% to e . mean thats no p#olem

at all" thats a %ood n!me# . think thats like one of the" yo! %!ys a#e p#oaly in

the top 5 with that 7iffe#ent meet!ps do thin%s kind of diffe#ently so what is it that

yo! %!ys do the#eC 7o yo! do p#esentations" is it mo#e $!st like a netwo#kin%

info#mal thin% o# like whats the" what wo!ld someody see if they went the#eC

;>= K@

/8 = Well the typical fo#mat is we in*ite speake#s oth locally and a#oad We+*e

had people f#om Hashfast" 1oinase We had Eddy f#om /eed1oin" who+s

th#owin% the Bitcoin 1onfe#ence end of this week" T#a*is f#om 1oin(a#ket" a#on

f#om 1oin/ette#


3/27


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)nd the othe# side of thin%s is well" a little it mo#e estalished with the Echan%es

and 2latfo#ms and as the 8e%!lato#y p#olems a#e hashed o!t we+#e seein% a lot

mo#e people kind of e p#e-empti*e in dealin% with that They+#e )cco!ntin% fo#

Ta" wo#kin% with diffe#ent le%al entities to make s!#e they ha*e thei# ases

co*e#ed /o the#e+s a little it mo#e of an a%%#essi*e stance as ente#in% into Bitcoin

has ecome as mo#e adopted wo#ldwide )nd . think the *al!e add is wellyo! can

scale on a %loal en*i#onment with !sin% Bitcoin" which is somethin% yo! cant

always !se elsewhe#e . think its p#etty ecitin% $!st to see people f#om diffe#ent

*e#ticals lookin% at Bitcoin as an oppo#t!nity to take thei# !siness %loally

;5= 65@

)B = .f 2l!%+n 2lay Tech has 6?? sta#t!ps in the !ildin%" then .+m especially

c!#io!s . mean like how is Bitcoin compa#ed to othe# thin%s that people a#ec#eatin% sta#t!ps a#o!nd C

)nd yo! said that eistin% sta#t!ps a#e lookin% at it as an a*en!e to epand into

that seems like a #eally i% deal to me :

7o yo! think that in the non-Bitcoin sta#t!p scene" this co!ld #eally e seen as a

way to #oaden yo!# options C

;5=5J @

)sol!tely - the#e is an inte#*iew with )nd#esen" ack in say mid-ctoe# on

2andodaily and the t#end that he noticed is not only a#e the#e mo#e sta#t!ps

ente#in% the space" !t epe#ienced and *e#y talented de*elopment teams a#e

lookin% at it fa# mo#e se#io!sly . think that indicates $!st a %#owin% kind of

ecitement ao!t what Bitcoin can do" the implications of the p#otocol and $!st the

a*ailaility" . %!ess" to mo*e yo!# !siness anywhe#e yo! want

/o its inte#estin% on > f#onts - the fi#st f#ont . wo!ld say is domestically the

#e%!lato#y en*i#onment in the 0/ is ha#d to !nde#stand .ts *e#y sca#y fo#someody to taken on a liaility of ente#in% into a non-#e%!lated space

*io!sly the#e+s a lot at stake if yo!+#e doin% somethin% like that and its *e#y

epensi*e to %et the specialty kind of insi%ht of an atto#ney We see a lot of sta#t!ps

a#oad that a#e adoptin% this m!ch faste# " so thats the one ecitin% #elationship

that we ha*e at 2l!%+n 2lay is they ha*e a n!me# of inte#national accele#ato#s


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f#om o#dan" 2oland" e#man" /in%apo#e . mean yo! name it we+#e kind of all o*e#

the place We+*e noticed that the#e+s a co!ple of sta#t!ps" in /in%apo#e especially

that a#e lookin% *e#y ha#d at Bitcoin Then on the othe# f#ont yo! see this %#owin%

t#!st wo#thiness of Bitcoin in and of itself The ma#ket cap+s now p!shin% o*e# K

illion and while still *olatile" people a#e comin% !p with #easons to inco#po#ate it

. think in the lon% te#m" yes yo!+#e seein% ette# de* teams" ette# ideas epandin%

eyond $!st the act!al accessiility to Bitcoin . think a lot of people !nde#stand this

p#otocol is *e#y simila# to T12P.2 when it fi#st came o!t and yo! saw thin%s like

etscape" and this has kind of een said efo#e" !t the#e+s a lot of diffe#ent

platfo#ms that can e !ilt !pon this pee#-to-pee# system so . think thats #eally

ecitin%

;=KJ@

)B = Lets #eal 4!ickly talk ao!t the 0/ in that contet Do!+#e an inc!ato# - . dont

think that yo! deal with Bitcoin sta#t!ps yet specifically !t yo! do deal with

sta#t!ps .f yo! we#e %oin% to deal with Bitcoin sta#t!ps is the #e%!lato#y

en*i#onment somethin% that %i*es yo! pa!seC # is that $!st the oppo#t!nity -

eca!se noody knows what its %oin% to e so yo! may as well !ild it now while

we+#e fi%!#in% it o!t C

;J=?J@

/8 = /!#e yeah" .+d say oth n the one hand " the *e#tical is inc#edile - the le*el

of #isk may o!twei%h" c!##ently" the le*el of #et!#n !t the potentiality of a ma$o# shift

in the economy in the %loal scale is possile . think f#om the #iskie# side of thin%s -

yes" its a *e#y ecitin% *e#tical and the#e co!ld e a lot of oppo#t!nity the#e n the

flip side of that Fdid )B $!st !#p :C::CG . think a lot of the '1+s in the *alley a#e

skeptical in the sense of in*estin% st#ai%ht to sta#t!ps .ts almost as tho!%h yo!+#e

seein% a lot mo#e ein% p!t into the o*e#all ecosystem of Bitcoin /o entities like

/econd(a#ket" that a#e #in%in% in t#!st to most t#ade#s" o# what the Winkle*osstwins a#e doin% with thei# compa#ale p#od!ct is somethin% that . think people a#e

sta#tin% to *ent!#e into The#es not as m!ch" lets say" ma$o# mo*ement in the

sta#t!p in*estment side of thin%s !t f#om a 2l!%+n 2lay pe#specti*e we+#e *e#y

ecited . mean we+*e %ot kind of a hope to !ild the enti#e f!ll line" f#om hostin%

Bitcoin mine#s in a data cente# to in*estin% in


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months We+#e $!st em#acin% it f#om the %et-%o . think we+#e a little it late to the

%ame The#e+s anothe# %#o!p " Boost'1 with )dam 7#ape# $!st little it no#th of !s

in /an (ateo and they+*e %one th#o!%h a second atch now al#eady They+*e %ot

some ecitin% companies comin% o!t of the#e !t . think we+#e #eady to mo*e and

we sho!ld ha*e some ecitin% anno!ncements comin% late# this week at the

confe#ence in /in%apo#e

;9=65@

)B = Do! %!ys act!ally a little it late to the pa#ty . think that the#e a#e act!ally >

othe# inc!ato#s" altho!%h they+#e not in 1alifo#nia" esides Boost'1 B!t . think

that this is act!ally a *e#y inte#estin% 4!estion = Why now is 2l!%+n 2lay %ettin% into

ein% an inc!ato# o# wo#kin% and ein% hi%hly inte#ested in Bitcoin C What

chan%ed and when did that chan%e C

;


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/o we+#e a little it mo#e confident of whe#e Bitcoin is %oin% and . think that

wa##ants a lot mo#e ene#%y and ecitement f#om o!# sides of thin%s eca!se Bitcoin

co!ld e a ma$o# dis#!ption to the wo#ld economy We+#e payin% attention

;?-6? yea#s f#om now !t its ce#tainly

leadin% the cha#%e and to say that the#e wont e anothe# *i#t!al c!##ency that+ll e

$!st as competiti*e o# f!nctionally mo#e impo#tant. co!ldnt say . dont think we

a#e #!lin% anythin% else o!t " !t Bitcoin is the p#ima#y foc!s $!st eca!se we see a

lot people mo*in% in that space" and the#es a lot mo#e ene#%y ein% p!t into the

de*elopment of diffe#ent platfo#ms on the p#otocol /o yeah we a#e stickin% mostly

with Bitcoin sta#t!ps at this point

;


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/8 = 2l!% and 2lay Tech 1ente# p!ts on a 4!a#te#ly epo and the whole point is to

asically p#esent !p to 6? sta#t!ps to o!# netwo#k and the comm!nity and the

p!lic" which is asically a 6 min!te #apid fi#e pitch session 2eople %et on" show

the#e "eplain what they+#e doin%" eplain how they+ll make money etc and its a

way fo# !s to deli*e# the p#od!ct that we de*eloped

.n o!# !ildin% we in*est in only ao!t 5O of the 6?? sta#t!ps that a#e he#e and its

a !ni4!e way of lookin% at thin%s eca!se . feel it allows o!# nets to #each f!#the#

and it %i*es !s mo#e of an insi%ht as to whe#e the t#ends a#e %oin% .f yo! look at D

1ominato# they only asically p!t th#o!%h thei# p#o%#am companies that they ha*e

in*ested in" simila# with 5??sta#t!ps" #ememe# the othe# inc!ato#s in the a#ea

Beca!se we ha*e so many diffe#ent B#ick and (o#ta# facilities a#oad and diffe#ent

B#id%e 2#o%#ams etween )el/p#in%e# in Be#lin and some of the othe#s like CCC

Bose1apitalCCC !p in 1anada" we feel the epo allows !s to pick and choose f#om

the la#%e# net and !nde#stand which a#e the act!al t#ends which a#e #eally pickin%

!p t#action

This 7eceme# 5th sta#tin% at


9/27

/o if yo!+#e a Bitcoin o# 3intech sta#t!p lookin% fo# f!ndin% and yo!+#e a#o!nd o#

willin% to come down to /!nny*ale" 1alifo#nia" we+d asol!tely lo*e yo! to apply at

pl!%andplaytechcente#comPepo

Do! can see some of the info#mation ao!t what its ao!t" how to apply" the date"#e%ist#ation etc We+d lo*e to ha*e mo#e people - the mo#e the me##ie#: .+m s!#e we

can always fit an et#a one if we need to

;?@

)B= Do! mentioned that yo!+*e %ot an anno!ncement comin% !p on this 3#iday"

thats act!ally when the show is %oin% to ai# 7o yo! think that yo! can tell !s

what

;


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Toyota" (e#cedes The idea is we t#y and c#eate a ma#ket o# a *e#tical-specific

)ccele#ato# 2#o%#am that allow !s to le*e#a%e o!# co#po#ate #elationships y

int#od!cin% to them a deal flow to some of the sta#t!ps we ha*e in the p#o%#am

.n this case" with Bitcoin o# *i#t!al c!##ency" we+ll ha*e diffe#ent #elationships thatwe+#e le*e#a%in% $!st f#om the ecosystem we+#e !ildin% he#e - etween the

immediate comm!nity and the data cente# thin%s we+#e doin%" and a n!me# of the

#elationships we ha*e a#e with financial instit!tions so it %i*es !s !ni4!e offe#in% in

c#eatin% these )ccele#ation 2#o%#ams .n this case" it+ll e specific to anyone thats

in Bitcoin" o# is #elated to 3inancial Tech

With *i#t!al c!##ency this+ll e a %#eat oppo#t!nity to see whe#e yo! can %o and !se

o!# s!ppo#t system as it al#eady eists he#e

;?@

)B = /cott 8oinson" Bitcoin /ilicon 'alley and N2l!% and 2lay BitcoinN" thanks *e#y

m!ch fo# $oinin% !s today :

;5@

/8= Thank yo! )dam:

;


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sponso# this show 7o !siness with a company that sha#es yo!# *al!es et a


12/27

and %o t#yin% to do the same thin% )s one dies" the othe# one t#ies to sol*e that

p#olem and if they s!cceed then they contin!e on" and if not" then they fail and

someody else t#ies to sol*e the p#olem How fa# away a#e we f#om that

lockchain-like sol!tionC

;>?=6?@

)/= )t the moment" . think we+#e still li*in% in the e#a of NThe#es nothin% in finance .

don+t think we can sol*e with a sc#appily desi%ned 2H2 wesiteN That+s the e#a

we+#e in Fsmi#ksG:

)nd so pick a p#olem in finance - someone thinks they can sol*e it y w#itin% a few

lines of 2H2 . think its %oin% to take a it mo#e than that . think we+#e still 4!ite fa#

f#om the le*el of mat!#ity in the t#ansactional lan%!a%e that we wo!ld need to !ild

those o*e#lays B!t they+#e comin%: We+#e al#eady some of the eamples" with

thin%s like (aste#coin and *a#io!s othe# o*e#lay p#otocols that a#e comin% alon%

;> yea#s a%o -

wo!ld+*e een the LB/E . dont #ememe# what that stands fo# !t it wasasically

/(= loal Bitcoin /tock Echan%e . tho!%ht" #i%htC

)B= loal Bitcoin /tock Echan%e - that so!nds #i%ht: Deah the cha#acte# who #an

that fo# a while was efa#io!s He was li*in% in 1hina at the time" and its so#t of

inte#estin% to see that fi#st echan%e come o!t of 1hina By p!ttin% thin%s onto the

lockchain" essentially yo! #emo*e the company and y #emo*in% the company yo!

#emo*e the #isk Beca!se the company is the #isk #athe# than anythin% that itsact!ally doin%" #i%htC

;>


13/27

may not complete the t#ansaction /o ) & 1 a#e not yo!# only #isks anymo#e Thats

the iss!es that yo!+#e addin% anothe# laye# to the t#ansaction

.f the t#ansaction can e encoded in s!ch a way that the > pa#ties that a#e" fo#

eample" sellin% e4!ity sha#es to each othe#" dont ha*e to %o th#o!%h any clea#in%ho!se - and the #ecipient of those sha#es can *alidate that they ha*e #ecei*ed them

on the lockchain" and can *e#ify that t#ansaction then that t#ansaction is

i##e*ocaly #edeemale That means that at any moment of time" the owne# of the

necessa#y keys can %o and #edeem that t#ansaction to %et thei# e4!ity The#e is no

othe# co!nte#pa#ty in*ol*ed o# othe# co!nte#pa#ty who can mess !p the inte#action

Thats the ad*anta%e of the lockchain - once yo! ha*e that t#ansaction on the

lockchain it is a %!a#antee that in the f!t!#e at any point in time yo! will e ale to

#edeem that o one can take away that aility f#om yo! .f yo! in*est that t#!st in a6#d pa#ty then the le%al system sta#ts %ettin% in*ol*ed" and its no lon%e# a matte# of

N7o yo! ha*e a *e#ifiale" s!spend ale o!tp!t that yo! can i##e*ocaly #edeem and

appoint in the f!t!#eCN it is N1an yo! enfo#ce a cont#act with a 6#d pa#ty CN

Thats in the le%al #ealm and that opens a whole othe# a##el of #isk

;>6=??@

)B= .f we a#e talkin% ao!t this in the contet of a lockchain-like sol!tion" does that

#emo*e le%al #iskC 3#om a technical standpoint" it seems like it sho!ldn+t

necessa#ily matte# what yo!# denominatin% in" it sho!ld only matte# whats act!ally

happenin% Like a#te# is still taale

;>6=


14/27

;>6= 5I@

/(= *io!sly the#e+s co!nte#pa#ty #isk in*ol*ed in the analo%o!s type of

t#ansaction thats in the le%acy ankin% system F)B= (hmG" #i%htC /o people a#e

willin% to accept it" o# maye at least p!t !p with it in o#de# to do this kind of t#adin%B!t sho!ld they ha*e to p!t !p with that same kind of #isk when dealin% with

BitcoinC

;>K=5=?J@

)B= /o )nd#eas" is this what (aste#coin and Bitsha#es a#e attemptin% to doC

;>5=


15/27

;>5=K5@

)/= Eactly - Thats eno#mo!sly powe#f!l: .ts eno#mo!sly powe#f!l eca!se now

yo!+*e #emo*ed all of the !nce#tainty thats c#eated y a le%al p#oceedin% and

t!#ned it into p!#e mathematics

;>5=55@

)B= How will the #e%!lato#y en*i#onment deal with somethin% like thatC . can see

that the#e isn+t a%ain" $!st like Bitcoin" the#e $!st isn+t too m!ch that act!ally can e

done B!t at the same time" that doesnt mean that people won+t want to do

somethin%

;>I=?J@

)/= Well in some ways it is wo#se fo# #e%!lato#s eca!se it will %i*e them a %limpse

into the fact that this is a p#o%#ammale" dist#i!ted" asset led%e# and c!##ency is

$!st the fi#st application /o if they we#e wo##ied ao!t that fact that yo! canCCC

synonymo!slyCCC t#ansfe# c!##ency anywhe#e to anywhe#e witho!t any

inte#mediate stops" o# any possiility of cont#ol of #e%!lation

They+ll e


16/27

a#e enfo#ced that is in fact the #e%!lation isn+t itC 7o we $!st not need the old

#e%!lato#sC We ha*e the new #e%!lato#s and its all a!tomated

;>=K?@

)/= 2#etty m!ch" yes Do! ha*e the new #e%!lato#s and its all a!tomated The

p#olem is that the #e%!latin% al%o#ithm is net ne!t#al .t doesnt ca#e ao!t the

content" and it doesnt ca#e ao!t the so!#ce o# the destination of the t#ansaction

)ll it ca#es ao!t is= 1an the #ecipient who+s t#yin% to spend these t#ansactions o#

t#ansfe# them fo#wa#d" p#o*e the *e#ifiale #e4!i#ement fo# that t#ansactionC Which

is whate*e# it mi%ht e - it mi%ht e a p#i*ate key in the fo#m of si%nat!#e" it mi%ht e

a sol!tion to a p!AAle" it mi%ht e whate*e# it mi%ht e encoded on the lockchain

.n te#ms of #e%!lation" yes this is new a!tomated #e%!lation !t at the same time its

not #eally #e%!latin% .ts simply - yo! know - can yo! pass the #e4!i#ements of the

al%o#ithm and those #e4!i#ements a#e et#emely low and they a#e completely

i##ele*ant to the so!#ce o# destination of the t#ansaction /o if the only #e%!lation

yo! can %et is that" then . wo!ld ass!me the #e%!lato#s wo!ld think - NThat+s not

#eally #e%!lation:N

;>J=K?@

)B= Well the #e%!lation is that yo! can+t cheat the system" #i%htC The #e%!lation is

that if yo! don+t ha*e it is that its *e#y diffic!lt to commit f#a!d with

;>J=K5@

)/= Eactly its i##e*ocaly #edeemale" #i%htC .t %!a#antees yo!# sec!#ity a%ainst

that t#ansaction and the sec!#ity and t#!stwo#thiness that yo! cant do!le spend o#

do!le #edeem to the enti#e netwo#k

;>J=55@

/(= B!t thats not #eally the kind of #e%!lation that the le%al #e%!lato#s a#e lookin%

fo# Fla!%hsG

;>9=?6@

)/= Fla!%hsG 8i%ht: Eactly" eactly: This will lea*e them fa# dissatisfied fo# what

they a#e t#yin% to do )nd what they a#e t#yin% to do is impose political cont#ols o*e#


17/27

the t#ansactions 1ont#ols that ha*e nothin% to do with whethe# the assets a#e

owned y" and who a#e owned y The#e a#e meta-#e%!lations that ha*e to do with

the politics of it all )nd those they cant apply:

Beca!se those meta-#e%!lations that deal with the political aspect of money a#e all6#d pa#ty co!nte# pa#ty #isk - thats what it means to ha*e co!nte#-pa#ty #isk .ts that

the #e%!lato#s can s!ddenly tell yo! that the asset yo! own" yo! don+t own # that

an asset that yo! own" yo! can+t t#ansfe# )nd that kind of #isk" the lockchain

completely olite#ates: .t %i*es yo! *e#y little in #et!#n - it %i*es yo! *e#ifiale

t#ansactions Fla!%hsG and thats it:

;>9=5?@

)B= . mean thats a #eally inte#estin% point . don+t know whats %oin% to e sca#ie#

to the #e%!lato#s - the c!##ency side o# the sec!#ity side B!t one way o# the othe#" it

seems like we+#e kind of %oin% to ha*e a ette# pict!#e of whats %oin% to happen

within a co!ple of months Beca!se . don+t know if yo! %!ys if yo! saw this" !t

the#e a#e a n!me# of hea#in%s planned . elie*e that the#e a#e > c!##ently

sched!led - %oin% to takin% a look at this p#olem of Nc#yptoc!##encyN and of p!llin%

in .m s!#e of Nwho+s whoN of names to talk ao!t it This clea#ly was ine*itale !t

do yo! think that this is %ood o# adC

;6?=>?@

/(= Well it definitely seems like they+#e sta#tin% o!t with some concl!sions al#eady

d#awn .sn+t the title somethin% like Fin a d#amatic toneG NThe 8isk of 'i#t!al

1!##enciesC They+*e made it so!nd #eally sca#y . mean that #eally shows what

mindset they+#e kind of %oin% into it with 7espite all the claims y the Bitcoin

3o!ndation and othe# people sayin% that NThey+*e een talkin% with #e%!lato#s and

it was all positi*e and it seemed like they had #eached some !nde#standin%N" it

seems like the#e a#e definitely still a lot of people in the %o*e#nment who a#e

comin% at *i#t!al c!##ency" and at Bitcoin with a *e#y ne%ati*e *iew to sta#t o!t with

)nd f#ankly that+s a ias #i%htC

;6?=5J@

)/= Eactly #i%ht . think this will e a %ood oppo#t!nity to ed!cate !t we won+t

#each any concl!sions )s yo! point o!t )dam" this whole se#ies of in*esti%ations"


18/27

hea#in%s whate*e# yo! want to call them" ha*e come at it with some *e#y specific

f#amin% )nd this f#amin% is oth et#emely na##ow" it sees Bitcoin as a c!##ency

and it completely misses Bitcoin as a payment netwo#k" Bitcoin as a p#otocol"

Bitcoin as a means fo# a dist#i!ted asset led%e# that can e laye#ed with othe#

p#otocols and enale all kinds of a!tomated and t#ansactional t#ade

/o its *e#y na##owly foc!sed to Bitcoin as a c!##ency" and *e#y na##owly foc!sed to

Bitcoin as a c!##ency p#esentin% #isks to the le%acy systems /o these hea#in%s will

completely miss the point

They will completely fail to oth !nde#stand the #isks that this poses to the le%acy

systems" so in one way they a#e !nde#-estimatin% how ad this is fo# le%acy

ankin% and le%acy financial systems in te#ms of thei# cont#ol )nd at the same

time" they a#e %oin% in with s!ch ias that they will e completely !nale to see thepositi*e aspects of #emo*in% an enti#e laye# of #isk and how m!ch that can add to

the *al!e of t#ansactions and #emo*e costs f#om economic t#ade

/o yeah" these hea#in%s will #es!lt in asol!tely nothin%: They a#e show" they+#e

maye %oin% to ed!cate a few lawmake#s in the *e#y" *e#y na##ow aspect of Bitcoin

that they ha*e chosen to talk ao!t

;6>=69@

)B= /o then we#e we w#on%C . think that the 3o!ndation p#etty ea#ly on" said flat o!t

that they we#e inte#ested in inte#facin% with Washin%ton and the#e was money that

was planned to e th#own at hi#in% a loyist" o# loyists to make that happen

7o we think that if they had %one fo#wa#d and done that" instead of $!st ha*in%

meme#s and *ol!ntee#s and thin%s like that" %oin% to inte#face with #e%!lato#s 7o

we think that that mi%ht+*e helped the sit!ationC

(aye the f#amin% wo!ld e a little it mo#e f#iendly if the#e had al#eady een

loyin% %oin% onC

;66=?J@

)/= o" asol!tely not eca!se this f#amin% is comin% f#om *e#y" *e#y specific

inte#ests and *e#y specific and *e#y na##ow wo#ld *iew )nd that wo#ld *iew is=

Whats %ood fo# the anks is %ood fo# )me#ica" Whats %ood fo# the anks is %ood


19/27

fo# )me#ica and when the anks and the stock echan%e and *a#io!s othe# pa#ties

come to !s with millions and millions of dolla#s of loyin% and tell !s NThis is

somethin% we sho!ld fea#N we will fea# it )nd we will fea# it efo#e we listen f#om

any of these little loyists who a#e comin% alon%

/o its not %oin% to wo#k f#om that pe#specti*e" !t . %!ess its ette# to t#y to

ed!cate them than to step away f#om the con*e#sation enti#ely .n the end" it #eally

doesn+t make a diffe#ence The lockchain will contin!e to eist #e%a#dless

;66=5?@

/( = .+m not s!#e if its e*en ette# to t#y to ed!cate them eca!se . think what . see

happenin% is the#e a#e %oin% to e some people claimin%" yo! know" a!tho#ity o*e#

e*e#yody and the way that they !se Bitcoin" the way that they !se money - who

elie*e that they !nde#stand and they know a lot ao!t Bitcoin B!t they #eally dont

#i%htC B!t they+#e %oin% to #e%!late it anyway /o . dont know how m!ch *al!e .

see in t#yin% to Ned!cateN them eca!se" yo! know" . $!st dont see anythin% %ood

ecomin% o!t of it fo# the end !se#

;6K=>6@

)/= Well it keeps them !sy fo# a while - which may dist#act them f#om passin%

immediate #e%!lations eca!se they dont !nde#stand it B!t . wo!ld a%#ee

/tephanieS if the#e is a *al!e the#e it mi%ht e ma#%inal .n the end they a#e %oin% to

t#y to #e%!late and cont#ol somethin% that inhe#ently they cant cont#ol:

;6K=6I@

)B = )nd f#ankly don+t ha*e the #i%hts to cont#ol - . mean that the othe# thin% of it is

that #e%a#dless of what happens in these hea#in%s" !ltimately this is a *e#y" *e#y

small p#opo#tion of the pop!lation that will e*ent!ally !se it . think that the stall

tactic is p#oaly the est possile scena#io he#e #i%htC F)/= 8i%htG eca!se if we

can $!st wait" then the p#olem is sol*in% itself

The fact that the p#ice is doin% this" that all of the ad*e#tisement that c#yptoc!##ency

needs 2eople a#e lookin% at this eca!se its somethin% that ope#atin% in an

en*i#onment whe#e ha#dly anythin% is ope#atin%

Ecept fo#" of co!#se" stocks - if yo! want to in*est in stocks


20/27

;65=


21/27

;6=??@

)/= Deah asol!tely: What we+#e seein% he#e is the fact that !p to now " a lot of

what we tho!%ht was eithe# #est#aint y the o*e#nment" o# #espect of lie#ty and

f#eedom" was #eally simply technolo%ical const#aints nce it ecame possile fo#them to do an epansi*e" he%emonic" holistic cont#ol of the economy" of o!#

telecomm!nications" of o!# p#i*ate info#mation etc they ha*e done what is

possile: ot what they sho!ld do" o# const#ained y any othe# conside#ations othe#

than what is possile .f it can e done" the 0/ o*e#nment will t#y to do it

/o Bitcoin is one of the fi#st cases whe#e what we+#e takin% ack is not politicalcont#ol" its technolo%ical cont#ol

We+#e makin% it not possile to do the thin%s they want to do )nd this may come

as a s!#p#ise to them

;6=5>@

/(= Thats why . think inhe#ently" thats what Bitcoin is desi%ned to do .ts desi%ned

to find a way a#o!nd these Fla!%hsG #e%!lato#y cont#ols and these #est#ictions that

the #!lin% class places on people . think that is what /atoshi intended" and thats

what the point of Bitcoin is and the nat!#e of Bitcoin ein% so decent#aliAed

/o thats why . kind of do!t how f#!itf!l a lot of these app#oaches to N(ake BitcoinLe%itN o# ha*e it N#ow 0pN o# make it compliant with all these #e%!lations that it

#eally $!st cannot comply with eca!se they+#e not desi%ned fo# it and Bitcoin is not

desi%ned fo# it : Thats not the point

;6J=6?@

)B= This is the key thin% he#e" is that we li*e in a wo#ld #i%ht now whe#e fo# a *a#iety

of #easonsS the oppo#t!nities that a#e p#esented to most people o!t the#e a#e *e#y

low /o a%ain yo! ha*e somethin% like this thats o!tside of the system that !s!allywinds !p et#actin% all of that oppo#t!nity .nstead" yo! ha*e a system that doesn+t

ca#e what yo! do with it" doesn+t ca#e who yo! a#e" doesn+t ca#e how many yo!

ha*e They+ll t#eat yo! the same /o that #i%ht the#e at its co#e - thats the thin%

;6J=5@


22/27

)/= Thats the most powe#f!l aspect of it" and we ha*e to stop fo# a moment now

and conside# the othe#


23/27

/( = Do!+#e not kiddin% :

;K


24/27

;K>=KJ@

7L = The la!nch of 2#oto/ha#es has een a wild #ide : The #esponse has een

amaAin% with se*e#al o#de#s of ma%nit!de mo#e people showin% !p to mine than we

had anticipated /o m!ch Hash 2owe# has een th#own at the netwo#k that despitea ha#d-fo#ked inc#eased diffic!lty" we still mined o*e# one-thi#d of the 2#oto/ha#e

s!pply in the fi#st week and a half

)s locks that we#e s!pposed to take 5 min!tes to sol*e we#e ein% fo!nd e*e#y >?

seconds The diffic!lty has %one !p to


25/27

n the downside" we+#e !nale to mine as many 2#oto/ha#es as we wo!ld ha*e

liked eca!se most of o!# mine#s didn+t show !p on time /o we had to mine in the

clo!d like e*e#yone else

/ome people ha*e a#%!ed that the sha#es we#e mined too 4!ickly B!t f#om o!#pe#specti*e" it doesn+t #eally matte# how 4!ickly they we#e mined .t was all a lotte#y

%i*eaway system anyway What matte#s now is that 2#oto/ha#es a#e o!t the#e and

can e t#aded

;K5=??@

)B = ne of the aspi#ations was a 120-(inale 2#oof-of-Wo#k that wo!ld make the

dist#i!tion mo#e fai# 7o yo! think that was accomplished and why C

;K5=?9@

7L = . think we s!cceeded in c#eatin% a 2#oof-of-Wo#k that is ha#de# to mi%#ate to a

20" o# e*en an )/.1 B!t we #ecently fo!nd some weaknesses" thanks to a

Bo!nty and 2!licity that indicate that while ette# than /c#ypt" its not 4!ite %ood

eno!%h

This #in%s !p a mo#e impo#tant topic - How sho!ld sha#es in 7)1 e dist#i!ted C.f

yo! p#e-mine" one %#o!p will ha*e yo! .f yo! make it 120-only othe#s will complain

ao!t otnets .f yo! make it 20-f#iendly someone else will enefit and if yo!make it )/.1-f#iendly" yo! will ha*e cent#aliAation p#olems The#e is #eally no %ood

sol!tion that will make e*e#yone happy

;K5=K@

)B = Based on the epe#ience so fa#" what wo!ld yo! do diffe#ently if yo! had to do

it o*e# a%ain C

;K5=56@

7L = .n the f!t!#e" . wo!ld need to set the initial diffic!lty like an .2 p#ice

1onside#in% the fi#st t#ade fo# 2#oto/ha#es was at a p#ice of V> the initial p#ofit of

minin% was m!ch hi%he# than the cost of minin% )s a #es!lt" minin% powe#s added

to the netwo#k !ntil the cost of minin% app#oached to the p#ofit )s a #es!lt" new


26/27

comp!te#s a#e th#own at the netwo#k !ntil the cost of minin% e4!als the p#ofit that

can e ea#ned f#om minin%

;KI=6>@

)B = The#e ha*e een acc!sations that this was intentional and that .n*ict!s di#ectly

p#ofited f#om this happenin% 3#om what yo!+*e told me " . don+t elie*e thats t#!e

. don+t know if yo! talk ao!t company finances !t can add#ess this p!licly C

;KI=K>@

7L = .n*ict!s had planned on minin% like e*e#yone else and tho!%ht that we+d e

ale to le%itimately mine ao!t 6?O of the money s!pply o*e# I months We had

planned to !se clo!d minin% comined with some of o!# own ha#dwa#e

0nfo#t!nately fo# !s" e*e#yone else had the same idea and as a #es!lt" .n*ict!s was

ale to mine only a co!ple of pe# cent of the money s!pply

We had to ea#n the #est of o!# s!pplies th#o!%h se#*ices s!ch as (inin% 2ools and

7i#ect 2!#chases on the ma#ket The#e a#e othe# mine#s who we#e ale to mine fa#

mo#e than we did Thei# minin% was fai# with no p#emine" as s!pe#6 at itsha#estalk

can testify" that he mined the >nd lock .n*ict!s was on a le*el playin% field with

e*e#yone else

/ome people ha*e acc!sed !s ha*in% sec#et" hi%h pe#fo#mance mine# B!t withindays of la!nch" D2ool had #eleased a mine# with 5 times the pe#fo#mance of o!#

mine# )nd e*en still" we ha*e not een ale to #eplicate thei# pe#fo#mance The#e

will always e c#itics" !t o*e#all . think most people a#e happy with how thin%s ha*e

%one and a#e %lad that they %et to e a pa#t of what we a#e doin%

;K=KJ@

)B = n the last episode" we talked ao!t a plan fo# mo#e p#od!cts that wo!ld e

fo#ked f#om 2#oto/ha#es Has anythin% ao!t this la!nch chan%ed" anythin% ao!tthat plan C

;K=5@

7L = 2#oto/ha#es a#e desi%ned to %i*e people a c!t of most of o!# f!t!#e 7)1

offe#in%s Eithe# di#ectly o# indi#ectly othin% has chan%ed f#om these plans


27/27

;KJ=?@

)B = )nd finally" this seemed insanely fast in the way that thin%s de*eloped 7o yo!

think that this is a s!stainale model that yo! wo!ld #ecommend to othe#

companies C # does it need f!#the# tweakin% efo#e #eally anyody sho!ld e!sin% this C

;KJ=

Episode 59 - Bitcoin’ s Center of Gravity

Documents

Episode 59 - Bitcoin’ s Center of Gravity