Let's Talk Bitcoin

Episode 13 - Movers and Shakers Participants

Adam B. Levine (ABL) - Host Andreas M Antonopolous (AMA) - Co-Host Dr. Stephanie Murphy (SM) - Co-Host Charles Hoskinson (CH) ounder o! the Bit"oin #du"ation $ro%e"t Chris (A&A '!ello(traveller)) ( *) Developer o! +pen *ransa"tions Mark Ho"hstein (M,) #ditor o! Ameri"an Banker Bailey ,eut-el (B,) ,eporter at $aymentsSour"e

ABL: Comin. up on today/s episode o! Let/s *alk Bit"oin0 1$ro%e"t *alk - .ot a "harity2 Have some 3it"oins. 1terk."o4s !ree 5ordpress tip %ar plu.in. 1Bit"oin $ress Center6 (ith up to 77 lan.ua.es. 18ntervie( (ith Charles Hoskinson6 !ounder o! the Bit"oin #du"ation $ro%e"t6 as they roll out their ne( e!!ort. 1Bit"oin neutrality - lookin. ahead to not trap innovation (ith the limitations (e have no(. 1+pen transa"tions and Bitmessa.e - 8 intervie( Chris6 3etter kno(n as fellowtravler, on the intri"a"ies o! this ne( system. 1Mi"ro-transa"tions vs. Bitdust - thro(in. the 3a3y out (ith the 3ath (ater. 1My (ide ran.in. intervie( (ith Mark Ho"hstein6 editor o! Ameri"an Banker6 and Bailey ,eut-el o! $aymentsSour"e, durin. (hi"h (e "over Bit"oin/s "ompati3ility (ith e9istin. !inan"ial system6 the %ourney o! %ournalism6 and ho( everythin. old really is ne( a.ain. Hi6 and (el"ome to Let/s *alk Bit"oin6 a t(i"e (eekly sho( !o"used on the ideas6 pro%e"ts6 and people 3uildin. the ne( di.ital e"onomy and the !uture o! money. 8! you/re 3rand ne( to Bit"oin and (ould like to learn more6 please visit (((.letstalk3it"oin."om:learn to 3e dire"ted to the Bit"oin #du"ation $ro%e"t. My name is Adam B. Levine. 8/m a (riter and speaker (ho likes to talk a3out "ompli"ated topi"s in understanda3le terms. ;oinin. me in our t(i"e-(eekly sear"h !or "larity6 Andreas M. Antonopoulous is an e9pert in distri3uted systems and de-"entrali-ed net(orks. AMA: Hi6 everyone< ABL: Dr. Stephanie Murphy is a s"ientist and syndi"ated radio-host. SM: Hi< ABL: 5e/ve skipped 'pro%e"t talk) !or the last "ouple o! episodes (e (ere .oin. in6 and 8 kno( that (e %ust have a %am-pa"ked episode a.ain today (ith fellowtraveler "omin. up later to talk a3out open transa"tions and Bitmessa.e6 3ut 8 kno( that there are "ouple o! pro%e"ts that (e/d like to .et to. So Stephanie6 (hy don/t you take it a(ay2

SM: =eah6 8 (anted to really hi.hli.ht somethin. that 8 think is a super-"ool pro%e"t. 8t/s not my pro%e"t6 3ut 8 did meet one o! the people 3ehind this pro%e"t at the Bit"oin "on!eren"e and that (as ,assah. He also posts as ,assah on the Bit"ointalk !orum6 and the pro%e"t is "alled Bit"oin>??@ an or.ani-ation that/s desi.ned to help non-pro!it entities and "harities a""ept 3it"oin. So6 (hat they (ill do !or a non-pro!it is set them up !or a (allet6 a Bit"oin (allet6 sho( them ho( to use Bit"oin and then start them o!! (ith a A>??? (orth o! 3it"oin donations. *he reason they (ere "alled Bit"oin>??6 initially6 (as 3e"ause they !ormed (hen Bit"oins (ere (orth A>? ea"h and so they (ere startin. "harities o! (ith a >?? 3it"oins o! donations in the past6 3ut then they "han.ed it to a A>??? (hi"h ri.ht no( is around B 3it"oins or somethin. like that. So6 8 %ust think that this is really "ool6 they/ve already hi.hli.hted some "harities that they/ve helped a""ept 3it"oins. *hey a"tually %ust helped out Fr33 Aid, and o! "ourse Fr33 Aid (as a""eptin. 3it"oins 3e!ore (e met them (hen (e (ere primarily Bit"oin 3ased "harity6 3e!ore (e ran into Bit"oin>??. But they %ust helped Free Aid out (ith a ni"e donation and so (e really thank them !or that. But they haven/t had enou.h takers6 !rankly - they still have Cuite a lar.e !und that they (ant to use to help non-pro!it or.ani-ations .et started (ith Bit"oin6 so i! you have a non-pro!it or "harity6 this is6 o! "ourse6 somethin. that4s very important to me as 8/ve talked a3out 3ein. involved (ith Fr33 Aid the "harity6 earlier on in the sho(. 8! you have a non-pro!it or "harity or.ani-ation that you (ant to help .et started (ith 3it"oins and start them o!! (ith a ni"e donation6 please .et in tou"h (ith them. *heir (e3site is 3it"oin>??.or.6 and you "an !ind out more a3out them there. ABL: +ne o! the areas that 8 really have 3een !o"usin. on is helpin. people to moneti-e ori.inal "ontent that they make on the 8nternet. =ou kno(6 makin. a release on the 8nternet and it/s hard to .et paid to do that. So6 8 .ave a talk a3out this at Bit"oin 7?>D at San ;ose. As a result o! that6 there have 3een a num3er o! pro%e"ts that sprun. up and one o! the ones that4s really !ar alon. a"tually is a 5ord$ress plu.in6 that is already !un"tional6 "ompletely !ree and essentially automates the pro"ess o! "reatin.6 and displayin.6 and e9plainin. a tip (id.et or tip address !or every sin.le post that you make6 so that you "an have readers or listeners or (hatever your type o! "ontent is donate to support spe"i!i" pie"es they like6 rather than %ust puttin. up a donation thin. that %ust .oes to you6 they "an say this is somethin. that 8 (anna re(ard. So that/s somethin. that/s a"tually availa3le no(. =ou "an no( .o and do(nload that !or !ree at *-#-,-&-dot-C-+ that4s terk."o6 (hi"h is the s"reen-name o! the developer (ho has desi.ned this plu.in a"tually. 8! you/re in the "ontent "reation industry6 8 re"ommend you "he"k it out. *erk."o SM: *hat sounds really use!ul6 and as you (ere talkin. a3out that6 Adam6 8 kind o! had the thou.ht pop up that this sprin.s up a philosophi"al issue a3out tips. =ou kno(6 tips are meant to 3e this market me"hanism 3y (hi"h you provide !eed3a"k a3out some3ody/s servi"e that they/ve .iven you6 ri.ht2 *o a server at restaurant or somethin. like that6 i! they/re a .reat server6 you/re supposed to .ive them a 3i..er tip6 and i! they/re not so .reat6 you "an .ive them a small tip. But tips are really not that e!!e"tive !or "ommuni"atin. that in the (orld that (e live in no(. 8t/s like6 you kno( you/re kinda supposed to .ive a !i!teen-per"ent tip at a restaurant or even t(enty-per"ent and i! you don/t .ive that hi.h o! a tip they don/t kno( (hy the server has no idea (hy. Enless you "ommuni"ate a3out it and (rite on your 3ill6 you kno(6 8 (ould/ve liked to .ive you a 3i..er tip6 3ut you didn/t do this or (hatever. So6 8 think may3e an app like this "ould really help people .et more pre"ise !eed3a"k a3out (hy they are or are not .ettin. tips. May3e not (here they/re not .ettin. tips6 3ut "ertainly (hy they are 3e"ause you "ould tip a very spe"i!i" thin.. ABL: =ou/ve identi!ied a real "ore point here6 and also the pro3lem (ith tips6 (hi"h 8 totally a.ree (ith you. 5hen 8 .o into a restaurant6 it/s totally e9pe"ted that you tip no matter (hat the servi"e is6 not 3e"ause that/s (hat the person (ants to 3e tipped6 (here they4re like '+h6 (ell6 you have to tip me6 no6 3e"ause that/s 3uilt into the earnin. assumption. 8t4s 3uilt in that yes6 you/re .oin. to6 as a server in this type o! role6 re"eive su"h and su"h per"enta.e o! your in"ome !rom tips6 and so they/re paid less 3e"ause

o! that. +n the 8nternet6 it/s kind o! the opposite thin.. +n the 8nternet6 no3ody/s paid6 and so it/s like the e9"eption i! you are paid at all so tips have a hi.her disproportionate e!!e"t relative to ho( lar.e they are in terms o! 3ein. a3le to impa"t 3ehavior. So no6 8 think it/s .reat and it really is a tool !or "ontent-"reators and really it4s not %ust "ontent-"reators either. 8 talked (ith the (oman (ho runs anti(ar."om6 and it/s the same thin.6 they produ"e ori.inal "ontent and - they/re "reatin. "ontent6 3ut ultimately6 its "reatin. "ontent (ith an ideolo.i"al 3ent that reports in a spe"i!i" (ay6 and so it/s less a3out the spe"i!i" ne(s item and more a3out the !a"t that they/re reportin. on it. More a3out the !a"t that people appre"iate the perspe"tive that they/re 3rin.in. - so a.ain6 they haven/t implemented this yet 3ut 8 think they/re really "lean use s"enario !or this6 (here it/s not really %ust a3out re(ardin. "ontent "reation6 so mu"h as it is a3out doin. the thin. in .eneral and providin. !eed3a"k. AMA: 8 think i! you sit do(n and (at"h a pie"e o! "ontent (ith more than si9 people6 the tip (id.et should automati"ally "ount an >B per"ent tip. ABL: (lau.hs) SM: (lau.hs) AMA: ;ust kiddin.6 3ut 8 mean6 the lo.isti"s 3ehind this are Cuite tri"ky. 5e reali-e that (ith Let/s *alk Bit"oin. ;ust "reatin. addresses and then 3ein. a3le to meanin.!ully "orrelate and "onsume the data-!lo( that "omes 3a"k@ the analyti"s - (hi"h pie"e o! "ontent are doin. (ell and (hi"h are not. And then 3ein. a3le to "orrelate that (ith se"urity settin.s and thin.s like that6 3e"ause it/s !airly easy !or someone to .o and in%e"t their o(n address into some3ody else/s "ontent and then 3asi"ally divert the stream o! tips to themselves. So6 you have to have some se"urity pro"edures to (at"h !or that. 8t/s a lot more than puttin. a tip %ar up there. =ou have to think a3out all o! the lo.isti"s 3ehind the s"ene6 (hi"h is (hy these (id.ets are very interestin. and 8 think very valua3le developments. ABL: *hat/s somethin. that (e have not really addressed in the sho(. =ou/re ri.ht6 these thin.s "an 3e hi%a"ked. 5e haven/t a"tually had a pro3lem (ith that6 yet6 and 8 think that (e/re kind o! at the !ore!ront o! tryin. this te"hnolo.y6 so talkin. a3out this sort o! invites it. 8/m "urious to see i! there are any pro3lems. 5e/re su"h a nas"ent part o! the development o! all o! this te"hnolo.y that all o! these mistakes are really easy to make6 and so it/s interestin. to see (hi"h ones (ind up a"tually 3ein. pro3lems6 and (hi"h ones are %ust te"hni"ally possi3le pro3lems. AMA: =ou kno( one o! the ni"e thin.s a3out the 8nternet and doin. this on the 8nternet is that you "an monitor the tip addresses that are asso"iated (ith "ertain pie"es o! "ontent remotely. So6 you "an have a separate servi"e that (at"hes i! the tip address has "han.ed and noti!ies you. So6 even i! someone is a3le to "ompletely hi%a"k a site and in%e"t tip addresses6 they (ould have to hi%a"k this "ompletely separate servi"e that monitors. At least that/s the approa"h (e/re takin. to monitor tip addresses e9ternally to make sure they haven/t 3een hi%a"ked. ABL: Fiven a(ay the 3usiness model there Andreas6 aren/t ya2 (lau.hs) AMA: Go6 8 think se"urity advi"e should 3e shared6 pro3a3ly6 3e"ause 8 think other 3usinesses are .onna run into this pro3lem and the last thin. (e (ant to see is people not trustin. tips6 3e"ause 3ut yeah6 8 did .ive a(ay the 3usiness model there. ABL: *hat/s okay. *hat/s seems to 3e.. (lau.hs) AMA: 8 open sour"ed it.

ABL: (lau.hs) +kay6 "ool. Andreas6 do you have a pro%e"t you (anna talk a3out today2 AMA: 8 (ould love to talk a3out the 3it"oinpress"enter.or. site. 3it"oinpress"enter.or. is a site that 8 3uilt as part o! ,oute#leven6 my "ompany6 a "ouple months a.o and may3e not even that lon.6 month and a hal! a.o. And (hat it does is it presents a pla"e !or %ournalists in radio6 print6 *H to 3e a3le to !ind Bit"oin e9perts (ho "an "omment a3out Bit"oin stories6 "an provide Cuotes6 "an 3e intervie(ed !or stories. *he key thin. a3out 3it"oinpress"enter.or. is that it4s .lo3al !rom the .et-.o. 5e no( have almost I? press "onta"ts speakin. 77 di!!erent lan.ua.es. *he entire site is .eared to(ards !indin. the e9a"t ri.ht person6 so you "an sli"e-and-di"e and !ind spe"i!i" "ountries6 time -ones6 lan.ua.es6 or even areas o! e9pertise i! you (ant someone (ho is an e9pert in e"onomi"s6 or so!t(are6 or hard(are6 or i! you (ant someone (ho has e9perien"e as miner6 or mer"hant or user o! the "urren"y. And then you "an narro( it do(n. 8! you (ant to !ind the Cali!ornia e9pert (ho speaks arsi6 (ho is an e9pert at the so!t(are side o! thin.s6 you "an !ind him. And so6 (e invite people to "ome and nominate e9perts (ho speak their lan.ua.e. $lease visit 3it"oinpress"enter.or. and add as many "onta"ts as you think are appropriate (ho "an speak to the media intelli.ently a3out Bit"oin. 8t/s an open and in"lusive plat!orm and the more people (e have6 and the more ri"h meta-data (e have6 the 3etter. ABL: 8t looks pretty .ood6 too. 8 %ust updated my pro!ile last ni.ht6 a"tually. AMA: 5ell6 it/s very !o"used and 8 think that/s the key. 8t/s not a .eneri" site6 it/s a3solutely a3out Bit"oin and !o"used on Bit"oin6 so it/s very easy to hi.hli.ht@ really sho( the skills in that spe"i!i" area that you have. (short pause (ith musi" playin.) ABL: 8/m really pleased today to 3e %oined 3y Charles Hoskinson. Charles has 3een runnin. the Bit"oin #du"ation $ro%e"t !or a3out a month no( and he/s .ot some pretty e9"itin. announ"ements to make. So6 Charles6 (hy don/t you e9plain (hat (e/re talkin. a3out here. CH: *he Bit"oin #du"ation $ro%e"t is somethin. (e started a3out a month a.o and it/s !la.ship produ"t (as a Edemy "ourse named 'Bit"oin6 or Ho( 8 Learned to Stop 5orryin. and Love Crypto6) and a!ter 8 laun"hed it6 8 reali-ed there (as a lot o! people in the "ommunity (ho really en%oyed tea"hin. a3out Bit"oin and they (ant to "ontri3ute may3e a small pie"e o! "ontent or do a le"ture series. And so6 8 said6 '.osh< 8t (ould 3e a really ni"e thin. to do to a..re.ate all o! that into a "entral pro%e"t) and so that/s (hat the Bit"oin #du"ation $ro%e"t is all a3out. So over the last !e( (eeks6 (hat 8/ve 3een doin. is 3uildin. the (e3site6 talkin. to people6 re"ruitin. ello(s and 8/m pleased to announ"e today our o!!i"ial laun"h to pu3li" on Let/s *alk Bit"oin !or the Bit"oin #du"ation $ro%e"t. +ur .oal is to 3uild peer-revie(ed !ree "ontent !or pu3li" release6 3oth "ommer"ial and !or personal use6 (ith the end .oal o! usin. this "ontent to 3rin. one million a"tive6 en.a.ed users into the Bit"oin e"osystem. ABL: *hat/s a pretty am3itious .oal there. CH: ,i.ht6 yeah6 and 3y the end o! 7?>J6 8 should say. Ho( (e/re .oin. to a""omplish this is !irst usin. our !la.ship "ourse6 the Bit"oin "ourse that 8 %ust mentioned6 and t(o other "ourses that (e4re 3uildin. over the summer. So6 one "lass is .oin. to 3e Bit"oin !or "omputer s"ientists6 and that "ourse is .oin. to 3e spe"i!i"ally !or .raduate level pro!essionals. So6 people (ho are in a Master/s pro.ram or a $hD pro.ram6 or some3ody (ho4s in industry (ith D or J years o! e9perien"e in peer-to-peer net(orks and "rypto.raphy. *he .oal there is to a"tually annotate the entire Satoshi proto"ol. So6 (e4re .onna %ust kind o! like (hat Charles $et-old did (ith the Annotated *urin.6 (e4re .onna open up Satoshi4s (hitepaper and

.o throu.h se"tion 3y se"tion and dis"uss (hat did Satoshi say6 (hat ended up .ettin. implemented and (here is this .oin.2 And then also (e4re .onna have some le"tures on "rypto.raphy and some le"tures on peer-to-peer net(orks and so !orth. *he .oal !or this "lass is to kind o! spur adoption in the "omputer s"ien"e departments o! universities so a"tive resear"h "an 3e done6 and also to en"oura.e people to 3e.in (orkin. on the Bit"oin proto"ol and a"tually "olla3orate (ith the pro%e"t. *he third "ourse is .oin. to 3e a 'Bit"oin !or Business $ro!essionals.) 8t/s kind o! a Bit"oin !or entrepreneur "ourse. +ne o! the thin.s 84ve .otten no( that (e4ve had our !irst "ourse out !or a3out a month6 (e have >B?? students so !ar6 is 84ve .otten a hu.e amount o! !eed3a"k !rom people in the "ommunity a3out - they don/t understand the re.ulations6 the la(s. 8! their 3usiness (as to a""ept 3it"oins6 (hat do they have to (orry a3out2 And those are very valid and very .ood Cuestions and they should 3e addressed thorou.hly and a""urately6 and so6 (e4re .onna laun"h a third "ourse over the summer6 'Bit"oin !or Business $ro!essionals6) and that "ourse is .oin. to !o"us on0 (hat are the ta9 set la(s6 (hat are the re.ulations i! you4re .oin. to use 3it"oins6 ho( do you re"ord them in your 3ooks6 and also (e4re .oin. to use that "ourse as an e9pose !or lot o! mer"hant servi"es that e9ist !or Bit"oin. or e9ample6 i! you (ant to a""ept Bit"oin throu.h Bitpay6 ho( do you a"tually do that2 Ho( do you inte.rate that into your (e3site2 So6 those are the three pie"es o! "ontent that (e intend on produ"in. throu.hout the summer and (e4re .oin. to market it heavily and re!ine it6 update it6 and 3uild it in a very "olla3orative (ay6 and our .oal is to use that "ontent to 3rin. > million people6 3y the end o! 7?>J6 into Bit"oin. ABL: So the edu"ation pro3lem is one you4re o3viously really !amiliar (ith. 5hat do you think people have the most trou3le .raspin.2 CH: *erminolo.y is pro3a3ly the !irst 3i. issue. $eople have no idea (hat a 3lo"k"hain is6 or a 3lo"k. *he "rypto.raphi" "on"epts are also very di!!i"ult. 8t really depends upon the parti"ular person6 (here the person4s "omin. !rom. So6 !or 3usinesses6 really (hat/s ve9in. them6 they really don/t have any idea (hat the la(s are (ith Bit"oin. *hey don/t really have any idea (hat the re.ulations are. 5hat !orms they have to !ile2 5hat people they have to talk to2 Ho( lon. they should hold the 3it"oins2 5here they "an liCuidate the 3it"oins !or ES Dollars or #uros6 and a"tually6 (hat makes this pro3lem even more "omple9 is that 3usiness is international so re.ulations and la(s are di!!erent in every sin.le "ountry. So6 you "ould 3e in "omplian"e in Ameri"a6 !or e9ample6 then all o! a sudden 3e out o! "omplian"e in #urope6 and so that/s somethin. !or the 3usiness side that (e "ommonly .et a lot o! Cuestions a3out. or .eneral "onsumers6 a lot o! Cuestions usually "ome o! (hy do they have any value (hatsoever2 5hy does a 3it"oin - (hy is it (orth anythin.2 5hi"h is an a"tually a very .ood Cuestion6 and (e tried to ans(er it as 3est (e "an in our !irst "ourse Bit"oin or 'Ho( 5e Learn to Stop 5orryin. and Love Crypto.) 5e also did a lot o! Cuestions a3out ho( do 8 se"urely use Bit"oin2 *hat/s somethin. that people are al(ays "on"erned a3out6 3e"ause (e al(ays tell people 'hey6 these transa"tions are irreversi3le. 8! you4re not "are!ul people "an steal your private keys throu.h so"ial en.ineerin. or throu.h 3u.s in so!t(are and so !orth.) So you kno( there is a "ertain de.ree o! "ompeten"y that you have to have6 and it does s"are avera.e everyday users and so that/s one o! the thin.s (e .et o!ten and (e try to ans(er. *here is no silver 3ullet !or (hat people tend to ask. 8t/s kind o! a spe"trum o! Cuestions. So that/s (hy (e4re releasin. a series o! three "lasses 3e"ause (e4re tryin. to "over as 3road o! a 3ase as possi3le6 3e"ause the Cuestions "omputer s"ientists are .onna ask are .onna 3e mu"h more sophisti"ated and in-depth than6 let/s say6 your .randmother (ould ask a3out Bit"oin. But they4re 3oth eCually valid. 5e need 3oth .roups o! people in the e"osystem i! the e"osystem is .oin. to survive. ABL: 8t seems like (ith your annotated Satoshi line that you4re not only tryin. to .ive the te"hni"al 3a"k.round 3ut also kind o! the "onte9tual 3a"k.round to (hat (as 3ein. thou.ht at the time that this (as 3ein. "reated. CH: ,i.ht6 and a"tually6 it/s a very valid and valua3le thin. to do !rom an a"ademi" standpoint 3e"ause

the (hitepaper (as really sayin.6 'these are some pro3lems 8 (ould like to resolve and here is the implementation 8 have "hosen to resolve these pro3lems6) and so i! you understand it !rom that lens6 you may have "ertain kno(led.e domains that (ould 3e a3le to 3etter resolve the pro3lems in the (ay the proto"ol has. A .ood e9ample (ould 3e the proo!-o!-(ork that (e "urrently deploy (ith Bit"oin. 8t does resolve t(o 3i. pro3lems. Gum3er >6 ho( do you veri!y transa"tions2 And num3er 76 ho( do you .o ahead and distri3ute money2 *he pro3lem (ith proo!-o!-(ork is that6 (hile it a""omplishes 3oth o! those !eatures6 the "omputations are thro(n a(ay. *hey4re not so"ially 3ene!i"ial in any sense o! the (ay. 8! one6 !or e9ample6 "ould !ind a (ay to a""omplish 3oth thin.s6 veri!y transa"tions and allo( more money into the e"osystem in a !air (ay. But at the same time6 let/s say6 may3e inte.rate !oldin.Khome !or the "ity pro%e"t into the proo!-o!-(ork then all o! a sudden you4re not only makin. 3it"oins6 3ut you4re also doin. somethin. so"ially 3ene!i"ial (ith minin. pro"ess. So this is an e9ample o! (here the annotated Satoshi line "an take us. 8t allo(s a very diverse .roup o! people !rom a"ross the a"ademi" and pro!essional spe"trum to take a look at the proto"ol6 (here it stands6 (hat/s 3een done6 and (hat are the pro3lems they4re tryin. to resolve. 8t .ives them the "onte9t they need to take their o(n e9perien"es6 and their o(n solutions6 and their o(n ideas into the e"osystem6 and may3e it4ll mean improvin. the proto"ol itsel! or may3e it (ill mean the development o! alternative "urren"ies that are superior. But that/s kind o! the hope6 it/s that (e (ant to spur that "onversation. 5e (ant peer revie(ed resear"h to start 3ein. produ"ed in "omputer s"ien"e departments that "an help us .ro( Bit"oin to meet the "hallen.es o! the !uture. ABL: Both Andreas and 8 have .otten involved as !ello(s. 5e4ll 3e .ivin. le"tures !or the pro%e"t. Ho( "an interested people .et involved2 CH: +h6 a3solutely. So6 (e4re "urrently lookin. !or three .roups o! help. irst you "an volunteer !or the pro%e"t6 either your time6 market the pro%e"t6 help us (ith !und raisin. or even produ"e "ontent. *he 3est (ay o! .ettin. in "onta"t (ith is my email "harles.hoskinsonK.mail."om or you "an .o to our (e3site 3t"edpro%e"t.or.. So Barry-*ony-Charlie-#d-Derri"k-pro%e"t-dot-or.. So6 that/s a ni"e "entrali-ed e!!ort to see (hat (e4re (orkin. on and (hat (e4re doin. and there are numerous links to "onta"t us there either se"urely (ith $F$ or %ust via email. So6 i! you4d like to volunteer6 (e4d love to have you. ,e.ardless o! i! you4re a ne(3ie or i! you4re a veteran in the "ommunity. *he other t(o thin.s you "an de!initely do to help the pro%e"t - one (ould 3e to donate to the pro%e"t. 5e4re startin. a !und raisin. "ampai.n6 doin. thin.s like payin. a la(yer to !i.ure out (hat the re.ulations are in Ameri"a or (orkin. (ith "omputer s"ientists to a"tually .o throu.h sour"e "ode and deal (ith the proto"ol are not !ree. Go matter ho( many volunteers you .et6 you have to pay people at some point. So6 (e4re startin. a donation drive to help "over some o! those e9penses and that/s .oin. to 3e >?? 3it"oins in D? days. So6 our donation address (ill 3e in the sho( notes. 8t/s also on our (e3site. So6 you "an de!initely donate to the pro%e"t and (e4d love !or you to do that6 and !inally the last thin. you "an do is to tell your !riends and !amily. 8! you like Bit"oin and you (ant to tell them a3out Bit"oin instead o! havin. to sit do(n and e9plain it over the kit"hen room ta3le6 you "an no( %ust .ive them our Edemy link6 and i! they take our "ourse6 (e think that it4ll really help them .et to (here they need to .o and hope!ully evan.eli-e them enou.h to a"tually spread the messa.e amon.st their !riends and !amily. ABL: 5ell thanks very mu"h !or doin. this important (ork6 Charles6 and thanks !or your time today. CH: *hank you so mu"h6 Adam. [Advertisements] ABL: #veryone kno(s that o!!line stora.e is the only sa!e (ay to store your 3it"oins. Go( there4s an easy6 "onvenient6 and se"ure (ay to make Bit"oin (allets !or sa!e o!!line stora.e. 5ith the sa!ety paper (allet

kit6 you .et everythin. you need to print Bit"oin (allets usin. your o(n $C. Store them in a sa!e deposit 3o96 your home sa!e6 or even your so"k dra(er. Anythin.4s more se"ure than keepin. them online. Fet your kit no( at sa!epaper(allet."om. SM: =ou4re listenin. to Let/s *alk Bit"oin6 the premier audio "ast@ providin. ne(s and insi.hts that "over the rapidly-evolvin. (orld o! di.ital money. +ur t(i"e-(eekly sho(s in"lude analysis o! late 3reakin. ne(s6 updates on key te"hni"al6 3usiness6 and re.ulatory issues6 and in-depth intervie(s (ith the key people drivin. the ne( di.ital e"onomy. Let/s *alk Bit"oin o!!ers sponsors an attra"tive (ay to rea"h a tar.eted and savvy audien"e. or more in!ormation6 email sponsorsKletstalk3it"oin."om. [/Advertisements]

AMA: *his is a topi" that/s very "lose to my heart and it/s the topi" o! Bit"oin neutrality. 8t takes a 3it o! e9planation to e9plain (hat Bit"oin neutrality is. But simply enou.h6 it is the e9a"t same "on"ept that (e4ve 3een livin. on the 8nternet !or the past t(o de"ades6 and !ortunately6 on the 8nternet6 (e4ve 3een a3le to 3oth e9press that prin"iple and implement it and preserve it a.ainst attempts to 3reak it do(n. So6 Bit"oin neutrality is the "on"ept that Bit"oin as a plat!orm should 3e neutral and should 3e a3le to "arry any type o! payment "ontent !rom any payment initiator to any payee re.ardless o! (ho the ori.ins are6 (ho the destinations are6 their si-e6 or anythin. else and simply "arry the payment6 i! it4s paid !or (ith !ees6 neutrally. *here are other aspe"ts to Bit"oin neutrality 3ut that/s the 3asi" one (hi"h means empo(er the end-points. Make the net(ork itsel! as neutral as possi3le@ a3le to "arry (hatever people may "ome up (ith. 8t/s important 3e"ause it re"o.ni-es that Bit"oin is a plat!orm and a proto"ol that other thin.s (ill 3e 3uilt on top o! it - rather than Bit"oin 3ein. seen as a payment system that is essentially done6 "omplete6 and (e4re optimi-in. it as a payment system 3e"ause i! you try to optimi-e it6 you end up makin. it less neutral. 5hereas6 i! you see it as a plat!orm6 then you 3uild other thin.s on top o! it that are more spe"iali-ed. ABL: 8t/s a Cuestion o! spe"i!i"ity6 ri.ht2 So6 (hen (e talk a3out optimi-in. thin.s6 optimi-in. doesn/t mean you .o throu.h and6 you kno(6 you4re pi"kin. throu.h all the most e!!i"ient pra"ti"es. +ptimi-in. means that you .o throu.h6 you determine (hat the end result is that you4re tryin. to a""omplish6 and then you pi"k all o! the methods and pra"ti"es that a""omplish that .oal. So6 8 think emphasi-in. that Bit"oin is a plat!orm rather than an end in and o! itsel! is really important here 3e"ause it means that you "an/t optimi-e it. 8t means that the (ay to optimi-e it is to 3e as in"lusive as possi3le so that you "an support as many 3usiness models6 as many di!!erent uses6 and types o! thin.s that people (ant to do (ith it instead o! tryin. to !i.ure out ho( to spe"i!i"ally streamline it !or this one use that you had in mind in the 3e.innin.. SM: *here is de!initely room !or spe"iali-ed uses o! Bit"oin as a system6 and !or sort o! division o! la3or6 !or some people to use Bit"oin !or spe"i!i" purposes at spe"i!i" times as lon. as those uses don/t prohi3it other uses or don/t impin.e on other uses6 as lon. as it remains that Bit"oin is a diverse tool that/s de"entrali-ed6 that "an 3e used !or potentially a lot o! di!!erent purposes dependin. on (hat the individual user (ants. AMA: ,eally6 3ein. a3le to preserve Bit"oin as a plat!orm6 re"o.ni-es the individual "omponents o! Bit"oin as havin. tremendous innovation value themselves. So6 this is a3out sayin. (hat should .o in the 3lo"k"hain2 5hat types o! transa"tions do (e (ant to ena3le6 and ho( do you deal (ith thorny issues o! "ontention around use o! the 3lo"k"hain as they arise2 So6 !or e9ample6 (e already have some issues that are Cuite "ontroversial around unspenda3le or not-prova3ly unspenda3le outputs. Basi"ally6 outputs that "an/t 3e reused 3e"ause they4re too small6 or outputs that .o to addresses that no3ody has the keys

!or6 essentially they4re thro(-a(ay money. 8! you don/t kno( that they4re thro(-a(ay money6 they %ust sit around in the 3lo"k"hain !orever (hereas i! you kne( that those addresses "ould not 3e spent6 you "an a"tually prune some o! them (hile still keepin. the !a"t that they entered the 3lo"k"hain. *hose are some o! the issues that the developers are dealin. (ith ri.ht no(. 8t also ties into issues around the si-e o! the 3lo"k"hain6 around the propa.ation o! messa.es on the peer-to-peer net(ork et". and the "hoi"es (e make no( (ill a!!e"t ho( open and !le9i3le Bit"oin the proto"ol6 Bit"oin the plat!orm6 the 3lo"k"hain (ill 3e to !uture uses that (e "an/t even ima.ine. *hink i! the early 8nternet people said6 'email is the predominant use6 te9t is (hat people are .onna 3e usin.. Let/s make it very6 very !riendly to te9t and not parti"ularly !riendly to voi"e and video.) 5e (ouldn/t have many o! the appli"ations (e really "herish today. SM: *hat/s a really important point to 3rin. up 3e"ause (e don/t really kno( e9a"tly (hat the shape o! Bit"oin is .onna 3e in the !uture6 and there needs to 3e room !or all kinds o! innovation to happen and that means6 really6 no spe"i!i" individual or .roup o! individuals should 3e makin. top-do(n de"isions a3out (hat the ri.ht6 or "orre"t6 or optimal use o! Bit"oin a"tually is. *here needs to 3e the !reedom !or all kinds o! di!!erent uses to 3e a""epta3le6 okay. And6 you kno(6 people may have individual %ud.ments a3out thin.s like thro(-a(ay addresses or a3out thin.s like 'Bitdust6) or anythin. like that6 3ut it/s really important to6 8 .uess6 .ive those at least the spa"e to e9ist even i! you6 personally6 (ould not use Bit"oin in that (ay. 8t/s %ust like !reedom in the rest o! li!e. +ther people need to have the li3erty to live their lives as they "hose and as they see !it (ithout any3ody else mana.in. (hat they do in order to have a !ree so"iety. ABL: *his pro%e"t and this pro3lem seem to 3e tied a lot around the idea that some o! these !un"tions "an/t 3e done on another 3lo"k"hain 3esides the Bit"oin 3lo"k"hain. So6 84m "urious !or (hat every3ody thinks a3out that2 8 mean6 i! you (ere to take an appli"ation like Satoshi Di"e and "reate Satoshi"oin6 or di"e"oin6 or (hatever you (anted to "all it6 and it (as essentially the same thin.6 e9"ept instead o! .oin. on the 3lo"k"hain (ith every3ody else it used its o(n 3lo"k"hain and (as !or its o(n purpose sort o! like datastamp"oin or somethin. like that. Be"ause those are the primary thin.s that people are havin. pro3lems (ith. =ou kno( like the notary servi"e (e talked a3out in the last episode. Eltimately6 it "reates irredeema3le transa"tions that are 3roken intentionally so that they put this in"orre"t in!ormation that serves the purpose that it (ants to serve6 (hi"h is veri!yin. that this parti"ular do"ument (as veri!ied and put into the 3lo"k"hain at this point in time. So6 "ould you have like aLnM alt-use "hain that does all the same stu!! as Bit"oin 3ut runs on a parallel pro"ess. 8 mean6 (ould that still (ork in the same (ay6 or does that lose somethin.2 AMA: *hat loses a .reat deal. *he 3lo"k"hain really is t(o thin.s. 8t/s a tremendously use!ul te"hnolo.y6 3ut it/s also a very distri3uted and very 3roadly distri3uted data-set. So6 part o! the advanta.e o! 3ein. on the Bit"oin 3lo"k"hain is that 3e"ause that people also use it !or payments6 it4s very (idely distri3uted6 very "are!ully "he"ked6 it has a massive amount o! hashin. po(er 3ehind it to veri!y it. 8! you .o on another net(ork6 you4re doin. t(o thin.s. irst o! all6 you4re "reatin. t(o di!!erent silos. So6 you4re movin. in the opposite dire"tion o! a plat!orm. 8t/s a 3it like sayin.6 (ell6 8$ is not so suita3le !or video6 so lets 3uild a parallel net(ork to the 8nternet and don/t think that the tele"oms didn/t try to do that - they a3solutely did. irst6 (ith A*M the proto"ol6 asyn"hronous trans!er mode6 "ell-3ased net(orks instead o! pa"ket3ased net(orks6 "ell s(it"h net(orks6 and also sonnet !i3er opti"s net(orks6 and all o! those !ailed. And they !ailed 3e"ause the value o! de"entrali-ation trumps the spe"ial use-"ase. 8t/s mu"h 3etter to have one "ommon6 neutral net(ork that everyone "an play on 3e"ause that in"reases the net(ork e!!e"t. 8! you put your transa"tion on the Bit"oin 3lo"k"hain6 that .ives you the "ertainty that it/s .oin. to 3e very (idely distri3uted and .uaranteed (ith a lot o! hashin. po(er. *he real Cuestion is6 "an you do that (ithout 3loatin. the 3lo"k"hain and (ithout "reatin. too mu"h pro"essin. on the end nodes (hi"h tend to 3e pretty small and in"reasin.ly mo3ile. *hat/s the real issue here6 and 8 think the developers are already

dis"ussin. that. *he issue is not unspenda3le transa"tions6 it4s rather prova3ly unspenda3le transa"tions. 8! you send transa"tions to addresses that everyone "an veri!y6 don/t have private keys6 or are 3o.us6 that/s okay 3e"ause no one4s then .onna try and spend those or it doesn/t need to keep a re"ord o! them. *he pro3lem is (hen you don/t kno( i! the transa"tion "an 3e spent or not6 so you keep it around !orever in the E*N+ pool. ABL: Andreas6 "an you please e9plain (ho a"tually sees this EN*+ pool that (e4ve 3een talkin. a3out6 3e"ause that/s a little a3stra"t. AMA: E*N+ is the unspent transa"tion outputs. *hink o! it this (ay6 every time you (ant to "reate a ne( transa"tion6 (hat you do is you take all o! the unspent transa"tions you have in your (allet and then you 3undle them to.ether to .et the ri.ht amount or more than the ri.ht amount that you4re .onna spend6 send that to the payee6 and also have some "han.e "omin. 3a"k to you i! it/s more than the amount. 8! you have to use lots o! tiny ones6 that makes a very 3i. transa"tion. *he E*N+ pool is shared6 essentially "onstru"ted dynami"ally6 !rom (hat 8 understand6 !rom the 3lo"k"hain. So6 i! you traverse the entire 3lo"k"hain6 you "an !ind all o! the unspent transa"tions6 and 3y keepin. that in memory6 you "an immediately veri!y i! a payment has the "orre"t unspent transa"tions in it - and i! 8 understand6 it4s done (ith a Merkle tree (hi"h makes it easier to prune o!! entire se.ments o! that tree and only keep their hash. #ssentially it/s like6 "uttin. o!! the 3ran"h o! the tree6 3ut kno(in. that it (as there 3e"ause the stump o! the 3ran"h still .ives you an idea o! ho( 3i. that 3ran"h (as6 and you kno( (hat (as there 3e!ore (ithout havin. to veri!y every sin.le part o! it. So really6 this is a .lo3al data3ase. 8! you have a lot o! stu!! that/s in there 3ut really "an/t 3e used 3y anyone it %ust makes the si-e o! the data3ase lar.er (ithout 3ein. use!ul - the unspent transa"tions. And you keep it there so that you "ould potentially spend it in the !uture6 and that %ust keeps in"reasin. the si-e o! the pool. ABL: *hey4re talkin. a3out settin. up disin"entives. *hin.s that make it so you (ouldn/t (ant to do these transa"tions that are not the intended Ouse6O (hi"h is sendin. value (ith 3it"oin. 5hat i! a modi!i"ation (as made to the proto"ol that made it so there (as a "he"k3o9 that you "ould "he"k that says this is a other-use transa"tion and it makes it so its prova3ly unspenda3le6 3e"ause it/s not intended to 3e spent. 5ould that 3e a potential solution to this pro3lem or do you think that it %ust needs to 3e "ompletely le!t alone and all these thin.s are %ust !urther makin. it (orse. AMA: 8 think that/s e9a"tly the dis"ussion that/s happenin. ri.ht no(6 (hi"h is a "om3ination o! ho( do you mana.e the 3lo"k"hain si-e and ho( do you mana.e the E*N+ pool - the unspent transa"tion outputs that needs to 3e6 at least maintained at a reasona3le level and not 3loat (ith thin.s that everyone kno(s are useless6 3ut "an/t really prove they4re useless. SM: 8 have a Cuestion. Bloat is a relative term6 ri.ht2 8t4s su3%e"tive6 its a""ordin. to some3ody4s opinion6 and so 84m %ust (onderin. (hat are the "riteria !or 3loated 3lo"k"hain and (hat (ould 3e Otoo many in the E*N+ pool.O AMA: So6 8 (ould say there4s a very 3i. distin"tion 3et(een the t(o. 8 think you "an/t really talk a3out 3loat in the 3lo"k"hain 3e"ause that really is a "ompletely su3%e"tive "riteria. Ho(ever6 i! a transa"tion is not spenda3le6 then holdin. it in the unspent transa"tion output pool is pointless. So that is 3loat. 8 mean it really has no !un"tional use to 3e in the unspent transa"tion output pool 3e"ause the only reason !or 3ein. in there is so that someone "an spend it6 ri.ht2 And i! you kno( it "an/t 3e spent6 it/s %ust sittin. there !or no reason6 it (ill never 3e spent pra"ti"ally6 and there!ore6 it/s never .oin. to .o a(ay. *hat is a te"hni"al pro3lem. (SM0 But doesn4t that--) *here is no do(nside to not havin. those transa"tions in the pool. *hey4ll still 3e in the 3lo"k"hain. *hey4ll re"o.ni-ed as havin. 3ein. "reated. =ou4re %ust re"o.ni-in. the !a"t that they4re no lon.er spenda3le and there!ore you don/t need to keep the a"tual output around

!or !uture spendin.6 and the dis"ussion ri.ht no( is6 ho( do you mark them or (hat transa"tion s"ript "an you "reate that makes that a prova3ly unspenda3le output6 so you "an simply in"lude it in the 3lo"k"hain as a proo! o! e9isten"e and then dis"ard the output 3e"ause it "an/t 3e spent. (short pause (ith musi") ABL: So6 84m %oined 3y fellowtraveler. Chris6 there4s 3een a lot o! talk re"ently a3out open transa"tions and Bitmessa.e. Be!ore (e .et into that6 "an you .ive us6 %ust kind o! !rom >? thousand !eet6 (hat is open transa"tions2 FT: +pen transa"tions is an open sour"e !inan"ial "rypto.raphy li3rary (hi"h is availa3le in many di!!erent lan.ua.es. 8t/s (ritten in CPP6 3ut you "an use it !rom $ython or (hatever. ABL: +kay6 so (hat does that mean2 FT: At the 3ase level6 it/s %ust a li3rary that does !inan"ial "rypto.raphy operations and then6 usin. that li3rary6 8 3uilt a server6 a "lient A$8. 5hat you4re a3le to do is6 you4re a3le to "onne"t to these servers and issue "urren"ies6 open a""ounts6 (ithdra( "ash6 (rite "he"ks6 trade on markets. ;ust all kinds o! di!!erent !inan"ial operations "an 3e a"hieved throu.h the open transa"tions system. ABL: *he open transa"tions system- one o! its !un"tion is as a de"entrali-ed market6 (hi"h is also the same as a de"entrali-ed e9"han.e6 ri.ht2 FT: Go6 not e9a"tly6 3e"ause ea"h server "ontains a market6 or a"tually a set o! markets dependin. on the di!!erent "urren"ies that are 3ein. traded there6 so6 !or e9ample6 you "ould "onne"t to a spe"i!i" server and trade one "urren"y !or another "urren"y. =ou "an say6 '84m .onna sell some .old to 3uy 3it"oins (ith6) or (hatever (hatever the "urren"ies are that are issued there. *he 3i. pro3lem that (e had6 i! you (anna have a distri3uted e9"han.e6 you (anna 3e a3le to have trades that .o a"ross servers. Any t(o people "an trade on a spe"i!i" server i! they4re a3le to dis"over ea"h other and !ind a server that they4re .onna a.ree to meet on and per!orm a trade at. But let/s say that there4s hundred servers or thousand servers out there - these people aren/t ne"essarily on the same server6 and so that/s (hat Bitmessa.e solved. Bitmessa.e 3e"ame a p7p dis"overy layer that (e "ould use !or anyone to dis"over other users (ho mi.ht 3e on di!!erent servers so that they "an !ind a "ommon server to meet on and do trades on. ABL: 8s it the 3road"ast !eature2 5e4ve 3een playin. around (ith Bitmessa.e on the sho(6 and one o! the thin.s (e4ve 3een lookin. at6 o! "ourse6 is the 3road"ast !eature. 5e4re thinkin. a3out it !or ne(sletters. But 84m thinkin.6 3ased on the pro3lem you4re talkin. a3out (hi"h is a 3un"h o! di!!erent servers runnin. markets that are o(ned 3y di!!erent people (ho don/t ne"essarily kno( ea"h other6 they still need to 3e a3le to !ind ea"h other in order !or the market to 3e !ri"tionless6 so to speak. FT: *hat/s e9a"tly it. 8t/s the 3road"ast !eature. ABL: 5hat does that mean2 Sin"e this is happened6 (hat/s the ne9t step in this thou.ht pro"ess2 FT: 5ith Bitmessa.e and this is %ust one dis"overy layer. 8 really like it6 3e"ause (e played around (ith it and proved that (e "ould use it and that it (ould (ork. But te"hni"ally6 you "ould s(ap it out and use any other dis"overy layer as (ell. But this is .onna 3e the !irst implementation6 it/s .onna 3e (ith Bitmessa.e6 and (ith Bitmessa.e (hat you "an do is you "an sort o! name a "hannel6 like ima.ine on 8,C 6i! you say 84m .onna .et on the Bit"oin "hannel6 and then anyone else that .ets on the Bit"oin "hannel6 they meet you there and they4re all a3le to send messa.es to ea"h other. Sort o! like that (ith

Bitmessa.e6 (ith Bitmessa.e you "an name a "hannel. =ou "an say6 '8 (anna meet on the Bit"oin "hannel6) and anyone else (ho4s listenin. to that same "hannel (ill see your 3road"asts6 and so (hat 84m a3le to do is6 !or e9ample6 let/s say that 8 (anna trade .old !or silver. Go( in open transa"tions6 ea"h asset type has an 8D. 8t kind o! looks like a Bit"oin address or somethin. like that6 it/s %ust this lon. hash6 3ase-I7 8D. And so6 (hat you "an do is you "an take6 say6 the .old 8D and the silver 8D and then N+, them to.ether. N+, pro"ess is %ust a "rypto pro"ess that sort o! "om3ines them to "reate this ne( 8D that/s a "om3ination o! the t(o6 and then 8 use that as my 3road"ast "hannel. So6 anyone else (ho4s interested in .old and silver (ill 3e listenin. to that same "hannel and then so (hen 8 say6 OHey6 8 (anna trade .old !or silver6 84m (illin. to pay this mu"h6 or 8 have this mu"h !or sale and 84m on this server6O and anyone else "an then "onne"t to that server and trade (ith me there. So6 it %ust .ives us a (ay to sort o!6 dis"over ea"h other. ABL: So this is like Bitmessa.e addresses as deterministi"6 ri.ht2 *hat/s (hat you4re doin. here6 ri.ht2 =ou4re takin. essentially "om3ination o! names that are then turned into these addresses that are then used as 3road"ast "hannels 3e"ause any3ody (ho4s turnin. those t(o parti"ular thin.s into this Bitmessa.e address name is .oin. to !ind the same thin. that the person (ho4s doin. it ori.inally did. 8s that ri.ht2 FT: *hat/s e9a"tly ri.ht6 and 84ll .ive you another e9ample. Let/s say that it (asn/t "ross-server tradin.. Let/s say that it (as a (ire6 3e"ause you "an use it !or di!!erent thin.s. Let/s say 8 (anna (ire some !unds !rom server A to server B. or e9ample6 let/s say 8 (anna (ire some .old !rom server A to server B. So6 8 take the .old 8D6 the server A 8D and the server B 8D and N+, them to.ether6 and then 3road"ast on that "hannel6 and then anyone else (ho4s (illin. to per!orm su"h (ires6 anyone else (ho has an a""ount on 3oth servers and he4s (illin. to do it !or (hatever !ee that 84m (illin. to pay6 then he "an reply 3a"k and say6 OHey 84ll do it6O and then 8 .ive him some money on server A and he .ives me some money on server B6 and (e4re a3le to ne.otiate that pro"ess usin. es"ro( on +*6 (here server A keeps it in es"ro( and then server B .oes into es"ro( and that sort o! thin.. ABL: *hat sounds pretty .ood6 that sounds like a really innovative use. =ou4re not... *here hasn/t 3een a spe"i!i" "lient developed to do this yet6 has there6 or is that (hat your proo!-o!-"on"ept is2 FT: +h6 no6 not at all. 8 %ust proposed this a "ouple days a.o. 5e (ere playin. around (ith Bitmessa.e and this is kind o! a lark. 8 mean this (as somethin. that (as "omin. some day and 84ve (ritten on my (iki a3out ho( this sort o! thin. is "omin. someday. 5e %ust happen to 3e messin. around (ith Bitmessa.e and (e4re like6 OHey6 (e "an do server (ires (ith this. 5e "an do "ross-server tradin. (ith this6 lets (rite this up.O So6 8 (rote out the proto"ols6 the sort o! a 3asi" (rite-up o! (hat the proto"ols (ould 3e and post it on the Bit"oin !orum6 and it really "aused a splash (hi"h is a little surprisin. to me in a sense 3e"ause 8 have said on my (iki that this is "omin. !or a lon. time. ABL: 5ell6 8 think this topi" is pretty sensitive ri.ht no( 3e"ause o! all the "on"erns a3out e9"han.es and people vie( open transa"tions in the same (ay they vie( ,ipple6 (hi"h is a (ay to move a(ay !rom the transa"tions happenin. on the "entrali-ed servers like Mt. Fo96 and there4s a lot o! "on"ern in the "ommunity a3out that6 so you4ve 3een (orkin. on open transa"tions no( !or a3out t(o years2 FT: 8 started in the 3e.innin. o! 7?>? ABL: So6 three years. FT: So6 (e4re no( at three and a hal! years.

ABL: Ho( si.ni!i"ant is this2 Does this impa"t the development s"hedule2 8s there a time !rame on open transa"tions at this point that is even reasona3le to talk a3out2 FT: 5ell6 8 mean6 Bitmessa.e inte.ration has to 3e "oded. 8 "ouldn/t .ive a time!rame on that. 8 "an say that it/s de!initely on the hori-on no(6 no( that (e4ve !i.ured out ho( it (ould 3e done. 8 "an/t say e9a"tly ho( lon. it (ould 3e. ABL: *here are already servers that are runnin. open transa"tions6 so it/s out there in the (ild. Are people a"tually usin. it !or the purpose as intended6 or is it more %ust proo!-o!-"on"ept installations at this point2 FT: 8 (ould say its proo!-o!-"on"ept installations. *here are pla"es (here it/s 3ein. used. But it/s not in "ommon use6 and the reason !or that is 3e"ause there4s not a really easy "lient yet !or people to use. Basi"ally6 everyone "an use it ri.ht no( i! they (anna use the "ommand line. +r i! they (anna use the u.ly6 %ava6 test FE8 (hi"h is really %ust !or developers. Go( 8 do have ni"er FE8s "omin.. 5hat 8 did (as6 !or a "ouple years6 8 %ust !o"used on the "ore6 the en.ine6 the s"riptin.6 the "ommand-line6 3e"ause 8 !i.ured 84m .oin. to .ive every3ody else a head-start to make "lients. *he li3rary itsel! is already a !ulltime %o36 and so 8 !i.ured 84ll %ust make this li3rary and !o"us on this li3rary and then everyone else has the opportunity to .et a head-start and make the "lients that people "an use and they "an sort o! o(n their o(n pro%e"ts. And no(6 3asi"ally6 (hat/s .oin. on is6 my "ompany6 (e started a "ompany Monetas and (e started to .et !undin. and so (e4ve started implementin. "ommer"ial "lients6 like an i$hone app6 Android app6 desktop app6 this kind o! thin.. And so it "ould 3e that 84m .onna end up havin. the !irst "lients mysel!. 8 "ould say that the 8$hone app (ill pro3a3ly 3e (orkin. in another "ouple o! (eeks. 8 don/t kno( i! 8 (ould sti"k it up in the app store yet6 3ut 84d 3e a3le to demonstrate it to people. ABL: As an open sour"e pro%e"t that is kind o! on the 3leedin. ed.e o! this monetary transa"tions te"h6 it/s 3asi"ally you and ,ipple takin. a shot at this spa"e. 84m "urious - you4re sayin. no one has developed a "lient !or open transa"tions and you mi.ht 3e the !irst one out even D and a hal! years later. So6 84m (onderin.6 (ere you e9pe"tin. more support2 Has there 3een mu"h support !rom other people that (anna develop on top it2 FT: 5ell6 8 "an say that there has 3een de!initely a lot o! parti"ipation !rom the open sour"e "ommunity. *here has not 3een anyone (ho has %umped !or(ard and said6 O84m .onna (rite some 3adass "lient<O +! "ourse6 8 have to 3e !air in sayin. that (hat4s easy !or me is not ne"essarily easy !or others. 5hen 8 !irst released the pro%e"t6 there (as only a very lo(-level A$8 (hi"h seemed easy enou.h to me6 3ut everyone else thou.ht it (as pretty damn "ompli"ated6 and so then 8 said6 '!air enou.h6) and 8 started (orkin. on a really hi.h level A$86 (hi"h (e have no(6 (e have a really hi.h level A$8. And 8 think it (ould 3e mu"h easier !or someone no( to (rite an open transa"tions "lient. 8t/s "ertainly 3een very easy !or me to slap to.ether an 8$hone app. 8 (ould say that a lot o! the "ontri3utions that (e4ve had6 and (e4ve had had a lot o! "ontri3utions6 has 3een more on the 3a"kend side6 like testers. *here4s a .uy (ho volunteered to 3uild the Linu9 tar 3all6 the 3uild system. *he 3uild system that (e have no( "ame !rom volunteers and there4s a lot o! stu!! in there that 8 don/t even understand. 8 don/t understand ho( these auto tools 3uild system (orks. But these "ontri3utors "ame on and .ot it all put to.ether6 and there it is. ABL: So6 outside o! the "lient6 (hat/s kind o! ne9t2 =ou !ormed a "ompany6 Monetas6 and you4ve sou.ht !undin.. So6 (hat/s the !undin. .oin. to(ards2 8s this .oin. to 3e"ome your !ull-time %o36 is it already2 FT: =eah it/s already my !ull-time %o3 and has 3een !or - sin"e late last year6 mid last year. 5e4re makin. a 8$hone app6 and then6 like 8 said6 8 should 3e a3le to demonstrate that to people that its (orkin. (ithin6 may3e another (eek or t(o6 and then a lot o! the "ode that/s in the i$hone app is .oin. ri.ht on over into

the Android app6 and the Android app is a"tually mu"h more important than the i$hone app. =ou make the i$hone app !irst 3e"ause all the investors have i$hones. But (hat you4re really aimin. !or is the Android app6 3e"ause everyone in A!ri"a is .oin. to have Android. ABL: 5ell Chris6 (e4re .oin. to have to have you 3a"k on on"e the i$hone app is (orkin. and (e "an kind o! take a look at that and see ho( it (orks in real li!e. 8! you4d like to learn more a3out open transa"tions6 visit letstalk3it"oin."om:ot. FT: 5e4ve also .ot a 8,C "hannel on !reenode - ir".!reenode.net. *here4s a open transa"tions "hannel (ith no dash in it and there4s QJ people lo..ed in there ri.ht no(. ABL: 5ell6 thank you !or your time Chris6 (e4ll look !or(ard to havin. you 3a"k on. FT: *hank you. *hank you very mu"h. (short pause (ith musi" playin.) ABL: So6 84m really "urious a3out disin"entives6 ri.ht2 Be"ause this is like6 makin. it less attra"tive to do these thin.s and havin. it only apply to transa"tions that are transa"tions that (e don/t like6 and (hen 8 say O(e6O 8 mean the net(ork6 relative to transa"tions that are %ust normal transa"tions. Can you think o! any (ays (here you "ould implement disin"entives or even 3e a3le to tell one o! these .ood transa"tions !rom one o! these 3ad transa"tions (ithout havin. a net ne.ative e!!e"t on the net(ork2 AMA: =es6 a3solutely. 8 think the issue here is the matter o! timin.. So6 the lon.-term plan6 as !ar as 8 understand it !rom the dis"ussions amon. developers that 8 !ollo(6 is to e!!e"tively have an e!!i"ient market in pro"ess !or the minin. that allo(s transa"tions to 3e in"luded 3ased on the !ees6 and to streamline that so that the market e!!i"ien"ies make that de"ision. ,eally (hat (e (ere talkin. a3out in the previous episode6 (hi"h is %ust let the market de"ides and i! you have value asso"iated or !ree asso"iated (ith it6 it/s .ood enou.h to .o on the 3lo"k"hain. At the moment6 there is no market me"hanism. So6 (hat/s happenin. is6 until that market me"hanism is 3uilt6 you have the pro3lem o! (hat do you do in the meantime. Separately6 there is this issue o!6 "an you at least !la. these transa"tions so that they don/t to .o into E*N+6 (here they4re really not ne"essary6 and everyone a.rees on that. *hat/s not a su3%e"tive issue. Enspenda3le transa"tions don/t need to 3e in the E*N+. So6 the Cuestion is6 ho( do you .et !rom here to a !uture (here you have a market system (ithout 3lo(in. up the net(ork in the meantime. And 8 think the idea that/s 3ein. dis"ussed a lot6 ri.ht no(6 to "reate temporary disin"entives or to 3alan"e thin.s more to(ards payments6 !or no(6 (hile at the same time6 movin. to(ards a market model that is more neutral and is 3ased truly on value and to "orre"tly 3rin. these e9ternalities 3a"k into the pri"e. 8 think that/s the real issue@ markets !ail (hen they have e9ternalities. 8! you "an take a vat o! sul!uri" a"id and dump it in the river6 and it "osts you less than pro"essin. that "leanly and every3ody else su!!ers 3e"ause o! that6 3ut you don/t really pay a pri"e6 that/s an e9ternality. Similarly6 i! you "an pri"e these e9ternalities 3a"k into the market !un"tion6 then you really don/t need to (orry a3out them 3e"ause they then 3e"ome part o! the market. Entil that happens6 you need some 3asi" disin"entives6 so that/s really the dis"ussion .oin. on ri.ht no( and 84m interested in this dis"ussion 3e"ause 8 think that net neutrality !or Bit"oin is 3asi"ally on the "hoppin. 3lo"k ri.ht no(. 8t/s the topi" that/s a!!e"ted most 3y the de"isions that are made in the ne9t !e( months6 in the ne9t year6 as to ho( to these thin.s are handled. ABL: 8t sounds like (hat you4re tellin. me here is that6 a.ain6 tryin. to think a3out (ays that these disin"entives "ould (ork6 the only thin. that 8 "an really think o! is in"reasin. the transa"tions !ees6 ri.ht2 Be"ause you4re sayin. there4s no market me"hanism !or settin. these ri.ht no(6 so they "an/t properly value them. *o in"rease the disin"entives !or smaller transa"tions6 that means that you have to raise the

relative pri"e o! ea"h smaller transa"tion6 (hi"h means you have to raise the transa"tion !ee6 ri.ht2

AMA: *hat/s already happened. Got ne"essarily raisin. the transa"tion !ee6 3ut makin. it so that6 as a !irst step6 miners "an pro.rammati"ally set their minimum !ees and some re"ommendations a3out (hat those minimum !ees should 3e. 5hile at the same time6 keepin. the .ro(th o! the 3lo"k"hain6 the ma9imum 3lo"k si-e6 in"reasin. in a more "ontrolled !ashion. *hat "reates market pressure in itsel! to only in"lude transa"tions that pay enou.h to 3e (orth it. So6 it/s de"reasin. the supply o! spa"e in the 3lo"k"hain 3y arti!i"ially "onstrainin. the si-e o! the 3lo"ks6 the top end6 (hi"h (e4ve 3een doin. all alon.. And that puts a premium on transa"tion si-e6 (hi"h then in!luen"es the miners into makin. "hoi"es a3out (hat transa"tions they put in. So6 it4s 3e.innin. to 3rin. some o! these thin.s in6 3ut not in a very markete!!i"ient manner. ortunately6 this is "learly seen as an interim step 3y everyone involved. *he lon.-term .oal is to make this market me"hanism. SM: Hold on a minute thou.h6 3e"ause as 8 understand it6 the 3lo"k si-e ri.ht no( o! > me.a3yte is not 3ein. hit. 8t/s not inhi3itin. any transa"tions !rom 3ein. in"luded ri.ht no( - it may in the !uture6 3ut not ri.ht no(. Also another point6 there4s a 3i. di!!eren"e 3et(een 3uildin. into the "ode an in"reased transa"tion !ee6 sort o! a "entral (ay o! raisin. the transa"tion !ees6 versus lettin. the miners set their o(n minimum transa"tions !ee that they4re .oin. to in"lude in their 3lo"k. So6 8 think that/s a lot more de"entrali-ed me"hanism. AMA: At the moment6 (e don/t kno( (hat the out"ome (ill 3e. *here4s pressure even i! (e4re not hittin. the ma9imum 3lo"k si-e6 you have to ima.ine that a lot o! that is essentially sel!-re.ulation 3y the miners. &no(in. that the ma9imum is there makes you more sele"tively pi"k transa"tions or put settin.s that more sele"tively pi"k transa"tions and at the moment it/s not a pro3lem6 3ut 8 think that in turn is "onstrainin. people .eneratin. transa"tions6 3e"ause they kno( that they i! they try to put a lot o! tiny6 tiny6 tiny transa"tions6 that/s .oin. to push the miners to(ards !ilterin. them. *his 3alan"e is happenin. 3ased on "onsensus and understandin. (here the limits are and not approa"hin. them. ABL: *here are t(o thin.s here. +3viously6 this is a lon.er "onversation and 8 think (e4re pro3a3ly .oin. to (ind up "ontinuin. this on the ne9t episode (hen (e4re talkin. a3out mi"ro-transa"tions. But that/s kind o! (hat this "omes to. Mi"ro-transa"tions (ind up 3ein. the 3a3y that .ets thro(n out (ith the 3ath (ater in this 3e"ause (e4re "on"erned a3out these small transa"tions6 it/s very di!!i"ult to tell a small transa"tion !rom another small transa"tion. So6 i! you4re talkin. a3out a mi"ro payment that/s in the realm o! .?> 3it"oin or .??Q 3it"oin or somethin. like that6 then 8 %ust don/t see ho( there4s any (ay to really di!!erentiate 3et(een the t(o sin"e it/s su"h an a.nosti" proto"ol. AMA: At the moment6 there isn/t and that/s the pro3lem - (hi"h is .radually !indin. (ays to e9pli"itly en"ode unspenda3le transa"tion (hose .oal is to e9press data rather than payment so that those are not taken as spenda3le transa"tions 3y the miners and atta"h !ees to them so that they "an 3e pro"essed properly like everythin. else. So6 in a (ay this is really an interim thin.. 8 think over the ne9t I months (e4re .oin. to see some "larity and movin. more "learly to a market approa"h. ,i.ht no(6 essentially (e4ve .ot the (orse o! 3oth (orlds. *here is "onstraints on the limit o! the 3lo"k si-e and there4s no easy (ay to tell 3et(een a"tually paya3le transa"tions or non-spenda3le transa"tions 3e"ause you "an/t prove that they4re not spenda3le. [Advertisements] SM: 5ant to set up an online store that a""epts 3it"oins2 Fo to open3it"oinstore."om and you "an have a store up and runnin. 3e!ore the end o! this messa.e. ;ust enter your email address and the store name6

and in less than D?-se"onds6 you4ll have a se"ure 5ord$ress e-"ommer"e site up and runnin. that a""epts 3it"oins and pays you in "ash (ithin 7J hours6 and 3est o! all6 it/s "ompletely !ree. Fo to open3it"oinstore."om today and open !or 3usiness no(. ABL: Let/s *alk Bit"oin is heard ea"h (eek 3y thousands o! people (ho are parti"ipatin. in the ne( di.ital e"onomy. +ur listener 3ase o! 3it"oin o(ners6 miners6 investors6 te"hnolo.ists and mer"hants is .ro(in. !ast. 5e o!!er a limited num3er o! short advertisin. slots in ea"h sho( to keep our listeners en.a.ed and to provide ma9imum impa"t !or our sponsors. 8! you4d like to talk to us a3out Let/s *alk Bit"oin6 send us an email at sponsorsKletstalk3it"oin."om. [/Advertisements]

ABL: So this mornin. 84m %oined 3y Bailey ,eut-el (ith $aymentsSour"e6 and Mark Ho"hstein (ith Ameri"an Banker. +ver the last "ouple o! (eeks there have 3een some interestin. developments on the e9"han.e side o! thin.s and spe"i!i"ally (ith Mt. Fo9 and this on-.oin. D(olla issue6 (here there4s 3een some tension 3et(een the Department o! Homeland Se"urity and one o! payment pro"essors that Mt. Fo9 uses as its primary on-3oardin. me"hani" !or .ettin. Ameri"an users into their ;apanese system. 8 (as (onderin.6 !rom your perspe"tive6 (hat/s .oin. on here and (here do you think it/s .oin.2 MH: *his (as the !irst ma%or re.ulatory a"tion that (e sa( a.ainst a "ompany in the Bit"oin (orld and 8 think people (ere 3ra"in. !or it6 e9pe"tin. it to "ome sooner or later. 8t/s .oin. to 3e interestin. to see ho( Mt. Fo9 de!ends its position. 8nterestin.ly6 it all "omes do(n to the de!inition o! (hat is a money transmitter and (hat is a money servi"es 3usiness. *he inC#G .uidelines that "ame out "ouple o! months a.o indi"ated that they e9pe"ted "ertain 3usinesses that are involved in virtual "urren"y6 and they didn/t spe"i!i"ally mention Bit"oin at the time6 3ut they said that they e9pe"ted these "ompanies to "omply (ith the re.istration reCuirements !or MSBs and in many "ases6 (ith the money transmitter reCuirements (hi"h are even more strin.ent than the MSB re.istration6 and it seems that the .overnment has de"ided that Mt. Fo9 is a money transmitter. And 8 kno( a lot o! this6 (hat 84m tellin. you is nothin. you don/t kno(6 3ut they de!initely "ame pretty !ast and !urious in terms o! !ree-in. the a""ounts that Mt. Fo9 had here in the ES (ith D(olla and at 5ells ar.o6 and the so-"alled smokin. .un that they had (hen Mt. Fo9 or a su3sidiary o! Mt. Fo9 applied !or an a""ount (ith 5ells ar.o6 5ells ar.o asked them6 Oare you a money transmitter2O and they ans(ered OGo.O And 8 suspe"t that there may 3e some interestin. "ase at some point6 de3atin. (hat is the de!inition and do they have any plausi3le denia3ility2 ABL: =ou4re totally ri.ht. *hey did6 at one point6 say that they (ere not a money transmitter on one o! their appli"ations. But kind o! an interestin. thin. !rom (here 8 sit6 is that appli"ation (as a"tually !illed out in early 7?>>6 so at the time.. MH: Lon. 3e!ore the inC#G .uidelines "ame out6 ri.ht2 ABL: ,i.ht. #9a"tly6 so it seems like (hen these re.ulatory a"tions happen in almost a retroa"tive !ashion. Ho( "an 3usinesses really 3e e9pe"ted to "omply (ith that2 Do you think that that/s a !air standard2 MH: 8 think they mi.ht have a "ase (ith that. *he inC#G .uidelines (hen they "ame out a "ouple months a.o6 said that they (ere "lari!yin. .uidelines. *he su3te9t o! that (as6 in "ase you had any dou3ts6 yes6 this does apply to 3usinesses that !it these des"riptions6 that tra!!i" in virtual "urren"ies. But a.ain6 8 think it may 3e an interestin. de!ense that they "ould theoreti"ally mount. =ou told us a!ter the !a"t that (e (ere de!initely su3%e"t to this and no( you4re !ree-in. us. 8 don/t think they .ot a (arnin.. 8t

(asn/t like they .ot a "ease and desist letter that says you have D? days to .et li"ense as a money transmitter or (e4re shuttin. you do(n6 8 mean6 it "ame pretty Cui"kly. And no(6 i! they (ere a too-3i.-to!ail 3ank6 they mi.ht4ve .otten a little 3it .entler treatment6 3ut 8 think as a lot o! money servi"es 3usinesses6 not %ust in the Bit"oin (orld6 have learned6 %usti"e is pretty s(i!t and harsh i! you4re a small operation6 and i! you4re HSBC or a lar.e .lo3al institution like that6 you .et kid .loves. B : 8 think this sho(s the .ro(in. attention that/s 3ein. put on Bit"oin and these 3usinesses are really .oin. to have to pay attention to the .uidelines and (hat not. At the Bit"oin "on!eren"e6 some3ody in the le.al realm (as talkin. a3out ho( 5estern Enion (as really lookin. at Bit"oin too. So6 (e4re %ust seein. a lot o! these le.a"y systems start payin. attention 3e"ause Bit"oin has the opportunity to really disrupt those industries. ABL: At the Bit"oin "on!eren"e6 you4re there kind o! representin. - you (rite !or $aymentsSour"e6 (hi"h talks more a3out "onventional 3ankin. and thin.s like that. 5hat (as kind o! your take on Bit"oin. Do you think that it represents threat2 8s it a .ood thin.6 is it a 3ad thin.2 5hat your read at this point2 B : Bit"oin de!initely poses a threat to "ertain areas ri.ht no(. 8 kno( they (ere talkin. a3out this mi"ropayments6 like so you "an pay per arti"le instead o! per su3s"riptions. Charita3le .ivin. is another one that they talked a3out6 and then international remittan"e (as a really 3i. deal as (ell. So like 8 said6 5estern Enion and some o! these other (ire trans!ers6 Bit"oin de!initely poses a threat to them. But supposedly6 they4re on it. So6 (ill they (ork (ith Bit"oin or ho( (ill they (ork (ith Bit"oin6 8 .uess6 is (hat (e need to think a3out no(2 MH: 8n the 3i..er pi"ture6 Adam6 all these thin.s "ould 3e "omplimentary. 5hen people talk a3out "ompetition6 "ompetition does not al(ays have to mean (inner-take-all. $en"ils and pens "ompete (ith ea"h other in some sense6 3ut there are some types o! (ritin. that you mi.ht "hose to do (ith a pen"il and there are some types o! (ritin. that you mi.ht "hose to do (ith a pen. Bit"oin4s an alternative that "ould siphon o!! some transa"tion volume6 3ut it doesn/t mean kno"kin. the other thin. out o! the 3o9 ne"essarily. Somethin. that 8 al(ays like to talk a3out6 (hen (e talk a3out .oin. to a "ashless so"iety there are "ertain transa"tions today that 8 like to pay !or (ith my "redit "ard6 3e"ause even thou.h 8 pay it o!! the "redit "ard at the end o! every month6 8 like to .et the re(ards6 8 like the !raud prote"tion. So6 there is some value to that6 3ut there are other transa"tions that today6 8 mi.ht "hose to pay !or (ith "ash and i! "ash .oes a(ay6 8 mi.ht (ant some other (ay to pay that is not ne"essarily tra"ked6 and tra"ed6 and data-mined and that there needs to 3e some kind o! an alternative as (e .o to di.ital payments6 and Bit"oin has sho(n that that/s possi3le. ABL: =ou say that "rypto "urren"ies represent an alternative6 and 8 think that 8 a.ree (ith that6 3ut the part that 8 "ome 3a"k to6 you kno(6 in the $en"il:$en ar.ument is that may3e that (ouldn4t 3e the "ase6 i! all the (orld had ever kno(n (as pens. =ou kno( (hat 8 mean2 8t seems like that4s true6 3ut ri.ht no(6 (e have kind o! a de3t 3ased money system6 and Bit"oin isn4t de3t 3ased6 Bit"oin is asset 3ased6 it4s o(nership 3ased. ;ust seems like it4s very6 very disruptive to a lot o! e9istin. systems 3eyond the ones that you happen to mention. 8 am "urious !or your thou.hts on that2 MH: 8t de!initely is an emer.in. "ompetitor to $ay$al6 and to some e9tent6 to 5estern Enion6 MoneyFram6 3usinesses like that. =ou kno(6 there is a report that "ame out a3out a (eek a.o 3y this "ompany "alled 8S6 they are vendor o! 3ankin. te"hnolo.y6 the "ore systems that 3anks run6 they are one o! the 3i. providers o! that. And they did this (hole sort o! !o"us .roup study a3out real-time payments6 and they did all these sort o! pollin. and resear"h to make a 3usiness "ase that "onsumers (ant real-time payments6 and that they (ould "onsider this e9tremely valua3le. And 8 read that6 and 8 thou.ht it4s kind o! silly that in the (orld that (e live in today6 (here 8 "an send you an email and you4ll .et

it almost instantaneously6 that it4s "onsidered a sort o! a .oal or rea"h !or the 3ankin. system to ena3le real-time person-to-person payments or a""ount-to-a""ount trans!ers or real-time remittan"es. Ho( hard "ould it possi3ly 3e2 8! you 3uild the 3ankin. system !rom s"rat"h today6 it (ould look more like Bit"oin than the pat"h(ork that (e have6 and so it sho(s (hat 3ankin. "ould 3e like i! you didn4t have so many le.a"y systems. ,e.ulation is also a !a"tor and 8 don4t (ant to 3e disin.enuous6 8 think that the part o! the issue the 3anks !a"es they have a AML and &=C reCuirements. *hat adds "ost and that adds !ri"tion. Satoshi didn4t ask !or any li"enses or permissions (hen he desi.ned Bit"oin6 he %ust kind o! L(entM ahead and did it6 and le!t it !or the users to !i.ure out ho( they inte.rate that into the real (orld. B : 8t4s de!initely really 3ene!i"ial !or mer"hants LthatM the "urren"y sta3ili-es. 8t4s .oin. to 3e a "heaper system i! like Mark said6 (e "an keep the "ost do(n6 3ut (ith the "urrent re.ulations 8 am not sure that that4s .oin. to 3e possi3le6 3e"ause these 3usiness are .oin. to have to start .ettin. state li"enses (hi"h is a pretty 3i. e9pense6 3ut you also have the no "har.e-3a"k thin. (hi"h6 !or mer"hants6 looks very attra"tive. So6 hope!ully6 (e "an do that and then it (ill 3e a 3i. threat6 3ut the re.ulation ri.ht no( is - (e are .oin. to really have to talk to the re.ulators6 8 think - the Bit"oiners are a"tually .oin. to have to .o out and make that happen and not (ait !or the .overnment to ask them. ABL: #rik Hoorhees is one o! the names out there in the Bit"oin "ommunity (ho is 3asi"ally sayin. that it is a 3ad idea and askin. !or trou3le to operate any kind o! Bit"oin 3ased 3usiness out o! the ES. So6 on one side o! it6 there4s that. +n the other side o! it6 as you4re talkin. a3out (hat the re.ulations and state 3y state li"enses some states6 su"h as *e9as6 have essentially said that anyone (ho does 3usiness (ith anyone livin. in *e9as (hether or not you have a ne9us6 as they "all them6 (ithin the state must "omply (ith6 have all the li"enses and !ollo( all o! the rules as i! they (ere in the state. Do you think that there is a pla"e !or Bit"oin 3ased 3usinesses to 3e operated out o! the Enited States6 or do you think (e (ill see more o! an e9odus as (e move2 B : 8 (ould %ust say that 8 think there is a lot more states than %ust *e9as. Most o! the states that 8 mean you have to .et li"enses in6 even i! you4re outside o! the ES. So that4s %ust somethin. that .oin. to have to happen either (ay. MH: 8 think it4s .oin. to 3e hard. 8 think it4s de!initely .oin. to 3e hard !or Bit"oin-related 3usinesses. #rik (orked that Bit8nstant and they sa( the (ritin. on the (all in the sense that they did re.ister as an MSB a lon. time a.o6 like6 more than a year a.o6 8 think. *hey re.istered as an MSB6 they %ust6 you kno(6 it (asn4t ne"essarily that they (ere 3ein. .oody .oodies. $eople don4t (ant to .o to %ail. *hat4s a very reasona3le motivation. 8 think it4s .oin. to .et harder and 8 think you are seein. ripple e!!e"ts !rom the re.ulation throu.h the 3ankin. system. 8 kno( o! at least one Bit"oin entrepreneur (ho had to put some plans on hold 3e"ause his 3ank .ot !reaked out. -Got that it (as 3ased ne"essarily on lo.i" or reason or pointin. somethin. spe"i!i" in the re.ulations6 it (as the Mt. Fo9 sei-ure ne(s 3roke6 and the 3ank that previously had made "ommitments to (ork (ith him %ust said6 '(e are not doin. this6) and the .uy has to start !rom s"rat"h a.ain. So there4s these sort o! indire"t e!!e"ts that are "omin. !rom the re.ulations. 8t4s .oin. to 3e hard. 8t4s .oin. to 3e really interestin. to (at"h. 8 don4t kno( (hether there has to 3e an e9odus6 3ut 8 (ouldn4t 3e surprised i! some entrepreneurs sou.ht more (el"omin. %urisdi"tions. B : 8t .oes (ith the Bit!loor thin. too6 (ith ,oman. His a""ount .ot shut do(n at Capital +ne6 and likely 3e"ause they4re lookin. at him as risky money transmitter 3usiness6 (hi"h even outside o! the Bit"oin spa"e6 those a""ounts .et shutdo(n Cuite !reCuently. But he4s havin. to deal (ith like .ettin. the "he"k 3a"k !rom the 3ank6 and then !indin. another 3ank to open an a""ount so he "an .et that money 3a"k to his users 3e!ore6 (hi"h is .oin. to 3e Cuite di!!i"ult !or him6 so it4s %ust6 yeah6 8 think the ES re.ulations and the 3ankin. system ri.ht no(6 lookin. at Bit"oin 3usinesses6 it4s .oin. to 3e a stru..le !or Bit"oin

3usinesses. ABL: +ne thin. that %umped out to me a3out the Mt. Fo9 issue (as that the a"tions a"tually taken 3y the Department o! Homeland Se"urity. 8 had 3een under the impression that this (as not .enerally an area that they (ere involved in. So6 a.ain6 !rom your perspe"tive6 is this a normal a"tion2 Should it have "ome !rom a di!!erent a.en"y2 8s it surprisin. to you at all2 +r am 8 %ust makin. somethin. out o! nothin.2 MH: 8 (as surprised. 8 am not an e9pert in all o! the le.al issues here 3ut 8 (as little 3it surprised6 3e"ause 8 think (hen 8 think o! the Department o! Homeland Se"urity6 8 think o! LthemM stoppin. ti"kin. time 3om3s or (hatever. May3e this does !all under their port!olio6 3ut you kno(6 inC#G (ould have 3een the a.en"y 8 (ould have e9pe"ted to take a"tion6 and o! "ourse it doesn4t really help in terms o! opti"s that it4s Department o! Homeland Se"urity6 ri.ht6 8 mean... ABL: Certainly. MH: 8! the kno"k on "rypto-"urren"ies is that they !a"ilitate money launderin.6 then even i! this (as under the %urisdi"tion o! DHS it %ust sort o! has all this insinuations that may not 3e !air. 8 mean the "rime that alle.edly (as "ommitted 3y Mt. Fo9 (as operatin. as aLnM unli"ensed money transmitter6 so 8 have seen no eviden"e that any ne!arious "hara"ters or truly ne!arious "hara"ters (ere usin. Mt. Fo9 to launder money. 8t (as more %ust a violation o! the reCuirements to !ile the ri.ht paper(ork and pay the !ees and (hatnot. But (hen you have DHS involved6 that name %ust has "ertain asso"iations (ith it. ABL: 5here do you think that this "rypto"urren"y movement is .oin.2 MH: 8 think there is... Bailey had to step out 3y the (ay. rom (hat she told me a3out the "on!eren"e6 there is still a lot o! interest in it. De!initely !rom the HC "ommunity. 8 think that dealin. (ith the re.ulators is .oin. to 3e a "hallen.e. 8 think dealin. and inte.ratin. (ith the 3ankin. system is .oin. to 3e a "hallen.e. But there is somethin. that - 8 al(ays !or.et to note this (henever 8 talk a3out 3it"oin (ith people - 3ut there is somethin. that "rypto"urren"y has .oin. !or that it4s sort o! su3%e"tive6 3ut the ener.y and the enthusiasm around it in that "ommunity is really somethin.. 8 have never heard o! anyone talk a3out .oin. to a Foo.le 5allet MeetEp6 ri.ht2 Ho( many $ay$al user !orums are there out there6 aside !rom (hat people "omplainin. a3out $ay$al. *here is a real sort o!... And "riti"s "all it "ultish and 8 a"tually think that it sort o! very endearin. (ith the people you meet there6 there really into it6 they 3elieve they are "han.in. the (orld6 8 don4t kno( i! they a"tually are "han.in. the (orld6 3ut they 3elieve in it and they are dedi"ated and that "ounts !or somethin.. *he other thin.6 (hen people talk a3out the value o! "rypto"urren"y6 i! 8 handed you a poker "hip and 8 said6 OAdam6 this poker "hip is really valua3le6O you (ould lau.h at my !a"e - it4s %ust a pie"e o! plasti". But i! 8 told you that this poker "hip "ould sprout out (in.s and !ly any(here in the (orld pro3a3ly instantaneously6 and at tops 7? minutes6 any(here 8 said on "ommand6 and the person re"eivin. it (ouldn4t even have to kno( it "ame !rom me6 (ell that has some value. 5e don4t kno( e9a"tly ho( mu"h that (orth6 3ut it4s (orth somethin.6 and so 8 think as lon. as the e9"han.e rate is... And you kno( (hat it4s sta3ili-ed too6 it4s like over a >?? no( ri.ht2 8 mean it (as like >>7 last 8 "he"ked. ABL: =eah6 it4s 3een !loatin. around there. MH: =eah6 so6 you kno(6 a!ter the volatility !e( (eeks a.o6 it seems to 3e !airly sta3le 3ut as lon. as this thin. .ets (orth more than a penny in terms o! the e9"han.e rate6 then the proto"ol is use!ul. So6 8 don4t kno( i! it4s .oin. to %ust sort o! stay as under.round thin. or it (ill .et more mainstream6 3ut it4s .oin. to 3e really interestin. to (at"h6 and 8 don4t kno( e9a"tly ho( it4s .oin. to play out6 3ut 8 do think it4s .oin. to

have some kind o! an impa"t. #veryone makes !un o! me here 3e"ause 8 talk a3out Bit"oin so mu"h around the o!!i"e6 and 8 have 3een into it !or like a year no(6 3ut 8 %ust... 8 really admire that "ommunity. As !ar as (hether Bit"oin "an 3e "ompati3le (ith 3ankin. - in a 3etter (orld it (ould 3e. 8 mean6 in reality6 no. 8n reality 8 think there is .oin. to 3e6 like6 they are either .oin. to really "ra"k do(n on these 3usinesses6 or it4s .oin. to !or"e some kind o! a 3roader "onversation a3out money and priva"y6 (hi"h is - the optimisti" vie( is that may3e like people (ill take another "loser look at some o! these money launderin. la(s. Do (e really need &=C at the very lo( end2 8 (ent to MoneyFram last year %ust to pay a 3ill6 and 8 had an invoi"e num3er !or the 3ill6 ri.ht2 So6 8 had the "orre"t amount o! money6 "orre"t amount o! "ash6 8 had the invoi"e num3er6 so the re"ipient o! the payment kno(s that it4s the ri.ht 3ill6 3ut MoneyFram still asks and they didn4t6 the re"ipient did not need my name or address. ABL: ,i.ht6 they don4t "are they "are as lon. as they .et paid. MH: ,i.ht6 3ut MoneyFram insisted that 8 .ive them my name and address. And 8 am sure it4s not 3e"ause MoneyFram really "ares. *hey are pro3a3ly doin. it - either they are e9pli"itly reCuired to do that under &=C6 or they are tryin. to impress the re.ulators 3y .oin. over-and-a3ove sayin. look at all this data (e are keepin.. But either (ay6 8 mean6 (hy do 8 have to have my name and address !loatin. around one more data3ase2 ABL: And it kind o! 3rin.s us 3a"k around to this 3i. vs. small is a"tually in reality di!!erent6 3ut the (ay that our rules tend to (ork does not di!!erentiate 3et(een those t(o. 8t4s very one-si-e-!its-all solution a.ain this is an area (here 3e"ause Bit"oin is so .ranular in its implementation6 8 mean6 you "an do very6 very small payments very easily6 you "an do very6 very lar.e payments very easily. 8t seems like the lar.e payment si-e is kind o! already taken "are o!6 (e have systems (here that already !un"tions (ell and its "ost relative to the amount that 3ein. trans!erred isn4t that 3ad6 3ut it4s on that lo( end (here these ne( "rypto"urren"ies really seem to 3e innovatin. 3y takin. out a lot o! this6 !rankly6 heada"he. 8 mean6 do you think that the system "ould possi3ly develop in su"h a (ay so that smaller transa"tions6 or little stu!!6 small-3all stu!!6 is not under the same sort o! reCuirements su"h as the &no( =our Customer - &=C - and all o! the other re.ulatory 3urdens that the 3i. 3anks need to have !rom the perspe"tive o! .overnment6 3ut may3e don4t make sense on the small ones. MH: 8t "ould 3e (ith6 like6 the Lo"al Bit"oin sellers6 3e"ause there is an out in the inC#G re.ulations. 8t says you4re su3%e"t to these reCuirements6 you4re a money transmitter - MSB - i! you do this 'as a 3usiness.) So some o! these Lo"al Bit"oin sellers6 and 8 don4t ho( they de!ine 'as a 3usiness6) 3ut the MeetEp .roup that (e .o to6 some o! those people have 3ou.ht or sold 3it"oins in over the "ounter market6 and that "ould %ust 3e part o! the solution6 3e"ause they keep under the radar6 they do a little transa"tions here and there. 8t4s not super e!!i"ient6 3ut it4s harder to "ontrol or shutdo(n like Mt. Fo9 (as. Mt. Fo9 (as the least Bit"oin-like aspe"t o! the Bit"oin (orld6 ri.ht2 8 mean Bit"oin is de"entrali-ed6 it4s peer-to-peer6 it4s distri3uted6 it4s you kno(... *his is somethin. a"tually you .uys should talk a3out (ith your "o-host is that you "an ar.ue that it4s anti-!ra.ile system. ABL: =eah6 8 am very !amiliar (ith this "on"ept. 5e4ve 3een talkin. a3out it !or a3out a month no(. =eah6 the more you pun"h it6 the less dama.e you take !rom ea"h pun"h. MH: ,i.ht6 so 8 think the little Bit"oin sellers "ould 3e part o! the solutions. 8t4s not .oin. to 3e a .reat (ay !or like HCs to 3uy this stu!!6 or !or institutional investors6 3ut i! 8 (ant to 3uy somethin. !rom... And it4s not super e!!i"ient either to .o to meet someone at the Star3u"ks to .et the payment. 8 mean6 that (ill 3e a part o! it@ people (ho run a little small 3usinesses i! they %ust start a""eptin. 3it"oins and .ettin. paid in 3it"oins. =ou "an4t live on that6 e9"ept !or that or3es reporter6 you "an4t. *he priva"y aspe"ts o! Bit"oin

are (hat really dre( it to me. *he (hole idea that you "an do di.ital transa"tions and not 3e tra"ked6 and tra"ed6 and "atalo.ed i! you don4t (ant to 3e. 8 think that4s very valua3le6 and 8 think that4s very valua3le to people (ho are not ne"essarily "riminals and terrorists6 and that4s (hat e9"ites me6 and the idea that you "an 3ypass "ensorship6 so %ust 3e"ause ;oe Lie3erman doesn4t (ant you to send money to 5ikiLeaks6 Bit"oins .ives you a (ay to do it. *hat4s (hat ener.i-es me. 5ho kno(s6 may3e rei"oin is ri.ht2 May3e rei"oin is... that4s the one that i! you don4t spend6 it you .et ta9ed6 ri.ht2 8s it somethin. like that2 ABL: ,i.ht. =eah6 that is the one that looses value over time6 "ertainly. MH: 8n theory6 8 (ould entertain a "rypto"urren"y that (as "ra-y and ma.i" money tree "rypto"urren"y6 not sayin. that 8 a.ree (ith those theories6 either6 8 am %ust a.nosti" a3out that6 3ut Bit"oin4s out there. 8t4s made a "ontri3ution already %ust in terms o! humanity %ust 3e"ause o! those other aspe"ts o! it6 re.ardless o! (hether they are ri.ht a3out in!lation or de!lation. ABL: My theory is I months to >7 months !rom no( (e4re .oin. to see "on.ressional hearin.s. 5here they pull in 3asi"ally any3ody they "an !ind to talk a3out this Bit"oin thin.6 and 8 am "urious6 3ut do you think that that4s an a""urate time !rame here 3ased on ho( thin.s are lookin.6 or do you have a .uess2 MH: 84d say I months sounds a3out ri.ht. *o the e9tent that 3anks are payin. attention to Bit"oin6 they pro3a3ly !eel threatened at the mar.ins. 8 am sure they (ould all say like O+h (ell6 (e have to invest in all this "omplian"e6 so (hy don4t these other ne("omers have to do it2O. ABL: 8 mean a.ain (ith all these thin.s it4s kind o! like !i.htin. 3a"k the tide to a "ertain e9tent. #ven as an o3server standin. (ay 3a"k you "an kind o! see the dire"tion that thin.s are .oin.6 and so you "an !i.ht that6 3ut that4s still the dire"tion that thin.s are .oin. in. MH: 84d like to make the analo.y to E3er. E3er is sort o! the start-up that shoots !irst and asks Cuestions later6 and they run into resistan"e !rom all o! the "ities they .o in to. *hey insist everythin. they4re doin. is le.al6 3ut they .et a lot o! "hallen.es6 3ut they "reate !a"ts on the .round. 8 hate that e9pression6 3y the (ay6 3ut 8 "an4t think o! a 3etter (ay to say it is that they .o in6 they start their 3usiness6 they .et "ustomers (ho like them6 and then they !i.ure out the re.ulatory stu!!. 8 (onder i! that4s the (ay to .o !or disrupters in the !inan"ial servi"es industry6 and 8 don4t kno( (hat the ri.ht ans(er is. But "ontrast that... Have you ever heard o! Aaron Freenspan2 ABL: Aaron Freenspan2 Go6 8 don4t 3elieve so. MH: Aaron Freenspan he has a "ompany "alled6 or he had a "ompany "alled a"e"ash out on Cali!ornia. 8t (as some kind o! a innovative payments idea he had. He 3asi"ally put a million dollars into this thin.6 and he4s had a really... Basi"ally6 he never .ot his 3usiness o!! the .round 3e"ause there4s a money transmitter la( passed in Cali!ornia in 7?>? that (as lo33ied !or 3y Ameri"an #9press6 5estern Enion et". that 3asi"ally .ave the state re.ulator dis"retion as to ho( mu"h o! a 3ond that a ne( li"ensee had to put up6 and this .uy "ould never .et a strai.ht ans(er !rom the Cali!ornia re.ulator as to ho( mu"h money he (as supposed to have or ho( mu"h "apital he (as supposed to have6 and he (as never a3le to start his 3usiness. He sued the state6 he sued a lot o! people. *hat4s kind o! a sad story6 3ut you kno(6 he (as an e9ample6 you "ould point to him as an e9ample. Here4s a .uy (ho tried to play 3y the rules6 and asked !or permission6 and did everythin. he (as supposed to do and he .ot hosed. As opposed to E3er or AirBnB. *hey startup and they .et "ustomers and they do 3usiness and then later on O+h 8 didn4t kno(6 8 (as supposed to apply !or a li"ense6) and (hat4s the ri.ht ans(er 8 don4t kno( it6 and 8 don4t (ant to advi"e anyone to .o and test the limits. 8 "ould have it on my "ons"ien"e i! they ended up in a 3ad situation6 3ut

at the same time6 8 see the "ase !or that. ABL: *he results speaks !or themselves to a "ertain point. So6 8 have an unrelated Cuestion6 (e are in the pro"ess o! turnin. Let4s *alk Bit"oin into a !ormal %ournalisti" or.ani-ation. 5e are at this "on!eren"e6 makin. these de"isions6 and 8 "ome 3a"k and 8 see that this kind o! ma%or s"andal has 3roken a3out .overnment (ire taps and su3poenas and la(suits6 essentially .oin. a!ter %ournalists !or 3ein. %ournalists. 84ve 3een (at"hin. this spa"e !or a lon. time6 and 84ve a"tually never seen anythin. like this in my li!etime. 8 am only 7B. *he 3i..est re!eren"e point that people "an .ive me is that this is (hat happened durin. the Gi9on administration. *his seems like it4s an important development to me6 and 8 am "urious i! you also think that2 MH: 8 think a lot o! %ournalist6 parti"ularly i! they are reportin. on sensitive topi"s like national se"urity6 are .oin. to have to learn more a3out "rypto. L84veM 3een da33lin. (ith this stu!! !or a3out a year6 3ut it4s mostly 3een theoreti"al. 8 don4t like the idea that the GSA "ould 3e listenin. - 3y the (ay6 i! the GSA is listenin.6 pea"e 3e upon you. ;ust on the a3stra"t level6 3ut you kno(6 it4s 3e"omin. more palpa3le. S6o 8 think that %ournalist... 8n !a"t6 this is the topi" o! the panel 8 am .oin. to do at the Ge( =ork "on!eren"e. Got so mu"h !or Bit"oin (ith %ournalists. So6 that4s part o! it. H$Gs and *or and ;itsi. Start makin. use o! those tools. Go limitations o! them 3e"ause none o! them are .uaranteed to 3e >??R !oolproo!6 3ut a.ain6 that4s not a reason not to use it6 and you "an put a kryptonite lo"k on your 3ike6 and there is still a "han"e that someone (ill use reeon to smash it6 3ut it4s 3etter than %ust leavin. your 3ike on the street (ith no lo"k6 ri.ht2 So6 yeah6 8 mean no6 no it4s horri3le6 it4s "ompletely L3eepM up. 8 used to make !un o! *ea $artyers6 and 8 still reserve the ri.ht to make !un o! *ea $artyers.

ABL: (lau.hs) MH: But they look a lot more "redi3le6 no(. 8! the 8,S (as pro!ilin. .roups to s"rutini-e 3e"ause they have patriot or *ea $arty or Li3erty in their name. May3e they have a point (hen they talk a3out this stu!!. 8t4s not en"oura.in.. 8t is not .ood. And that4s (hy 5ikiLeaks is an important part o! the Bit"oin story that .ets overlooked too mu"h. Say (hat you (ill a3out 5ikiLeaks6 ;ulian Assan.e is kind o! a L3eepM. But they (ere a %ournalisti" (histle-3lo(er or.ani-ation that some politi"ian de"ided e9trale.ally put pressure on the 3i. payment net(orks to stop sendin. payments to. 8t4s $ay$al4s 3usiness i! they (ant to send money to someone or not. 8t4s there "ompany. But there ou.ht to 3e some alternative (ay to .et money around6 so that4s (hy Bit"oin4s an important alternative6 3e"ause it "an4t 3e "ontrolled. ABL: *here is a dire"tionality that (e are movin. in6 and it4s not one that involves more !reedom !or people and less s"rutiny !or people. *his is kind o! all done under the auspi"es o! prote"tin. "iti-ens a.ainst "riminals - very 3road strokes6 o3viously. *his is a 3ad dire"tion6 and it4s... And the a"tions that are 3ein. taken6 like the %ournalisti" thin.6 3e"ause %ournalisti" or.ani-ations haven4t really 3een doin. their %o3 (hen it "omes to "overin. politi"al issues !or Cuite some time no(. *hat4s a"tually not a ne( thin.. 8 don4t think many people are surprised a3out that at this point. 5hat is surprisin. is that no(6 the stru"ture that they have 3een representin. and apolo.i-in. !or and presentin. the "ase !or6 is turnin. on them6 and to me6 that says that somethin. is very (ron. (ith not %ust the system6 3ut somethin. is so (ron. that it4s reCuirin. almost "anni3ali-ation o! the e9istin. "ontrol me"hanisms. So6 a.ain6 this "an 3e on and o!! the re"ord as you like it6 3ut 8 am very "urious i! 8 am readin. this (ron.2 MH: *hat4s a 3i. Cuestion. ABL: 8t is6 yes6 and like 8 said 8 am .enuinely "urious mysel!6 3e"ause 8 am lookin. at this situation6 and

.oin.@ Man6 8 am startin. a %ournalisti" or.ani-ation at a time (hen %ournalism is !un"tionally 3ein. outla(ed and 8 am doin. it a3out a topi" that invalidates a lot o! the e9istin. po(er stru"tures 3e"ause it takes out all o! the pro!it. MH: =ou kno(6 the pendulum "an s(in. the other (ay. Go( that the A$ thin. has 3roken they4re makin. a stink a3out it. +ne (ould hope that that (ould provoke su!!i"ient outra.e that there is some push3a"k. 8 don4t think it4s the apo"alypse 3ut it4s %ust 3ad6 and it does not re!le"t (ell on this administration6 it does not re!le"t (ell on his party6 o! (hi"h 8 (as raised to 3elieve that (as the party o! "ivil li3erties6 hah< But sho(s you ho( mu"h attention 8 (as payin.. 8 mean6 there is .enerally a .ro(in. mistrust o! institutions (hether they 3e .overnment6 media6 the 3anks... ABL: or me6 it4s a3out "entrali-ation. 8 mean6 really. MH: =eah6 8 think that the peer-to-peer thin. is a very stron. "ase !or it. 8t4s a 3i. philosophi" Cuestion6 3ut yeah6 you de!initely have a .ood point6 3ut the media is 3e"omin. more and more di!!use on its o(n. *he 3i. media outlets6 they are all stru..lin.. Ameri"a Banker4s .ot a ni"he6 so (e4re doin. ok. A"tually6 (e4re doin. pretty (ell6 8 think. ABL: ,i.ht6 you4re not !inan"ially sensitive6 yeah6 8 a.ree (ith you 8 think that the ni"he that you4ve approa"hed is .ood6 and a.ain it almost speaks to that idea that the smaller that you .et the more valua3le that you are6 and the inverse o! that is also true6 the lar.er you .et the less relative value you o!!er to ea"h individual 3e"ause you have to a""ommodate more individuals in your perspe"tive. MH: =eah6 you kno(6 the !unny thin. is that (e are a"tually the oldest !inan"ial ne(spaper o! the "ountry. ABL: 8 didn4t reali-e that. MH: 84ll leave you (ith this. 5e (ere !ounded in >BDI (hen every 3ank issued it4s o(n "urren"y6 and there (as no national "urren"y6 and the ori.inal mission o! (hat (as ori.inally "alled *hompson4s Bank Gote ,eporter (as to di!!erentiate 3et(een the 3ank notes that (ere !or real and the 3ank notes that (ere L3eeM. So you kno( he (ould e9pose "ounter!eits. ;ohn *hompson (ould e9pose 3anks that6 shinplasters (as the term he used. He (ould send his sons around to(n in Ge( =ork6 and they (ould .o to di!!erent 3anks (ith the 3ank notes and say here4s a dollar that you4ve issued "an you .ive us a dollar4s (orth o! .old2 And the ones that "ould .ive them - "ould produ"e the .old "oins (ould .et .ood ratin.s in *hompson4s Bank Gote ,eporter and the ones that "ouldn4t he (ould sava.e them. So our herita.e ties 3a"k to all this stu!!... ABL: =eah. MH: He (as a "hara"ter. He (as a pra"titioner as (ell as a %ournalist. He !ounded one o! the 3anks that is no( part o! either Citi3ank or Chase6 8 !or.ot (hi"h. And his sons (ere 3ankers too. But here is a (ild "hara"ter. ABL: Mar" Ho"hstein6 Ameri"an Banker. *hank you very mu"h !or your time. MH: My pleasure. (short pause (ith musi" playin.)

AMA: 8 may have .otten some o! these te"hni"al details not Cuite ri.ht. So6 8 (ill a3solutely (el"ome people4s responses and 3e "orre"ted6 and6 in !a"t6 it (ould 3e .reat to have some o! the developers intimately involved in these de"isions and (ho understand the 3alan"e and "omprises and tradeo!!s more "learly talk a3out this6 and perhaps "ome on the sho( and 3e intervie(ed6 3ut the 3ottom-line6 the prin"iple 8 really !o"us on6 is the prin"iple o! neutrality. 8t4s 3asi"ally re"o.ni-in. that (e have no idea (hat Bit"oin (ill 3e as a plat!orm6 and (hat appli"ations (ill 3e ena3led. 5e have 3arely s"rat"hed the sur!a"e6 and in terms o! the 8nternet history6 (e are at the point o! ena3lin. email6 (hi"h (as on the 8nternet in the S?s. rom there until you .et to a"e3ook there is a lot o! evolution that happens6 and none o! it (as !oreseea3le 3a"k in the S?s. So let4s not make net(ork that "an only do email. *hat4s the 3asi" "on"ept here. Geutrality (ill help us 3uild the ne9t layer o! appli"ations and a3ove that the ne9t and so on. ABL: 8 think that that4s really a .reat point to emphasi-e is %ust that (e don4t kno( (hat4s .oin. to happen. 8t4s that (e4ve .ot this thin. that o3viously has potential and there "ould 3e so many thin.s that "ould "ome on top o! it6 3ut the appli"ations that are .oin. to 3e the really revolutionary ones that "han.e everythin. (e have no idea (hat they look like. So6 yeah6 %ust reservin. those de"isions. 8! this de"ision should 3e made it shouldn4t 3e made at this point. 8t needs to 3e made !urther do(n on the line (hen (e4ve seen some o! this .ro(th that "omes on top o! it6 and (e say@ +k (ell6 these are the thin.s that (ork and these are the thin.s that "learly do not (ork. But even so6 the point is that the de"ision 3ein. made no( is a de"ision made in i.noran"e and it4s al(ays a poor "hoi"e to do that. AMA: =ou4re mu"h more likely to .et the de"ision (ron. at this point. +ur plannin. hori-on is mu"h shorter than our innovation hori-on6 so essentially you4re steerin. 3lind i! you make de"isions like that no(. *he key here !or me is neutrality is not a la"k o! prin"iples. Geutrality is a prin"iple in itsel!. 8 think it4s the most important prin"iple in Bit"oin - the one that .ives it all its po(er. ABL: *hanks !or tunin. into #pisode >D o! Let4s *alk Bit"oin. 5hether you liked6 loved or hated the sho(6 (e (ant to kno( (hat you think. $lease send all "omments6 Cuestions and o!!ers to help to mailKletstalk3it"oin."om. *hanks to Andreas M. Antonopoulos6 Dr. Stephanie Murphy6 *homas +4Brien6 Mi"hael Me.an6 Chris +dom6 Charles Hoskinson6 Mar" Ho"hstein and Bailey ,eut-el !or providin. "ontent !or this episode. Musi" !or this episode (as provided 3y ;ared ,u3ens . or more in!ormation a3out the musi" (e use and the open sour"e artist to "reate please visit (((.letstalk3it"oin."om:musi". Stay tuned !or #pisode >J "omin. up on riday6 the Sth o! ;une !eaturin. an intervie( (ith $eter6 the lead developer o! eather"oin and Ta"h one o! the minds 3ehind the Bit"oin vendin. ma"hines "omin. to a !uture near you. As al(ays you "an !ind our episode spe"i!i" tip %ars and other support means at (((.letstalk3it"oin."om. *hanks !or listenin..

*his episode (as trans"ri3ed 3y Lord8* and Mansoor Mu-a!!ar. *he trans"ription (as revie(ed 3y A3dussamad (https0::3it"ointalk.or.:inde9.php2a"tionUpro!ile@uUBQVB>). *his trans"ript is released under the Creative Commons Attri3ution D.? li"ense0 http0::"reative"ommons.or.:li"enses:3y:D.?: