Let's Talk Bitcoin

Episode 32 Sneak's Law and Bitcoin's Next 2 Billion Participants

Adam B. Levine (ABL) Host Manu Sporny (MS) Founder and CEO of Di ita! Ba"aar #effrey $au! a%a Snea% (#$) Ha&%er'Entrepreneur Ste(art )uea!y (S)) Host of Media*istro event +nside Bit&oins Questioners at Inside Bitcoins event #e" San (#S) An e! +nvestor and Entrepreneur $eter Seed ($S) Entrepreneur Advertisement Voice Artist Dr. Step,anie Murp,y (SM) ABL: Hi- fo!%s. Adam B. Levine ,ere. /oday0s s,o( isn0t afraid to 1ump in t,e mud. First- (e sit in as Manu Sporny of t,e 2or!d 2ide 2e* Consortium s,ares ,is perspe&tive from years of *att!e for &onsensus in t,e tren&,es of (e* standards. He (ants to *rin t,e ne3t 4 *i!!ion users into Bit&oin and ,is met,ods are proven to (or%. /,e se&ond ,a!f of today0s s,o( &onsists of a !on intervie( + &ondu&ted (it, #effrey $au! a%a Snea%. #effrey is an Ameri&an ,a&%er and entrepreneur (,o sp!its ,is time *et(een 5e( 6or% and Ber!in. 2e &au ,t up (it, ,im t,e day after t,e +nside Bit&oins event in Man,attan for an eye7openin dis&ussion of &rypto&urren&y- se&urity- priva&y- t,e onion router net(or% and mu&, more. + !earned a (,o!e !ot from t,is intervie( and t,e ta!% *efore it and + t,in% you (i!! too. +f you ,ave &omments- 8uestions or topi&s for t,e s,o( p!ease visit !etsta!%*it&oin.&om'reddit to *e dire&ted to our ne( !istener intera&tion su*7reddit. 2e0ve ,ad a !ot of a&tivity ,ere so far and +0m e3&ited to ,ear (,at you ,ave to say. +f you en1oyed t,e &ontent from t,e &onferen&e t,at (e0!! *e rea!i"in over t,e ne3t fe( (ee%s- p!ease donate *it&oins or !ite&oins at !etsta!%*it&oin.&om. /,is trip (as out of po&%et and your support a!!o(s us to &over future &onferen&es in t,e same fas,ion. 2e ,ave t,ree or four more s&,edu!ed *efore t,e end of t,e year. A!so t,an%s to Media*istro for puttin on su&, a reat event (it, +nside Bit&oins. On&e a ain + ,and it off to Media*istro0s Ste(art. En1oy t,e s,o(. SQ: So- our ne3t spea%er +0m rea!!y e3&ited a*out... 2e run anot,er event &a!!ed Semanti& 2e* SEM/EC 7 it ta!%s a*out Bi Data- Lin%ed Data (,atever you (ant to &a!! it. He is one of t,e masters of t,e universe in t,at domain and + (as fortunate enou , to meet ,im t,rou , our &onferen&e &,air (,o runs our Semanti& 2e* event. Manu Sporny is t,e founder and CEO of Di ita! Ba"aar. He spends most of ,is time &reatin open standards and open te&,no!o y t,at (i!! inte rate payments into t,e &ore of t,e (e*. His vision is to demo&rati"e finan&e t,at0s a *i mission 7 you0re oin to ,e!p do it todayri ,t9 He0s t,e &,airman a!so for t,e (e* payments standardi"ation roup at t,e 2:C. Let0s ive ,im a *i round of app!ause. (Sounds of &!appin ) MS: /,is is my first Bit&oin &onferen&e. + didn0t rea!!y %no( (,at to e3pe&t. $art of me (as %ind of

e3pe&tin t,e !i ,ts to *e a !itt!e dimmer t,an t,ey are no(- peop!e *e %ind of ,an in out in t,e &orner. My e3perien&e so far ,as *een &omp!ete opposite of t,at. +t0s *een rea!!y rea!!y &oo! to meet a num*er of t,e fa&es in t,e audien&e today and 1ust ta!% a*out t,e future of Bit&oin. /,ere0s !ot of e3&itement around t,is te&,no!o y ,ere and so *e&ause of t,at + am rea!!y e3&ited to ta!% to you a*out ,opefu!!y on7*oardin t,e ne3t t(o *i!!ion *it&oin o(ners- ri ,t9 + t,in% a!! of us (ant to see Bit&oin ro( 7 to *e mu&, !ar er t,an it is today 7 so part of (,at + do in (or!d standards is to fi ure out ,o( to ta%e nas&ent te&,no!o ies and *ui!d t,em into !ar er &ompanies- produ&ts- peop!e !i%e Mi&rosoft- ;oo !e- Fa&e*oo%. 2e ,ave a very su&&essfu! tra&% re&ord of doin t,at and so (e (ant to do t,e same t,in for Bit&oinso !et0s o a,ead and et started ta!%in a*out ,o( are (e onna et t,e ne3t t(o *i!!ion peop!e onto Bit&oin. +t ,e!ps to %ind of understand (,ere (e0re &omin from as far as Bit&oin0s &on&erned and one of t,e easiest metri&s to !oo% at ri ,t no( is to see ,o( *i t,e E&o7system is ri ,t no(- so t,e *it&oin mar%et &ap ri ,t no( is around <.< *i!!ion =SD. /,at0s a&tua!!y rea!!y surprisin to me. + t,ou ,t it ,adn0t ro(n t,at mu&, over t,e past &oup!e of years *ut &onsiderin t,ere (as not,in 7 it (as (ort, *asi&a!!y not,in a fe( years a o 7 t,at0s pretty impressive. +f you &ompare it to somet,in !i%e t,e =S do!!ar money supp!y 7 t,at is M>- M<- M4- *asi&a!!y printed &urren&y- money t,at0s sittin in peop!e0s &,e&%in a&&ounts- money t,at0s sittin in CDs 7 t,e =S Do!!ar supp!y is at around <?.: tri!!ion do!!arsso t,ere0s a ,u e ap t,ere. Same t,in (it, *it&oin addresses 7 t,ere are a*out <.? mi!!ion a&tive *it&oin addresses today. +f (e 1ust !oo% at =S *an% a&&ounts as means of stored va!ue- t,at0s %ind of t,e (atermar% of (,ere peop!e store t,eir money- in t,e =S ri ,t no( t,ere0s @A.B mi!!ion a&&ounts a ain C> times !ar er- so mar%et &ap <?>>> times of a ro(t, *et(een *it&oin and t,e =S do!!ar 7 need it to et as *i as =S Do!!ar 7 a*out C> times for addresses. 5o(- + am pointin t,is out not to say t,at t,is is a *ad t,in D t,is is a&tua!!y fantasti& ne(s. +t0s rea!!y fantasti& ne(s for t,e peop!e sittin in t,e audien&e *e&ause you0re ettin it on t,e round f!oor. 2e a!! *e!ieve Bit&oin is oin to *e a*so!ute!y ,u e and + t,in% a!! of us (ant to fi ure out t,e (ay to et it t,ere. 2e (ant to fi ure out t,e (ay to ro( it as 8ui&%!y as possi*!e in t,e most responsi*!e (ay possi*!e- so *ottom7!ine Bit&oin ,as a !ot of room to ro( so it0s rea!!y e3&itin to *e in t,is area at t,is time. 5o(- (,en you ta!% a*out ro(in a te&,no!o y- and t,e 2or!d 2ide 2e* Consortium ,as a !ot of e3perien&e doin t,in s at (or!d s&a!e!i%e t,e 2e* started off as t,is tiny !itt!e pro1e&t and no( it0s t,is ,u e t,in - so t,e 8uestions t,at (e (ant to as% ,o( are (e onna et 4 *i!!ion peop!e onto Bit&oin need to *e a !itt!e more pointed. Ho( do (e do t,is in t,e ne3t five years *e&ause *y puttin a time !imit on it (e time7*o3 it and *y time7 *o3in it (e start rea&,in for !o( ,an in fruit. 2e start *ein a !itt!e more &reative (it, t,e so!utions for ettin Bit&oin adopted in a mu&, !ar er (ay. /,e ot,er 8uestion to as% is (,at e&o7system &urrent!y ,as 4 *i!!ion peop!e t,at are fair!y a&&essi*!e to t,e Bit&oin &ommunity9 +s it &e!!p,one providers around t,e (or!d9 /,ere are many *i!!ions of peop!e t,at ,ave &e!!p,ones around t,e (or!d. +s it t,e *an%s9 +s it somet,in &omp!ete!y ne( 7 a ne( proto&o! for t,e +nternet9 + t,in%- rea!!y- t,e ans(ers are pretty o*vious. /,ere is on!y one net(or% on t,e p!anet t,at is 4 *i!!ion stron . /,ere is on!y one net(or% in t,e (or!d t,at ,as a fair!y even p!ayin fie!d and t,at0s t,e 2e*. 4.E *i!!ion peop!e a&&ess t,e 2e* on re u!ar *asis no( and if (e0re ta!%in a*out as%in t,e ri ,t 8uestions ,o( do you et Bit&oin te&,no!o y in front of 4.E *i!!ion peop!e9 2e!!- it turns out t,at B@F of t,ose peop!e use one of four (e* *ro(sers- one of four &ompanies. /,ose *ro(sers are +nternet E3p!orer- App!e Safari;oo !e C,rome- Mo"i!!a Firefo3. +f you &an &onvin&e t,ose &ompanies to inte rate Bit&oin into t,e *ro(ser t,ere (i!! *e an e3p!osion in usa e and t,e ood ne(s is t,at one of t,ose &ompanies is a&tua!!y very- very interested in inte ratin it in t,ere. 2e0!! et to t,at a *it more *ut t,e 8uestion is OG fine t,e 2e*0s out t,ere- t,ere are t,ese four (e* *ro(ser &ompanies out t,ere- ,o( do (e *ui!d Bit&oin into t,e *ro(ser9 2,at0s t,e pat, for(ard9 /,at0s (,at + do. + am t,e &,air of somet,in &a!!ed t,e 2e* $ayments ;roup at t,e 2or!d 2ide 2e* Consortium. My 1o* is to o out t,ere- find te&,no!o ies t,at (e &an inte rate (it, Mo"i!!a Firefo3- ;oo !e C,rome- +nternet E3p!orer and ta!% (it, t,ose &ommunities to fi ure out ,o( (e &an et t,ose te&,no!o ies in t,ere in a safe and inter7 opera*!e (ay. + a!so do a !ot of stuff (it, !in%ed data and identity and se&urity on t,e (e* 7 t,ese are

a!so rea!!y ,ot topi&s. Most!y- it0s *e&ause peop!e (ant payments inte rated into t,e 2e* *ut t,ere are a !ot of rea!!y &omp!i&ated pro*!ems. /,ese are pro*!ems t,at peop!e ,ave *een (or%in on for <> years. /,ey0re are not ne( t,in sD everyone %no(s t,ey need to *e fi3ed- *ut ettin a reement *et(een a!! of t,ese &ompanies is a diffi&u!t t,in . + am a!so t,e founder of a &ompany &a!!ed Di ita! Ba"aar. 2e *asi&a!!y ta%e standardi"ed te&,no!o y and (e &ommer&ia!i"e it- so (e *ui!d soft(are systems for *an%s and finan&ia! industry and fo!%s !i%e t,at. + spend most of my time &,ampionin te&,no!o ies t,at do t,in s !i%e t,e (e* &ommer&e A$+ (,i&, a!!o(s you to do one &!i&% payments t,rou , t,e (e*se&ure messa in D (,enever you0re dea!in (it, finan&ia! transa&tions you ,ave to ma%e sure t,at t,e messa in is se&ure *ut sin&e t,e (e* is t,is open p!atform t,ere0s a &omp!ete!y ne( set of pro*!ems t,at are *rou ,t to t,e fore- H//$ si natures (,i&, is a (ay of doin di ita! si natures in H//$- a ne( payment proto&o! &a!!ed $ayS(armD fi urin out ,o( (e &an do &ro(d fundin is a pro*!em (e0re rea!!y interested in tryin to put into t,e &ore of t,e (e*0s ar&,ite&ture- !in%ed data te&,no!o ies. At t,e very end- (e0re rea!!y interested in Bit&oin and tryin to fi ure out a (ay to ,e!p t,e Bit&oin &ommunity- %ind of *ui!d it in some of t,e more mainstream te&,no!o ies t,at peop!e use on an everyday *asis. For t,ose of you t,at don0t %no( (,o t,e 2or!d 2ide 2e* Consortium is 7 it0s usua!!y referred to as 2:C. +t (as &reated *y Sir /im Berners7Lee. He (as t,e uy t,at invented t,e (e*. He sti!! is t,e &,air of t,at or ani"ation t,at0s *ased out of M+/. /,ere are :B4 mem*er &ompanies- so t,ese are &ompanies !i%e App!e- Fa&e*oo%- $ay$a!- Ama"on- Boein - H$- a!! t,e rea!!y *i te&,no!o y &ompanies &ome to t,e 2:C to fi ure out (,at t,e ne3t ar&,ite&ture of t,e (e* is oin to *e. /,ere are around C> (or%in roups a&tive at a time (or%in on t,in s !i%e H/MLC- CSS- (e* paymentsevery sin !e *ro(ser A$+ t,at you use- if any of t,e (e* *ro(ser t,at you use ri ,t no(- every sin !e one of t,ose (e* *ro(ser A$+s (as standardi"ed at t,e 2:C 7 so *asi&a!!y- (,at + am tryin to say is 2:C *ui!ds t,e (e*. +f you (ant somet,in to rea&, 4 *i!!ion peop!e you (or% (it, t,e 2:C. 6ou &onvin&e t,e *ro(ser manufa&turers t,at it0s somet,in t,at0s (ort, doin and you et it *ui!t7in to t,e &ore of t,e (e*. 5o(- t,e pro&ess t,at you o t,rou , at t,e 2:C to do t,is it0s pretty simp!e pro&ess so you &ome up (it, a proposa!- so !et0s say our proposa! is (e (ant to *ui!d Bit&oin into t,e t,e *ro(ser. /,at seems !i%e somet,in t,at0s in a!! of our interest. 6ou &ome up (it, a draft spe&ifi&ation (,i&, is *asi&a!!y a te&,ni&a! overvie( of ,o( e3a&t!y t,at0s onna (or% 7 usua!!y soft(are deve!opers (or% on t,at *it of it 7 and t,en if t,e mem*ers,ip 7 Mi&rosoft- App!e- ;oo !e 7 a ree t,at puttin Bit&oin in t,e *ro(ser is somet,in t,at0s (ort, doin - (e &reate a (or%in roup and t,at (or%in roup operates for t,ree years ma%in sure t,at t,e standard is *ui!t proper!y- t,ere are no se&urity issues- t,ere is an enormous amount of revie(- it0s &omp!ete!y open so t,e 2:C is &omp!ete!y open to t,e pu*!i&. A!! meetin s are transparent- so you et a !ot of pu*!i& &omments from &rypto rap,ers and resear&,ers sayin fi3 t,is or fi3 t,at or + see se&urity issues ,ere. Be&ause of t,at- it ta%es rou ,!y E years to &reate a standard *ut on&e you ,ave a 2:C standard you ,ave t,e *a&%in of t,e *ro(ser manufa&turers- you ,ave t,e *a&%in of !ar e &ompanies !i%e Mi&rosoft and t,at adds an enormous amount of !e itima&y to your te&,no!o y. /,e ot,er rea!!y important t,in - and + don0t t,in% many peop!e %no( t,is a*out t,e (e*- *ut a!! (e* te&,no!o y t,at is *ui!t into t,e *ro(ser is avai!a*!e under an open pat, and roya!ty7free !i&ense (,i&, means any*ody &an imp!ement it- any*ody &an operate it. /,e reason t,e (e* is as *i as it is today is *e&ause (e ,ave ta%en t,at pat, from day one on t,e (e*. Any %ind of standards around (e* payments (ou!d fo!!o( t,e same pat, and it0s in&redi*!y &ompati*!e (it, t,e (ay Bit&oin0s *ui!t. /,at0s one of t,e reat t,in s a*out Bit&oin. /,is ta!% is tit!ed One 2e* =nder Bit&oin and + t,in% t,ese t(o approa&,es for &reatin payment te&,no!o ies are in&redi*!y &ompati*!e (it, one anot,er. Let0s 1ump *a&% for a *it and try and understand (,y t,e 2e* $ayments ;roup e3ist at a!! at t,e 2:C. 2:C a&tua!!y tried to so!ve t,e payment pro*!em in <BBB. 2e did a (,o!e *un&, of stuff (it, mi&ro7payments. +t (as a disma! fai!ure *e&ause- at t,at time- t,ere (asn0t a !ot of interest in ne3t7 eneration payments 7 peop!e t,ou ,t &redit &ards (ere fine- ivin &redit &ard num*er over H//$ unse&ured (as fine 7 so t,at fo!ded- *ut fast for(ard <> years and (e0ve ot some rea!!y &oo! stuff ,appenin (it, Bit&oin and Hen and Iipp!e and t,ese &rypto&urren&ies. /,ere0s a !ot of

interest from t,e *an%in (or!d to %ind of update t,eir ar&,ite&tures as (e!!- *ut fundamenta!!y- even today- e3&,an in funds on t,e (e* is (ay more &omp!i&ated t,an it needs to *e. 2e a!! %no( t,at t,ere are pro*!ems ,ere. /,e speed of o!d money it &an ta%e days to et a payment from point A to point B. Computers &an &ommuni&ate in mi!!ise&onds ,a!f(ay around t,e (or!d. /,ere0s no reason t,at money needs to *e t,at s!o( anymore. Credit &ard num*ers are effe&tive!y pass(ords into your *an% a&&ount and it seems %ind of &ra"y (,en you t,in% a*out it *ut you0re ivin t,at pass(ord a(ay to every sin !e mer&,ant t,at you do *usiness (it,. /,ey ,ave un!imited a&&ess to your funds. 5o(ranted t,ere are a !ot of !e a! prote&tions in7p!a&e to ta%e t,em to 1ai! if t,ey misuse it- *ut it sti!! does not stop t,ose &redit &ard num*ers from *ein a rea!!y reat tar et for peop!e t,at (anna stea! your money. One in every C> internationa! transa&tions are fraudu!ent. One in every <A> domesti& &redit &ard transa&tions are fraudu!ent. /,at is a pro*!em. +t0s a ,u e pro*!em. +t0s su&, a *i pro*!em t,at t,ere0s a ,u e &omp!ian&e industry t,at0s *ui!t up around prote&tin t,ose &redit &ard num*ers *ut (e a!! %no( t,at- (,i!e it ,e!ps- it0s not a rea!!y ood so!ution to t,e pro*!em. /,ere are (ay too many steps re8uired to send and re&eive money. Bit&oin ,as rea!!y made fantasti& strides in t,is area *ut even Bit&oin ,as its pro*!ems. 2aitin for *!o&%&,ain verifi&ation- !osin your (a!!et %eys. /,ere are num*er of p!a&es t,at Bit&oin &ou!d advan&e and + %no( a num*er of t,e spea%ers today are ta!%in a*out t,ose pro*!ems. /,e ot,er pro*!ems (it, payments JareK doin di ita! re&eipts 7 t,ere is no ma&,ine reada*!e re&eipt format ri ,t no(. $eop!e emai! you re&eipts a!! t,e time *ut (,at you do (it, t,em9 6ou pro*a*!y ,it de!ete or send it ri ,t to t,e tras, *e&ause it0s pretty use!ess to you. 2,at (e0d !i%e to do is ma%e t,ose %inds of re&eipts usefu! over !ifetime idea!!y- and t,is is !oo%in <> years out(e (ant peop!e to *e a*!e to fi!e t,eir ta3es *y 1ust pointin it at a transa&tion re&ord 7 a persona! transa&tion re&ord 7 it0s private *ut it0s ot ma&,ine reada*!e data t,at *asi&a!!y &an do your ta3es *ased on t,e ma&,ine reada*!e data in t,ose di ita! re&eipts t,at you ,ave. $at,s for(ardD (,at are t,e (ays t,at (e &an *ui!d Bit&oin into t,e *ro(ser and et it a&&essi*!e to 4.E *i!!ion peop!e9 /,ere are t(o pat,s ri ,t no( t,at (e0re &urrent!y (or%in on. /,e first one is &a!!ed $ayS(arm. +t0s a &urren&y a nosti& standard for (e* payments. #ust !i%e sendin an emai! ,as a proto&o! on t,e (e*- 1ust !i%e Bit&oin ,as a proto&o! on t,e (e*- (e (ant to *e a*!e to ,ave t,is standard for doin payments on t,e (e* t,at0s &urren&y a nosti&. /,e (e* &ommer&e A$+ is somet,in t,at Mo"i!!a is (or%in on and (e0re ,e!pin t,em *ui!d t,at into t,e *ro(sers as (e!! as a standard for doin one &!i&% payments on a (e*site. 6ou s,ou!dn0t ,ave to o to a (e*site and si n up for an a&&ount and verify your address and put in your &redit &ard num*er. 6ou s,ou!d 1ust *e a*!e to o to t,e (e*site and &!i&% L*uyM or LdonateM or L&ro(dfund.M /,at0s (,at (e0re oin for ,ere. Somet,in rea!!y 8ui&% on $ayS(arm- !i%e + said- it0s t,e first universa! open standard for payments on t,e (e*. + do rea!i"e t,at Bit&oin is open. Bit&oin is open in a different (ay 7 it !eads (it, sour&e. +f you (ant to et somet,in into t,e *ro(sers you ,ave to !ead (it, standards. /,at0s effe&tive!y t,e (ay t,at0s typi&a!!y (or%ed. +t0s payment provider a nosti&. 6ou s,ou!d not &are (,o your mer&,ant0s *an% is (,en you o to pay for somet,in on t,e (e* and t,ey s,ou!dn0t &are (,o your *an% is 7 t,e money s,ou!d 1ust f!o( to (,ere it needs to o and t,at0s at t,e &ore of $ayS(arm. +t0s a!so &urren&y a nosti&. +t doesn0t matter if you0re usin =S do!!arEuro- Bit&oin- Iipp!e- Hen- a!ternative &urren&ies- fiat &urren&ies- t,ey s,ou!d a!! 1ust (or%. $ayS(arm a!so ,as a num*er of rea!!y &oo! features su&, as *ud etsD you &an setup *ud ets (it, sites !i%e t,e 5e( 6or% /imes- so t,at as you o in read stories from day to day you0re &,ar ed out of &ard automati&a!!y you don0t even see a *uy *utton. ;ranted- you ,ave to set t,at up prior to usin t,e 5e( 6or% /imes. Di ita! &ontra&ts and re&eipts- ma&,ine reada*!e di ita! &ontra&ts and re&eipts- t,at0s a!so a *i part of t,e standard. +t ,as to *e de&entra!i"ed- t,e (e* is de&entra!i"ed- no &entra!i"ation 7 &entra!i"ation is *ad. /,at is t,e (ay te&,no!o ies are *ui!t at t,e 2:C *e&ause t,at is t,e t,in t,at ives t,e mar%et an even p!ayin fie!d and a!!o(s &ompanies su&, as t,ose sittin in t,e audien&e today t,e a*i!ity to &reate rea!!y round*rea%in ne( te&,no!o ies. /,e ot,er t,in t,at (e &are a*out a !ot in t,e 2e* $ayments ;roup is &ommer&ia!i"ation. /,is is not 1ust a *un&, of a&ademi&s t,eori"in a*out (,at t,e idea! (or!d (ou!d !oo% !i%e. 2e0re invo!ved (it, t,e messy detai!s of t,e (or!d. 2e (ant t,ese te&,no!o ies

&ommer&ia!i"ed as soon as possi*!e- so t,ere is a ,u e fo&us on &ommer&ia!i"ation. $ayS(arm &urrent!y &ommer&ia!i"in a system &a!!ed Meritora. +t e3&,an es =S do!!ars today. +n a*out ? or B mont,s- (e ,ope to ,ave Bit&oin support in t,ere as (e!!. /,e ot,er approa&,... t,at0s t,e open proto&o! approa&,- t,at if (e (ant to fi ure out a (ay to rea!!y et Bit&oin in t,ere- (e do somet,in (it, $ayS(arm. /,e ot,er approa&, is somet,in &a!!ed t,e (e* &ommer&e A$+. +t0s a (ay to initiate payments in t,e *ro(ser. 2e (ant to ma%e payments easy and native. 6ou s,ou!d *e a*!e to do 1ust one7&!i&% payment for *it&oin on a (e* pa e. 6ou s,ou!d *e a*!e to do one7&!i&% payment for =S do!!ars- Euros on a (e* pa e. 2e0re (or%in (it, Mo"i!!a Firefo3. /,eir insta!! *ase is around E>> mi!!ion 7 EC> mi!!ion peop!e use Mo"i!!a Firefo3- so t,is A$+ is oin to *e a&&essi*!e to a very !ar e num*er of peop!e- typi&a!!y ;oo !e C,rome- App!e Safari and Mi&rosoft and (e0re imp!ementin in t,at order after t,e first version of an A$+ oes out. /,e (e* &ommer&e A$+ is a dum* pipe- so if t,ere are &ompanies in t,is room t,at don0t ne&essari!y (ant to ive up t,eir proprietary A$+- t,eir proprietary (ay of doin payments (,i!e it0s not idea! on t,e (e*- t,is provides a (ay for you to sti!! do paymentsone7&!i&% payments- t,rou , t,e *ro(ser usin your proprietary e3&,an es A$+. On&e a ain t,is is &ommer&ia!i"ed in Firefo3 OS (,i&, is s,ippin very soon no( and it0s oin into t,e main *ro(ser (it,in t,e ne3t year- so t,ere are mu!tip!e avenues for(ard to et Bit&oin into t,e *ro(ser- to et Bit&oin in front of t,e 4.E *i!!ion peop!e- *ut (e rea!!y need ,e!p from peop!e in t,is &ommunity. +f (e don0t et ,e!p from peop!e in t,is &ommunity- it0s onna ta%e a mu&, !on er time to et it in t,ere t,an it s,ou!d- so (e need peop!e t,at are deve!opers- e3e&utives- evan e!i"ers *asi&a!!y- if you ,ave any interest in puttin Bit&oin in front of 4.E *i!!ion peop!e &ertain!y 1oin t,e 2e* $ayments ;roup at t,e 2:C. $u!! me aside at t,e &onferen&e if you (anna ta!% a *it more a*out it. Even if you0re interested in %ind of %eepin up (it, (,at0s oin on- 1oin t,e mai!in !ist *e&ause (e ,ave a !ot of peop!e ta!%in a*out a ton of different payment te&,no!o ies and ,o( it0s onna (or% on t,e (e*. + (anted to !eave a !itt!e *it of time at t,e end for 8uestions- so if you ,ave any 8uestions on t,e 2:C- ,o( it operatesanyt,in to do (it, Firefo3 or ,o( you et t,ose peop!e in t,ere- p!ease raise your ,and to as% 8uestions 7 so (,i!e (e0re doin t,at- t,ese s!ides are on t,e (e* if you o to pays(arm.&om's!ides a!! of t,ese oran e !in%s t,at you see (i!! a&tua!!y o to t,e sour&e materia!. 6ou &an 1oin t,e 2e* $ayments ;roup ,ere *y fo!!o(in t,e !in% on t,e s!ides. 2e ,ave a*out a <C> peop!e in t,e roup ri ,t no(. 2e0d !ove to see a !ot more Bit&oin fo!%s in t,ere and t,en + ta!% a*out t,is stuff a !ot on /(itter- Nmanusporny is my t(itter ,and!e- + am on ;oo !eO as (e!!. +f you (ant to send me a private emai!- t,ere0s my emai! address- so in &!osin ri ,t *efore (e et to 8uestions- if you0re interested in t,is in any (ay- &ome and find me at t,e &onferen&e- + am !eavin at E $.M. today *ut fo!!o(7up via emai!. + am very interested in ta!%in (it, &ompanies and ettin Bit&oin into more peop!e0s ,ands. JS: Hi Manu- + am #e". + am an An e! investor and /e&, Entrepreneur. + ,ad a 8uestion a*out one of your ear!y s!ides (,ere you said t,at <.? mi!!ion *it&oin addresses t,at ,ad a va!ue in t,em. Do you ,ave any data on a&tua!!y ,o( many peop!e t,at represents *e&ause o*vious!y some peop!e in some &ompanies use !ots of addresses9 MS: 6ea,- and t,at0s one of t,e pro*!ems (it, t,at first s!ide is t,at t,ere it0s not an app!es to app!es &omparison. =sua!!y- &,e&%in a&&ounts aren0t s,ared *y mu!tip!e peop!e (,ereas *it&oin addresses are usua!!y one person ,as mu!tip!e *it&oin addresses. JS: 2e!!- more important!y mer&,ants ,ave disposa*!e *it&oin addresses and so every transa&tion is a different address MS: 6ea,- so it &ou!d *e t,at (e0re !oo%in at on!y a ,undred t,ousand peop!e in t,e (or!d use Bit&oin*ut + t,in% a!! of us in t,is room *e!ieve t,ere are more peop!e t,at t,at usin it. + mean t,e &ap is definite!y a*out <.? and t,ose are a&&ounts t,at ,ave money in t,em. /,ose aren0t every *it&oin

addresses t,at e3ist- t,ose are spe&ifi&a!!y a&&ounts t,at ,ave money in t,em. SQ: A(esome. /ime for one more 8uestion9 6ea,9 $erfe&t. Here (e o. 2ant to stret&, over9 PS: Hi- my name is $eter Seed and Ma3 Geiser and myse!f are doin a startup &a!!ed /radefor 7 /,e =!timate Bit&oin /radin ;ame. 2,at a*out Fa&e*oo%9 + mean- (,en you (ere oin t,rou , t,e num*ers- + t,ou ,t (e!! if Fa&e*oo% adopted a virtua! &urren&y t,at (ou!d *e ame over. 6our t,ou ,ts on t,at9 MS: 6ea,- so Fa&e*oo% is a!so a 2:C mem*erD in fa&t- + %no( a !ot of peop!e... + %no( a!! t,e peop!e in Fa&e*oo% t,at are invo!ved in standards. /,ey are very 8uiet on it. A!! t,e *i &ompanies are very 8uiet on t,is and t,ey !i%e to stay very 8uiet on it unti! t,ere0s more movement on t,e standard. +t (ou!d *e ,u e if Fa&e*oo% ,ad supported virtua! &urren&ies. + am a!most positive- and t,is is &omp!ete!y unfounded- + am a!(ays positive t,at t,ey are !oo%in into 1ust !i%e every ot,er !ar e te&,no!o y &ompany is !oo%in into it *ut t,ey are not onna *e pu*!i& a*out it. /,ey are not onna say anyt,in pu*!i&!y unti! (e et a 2e* $ayments 2or%in ;roup off t,e round and runnin . Offi&ia!!y- meanin t,at (e need offi&ia! approva! from Fa&e*oo% and ;oo !e to start a 2e* $ayments ;roup- (e *e!ieve t,at0s onna ,appen at t,e end of t,is year- in #anuary J4><EK. +f you et invo!ved in t,e 2e* $ayments ;roup no(- you (i!! ,ave a seat at t,e ta*!e to ta!% to fo!%s !i%e Fa&e*oo% and ;oo !e a*out may*e ettin an a!t7&urren&y into t,ere. +0!! *e ,appy to do any %ind of &onne&tions *et(een &ompanies ,ere and Fa&e*oo% if you0re interested in doin a!! &urren&y stuff (it, t,em. SQ: OG- reat. + am afraid (e (i!! ,ave to end it t,ere- !et0s ive Manu anot,er *i round of app!ause. (Sounds of &!appin ) JAdvertisementK EasyD5S is t,e S(iss Army %nife to your domain names- ,e!pin meet t,eir &ustomer0s individua! needs sin&e <BBA. EasyD5S ,as *een an outspo%en &riti& of SO$A and C+S$A. EasyD5S (as an ear!y supporter of Bit&oin and no( t,ey are proud to sponsor t,e s,o(. Do *usiness (it, a &ompany t,at s,ares your va!ues. ;et a <:F dis&ount (,en you pay (it, Bit&oin. ;o to *it&oin.easydns.&om and *e sure to use dis&ount &ode L/B. #GD Hi- /,is is #ason Gin from Bit&oin <>> and you0re !istenin to Let0s /a!% Bit&oin. But- you %no( Bit&oin is not rea!!y a ta!%er- it0s a doer- 1ust !i%e t,e *est nonprofits and &,arity or ani"ations- and at *it&oin<>>.or a!! (e do is find ,ard(or%in nonprofits and &,arities and ive t,em a <>>> do!!ars in *it&oin. /,at0s a!! (e do- so donate to Bit&oin<>> and !et Bit&oin non7profits and &,arities do (,at t,ey do *est. J'advertisementK ABL: Hi- every*ody. Adam B. Levine ,ere (it, Let0s /a!% Bit&oin. /oday- + am 1oined *y #effrey $au! a%a Snea%. #effrey- (e0ve *een tryin to et to et,er to do t,is ta!% for + uess &oup!e of mont,s no(. 6ou ,ave a rea!!y interestin *a&% round and a&tua!!y it (as your ta!% in ;ermany... JP: + started ivin t,e ta!% in 4><>. + t,in% t,at one (as from 4><< or 4><4.

ABL: 6ou ave a ta!% &a!!ed LFinan&in A Ievo!utionM and t,at (as a&tua!!y t,e ta!% t,at turned me on to &rypto&urren&ies in enera! and a&tua!!y *eyond even t,e &rypto&urren&ies side of it- it e3p!ained in a (ay t,at made me understand (,y it (as a&tua!!y ,e!pfu! to ,ave &urren&ies t,at (eren0t ne&essari!y tied to identity and t,ey &ou!dn0t ne&essari!y *e pre&!uded for reasons t,at (ere ar*itrary. JP: 6ea,- one of t,e t,in s + rea!!y !i%e a*out t,e CCC- t,eir events t,ey produ&e 7 and t,ey0re very te&,ni&a! 7 *ut t,ey a!so produ&e t,em spe&ifi&a!!y (it, an eye to(ard freedom and !i*erties and t,in s !i%e t,at. Bein ;erman t,ey are very fo&used on persona! priva&y and t,e interse&tion *et(een priva&y and te&,no!o y and + !i%e t,at- so + didn0t (ant to 1ust ive a pure!y te&,ni&a! ta!%- t,at of &ourse ,as *een done sin&e t,en- *ut it (as rea!!y important for me to s,o( (,y it0s not 1ust some !i*ertarian o!d *u t,in t,at (e need +nternet and e!e&troni& payments t,at &an0t *e &ensored *y overnment *ut a!so it0s 1ust fundamenta!!y important to everyone t,at *e!ieves in demo&ra&y or individua! !i*erty (it,in a so&iety *e&ause (it,out it t,en t,ere are a (,o!e *un&, of t,in s in t,e dependen&y tree t,at stem from *ein a*!e to ma%e payment t,at may*e t,e overnment doesn0t (ant you to- so t,at (as one of t,e *i reasons + (ant to ive t,at ta!%. + ive us sort of a provo&ative tit!e 7 LFinan&in A Ievo!ution.M At t,e time Bit&oin (asn0t rea!!y t,at *i and its sort of no( *e&omin t,is de fa&to +nternet &urren&y and (e0re onna see more and more of t,em + t,in%. +t0s sti!! not to t,e point (,ere you &ou!d finan&e revo!ution (it, it yet *ut + t,in% (e0!! see t,at (it,in t,e ne3t C to <> years. ABL: 6ou0re sayin C to <> years out. +0m &uriousD are you ta!%in a*out Bit&oin spe&ifi&a!!y or are you ta!%in a*out &rypto&urren&ies *road!y9 JP: Bit&oin raises an interestin 8uestion. A !ot of peop!e (,en t,ey first ,ear a*out Bit&oin t,ey say (e!! t,is is stupid- it ,as no va!ue and no one s,ou!d use it- *ut t,e fa&t is it does ,ave va!ue *e&ause t,e su*1e&tive t,eory of va!ue is rea!!y on!y t,e pra&ti&a! one- and you &an ar ue a!! day !on (,et,er or not your paper money ,as va!ue or o!d ,as any intrinsi& va!ue or anyt,in !i%e t,at- *ut t,e fa&t is t,at peop!e a&&ept t,em as va!ue and t,e same oes for *it&oins. /,ere are ot,er &rypto&urren&ies t,at ,ave sprun up- a!most a!! of (,i&, are dire&t!y des&ended from Bit&oin- + a&tua!!y t,in% a!! of t,em are dire&t!y des&ended from Bit&oin- t,e de&entra!i"ed ones any(ay- *ut rea!!y it *oi!s do(n toD are t,ey usefu!9 + %no( a !ot of peop!e ,ave otten into Lite&oin and Stron &oin and t,in s !i%e t,at *ut ,onest!y + don0t rea!!y &are a*out t,ese *e&ause t,e uti!ity of t,e &urren&y is on!y (,o a&&epts it and (,en you0re dea!in (it, somet,in t,is sma!!- mar%ets t,is sma!! and adoption &urves t,at are !inear rea!!y- t,e on!y t,in t,at0s interestin to me are t,e ones you &an a&tua!!y use as money today and t,at0s *are!y Bit&oin. Bit&oin is an order of ma nitude !ar er t,an any of t,e ot,er ones at !east. ABL: Do you see t,at as a *it... so you t,in% t,at advanta e t,ere is po(erfu! enou , t,at it (i!! *e Bit&oin for t,e foreseea*!e future *e&ause its a!ready a&,ieved t,at and so if one is oin to put effort into somet,in - it ma%es more sense to put it into t,at re ard!ess of (,at e!se is out t,ere. JP: A*so!ute!y. +0ve never rea!!y !i%ed Lite&oin or Stron &oin. + t,in% t,ey0re interestin resear&, pro1e&ts *ut- rea!!y- t,is (,o!e idea of de&entra!i"ed stored va!ue- de&entra!i"ed payment me&,anism is forei n to most peop!e and it re8uires a &u!tura! s,ift for t,is to *e&ome a&&epted in t,e (ider (or!d. Ii ,t no(- it0s of interest to se&urity peop!e- interest to ,a&%ers- it0s of interest to !i*ertarians- and ot,er &rypto7anar&,ists- t,in s !i%e t,at- *ut t,e !on 7term t,in ,ere is t,at peop!e need to understand t,at yes t,is is unintentiona!- no it is not run *y overnment and yes it ,as va!ue and t,at is a rassroots t,in . + am (or%in on a ne( Bit&oin *usiness (,i&, +0!! te!! you a*out in a fe( (ee%s or a mont, on&e it0s more so!id- *ut one of t,e &ore metri&s (e0re tra&%in to i!!ustrate t,e adoption of Bit&oin in t,e mar%et is not ,o( many *it&oin transa&tions t,ere are- it0s not (,at t,e pri&e of *it&oin is on t,e e3&,an e- it0s ,o( many nodes are on t,e peer to peer net(or% advertisin t,eir address 7 ,o( many

peop!e ,ave a&tua!!y do(n!oaded and are runnin t,e soft(are at t,is moment in time and if you !oo% at t,at &urve it0s not an e3ponentia! &urve- it0s not t,ese order of ma nitude ro(t, and t,is is not a *ad t,in - *e&ause it s,ou!dn0t *e- *ut it s,o(s stron !inear ro(t,. Every mont, P t,ousand peop!e ,ear a*out Bit&oin- do(n!oad it- run it- try it out- and t,at adds to t,e poo! and t,en t,ose peop!e te!! t,eir friends and + am not sayin it (on0t o e3ponentia! at some point *ut so far (e0ve seen !inear ro(t, and t,at0s a ood t,in . /,is mar%et is sti!! very- very sma!!. A !ot of peop!e et rea!!y e3&ited a*out ,o( t,is is onna ta%e over t,e (or!d and a!! t,at- and it0s true- *ut it ,asn0t yet and *e&ause t,e mar%et is so sma!! if a!! of a sudden you ,ad t,ousands of peop!e tryin to *uy a mi!!ion *u&%s (it, *it&oin t,e mar%et (ou!d 1ust imp!ode t,at you &an0t even do t,at- and it0s very diffi&u!t today even if you *uy a fe( mi!!ion do!!ars (it, *it&oin. /,e metri& t,at + am usin to monitor t,e ro(t, and e3pansion of t,is t,rou ,out so&iety- is not pri&es- is not transa&tion vo!ume *ut t,e net(or% node &ount (,i&, is as not a !ot of peop!e seem to *e &,artin or... /,ere0s a &oup!e peop!e t,ere t,at are !o in t,e state and is avai!a*!e to anyoneD if you0re on t,e net(or%- you &an see a!! t,e addresses of a!! t,e parti&ipants *ut t,is isn0t a rea!!y pu*!i&i"ed one. + t,in% it0s a very important metri&. ABL: 2,y is it important9 JP: As + e3p!ained *efore- t,e va!ue of a &urren&y is its su*1e&tive va!ue- and t,e more peop!e t,at re&o ni"e Bit&oin as a t,in as say OG t,is is a soft(are t,at + run and + use it and it ta!%s to ot,er peer to peer soft(are. /,e more peop!e t,at understand- if not on a deep te&,ni&a! !eve!- to some &ursory !eve!- (,at Bit&oin is and ,o( it (or%s- if not,in more t,an ,o( t,e soft(are (or%s- you do(n!oad itrun it and it syn&,roni"es- you &an send and re&eive payments. /,ose peop!e are added to t,e poo! of peop!e (,o may*e not immediate!y *ut may re&o ni"e Bit&oin as va!ua*!e- and t,at in&reases its uti!ity. ABL: +n t,is &ase you0re e8uatin nodes to individua! users. JP: 6es. ABL: OG so (,en (e ta!% a*out nodes t,en t,ere0s a differentiation- t,ere are fu!! nodes (,i&, a&tua!!y ,ave t,e entire *!o&%&,ain and t,en t,ere are t,e !i ,t nodes (,i&, referen&e anot,er servi&e. Do you differentiate *et(een t,ose9 JP: 2e!!- you ,ave to differentiate *et(een t,ose *e&ause !i ,t nodes- for e3amp!e- if you 1ust ,ave a front7end &!ient for an on!ine (a!!et servi&e t,ose aren0t represented in t,e net(or%- *ut t,ere is no (ay for us (it,out oin dire&t!y to t,ose servi&es and as%in t,em. Some of t,em pu*!is,- for e3amp!e- t,e *!o&%&,ain.info (a!!et t,ey s,o( ,o( many peop!e are usin t,eir (a!!et servi&e- *ut you %no(- for e3amp!e- + ,ave no idea ,o( many users Mt. ;o3 ,as t,ese days and + ,ave no idea ,o( many users Coin*ase ,as or (,at t,ere transa&tion vo!umes are. +t0s very important for t,e !on 7term ro(t, and !on 7term va!ue of Bit&oin to understand ,o( many individua!... it doesn0t ,ave to *e e3a&t- *ut a rou , order of ma nitude estimate- ,o( many individua! peop!e re&o ni"e Bit&oin as va!ua*!e today and ,o( is t,at num*er &,an in over time- ,o( many ne( *it&oin users do (e ,ave per mont,- and !i%e + said it doesn0t ,ave to *e anyt,in even remote!y e3a&t 1ust (e ,ave to ,ave some sort of fee! for t,ese num*ers. ABL: Ii ,t- so one of t,e ot,er t,in s (e0ve *een ta!%in a*out a !ot is t,is idea t,at even t,ou , you ,ave Bit&oin as t,is de&entra!i"ed and &rypto&urren&ies as t,is de&entra!i"ed net(or%s- it seems !i%e t,ey are a&tua!!y approa&,in more &entra!i"ed infrastru&ture as minin *e&omes ,arder to a&,ieve and more institutiona!.

JP: Certain!y- and + t,in% t,at (e0re oin to see- in t,e s,ort term- a !ot of t,is sort of &entra!i"ation *ut t,e t,in t,at differs fundamenta!!y *et(een a de&entra!i"ed mode! t,at tends to(ard &entra!i"ation and a mode! t,at is &entra!i"ed *y its desi n- is t,at if- for e3amp!e- !et0s ta!% a*out t,e federa! reserve (ired net(or% in t,is &ountry 7 if you (ant to parti&ipate... t,at ,as a *un&, of different parti&ipants you &an send (ires *et(een t,em 7 *ut if you (ant parti&ipate (it, t,at- you ,ave to o to t,e &entra! aut,ority and say + (ou!d !i%e to app!y. ABL: $ermission. JP: 6es- (,ereas (it, de&entra!i"er- even if it tends for &entra!i"ation- even if (e on!y ,ave <> ma1or p!ayers doin a!! t,e minin in Bit&oin- t,e fa&t is anyone &an o out and o to someone (,ose manufa&turin AS+Cs and *uy a (,o!e tru&% !oad of t,em- et an internet &onne&tion and et a ra&%- fi!! it up and *e in parti&ipatin in t,is net(or%- it0s not a &a*a!. ABL: OG. JP: Seems !i%e one- *e&ause it0s a!! ear!y adopters ri ,t no(- it0s a!! peop!e (it, entren&,ed interests*ut t,at0s oin to &,an e. 2e rea!!y ,aven0t seen institutiona! money &ome to Bit&oin eit,er on t,e investment side yet or on t,e ,ard(are and te&, side yet. ABL: A!t,ou , t,ere are some rumors s(ir!in over t,e !ast &oup!e of days t,at institutiona! money is pourin into minin in a &oup!e of different &apa&ities. JP: A*so!ute!y (i!! *e. /,ere0s oin to *e a !ot of interest in a!! of t,e different (ays you &an ma%e money usin Bit&oin !evera in e3istin &apita!. ABL: Same sort of !o i&- it seems !i%e- &an *e app!ied to... t,at it0s not &ertain!y *ad to ,ave a fe( AS+C manufa&turers *e&ause t,ey &an *e so!d- *e&ause t,eir se!!in t,eir produ&t and so you sti!! et distri*ution it0s 1ust a*out t,e manufa&turin side. JP: A perfe&t ana!o y ,ere is SM/$ 7 emai! on t,e internet. ABL: OG. JP: 2e ,ave massive &entra!i"ation (it, emai! on t,e +nternet. ;mai!- 6a,oo- Hotmai!- Fa&e*oo% no(t,ere are a do"en providers t,at ,and!e over B>F of a!! t,e emai! on t,e +nternet. +t ma%es it very easy for t,e 5SA to o to t,em. ABL: Ii ,t- + (as onna say... JP: Ho(ever- anyone &an set up t,eir o(n emai! server and interoperate (it, t,ese peop!e. /,at- in t,eory- &ou!d &,an e in t,e future if t,ese peop!e de&ided to imp!ement ru!es. For e3amp!e- ;oo !e used to run #a**er servers t,at anyone &an &onne&t to. J6ouK &ou!d run your o(n #a**er server and ,ave +M &onversation of peop!e on ;oo !e /a!% and t,en t,ey s,ut it off. A !ot of peop!e (ere upset a*out t,at *ut it0s t,e e3&eption not t,e norm to Juninte!!i i*!eK it (it, t,in s !i%e t,at. 2it, emai!- you ,ave to. 6ea,- everyone t,at ets emai! e3pe&ts to *e a*!e to send and re&eive to anyone (it, an emai! address. ABL: 5o (a!!ed ardens.

JP: 6ea,- e3a&t!y- even if it0s not a ;mai!. + mean may*e users are ettin trained ot,er(ise (it, t,e pro!iferation of dire&t messa es on Fa&e*oo% and /(itter and t,in s !i%e t,at- *ut + sti!! t,in% t,at peop!e t,at ,ave emai! addresses (ou!d... if you ,ad a (eird emai! domain and someone &ou!dn0t send emai! to you or &ou!dn0t re&eive emai! from you + t,in% users (ou!d ,ave an issue (it, t,at. ABL: Ii ,t- + tota!!y a ree. On t,e ot,er side of t,e issue- you %no( t,ere0s t,e minor &entra!i"ation &on&ern on t,e AS+C side *ut t,en (e start ta!%in a*out OG- so (,at if you &ou!d o *a&% to C$=s as t,e primary t,in for minin and you (ere a*!e to &reate somet,in t,at didn0t s&a!e 7 minin te&,no!o y t,at didn0t s&a!e. JP: 2e!! it sti!! s&a!es- +t sti!! s&a!es (it, C$=s. 6ou Juninte!!i i*!eK more C$=s. ABL: Ii ,t- e3a&t!y. JP: +t0s t,e same &ost &urve. +t0s 1ust you spend t,e money on somet,in different. ABL: Hmm JP: + mean you &an *uy (it, t,at... &ertain!y it doesn0t s&a!e may*e t,e orders of ma nitude t,at it does... ABL: /,at0s- t,at0s... JP: 6ou &an sti!! o out and *uy... ABL: 2e!!- for e3amp!e- yesterday at t,e &onferen&e (e spo%e (it, severa! AS+C manufa&turers and t,ey are in t,e transition point no(. /,e 4A nanometer &,ips are 1ust a*out to &ome out and t,en t,ere movin to <E- sorry it0s 4>- it0s a num*er not t,is <E. <E is &omin out of )4 of ne3t year. JP: =, ,u, ABL: /,e point is t,at ea&, one of t,ese is an e3ponentia! step up in terms of effi&ien&y... JP: =, ,u, ABL: ...and so for everyone (,o ,as pur&,ased t,e e8uipment *efore- t,ey0re essentia!!y inva!idated. /,e e8uipment doesn0t enerate enou , return to even 1ustify operatin under most of t,ese &ir&umstan&es- so (e ,ave *een ,avin t,is on oin &onversation a*out (,at t,e point of minin is and (,at + (anna et to (it, you is (,at are t,e &ommon t,in s (e et is t,at if you (ere to revert to C$= minin iven t,e si"e t,e Bit&oin net(or% at t,is point you (ou!d ,ave *otnets- !ar e *otnets- t,at (ou!d dominate *ut it seems !i%e t,is &ompetition e!ement ma%es it so t,at t,e in&entives are t,ere to ,ave mu!tip!e *otnets essentia!!y &ompetin (it, ea&, ot,er- and it0!! *e very ,ard to a&,ieve dominan&e (it, anyone parti&u!ar net(or%. JP: Fast for(ard to t,e end ame of AS+C minin . Assume t,at (e ,ave t,e p,ysi&a! e!ement of AS+C effi&ien&y. /,e t,in you ,ave to remem*er a*out t,e time!ine (e0re on (it, Bit&oin is t,at Bit&oin is sti!! very ne(. 6ou &an *uy most of t,e pu*!i&!y avai!a*!e *it&oins ri ,t no( for <> mi!!ion do!!ars. +t0s a very- very sma!! mar%et- and despite a!! of t,e media attention- it0s sti!! not a very *i mar%et. +t0s

ro(in . +t0s ro(in very 8ui&%!y- and in C years it (ou!d *e i anti&- and its a!ready i anti& &ompared to (,ere it (as even a fe( years a o- *ut (e0re sti!! in t,e ear!y adopter p,ase despite a!! t,is. ABL: Ii ,t- + tota!!y a ree (it, you. JP: Before t,e ear!y adopter p,ase is over- (e (i!! *e at t,e end ame of AS+C minin - and *e&ause t,e diffi&u!ty is varia*!e- it doesn0t rea!!y matter if (e0re at t,e end ame of AS+C minin or at t,e end ame of C$= minin . 2,at it *e&omes t,en is a fun&tion of ,o( many do!!ars &an you spend on &,ips*e&ause t,e AS+Cs and t,e C$= t,at (i!! 1ust &ompensate for ,o(ever many you0re runnin in t,e tota! re&ord. ABL: Ii ,t. JP: 2,at it *oi!s do(ns to is t,at t,e peop!e t,at (i!! &ontro! minin are t,e peop!e t,at &an dump t,e most money into &,ips (,et,er t,ose &,ips are enera! purpose C$=s or rat,er AS+CS or ;$=s or (,atever a! orit,m is t,e *est avai!a*!e te&,no!o y in t,e mar%et for runnin t,at proof7of7(or%. ABL: /a!%in a*out t,is end ame do you t,in% t,at0s a pro*!em9 JP: 2,et,er it0s a pro*!em or not doesn0t matter *e&ause Bit&oin0s de&entra!i"ation re8uires a proof7of7 (or%- and t,ere0s no proof7of7(or% t,at (e &an desi n t,at is resistant to someone (,ose (i!!in to spend QC> mi!!ion. ABL: O%ay JP: (!au ,s) ABL: Money is effe&tive!y (or% in t,is &onte3t. JP: 6ea,- e3a&t!y *e&ause you 1ust *uy more &,ips and *uy more po(er and t,ere0s not,in t,at &an stop t,at &entra!i"ation 7 more resour&es e8ua!s more proof7of7(or%. Doesn0t matter if it0s an AS+C t,at does C>> *i!!ion more operations per se&ond t,an a enera! purpose C$=. +t0s 1ust a matter of ,o( many do!!ars &an you dump into your minin ri . ABL: Ii ,t. JP: Eventua!!y AS+Cs (i!!... (e (ent from C$= miners to ;$= miners. + ran one of t,e very first ;$= miners. + (as eneratin a fe( ,undred *it&oin a day at t,at time. + *ou ,t a... t,is is a&tua!!y a rea!!y very funny story. 2,en + started minin - + *ou ,t a QC>> A/+ video &ard. + put !i%e ten of t,em in my Ama"on &art and t,e (ay + fi ure 7 + did t,e !itt!e minin &a!&u!ation and + (as a*out to put t,em on my Ameri&an E3press &ard and + ,ave !i%e :> days to pay for t,at- so it0s !i%e if + et t,ese and put t,em on &omputers t,en t,ey0!! pay for t,emse!ves in !i%e t(o (ee%s ri ,t and (e!! + put <> of t,em- and t,en you %no( (,at if t,is (,o!e *it&oin t,in is.. ABL: (!au ,s) 6ea,- ri ,t. JP: (!au ,s) /,en + 1ust *!e( C>>> do!!ars on video &ards- !i%e (,at am + doin - and so + too% B of t,em out and + 1ust *ou ,t <. + ot it and + enerated a fe( ,undred *it&oin a day (,i&, today seems

ridi&u!ous. ABL: At t,e time- (,at (ere t,ey (ort, at t,e point you (ere doin t,is9 JP: + mean it paid for a video &ard in may*e !i%e t(o or t,ree (ee%s. ABL: So- C>> do!!ar video &ard- 4 or : (ee%s and a &oup!e of <>> &oins a day. JP: 6ea,- and it (as (,en t,e m>m&,i!! miner- t,e very first ;$= miner t,at (as pu*!i&!y re!easedand + ot it (or%in and it (as &oo! *ut t,en + so!d t,e *it&oins immediate!y as soon as t,ey (ere enerated. + (asn0t interested in spe&u!atin t,em a &urren&y. ABL: Ii ,t. JP: + t,in% (,at0s oin to ,appen- (e o from C$= minin to ;$= minin - from ;$= to AS+Csdifferent pro&ess si"es (it, AS+Cs- eventua!!y (e0re onna *ump up a ainst t,e !imits- and at t,at point t,e diffi&u!ty (i!! *e t,e same do!!ar7for7 do!!ar for ;$=s or rat,er AS+Cs runnin t,is proof7of7(or% or for enera! purpose &omputers runnin some different proof7of7(or%. ABL: Ii ,t. JP: Certain!y- it0s !i%e a *and aid and t,e ans(er is as far as + see it s(it&,in to a different proof of (or%- usin a different &rypto&urren&y t,at use a different proof of (or%- it0s a ,u e dent in t,e adoption &urve. Say LOG- don0t use Bit&oin- use Stron &oinM or somet,in e!se !i%e t,at. 6ou0re not et even dou*!e di it per&enta e to stop usin one and start usin t,e ot,er- and t,e *enefit is not a !on term *enefit it0s a s,ort term *enefit *e&ause eventua!!y (,i&,ever one *e&omes dominant- and + t,in% it (i!! *e&ome dominant *e&ause (e don0t need more t,an one- + mean one is enou ,- and + t,in% t,at0!! *e Bit&oin. $eop!e (i!! 1ust dump a!! t,eir money into (,atever &,ip ma%es t,em t,e most money and it doesn0t matter (,at a! orit,m t,at0s runnin . ABL: See- no( + used to *e!ieve t,at too. + used to t,in% t,at t,ere &an on!y *e one t,in - *e&ause a ain you ,ave ot t,e net(or% effe&t and t,at0s su&, a po(erfu! advanta e in t,is parti&u!ar type of fie!d- *e&ause !i%e a !an ua e money isn0t t,at usefu! if no*ody e!se uses it. JP: =, ,u,. ABL: +t seems !i%e ri ,t no( (e are in a!most a rea!ity *u**!e- (,ere peop!e !oo% at t,e ne( situation t,at (e ,ave (it, &rypto&urren&ies and t,ey say- LOG- (e!!- + use one *e&ause t,at0s (,at you do-M *ut it seems !i%e t,ere is some destru&tive t,in s &omin in t,e future to t,e Bit&oin net(or% and to t,e Bit&oin proto&o! potentia!!y- e3&use me- t,at you %no( ,ave t,e potentia! to pop t,at- and t,ere are a!t&oins (aitin at every- ,un ri!y (aitin to &apita!i"e. JP: A*so!ute!y- + am not sayin t,at t,ey0re oin to die. + am 1ust sayin t,at t,ere (i!! on!y *e one t,at ,as fifty mi!!ion users. ABL: OG. OG. JP: + don0t see a!t&oins as providin enou , uti!ity versus t,e one t,at a!ready ,as t,e net(or% effe&t oin for it. /,ere (i!! *e !ots of a!t&oins out t,ere t,at ,ave !ots of use *ut my t,eory is t,at Bit&oin- or

may *e it mi ,t *e an a!t&oin- *ut t,ere is on!y oin to *e one t,at0s oin to ,ave fifty or ,undred or five ,undred mi!!ion users five- ten years from no(. ABL: + %no( is t,at (e ta!% a*out priva&y. 2e0!! et to t,at in t,e ne3t se ment. Have you read t,e Bit&oin 4.> spe&ifi&ation t,at0s *een f!oatin around9 JP: + ,ave. ABL: Hery &urious for your t,ou ,ts on t,at. Can you summari"e some of t,e t,in s t,at Juninte!!i i*!eK9 JP: 2e0re ta!%in a*out t,e se&ond Bit&oin (,ite paper9 ABL: 6es. JP: + !i%e t,e ideas and + !i%e t,e &on&ept of not ,avin to ma%e su*stantia! &,an es to t,e Bit&oin net(or% proto&o! or t,e *!o&%&,ain- *e&ause- for e3a&t!y t,e same reason + mentioned *efore t,e net(or% effe&t. +f you ,ad to ma%e su*stantia! &,an es you ,ave some sort of OG you ,ave to pi&% A or B or if t,ere is a for% t,en you are not oin to et *uy in- *e&ause t,e reason t,at Bit&oin ,as *een so su&&essfu! so far- and + t,in% t,e &ore devs understand t,is on a fundamenta! !eve!- is *e&ause it0s a set of ru!es (e0ve a!! a reed on de fa&to. 2e start &,an in t,ose ru!es t,ere is oin to *e some per&enta e t,at say- L(e!!- + didn0t si n up for t,is.M ABL: 2e!!- *ut t,at0s t,e t,in of &ourse is t,at t,e *it&oin t(o paper t,at &ame out (asn0t re!eased in a va&uum. +t (as re!eased as a dire&t response it seemed to me to t,e &,an es t,at ,ave *een proposed for >.B. Have you ta%en a !oo% at t,at9 JP: 5o- + ,aven0t !oo%ed t,ose yet. ABL: My understandin is t,at >.B in&!udes ne( editions *asi&a!!y t,at add a &entra! issuin aut,ority so t,at invoi&es &an *e issued- and t,en t,ey &an *e verified a ain *y a t,ird party and so t,at sets off a!! sorts of (arnin *e!!s. JP: /,e t,in (it, somet,in !i%e t,at is t,at as !on as it isn0t in t,e dire&t payment &,ain. /,ere ,ave *een a !ot of initiatives to fi ure out a (ay of aut,enti&atin a re8uest for money. ABL: Ii ,t. JP: A!! of t,e (ays (e ,ave for &onveyin %eys from person A to person B are su*1e&t to t,e same %ey mana ement pro*!ems (e0ve *een ,avin (it, &rypto end7users for !ast t(enty years. A met,od for someone to verify t,at t,is %ey is re8uestin money from you is a&tua!!y t,e %ey t,at you (ant to pay is not a *ad t,in . 2,et,er or not it s,ou!d *e in t,e proto&o! is anot,er 8uestion. $erfe&t s,ou!d *e somet,in t,at runs a!on side it- *ut as !on as it0s not in t,e a&tua! &oin transfer pat,- + don0t rea!!y see anyone ,avin a ,u e pro*!em (it, it. ABL: OG JP: May*e not a &entra! issuin aut,ority- *ut a &entra! &ertifi&ation aut,ority (,i&, 1ust sounds !i%e (,at you0re des&ri*in . A pu*!i& %ey t,at s,ips (it, t,e &!ient t,at says t,is is a !e itimate re8uest.

Certain!y- it ives a !itt!e *it of &ontro! (,ere peop!e mi ,t ,ave an issue. ABL: 2e!!- it0s t,at s!ippery s!ope t,in . /,at0s t,e pro*!em t,ere. JP: Certain!y- *ut it doesn0t ne&essari!y as !on as t,ere is a (a!! t,ere in *et(een t,e a&tua! payment system and t,e aut,enti&ation system for &ertifyin transa&tion. As !on as you &an a!(ays send transa&tion to a %ey t,at you verified *y yourse!f as opposed to verified *y some &entra! roup t,en you s,ou!d *e fine. + don0t see anyone rea!!y ,avin a ma1or pro*!em (it, t,at. ABL: Fair enou ,- fair enou ,- so t,at is my understandin is t,at it0s not ne&essari!y t,at t,ese are 1ust ideas t,at t,ese peop!e- + *e!ieve t,e roup is out of J$anama9K t,at0s re!eased t,is spe&ifi&ation- t,at t,ey 1ust &ame up (it, ideas in va&uum t,at rat,er t,is (as a response to t,in s t,at are &omin . 2it, t,at in mind- it seems !i%e t,e situation isn0t t,at (e %eep oin as (e0re ro(in or (e &,an e (e do t,is ne( t,in . +t seems more !i%e one (ay or t,e ot,er (e ,ave to &,an e. JP: + rea!!y don0t t,in% t,at0s ne&essari!y true. One of t,e t,in s t,at some of my asso&iates ,ave ni&%named RSnea%0s !a(R is users &annot and (i!! not se&ure!y mana e %ey materia!. ABL: (!au ,s) OG. JP: Most users &an0t and t,e ones t,at &an (on0t- and so t,is means is t,at... t,is is (,y (e don0t ,ave... t,is is (,y (e sti!! use pass(ords on t,e (e*. /,is is (,y (e sti!! ,ave most emai! *ein under7 en&rypted. =sers &an0t se&ure!y mana e %ey materia!. /,ey &an0t *e e3pe&ted to- and t,en t,e ones t,at &an 1ust (on0t *e&ause it0s a ,u e pain in t,e ass- and so t,e ni&e t,in a*out Bit&oin is t,at it sort of for&es peop!es0 ,and and t,at if you0re oin to use Bit&oin in a non7&entra!!y &ontro!!ed fas,ion- !i%e you are oin to run your o(n Bit&oin soft(are- t,en you ,ave to mana e your %ey pair *e&ause your %ey pair are your *it&oins. +f you use somet,in !i%e an on!ine (a!!et t,en you0re %ind of outsour&in t,e (,o!e t,in to someone e!se *ut a !ot of peop!e t,e t,in t,ey !i%e a*out Bit&oin is it0s de&entra!i"ed nature 7 ri ,t no( any(ay. May*e not C years from no( *ut most peop!e + t,in% !i%e Bit&oin ri ,t no( *e&ause de&entra!i"ed and so t,at for&es peop!e to mind t,eir %eys- *e&ause if t,ey don0t t,en t,ey &an0t parti&ipate or t,ey 1ust et t,eir *it&oins sto!en any(ay. ABL: Ii ,t. JP: 2,at t,at &an tri er is t,at no( (e ,ave t,e *asis for (e* of trust- *e&ause a *it&oin %ey &an *e used... it (as added to t,e &!ient 7 + t,in% in t,e !ast year or may*e a year and a ,a!f 7 t,at you &an si n an ar*itrary strin (it, a *it&oin %ey. /,ese are 1ust %ey pairs you &an use t,em to en&rypt. 6ou &an use t,em to si n. 6ou &an use t,em as... ABL: 6ou &an verify it on&e you si n. JP: 6ou &an use t,ese %eys for any sort of &rypto operation not 1ust for Bit&oin and + t,in% t,at is t,e met,od *y (,i&, you &an sort of *ootstrap t,is sort of t,in . +t doesn0t need to *e &entra!i"ed it &an *e *ui!t a!on side *it&oin (it,out a&tua!!y &,an in t,e &!ient. ABL: + see. JP: Somet,in t,at reads your (a!!et and &an issue a si ned messa e sayin Lt,is ot,er *it&oin %ey is oursM or somet,in !i%e t,at.

ABL: Ii ,t. JP: 6ou &ou!d re&reate somet,in !i%e $;$0s (e* of trust (,i&,- to *e fair- ,as *een a ,u e usa*i!ity fai!ure. 2it, t,e &orre&t sort of user interfa&e and so&ia! proto&o! in top of it peop!e are a!ready used to Bit&oin0s %eys sort of *ein a ,u e pain to dea! (it,- so you are a!ready doin t,at you mi ,t as (e!! reap t,e *enefits from t,em as (e!!. ABL: Ii ,t. 2e!!- t,at ma%es sense. 2e!! + rea!!y appre&iate you &!earin up some of t,ose t,in s t,at... t,is is a... + try to &ome at t,is from as mu&, of a... e3p!ainin it is possi*!e and t,is is sti!! ,ard. + am &urious (it, Snea%0s !a(D so it0s 1ust a ,u e pain in t,e ass9 JP: Most peop!e don0t %no( ,o(. ABL: OG. JP: /,e ones t,at %no( ,o( don0t Jdo itK *e&ause it0s in&onvenient. ABL: Do you9 JP: + try. ABL: (!au ,s) JP: 6ou and + *ot, use O/I- for e3amp!e- for SMS. Ho( many of t,e O/I &onta&ts did you spea% to on a re u!ar *asis ,ave you- not via SMS- not via some a!so possi*!y man7in7t,e7midd!e &,anne!- ,ave you verified t,eir O/I fin erprints9 ABL: Ii ,t. +t0s a ,andfu!. JP: + &!i&%ed t,e verify !ater *utton more t,an + do anyt,in e!se- and + %no( ,o( to mana e %eys. /,e fa&t is- it0s se&ure &ommuni&ations (,i&, is one of t,e reason- one of t,e primary reason- (e (ant to use &rypto rap,y are rea!!y- rea!!y ,ard. A *uddy of mine pointed t,is out to me t,e ot,er day tryin to (rite a*out ,o( t,ere is so mu&, sna%e oi! *ein re!eased in t,e (a%e of a!! t,is 5SA spyin - and everyone (ants to ma%e some easy app you 1ust do(n!oad- point and &!i&% and it0!! en&rypt everyt,in se&ure!y and t,e 5SA is foi!ed. =nfortunate!y- se&ure &ommuni&ations are !o i&a!!y a ,ard pro*!em even in t,e most simp!e *!o&% dia ram mode. Even if you t,e most perfe&t user interfa&e- you ,ave to do %ey mana ement some,o(- and if you 1ust ma i&a!!y (ave your ,ands and say- Lo,- everyt,in is se&ret and en&ryptedM and you don0t address %ey mana ement you0ve not so!ved t,e pro*!em. =sers need to understand t,at %ey mana ement is fundamenta! to se&ure &ommuni&ation or effe&tive use of &rypto rap,y. ABL: Do you t,in% t,ere is a so!ution for t,is pro*!em9 JP: /,ere is. + t,in% t,at it (i!! *e partia!!y ,ard(are and partia!!y so&ia!. + t,in% t,at eventua!!y (,at0s oin to ,ave to ,appen for us to use t,e too!s t,at (e *e!ieve to *e overnment snoopin 7resistant 7 peop!e are oin to ,ave to !earn to mana e t,e %ey or t,ey 1ust (on0t ,ave priva&y. /,at0s t,e ot,er option- or (e &an..

ABL: Eit,er one of t,em so!ves t,e pro*!em in a manner of spea%in (!au ,s). JP: (!au ,s) /,e te&,no!o y no( is ettin to t,e part (,ere it0s oin to *e easier to mana e %ey materia!. Li%e + said- Bit&oin is for&in t,e issue. /,ere0s *een so mu&, (or% in ,ard(are modu!es and %ey stora e and off!ine %ey eneration smart &ards a!! t,at %ind of stuff- *e&ause peop!e rea!i"e t,at if you store your %eys in your &omputer and &omputer ets ,a&%ed- your %eys are one. ABL: Ii ,t. JP: /,ere is a !ot of peop!e no( interested in *ui!din t,in s t,at (i!! a!!o( t,em to %eep t,eir %eys private even in t,e &ase (it, t,eir &omputer ettin Juninte!!i i*!eK (,i&, ,appens a!! t,e time. On&e you ,ave t,at in p!a&e t,ose same %eys &an *e used for any sour&e of &rypto operations. ABL: Ii ,t. JP: /,at + t,in% is oin to *e t,e seed t,at eventua!!y for&es peop!e to adopt t,e (e* of trust- *e&ause on!ine payment systems 7 t,ere JareK on!y t(o (ays t,ey &an o. One (ay is t,at you ,ave a p,one t,at is under t,e &ontro! of your nationa! overnment. /,at a&&esses some &entra!i"ed system for ma%in payments- and you don0t t,in% a*out your %eys *e&ause it0s aut,enti&ated... you o in to t,e- you s,o( your overnment +D and t,ey ive you ne( ones or somet,in !i%e t,at. +t0s a!! &entra!!y &ontro!!ed- *ut t,at0s not onna f!y- *e&ause- more t,an ever- nationa! overnments don0t trust ea&, ot,er. ABL: Ii ,t. JP: /,is (,o!e $I+SM t,in t,at0s &ome out (it, t,e 5SA is spyin on everyone. /,ey put a *u!!et in t,e ,ead of t,e =S +nternet industry- *e&ause no one0s onna trust =S &ompanies (it, t,e private data ever a ain. ABL: Ii ,t. JP: 2e !ive in a !o*a! e&onomy- so t,e payment system t,at0s oin to (in is oin to *e one (,ere everyone &an stand t,ere in a standoff (it, uns pointed at everyone e!se not trustin anyone- *e&ause t,at0s t,e mar%et (e !ive in (,et,er you !i%e anar&,y or not. 2,et,er you are anar&,o7&apita!ist or not. /,at0s t,e mar%et t,at Eart, ,as *et(een nations. + %ind of !i%e t,at. /,at0s one of t,e t,in s t,at ma%es me s!eep (e!! at ni ,t is t,at- re ard!ess of (,atever !a(s man tries to imp!ement on t,is p!anet- (e sti!! ,ave an anar&,o7&apita!ist so&iety in *et(een nations. ABL: Let0s ta!% a*out t,at for 1ust a *rief se&ond and t,en + t,in% (e are onna end t,is se ment... so (,en (e ta!% a*out- you %no(- anar&,o7&apita!isti& re!ations,ips on a nation *y nation *asis- + t,in% a !ot of peop!e ta%e t,at as *ein &,aos- *ut t,at0s not rea!!y t,e (or!d t,at (e !ive in. +t0s more !i%e re!ations,ips (,ere every*ody a&ts in t,eir o(n *est interest to as reater de ree as is feasi*!e. +s t,at &orre&t9 JP: 6ea,- t,e reason t,at (e ,ave mar%ets t,at aren0t vo!untary is *e&ause of &oer&ion- and you &an0t &oer&e anot,er nation state t,at a!so ,as nu&!ear (eapons aimed at you. /,e (ay t,at (e imp!ement a!! t,ese systems of &ontro! (it,in a nation is (it, t,e t,reat of for&e or de!ivery of for&e if t,e t,reat doesn0t (or%- and (,en you o to a nation7state !eve!- t,at doesn0t (or% anymore. For e3amp!e- t,at0s (,y Sno(den (ent to C,ina- *e&ause t,e =S &an0t *u!!y C,ina around- *e&ause t,ey ,ave a!! t,e (eapons t,at (e do.

ABL: Ii ,t. JP: 2,at (e0re oin to see eventua!!y is t,at for payment systems... and it may 1ust *e 1ust nationa! (a!!ed ardens. 2e may 1ust o *a&% to (,ere it0s mu&, more diffi&u!t to trade (it, peop!e in ot,er &ountries t,an in your o(n- *ut + t,in% t,at too many peop!e no( e3pe&t t,e +nternet to ma%e !o*a! &ommer&e easy. ABL: Ii ,t. JP: 5o amount of !e is!ation- + t,in%- is onna put t,at &at *a&% in t,e *a - so t,e systems t,at su&&eed (i!! *e t,e ones t,at ma%e t,at easier not ma%e t,at ,arder and no one0s onna use t,eir enemy0s &entra!i"ed (a!!ed arden for payments. ABL: Ii ,t. JP: /,e (ay (e do it ri ,t no( is t,at (e ,ave sett!ement systems *et(een t,ese &ountries- *ut... ABL: But t,ey are *u!%y. JP: /,ey are *u!%y and t,ey are s!o( and t,ey are time &onsumin JandK t,ey are ,eavi!y re u!ated. + t,in%- eventua!!y- it0s oin to start... it ,as started (it, t,e *!a&% mar%et- *ut eventua!!y it0s onna for&e t,e a*ove round mar%ets to to et (it, pro ram- *e&ause you &an0t &ompete (it, somet,in t,at... (or%in !i%e t,at- you &an0t &ompete (it, somet,in t,at &an ma%e a payment in ten minutes of any si"e to anyone on eart, (it, an +nternet &onne&tion. /,ere0s 1ust... it0s not onna f!y. ABL: 2it, &rypto&urren&y you &an. JP: 6ou &an. ABL: #effrey- you %no( one of t,e first t,in s t,at you and + startin ta!%in a*out (,en you ot ,ere t,is mornin (as t,is idea t,at priva&y is not on!y important *ut t,e peop!e rea!!y are misattri*utin (,at a&tua!!y is ,appenin ri ,t no( in t,e (or!d as far as priva&y is &on&erned. Can you te!! somet,in a*out t,at9 JP: 6ea,- + t,in% a !ot of peop!e &ame to Bit&oin- *e&ause it a!!o(s t,em somet,in t,at0s &ensors,ip resistant. 6ou &an pay anyone you (ant- any(,ere you (ant- t,e overnment ,as no say in it- *ut Bit&oin itse!f- as (e %no(- is not anonymous. /,e f!o(s &an *e easi!y *e monitored t,rou , t,e Bit&oin *!o&%&,ain- *ut !et0s say t,at you0ve some,o( mana ed to satisfy yourse!f t,at you ,ave *it&oins asso&iated (it, t,e %ey t,at is suffi&ient!y disasso&iated from yourse!f. 6ou use a mi3in servi&e oryou %no(- *ou ,t t,em for &as, to a *rand ne( %ey- or some (ay t,at you &ame a&ross Bit&oin and t,ey0re su*stantia!!y disasso&iated from yourse!f. 5o(- a !ot of peop!e say- L(e!!- t,en no( t,at you ,ave t,ese anonymous *it&oins you &an use /or- and you &an send t,em to (,oever you (ant or you &an si n a transa&tion and use /or and pus, it t,rou , you %no( same (e* interfa&e t,at !ets you pu*!is, transa&tions t,en you &an use *it&oin tota!!y anonymous!y.M /,e pro*!em + t,in% (it, t,at is t,at t,ere is so mu&, in t,e Bit&oin e&osystem t,at peop!e ,an t,eir ,opes upon /or ri ,t no(- and *e&ause not a !ot of peop!e understand ,o( it (or%s- t,ey assume t,at it0s t,is *!a&% *o3 and you use it and t,en you are anonymous from t,e +nternet. /,e pro*!em (it, t,at not t,at (e ,ave !earned t,at t,e 5SA monitors a!! +nternet traffi&- *ot, overseas and domesti&a!!y- t,ey0ve tapped a!! t,e su*marine

&a*!es and t,ey0ve tapped dire&t!y into e3&,an es for years no(. +t ma%e *e&omes very easy to it doesn0t matter (,at en&ryption /or uses- 1ust from traffi& ana!ysis (at&,in t,e f!o(s of traffi& t,rou , t,e net(or% it *e&omes very easy to a) ,ave a &omp!ete pi&ture of t,e /or net(or% itse!f and *) (at&, traffi& as it enters- *oun&es around and pops out. A !ot of peop!e said ,istori&a!!y (e!! a!! you ,ave to do to su*vert /or is run a "i!!ion tor nodes and (at&, t,e traffi& yourse!f. /,at0s (e!! (it,in t,e rea&, of t,e =S mi!itary- *ut t,ey don0t even need to do t,at no(. /,ey &an 1ust (at&, t,e traffi& *et(een peop!e0s e3istin /or nodes and statisti&a!!y t,is *e&omes very easy to &orre!ate t,ese f!o(s- *e&ause /or provides re!ative!y !o( !aten&y. +f you put a messa e into /or and it oes *et(een t,ese nodes 77 so (e vie( t,is in our ,eads as 1ust a rap, of /or nodes *ut t,e rea!ity is t,at a!! t,ose node to node &onne&tions run over &a*!es t,at do not mirror t,at /or rap,. For e3amp!e- it oes *et(een t,ree nodes t,at may *oun&e *a&% and fort, a&ross t,e same &a*!e t,ree times... ABL: Ii ,t. JP: ...as t,ose nodes ta!% to ea&, ot,er- *e&ause you ,ave no idea (,ere t,ey are. +f t,e 5SA monitors a!! t,at information- JitK *e&omes very easy for t,em to asso&iate t,at assumin t,at your &onne&tion oes on for more t,an you %no( one or t(o pa&%ets (,i&, it ,as to. From my perspe&tive- if you are tryin to prote&t yourse!f 7 prote&t your priva&y on t,e +nternet from t,e overnment in Ameri&a 7 t,en /or is insuffi&ient- (,i&, means t,at a!! t,e ot,er priva&y uarantees t,at you are e3pe&tin /or to provide ,i ,7!eve! proto&o!s- for e3amp!e- Bit&oin are a!so insuffi&ient. +f you are doin somet,in - for e3amp!e- finan&in revo!ution (it, Bit&oin- !et0s say *it&oin no( ,as enou , va!ue to do t,at- and you use /or to send t,ese payments or to re&eive t,e payments and use /or to send to someone e!se you are oin to run a ne( pro*!em- *e&ause t,e /or *e&omes transparent if you &an monitor enou , for t,e net(or%. JAdvertisementK ABL: Let0s /a!% Bit&oin is ,eard ea&, (ee% *y t,ousands of peop!e (,o are parti&ipatin in t,e ne( di ita! e&onomy. Our !istener *ase of *it&oin o(ners- miners- investors- te&,no!o ists and mer&,ants is ro(in fast. 2e offer a !imited num*er for a s,ort advertisin s!ots in ea&, s,o( to %eep our !isteners en a ed and to provide ma3imum impa&t for our sponsors. +f you0d !i%e to ta!% to us a*out Let0s /a!% Bit&oin- send us an emai! at sponsorsN!etsta!%*it&oin.&om. SM: +f + s,o(ed you a (e*site (,ere you &ou!d easi!y pur&,ase e!e&troni&s from t,e (or!d0s !ar est distri*utor (it, *it&oins at "ero per&ent mar%up- (ou!d you t,in% it (as too ood to *e true9 ;ood ne(sD it0s rea! and it0s at *it&oinstore.&om. C,oose from ,a!f a mi!!ion items- save money over Ama"on and 5e(e and &onvert your *it&oins to rea! (or!d items. 6ou &an even *uy (it, priva&y a!! t,ey need is a s,ippin address- *ut don0t ta%e my (ord for it. See for yourse!f at *it&oinstore.&om . J'AdvertisementK ABL: OG !ets *a&%up and simp!ify t,is sma!! amount so /or is t,e Onion routin net(or% *asi&a!!y and... JP: +t0s used for anonymity on t,e +nternet. ABL: =sed for anonymity on t,e internet (it, t,e idea *ein t,at every node &an on!y see t,e ones t,at it dire&t!y &onne&ts to and sin&e it routes from node to node to node to node you &an0t te!! (,i&, node is ori inatin - *e&ause you &an on!y see on&e step eit,er in t,e dire&tion.

JP: /,en t,ey are en&rypted in various !ayers. /,at (ay t,e !ayers pee! off t,en it &omes out t,e ot,er ,and. ABL: OG- so t,e pro*!em t,at you are !ayin out ,ere is in a &u!ture and in a system !i%e (e ,ave ri ,t no( of pervasive survei!!an&e. 6ou &an put a rin around it and (at&, everyt,in t,at oes into it and everyt,in t,at &omes out of it and *e&ause of t,e !o( !aten&y nature of t,e system it0s easy to &orre!ate t,ose so as !on as you ,ave t,at top7do(n ten t,ousand.. JP: 6ou ,ave to *e a*!e to monitor t,e traffi& *et(een every sin !e node. ABL: +s t,at a!so- sure a ain- oin *a&% to Bit&oin for a se&ond. JP: /,e ma1ority of t,e nodes. ABL: Ii ,t- e3a&t!y t,e ma1ority of t,e nodes o*vious!y t,e more t,at you &an see t,e *etter of your pi&ture is- *ut it (or%s even at a fifty per&ent9 + ,ave to ima ine at a !o( !eve! it (ou!d sti!! (or% too. JP: 6ea,- one of t,e *enefits of /or is t,at it is used (or!d(ide and so a !ot of nodes are outside of =nited States- *ut t,ere aren0t a ton of /or nodes in enera! *ut more important!y t,ere aren0t a ton of peop!e usin /or. ABL: Ii ,t. JP: /,at0s rea!!y t,e *i est pro*!em- *e&ause... ABL: +ts se!f se!e&tin to a &ertain e3tent9 JP: 5ot on!y is it0s se!f se!e&tin *ut a!so you0re not onna ,ave a ton of traffi& to ,ide it t,rou ,. One of t,e (ays t,at t,is &ou!d *e miti ated is (it, &,an es to t,e /or soft(are and proto&o! t,at send defined amounts of traffi& at re u!ar interva!s. ABL: + see. JP: $addin and 1ust send it (,et,er you a&tua!!y sendin somet,in or not and t,is (ou!d ma%e it... ABL: Some more noise. JP: 6ea,- e3a&t!y *ut t,is ta%es a !ot more *and(idt, and ma%es t,e &ost of runnin a /or node ,i ,er and in&reases !aten&y for everyone. ABL: 6ou say you redu&e fun&tiona!ity in order to in&rease t,e anonymity and t,e se&urity.. JP: A!! t,at means is t,at on!y fe( peop!e are oin to use it. (!au ,s) ABL: Ii ,t- e3a&t!y so it &ompounds t,e pro*!em. JP: 6ea,- e3a&t!y.

ABL: OG- so oin *a&% to t,e Bit&oin for a se&ond ,ereD everyt,in t,at you 1ust to!d me seems !i%e it app!ies even more so to *it&oin mi3in servi&es *e&ause *it&oin mi3in servi&es you don0t even need to stand on t,e rin around instead you ,ave t,e entire rap, t,ere in front of you. JP: /,at0s true. ABL: Our mi3in servi&es (ort,(,i!e at t,is point9 JP: /,e t,in (it, mi3in servi&es is t,at you &an (it, /or- you0re &onne&tin from sour&e A to end point B- and it oes t,rou , /or- *ut it0s a sin !e point to point t,in (,ereas (it, mi3in servi&es you &an &om*ine many inputs into a sin !e %ey and t,en fan t,ose out to different %eys- and as !on as you ,ave suffi&ient inputs and suffi&ient outputs- &ertain!y t,e mi3in servi&e %no(s it0s oin on- *ut someone (,o 1ust ,as t,e *!o&%&,ain mi ,t not. ABL: /,is is different.. JP: +f you on!y ,ave five inputs and five outputs t,en o*vious!y t,at0s oin to *e easy to tra&%- *ut if... + fee! t,at *it&oin mi3in servi&es- if t,ey ,ave suffi&ient adoptions and a!so suffi&ient trust- *e&ause t,ey are oin to *e trusted- *e&ause mi3in servi&es needs to %no( (,o put &oins in to et &oins *a&% out. ABL: Ii ,t. JP: /,ey &an (or% &orre&t!y *ut t,ey ,ave a !ot of users and t,ey ,ave to *e (ritten in su&, a (ay as to not &ompromise t,e identities. 5o- t,ey need to a&tua!!y mi3. ABL: /,e differen&e ,ere is t,at in t,e /or net(or% (,en you send data t,rou ,- it is t,e same data t,at enters as t,at !eaves fun&tiona!!y. JP: /,e si"e- yea,. ABL: /,e si"e- yea,- OG. 2,ereas (it, a mi3in servi&e you put five in and t,ose five o to some*ody e!se. JP: /,e ot,er t,in t,at differs is t,at t,is is traffi& ana!ysis. 2it, /or 7 (,en you send data t,rou , /or- t,at data &omes out t,e ot,er end in !ess t,an a se&ond. ABL: Ii ,t OG JP: 2,en you send &oins into a mi3in servi&e t,at mi ,t- dependin on t,e &ontra&t you ,ave (it, t,e mi3in servi&e- you mi ,t not et t,ose *a&% for may*e a (ee%. +t0s mu&, easier to ,ide net(or%s from an enemy t,at is usin traffi& ana!ysis if you &an in&rease !aten&ies and in&rease &,aff paddin in t,at messa e... ABL: Ii ,t. JP: ...(,ereas (it, somet,in !i%e /or- (,i&, is desi ned to *e as !o(7!aten&y as possi*!e for usa*i!ityit *e&omes mu&, mu&, ,arder.

ABL: A ain- if peop!e are see%in anonymity or see%in some sort of you %no( meanin fu! priva&y t,rou , systems !i%e t,is are t,ere ot,er systems you (ou!d re&ommend t,at t,ey use or is t,ere a (ay to use /or t,at is safe9 JP: /,at0s t,e pro*!em 7 is t,at + don0t %no( any ot,er system on t,e s&a!e t,at offers any of t,ese uarantees. One of t,e *i est issues t,at (e ,ave ri ,t no( is t,at t,ere is no (ay t,at + %no( of to &ommuni&ate se&ure!y on t,e internet (it,out ivin up your so&ia! rap,. Even assumin /or isn0t *ro%en- assumin you use stron &rypto rap,y and you do %ey mana ement perfe&t!y and a!! your resour&es to %ey mana ement perfe&t!y- you are sti!! sendin data from point A to point B. ABL: Ii ,t. JP: 6ou &an sti!! ana!y"e t,at traffi& and unti! (e ,ave !ar e net(or%s (it, many many users t,at are sendin re u!ar fi3ed7si"ed *!o&%s of data at re u!ar predi&ta*!e interva!s so as to mas% t,e a&tua! fre8uen&y of messa es t,at are rea! or t,e si"e of t,ose messa es t,at are rea! or t,e time 7 t,e time7 stampin of t,ose 7 t,en (e0re not oin to ,ave anonymous &ommuni&ation on +nternet. 2e &an ,ave private &ommuni&ation ri ,t no( usin stron &rypto rap,y assumin %ey mana ement ,as survived*ut (e0re not onna ,ave anonymous &ommuni&ations. ABL: Does t,at matter9 JP: A*so!ute!y it matters. /raffi& ana!ysis a!one (,i&, is *ein referred to in t,e press today as meta data is everyt,in . Let0s say you are tryin to start a revo!ution and you ,ave a &e!! (it, five peop!e in it and your &over ets *!o(n. /,ree or four of t,em et t,ro(n in prison. /,ey are onna %no( e3a&t!y (,ere you are oin to o. /,ey don0t need to %no( (,at t,at &on&ept of t,at traffi& is. /,ey 1ust need to %no( (,o you are asso&iate net(or% is and t,en t,ey &an tar et t,em dire&t!y. /,e &on&ept of traffi& ana!ysis is an ama"in - ama"in t,in . /,ere is &ryptana!ysis and t,ere0s traffi& ana!ysis and (it, no understandin (,atsoever 7 it0s &omp!ete!y opa8ue messa es 7 and usua!!y t,ey are not &omp!ete!y opa8ue- *ut assumin for a moment t,e messa es are &omp!ete!y opa8ue 1ust %no(in (,en t,ey are sent- ,o( fre8uent!y t,ey are sent and from (,ere and to (,ere you &an et a !ot of information- and t,ere is no (ay to ,ide t,at on t,e +nternet. /,at0s ,o( t,e +nternet (or%s and so t,e *est t,in you &an do is you &an o*fus&ate it. 6ou &an send fi3ed7si"e messa es at re u!ar interva!s and t,en em*ed your irre u!ar &ommuni&ations into t,ose- *ut t,at re8uires *ein p!u ed in a!! t,e time. ABL: Ii ,t. JP: 6ou are sti!! sendin fi3ed si"e messa es *et(een peop!e. 6ou0re onna need a very !ar e net(or%. ABL: $!ayin out t,is !o i&- (,at does t,e (or!d !oo% !i%e in five years9 2,at does t,e (or!d !oo% !i%e in ten years9 JP: O,- !ot more tota!itarian- + t,in%. ABL: /,at doesn0t sound tremendous!y ood. +s t,ere a ood s&enario t,at &an &ome of t,is are t,eir a&tions you t,in% t,at &ou!d !ead us t,ere9 JP: +0d !ove to say t,at Lo,- (,at if (e made t,e ri ,t soft(are (e are oin to (in t,e (ar and ive

everyone t,e anonymity and priva&y-M *ut it doesn0t (or% !i%e t,at unfortunate!y t,is is oin to *e a !ot of !itt!e *att!es *et(een a peop!e t,at (ant tota! &ontro! of payment systems and peop!e t,at (ant tota! &ontro! of +nternet monitorin and t,ose t,at re&o ni"e t,at t,at0s to3i& your free so&iety. ABL: Does t,at !oo% !i%e t,e SO$A'$+$A of !ast year9 +s it somet,in different t,an t,at9 + am tryin to et an idea of (,at even t,ese moves are onna !oo% !i%e movin for(ard9 JP: A !ot of it (i!! *e soft(are- *ut a !ot of it is 1ust oin to *e individua! &u!tura! &,an es t,at (e ,ave to ma%e in t,e (ays t,at (e &ommuni&ate. ABL: + see. JP: +t0s *een an open se&ret for years t,at + mean t,is is in a&tion spy movies years a o- *urn your &e!!p,ones t,at you send a te3t on- t,ro( t,em in t,e ar*a e- *e&ause you %no( t,e =S inte!!i en&e is onna "ero in on you. 2e %no( t,at t,e (ays t,at (e ,ave of &ommuni&atin are monitored. 2e0ve %no(n t,is for years and no( (e ,ave dire&t eviden&e of it- and it e3tends t,e +nternet as (e!! t,ere is a s!ide t,at &ame out today. +t i!!ustratin pro ram t,at *een oin on sin&e 4>>A (,ere t,e 5SA- t,is is separate from t,e $I+SM one- (,ere t,e 5SA monitors t,e &ontents of peop!e0s traffi& and puts it a!! on a *i data*ase and ma%es it sear&,7a*!e *y !o(7!eve! 5SA emp!oyees. Everyt,in you do on t,e +nternet and usin soft(are.. ABL: Content- not metadata9 JP: 6ea,- and *e&ause ,ere is t,e t,in &o!!e&tin a!! <>>F of t,e data &omparative!y is very easy and t,en &o!!e&tin spe&ifi& *its of &ontent t,at you find interestin for everyone is a!so very easy. 6ou don0t et a!! t,e &ontent. 6ou re&eive a!! t,e &ontent and t,en you fi!ter it and &,op it up and save a!! t,e messa es and a!! t,e information- a!! t,e p,otos and t,in s !i%e t,at. 6ou don0t need to save every time t,e Fa&e*oo% !o o oes over t,e (ire. ABL: Ii ,t. JP: /,ey put a!! t,is information in a data*ase and t,en ma%e it avai!a*!e to t,eir ana!ysts. ABL: 2e0re in 5e( 6or% ri ,t no(. 6ou enera!!y !ive in ;ermany and you0re Ameri&an &iti"en and (,y do you do t,at9 (!au ,s) 2,y aren0t you ,ere9 JP: One of t,e *i reasons + !eft is *e&ause t,ey aren0t any ood !ar e Ameri&an &ities. + !i%e &ity !ife and... ABL: 6ou say t,at in 5e( 6or%9 JP: 6ea,- + !ove 5e( 6or% *ut +0!! never !ive ,ere a ain. + !ived ,ere for years *efore + moved and it0s a... Ameri&a suffers from t,is terri*!e sense of L(e ,ave to use a !ot of overnment or (e (on0t ,ave ni&e t,in s-M and a !ot of peop!e *uy into t,at. 5e( 6or% is very mu&, !i%e t,at. San Fran&is&o is very mu&, !i%e t,at. + (ant to !ive in a (or!d7&!ass &ity- + don0t (anna pay out t,e nose to do it- and +0d !i%e some sem*!an&e of freedom in my day to day !ife- and you don0t et a!! t,ose t,ree t,in s at on&e in any &ity in Ameri&a. +t0s a %ind of *ummer- *e&ause a!! t,e peop!e + &are a*out are ,ere- and + am aut,ori"ed to (or% ,ere. + t,in% one of t,e *i issues t,at a !ot of peop!e don0t rea!i"e a*out t,is (,o!e 5SA t,in is t,at- espe&ia!!y iven t,at t,is &omp!ete!y indi&ates t,e usefu!ness of /or-..

ABL: Ii ,t. JP: ...is t,at (,en you ,ave a!! t,is data- even 1ust metadata- *ut a!so t,ey ,ave a!! t,e rest of t,e data as (e!!. 6ou ,ave a!! t,is data and you put it into a data*ase- and !et0s see your on!y usin it for anti7 terrorism a&tivities today (,i&, a!so (e0ve !earned it doesn0t (or% <>>F (e!! for. +t doesn0t (or% a ,undred per&ent (e!! for it. 2,at you are settin t,e sta e for is a pus,7*utton si!ent mi!itary &oup in t,is &ountry- *e&ause (,en you ,ave a data*ase !i%e t,is may*e it0s not a*used today or tomorro( or five years from today- *ut five- ten years do(n t,e road you ,ave a!! t,is information a*out every sin !e person in t,e &ountry anyone t,at ,as a&&ess to t,at- t,at0s suffi&ient!y evi!- and (e don0t %no( (,at t,e future is onna ,o!d (e don0t %no( (,o is oin to a&&ess t,at data*ase in t,e future- anyone t,at ,as a&&ess to t,at &an t,en *!a&%mai! anyone in t,e &ountry. 6ou &an *!a&%mai! every federa! 1ud e- every &on ress person- every state overnor. ABL: +t0s a !ot po(er. JP: +t0s un!imited po(er and t,e person t,at (ie!ds t,at &an &ontro! t,e entire &ountry and- *y e3tension- most of t,e free (or!d *e&ause Ameri&a0s t,e !ast !o*a! superpo(er. ABL: Let me as% + mean- iven (,ere (e are today- &an t,is *e (a!%ed *a&%9 C!ear!y (,at0s ,appenin is e3tra7Constitutiona!. 2e are *ot, Ameri&ans &iti"ens and (e ,ave supposed!y t,e ri ,t to variety of t,in s to say (,at (e (ant. /,ere is supposed to *e a prote&tion from sear&,es and sei"ures (,i&, &ertain!y t,is sort of metadata and &ontent &o!!e&tion seems to *rea&,. Do you t,in% t,at t,e system &an even (a!% t,is *a&%9 S,ou!d it (ant to or.. JP: Let0s say t,at t,ey dismant!e t,e (,o!e t,in and te!!s t,ey0ve done so. 2,at0s to stop t,em from *ui!din anot,er and !yin a*out t,at and &opyin t,e data over. /,e dire&tor of 5ationa! +nte!!i en&e ,as a!ready !ied dire&t!y to &on ress. /,ere is a... + don0t t,in% t,ere is mu&, ,ope for t,is &ountry. + t,in% t,e !on term so!ution is for peop!e to rea!i"e t,at t,e on!y (ay to sustain t,is sort of t,in s is for t,em to &ontinue erodin freedoms- *e&ause t,e more !i*erty you ,ave- t,e !ess effe&t of t,e t,in isand t,e more you &an resist it. 2e0ve seen &urren&y transa&tions of t,is &ountry o from ten t,ousand to t,ree t,ousand and !o(er no( and suspi&ious a&tivity reports are fi!ed for any do!!ar amount- no(. 2e are !osin t,e a*i!ity- *it *y *it- to &ondu&t ourse!ves in (ays t,at are not su*1e&t to survei!!an&e- and + t,in% eventua!!y t,at0s oin to !ead to a *rain drain. Eventua!!y- *e&ause as it sounds ri ,t no(- no forei n &ompany t,at ,as ,i ,7va!ue &onfidentia! data is oin to trust it to any =S &ompany. Every =S &ompany is at a ,u e startin disadvanta e on t,e +nternet ri ,t no(- *e&ause it0s pu*!i& %no(!ed e t,at t,ey &an *e for&ed si!ent!y to spy for t,e nationa! mi!itary- and so (,at t,is means is t,at peop!e t,at (ant to not start (it, a disadvanta e are oin to start &ompanies in ot,er &ountries. /,at0s oin to dire&t!y affe&t t,e ta3 *ase in t,e =S and t,e ;D$ and t,e 8ua!ity of !ife ,ere- eventua!!y. +t0s a !on road- *ut t,e end of Ameri&a is no( *e innin . ABL: 2it, t,at- #effrey $au! a%a Snea%. /,an% you very mu&,. JP: /,an% you. ABL: /,an%s for !istenin to t,is portion of our spe&ia! Let0s /a!% Bit&oin &onferen&e &overa e. Bi t,an%s to Media*istro for puttin on a (onderfu! event at +nside Bit&oins. Stay tuned for more to &ome over t,e &ourse of Au ust. +f you ,ave any 8uestions or &omments for me dire&t!y- you &an emai! adamN!etsta!%*it&oin.&om.

/,is episode (as trans&ri*ed *y Mansoor Mu"affar and revie(ed *y A*dussamad. +t is re!eased under t,e Creative Commons :.> Attri*ution Li&enseD ,ttpD''&reative&ommons.or '!i&enses'*y':.>'