Transcription of Episode 60 Everything Old Is New Again

Participants: Adam B. Levine (ABL) Host Andreas M. Antonopoulos (AA) Co-host Stephanie Murph (SM) Co-host !inn Lin"ham (!L) - C#$% & 't( appears in )*he &i't o' Bitcoin) se"ment startin" at +,:-. &eor"e #ttin"er (&#) - Let)s *al/ Bitcoin Contri0utin" #ditor( delivers editorial at 1-:+.. Cr stal Levine (CL) - reads su0-headin" titles durin" editorial se"ment at 1-:+..

ABL: Hi% and 2elcome to episode 3. o' Let)s *al/ Bitcoin% a t2ice-2ee/l sho2 a0out the ideas% people% and pro4ects 0uildin" the di"ital econom and the 'uture o' mone . !isit us at letstal/0itcoin.com 'or our dail "uest 0lo"% all our dail episodes% and o' course% tippin" addresses. M name is Adam B. Levine% and toda it)s 4ust o0vious that ever thin" old is ne2 a"ain. 5hen 6 sa "i't-card% ou thin/ plastic% 0ut 2ith smart phone app & 't% ou can put a2a our 2allet and cash in our Bitcoin. 6 sat do2n 2ith & 't C#$ !inne Len"am to tal/ &i't cards) 0ud"etin" in the modern 2orld% the allure o' the 0itcoin meal% and 2h spendin" 0itcoin no2 "ets ou more 0an" 'or our "i't-card 0uc/. *hen% Coinla0 can)t catch a 0rea/. Aside 'rom the on"oin" Mt &o7 drama% their 'irst internall incu0ated pro4ect rolled over in less than si7 months 2ith massive losses. 5ould the price 0itcoin have chan"ed the 'ate o' this 'ailure8 Andreas and Stephanie 4oin me to tal/ a0out it. 5e end toda )s sho2 2ith an editorial 'rom L*B contri0utin" editor &eor"e #din"or. His proposal% entitled 9in'initel divided 2e stand%: is a ;uestion and challen"e. <ou can email him directl via "eor"e=letstal/0itcoin.com. But 'irst% Sil/ >oad is dead% lon" live Sil/ >oad. Be'ore the dust is settled% a ne2 site% claimin" to 0e 0orn 'rom the ashes o' the old% has emer"ed% and a ne2 ?read Pirate >o0erts has 0een cro2ned. 6s this the @apster e''ect or a hone pot8 6s a ne2 Sil/ >oad 0etter than an old Blac/ Mar/et >eloaded% and 2hat)s in a name an 2a s8 Let)s tal/ a0out it. #n4o the sho2A SM: So% last month% 2e tal/ed a0out the Sil/ >oad 0ein" 0usted% and this "u 0ein" arrested 2ho ma 0e% alle"edl % the ?read Pirate >o0erts% the 0oss o' the Sil/ >oad. People 2ere predictin"- relativel ;uic/l % there 2ere some Sil/ >oad cop cats that sprun" up - and Sil/ >oad% o' course% 'or an 0od 2ho doesn)t /no2 or isn)t 'amiliar% 2as a hidden 2e0site accessi0le throu"h *or 2here people

could connect to 0u and sell dru"s online% and various other thin"s - there 2ere% 6 thin/% 0anned 0oo/s on there% there 2ere some other thin"s - passports% 6?)s% and various ille"al stu''. So% this 2ent on 'or ;uite a lon" tim%e and it 2as the su04ect o' a lot o' media attention. *here 2ere so man 4ournalists 2ho said 9AhA Bitcoin is 4ust 'or 0u in" dru"s online%: 0ecause% o' course% ou could use Bitcoin to do this. A lot o' studies sho2ed that this 2as not actuall the primar thin" that people 2ere usin" 0itcoin 'or% and 6 2ould li/e to ;uote the surve 'rom Bero Hed"e a0out a ear a"o that said actuall % the most common use o' 0itcoins at the time 2as not 0u in" dru"s online% it 2as actuall donatin" them or "ivin" them as "i'ts "ivin" charita0le contri0utions% tips% "i'ts% etc. 2ith their 0itcoins. >elativel ;uic/l a'ter the Sil/ >oad 0ust% cop cat mar/etplaces started to arise% and people 2ere in short order tradin" dru"s online 2ith these cop cats. 5ell% recentl % there has 0een the relaunch o' somethin" ne2. 6t)s called Sil/ >oad C..% complete 2ith its o2n ?read Pirate >o0erts% a person 2ho is o0viousl not >oss Dl0richt% 0ecause he is sittin" in a prison cell. *his is prett interestin"% 0ecause not much more than a month later - 6 thin/ it 2as E 2ee/s a'ter the 0ust o' the ori"inal Sil/ >oad - Sil/ >oad C.. launches% the Sil/ >oad 'orums 2ere% 6 "uess% seiFed 0 the GB6% and some admin o' the 'orums moved them to another 2e0site. 6 have to sa 6 haven)t 'ollo2ed the Sil/ >oad personall ( 6 haven)t "one on it% so all this 6 am hearin" second hand throu"h di''erent 4ournalism% so 6 apolo"iFe i' there are some details missin"% 0ut this is m understandin" o' it. *he moved their 'orum% and the 'orum prett much continues% and then there is this ne2 Sil/ >oad site% Sil/ >oad C..% and it)s prett much 0usiness as usual. Some people are /ind o' paranoid a0out this% understanda0l % 2hich 6 thin/ 6 2ould 0e too i' somethin" li/e this happened to me - paranoid that this Sil/ >oad C.. is 4ust 0asicall a hone pot% that the 'ederal "overnment has set up this Sil/ >oad C.. to encoura"e people to 4ump on their end and then the are "oin" to 0ust ever 0od 'or 0u in" dru"s. Some people sa it)s le"it 0ecause this 'orum admin 2as ver trust2orth % and the 0elieve that this ne2 site is actuall real. 6 "uess the ne2 ?read Pirate >o0erts and 0 the 2a % that name comes 'rom *he Princess Bride% and one o' the points that sometimes "ets missed in the media is that there)s supposed to 0e a lot o' di''erent people 2ho have the name 9?read Pirate >o0erts9 - and soABL: 6t)s li/e Borro. SM: <eah% ri"ht% it could 0e almost an 0od . So apparentl one o' the ne2 ?read Pirate >o0ertses has done an intervie2 2ith some ma4or pu0lication throu"h encr pted email. *he insist that the don)t /no2 2ho he is% or she 6s% and the 4ust leave it at that% 0ut this person insists that the site is real and that the have risen 'rom the ashes. 6t 2as /ind o' interestin"% 0ecause a "overnment o''icial came out and made a statement a0out this% and said 92e)re "onna have to adapt our la2 ma/in" policies to the ever-chan"in" technolo" %: and 6 have not seen them do that et% so... ABL: Sounds to me li/e 2e are "oin" to have an Hille"al compan analo" act%: or somethin" li/e that% 2here i' an ille"al compan "ets shut do2n% and ou start

somethin" that is similar to it% then that)s the sort o' 2a that somethin" li/e this 2ould 0e treated% i' the 2ere "oin" to do an thin" a0out it% ri"ht8 SM: 6t)s interestin" to me% 0ecause 6 thin/ o' *he Pirate Ba . *he had their server seiFed at one point% and then the 4ust moved them% and no2 the are 'loatin" in the middle o' the sea% or the are decentraliFed% or somethin" li/e that. 6t)s li/e 92hac/-a-mole.: *hese% ;uote% Hauthorities9 are tr in" to /eep up 2ith all this ille"al activit % 0ut it)s movin" too 'ast 'or them and the 4ust can)t /eep up. 6' this is% in 'act% real% i' it)s not a hone pot. 6 mean% ma 0e the can /eep up% and ma 0e this ne2 Sil/ >oad is actuall created 0 the 'eds% and people are "oin" to "et 0usted. 6 2ouldn)t recommend "oin" to an o' these thin"s% 0ut some people clearl are. AA: 5ell% the one thin" 2e do /no2 is that no matter 2hat this ne2 Sil/ >oad is% this 2ill not 0e the end o' the 2ar on dru"s. *his 2ill not 0e the 'inal nail that destro s the 2ar on dru"s and sa s 9$I% 2ell% turns out i' 2e do enou"h en'orcement% people 2ill stop 0u in" dru"s. 6' ou attac/ the suppl enou"h% people 2ill stop 0u in" dru"s. 6' ou appl enou"h prohi0ition% people 2ill stop 0u in" dru"s.: *he simple truth o' it is people 2ill not stop 0u in" dru"s. 6t)s the second most traded commodit in the 2orld a'ter 'ood. 6' ou include the 0roader measure o' dru"s% 2hich includes most recreational thin"s that are le"al and the recreational thin"s that are ille"al% 0oth here and across the 2orld% prohi0ition /ills people. ?ru"s don)t /ill people. ?ru" prohi0ition /ills people - and so this attac/ a"ainst more and more suppliers and hone pots is et another e7ample o' 'ailure in prohi0ition. 6t 2ont chan"e an thin" other than endan"er the lives o' those 2ho 2ant to 0u recreational dru"s 2ith 0itcoin% 2hich the can do 4ust as easil 2ith DS ?ollars. A currenc that ou can)t 0u dru"s in is a crapp currenc . 6' ou can)t 0u the second most traded commodit in the 2orld 2ith our currenc % it)s not ver "ood mone . So% o' course ou can 0u dru"s 2ith 0itcoin. 6' ou couldn)t% there)d 0e somethin" 2ron" 2ith the currenc . 5hat)s 2ron" here is the assumption that i' 2e /ill enou"h o' the suppliers% 2e)re "oin" to someho2 stop the demand in dru"s. M ;uestion is% ho2 man more people have to die 0e'ore 2e learn that lesson8 ABL: *he core thin" 'or me is that in these situations 2here ou don)t reall have identit to rel on - 0ecause the identit - ou don)t reall /no2 2ho)s 0ehind it it)s not real - it)s not an identit ou can actuall rel on 0ein" a0le to have a contractual o0li"ation 2ith - 0ecause that)s "one 'rom the ori"inal Sil/ >oad% 6 reall don)t see ho2 an o' these sites% re"ardless o' 2hether or not the are Sil/ >oad C or not% can 0e trusted at all - 0ecause even i' it)s not the "overnment% it could 0e some0od else 2ho 4ust put up a di''erent site - scraped the site% and put it up - that loo/s similar to it% or 4ust stole the 0randin" - and a"ain% the could han" around and 0e totall 'unctional 'or 3 months% a ear% ho2ever lon" it ta/es 'or them to "et to their point. 6 mean% 2hat ou need is a trac/ record% so it)s /ind o' a chic/enJe"" pro0lem% 2here i' ou have no trust and no trac/ record% it)s ver di''icult to ac;uire that in the 0e"innin"% unless ou have people 2ho have no other options and the )re 2illin" to ris/ - and ri"ht no2% that)s not reall the case.

AA: @o% it is the case% 0ecause 2hat is the alternative% Adam8 *he alternative is to "o out on the street and tr to procure the dru"s 'rom someone 2ho is ph sicall and immediatel in 'ront o' ou% and there'ore can sta0 ou% shoot ou% ro0 ou% mu" ou% rape ou% and /ill ou. *he alternative o' di"ital mar/et place that ma 0e a hone pot% ma not 0e a hone pot% 0ut can certainl not sta0 ou over *CPJ6P is a much 0etter proposition 'or an one% so the options people have are: ;uit doin" dru"s entirel . *hat)s not "oin" to happen. Bu their dru"s on the street 2ith all o' the ris/s that come 2ith that% and all o' the death that comes 2ith that% or% 0u them 'rom a mar/etplace that potentiall is a hone pot. 5ell% that is a ver 0i" ris/ 'or the sellers% it)s much less o' a ris/ 'or the 0u ers - and there'ore% 6 thin/ the 2ill 'loc/ to it and all other sites that o''er it% 0ecause it)s 0etter than the ph sical alternative. ABL: But it)s that Hall other sites that o''er it: thin" that 6 thin/ is the point that 6 am tr in" to ma/e. <ou loo/ at a site li/e Blac/ Mar/et >eloaded% and even thou"h 6 thin/ that the )re pro0a0l much smaller than the Sil/ >oad 2as% the have still 0een around lon"er than the ne2 Sil/ >oad has. So 2hat 6 am sa in" is% does the "ame start over at some point8 Kust as 2ith cr ptocurrenc % Bitcoin% one could ar"ue% is in a dominant position 0ecause it)s 0een around the lon"est( it)s the thin" that people "ot used to% "ot attached to% and invested in 'irst - and so% is the same thin" true here8 SM: 5ell% Sil/ >oad 2as around 'or ;uite a 2hile... ABL: <es% 0ut then it 2ent a2a A But then it 2ent a2a in a ver pu0lic 'ashion% and is run 0 ne2 people so% 6 mean% he ma 0e ver trusted% 0ut all ou)re tal/in" a0out is a P&P /e . AA: *he ar"ument ou)re ma/in" here is trust versus 0rand% reall % 2hich is% is the 0rand)s stic/iness o' Sil/ >oad enou"h to overcome the rational concerns one mi"ht have a0out the trust that the should put into this ne2 s stem% versus the 0rand o' some other 0lac/ mar/ets that is not as 2ell /no2n8 *he thin" is% most people 2ill not ma/e a rational ris/ assessment o' the chance o' it 0ein" a hone pot. 6nstead% the 2ill have heard o' the 0rand% the 0rand 2ill lead them to do a search and 2ill lead them to the site% and 0ecause the )ve heard o' the 0rand% that 2ill overcome an o' the trust issues the have - and that)s 2h it ma/es 'or a per'ect hone pot. 6 thin/ 0rand% in the end% 2ins. ABL: #ven i' it)s somethin" somethin" so serious% li/e this8 Because i' the are cau"ht% then 2e)re tal/in" a0out 'airl serious penalties( 4ail time. AA: <eah% the 0u ers% "enerall % 6 2ould sa % don)t thin/ a0out 2hether the )re "onna cau"ht% 0ecause% 'irst o' all% the )re hi"h% and secondl % the alternative is dealin" 2ith some s/eeF dude on the corner - so the 2ill "o 'or the 0rand that the thin/ the can trust the most% or the 0rand that the heard the most La0outM% 0ecause% pro0a0l % that)s the onl one the )ll 'ind. ABL: $I% so% 4ust 'or 'un: 6 thin/ it)s a hone pot.

AA: 6 thin/ it)s a hone pot% 0ut it doesn)t matter% 0ecause even i' it is a hone pot% it)s still "oin" to deliver some dru"s to some users and that)s 'ine. SM: 6 don)t /no2 2hat it is. 6)m not read to ma/e a prediction% 0ut 6 2ouldn)tABL: 6)ll tell ou% 6 2ouldn)t trust it% that)s 2hat 6 mean 0 that. (SM: eah% 6 2ouldn)t trust it either.) 6' that 2as somethin" that 6 2anted to do% 6 2ould 0e so concerned a0out that. 6 mean% "ood lord% it)s 4ust% it)s an invitation to "et into a lot o' trou0le. AA: 5ell% one o' the 'acts that 2e have to loo/ at is: 2ho has the GB6 prosecuted or 0rou"ht char"es a"ainst% so 'ar% in the ori"inal Sil/ >oad% 2hich 2e /no2 2as a hone pot 'or at least N months% ri"ht8 6' ou loo/ at the indictments that have come do2n the pipe so 'ar% the have 0een indictments a"ainst sellers- a"ainst some o' the 0i""est sellers% and a"ainst some o' the sellers 2ho 2ere sellin" opiates and other% let)s sa % ;uote - 9harder9 un;uote% dru"s - and 6 thin/ a lot o' 0u ers see that% and the sa 92ell% the haven)t reall prosecuted an one 2ho 0ou"ht a small amount o' 2eed%: or somethin" li/e that% Hand so ma 0e the ris/ isn)t as hi"h% even i' is a hone pot% 0ecause 6)m not 0u in" 0lac/ tar heroin% so there'ore the )re not reall a'ter me9 - and that)s a rational ris/ assessment% and could there'ore 0e a valid reason 2h ou 2ould use it% even thou"h ou suspect hi"hl that it is a hone pot% 4ust assumin" the are not "oin" to 'ocus on ou. SM: <ou /no2% the ne2 ?read Pirate >o0erts has made a statement sa in" that% 4ust li/e in the old Sil/ >oad - the had a polic 2here 2eapons and child porno"raph 2ere 0anned( ou couldn)t 0u or sell those on the Sil/ >oad the )re continuin" that polic 2ith Sil/ >oad C..% so the do seem to have some /ind o' moral standards% ri"ht8 5hich 6 thin/ is reall interestin". ABL: 5ell% the mi"ht% or the are 4ust tr in" to /eep continuit % 0ecause a"ain% it)s a0out tr in" to maintain% and i' ou 2ant the 0rand% ou)ve "ot to act li/e the 0rand. AA: <eah% that)s ver true. #ither 2a % 6 thin/ the 'ocus on thin"s that involve consensual introduction o' chemicals into one)s o2n 0od 2ithout a victim is a ver di''erent thin" 'rom sellin" child porno"raph % 'or e7ample% 2hich has ver % ver horri0le victims - andJor "uns that 2ill potentiall have a victim do2n the road. SM: ?o ou "u s thin/ the 0itcoin communit - 2ho 2ants 0itcoin to survive% and thrive% and live out it)s potential - has an role in commentin" on thin"s li/e the Sil/ >oad8 5hat do ou thin/ a0out that8 ABL: 5ell% 2e)ve seen the Bitcoin communit 0uilt in la ers over time% and 6 thin/ the cro2d that started out usin" the Sil/ >oad pro0a0l 2as a prett earl la er so the )re in"rained in this culture% 0ut at times li/e this% 2hen 2e tal/ a0out the Sil/ >oad% and 2e tal/ a0out 0itcoin and dru"s% 6 thin/ it)s reall reall important that 2e al2a s mention that the total volume o' dru"s that are transacted in 0itcoin is less than +O o' the "lo0al dru" tra''ic/in" num0ers - and it)s actuall

'ar 0elo2 +O. *he real currenc that people are tradin" 'or dru"s in DS ?ollars and other local currencies% 0ut mostl DS dollars% so. AA: *he thin" a0out the DS ?ollar is that it has 'unded ever sta"e o' dru" production( plantin"% harvestin"% processin"% distri0ution% smu""lin"% cuttin"% resmu""lin"% distri0ution a"ain - until eventuall it lands on the ta0le 2here ou roll up the actual DS ?ollar 0ill and then use it to snort the dru"s ri"ht up our nose. Bitcoin has a ver limited role vis-a-vis all o' those steps% and so it)s reall ;uite ironic and h pocritical to loo/ at Bitcoin as havin" an impact reall on the dru" trade% or an real involvement in the dru" trade% other than as an e''icient means o' transaction. *he thin" here is that all o' these ed"e cases% 2here ou are dealin" 2ith illicit "oods or "oods that are 0anned% or 2hatever% 2here the 'riction o' the currenc reall matters are - ed"e cases 2ere "oin" to test 0itcoin and test its relationship 2ith re"ulators% and test its relationship 2ith la2ma/ers% and test it)s relationship 2ith la2 en'orcement - 0ecause this is the sharp ed"e o' some o' the Bitcoin capa0ilities. *his is 2here some o' the Bitcoin capa0ilities start actuall hurtin"% or ru00in" up a"ainst% our re"ulator political and le"al 'rame2or/% 0ecause it)s not desi"ned to tolerate these /inds o' e7ceptions% and Bitcoin is ver much the e7ception. (Intermisssion) ABL: Hi% listener. Here at Let)s *al/ Bitcoin% 2e are 0uildin" a "lo0al net2or/ o' correspondents% a0le to contri0ute on-the-"round perspective 2hen cr ptocurrenc related in'ormation comes across their 'ilters. i' ou)d li/e to 4oin our "lo0al conversation% send an email 2ith our name and "eo"raphic or cultural niche to appl =letstal/0itcoin.com. Kust li/e Bitcoin% the onl 0arrier to entr is our time and "ood 2or/. *han/s 'or listenin". (Intermission continues - ad) Gemale voice: #as ?@S is the S2iss Arm /ni'e 'or our domain names% helpin" meet their customers) individual needs since +PPN. #as ?@S has 0een an outspo/en critic o' S$PA and C6SPA. #as ?@S 2as an earl supporter o' 0itcoin% and no2 the are proud to sponsor this sho2. ?o 0usiness 2ith a compan that shares our values. &et a +-O discount 2hen ou pa 2ith 0itcoin. &o to 0itcoin.eas dns.com% and 0e sure to use discount code L*B. (End of intermission) ABL: !inn Lin"ham is the co-'ounded and C#$ o' & 't. *heir smartphone app essentiall ta/es the card out o' "i't cards% and ou can use 0itcoins to do it. !inn % than/s 'or 4oinin" us on Let)s *al/ Bitcoin. !L: *han/s Adam% "reat to meet ou. ABL: 6)m "onna 0e honest 2ith ou: 6 haven)t used a "i't card% plastic or other2ise% in ;uite a 2hile% and 6 hadn)t heard o' a compan li/e ours until actuall "ot involved 2ith Bitcoin and 6 sa2 the compan li/e ours accepted it. Can ou tell me ho2 "i't came into 0ein"8

!L: 5e loo/ed at the mar/et 'or "i't cards a0out t2o ears a"o% and it)s an un0elieva0le mar/et. 5e)re tal/in" a0out +CE 0illion dollars a ear% in the DS alone% in terms o' "i't card sales% so this is somethin" 2hich - recent reports o' come out sa the "i't cards o' the num0er one re;uested Christmas present% a0ove electronics and to s. People li/e it% the love the "i't o' choice% the love the idea that the can "o and choose 2hat the 2ant in the 'avorite stores. *he notion o' 0u in" someone an item the ou thin/% or hope% that the 2ant% and do not have it)s /ind is outdated% 2e)re 2a past that in toda )s societ % and people have 2a more choices. *here)s 2a more thin"s ou can do 2ith our mone % and 0e smart a0out ho2 ou spend it - so% 2hen ou)re "ivin" a "i't% "ivin" the "i't o' choice in the 'orm o' a "i't card has 0ecome a cultural shi't 'or a lot o' people. 5e)re also seein" the there)s a ton o' Hun-0an/ed: people% especiall oun" adults - the don)t have 0an/ accounts% the don)t 2ant 0an/ accounts% the don)t 2ant to 0e part o' the Hcost center: that 0an/s provide 'or consumers% 2here there)s 'ees etc. etc.% so 2e see a lot o' oun" /ids as/in" their parents send them "i't cards instead% so the /no2 that +.. 0uc/s the "et - that)s +.. 0uc/s o' the can spend on 2hatever the 2ant. 6 thin/ is the mer"er o' the mo0ile smartphone revolution% alon" 2ith% 6 thin/% 2hat)s happenin" in 'inancial services% alon" 2ith 2hat)s happenin" 'rom a social norms perspective around "i'tin"% and that led to the 0irth o' & 't as a compan % around t2o ears a"o. ABL: <ou said% there% the people don)t 2ant to have a 0an/ account- oun"er people especiall % in that the 2ant to ma/e sure that their mone is li;uid. 6 "et that% and 6 can see the circumstances that 2e 'ind ourselves in certainl lend themselves to that. 6s that a "ood thin"% do ou thin/8 6 "uess it doesn)t even matter i' it)s a "ood thin"% it)s 4ust 2hat)s happenin". !L: 6' 2e ta/e a loo/ also 0an/ account represents% o/a % it)s a custodian accountso someone holds our mone % the potentiall lend it out to some other people% 0ut the can ta/e mone out o' it at an point in time% 'or 2hatever 'ees and char"es the 2ant% and ou)ve "ot to 'i"ht to "et our mone 0ac/. *he notion o' a 0an/ account is /ind o' a ver old concept% and 6 thin/ the outh these da s are sa in" 9loo/% it)s m mone % 6 don)t 2ant an one to ta/e an 'ees or an thin" out o' there 2ithout m permission%: and 2hen ou have a 0an/ account ou)re "ivin" that permission to a third-part ( and ou)re sa in"% 9this is m mone % 0ut i' ou de0it 'ees% i' someone s2ipes m credit card all m de0it card "ets stolen etc.% 6 don)t have that control% 6 don)t have that li'eline to live on9- o0viousl % the 'inancial crisis hasn)t helped 0an/s and their ima"e in the past 'ive ears% either. ABL: So% 2here does Bitcoin come into pla as 'ar as & 't is concerned8 !L: Bitcoin is di"ital cash. 6n our 2orld% and one o' the reasons 2h ou as/ the ;uestion 92h didn)t the compan li/e ours e7ist ears a"o89% it)s a ver simple ans2er - it)s 4ust that the economics don)t ma/e sense. *he economics o' runnin" a "i't card 0usiness 2here ou don)t see our customers% it)s all virtual% it)s all online-and in the past% o0viousl % so 2ithout smartphones% so ou can render the 0arcodes% and a lot o' people scan it at the point-o'-sale made it ver di''icult to deliver a "i't card as an thin" 0ut plastic% 0ut no2 2ith smartphones% and scanna0le screens% and Apple pass2or/ etcetera% 2hat 2e)re 'indin" is that

people are more accustomed to the notion that our "i't-card is no lon"er an actual plastic card 2hich ou can use% and ou can prepa our purchases% and 2e)re seein" people usin" it 'or 0ud"etin"% savin" 2e have so man stories o' people usin" it 'or allo2ances% etc( there)s man 2a s o' usin" it and 0ecause there)s no 'ees 2ith & 't ever% people trust us to 0e the custodian o' their 'unds. ABL: Could ou descri0e to me a normal use case 'or someone 2ho is usin" & 't 2ith Bitcoin% 0ecause ou)re tal/in" a0out 0u in" "i't cards to loc/ in value% 0ut a lot o' people loo/ at Bitcoin as i' that is loc/in" in value 0 /eepin" it in Bitcoin% so it seems li/e 2hen ou)re turnin" Bitcoin)s into a "i't card% that)s li/e a decision to spend it ri"ht then% ri"ht8 !L: Kust to 0e clear% 2hen 6 said loc/in" in value and savin"% some people 2ant to 0ud"et% so the 2ant to actuall put mone a2a to2ards 0u in" some item at a particular store. 6 thin/ the Bitcoin thin")s sli"htl di''erent% 0ecause 2e sa2 that 2ith peoples credit cards% prepa ment "i't cards-to "i't cards 2ill also 2a o' /no2in" that- one "u % 'or e7ample% said that his 2i'e 2ent to Mac )s ever month and he "ave her QC.. "i't card% and that)s her 0ud"et 'or the entire month% so she had to sta 2ithin the limit. 6nstead o' "ivin" her a de0it card to the 0an/ account 2hich is "oal that mone in it% he said Hloo/% here)s a "i't card% that)s ho2 much ou can spend per month.: ABL: *hat doesn)t seem ver 'latterin" to the people 2ho are 0ein" 0ut it should 'or% 0ut 6 "uess it that solves a pro0lem% and there)s a pro0lem to solve. !L: 5ell% that 2as one 2e)ve "ot tons o' stories around this% 2e)ve "ot people 2ho% 'or e7ample% does a0out-2e have one "u % 2ho actuall send his /ids% ever 2ee/% a "i't card-2e emailed him and said H2ould ou mind tellin" us our stor 8: - He 2as one o' that po2er users - H2e)d love to /no2 2hat ou do 2ith & 't.: And he sa s% 9it)s simple% m /ids are in colle"e% and ever 2ee/% on a Grida ni"ht% 6 send them mone -6 don)t 2ant to send them cash. *he tell me 2hich restaurant 6 "oin" to do% and 2here the 2ant to spend mone % 6 sent them the "i't card% and 6 /no2 this spendin" in that place. *he )re not 0u in" alcohol or 2hatever else the do 2ith it. *he )re actuall 4ust spendin" their that store% and 6 'eel com'orta0le that)s 2hat the )re doin".: 5ith someone 0ud"etin" the spouse% o/a % that)s /inda 2eird% 0ut people do di''erent thin"s in ho2 the 0ud"et their personal lives% 0ut 2hen it comes our /ids8 6 thin/ it)s 2a more pure that 2hen ou 2ant to "ive someone a "i't card 'or 0ud"etin" purposes - 6 2ould 0e more com'orta0le "ivin" m /id a card 2here the can spend it% and 6 /no2 2here the )re spendin" it% than 4ust 9hell% his +.. 0uc/s% have 'un in !e"as.: ABL: >i"ht. *hat ma/es a ton o' sense to me% 'or /ids. So 2hen ou see people purchasin" 2ith Bitcoin% are the doin" this in these 0ul/ amounts 2here it)s li/e 9this is a month)s 2orth o' the thin"%: or is it more% 6)m at a restaurant% or 6)m in a store% and Hhere)s the thin" 6 2ant to 0u ( 6 need QNE 2orth o' "i't card to this%: and 4ust order ri"ht there. Both o' those useLsM cases that ou cater to8

!L: 5e cater more to- o0viousl % 2e sell prede'ined denominations 2hich the retailers "ive us% so 2e can)t "ive ou a "i't card 'or ei"ht 'ive dollars and t2ent -t2o cents( 0ut% ou can order a hundred dollar "i't card% and hope'ull ou)ll spend the mone a"ain 2ithin the Ltime 0e'ore the e7pirationM. So% the use case% 6 thin/% 'or 0itcoin users is that 2hen ou 2ant to actuall spend ou 0itcoin and a lot o' people are startin" to earn 0itcoin as part o' their salar ( 6 /no2 a ton o' people in the 0itcoin communit 2ho sa Hloo/% 6 2ant 0itcoin as m salar % and i' 6 2ant to spend it at that particular second% and 6)m in a store% 6 2ill cash those 0itcoins out% in-store% 'or 2hat 6 2ant to 0u : - and the use it on the spot% so the "et a "i't card 2hich the can redeem ri"ht there and then. ABL: *hat)s a reall interestin" phenomenon to me% 0ecause a"ain% ou use BitPa to ena0le these Bitcoin transactions% ri"ht8 !L: 5e do. ABL: $/a % so then ou)re li/e a second la er o' 0rid"e compan % ri"ht8 Because the companies that inter'ace 2ith - ou don)t compensate our merchants in 0itcoin( even i' the user pa s in 0itcoin% ou)re pro0a0l compensatin" them in dollars% ri"ht8 !L: 5ell% 2e have to. ABL: #7actl % so% that)s 0asicall the same thin" that BitPa alread does% so ou have t2o la ers o' 0rid"e companies there% 0ut neither o' ou are ta/in" 'ees. Ho2 is that possi0le8 !L: *hat)s part o' the amaFin" part a0out Bitcoin: 0ecause the cost o' so lo2% 2e 2ere a0le to a0sor0 processin" 'ees - and eah% BitPa )s recentl moved to a ver "ood pricin" model% so there)s a 'i7ed rate pricin" model 2e pa 'or month 'or all the processin" - and as a result% 2e are "oin" to 0e parsin" these 0ene'its o' the consumers. ABL: So% 2hat happens to the 0itcoins that ou 0rin" in8 Are those all 4ust "oin" to BitPa and then 0ac/ onto the mar/et% or are ou /eepin" an to tr and speculate on the 'uture value8 Because 2e)ve 0een tal/in" a0out this idea o' ho2% 2hen ou)re tal/in" a0out a de'lationar currenc % a lot o' the 0usiness models that ou reall have to loo/ at to 'i"ure out 2hat ma/es sense to proceed 2ith are actuall completel counterintuitive to 2hat ou)d e7pect in a modern 2orld% 2here ou)d 2ant to ma/e more mone on a sale up'ront. 6t seems li/e in a de'lationar paradi"m% it actuall ma/es more sense to 0e cheaper% so the people spend 2ith ou sooner% and then ou can reap the re2ard on the appreciation over time. !L: *hat)s the idea% eah. ABL: So no2% 2hat happens to the 0itcoins to ou 0rin" in8 Are ou 4ust sellin" them onto the mar/et% throu"h BitPa 8 Are ou /eepin" an to speculate on the 'uture value8

!L: So% here)s 2hat 2as done to date. 5e an launch 2ith Bitcoin si7 months a"o% and 2e didn)t reall have enou"h 'undin"% 6 suppose% to han" onto the 0itcoins% and un'ortunatel % the price is "oin" up. But 2e had to reconvert those coins to dollars to repurchase inventor ou /no2% 4ust to turn out 2ith a 0usiness. 5e announced t2o months a"o LthatM 2e raised 'ive hundred dollars in series A 'undin" LP> note: prett sure he misspo/e & 't raised QEM in Septem0er )+-% 2hich 6 0elieve he)s re'errin" toM% so 2e have enou"h cash ri"ht no2 in the 0usiness that 2e 2ant to 0e sensitive to the 0itcoin communit )s needs% and 2e 2ant to support the Bitcoin ecos stem% so the 0i" announcement 2e made esterda 2as that 2e are no2 storin" all our mar"in in 0itcoin 0et2een no2 and the end o' C.+1. $0viousl % 2e need to restoc/ cards% so 2e 2ill convert the coins that 2e need to restoc/ 0ut all the mar"in 2e ma/e% 2e)re "onna "o lon" in 0itcoin% and 2e)re "onna hold that mar"in in 0itcoins until the end o' the ne7t ear. ABL: So% is this 4ust 'rom 0itcoin sales% or is this 'rom all sales in the & 't net2or/% and ou)re choosin" to convert even ones that aren)t in 0itcoin into 0itcoin8 !L: @o% 4ust 0itcoin sales. ABL: $ne o' the other thin"s that 6)ve reall 0een 2onderin" is: does the price matter 2hen it comes to people spendin" these 0itcoins8 Sometimes% 2hen the price is movin" around a lot% it seems li/e people are reall reticent% 2hether it)s up or do2n% to sell% 0ecause the don)t 2ant to 0e 2ron". Have ou noticed an trends in terms o' ho2 people are usin" our application 2ith 0itcoin8 !L: So% 2hat 2e)ve trac/ed o0viousl % the 0itcoin price and volume a"ainst the "i't card sales 6 thin/ the 0i""est pro0lem% honestl % in the 2orld Lo' BitcoinM ri"ht no2 is the spread 0et2een Mt. &o7 and the other e7chan"es( 0ecause people see the Mt. &o7 prices% and then the loo/ at the e7chan"e prices% and the tr to reconcile 2h there is a di''erence. 5hen the spread narro2s% o0viousl % 2e do a lot more 0usiness( 2hen the spread 2idens% 2e don)t% 0ecause% 6 thin/% a 'e2 have the misconception that those prices are true. 6 thin/ over time% Mt. &o7 is "onna 0e less and less o' a 'actor in pricin". 6 thin/ that has one impact on our 0usiness. *he second impact on our 0usiness% o0viousl % is 2hether or not people 0elieve the price is "onna move or not move. 5hat 2e 'ind is% 2hen it)s in a stead state% 2e actuall do a lot 0etter. 5hen it)s movin" up% 2e do reall 2ell. 5hen the price is comin" do2n% people tend to hold. 6t)s actuall a "ood thin" 2e see that the 0itcoin users don)t see price drops as a 2a o' cashin" out. *he 2ould rather loc/ in "ains on the 2a up than cash out on the 2a do2n. ABL: *hat)s reall interestin". Are there an other metrics that ou)re trac/in"% or an other in'ormation that ou can share8 Bitcoin is so decentraliFed% it)s reall di''icult to "et an data li/e that% a0out ho2 people are actuall usin" it. !L: <eah% 2e have a ton o' data. 5e don)t release it% o0viousl % it)s proprietar 'or our 0usiness% 0ut 2e have a ton o' data on this. 6 thin/ 2hat 2e)re 'indin" is that the 0itcoin communit is mad and craF a0out 0itcoins. 5hen 2e see these 0u00les come and "o 2e)ve seen them "o 'rom C. cents to C. 0uc/s% do2n to C 0uc/s% up to QCEE% do2n to QE. it)s 0een all over the place. 6' ou loo/ at the

current 0ull run that 2e)ve 0een in% it)s 0een prett stron". Price 'luctuations LareM prett much on par 2ith 2hat ou see in some o' the ma4or 0lue-chip stoc/s. ABL: <eah% this time especiall has 4ust 'elt di''erent. *his is the thin" that ever 0od al2a s sa s% 0ut le"itimatel % it seems li/e there)s some decent support% and it seems li/e 6 mean% there has to 0e a pull0ac/% 0ut it 4ust 'eels a little 0it di''erent. 6)ve 0een in the last t2o crashes% too% and this one is a little 0it 2eird. Are there an particular 0rands that stand out as reall 0i" recipients o' 0itcoin 'unds or 0itcoin users8 !L: 5e don)t release this in'ormation a"ain% proprietar stu'' 0ut 2e al2a s see there)s an a''init 6 2ould sa the a''init to2ards brands is less so than the a''init to2ards categories. So% 2e 'ind 0itcoin users spend a lot o' mone on restaurants and 'ood% more than the do on 2hat our t pical audience does. $ur t pical audience ma 0e shoppin"% 2ine% "i'ts% retail( 0itcoin actuall "oes to2ards% o0viousl % a lot o' electronics as 2ell% 0ut 2e have a lot o' 0itcoin users "oin" to Bur"er Iin" and >ed >o0in and all those places. *he notion o' pa in" 'or a meal usin" 0itcoins is 4ust somethin" 2hich intri"ues people. So% he % ou /no28 5hatever 2or/s 'or them. ABL: $I% and ou pro0a0l can)t ans2er this ;uestion( can ou "ive me a 0allpar/ on ho2 much o' the 0usiness 0itcoin is actuall accountin" 'or8 !L: <ou can see 'rom the advertisin" 2e)re doin" and the promotions 2e)re doin"( it)s si"ni'icant. 6t)s enou"h to 'und itsel' and /eep "oin". *he thin" a0out the 0itcoin users% 2hich reall ma/es us support the 0itcoin communit o0viousl % 6)m a 0itcoiner m sel'% so 6)m passionate a0out it% 0ut it)s the passion that the have 'or our product% and the 'act that the tell their 'riends and 2e)ve seen people 2ho are 'riends 2ith 0itcoin users 2ho)ve 4oined & 't% and the don)t use 0itcoin. *he use credit cards. *he 0itcoin communit is our earl adopters% our in'luencers( it)s the t pical in'lencer% earl adopter communit that 2as around 'or the 6nternet as 2ell% and the )re spreadin" the 2ord a0out 2hat 2e)re doin"% so more than hal' o' our ne2 customers ever da come 'rom 2ord o' mouth 2e)ve severed our users% it)s pure 2ord o' mouth. ABL: *hat sounds reall promisin". 6 have to sa % this sounds li/e ou "u s are prett happ 2ith ho2 this is "oin". !L: <eah% 2e)re e7ceptionall happ 2ith ho2 thin"s are "oin"% and 2e 2ant to than/ the 0itcoin communit 'or all their support% and 2e)ll /eep tr in" to "ive value 0ac/ to them. ABL: 6s there an thin" else ou)d li/e to tal/ a0out% 0e'ore 2e 2rap up8 !L: <eah% 6 thin/% 2e announced the release o' points% and essentiall % that means that the 0itcoin communit can no2 earn & 't points three percent 0ac/ on all their purchases usin" & 't 'or all their da -to-da purchases( so this is 0etter than an credit card pro"ram ou)ll ever 'ind. Most credit card pro"rams "ive ou a hal' a point% ma 0e one% one and a hal' points 0ac/% in terms o' points +O 0ac/ in points and 2e)re "ivin" -O 0ac/% and the 2a 2e)re doin" this is 2e)re sa in" :loo/% i' 2e)re "onna sell this throu"h 0itcoin% and not credit cards - 2e)re "onna save the credit card 'ees% and 2e)re "onna "ive it 0ac/ to the communit %:

and actuall ma/e their lives 0etter 0 sa in" :2h should ou 0e crosssu0sidisin" the costs o' ever one else)s purchases8: 5hen ou "o into a supermar/et% or a retailer% the )ve alread 'actored in -O o' their prices 'or credit card 'ees% 0ecause most people 0u on credit cards in these stores. *he 2ill have 'actored in credit card 'raud% credit card 'ees% etc. etc.% so the moment ou 2al/ into a store and ou)re not pa in" 2ith a credit card% ou)re losin". 6' ou)re pa in" cash% ou)re cross-su0sidisin" someone else)s credit card. 5e)re 4ust sa in" :loo/% let)s 4ust reinvent this 2hole retail space. 5e)re "onna "ive ou "i't cards% 2e)re "onna "ive ou points 0ac/ to 0e lo al to & 't and ma/e all our purchases throu"h us% and 2e)re "onna eat that mar"in% 0ut than/s to Bitcoin there)s no 'ees% so 2e)re a0le to "ive ou a hu"e upside and ma/e ou /no2% advanta"e our lives.: *hat)s% 6 thin/% one o' the tenets o' our compan ( 2e)re "onna continue to 0e innovative in this space% and "ive value 0ac/ into the hands o' people 2ho 2ant to use 0itcoin. ABL: As 'ar as these points are concerned% ho2 e7actl does that 2or/8 6s this li/e so ou "et -O 0ac/% and then% 2ith these points% ou 0u more o' the "i't cards8 !L: A0solutel . 6t 2or/s li/e most re2ards pro"rams( ou "et -O o' our spend 0ac/ in points% and ou can use those points 'or a 'ree purchase so i' ou 0u Q+... 2orth o' "i'tcards 'rom us in a particular month% 2e)ll "ive ou three thousand & 't points% 2hich is thirt 0uc/s. ABL: $I% so that)s speci'icall 'or Bitcoin. ?o ou have this pro"ram also 'or other pa ment methods as 2ell8 !L: 5e do% 0ut 2e "ive credit card users +O and 2e)re "ivin" Pa pal% on promotion% no2 CO as 2ell% 0ecause 2e)re 4ust launchin" Pa pal% 0ut Bitcoin "ets the hi"hest. Bitcoin "ets three points 0ac/. ABL: *hat)s reall interestin". 6)ve 0een 'ascinated 2ith this idea that it ma/es a ton o' sense to actuall incentiviFe% and "ive discounts% 'or people pa in" 2ith 0itcoin% 0ut 6 thin/ ou)re the 'irst and certainl the lar"est compan that 6)ve seen that)s actuall doin" this. *hat)s incredi0le. So% this 4ust started8 !L: <ep% 2e 4ust launched it last 2ee/. ABL: $/% 2ell% 6 can)t 2ait to see it. So% once a"ain% than/ ou !inn Lin"ham 'or 4oinin" us% C#$ o' & 't. *his 2as a reall "reat conversation and 6 loo/ 'or2ard to seein" our product continue to develop. !L: *han/s% Adam% it)s 0een "reat 0ein" on the sho2 2ith ou. *han/ ou. (Instrumental interlude ad) Male voice: 6s the 0itcoin price in a 0u00le8 $nl time 2ill tell% 0ut one thin")s 'or sure: 0itcoin video passes are on sale. @ormall ,E dollars 'or those pa in" in DS 'unds% visit 0itcoinvideopass.com and spend onl ..+ to ..C 0itcoins ..+C 0itcoins at the time this 2as recorded to access all the tal/s and panels 'rom the $cto0er Cr pto-Currenc Con'erence. See ho2 eas 0u in" 2ith 0itcoin can 0e% and e7perience instant access as soon as ou)ve paid% 2ithout even reloadin" the pa"e. Chec/ it out at 0itcoinvideopass.com.

(Interlude continues new ad) Kason Iin": Hi% this is Kason Iin"% 'ounder at Sean)s $utpost% and ou are listenin" to Let)s *al/ Bitcoin. Sean)s $utpost is a homeless outreach in Pensacola% Glorida% and 2e are proudl po2ered 0 0itcoin. *o date% over +-%... meals have 0een 'ed to the homeless in our area% all purchased 2ith 0itcoin% and throu"h the "enerosit o' the cr pto-currenc communit . >ead more a0out us at (spelled out) seansoutpost.com. Good% shelter% 0itcoin% ever 0od ( Seansoutpost.com. (End of interlude) ABL: So% it seems li/e Coinla0 4ust can)t catch a 0rea/. 6n the time since 2e last chec/ed in 2ith them% Coinla0 2as partnerin" 2ith Mt. &o7% and then there 2ere a series o' la2suits and counter-suits% essentiall 0ecause the re"ulator environment chan"ed a couple o' da s 0e'ore the contractual re"ulator re;uirement 2as due and so% 0ecause o' that 0ecause there 2as so little time% in order to "et 0ac/ into compliance 2ith the new re;uirements then the 2ere in 0reach o' contract% and there)s a lot o' nonsense "oin" 0ac/ and 'orth on that. 5hat)s happened no2 is that% a'ter pivotin" a2a 'rom tr in" to 0e Mt. &o7)s DS arm o' operations% the LCoinla0M essentiall "ot into the accelerator% or incu0ator% space. *heir 'irst spino'' 2as called Al dian% 2hich 2as a compan that 2as aimin" to% essentiall % allo2 users to 0u minin" ri"s and host them at an o''site 'acilit . 6t has declared 0an/ruptc % is ver much in de0t% and seems to have 0een a prett massive loss 'or Coinla0. AA: *his is a t pical Silicon !alle thin"% 2here it)s an old-st le startup 2ith a lot o' !C-t pe 'undin" 'rom various sources in the millions% and ver little in tech innovation underpinnin" it. ABL: *his 2as one o' those 2e)ve 0een tal/in" a0out AS6C minin" a lot and this 2as one o' those pro4ects that 2as aimin" to have a plu"-and-pla solution% 2here ou essentiall 4ust plu" in the 0o7 plu" it into an ethernet core% into po2er and% prett much% ou)re done. 6t)s runnin"% and it can operate% and ou don)t actuall need to have an technical e7pertise. Could that have had this pro0lem% or is this 4ust Coinla08 AA: <eah% sure% ou can solve that pro0lem. *he ;uestion 2e reall need to as/ ourselves at this point in the 0itcoin ecos stem: do 2e need to 0e 0uildin" 0usinesses that have millions o' dollars in venture capital 'undin"8 6 thin/ that model is reall 0ro/en% and it)s the old model 'or doin" 0usinesses% and there)s so much opportunit 'or innovation on the 0loc/chain( 2hat 2e don)t need is innovation and 'undraisin" schemes and la2suits% 2hich seems to 0e% 0 the 2a % the main 0usiness plan o' Coinla0 partnerships% mer"ers and ac;uisitions% and la2suits. 6% so 'ar% have not seen a sin"le piece o' technolo" come out o' that compan % a'ter almost t2o ears% and et its leader is the head o' the Bitcoin Goundation. 6t)s /ind o' 0iFarre. SM: So% mi"ht these 0e a horri0le 2arnin" to traditional !Cs that this model ma not 0e 2or/in" in the 0itcoin space% and 2ill this deter them 'rom ma 0e 'undin" other companies% and is that a "ood or a 0ad thin"8

AA: 6 thin/ the ris/s in the re"ulator environment are clear 'or an one to see. !Cs 2ho tr to pla this "ame need to 0e read 'or massive losses. *he onl ;uestion is% :is this a "ood 0usiness 'or 0itcoin8:% and that)s the ;uestion 6)m most interested in - :do these t pes o' 0usinesses reall add value to the 0itcoin environment and net2or/8: And 6 2ould sa :some do% some reall don)t: the )re 4ust corporate shell "ames that have nothin" to do 2ith innovation on the 0loc/chain. ABL: *his 2ould)ve 0een 0etter 'or Coinla0 i' the had 4ust invested the 'unds into 0itcoin itsel' o' course% 0ecause this a 0an/ruptc 0ut even so% even i' the had 2on% the must have 0een loo/in" 'or a - +. times% +.. times% somethin" li/e that - multiplier 'rom their investment% i' the )re "oin" to 0e puttin" that in instead o' 0itcoin. *his is% o' course% another ;uestion: since this 0an/ruptc has come to li"ht% the price o' 0itcoin has s/ roc/eted. 6 2onder i'% ma 0e% 0itcoin 2as Q+E. hi"her at the time that the 2ere loo/in" at declarin" 0an/ruptc % i' the 2ould)ve 0een% 0ecause ultimatel % AS6C minin" is as pro'ita0le as the e7chan"e rate% ri"ht8 AA: *hat)s a ver "ood point. 5hat 2e)re sa in"% reall % is that the created a 0usiness that 2as ver % ver % ver heavil e7posed to the volatilit in the currenc 2ell% there ou "o% that)s one o' the reasons 2h it 2ent do2n. SM: Actuall % Adam% 6 2ould sa AS6C minin" is less pro'ita0le than the e7chan"e rate% 0ecause% still% ou have to invest all this mone in the hard2are% and ou)ve "otta maintain it% and ou)ve "otta ma/e sure it)s runnin"% and ou)ve "otta po2er it% so it)s not even as simple as the e7chan"e rate( it)s li/e ou)re alread startin" o'' at a disadvanta"e% and have to recoup some costs 0e'ore ma/in" an /ind o' a pro'it. ABL: M point 2as that 2ith minin"% ou)re earnin" a 'i7ed amount o' 0itcoin% 0ased on our hashin" po2er compared 2ith the rest o' the net2or/% 0ut i' that 0itcoin is 2orth a dollar per 0itcoin% then o0viousl % there)s a lot less pro'it in it than i' it)s 2orth 'ive hundred dollars per 0itcoin. *hat 2as m point( that the e7chan"e rate has a hu"e impact on ho2 pro'ita0le minin" is% assumin" ou are minin" to sell. AA: Here)s the 0ottom line 6 thin/ i' ou loo/ at minin" 2ith a so0er% anal tical perspective% minin" should not be profitable. @ot over the lon"-term. 5h 8 Because it)s an almost per'ect mar/et. *he 0arriers to entr are not that hi"h% the technolo" used is commoditiFed 'or the most part% or rapidl 0ecomin" so and the di''icult is sel'-ad4ustin". 6t)s desi"ned to remove pro'its% and an e''icient mar/et should 2or/ li/e that% and i' ou)re o''erin" somethin" that has little di''erentiation% or value-add over ever 0od else% and an one can enter the mar/et% then our pro'it mar"in 2ill approach Fero as mptoticall % as ou sta lon"er in the mar/et. Minin" should never 0e pro'ita0le. *hat)s ho2 it 2or/s. ABL: 5ell% minin" shouldn)t eventually 0e pro'ita0le% 0ut 6 thin/ sa in" it should never 0e pro'ita0leAA: $ver the lon" term% and as an entire industr % 2hat minin" o''ers is the opportunit to "ain some advanta"e 0 0ein" an earl adopter% 0ut over the lon"

term% and as an entire industr % it 2ill 0e barely pro'ita0le. *hat)s ri"ht% that)s ho2 the mar/et should reach an e;uili0rium 2here it reall re'lects the value o' the service and the di''iculties o' "ettin" into it. ABL: >i"ht% eah% ou)re "ettin" no disa"reement 'rom me on that% 0ut a"ain% it)s that core middle part% ri"ht8 5e had the 0e"innin" 6 2ould ar"ue that the ver ver 0e"innin" 2as the 2ild "old rush da s% and o0viousl 2e)ve seen that come to 'ruition% 2here the people 2ho 2ere involved at that point have 0ecome the people 2ho are ma4or pla ers in the space and "enerall ;uite 2ealth . 6 understand that at the end o' this% ou have that% 0ut 'or me it)s li/e the AS6C ;uestion% too. *he AS6C end"ame is that there are tin AS6Cs in ever 2ater heater% car% cellphone% ever thin"% that does ever thin". 6 can see that% and that indeed 2ould 0e somethin" 2here it)s 0asicall 0rea/-even% 0ecause the hard2are)s completel pervasive and a0solutel ever 2here 0ut 6 don)t see ho2 ou "et 'rom 2here 2e are no2% 2ith a couple o' AS6C manu'acturers competin" 2ildl a"ainst each other% to that place 2ithout a craF amount o' pro'it 0ein" made 0 someone durin" the interim. AA: 5ell% no% it)s not a craF amount o' pro'it unless ou do it at volume. So 0asicall % this mar/et is no2 "oin" to 'avor those 2ho can 0rin" to 2ield ver lar"e economies o' scale. AS6C minin" will 0e pro'ita0le% 0ut only at ver lar"e scales. 6' ou can put do2n a datacenter near h dro% or near solar% or near some other source o' electricit that)s e7tremel cheap% and ou can cram it 2ith AS6Cs that ou can "et delivered to that datacenter% ou)re "onna ma/e a pro'it. But inherentl % that)s "oin" to 0e limited onl to those 2ho can 0rin" to 0ear the scale that)s re;uired and that)s 'ine% mar/ets shouldn)t 0e ridiculousl pro'ita0le over time% especiall i' the )re not ver heavil di''erentiated. *his is a challen"e 'or ever one enterin" the 0itcoin mar/et% 2hich is at this point in the "ro2th ver 'e2 thin"s are innovative and value-"ivin" enou"h to 0e 0etter than simpl puttin" our mone into 0itcoin and holdin". (instrumental interlude) &#: 6n'initel ?ivided 5e Stand: 5h settin" standards toda is an investment in 0itcoin)s 'uture. B &eor"e #ttin"er. Bitcoin has 0een accused more than once o' 0ein" ultra-e7clusive. 5ith our mar/et cap o' C+%...%... 0itcoins a centur a2a % our current t2elve million in print puts us alread hal'2a there. C+ million alread isnRt a lot to share amon" seven 0illion inha0itants% much less the t2elve million 2e have no2. Dn'ortunatel % 2e have 'ar less than even that. CL: *he ?read Pirate)s lost treasure &#: $ne o' the ne2est crises-du-4our in the 'ace o' Sil/ >oadRs shutdo2n is not onl the 'ate o' the C3%... coins the GB6 has seiFed% 0ut the nearl m thical hal'million the havent. ?espite the C3%... coins the GB6 2as a0le to ;uic/l round up 'rom Sil/ >oad escro2 and assets% it appears that ?read Pirate >o0erts o2n accumulated 'unds are still out o' their reach. 5ith his 2allet in hand% the lac/ the necessar encr ption /e s to open H?read Pirate: >oss Dl0richtRs supposed 3..%... B*C stash. *he lost 'ortune o' the notorious 0andit proprietor o' Sil/

>oad8 *he screenpla 2rites itsel'. 5hat% then% i' this le"endar pirate treasure is never opened8 $ut o' a present t2elve million 0itcoins in circulation% this is potentiall five percent of the entire supply - 'urther on% still nearl three percent o' all 0itcoins there shall ever be - and et% thatRs nothin" compared to the scope o' the untouched HSatoshi 5allet%: an address sittin" on more than +.+ million 0itcoins that have not moved in ears. 5hether or not itRs "enuinel the lost vault o' Satoshi him-her-their-sel'% it is nonetheless another ten percent o' the pool "one as 2ell. *hese t2o "randiose sums are one seventh o' the mar/et% no2 ta/en out o' the "ame. Add in the incalcula0le amount o' 0itcoin 2allets and /e s lost or deleted over the last three ears% and 2e could have this much all over a"ain. *his pool is lea/in"% and it ma end up lea/in" 'aster than 2e can 'ill it. CL: *he d2indlin" reserves &#: Lost 0itcoins are a more un'or"ivin" haFard than man o' us care to admit. *he 2ord Hlost: con4ures up reassurin" notions o' chec/in" 0et2een couch cushions and under 'urniture - it "ives ou delusions o' somethin" 2aitin" to 0e 'ound. <our optimism is no "ood here: lost 0itcoins are practicall destro ed% and it happens on a re"ular 0asis. 6t isnRt 4ust a matter o' 'eds seiFin" and s;uattin" on 'unds- hell% those mi"ht still re-enter the mar/et in some 2a . @o% this is the threat 'rom acts o' &od and man. Hard drives crash. Bac/ups 'ail. *he 0est laid passphrases o' mice and men can 0e 'or"otten. Plent o' 0itcoins have even 4ust 0een thro2n a2a as di"ital clutter. As one earl miner on 0itcointal/ admitted% HBitcoin 2as 2orthless then% the so't2are 2as anno in"S 6 didnRt /eep m ori"inal 2allet.: *he actual num0er o' 0itcoins this econom can still count on are di''icult to measure% 0ut the ones 2eRve con'irmed lost thus'ar are more than enou"h to 'uel BitcoinRs detractors. *hose 2ho call it e7clusive% a scam% or simpl use Hde'lationar : as a pe4orative can 'ind plent 2ron" 2ith this trend: a 'uture o' reduced minin" re2ards com0ined 2ith more-'re;uent coin-losin" catastrophes. *he diehard de'lationists 2ill su""est another point o' vie2: that ever coin lost 4ust 0olsters the value o' the ones 0ein" held. *he Bitcoin 5i/i assures us% H6' ou lose our coins% all other coins 2ill "o up in value a little. Consider it a donation to all other 0itcoin users.: - and the arenRt 2ron"- at least not mathematicall . 6ncreased scarcit 2ith consistent demand does lead to hi"her value% 0ut thereRs a 2orld o' other conse;uences that 2ill a''ect the perception (and 'unction) o' Hvalue.: Massive events that lead to lost coins tend to have 'ar-reachin" repercussions in and o' themselves. Prices have re0ounded 2ith "usto since the collapse o' the Sil/ >oad% 0ut this 2as more an e7pression o' consumer con'idence than the ripples o' lost coins increasin" value. $' course hi"her values per coin are "reat 'or e7istin" o2ners and investors% 0ut i' 2e /eep losin" coins on the scale o' Dl0richt and SatoshiRs lost stashes% the hand'ul o' coins remainin" 2ill start to develop an ivor to2er around them... or 2ill the 8 An one 2ho /no2s their 2a around a transaction /no2s 2hat is supposed to prevent this. $ne o' BitcoinRs most intrinsic 'eatures can /eep the currenc via0le 'or the masses% 0ut onl i' our culture can em0race it in 'ull. CL: *he "reat dividers &#: *he immediate% o0vious reassurance is that Bitcoin is Hin'initel divisi0leA: 5ell% thatRs actuall not true at all. 6tRs not Hin'inite%: 0ut itRs a hell o' a lot% and it

'eels "ood to sa )in'inite)% so 2e 2ill. Man o' ou ma alread /no2 the details% 0ut% 'or those 2ho donRt% Hin'inite: divisi0ilit is the su0tle 0read-and-0utter o' 0itcoin transactions. Bitcoin can 0e sent in 'ractions as small as ei"ht decimal places( the o't-mentioned HSatoshi: o' Bitcoin% the smallest chun/ oR chan"e% is . .......+ 0itcoin. *hat)s seven Feros. *he C+-million limit on 2hole 0itcoins seems a lot less threatenin" 2hen ou thin/ o' it as rou"hl t2o ;uadrillion Satoshis. Compared to the estimated one trillion DS ?ollars in circulation% that leaves us a little 0reathin" room to lose a 'e2 coins over the ears. Bitcoin needs to scale do2n% and it needs to scale 2ith methods that suit the modern 2orld. *he HSatoshi: is% ri"ht no2% a 4un/ unit- a technolo"ical 0enchmar/% not a 'iscal one. 5hile itRs possi0le 2e ma eventuall reach the scenario o' operatin" on a Satoshi level% such a tremendous "ap could prove insurmounta0le to the thousands o' ne2 Bitcoin users arrivin" ever 2ee/. 5e alread have a crisis o' decimal-illiterac in the innumerate-and-proud Dnited States threatenin" to hold it 0ac/. *his is 2here the cr pto communit o' the 2orld needs to 'ind /inship in the scienti'ic. *he 6nternational S stem o' Dnits% esta0lished in +P3.% set the course 'or scienti'ic and mathematics 2or/ on a "lo0al level. &lo0al standards% and the resultin" phase-out o' re"ional Hle"ac : terminolo" 'or scienti'ic and chemical terms% have 0een a 0oon 'or the in'ormation a"e. Scienti'ic 2or/s 2orld2ide all 'unction on 0ase-ten metric pre'i7es and su''i7es( toda % the centi-% /ilo-% and millimeters o' research measurement are reco"niFed apoliticall across nearl all 0orders. A universal lan"ua"e that transcends 0orders should spea/ volumes to an Bitcoin supporter. *he recent adoption o' milli-0itcoins 0 2allets and users is a monumental investment to2ards the currenc Rs 'uture. BitcoinRs on"oin" de'lation needs a semi-ri"id 'rame2or/ to continue scalin". *he milli0itcoin - 0e it mB*C% em0it% millie% or else2ise- 2ill need to 0e the reco"niFed standard in the ver near 'uture. *he theoretical uB*C% the micro0itcoin% ma not have purpose toda % 0ut it is not a lon" road to reach it. *he S6Rs Hmetric: s stem remains somethin" o' a 4o/e in the Dnited States% seemin"l the last holdout o' irrational 6mperial units in the modern 2orld. As a nation% it is so deepl entrenched a"ainst S6 units that chan"e seems impossi0le - 0ut Bitcoin isnRt the Dnited States% and plent o' its users arenRt either. Ho2ever ou vie2 our place on the 0loc/chain- a consumer% user% mem0er% ho00 ist% lo00 ist% advocate% ou name it- it)s in our 0est interests to a0andon local 0iases and thin/ "lo0all . @o matter ho2 2e use (or lose) it% Bitcoin is "oin" to de'late. *o survive these chan"es% to transcend 0orders% it has to ma/e 2a 'or these ne2 scales. 6t canRt stand on its o2n i' 2e /eep treatin" it onl as a medium o' other 'iat currencies. Cr ptocurrenc isnRt e7clusive to the erudite or the 2ealth % either( itRs e7clusive to the open-minded and the hard-2or/in"% li/e the research and technolo" communities that set these standards. Grom Hmillies: to Hmi/es: to the occasional H/ilo%: em0racin" S6 units is not onl a step to2ards BitcoinRs 'uture% 0ut a "esture o' maturit 'or a culture that is comin" o' a"e. (Music begins) ABL: *han/s 'or listenin" to episode 3. o' Let)s *al/ Bitcoin. *he se"ments )Sil/ >oad C..: 5hat)s in a name8) and )CoinLa0 Gail) 2ere produced 0 Adam B. Levine and edited 0 Matthe2 Bip/in. *he 'eatured Andreas M. Antonopoulos%

Stephanie Murph % and Adam B. Levine. )*he &i't o' Bitcoin) 2as produced 0 Adam B. Levine% edited 0 Matthe2 Bip/in% and 'eatured Adam B. Levine and !inn Lin"ham. )6n'initel ?ivided 5e Stand) 2as 2ritten% produced and read 0 &eor"e #ttin"er% edited 0 Adam B. Levine% 2ith additional voice 2or/ 0 Cr stal Levine. Music 2as provided 0 Kared >u0ens. Tuestions or comments8 #mail adam=letstal/0itcoin.com. Have a "ood oneA (Instrumental continues till end.)