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Episode 109 – The Ideal Counterparty

Adam B. Levine (AL) – Host
Robby (R) - Developer of Counterparty

AL:Today is May 13th , 2014 and this is Episode 109. This program is intended for informational
and educational purposes only. Crypto-currency is a new field of study. Consult your local
futurist, lawyer and investment advisor before making any decisions whatsoever for yourself.


Welcome to Let’s Talk Bitcoin, a twice weekly show about the ideas, people and projects
building the digital economy and the future of money. My name is Adam B. Levine and in the
past we have talked about Metacoins or Newcoins whose purpose is to enable the building of
even newer coins on top of them. [0:40]

AL: Today on Let’s Talk Bitcoin we were joined by Robby, one of the developers on the
Counterparty team. Robby, thanks for checking the time with us. [0:46]

R: No problem, Good to talk to you. [0:48]

AL: So, I’m brand new here. What’s Counterparty? [0:51]

R: Counterparty is a project that introduces several pretty cool and pretty powerful peer-to-
peer financial tools layered on top of Bitcoin itself. It is first of fully functional decentralized
exchange in hedging and badging platform ever. It was released on January 2
of this year.
Codes out, it’s available and it’s all working today. So, Counterparty is known as an Embedded
Consensus System. This means each Counterparty transaction is embedded into a Bitcoin
transaction and then broadcast on the Bitcoin network. By doing this, Counterparty gains the
security and decentralization of Bitcoin and Bitcoin blockchain. Really our goal of Counterparty
is to create an open technology platform that’s free for businesses, developers , entrepreneurs ,
etc to build on. Our top goal and principles around the project have really been open since it’s
sustainability, for instance our code is open source and the three founders which I’m of one, as
well as most other members on the team are essentially self-sufficient volunteers.
To that point we went to great lengths to have clean and fair watch. We model the movement
after successful open source efforts such as Linux and Bitcoin itself and I guess we were the
crazy Bitcoin burning guys. I think that’s a good high level overview of Counterparty and I would
like to get into what the actual features of Counterparty are. We spend a lot of time talking to
people about Counterparty for instance I was in California last week just doing a lot of spoke at
few meetups, spoke at the Stanford crypto currency class that was great and got some user
feedback talking about these financial features and the what people saw in it, as well as just
taking to several entrepreneurs and developers that are already building on top of that
platform. We really do sat down to...when to talk to somebody about Counterparty it really
getting down to three main use-cases that we really seen with the community today. But
before I get started talking about those, I want to just make the listeners aware that
Counterparty is a global technology and as it has these features listeners should just be
educated about the laws and their jurisdiction and use the technology in a way that’s lawful
and responsible for working whoever they reside. Now that out of the way [3:12]

AL: Hang on a second here. Let me jump in there for a second, what kind of statement is that to
make in this current environment because I’m very interested in these type of technologies but
the legal situation is at best, really unclear ... I mean this is just your general disclaimer that you
don’t know what’s going on and people shouldn't blame you of something happens right. [3:34]

R: To a point, but I think you echoed a lot of what it is. Really just technology in general,
generally what happens is that the technology will come up. Bitcoin is a perfect example as it
comes out and really the legal precedent hasn’t been set because the laws have not had the
time to adjust and really take this kind of technology into account. Where you had Bitcoin rise
up and be kind of like a decentralized peer to peer money of you will, Counterparty and lot of
these 2.0 platforms like it are essentially talking about decentralized markets, decentralized law
(you know with these autonomous contract for instance). There is so much potential to really
move society along and help out society really create a lot of innovation, spend the economy
create more jobs and the space. There’s a lot of potential with all of this technology but at the
same time it’s not fully clear 100% how it will work out specially such as countries like the
United States. There’s not really something meant to scare people this is more just for people
to be aware of this. [4:41]
AL: But this is unknown terrain. [4:43]
R: To a point, I think there are several...I think that regulators will try to utilize existing laws on
the books to the maximum extent possible but for instance a lot of those laws. It’s not clear
that they apply to peer-to-peer technology. [5:00]