Transcription of Episode 4 The Horrible Warnings

Participants: Adam B. Levine (AL) Host Andreas M. Antonopolous (AA) Co-host Stephan Murph (SM) Co-host !oe Cascio (!C) - Bitcoin "# pro$ect% appears in se&ment startin& at '(:))

Adam B. Levine: (Over intro music) Hi* and +elcome to Let,s -al. Bitcoin* a sho+ /or an one interested in cr pto-currencies and the /uture o/ mone . Comin& up on toda ,s sho+: Pro$ect -al. 0r11Aid* distri2uted "#* and Bitcoin neutralit . Listener mail Litecoins* A3* and 2itcoin 2an.s. M intervie+ +ith !oe Cascio o/ the Bitcoin "# pro$ect* +here +e discuss his plan to ta.e 2ac. our identit * eliminate site-speci/ic lo&ins* and put the spammers out o/ 2usiness* 2 .eepin& our online identit in the 2loc.chain. -oda ,s horri2le +arnin&: Bitcoin A-M 2lo+s up4 And 2ecause +e $ust couldn,t not tal. a2out it* toda ,s other horri2le +arnin& is: Coinla2 sues Mt. 5o6. 7hat,s &oin& on here8 7e investi&ate. 9isit us at Lets-al.Bitcoin.com to su2scri2e* /or /ree* to our t+ice-+ee.l sho+. :ou can also /ind us on Stitcher ;adio* or in the ,<e+ and <ota2le, section o/ i-unes. "n our continuin&* =uote* >can +e support the sho+ /rom listener tips8? series* +e 2ro.e our ( 2itcoin-per-sho+ &oal +ith episode num2er 1. So /ar* +e,ve received (.@@)A( 2itcoins /rom a total o/ ten donors. -han. ou ver much. -his included a sin&le donation o/ one 2itcoin* and +hile lar&er donations are &reat* ultimatel +e can,t e6pect sin&le individuals to support the ma$orit o/ a sho+. Please remem2er that even i/ the amount ou +ould donate is small* +ith 2itcoin and a &ro+in& audience* it adds up /ast. Since +e,ve hit our &oal* some /un thin&s are &oin& to happen* and the ne6t /acet o/ the $ournalistic empire rolls out soon. "/ ou,re 2rand ne+ to Bitcoin* and +ould li.e to learn ho+ it +or.s in more detail* please visit letstal.2itcoin.comBlearn to 2e directed to the Bitcoin Cducation Pro$ect* +hich " hi&hl recommend.

",d also li.e to announce a schedulin& shi/t. Dur tendenc has 2een to release Saturda s and -uesda s. 7e,re shi/tin& it* /or host schedulin& reasons* to 0rida s and -uesda s. Spea.in& o/ hosts* i/ ou,re +onderin& +hat +e loo. li.e* or +ould li.e to learn more a2out either m sel/* Andreas* or Stephanie* chec. out the ,Meet the hosts, section o/ the site. Hosts have individual tip $ars on their pa&es* so i/ ou,d li.e to ma.e sure ou,re re+ardin& the ri&ht individual* that,s our destination. And* o/ course* the sho+ is nothin& +ithout an audience. Please share Let,s -al. Bitcoin +ith an one ou thin. +ould or should 2e interested in the /uture o/ mone . Let,s -al. Bitcoin is released under an open source license* +hich allo+s /or the noncommercial clippin&* remi6in&* and postin& in an /ormat to an site ou +ant* so lon& as ou include a lin. to our site* letstal.2itcoin.com. 7e,re also activel recruitin& 2oth on- and o//-air talent /or this and other sho+s to come. Dnce a&ain* i/ ou,re interested* please contact me at adamEletstal.2itcoin.com. M name is Adam B. Levine. ",m a +riter and a spea.er +ho li.es to e6plain complicated topics in understanda2le terms. -hat,s reall +hat +e,re doin& here ta.in& the complicated topic o/ cr pto&raphicall secured mone * and helpin& people see +hat it could mean in their o+n lives. !oinin& me in our on&oin& =uest /or clarit are Andreas M. Antonopolous* an e6pert in decentraliFed net+or.s and secure s stems Andreas M. Antonopolous: Hi4 ABL: - and #r. Stephanie Murph * a scientist and s ndicated radio host. Stephanie Murph : Hello4 ABL: -han.s /or $oinin& me a&ain on another episode o/ Let,s -al. Bitcoin. -his has 2een an interestin& +ee. /rom a ne+s standpoint% the price has 2een /loatin& around a lot* and a lot o/ that,s 2ein& attri2uted to thin&s that aren,t reall related to the currenc so much as the ,re related to the e6chan&es and 2usinesses that are involved in it. 7e,re &onna &et into that a little 2it later in the sho+* 2ut /irst* let,s tal. a2out pro$ects. 7hat,s on our plate toda * Stephanie8 SM: ",m reall e6cited to tal. a2out this on the sho+ ",ve 2een savin& it a little 2it* 2ut " volunteer and do operations /or a 2itcoin-2ased charit * or non-pro/it or&aniFation. "t,s called 0r11Aid* and +hen ou sa it on the radio it,s a little 2it +eird 2ecause it,s actuall spelled 0-;-three-three-A-"-#* and that,s the name o/ our +e2site* /r11aid.com and +hat 0r11Aid does is that 2asicall * +e &o to li2ert -themed events* and +e support volunteers +ho provide /irst aid at those events* and 0r11Aid +ill &ive out stu// that people need sun screen* 2u& spra * 2and aids - /irst aid supplies at those events. 7e also do health and sa/et outreach to the pu2lic a2out ho+ to use a de/i2rillator* ho+ to do CP;* and thin&s li.e that* and +e also provide a net+or.in& space /or healthcare pro/essionals or people +ho have /irst aid s.ills that +ant to net+or. +ith other /reedom-lovers. :ou can /ind out more a2out us* as " mentioned* at /r11aid.com. 7e recentl

announced that +e +ere &oin& to ta.e the or&aniFation in a Bitcoin direction* and +e +ere &oin& to do most o/ our 2usiness in 2itcoin use 2itcoin as much as possi2le* 2ecause +e reall 2elieve in Bitcoin m sel/ and m parter -heresa* at 0r11Aid this is part o/ the reason ",m &oin& to 2e at the Bitcoin ')(1 con/erence* moderatin& this panel discussion a2out non-pro/it or&aniFations and Bitcoin* and ho+ those t+o communities can 2ene/it each other. AA: -hat,s a reall /antastic pro$ect* Stephanie. " had no idea ou +ere ou +ere involved in it* 2ut it,s reall e6citin&. ",m an American ;ed Cross certi/ied CP; instructor m sel/* and " +ould love to $oin our team and to learn more. SM: Dh m &osh* that +ould 2e &reat* Andreas4 ",ll have to introduce ou to m partner -heresa at the Bitcoin ')(1 con/erence. "t,s /unn * 2ecause +ith +hen +e announced that +e +ere &onna &o in a 2itcoin direction +ith 0r11Aid* +e &ot some mi6ed responses. 7e &ot does the mainstream ne+s covera&e in the Hu//in&ton Post% the .ind o/ +rote a2out us usin& Bitcoin as a +a to avoid ta6es. 7e,re a charit 4 7e don,t have a lot o/ assets an +a * and +e reall li.e Bitcoin* and +e $ust +ant to use Bitcoin* and +e thin. that +ould ma.e thin&s easier - +e,d 2e a2le to /ocus on our mission more* o/ helpin& people +ith /irst aid* i/ +e could do most o/ our operations in 2itcoin. So* that,s reall +here +e are comin& /rom* 2ut the reporter .inda sensationaliFed it a little 2it* and +e &et a lot o/ nast con/erence on that article. -here +ere li.e G)) comments on the Hu//in&ton Post piece* 2ut +e also do a lot o/ 2itcoin donations* so* he * ou ta.e a stance on somethin&* and some people li.e it* some people hate it* 2ut ",m reall e6cited a2out 0r11Aid. AA: -here,s no such thin& as 2ad pu2licit * Stephanie* 2ut there,s plent o/ incompetent $ournalism. ABL: " thin. the one o/ the thin&s that people need to .eep in mind a2out a2out donations - and a2out charities - +ith Bitcoin* is that +hen ou,re tal.in& a2out a charita2le cause* in &eneral* the ones that have the a2ilit to raise /unds e//ectivel are ones that have a lar&e-enou&h or&aniFation that the can a//ord to have emplo ees* or a//ord to have a structure throu&h +hich the can collect those donations. Bitcoin,s reall interestin& /rom the charit perspective 2ecause it removes that minimum level 2e/ore ou can actuall start collectin&* and $ust ma.es it a2out our pro$ect instead o/ a2out our structure. SM: :eah* a2solutel % +e had some reall 2i& pro2lems +ith some o/ the le&ac 2an.in& institutions* too. Pa pal has loc.ed do+n 0r11Aid,s account t+ice* even thou&h our treasurers have su2mitted all the necessar paper+or. and stu//* 2ut the capriciousl .eep loc.in& it do+n. "t ma.es it hard /or people to donate% the ta.e /ees out o/ it unless ou have this ";S letter that reco&niFes that ou are actuall a nonpro/it or&aniFation in their e es. So* +e had a lot o/ pro2lems +ith the le&ac 2an.in& s stem* and that +as honestl a lot o/ the motivation /or usin& Bitcoin* 2ecause it $ust ma.es thin&s so much easier. 7e don,t have to /ocus on that stu//. 7e can /ocus on helpin& people.

AA: 0rom a practical perspective* one o/ the interestin& thin&s a2out donations throu&h 2itcoin is that it actuall creates transparenc * +hich is sorel lac.in& a lot the not-/or-pro/its. " also ta.e donations in one o/ m other pro$ects +hich is not /or pro/it* and 2ein& a2le to sa >loo.* our entire 2oo.s* our led&er* is on the 2loc.chain - ou can see e6actl ho+ +e,re spendin& our /unds.? -hat,s a po+er/ul messa&e o/ transparenc and accounta2ilit . Perhaps that should 2e the /ocus /or $ournalist stories on noHn-/or-Ipro/its. SM: " totall a&ree* that +as reall important to us too% to have transparenc and let people see ho+ much +e,re &ettin&* and +ho it,s comin& /rom* and stu// li.e that% and it,s prett neat that 2loc.chain .inda does it /or ou* ou don,t have to pu2lish a report a2out it* it,s $ust >he * chec. out.? ABL: -oda * /or Pro$ect -al.* " +anted to &ive a =uic. mention to an open-source pro$ect that,s &ettin& started called the Bitcoin "# Pro$ect. Basicall * instead o/ havin& a lo&in +ith ever +e2site ou +ant to participate on* speci/ic or multiple 2itcoin addresses 2ecome our identit or identities /or an +e2sites that participate in the s stem. -here,s 2een a lot o/ =uic. movement on the proposal* actuall % this $ust came out last month* the ori&inal +hite paper on it. :ou,ll hear more a2out this later durin& this sho+* 2ecause " did an intervie+ +ith !oe Cascio on the topic* +hich is +here " discovered that it +as such an interestin& pro$ect. SM: #o ou thin. that some people mi&ht have some o2$ections to that* 2ecause the +ant to use 2itcoin /or anon mit purposes8 ABL: " thin. that it can 2e used /or anon mit purposes +ith this. !ust li.e a 2itcoin +allet* ou can have as man identities +ith this as ou,d li.e to maintain* 2ut there,s permanence to them* 2ecause as soon as ou create them and esta2lish them - li.e " said* it,s a little 2it in-depth /i&urin& out ho+ +or.s - 2ut once ou do /i&ure out ho+ it +or.s* it it 2ecomes ver clear that it reall &ives ou complete control o/ our o+n identit * in reall +hatever /orm ou +ant to have* and i/ ou need to a2andon somethin& and +al. a+a * it,s not a di//icult process to accomplish* even i/ ou,re maintainin& multiple identities - 2ut the point is that it provides a 2arrier to entr * 2ecause ri&ht no+. i/ ou +ant to si&n up /or a +e2site or somethin&* reall all ou need to do is $ust have a random email address and there ou &o% 2ut +ith this* it ties it to somethin& real and it ties it to somethin& that ou can trac. over time* and at the same time* it ou let ou use it an +here ou +ant to as an actual veri/ia2le identit 2ac.ed up 2 the 2loc.chain. SM: -hat,s reall interestin&. AA: -he pro$ect ",d li.e to tal. a2out toda is actuall the presentation ",m &oin& to 2e doin& at the 2itcoin con/erence. -his +ill 2e in $ust (' da s* and on Saturda the (Jth at ':@A* ",ll 2e tal.in& a2out 2itcoin neutralit . -he topic here is loo.in& at ho+ to ma.e Bitcoin as read as possi2le /or mass adoption in a ver sudden +a * tri&&ered 2 some .ind o/ precipitous event a currenc crisis in a small countr * the devaluation or massive in/lation o/ a currenc * etc. So* the premise is: Bitcoin has to 2e neutrual so that it can 2e adopted in an &eo&raph *

culture* economic s stem or reli&ious s stem* and there are a lot o/ preconditions to ma.e sure that happens% /or the most part* Bitcoin alread meets them. -he tal. is a2out ho+ ou have Bitcoin read so that +hen that precipitatin& event happens* mass adoption can occur and it reall reco&niFes the /act that Bitcoin isn,t $ust &oin& to smoothl &ro+ on a nice &entle curve% ou are &oin& to have this .ind o/ tippin& point* in /act. ABL: So that,s the tal. at Bitcoin Con/erence ')(1* " hope see ever one there. SM: Cool* and in case people can,t ma.e it to the con/erence* +ill that 2e videotaped* or are ou &onna recap it on the sho+ perhaps8 AA: " +ill de/initel recap on the sho+* and let,s see +hat +e can do a2out video and audio. ",m not sure +hat the /acilities are li.e* 2ut eah* de/initel . ABL: 7e,re &oin& to 2e there +ith at least /our o/ us* and +e mi&ht +ind up 2rin&in& one more the con/erence* too* dependin& on +hat,s &oin& on* and i/ +e do then +e +ill 2e havin& more video covera&e than +e +ould other+ise - so ",m reall hopin& +e can &et =uite a 2it o/ content /rom the Bitcoin Con/erence* and ",ve 2een schedulin& meetin&s +ith various companies in various &roups that are doin& launches /or the last couple o/ da s* so i/ ou,re &onna 2e at the Bitcoin Con/erence* and ou,d li.e to sit do+n and have a conversation +ith us* +e,re &onna 2e there the da 2e/ore to have a 2unch o/ meetin&s* so $ust email me at adamEletstal.2itcoin.com. SM: So &u s* " &ot an email /rom listener that " +anted to share in the sho+* and correct a little misin/ormation that " ma have put out there in the last sho+* +hen +e +ere tal.in& a2out alt coins and speci/icall litecoins. " said that it +asn,t reall possi2le to mine litecoins on AS"C miner. -hat,s not e6actl true% AS"C stands /or application-speci/ic inte&rated circuit* " 2elieve* and so the ,re reall desi&ned /or speci/ic tas.s% the current AS"Cs that are out there on the mar.et +ere desi&ned* and are 2ein& used* to mine 2itcoins* +hich are mined on a di//erent al&orithm the SHA'A3 - than litecoins* +hich is mined on the scr pt al&orithm* so ri&ht no+ there are not an AS"Cs on the mar.et that use the scr pt al&orithm to mine litecoins* 2ut there could 2e* and that,s the thin& a2out AS"Cs% the can 2e desi&ned to do prett much an thin& ou +ant* a lot o/ di//erent thin&s. So Litecoin itsel/ is not reall resistant to 2ein& mined on AS"Cs* 2ut the +ould have to 2e t+ea.ed speci/icall /or litecoin* and no2od has done that et. " thin. it +ould 2e interestin& to see +hen that happens* i/ it happens. -here have 2een some pro2lems &ettin& AS"Cs out there* $ust /or minin& 2itcoins so /ar* even thou&h people have 2een reall e6cited a2out it. -here 2een a lot o/ challen&es /or the manu/acturers ma.in& AS"Cs to mine 2itcoins* so ",m +onderin& i/ an 2od thin.s it,s +orth+hile to desi&n one /or minin& litecoins - 2ut the point is that it could it could a2solutel happen and that +as a mista.e on m part* so " apolo&iFe /or that and ",m &lad that Case emailed to correct us a2out that. 7e mi&ht 2e tal.in& a little 2it more +ith Case * +ho emailed on the sho+* at some point in the /uture.

ABL: " thin. it,s a reall common mista.e to ma.e* and certainl it,s somethin& that " thin. +e,re all &uilt o/ here. -his technolo& - there are so man claims 2ein& made a2out it* it,s di//icult to investi&ate them all to the level o/ thorou&hness that one +ould li.e to do. M /ocus* certainl * has 2een on Bitcoin rather than the alt coins* 2ecause " thin. that the hurdles that are ahead o/ Bitcoin are re&ulator in nature* rather than rather than somethin& 2ased on the t pe o/ al&orithm. " don,t thin. that 2itcoin is super-vulnera2le to 2ein& hac.ed* H2ut itI could 2e attac.ed throu&h other re&ulator venues. 0rom that perspective* the alt coins are not that important to me in &eneral* 2ut to this point* i/ Litecoin does 2ecome a pla er* then " thin. that it,s $ust a &imme that +e,re &oin& to see AS"Cs i/ the ,re possi2le. " mean* reall * that,s +hat +ill happen an +a s% once ou have a main 2loc.chain* then ou essentiall have an arms race movin& /or+ard +ith the minin& process* so +hatever the minin& process loo.s li.e* it,s &oin& to 2e optimiFed as much as possi2le 2ecause that ma6imiFes the return /or the people involved. SM: And as people start to realiFe the value o/ +hatever the are* 2itcoins* litecoins* or ma 2e some other coin* there,ll 2e +a more o/ a pro/it incentive to up that arms race and ma.e more e//icient minin& devices. (Intermission AD) 0emale voice: "/ " sho+ed ou a +e2site +here ou could easil purchase electronics /rom the +orld,s lar&est distri2utor +ith 2itcoins at )K mar.up* +ould ou thin. it +as too &ood to 2e true8 5ood ne+s: it,s real* and it,s at 2itcoinstore.com. Choose /rom hal/ a million items* save mone over AmaFon and <e+e&&* and convert our 2itcoins to real-+orld items. :ou can even 2u +ith privac - all the need is a shippin& address. But don,t ta.e m +ord /or it - see /or oursel/ at 2itcoinstore.com. ABL: 7e received another listener email* this one /rom Ben* he sa s* =uote: >" +as thin.in&* +hile listenin& to the last episode o/ Let,s -al. Bitcoin* a2out all the trou2les that e6chan&es are havin&. Ma 2e it,s time to have an actual 2an. in the +or.s rather than $ust a simple e6chan&e% somethin& that +ill have relationships +ith LS 2an.s and 2e a2le to trade currenc +ith them* 2ut* i/ needed* also 2e located outside the countr * so a re&ulations couldn,t 2e so over2earin&.? " thin. that,s actuall 2een tried a num2er o/ times. -here +as pro$ect that came out called ClearCoin that +as /unctionall a 2itcoin 2an. - 2ut the pro2lem +ith an o/ these 2an.in& solutions is that Bitcoin doesn,t act li.e a normal currenc * and so ou can,t have a normal 2an. that +ould deal +ith the normal currenc . Dn the one hand* ou,ve &ot the re&ulator issues* +here the LS &overnment and &overnments around the +orld are not reall super e6cited to 2e dealin& +ith it* 2ecause it,s competition to them in a currenc sense* 2ut then on the other hand* ou,ve simpl &ot that a lot o/ the 2an.in& pro/it models and 2usiness models $ust don,t reall +or. +ith Bitcoin. "t,s ver di//icult to ma.e loans* 2ecause people essentiall ris. their 2itcoins in a +a that the reall don,t in a LS dollardenominated scenario +here ou have insurance 2ac.in& it up and ever thin& li.e that. 7hat do ou &u s thin. do ou +e,re &oin& to see 2itcoin 2an.s8

SM: " thin. 2itcoins eliminate the need /or 2an.s* personall * 2ut eah* there are certain services that people +ant - $ust havin& 2itcoins on our o+n ma not provide that. "t,s reall interestin&* +hat,s &oin& on +ith ;ipple ri&ht no+* +hich is this peer-to-peer lendin& credit net+or.% that " could represent a decentraliFed 2an.in& s stem* not necessaril +ith 2itcoins* 2ut +ith all .inds o/ currencies. Perhaps there are some services that somethin& li.e a 2itcoin 2an. could /ill* 2ut ",m not reall sure* " thin. +e,ll have to see as time &oes on. AA: "t .ind o/ depends on +hat ou mean 2 >2an.*? ri&ht8 Because i/ ou mean a depositor institution that .eeps our mone sa/e and provides a small amount o/ interest* that,s reall not necessar in Bitcoin. "/ ou mean a lendin& institution that &ives out loans to small 2usinesses and individuals* that could 2e interestin&* 2ut 2an.s in the real +orld* as +e call it* don,t actuall do that an more. 7hat most 2an.s do is the use re&ulation and monopol po+er to suc. o// a stead stream o/ income o// their loans* and ri&ht no+ the ,re not reall doin& an loans - the ,re speculatin& on the stoc. mar.et* en$o in& their =uantitative easin&* unlimited addition* don,t do innovation* don,t do to lendin& and don,t reall protect our assets +hen the ,re sittin& in there. So* an old-st le 2an.8 7hat ou onl /ind toda in communit 2an.s* credit unions* or&aniFations li.e that that still actuall lend8 -hat +ould 2e interestin&. <e+ st le 2an.8 A rent see.er that char&es a lot o/ spurious /ees8 7ell* not so interestin&. ABL: " thin. that ou,re ri&ht a2out the old-st le 2an.* +here ou,re tal.in& a2out somethin& that is much more /ocused on securit % it,s $ust the t pe o/ 2an. that e6ist no+* li.e ou said* that reall doesn,t ma.e an sense o/ 2itcoin 2ecause the model $ust doesn,t translate. AA: " +ould li.e to see somethin& li.e ta.in&* perhaps* one o/ the +idel spread online +allet companies - let,s sa Bloc.chain or Clectrum* or one o/ those online capa2ilities* +here ou don,t actuall hold our 2itcoin* 2ut it,s 2ein& held /or ou. <o+* that can o//er a &reat deal o/ securit * especiall /or users +ho are ne+ and +ould not do so +ell handlin& their o+n Bitcoin clients and +allets on* sa * a 7indo+s PC% the ,d lose their mone prett /ast. So* /or that reason* havin& a depositor 2an. that essentiall mana&es our .e s* mana&es our transactions* and deals +ith an re&ulations on our 2ehal/% that,s de/initel a &ood 2usiness model. -he onl pro2lem is ou can,t actuall do that in the LS +ithout enormous capital re=uirements* +hich reall are meanin&less* so that there,s no +a to &o /rom >small? to >2an.*? at least in the LS. SM: Another thin& that 2an.s do is provide some level o/ insurance* " &uess* a&ainst the/t o/ mone * and so " thin. people +ould 2e reall interested in that - a lot o/ people +ould - there 2een a num2er o/ hi&h-pro/ile 2itcoin the/ts in a lot o/ the online +allets* and /rom the e6chan&es. " thin. people +ould li.e to have a place +here the could &o and sa >loo.* +e,ll store our 2itcoins /or ou* and in case the ,re stolen* ou,ll &et them all 2ac.? and so /orth. " haven,t seen an 2od o//er a service li.e that et* 2ut " thin. that mi&ht 2e interestin&% and it,s done +ithout the 0#"C* that,s the other thin& a2out Bitcoin.

AA: :eah* a pooled insurance /und 2et+een the various +allet holders +ould 2e ver * ver interestin&* to cover the AK losses that occur* throu&h a pooled insurance /und% that +ould 2e ver interestin&. "n /act* " thin. 2uildin& a Bitcoin 0#"C is more interestin& than 2uildin& the Bitcoin 2an.s. ABL: So* no+ is our chance to chime in. 9isit +++.letstal.2itcoin.com and let us .no+ +hat you thin. a2out 2oth the idea Bitcoin 2an. or a Bitcoin 2an.in& insurance /und. So* +e,re here +ith !oe Cascio* o/ $oecascio.net* to tal. a2out his pro$ect involvin& soc.puppets on the "nternet* and ho+ that ties into Bitcoin. 7hen " 2rou&ht this up +ith some /ol.s +ho " +as tal.in& to a2out this intervie+* the said >are soc. puppets on the "nternet actuall a pro2lem8? !C: "/ ou spend an time on -+itter* ever /e+ +ee.s there,s another round o/ spammers* and the +a the +or. is +ith soc. puppets. Basicall * +hat the do is* the have a 2ot that creates hundreds o/ /a.e accounts% the &et a2out t+o or three spam t+eets out* and* o/ course* ever 2od 2loc.s them* at +hich point -+itter deactivates the accounts 2ut* ou .no+* the ,re disposa2le. "/ the &et one hit out o/ a thousand* the consider themselves to run +ell. -hat,s li.e a direct mail* ou .no+* the response rate or the hit rate on direct mails% i/ ou are achievin& (K* ou,re doin& spectacularl +ell - /or most it,s li.e a tenth o/ a percent. And it,s the same spam. -he +or. on the principle o/ thro+in& millions and millions o/ pieces out there and hopin& to &et a /e+ hits. ABL: So* our pro$ect is tar&eted more to+ards reducin& clutter on the "nternet8 Dr is it!C: 7ell* soc. puppets* also - people use them to do trollin&* and phishin&* all .inds o/ 2ad activities* and - /or instance - i/ ou are on some /orum - i/ ou have an account* and there are a lot o/ $ust* reall 2ad actors% ou .no+* spe+ 2ile over ever 2od and ma.e the no6ious comments tr and &et into /i&hts +ith people* that,s ho+ the &et their $ollies% i/ ou have the capacit o/ 2loc.in& someone* and the &et 2loc.ed enou&h* then the mi&ht &et their account suspended* 2ut i/ all the have to do is create a ne+ account* the ,re o// and runnin& a&ain. Sites have some limited +a s o/ tr in& to deal +ith that. Sometimes 2 "P address trac.in&* sometimes it,s 2 coo.ies% those can 2e /airl easil circumvented. "t,s $ust a +a o/ ma.in& creatin& identities more e6pensive - so the idea here is that i/ ou have to pa /or an identit * ou,re not create thousands o/ them and $ust thro+ a+a * 2ecause no+ ou,re thro+in& mone a+a . :ou,re not $ust thro+in& computer time a+a +ith a 2ot. -he idea here is to 2e a2le to* i/ ou +ill* pled&e* or post* a certain amount o/ mone that,s pu2licl visi2le* that,s tied to an identit and then - one o/ the 2eauti/ul thin&s a2out 2itcoin is the pu2lic led&er. :ou can see ho+ lon& and ou can see the 2alance histor o/ that 2itcoin address* /rom the time it +as /irst seen on the net until the present time. "t,s possi2le to determine ho+ lon& some2od has had a certain amount o/ 2itcoin in that address* HandI i/ the ,ve ever s+apped it out or tried to pla &ames +ith it - so in other +ords* ou can re=uire create an account* or ou re=uire* even* /or some2od to 2e/riend or /ollo+ ou. "t can 2e used in all those

cases. :ou can set our o+n limit and sa >",m not &onna 2e/riend* or let throu&h* an 2od +ho hasn,t pled&ed at least a tenth o/ a 2itcoin /or t+o +ee.s.? -hat reall cuts do+n on the a2ilit o/ people to create these sham accounts. ABL: So +hen ou sa pled&e .( o/ a 2itcoin /or t+o +ee.s* +hat does that loo. li.e in practice8 7here does that .( 2itcoin &o8 7ho,s holdin& it8 "s this tied to real names8 !C: <o. "t can 2e that,s optional. -he minimal 2itcoin identit +ould 2e simpl a 2itcoin address. A 2itcoin address is someplace ou can send 2itcoin* ri&ht8 So* i/ " create an address - +hich " can do an time* " can create a ne+ >'? address* i/ ou +ill* /or 2itcoin and then* /rom some other account that " have* " can send some 2itcoin to it. <o+ that 2itcoin is still mine* DM8 "t still 2elon&s to me. <o2od else can spend it - 2ut " have no+ posted it to that address. <o+* an 2od can e6amine the 2loc.chain* and i/ " &ive out that address* " can sa >see* there,s this much o/ a 2alance in it*? and that,s a /unction that,s readil availa2le /rom servers li.e 2loc.chain.in/o. ABL: So* 2asicall +hat ou,re sa in& then is HthatI ou are ta.in& some o/ the 2itcoins that ou have alread * and ou,re sendin& them /rom one o/ our +allets to a speci/ic +allet* and then ou use that speci/ic +allet as the proo/ that ou,re a real person. -he assumption here is that i/ ou,re a spam net+or. that,s runnin& thousands and thousands o/ o/ identities* and most o/ them aren,t &onna &enerate an mone and most o/ them are &oin& to 2ein& thro+n a+a prett =uic.l * then it doesn,t ma.e sense /or them to tie up mone in each particular identit . "s that a2out it8 !C: -hat,s e6actl it. ABL: So* " thin. " 2u the premise here. Ho+ +ould a +e2site that +anted to incorporate somethin& li.e this &o a2out it8 7e,re &onna set up letstal.2itcoin.com as a /orum* partl * and so i/ +e +anted to have users +ho didn,t have /ormal identities* 2ut instead +ere a2le to 2e pseudon mous - 2ut ma.e sure that the +ere actuall real people 2 usin& this s stem** ho+ +ould +e &o a2out implementin&8 !C: Actuall * it turns out it,s =uite a 2it easier to implement somethin& li.e this than it is to do DAuth. :ou,ve used it i/ ou,ve* /or instance* si&ned up /or an app on -+itter ABL: D.a * o.a !C: So ou ena2le the app to see our -+itter account* 2ut ou don,t &ive the app our pass+ord% ou tell -+itter >he * this app is o.a to access m account*? that,s DAuth and ",ve had some e6perience +ith implementin& DAuth on the server-side% it,s =uite complicated. -here are a num2er o/ redirections and call2ac.s that ou have to do* simpl 2ecause o/ the +a +e2 technolo& +or.s 2ut +ith collateraliFed "#* or +hat ou mi&ht call distri2uted "#* li.e this* m 2itcoin "# is m lo&in. " don,t have to store a pass+ord +ith the server. 7hat " do is* 2ecause it,s a pu2lic-private .e com2o* " can create a messa&e and si&n the

messa&e +ith the private .e that &oes alon& +ith it* and send that to the server. -hat proves that " o+n that address. "t,s li.e lo&&in& in* 2ut the site never has to .eep a pass+ord /or ou* +hich is a 2i& advanta&e 2ecause then the can,t lose it* or a hac.er can,t compromise their s stem. ABL: "t sounds li.e +hat ou,re sa in& is that all ou have to do in order to implement this s stem is set up so that our +e2site is essentiall re/erencin& the 2loc.chain and $ust chec.in& to ma.e sure the various addresses have* in /act* the current 2alances as promised8 !C: -hat,s part o/ it. -he other part is usin& that 2itcoin address as our identit on the server. ABL: <o+* +hen ou sa >as an address on the server*? do ou mean that that our pu2lic .e +ould in /act 2e 2oth our pu2lic lo&in name and our and our actual lo&in8 Ho+ +ould that +or.8 7ouldn,t some2od 2e a2le to $ust cop our pu2lic address and then tr to lo&in as ou8 !C: 7ell* no* 2ecause onl ou have private .e that &oes that pu2lic address* so $ust li.e ou,re the onl person +ho can spend the 2itcoin in there* ou,re the onl person that can lo&in +ith that "#* 2ecause onl ou can prove that ou o+n it and it,s a prett simple matter to do that. "t,s much more strai&ht/or+ard pro&rammin&-+ise. ABL: Let,s tal. a2out it /rom the user side. Ho+ does this loo. to the user8 "t sounds to me li.e ou,re sa in& that in order to si&n in* ou need to essentiall &o to our Bitcoin client and send not an amount o/ value* 2ut rather a si&ned messa&e /rom our Bitcoin client and that +ould lo& ou in8 "s that ri&ht8 !C: :es* essentiall althou&h ou pro2a2l +ouldn,t use the current Bitcoin clients% the are oriented to+ards sendin& and receivin& mone /rom other people. Actuall ",m +or.in& on an app /or this* +hich +ould run on our machine. "t +ould allo+ ou to create ne+ addresses* and it 2asicall +ould .eep HthatI in a separate +allet /rom our re&ular Bitcoin client. Let,s sa * ou could create several identities* one +hich ou mi&ht use and mi&ht identi/ oursel/% it mi&ht 2e a 2itcoin address* and ou mi&ht have supplementar in/ormation on there% >this is Adam B. Levine* " host this radio sho+? etc. - and so +hen ou +anna 2e pu2lic* ou can 2e* 2ut ou mi&ht also +ant to have one that +as a pseudon m that ou mi&ht +ant to use on various /orums +hen ou +anna maintain a little more anon mit * and ou mi&ht +ant to &et in/ormation that +a or +hatever it is ou +ant to do 2ut the .e /or this is that the identities have permanence. Dnce ou,re lo&&ed into a site* ou,re not &onna &ive up that identit easil * 2ecause ou,ve invested time in it and ou,ve invested time to ma.e a reputation on that site* so i/ ou have a &ood reputation on that site - ou,ve 2een a &ood citiFen* ou haven,t trolled people* ou haven,t spammed people that has value to ou% ou,re not &onna thro+ that a+a easil . "n addition to its havin& literal 2itcoin value* it has reputation to ou% it,s a +a o/ creatin& an identit that ou are more in control o/* rather than the site +hich o+ns it. Li.e* currentl no+*

-+itter reall o+ns our identit on -+itter* not ou* 2ut this is a +a o/ creatin& an identit that reall puts ou more in control. ABL: And it still allo+s ou to do +hat has 2een use/ul a2out -+itter. " lo& into* " don,t .no+* pro2a2l a2out a third o/ the services ",m usin& ri&ht no+* usin& some /orm o/ either -+itter or another social net+or.* that allo+s ou to lo&in +ith that. !ust 2ecause it,s so man less steps* ",d rather have m ris. associated entirel +ith this one than spread out all these others that mi&ht not have as &ood a reputation. -here are t+o thin&s that $ump out to me a2out our proposal* and " +anna &et our thou&hts on it. #o ou have an concerns a2out this limitin& the amount o/ speech that people +ho don,t have a lot o/ mone can actuall do8 Cven i/ ou,re tal.in& a2out a relativel small amount o/ mone * it still is mone that /unctionall $ust has to sit there and sa >" am a real person* " am not a spam2ot*? and that,s not &onna 2e necessaril achieva2le /or ever person on the "nternet* especiall oun&er .ids and stu// li.e that. !C: Actuall there,s t+o parameters to the permanence part o/ the identit . Dne is value* and the other is time. "/ ou loo. at it as the product o/ the t+o* as >2itcoin da s*? let,s sa - so then ou could put a hundredth o/ a 2itcoin /or t+o +ee.s* or ou could put a +hole 2itcoin /or a da . As lon& as the sum comes out the same* or some com2ination - 2ut ou see m point is that it can 2e a small a lot o/ mone /or a lon& time or a lar&er amount o/ mone /or a shorter time. So* it,s li.e man hours* i/ ou +ill. ABL: So* then* +hat a2out the /lipside o/ that8 "/ it,s a sum o/ those thin&s* +hat i/ some2od +ho +ants to sa a lot o/ terri2le thin&s puts on one 2itcoin on a thin&* the don,t actuall lose that 2itcoin i/ the account is 2anned - the can still &et it 2ac. and put it into another thin& so doesn,t it seem li.e - " &uess there +ould $ust have to 2e minimums* there +ould have to 2e minimums on either side o/ that* li.e /ive da s on one side* and ou,d have a minimum amount o/ value* too. !C: :ou,ve &ot it e6actl . ABL: -he time seems li.e it,s more important* reall * than almost the value. !C: -hat,s ri&ht* it reall does and* o/ course* ever 2od has time* so ou could in /act create an address and put a ver small amount o/ mone +ith it. <o+* o/ course* the other thin& is* a site is &oin& to esta2lish their o+n reputation /or ou% so let,s sa ou are (recording cuts out briefly) o/ the 2itcoin /orum* and ou,re a &ood citiFen* and ou ma.e &ood comments* and ou,re a valua2le contri2utor to the communit % +ell* the site is &oin& to up our reputation* in their e es* re&ardless o/ ho+ much mone ou have in the 2itcoin "#. So over time* ou develop a reputation +ith that site* and then* at that point* users could loo. at the site,s reputation /or ou rather than our 2itcoin value. ABL: So* i/ ou &o to a /orum li.e 2itcointal..com ri&ht no+* and ou lo&in* then ou are essentiall lo&&in& in* and that lo&in onl is ever &oin& to +or. at that site - 2ut it seems li.e the s stem that ou,re proposin& here also has the advanta&e o/ turnin& these into universal lo&ins +here ou can have an identit * and even our name* carr over to an other /orum* $ust 2ecause ou have this

uni=ue identi/ier that,s tied to it* and is assured as ou 2ecause o/ all these processes +e,ve 2een tal.in& a2out. !C: :es* that,s e6actl it. -hat comes 2ac. to +hat " +as sa in& a2out puttin& ou in control o/ our identit * rather than -+itter or 0ace2oo. - and this is reall distri2uted* or decentraliFed identit . All the other identities that ou have are onl +ithin the domain o/ the particular site ou,re at* so E$oecascio is onl valid +ithin -+itter* 2ecause it,s is the namespace* or the name domain* that controls it. Similarl * +ith 0ace2oo. or Bitcointal.. :es* it reall does put ou in control* 2ut - li.e 2itcoin itsel/ - it ma.es ou no+ much more responsi2le /or it. :ou have to protect our private .e s* 2ut* on the other hand* ou never have to +orr a2out a site &ettin& hac.ed and our pass+ord &ettin& stolen. ABL: ;i&ht. it seems li.e it,s all centraliFed on our local machine* so i/ somethin& is &onna happen* it,s &onna 2e 2ecause the 2ecause our speci/ic machine +as compromised* and " assume that li.e the Bitcoin protocol* ou,re &oin& to 2e incorporatin& encr ption8 !C: :eah* encr ption it is is central to the +hole notion% it,s +hat ma.es it +or.* 2asicall % 2ein& a2le to si&n the messa&e to prove that ou o+n the address is part and parcel o/ that. ABL: "/ some2od ,s listenin& to this and thin.s that this is an a+esome idea the +ant help ou +ith* the can reach ou at $oecascio.net +hich is (spells out) $-o-ec-a-s-c-i-o.net !C: HDrI the can &o and drop a comment on the 2lo&* and that +ould 2e a &reat +a to &et in touch. ABL: Bitcoin itsel/ is a reall cool technolo& * 2ut it,s pro$ects li.e this that ta.e it and appl it in di//erent +a s. :ou,re levera&in& nearl ever part o/ it* 2ut in a reall unconventional +a +here no mone and no value is actuall chan&in& hands* it,s $ust per/ormin& another /unction. "t,s ver interestin&. !C: -here are other thin&s that can 2e 2uilt on Bitcoin too* +hich uses meshnets. <o+* meshnets are li.e voluntar collections o/ machines that rela messa&es 2et+een each other* and Bitcoin +ould actuall ma.e a +a to re+ard people /or runnin& a mesh node. ABL: Ho+ so8 !C: "/ ou thin. a2out the +a miners +or.* 2itcoin miners* there is a re+ard in other +ords* there is a monetar incentive - /or ou to run a miner* so meshnets are /ine* 2ut people aren,t all that altruistic* +here the ,ll let their server 2e used /or ar2itrar communications. 7ith the Bitcoin 0oundation* ou could 2uild a +a to pa people /or runnin& a meshnet note* +hich means that on a P'P 2asis* or a completel distri2uted 2asis* ou could set up a node and start receivin& mone 2 clients usin& it. :ou +ould 2e incentiviFed* /or instance* i/ ou +ant to invest some mone to 2uild a hi&h capacit node* $ust li.e miners are incentiviFed the 2uild hi&h-rate hashin& minin& ri&s* 2ecause ou ma.e more mone that +a .

ABL: "t +ould 2e li.e >2it "nternet?* +here instead o/ pa in& /or it up/ront* instead* as ou use +hatever net+or. that,s availa2le to ou* ou have a certain amount o/ 2itcoins that are stored there* and /or ever () minutes* or amount o/ data that ou use* it sends .)))( 2itcoins to the actual server that ou,re usin&. !C: -hat,s it4 ABL: 7ith automated pa ment s stems* " thin. that that could 2e a +a * 2ecause ou,re ri&htN it,s this chic.en-e&& pro2lem that ou run into 2e/ore that point* +here there aren,t people +ho .no+ that there are servers to use* so the servers that are availa2le to use don,t &et used* and then the ,re not pro/ita2le to .eep up and runnin&* 2ecause no2od .no+s +hat the pro$ect is - oh eah* " totall see that +or.in&. !C: As +e +ere discussin& on chat* $ust 2e/ore +e started spea.in&* underdeveloped countries reall have an incentive - the have* reall * a 2etter opportunit to do that than +e do in the developed +orld. As ou pointed out in our last 2roadcast* i/ ou,ve &ot a '( me&a2it do+nload capacit on our ca2le modem* +hat the hec. ou +ant to use a mesh net+or. /or8 ABL: ;i&ht* e6actl . !C: But in places +here the don,t have that* or +here the su2$ect to repression 2 the &overnment* or crime* or +hatever that could 2e a hu&e thin&. ABL: -erri/ic* than. ou /or $oinin& us toda on Let,s -al. Bitcoin* !oe. !C: ",m ver happ to 2e here* and happ to participate. (Intermission ad break) 0emale voice: 0o6 cart.com is a 2etter chec.out e6perience* empo+erin& developers to create /le6i2le* po+er/ul* custom e-commerce in less time* +hile e=uippin& merchants +ith the /astest chec.out /lo+ availa2le to their customers. 0o6 cart is 2uilt /or +e2 pro/essionals. "t can service a /oundation /or advanced custom e-commerce deplo ments* or /or =uic. and eas sin&le product online stores- and* o/ course* 0o6 cart supports 2itcoin4 9isit 0o6 cart.com to learn more. ABL: Sometimes* even the 2est intentions reall +ind up &oin& craF . Dne o/ the pro$ects that ",ve 2een pa in& a lot o/ attention to over the last* " don,t .no+* " &uess it,s 2een si6 months* is the idea o/ havin& 2itcoin driven A-Ms* /unctionall * that can accept dollar 2ills or accept some sort o/ pa ment /rom our phone* and &ive ou 2itcoins% and then sometimes the +or. in reverse* too - ou can send them 2itcoins +ith our phone* and the &ive ou dollar 2ills. -here are couple o/ pro$ects /loatin& around. Dne most prominent ones +as called* &enericall * >-he Bitcoin A-M pro$ect.? -he ,ve 2een &ettin& a lot o/ reall positive attention* 2ut it loo.s li.e that positive attention has actuall led to parts o/ the partnership a&reement .ind o/ e6plodin&. !e// Ber+ic. o/ #ollar 9i&ilante posted a2out this* a/ter he +as let &o /rom the &roup* and " $ust +anted to read some selections

/rom this* 2ecause " /eel li.e it has applica2le lessons in it /or a lot o/ people +ho are runnin& Bitcoin 2usinesses ri&ht no+. "/ ou,d li.e to read the +hole article* ou can visit dollarvi&ilante.com. (Full article is available at http: sgtreport!com "#$% #& my'official'(ithdra(al' from'the'bitcoinatm'pro)ect ' not in the sho( description) (*eading) +As 2ac.&round* a /e+ months a&o* " +as approached 2 t+o oun& entrepreneurs. -he had purchased a semi-+or.a2le Bitcoin A-M o// o/ another entrepreneur and +ere e6cited a2out the prospects and approached me to help +ith mar.etin& to the pu2lic and prospective /ranchisees as +ell as &arnerin& investment interest. ?"t +as a ver2al handsha.e " had done via S. pe /rom the $un&les o/ 5u ana +hile loo.in& at a &old minin& enterprise. " then set o// on a month-lon& media so$ourn +hich had me in all the mainstream media promotin& BitcoinA-M and had 2een approached 2 numerous investors interested in the pro$ect. ?And then the '1 ear old entrepreneur* Cvan ;ose* +ho +as hal/-o+ner o/ the BitcoinA-M* noti/ied me a /e+ da s a&o that m participation +as no lon&er necessar . ?-hat +as interestin&* " thou&ht* as +e had an a&reement /or m involvement and " had done ever thin& " said " +ould do. "t turned out that once " had put BitcoinA-M on the +orld sta&e* he decided to ta.e all that " had done and dismiss me. ?" do not +ish to pu2lish dirt laundr ... and +hile the actions o/ the co-/ounders o/ BitcoinA-M +ere incredi2l dishonora2le* " put it do+n it to them 2ein& much li.e " +as at '1... oun&* HunI+ise and una+are o/ +hat the are even involved +ith. ?But it is m 2elie/ that he has no idea +hat .ind o/ 2usiness he is tr in& to &et into and ho+ hard it +ill 2e to do +ithout a num2er o/ the ri&ht pieces in place. ?A/ter a da or t+o o/ ponderin&* ho+ever* " have realiFed that this ma trul 2e a 2lessin& in dis&uise. -he 2i&&est issue +ith BitcoinA-M* and one that " have stated in the past man times* is that it is hard+are. An &overnment* an +here* can $ust come and ta.e it a+a . ?"t +as al+a s the achilles heel o/ this product. ?Can it succeed8 Sure* under the ri&ht &uidance and a massive amount o/ capital o/ la+ ers to /i&ht o// ever sin&le countr in +hich the machine is placed. And* even then* there is no &uarantee. !ust loo. at Canada +hich has alread 2e&un to shutter 2an. accounts o/ an one even involved in a 2itcoin e6chan&e. As ",ve also stated numerous times in the past /e+ ears* there is no real la+. ?"/ there is one thin& that m involvement +ith BitcoinA-M has sho+n me ver plainl in the last month* it,s that 2itcoin has the direct attention o/ the &overnments* central 2an.s and 2an.s. "t too. them nearl t+o decades to /i&ure out the "nternet +ould 2e their do+n/all. "n this case* it has onl ta.en them months to realiFe that 2itcoin could end their monopol on mone and 2an.in&.?

SM: " .inda +onder* do ou &u s .no+ i/ the other people involved in the pro$ect have released an statements o/ their o+n8 ,Cause ",m .ind o/ curious to hear +hat their side o/ stor is. ABL: #e/initel $ust &ettin& one side o/ the stor here. <o* " don,t 2elieve an 2od else tal.in& a2out it. -he +ent to standard >shut up and don,t sa an thin& and hope it &oes a+a ? mode* and it pro2a2l +ill &o a+a * 2ut the interestin& part here is this is somethin& that " actuall ran into +ith the #ail Bitcoin* is that once ou start doin& somethin& that people thin. is reall neat* then ou start &ettin& all .inds o/ attention% it,s reall eas to transpose that attention o// o/ +hat ou,re doin& and $ust onto oursel/* and so that,s +hat* /rom m read* ma have happened - people $ust &ot so e6cited a2out all the possi2ilities that the started sa in& >" don,t need an 2od else*? then started pushin& out people +ere on the peripher . SM: "t sounds li.e it,s .ind o/ un/ortunate* " mean* and " &uess +e can use this as the shinin& e6ample or horri2le +arnin& thin& that +e tal. a2out o/ten on the sho+. :ou mention that there other 2itcoin A-Ms* Adam* and " $ust +anted to point out that eah* that is a2solutel true. -his pro$ect +as 2ein& 2illed as the /irst 2itcoin A-M and ",m not sure* e6actl * i/ that,s accurate. ",m a+are o/ another compan called Lamassu Bitcoin* +ho - &ood luc. spellin& that* 2ut - the did have a +or.in& protot pe A-M that " actuall sa+ at a con/erence last 0e2ruar * or this 0e2ruar . People +ere usin& it* the +ere lovin& it% +ith an A-M* there,s &onna 2e the same challen&es as +ith a conventional cash A-M* so it has to 2e impenetra2le* it has to 2e di//icult to move* it has to 2e secure* unhac.a2le* " &uess* even i/ ou,re not &onna move it. "t has to 2e a2le to stop an attac.er /rom 2ein& a2le to &et the cash andBor 2itcoins that are inside. " haven,t seen that much a2out the securit /eatures on an o/ these 2itcoin A-Ms* 2ut ",m reall curious i/ the pass muster* and it,ll 2e interestin& to see* and " thin. it,ll sho+ the value o/ Bitcoin* i/ the are endin& up 2ein& the tar&et o/ the/ts* 2ecause people reall +ant 2itcoins. ABL: Ho+ +ould ou even steal 2itcoins /rom somethin& li.e that* thou&h8 " can see there 2ein& vulnera2ilit i/ +e,re tal.in& a2out somethin& that is ta.in& cash and storin& cash* " can totall see that* 2ut the 2itcoins - it,s not li.e the ,re actuall stored on the A-M* the ,re remotel accessed* and it,s throu&h an AP"* " believe is ho+ it +or.s. SM: :eah* " &uess i/ there +as some +a that ou could /ool the machine into thin.in& that ou had put mone in* then ou could $ust send the 2itcoins to our phone* it +ould 2e as simple as that - ",m +onderin& +hat .ind o/ securit /eatures the have. Apparentl * this other compan * Lamassu* has some protot pes that the ,re developin& /or commercial use* and ",ve heard - " actuall .no+ the /ounders o/ this personall - and +hat the sa is the +ant to see this in 2ars and restaurants and the ,re &onna let the /ranchisee* the person purchases their A-M* set the /ee on it - so that +ill 2e reall interestin& to see ho+ that sha.es out. AA: -here,s a lot o/ potential securit issues +ith this that " thin. have not 2een thou&ht out =uite +ell. Most o/ these e6amples ",ve seen present a O; code on a

screen. -hat ma.es the +hole process o/ s.immin& a lot easier% all ou have to do is put a camera an +here +ithin a2out ()) /eet o/ that screen - that can see the screen /rom an an&le - and ou can scan that O; code and spend it 2e/ore the other person,s even had a chance to pull out their phone. -here are some potential /la+s here* and o2viousl * 2itcoin* 2ein& +here the mone is* +ill 2e attractin& all .inds o/ people +ho +ant to ta.e that mone . -hat is one o/ the concerns* 2ut " +ould li.e to loo. 2ac. at the lesson o/ partnerships* 2ecause that,s a lesson " have e6perienced m sel/. "t,s a ver pain/ul lessons to learn as an entrepreneur* and* in m case* a /our- ear protracted le&al /i&ht in court* 2asicall * over a civil suit - a multimillion dollar civil suit - so eah* it is a2solutel a+/ul* tau&ht some &ood lessons. So* here,s m t+o 2its o/ +isdom on this particular issue. 0irst o/ all* an time ou have success and +e,re &onna see a lot o/ success and a lot o/ /ailure in Bitcoin - 2ut there are &onna 2e $ust as man companies that /ail throu&h success. An time ou have success 2rin&s mone or the promise o/ mone or the potential o/ increased mone in the /uture* and suddenl people ou .no+ and trust start 2ehavin& di//erentl . Mone chan&es people. Cven &ood people start ma.in& poor choices. -he pro2lem is that it,s ver eas to /ind oursel/ in a misunderstandin& +here people assume the +orst motivations 2ehind our actions HandI ou assume the +orst motivations 2ehind theirs. -+o pieces o/ advice: /irst o/ all* don,t do handsha.e deals. "/ ou,re &oin& into partnership on Bitcoin that has any chance o/ 2ecomin& success/ul* and that,s ever sin&le partnership o/ Bitcoin* ma.e sure ou have clearl set e6pectation a2out +ho &ets +hat* and +hat the e6it strate&ies are. :ou don,t +ant to 2e havin& that discussion +hen real mone is involved later on* and that* usuall * is ho+ ou destro /riendships and partnerships. Secondl * i/ ou can avoid &ettin& sued* avoid &ettin& sued. "n the end* it,s $ust &onna 2e a much more e6pensive +a to sit do+n and have a discussion a2out it so i/ ou can* sit do+n and have a discussion a2out it 2e/ore ou,re sued. (Instrumental interlude) ABL: So* the 2i& ne+s o/ the +ee.: Coinla2 is suin& Mt. 5o6 /or 2et+een A) million and PA million LS HdollarsI. -he 2asic /acts o/ the deal: () Mt. 5o6 +ould trans/er all LS and Canadian customers to Coinla2* and &rant them e6clusive ri&hts to 2oth e6chan&e services and those customers as o/ March ''% and ') Coinla2 +ould serve those customers, e6chan&e needs usin& Mt. 5o6,s service* 2ut the ,re prohi2ited /rom openin& a competin& e6chan&e. Basicall * this a&reement reads li.e t+o potential 2i& pla ers in the same space partnerin& up to minimiFe their costs and ma6imiFin& the impact o/ their shared mar.et. Coinla2 has lo+er cost and is not responsi2le /or in/rastructure* +hile Mt. 5o6 turns +hat +ould pro2a2l 2e a /ierce competitor into a dedicated* autonomous mar.etin&* customer service* and re&ulator arm. -he pro2lem is* this chan&eover +as supposed to happen on March ''* and /or +hatever reason it didn,t. Let,s -al. Bitcoin +ill 2e /eaturin& an intervie+ +ith Coinla2 on the topic* and +e,re still +aitin& /or response /rom Mt. 5o6. Andreas* ou,ve 2een in situations li.e this. 7hat,s &oin& on8 AA: " thin. the the mista.e here is to assume that this is a2out &ettin& the A) million dollars or so* +hich is de/ined in the la+suit as the punishment. -hat,s the

stic.* 2ut the stic. is meant to 2rin& 2oth parties to the ta2le to ne&otiate* and 2rin& them to the ta2le to ne&otiate in the conte6t o/ the /ederal courts and de/ined rules o/ civil procedure. 7hat that &ives it the a2ilit to do is HitI /orces them HinIto ne&otiations in &ood /aith* 2ecause i/ ou don,t ne&otiate in &ood /aith* there are penalties% it /orces them to use transparenc * 2ecause i/ ou sa one thin& and it can later 2e discovered* throu&h discover * that ou actuall meant another* that hurts. All o/ these thin&s - some parameters. -hin. o/ it has a ver * ver e6pensive ar2itration over the contract terms. Clearl here there,s 2een a /allin& out% at least* Coinla2 isn,t happ +ith the pace o/ transition. 7e can sa that* at the ver least* that,s +hat,s occurrin&* and perhaps there are some issues +ith Mt. 5o6 and its transition plan* or its +illin&ness to do the transition. At this point* this isn,t a la+suit +here Coinla2 +ants to &et A) million. #on,t misunderstand the &oal here. -he &oal here is to settle out o/ court. GG.GGK o/ civil cases 2rou&ht in /ederal courts are settled out o/ court* and all this does is it provides a /orum that sa s >loo.* +e,re serious* +e +ant the contract handled properl * and this is +hat +e,re &onna do i/ ou don,t.? SM: "s an 2od surprised that* perhaps* Mt. 5o6 /ell do+n and didn,t do +hat the said the +ould do* or +ere supposed to do8 ABL: 7ell* readin& to the complaint* actuall * it loo.ed li.e the +ere supposed to hand over one o/ the thin&s that +as reall emphasiFed in the contract 2et+een Mt. 5o6 and Coinla2 +as that there +as concern on Coinla2,s side o/ +hat +ould happen to Coinla2,s a2ilit to per/orm services i/ Mt. 5o6* /or +hatever reason* +as no lon&er a2le to provide them. Mt. 5o6 +as supposed to hand over all o/ the :u2i .e s* all o/ the 2asicall * the +ere supposed to ma.e all o/ the customers +ho +ould 2e &oin& to Coinla2 into Coinla2 customers* in ever sense o/ the +ord* includin& access to the entire s stem* 2asicall . Be ond that* the +ere supposed to provide a li=uidit /und so that Coinla2 could have a 2u//er to /loat +ith a&ain* since the ,re not providin& the mar.et services* the ,re choosin& Mt. 5o6,s mar.etin& services so there are a +hole variet o/ issues +here - it $ust appears /rom this complaint - and 2ecause Coinla2 isn,t operatin& ri&ht no+ in the +a that the said that the +ould 2e operatin&* that Mt. 5o6 $ust /ailed to deliver in a num2er o/ these circumstances. Andreas* do ou thin. that somethin& li.e this can actuall help the situation* or do +e $ust thin. that this is a continuation o/ that amateur hour thin& +e,ve 2een seen comin& out o/ Mt. 5o6 /or a couple +ee.s no+8 AA: " thin. that the the three- ear-old amateur hour sho+ that,s 2een &oin& on at Mt 5o6 should should concern ever one in the Bitcoin environment* 2ecause this is not $ust a pro2lem o/ /act technolo& that can onl do a2out 1) trades per second apparentl * or the 2usiness practices* P; practices and other thin&s &oin& on - it,s the +hole 2undle. M account* 2 the +a * is on Mt. 5o6* so " have a personal account there* $ust as a matter o/ disclosure. " &ot a messa&e sa in& that m account +ould 2e transitioned here* to 2e located +ith Silicon 9alle Ban.. <o+* to me* that,s a hu&e advanta&e% 2ein& a2le to attach it to a LS 2an.in& institution that can have direct access to m accounts* m other LS accounts* protected 2 0#"C etc. All o/ those are pluses* and " don,t particularl mind 2ein& in a re&ulated environment* 2ecause " am* e//ectivel - " have to pa

ta6es* " have to /ollo+ the anti-mone launderin& rules* +hether " trade +ith Mt. 5o6 in !apan or Coinla2 here in the LS - the onl di//erence is " +ould actuall &et some protection. So as a customer* " +ould hope that the eventual outcome o/ this is that the move /or+ard on the a&reement. "t seems to me that understandin& ho+ these t pes o/ /ederal civil la+suits +or. - that is the &oal. -his is not a2out ma.in& that punitive. "t simpl doesn,t +or. that +a . SM: #oes an 2od thin. that Coinla2 could start their o+n competin& e6chan&e8 Are the $ust so sic. o/ this partnership that ma 2e the ,ll stri.e out on their o+n8 ABL: -he prere=uisite to that* Stephanie* in /act* i/ ou loo. at the contract and the complaints* ou see that part o/ the reason Coinla2 can,t do that is 2ecause that,s +hat the &ave up in this =uid pro =uo. "n order /or them to &et the deal +ith Mt. 5o6* the ,ve 2asicall a&reed not to do e6actl that. Cither +a * this is &onna resolve that =uestion. Cither Mt. 5o6 +ill put up* or the deal is invalid void - there,ll 2e some dama&es some +a * most li.el not A) million* 2ut there,ll 2e some dama&es i/ it ends up voidin& the deal - 2ut +hat that also does* once that deal is voided* it allo+s Coinla2 to &o out and 2uild their e6chan&e +ithout &ettin& sued 2 Mt. 5o6 /or 2rea.in& the e6clusivit deal. ABL: Because that e6clusivit deal actuall +ent 2oth +a s- on the one hand* people 2een tal.in& a2out that A) million dollar /i&ure as thou&h it onl applies to Mt. 5o6* 2ut it,s onl appl in& to Mt. 5o6 2ecause Mt. 5o6 appears to 2e the one that 2ro.e the terms o/ the contract. "/ Coinla2 had opened a competin& e6chan&e* then the also +ould,ve violated that clause* and +ould 2een on the hoo. /or that A) million /or e6actl the same reasons Mt. 5o6 is no+ - not /ul/illin& the terms o/ the contract. ABL: 7e,ve 2een tal.in& a2out this o// air* 2ut " /i&ure it,s $ust time to do it: does an 2od here thin. that Mt. 5o6 is li.e a hone pot8 Because " don,t understand +h the ,re still operatin&* &iven their a2solute continued record o/ /ailure +ith all the e6chan&es that are closin& do+n around the +orld /or random reasons* +h is it that Mt. 5o6 is never is never 2ein& touched 2 the re&ulator side8 -he &et hit 2 hac.ers ever once in a +hile* 2ut that,s totall normal* and et the seem to 2e immune /rom an sort o/ actuall outside-re&ulator inter/erence. Are there an other e6chan&es in !apan that +e .no+ o/ that are a2le operate 2ecause it,s this &reat environment to 2e in e6chan&e in* or is Mt. 5o6 special8 AA: <ot too sure a2out that* Adam. " do +ant to point out that /rom a le&al perspective* " +ould e6pect +ithin the ne6t +ee. or t+o - i/ this actuall does move /or+ard the +a it,s movin& /or+ard - +e,re &oin& to see a countersuit /rom Mt. 5o6 a&ainst Coinla2 /or A) million dollars. -hat,s usuall ho+ this discussion starts: >",m suin& ou*? >/ine* ",ll sue ou 2ac.?% and then the sit do+n and have a discussion a2out +ho dismisses /irst under +hat circumstances. So* the countersuit is comin&. #on,t assume that the A) million dollars onl &oes one +a . 7e,re &onna see it in court too. -hat,s m prediction. <o+* on the topic o/ +hether !apan,s a &ood environment8 7ho .no+s8 " thin. it,s prett ar2itrar . "t,s $ust a matter o/ +ho &ets attention and +hen. "/ the !apanese &overnment turned

their spotli&ht onto - " ima&ine this as the 2i& e e o/ Sauron - the re&ulator spotli&ht turns around and starts loo.in& at Mt. 5o68 7ell* ou .no+* the could 2e shot in a da - $ust as easil as the LS e6chan&e - pro2a2l more easil * /rom +hat " understand o/ the !apanese $ustice s stem* the onl move +hen the ,re sure to &et convictions* and the &et them ever time. -here,s no traditional due process o/ assumption o/ innocence in the !apanese $ustice s stem. !ust so ou .no+. ABL: As someone +ho has an account in Mt. 5o6 - and that,s the case +ith me* too* ",ve had an account there /rom time to time doesn,t that ma.e ou a little nervous pa&e8 AA: l have al+a s 2een o/ the opinion that ou never store mone * lon&-term* in an o/ these accounts. An mone that,s not in m o+n controlled 2itcoin +allet " assume HitI can disappear at an time* +hether that,s dollars or 2itcoin. So* " put mone into the e6chan&es* trade it* and ta.e it out +hen ",m no lon&er tradin&* and " don,t leave much in there. " thin. that +ould 2e a sensi2le approach /or an one. 7hen these e6chan&es &o do+n* the ta.e our mone +ith them* and there,s no reason +h the /act that this one,s 2een up /or three ears is an indication that it,s &onna 2e up tomorro+. SM: " thin. it,s amaFin& that the ,ve lasted this lon&. -he had an advanta&e* " &uess* o/ 2ein& /irst to mar.et and &ettin& a lot o/ traction and a lot o/ popularit * 2ut at this point* almost ever one a&rees that the are not servin& the needs o/ their customers- the ,re not even doin& a particularl competent $o2 at +hat the ,re tr in& to do - so it,s hi&h time /or another e6chan&e. People 2een sa in& this /or a +hile. -here,s &onna 2e some other thin&s that pop up* 2ut the .eep &ettin& +hac.ed do+n 2 these re&ulations* and ma 2e 2ein& in !apan is the .e * ",m not sure* 2ut ",m reall surprised that Mt. 5o6 is still around and so popular. AA: "t seems li.e the the main 2usiness here is to /i&ure out the re&ulations +hich* i/ ou loo. at it /rom that perspective* +hat is the value in the Mt. 5o6Coinla2 a&reement8 Coinla2,s alread /i&ured out the re&ulations* the ,ve pro2a2l put do+n a prett serious amount o/ mone a&ainst that* the are 9C/unded% and the ,re 0inCC< approved and &ot a deal +ith a 2an.. Mt. 5o6 2rin&s the ta2le a tradin& en&ine that can do a2out* +hat is it* 1) transactions per second* +hich is a2out ()*))) times slo+er than an decent e6chan&e - so ma 2e i/ +e loo. at this la+suit* +e have to loo. at it /rom the perspective o/ Coinla2 &ettin& a >out? o/ this contract in order to 2uild their o+n e6chan&e* 2ecause over the last couple o/ months* +hile the +ere doin& the transition* Mt. 5o6 lost a lot o/ reputation* a lot o/ credi2ilit in the mar.et* and other e6chan&e en&ines are poppin& up. Ma 2e the /i&ure it,s not +orth it an more. ABL: 7e,re $ust &onna have to sta on this topic and see +here it &oes. Loo.in& /or+ard to hearin& 2ac. /rom Mt. 5o6 reall * the thin& that +ere missin& in this anal sis is their side o/ the stor * and it +ould 2e /antastic i/ +e could have that " $ust can,t ima&ine - it doesn,t seem li.e it ma.es an sense to enter into these a&reements* or to sa ou,re &onna do thin&s* or to $ust underper/orm on such a re&ular 2asis* unless there,s no other option 2ut to do that - and " $ust can,t ima&ine that 2ein& case* &iven ho+ much o/ the mar.et o/ Bitcoin the ,ve

captured. " reall +ant to tal. to some2od /rom Mt. 5o6 and tr and /i&ure out +hat is &oin& on. 7h are these thin&s happenin&8 7h is this a normal thin&8 AA: :eah* their o//icial statement* a&ain* le/t a lot to 2e desired. -he reall improve the P;SM: Cver thin& to 2e desired4 AA: - > eah* +e,re not &onna comment on these pendin& le&al thin&s 2ecause +e $ust &ot this* and +e $ust sa+ this?. 7ell* that,s not a ver &ood ans+er* and the could,ve done 2etter* even in the /irst press release* /rom that. " thin. Coinla2 is doin& the P; +ar release on this la+suit a lot 2etter than Mt. 5o6. ABL: Be ond that* thou&h* it,s not li.e the didn,t .no+ a2out this - li.e ou said* this is not a step that is ta.en $ust 2ecause >he * it,s the most convenient thin& to do? - this is somethin& that ou do a/ter ou,ve tried to /i6 the pro2lem over and over and a&ain* and it loo.s li.e ou,re at a point +here it,s not &oin& to &et /i6ed unless somethin& drastic happens. AA: -he /unn thin& is* the /ound out a2out this +hen a C<C- $ournalist called /or comment and the - " don,t remem2er the name o/ the CCD o/ the Mt. 5o6 responded to the $ournalists that his call +as the /irst time he,d heard o/ it. So* the press &ot hold o/ this 2e/ore the CCD* +hich - that,s a +hole other competence pro2lem - 2ut overall* ",ll &o +ith a rule o/ thum2: never attri2ute to malice +hat can 2e e6plained 2 incompetence. (-heme music begins!) ABL: And +ith that* " thin. +e,ve actuall run out o/ time /or this episode o/ Let,s -al. Bitcoin. -han.s a&ain /or $oinin& me* &u s* Andreas and Stephanie SM: -han. ou. AA: -han. ou. ABL: -han. ou tunin& into episode /our o/ Let,s -al. Bitcoin. 7hether ou li.ed* loved* or hated the sho+* +e +ant to hear +hat ou thin.. Please send all listener /eed2ac. comments or =uestions to adamEletstal.2itcoin.com. " literall respond to ever sin&le piece o/ mail that +e &et and it,s actuall not a small amount. "/ ou,re li.e me* and ou $ust can,t &et enou&h in/ormation or perspective on Bitcoin* chec. out our dail ne+spaper at thedail 2itcoin.com* +here ou,ll /ind the 2est ne+s* presentin& articles and ar&uments /rom all sides o/ the issue. -han.s to !oe Cascio* Andreas M. Antonopolous* and #r. Stephanie Murph /or providin& content /or the sho+. Music /or this episode +as provided 2 !ared ;u2ens* and #anielCastro* and D+sle . :ou can /ind lin.s to the son&s +e use* and the open-source artists +ho ma.e them* at letstal.2itcoin.comBmusic. Sta tuned /or episode /ive o/ Let -al. Bitcoin* releasin& late on -uesda * P Ma * /eaturin& an intervie+ +ith Michael Hall* +ho &ives us the inside stor on c phers and 2ailout the 2ro.e the +orld. (Instrumental continues till end!)