#581 - Andreas Antonopoulos

[0] The J. Hogan experience.

[1] Oh, the English cheats back.

[2] She's my favorite.

[3] Mr. Antonopoulos.

[4] No, you prefer to not go by Bitcoin Jesus.

[5] Is that correct?

[6] I do.

[7] I don't like the ending of that story.

[8] Doesn't turn out so good for...

[9] But he comes back.

[10] Well, that's one version.

[11] That's the problem with the Jesus story, right?

[12] He comes back and then you don't hear from him again.

[13] Like, wait a minute.

[14] What the fuck happened there?

[15] The guy comes back from the dead after three days and then nothing.

[16] You know, even so, the torture to death part for poking a stick at the big bad bear of the Roman Empire is a bad enough story as it is.

[17] I don't want to emulate any part of that.

[18] Thank you.

[19] I agree with you.

[20] Also, the misuse of magic.

[21] I mean, to have, like, all that power and to just, like, work on wine, you know, turning water into wine and walking on water and stuff like that, like, seems like some other things could have been done.

[22] or perhaps combining those two walking on wine there you go like converting the entire sea of galilee into wine that would have been a pretty awesome that would have been rude as fuck to all those fish that live in there though I just marinate them they can be thrown onto the grill right away I guess delicious they didn't have refrigeration back then so we're getting way off topic way early for those of you who don't know Mr. Antinopoulos is an expert in Bitcoin in digital currencies in what is most likely going to be, in my opinion, the future of economics.

[23] I really do believe that this is not just, I think what we're seeing right now is not just a trend.

[24] I think what we're seeing right now is the beginnings of what will eventually be a realization of what I think people don't need this third party system.

[25] They don't need banks.

[26] They don't need.

[27] What we need is we need to figure out some sort of a way to exchange goods and services with each other and to keep track of like what things costs.

[28] And right now we're doing it with money.

[29] And right now we're doing it with money that's like somehow or another being controlled by the World Bank, being controlled by the National or the Federal Reserve.

[30] And most people agree that that that sucks, that that system is not a, it's not a fair or equitable system.

[31] and you're working very hard to try to alert people about Bitcoin and spread the word and I think you're doing a pretty good job of it.

[32] I think that the word is getting out there.

[33] I don't think I really need to do much.

[34] That's the wonderful thing about marketing or trying to talk about something that's actually useful.

[35] Like if I was selling hydraulic fracturing, I'd have to really try hard to persuade people that it's not fucking up the environment.

[36] But with Bitcoin, it's really useful money.

[37] It can solve a lot of problems.

[38] All I have to do is introduce the concept.

[39] And young people, you know, the idea, hey, we're going to put money on the Internet.

[40] Well, of course we're going to put money on the Internet.

[41] That makes perfect sense.

[42] And we're going to make it global and it's going to work without borders and it's going to be instantaneous.

[43] Well, of course, you know, how come we haven't done that yet?

[44] And so it's an easy idea to sell.

[45] Well, the system, for folks who haven't heard your earlier podcasts that we did and they're not familiar with what Bitcoin is.

[46] Just give them a brief description of how the Bitcoin system works.

[47] So at a very basic level, Bitcoin is Internet money.

[48] It's money that you can send like an email.

[49] It's like Skype for money.

[50] You can create an account, if you like.

[51] It's kind of like an account, but it's basically an application that you download onto your phone or your desktop.

[52] And once you do that, you have a Bitcoin address, and you can send and receive Bitcoin and it's a currency.

[53] It works like a foreign currency.

[54] and you can convert dollars to Bitcoin and Bitcoin to dollars and back.

[55] But the really cool thing is that you can send Bitcoin to anybody else in the world in a matter of seconds for almost no fees at all.

[56] And if you do have to pay a fee, it's usually something like a third of a penny and it has nothing to do with how much you're sending.

[57] And in a few seconds, cheaply, securely, all around the world, instantaneous money.

[58] So it takes money from a technology of the 50s and it drags it into the 21st century, kicking and screaming.

[59] Just so we can get past this, just explain how it's created and explain like how it's, how it's controlled, like how the number of bitcoins is generated and how this is not something that can be fucked with the same way money is fucked with today, where they can just print money and cause debt and create a lot of problems.

[60] Explain that.

[61] So Bitcoin is a decentralized peer -to -peer network of money, and that's a lot of fancy words, but I'll relate it to things that people are familiar with, especially for a younger generation, things like BitTorrent or Napster, things like that, where you run a piece of software in your computer, and that's simultaneously using resources but also sharing resources for others, and the network is made up of everybody running a bit of software on the computer and coming together in a collaborative way.

[62] A Bitcoin is money done that way.

[63] So everybody runs some software and the collaboration of everybody on the network to run this software to secure and verify all of the transactions that is happening.

[64] That also produces the currency and the currency is produced at a predictable rate.

[65] So every 10 minutes, 25 Bitcoin are created.

[66] And they're created on the network, buy the network.

[67] And they're created through this kind of like a competition that happens online with computing power.

[68] I won't go into too much of that detail.

[69] But the point is every 10 minutes, 25 new Bitcoin I created.

[70] And then that happens for about four years.

[71] And then after four years, the rate of new Bitcoin is caught by half.

[72] So when it first started, it was 50 Bitcoin every 10 minutes.

[73] Now it's 25.

[74] In the year 2016, it's going to drop to 12 .5.

[75] Then it's going to go to 6.

[76] and a quarter, and it keeps reducing by half until eventually no more Bitcoin are created.

[77] And if you do the math and you add up the years and you keep dividing by two, you end up with about 21 million Bitcoin.

[78] And most of them will be done in the first decade.

[79] But then that last small percentage takes a very long time.

[80] The last one is in the year 2141, if you just project out.

[81] By that point, of course, the world has changed.

[82] if you just ran that equation.

[83] And so 21 million Bitcoin, that's all you can ever have.

[84] And the interesting thing about that is that it changes people's behavior.

[85] If you know how much money is going to exist in the system, you value it differently.

[86] Like right now, if the Federal Reserve had a meeting on Friday, no one in the world except for the people on the Federal Reserve Committee know what's going to happen with money the Monday after.

[87] You have no visibility.

[88] They might say, we're now going to print another trillion dollars.

[89] and all of the money you have in your pocket is now worth, you know, a tenth of a percentage less.

[90] Or they might say, we're not going to print anything next year, and suddenly the value of your money is going to change.

[91] But with Bitcoin, I can tell you exactly how much Bitcoin is going to be around two decades from now.

[92] Now, since you got involved with Bitcoin, what, if any, change in perception have you seen in the public?

[93] like the the initial idea of Bitcoin for a lot of people was like, wait a minute, what are you guys going to do?

[94] You have digital, like people like, hmm, but now you're seeing more and more people use it.

[95] Tiger Direct uses it.

[96] You could buy computers from them.

[97] Does Dell use it now as well?

[98] Dell, and more importantly, the most recent announcement about a month and a half or two months ago was PayPal.

[99] PayPal is now going full Bitcoin.

[100] They're going to offer Bitcoin as a payment mechanism for PayPal.

[101] That's pretty intense.

[102] Which is pretty huge news.

[103] I did not expect that was going to happen.

[104] I was thinking maybe in a year or two, it happened a lot faster than I expected.

[105] That's pretty intense.

[106] So PayPal and Square, of course.

[107] What is Square?

[108] Square is the little thing you stick on top of an iPhone to swipe a card with.

[109] And they have Square Market.

[110] They've been doing Bitcoin now for six months.

[111] Wow.

[112] And that's expanding.

[113] So in terms of retail shopping, it's moving pretty well.

[114] But, you know, as you probably remember from our previous discussions, retail shopping isn't where I think it's really powerful.

[115] But it's great to see these advancements.

[116] A lot of interesting things are happening.

[117] The perception is also shifting.

[118] At first, you know, Bitcoin was so obscure that the only people who talked about it were the complete lunatic French, like the geeks, the nerds.

[119] The people, no one understands at the party, and in any case, they don't really talk to us.

[120] So that was the lunatic fringe.

[121] Now we've upgraded.

[122] Now people think that Bitcoin is all about drug dealers, terrorists, and porn.

[123] So we're making some progress here.

[124] How does that happen?

[125] Well, you know, I mean, what do you think the media is going to focus on?

[126] Do you think they're going to focus on the fact that most Bitcoin is charitable giving donations and tipping, something you experienced too with the donations to the address you showed to the last show?

[127] A lot of that's going on.

[128] But then also what's going on is things like Silk Road.

[129] And the media really loves that kind of story.

[130] You're not going to say, well, people are raising charitable donations.

[131] on the internet.

[132] No, they're going to say people are buying cocaine on the internet, and that's a much better headline.

[133] So we went from completely obscure to mostly negative press, and now you're beginning to see people say, yeah, you know, there's more to it than that.

[134] And I think the public perception is gradually changing, because primarily they hear about it more and more in a better context.

[135] Yeah, we wound up sending thousands of dollars to Justin Wren, who is, he's got this charity that he does fighting for the forgotten and it's all about pygmies in the Congo he lives in the Congo most of the year and all that came from Bitcoin I just took the money from from Bitcoin I doubled it you know I whatever the people sent in from the donations from the address that we posted on the web show I took that and whatever they came up with I added the exact same amount and we sent it to Justin So, I mean, that money from Bitcoin donations want to deal with water issues that they have, digging wells, all sorts of things.

[136] And he's going to be on the podcast next week, so he'll explain to us.

[137] But that's Bitcoin in action right there.

[138] Yeah, I've already done two or three fundraisers with Bitcoin.

[139] There's a couple of favorite charities that I support in a number of ways.

[140] And I found that the fact that it makes it so easy for people to give and so instantaneous, and it's a way for them to demonstrate why they love this.

[141] a lot of people will do it.

[142] And a lot of people have been bugging me to get you to take Bitcoin on the stores and take Bitcoin on various activities or maybe even put a tip jar up for your new comedy show I heard.

[143] I actually saw a trailer of that.

[144] Yeah, it's all Comedy Central.

[145] I'd have to ask Comedy Central to do that because I did it through them, this latest one.

[146] But yeah, I'd be interested in doing something like that.

[147] I'm just, right now, I'm just super busy.

[148] That's the And it stops me from getting fully involved with this.

[149] But I'm always fascinated, and I love watching other people adopt it as well.

[150] Like Shooter Jennings just had a big ad online where he was taking Bitcoin for all of his new CDs.

[151] And he was selling them, old ones as well, selling them all through Bitcoin.

[152] Yeah, I've been talking to Shooter about doing some other activities with Bitcoin, too.

[153] So we'll see where that goes.

[154] Yeah, Shooter loves it.

[155] He thinks Bitcoin's the future.

[156] And, you know, he even had a post the other day.

[157] day, we're talking about people saying that Bitcoin, you know, hold on your, like, people have this idea of hold on your Bitcoin and one day you'll cash him in for a million dollars.

[158] And he's like, no, hold on your Bitcoin and one day you'll have Bitcoin.

[159] You won't need the cashmeremon.

[160] You won't need the million dollars.

[161] Right.

[162] It won't be valid.

[163] Like, well, it'll be valid.

[164] I'm sure money's not going to go away, but it'll also be just as valid.

[165] And, you know, what you're saying about PayPal, we're starting to see that.

[166] Yeah, I think so.

[167] And, you know, you've got to think also about.

[168] many countries in the world where their own currency is really bad.

[169] And this represents a global currency that may end up being more stable, more valuable than their own currency.

[170] So is it going to be more valuable and more stable than the US dollar?

[171] Probably not for, you know, at the best case decades, if then, if ever.

[172] But there's 193 currencies out there.

[173] Can it be more stable and more valuable than 30 of those probably is today, 50 of those within a few years.

[174] So you're basically seeing this revolution in international currencies.

[175] We're not going to displace the most successful currency that the world has ever seen overnight with something that at five years old is a toddler technology.

[176] But we can offer opportunities around the world where their own currencies are really, really poor and not very good for transnational and cross -border transactions at all.

[177] Now, what has been going on as far as like the shift?

[178] Because I know that there's been a lot of volatility issues where the price has gone up and down and things have moved around a lot.

[179] Like, has that in any way stabilized?

[180] It's stabilized.

[181] If by stabilized, we could say that it's gone down quite a bit.

[182] And then it's kind of stuck to around the $350 to $400 U .S. dollar level for a while now.

[183] But it depends what you do with Bitcoin, really.

[184] The volatility really affects you if you're looking for an investment, especially if you're day trading Bitcoin, which is about the stupidest thing you can do, because it behaves like a penny stock on steroids, right?

[185] So a lot of people get into Bitcoin because they hear about the price and they get this idea that this is a get -rich quick scheme, which it's not.

[186] And they try their hand at day trading with disastrous consequences because you're talking about a very volatile market, with exchanges that are not regulated and in various countries around the world, which have very little liquidity, and some pretty big professional traders who are like sharks in the water, who are like playing the market quite effectively and taking all the newbies for a ride.

[187] And so that's not, I don't think that's a valuable activity in Bitcoin.

[188] I think if you use it to, as a payment network, accept Bitcoin, then convert it to your national currency to restrict your exposure.

[189] So for example, let's say I sell a T -shirt for $10.

[190] I'll price it at $10.

[191] I'll get $10 worth of Bitcoin and I'll convert it to $10 right away.

[192] Now, if next week the price changes, it doesn't matter.

[193] I've already sold a T -shirt.

[194] I've already got dollars in return.

[195] I'm good.

[196] I've opened up a completely new payment channel without any of the risk.

[197] So you can kind of get around that and find ways to use it.

[198] I don't really, you know, for some people, Bitcoin can be a long -term investment, but it's really dumb to day trade it.

[199] And that's where you get exposed to most of that price volatility.

[200] Isn't that an issue, though, if you're selling things?

[201] Because if you're selling things online, like would you sell it, like say if you're selling mugs, like this mug you have in front of you?

[202] you were selling them for, you know, $10 American, what would you, you would, $10 worth of Bitcoin?

[203] Is that how you would factor it in?

[204] Yeah.

[205] So let's say today Bitcoin is, I actually don't know what the price is right now, but I can look it up.

[206] And so I can say what is $10 worth in Bitcoin?

[207] And once I do that calculation, I can figure out what the price is, and I can price the sale.

[208] So, for example, I would say receive, I would pick an amount in dollars, say $10.

[209] So $10 at the moment is 0 .026 Bitcoin or 26 .18 millibitcoins, thousands of a Bitcoin.

[210] So I would just, so the customer wouldn't see this, and the website would do this automatically.

[211] So I'd put my mug up, you'd click, and it would say, okay, $10, you put it in your cart, you say checkout, and it would just present you with a QR.

[212] code like this.

[213] Now, this is actually asking for 10 U .S. dollars worth, 26 millibits.

[214] So if you try to click on this with your wallet, it's going to tell you to pay the amount of 10 U .S. dollars equivalent in Bitcoin.

[215] So the store does the calculation automatically.

[216] And then when the Bitcoin comes in, it gets bundled.

[217] And at the end of the day, it gets converted to dollars or sooner if you have a lot of volume.

[218] And so you don't see any fluctuation.

[219] Price goes up, close down it doesn't matter because you price it you earn it you convert it now when you do that though like if you're if you're a person that has bitcoin and you're buying things you would wait until it's worth more before you bought something right yes so you wait until your bitcoin's more valuable like i'm thinking about buying something but i want to hold on until bitcoin like that seems to be a bit of an issue right yeah that's called a deflationary effect which means that if you have a currency that is deflating where the value of the currency is increasing over time, then people will tend to hoard that currency, hold on to it, and not spend it right away because they hope that it's going to be worth more in the future.

[220] Now, in the case of Bitcoin, we've had periods where it's climbed in value, so the hoarding instinct gets strong.

[221] We've had periods where it drops in value so people want to get rid of it.

[222] All currencies have that.

[223] Bitcoin has it a bit more of the moment because it's volatile.

[224] The hoarding instinct, you know, it's funny because in the U .S. we call it the hoarding instinct.

[225] instinct.

[226] In Asia, what they call this, savings, which is an inconceivable concept of most America.

[227] It's like the saving rates, for example, in Asia exceeds 20 % in some countries.

[228] And in the US, it's negative 0 .2 % or something like that.

[229] So actually, people increase their debt every month instead of saving.

[230] So it's also a cultural thing.

[231] I think hoarding is seen as a bad thing in a very, very strong consumer society where you're supposed to take your paycheck and convert it directly into plastic crap from China as quickly as possible and not keep any of it for the future.

[232] That makes for a really good Black Friday, right?

[233] That's the attitude.

[234] So if you don't spend, that scene is a bad thing.

[235] I'll tell you, once I started using Bitcoin, I ended up saving more money.

[236] I did become more frugal with my purchases, But honestly, when I saw something that was priced correctly and I wanted something to buy, I'd buy it.

[237] I wouldn't wait another week for the price to go up or down and start.

[238] Because then again, at that point, you're back to day trading, right?

[239] Well, since it's gone with PayPal, you could pretty much buy.

[240] There's a lot of things you can buy.

[241] I mean, I wouldn't say everything, but many things when you go to buy things online give you that PayPal option at checkout.

[242] Yeah, and not all PayPal vendors will turn on the Bitcoin option yet, right?

[243] Not all.

[244] But they will have the option to turn it on, you know, over time as PayPal rolls this out.

[245] They just started it as a trial basis.

[246] It's probably going to take, you know, six months to a year before they roll it out fully.

[247] And then it's something going to be in 19 countries or however many PayPal serves.

[248] And the merchants will have to go and turn it on.

[249] But, you know, it gives them another sales channel.

[250] So the other nice thing about that is that if you have a web store, PayPal integration usually comes with it.

[251] So turning on in your PayPal merchant account, the Bitcoin option makes your existing web store Bitcoin capable without you having to change any of the code.

[252] And that's a pretty big deal.

[253] That is a very big deal.

[254] Now, are you surfing totally unrelated over there?

[255] No, I was trying to recover my Bitcoin wallet.

[256] Yeah, we were talking about that before the show.

[257] So he got a new phone and his Bitcoin wallet for whatever reason didn't transfer?

[258] Yeah, I mean, I backed up all, like, you know, you get your phone, when you back up all your programs and stuff before, I sent, you know, I sold my old phone.

[259] And I didn't even think about it.

[260] Redownloaded all my apps automatically.

[261] Open it up.

[262] And it's like, oh, you know, sign up your, use an existing user.

[263] And I was trying to put in, it's really hard to figure out.

[264] That's what I was just trying to do is going online, try to reset my password.

[265] But it won't let you reset your password ever because they don't keep passwords on the websites.

[266] So it looks like I might have just pretty much lost my wallet, right?

[267] It depends.

[268] I think if you used the application that we installed last time, which was blockchain info, that created a web account that went with it.

[269] And if you put your email address in there, you can reset it fairly effectively.

[270] So you can send them a support message, and they can probably recover your wallet.

[271] Yeah, that's what it looks like.

[272] That's what I was doing just now, where I found out the email address I used.

[273] But now I have to, like, fill out, like, this questionnaire with my Skype name and stuff like that.

[274] It looks like they might want to even interview me to see them.

[275] It's actually going to take a few days.

[276] And the reason it's going to take a few days, and I used to advise that company from a security perspective, is because what we would do is we'd have hackers who compromised people's Gmail account.

[277] They found the fact that they signed up for a Bitcoin wallet.

[278] And they'd use the fact that they knew their email address.

[279] They'd troll and find their wallet's name and a bunch of other information, and then they'd go to this website, try to do a reset, and try to steal their money.

[280] So we make it a bit harder.

[281] you have to get a confirmation through email so that people can't easily socially engineer and fish for your account.

[282] But it seems like it's possible, which is good to hear.

[283] Oh, it's absolutely possible.

[284] You should be able to recover your funds and then all you have to do is then connect the application back to the website.

[285] And that's the advantage of this hybrid model where your wallet is on your phone and you have complete control.

[286] The website doesn't have access to it at all, but it stores an encrypted backup online so that as you see if you lose your phone Or you drop your phone in the toilet.

[287] Right, exactly.

[288] If you have like a million dollars with a Bitcoin, your phone and it falls in the toilet, that's fucking ridiculous.

[289] Yeah, that would be bad.

[290] You shouldn't keep that much money on your phone anyway.

[291] Just like, I mean, you have to treat your phone wallet the same way you treat your wallet, which is I don't carry my entire net worth in here.

[292] I have a bit of petty cash in here and the rest of my Bitcoin, just like the rest of my US dollars, I keep offline.

[293] I keep it in another location.

[294] But what if you're like one of them, Floyd Mayweather type ballers.

[295] It likes to walk around with a big briefcase full of Bitcoin.

[296] Well, then you can do some pretty cool demonstrations.

[297] There's this investor in Argentina who gathered a bunch of his investment friends at a golf outing and set them down at a table.

[298] Six people who had, you know, some of them had just met with the other people and had never done Bitcoin before.

[299] And he said, hey, let me show you how Bitcoin works.

[300] Download this application to your phone.

[301] So they all did that.

[302] And he said, okay, what we're going to do is we're going to, I'm going to send you some money.

[303] And we play hot potatoes.

[304] So you receive it.

[305] You wait and you send it to the person next to you and then the person next to you and then the person next to you.

[306] I'm like, oh, great.

[307] We're going to move some Bitcoin around and see how this works.

[308] So sends the first batch and the first person looks at their phone and they just received a quarter of a million dollars.

[309] What?

[310] A quarter of a million dollars sent in a matter of seconds for a third of a penny.

[311] And then they're like, they're hands shaking.

[312] and they just swipe across, send it to the next person, quarter of a million dollars, quarter of a million dollars, six times around the table.

[313] Now you've done one and a half million dollars worth of wire transfers for a total cost of less than 10 cents, and it's back at the original owner.

[314] And the purpose of this demonstration was there is no payment system on the planet that could do what we just did.

[315] Yeah, but in the future you're going to get screwed like the IRS.

[316] It's like, hey, it says here you've shared a half million dollars, we need half a million of you know yeah well yeah that depends i mean like what's the irs's take on it now there's some unique take on what bitcoin actually is they're not treating it as if it's regular money they're treating it uh for taxation purposes the way that would treat a tradable commodity which means that if you buy bitcoin and the price goes up and you sell bitcoin and you make a gain, you have to pay capital gains tax.

[317] And if you earn Bitcoin by selling products and services, then you have to pay income tax, which to me is a very reasonable and sensible way to treat it.

[318] So, for example, if I do a gig in Europe and I charge my clients in euros, I'm going to pay income tax on those euros.

[319] But if I hold those euros for three months and then I sell them and the price has gone up in the meantime, I'm going to pay capital gains on the difference between the price I bought them or earned them at and the price I sold them.

[320] So it works in exactly the same way.

[321] The IRS doesn't go around really tracking everybody's bank account, doing the sums and checking against your tax return.

[322] That's not how it works.

[323] The way it works is you make a, the burden is on you to make an honest, truthful, and complete return.

[324] And when you make an honest, truthful, and complete return, quite honestly, they don't check it.

[325] If they have reason to suspect where they randomly sample or they do statistical analysis and they, they see that things don't add up, then they're going to come and say, okay, you said X, prove it, right?

[326] And they flip the burden.

[327] And now you have to show that this is exactly what happened.

[328] Well, they treat Bitcoin the same way.

[329] You know, I make an honest, truthful, and complete tax return to the best of my ability, and I calculate my income based on my invoices and things like that, which I receive in Bitcoin, and I calculate my capital gains, and I pay my taxes.

[330] I mean, it's really not complicated for me. It's not complicated for the IRS, and if they come out at me, they're going to ask me, you know, show us where this Bitcoin came from and where it went, and I can show them.

[331] Is there any way, I don't know if this is even possible, but is there any way to simplify what dollars to Bitcoin actually stands for?

[332] Because when you say that one Bitcoin is, you know, X amount of U .S. dollars or one dollar is blah, you know, in digital points of Bitcoin, that conversion is confusing to people.

[333] oh yeah it's it's it's really confusing yeah that and i think that's an issue yes sorry that's an issue with some folks when we you know you talk about like getting involved in bitcoin and they see the numbers and they see the the differentiation it's it's problematic it gets in their head they're like what is how much a zero point one bit it's it's it's hard enough to go to italy order an espresso right and pay one thousand five hundred lira and it's your head, you're trying to figure out how much is 1 ,500 lira and dollars.

[334] That's already confusing enough for most people because it involves the, you know, higher order mathematics of division, which, you know, I can't do in my head.

[335] I use a calculator.

[336] And when it comes to Bitcoin, it's worse because when we use Bitcoin as the unit, because it's worth a lot more than $1, all of the denominations end up being fractions.

[337] So it's 0 .026, for example, is $10 .000.

[338] And that's even worse because most people can't do fractional mathematics to save their life.

[339] So one solution to that is to switch the unit to value.

[340] So instead of talking about Bitcoin, you talk about millibits.

[341] So it's easier to say it's 26 milliseconds.

[342] Right.

[343] Okay, 26 for a T -shirt.

[344] I can understand that.

[345] That makes a lot of sense.

[346] Right.

[347] And when Bitcoin was at about $1 ,000, then a millibit was a dollar.

[348] So it was a lot easier because then it would have been 10 milibets for a $10.

[349] a t -shirt, and that makes a lot of sense.

[350] Other people who have proposed bits, which takes you more to the Italian lira side, which is a hundred thousandth of a Bitcoin, and so at that point you're looking at, you know, 5 ,000 or 10 ,000 for a t -shirt.

[351] So it feels more like lira, where you have bigger numbers for smaller things, like Italian money.

[352] But still, better to do, you know, 5 ,000 bits, which is a fraction of a Bitcoin for a coffee, then tried to do 0 .0013.

[353] Yes.

[354] No one can do that kind of math.

[355] So really it's about what units do you use for everyday conversation?

[356] Yeah, no one can and no one wants to.

[357] No one wants to.

[358] Like we want like a dollar is a this.

[359] Yes.

[360] You know, I mean, that's what people want.

[361] I have the following simple rule of thumb, which is that in any currency, if you want to make it easy for people and you can pick the currency units you want, then a meal, a simple meal, a sandwich, a fast food meal, a cup of coffee, and a pastry should cost between 1 and 100 of your unit of currency.

[362] Pick whatever unit makes it fall into the 1 to 100 range.

[363] People are comfortable with the idea of spending 10, 50, 60, 15 for a meal, a coffee, a pastry.

[364] They're not comfortable with fractions.

[365] They're not comfortable with very high numbers either, like spending 5 ,000 for a a coffee doesn't make sense.

[366] But, you know, spending 25 of your unit for a coffee, that makes sense.

[367] So that's my rule of thumb.

[368] Between one and a hundred, pick the unit that makes it fall in that range.

[369] Why when Bitcoin was created, was it established that way where one Bitcoin would be such a large amount of dollars?

[370] Well, it wasn't.

[371] Here's the thing.

[372] When it was established, first of all, for the first year and a half, Bitcoin had no dollar price at all.

[373] Because no one was, there was no market where it was being actively traded so you could establish a price point.

[374] The price at the moment, say, $350 comes from the fact that recently someone was willing to give someone $350 for their Bitcoin.

[375] So it's a market -based system.

[376] When Bitcoin was launched, you could buy $1 ,000 or even $10 ,000 for a dollar.

[377] Right?

[378] Yes.

[379] Should have bought some debt.

[380] I know.

[381] Clean the fuck up.

[382] So we have one of the most famous things is the pizza event.

[383] And this was when in the first year and a half, when nobody really had a price for Bitcoin, a user called Laslo online suggested buying pizza for Bitcoin.

[384] And this was like crazy talk.

[385] Like, I want to find a way to use my Bitcoin to buy something I want.

[386] And there were no markets.

[387] There was no one who was taking it.

[388] And I want to buy pizza.

[389] So I'm going to give Bitcoin to someone who's going to order pizza with a credit card.

[390] online and have it delivered to my to my to my to my house i believe we talked about this on the yes so he so he got a ten thousand dollar pizza now or something like that it was a ten thousand bitcoin pizza oh jesus that's a three point five million dollar pizza he bought two of them that's seven million dollars for two pizzas so the point is the price has varied a lot bitcoin used to be fractions of a penny and now it's 350 bucks so we don't know where the price is going and the creator couldn't know what the creator and those who are participating in the early days thought was it's probably going to be worth very little now but over time if people adopt it because there's a limited quantity its value is going to go up so we're going to need to have more units to break it down into so we can start talking about tens of bitcoins and hundreds of bitcoins then we'll talk about bitcoins then we'll talk about tenths thousands millions and it goes down to a hundred millions the smallest unit is called a Satoshi it's a hundred millionth of a bitcoin eight decimal places that seems ridiculous i hate pennies i hate pennies i don't even really like nickels yeah fucking nickel everything should be dimes or nothing quarters what about quarters fuck yeah quarters and this is the difference between digital currency because this doesn't have value right now so you don't use it in conversation if it did have value in the future so if it was worth a quarter right then you'd use it that.

[391] And just give me a Satoshi and I give you a cup of coffee.

[392] Yes.

[393] And if, right, at which point a Bitcoin will be worth a lot of money.

[394] Now, you were just in New Zealand.

[395] I did a tour of Australia and New Zealand, a series of talks about Bitcoin.

[396] There's also a conference there called Bitcoin South in New Zealand in Queenstown.

[397] Now, when you fly over there, are you paying for your airline tickets with Bitcoin?

[398] Um, indirectly.

[399] He's, um, indirectly.

[400] He's, you know, Yes, and that's, first of all, when I was flying to New Zealand's, my cost was covered by the conference organizer.

[401] The conference organizer was paying both me and for all of the expenses in Bitcoin, all of the suppliers, the entire conference was paid for in Bitcoin.

[402] Where they can pay directly in Bitcoin, where they can't, they sell it, get New Zealand dollars, and they pay New Zealand dollars.

[403] I also got sponsored to do a couple of talks in Australia.

[404] I got paid in Bitcoin for that.

[405] When you were over in New Zealand, did you look into the Kim .com situation?

[406] And are you, you're smiling, so you must be well aware of what's going on with him over there?

[407] I think, I mean, Kim .com is such a really great personality.

[408] I mean, he's larger than life.

[409] And he just has this tendency to poke a stick in the eye of government.

[410] and he often gets away with it because governments tend to overreact and break their own laws going after him which is hilarious, right?

[411] Because they ran through just roughshod over their own judicial system to confiscate his servers and then he fought them in court and he won because they lost in court they had to return his servers to him after three years because they had illegally confiscated them.

[412] And Kim .com who was allegedly accused of copyright infringement, they raided his house with about a hundred paramilitary style police officers in the peaceful island of New Zealand, for God's sake, and helicopters, and rappelling down from helicopters in the middle of the night to serve a warrant for copyright infringement.

[413] So, I mean, if that doesn't say overreach, it's ridiculous.

[414] Yeah, that's clear that they're trying to send some sort of a message and not just send a message, but to scare them.

[415] They're trying to bully them.

[416] They're trying to, and bully anybody else that would be brazen enough to have similar resistance.

[417] And this wasn't a New Zealand operation alone.

[418] This was in conjunction with the FBI and other organizations from around the world.

[419] And it was a massive overreach, and they broke their own laws to do it.

[420] And he turned around and rubbed their face in it because they'd broken the law.

[421] They ended up being the criminals first.

[422] So, yeah, I don't know where the state prosecution is going on that, but as with many cases like this, there's a lot of upfront, you know, big talk about how they're bringing down this great criminal and then all of the charges fall apart when they try to present them in court.

[423] Yeah, and they're confiscating all of his money too, right?

[424] Well, they're trying to.

[425] Well, they have.

[426] I mean, he's actually said that he's broke now.

[427] He's in some precarious situation because he spent over $10 million in legal fees, and he actually generated some insane amount of money since they released him.

[428] He generated like $40 million worth of money.

[429] I mean, he's a money -making machine.

[430] The dude knows how to make money.

[431] Right.

[432] But his, that whole mega upload website and all that stuff, that's all in some serious trouble right now.

[433] Yes, it is.

[434] So, yeah, he, He obviously has nothing to do with Bitcoin, just to be clear, in case our audience are.

[435] Well, I wanted to bring that up, that, you know, here's a guy who maybe could possibly benefit from moving his money, at least a big chunk of it, into Bitcoin.

[436] Well, I mean, if what he's doing is, in fact, legal, and if what the government is doing is, in fact, bullying him outside the parameters of law, then that might be a perfectly justified stance.

[437] I mean, I wouldn't recommend using Bitcoin for criminal activities.

[438] I don't think that's a good advice for anyone.

[439] How legal and noble of you.

[440] I wouldn't recommend.

[441] Well, I don't think it's right to sit here and encourage illegal acts.

[442] But to talk about copyright infringements resulting in a helicopter raid and armed paramilitary raid on someone's house in the middle of the night.

[443] I think we have to really question where is the justice in that and what exactly is going out in that case.

[444] Well, copyright infringement for folks who are not completely informed on what the whole upload situation is with Kim .com's website, what he was accused of essentially is that people would upload illegal downloads of movies, of songs, things on those lines.

[445] So he wasn't even doing copyright infringement himself.

[446] was facilitating it allegedly for others, which is even one step removed from a crime that is a civil crime against property.

[447] And, I mean, really, talk about an overreaction.

[448] If that's the standard of justice, I have to ask, what kind of armed helicopter response should descend on AIG for fucking over a million homeowners and stealing billions of dollars during the mortgage crisis, right?

[449] How many helicopters should go down on that case where you have actual victims?

[450] This is the real issue here, which is that there are crimes that result in mega victims, millions of people put out of their homes, losing a generation's worth of savings, and no one goes to jail.

[451] Yeah, it's a huge point.

[452] It's a monster point.

[453] And there's sanctioned thievery in that sense.

[454] Did you guys see the thing that came out today in Iraq that there's 50 ,000 ghost troops there's 50 ,000 troops that are receiving checks that are human beings that don't even exist.

[455] Really?

[456] Yeah.

[457] They don't even exist and they're getting checks.

[458] Well, war has always been the most profitable racket available.

[459] Yeah.

[460] I mean, there's plenty of instances of people where they're obviously doing something that's illegal and getting away with it and somehow another it becomes okay because it's sanctioned or because it falls into some sort of an area where you're you're not allowed to look into it like like this but the mega upload situation is very fascinating to me because i've always been i've always been of the opinion when it comes to digital downloads and things like movies and songs that it is a completely new area and all our laws like our piracy laws and property laws they they're very vague when it comes to digital copies because digital copies it like people you can call it piracy all day i had paul stanley from kiss on and he kept insisting that it's stealing that it's stealing and my take on it is it's only stealing if the person who originally had it doesn't have it anymore right if i take your muffin you don't have any muffin to eat Exactly.

[461] If I take your song, you still have that song, and so does everybody else.

[462] Exactly.

[463] So it becomes an issue of what is the song?

[464] What is it?

[465] Where does it go?

[466] It's not stolen.

[467] Someone may have illegally copied it and put it up so that other people can take it down.

[468] And then it becomes sort of almost like a matter of ethics.

[469] Like if you appreciate the artist and you want to support the artist, there should be some way you can do that.

[470] And I also have always said, that if someone can't afford to buy your songs, like if they're a fan of your band, but they have no money, but they can download your music and then one day pay to see you in concert, like you gained a fan.

[471] Right.

[472] Or that fan stayed supporting you.

[473] But they didn't have money to buy your shit in the first place.

[474] They would not have purchased it, but now they have it and they get to enjoy it.

[475] And it's one more person to tell other people, people.

[476] And I think statistics have shown that, you know, like, artists are making the majority of their money now, like music artists, through live performances because of this.

[477] Well, let's look at historically what happened with music piracy.

[478] Music piracy at a time when music was incredibly expensive and inconvenient to get was thriving.

[479] And what stopped the vast majority of music piracy was not crackdowns.

[480] It wasn't lawsuits.

[481] It was the availability of things like Apple iTunes that made music easy and convenient and accessible to people.

[482] And then the range of music that people started consuming expanded massively.

[483] So from an artistic perspective, music is now thriving.

[484] From a money perspective, however, a lot of that profit is being concentrated in Apple.

[485] Here's the thing, though, and I hate to drag us back and, you know, this is my thing.

[486] I'll find a way to introduce Bitcoin to everything and annoy everyone around me. But one of the things I think that is magical about Bitcoin is because it allows micro payments, you can pay five pennies.

[487] And you can pay five pennies in such a way that the person receiving the five pennies still gets five pennies.

[488] It doesn't get chewed up in fees and transaction costs and things like that.

[489] And you can do that instantaneously.

[490] It offers on the internet a completely new business model for content and artistic creation.

[491] So this means that artists can now sell a listen of a song rather than the eternal perpetual rights of reproduction of a song, which is very expensive, a single listen for a penny, for a tenth of a penny, and actually do that without most of that money going to Apple or Visa or some of the intermediaries, but go directly to the artist.

[492] We're already seeing that.

[493] Artists are beginning to use Bitcoin to make a direct connection between themselves and the consumer, get most of the money come to them instead of the intermediaries, and it creates a new funding model for content creators.

[494] And this also applies to news and media and bloggers and people who write and make music and make YouTube videos for a living.

[495] So until now, it was really difficult to earn money on the internet.

[496] And the reason for that is because you were delivering a very small amount of value to each one of your consumers.

[497] But there was no payment mechanism by which they could pay you for a very small amount of money.

[498] They could only pay you for $5 or more.

[499] And it's very hard to bundle.

[500] So as a result, you end up doing two things.

[501] You either sell the consumer themselves by taking all their private information and turning them into a profile and selling the crap out of that to marketing companies.

[502] Or you cram advertising down their eyeballs until they hate what they're seeing.

[503] And now we have a third way, which is they actually pay for the content they consume.

[504] And that's revolutionary.

[505] I mean, it really is.

[506] You could do some amazing things with music and publishing.

[507] It's incredibly difficult to get people to pay for anything online, though.

[508] I mean, that's always been the rub.

[509] The rub is that the internet is so available.

[510] There's so much.

[511] It's essentially just this open ocean of content that anybody coming along saying, I want you to pay to read my blog, fuck off.

[512] You know, I've seen that.

[513] before.

[514] I've seen people say, you know, that you have to pay to read their blog.

[515] I'm like, you've got to be out of your fucking mind.

[516] No one's going to pay to read your blog.

[517] People have actually sent me links to websites that have paid subscription, like a link, like on Twitter.

[518] It's like really like kind of a scam.

[519] Like they're sending me a link so that hoping I retweet it and I'll click the link and then they'll say to read more, you know, subscribe.

[520] I'm like, fuck you.

[521] Well, how much does it cost to subscribe though?

[522] Like five bucks or something like that or something along those lines.

[523] it was a penny and it was music you wanted to hear most okay if it's music you want to hear yes if it's a movie you want to watch a documentary you want to watch but for a lot of things it's just people are going to find if you find something similar that's free you're just going to go towards that and if so there's something like like reading something like reading someone's blog that's a perfect example most blogs are free the vast majority of blogs are free and that's how people read them in the first place because it doesn't cost me any step that you take even a one click amazon step where it's so simple amazon one click is just the most simple thing of all time i love it i like it bang you hit that button it's on its way to you you're they already have your address in there it's just super easy to get even that like people like why do i have to pay for this when i can just go to his blog and and and read it for free or her blog and read it for free?

[524] Why would I give you money for something that is available for free?

[525] So when you get something like a blog or a newspaper online or a website, it's kind of already been clearly established that that's a free service.

[526] I think to a certain extent it has been.

[527] And the reason is that previously you were representing the cost of production.

[528] And then with the internet, the cost of production fell to zero.

[529] Right.

[530] The value of what you're delivering is a bit more than zero, but it's not high enough to charge a credit card or to differentiate it from all the other free things that are out there.

[531] And there's no payment mechanism that fills that gap between zero and $5, right?

[532] So your cost drop to zero, your minimum charge is $5, and there's nothing in between.

[533] And that means that a lot of things that may be worth a dollar or $0 .25 or 75 cents, So people would actually pay, because you can only charge five or zero, you end up going for zero.

[534] And you say that because of bank fees.

[535] That's why you can only charge five dollars.

[536] Because, yes, absolutely, because credit card minimum transactions online cannot go below five.

[537] And the inconvenience and the information, the identity information you provide on all of that.

[538] So we haven't explored that range of zero to $5.

[539] And so if I could say, for example, right now, the New York Times wants me to pay $10 ,000, 10 bucks a month to read more than 10 articles.

[540] But then if I want to read the Washington Post, I have to pay another 10 bucks a month to read more than 10 of their articles.

[541] And the Los Angeles Times experimented with something the same.

[542] What if I could put down $2 a month and read 25 articles from all of the newspapers that I want to?

[543] And just put that into my browser and say, I wanted to allocate $2 a month to newspaper articles.

[544] I'm going to give them a penny or half a penny each.

[545] I'm going to read 25, 50, 100 articles from all of the newspapers.

[546] Now, they're generating an actual revenue stream.

[547] And it may seem tiny when I'm paying just a fraction of a penny per article.

[548] You multiply that by a million consumers.

[549] And you've got some real money coming in, more than they're making with these paywalls.

[550] So you start exploring that range between zero and five or zero and ten dollars.

[551] I would pay for quality news content without advertising.

[552] We know people will pay for things that are free.

[553] Evian proves that.

[554] Apple iTunes proves that when I can go out and torrent a song, but it's more convenient for me to pay $1 .99 and just buy it to high quality.

[555] If you deliver high quality content and you lower the barrier for paying enough, people will pay for high quality content.

[556] And what we can do with Bitcoin is lower that barrier, enough that a whole range of content that you could never charge for before that was forced to free because there's no intermediate step can now make the artist and the creator income directly without intermediaries without them taking a giant cot I think that's pretty exciting it is exciting is there a way I was thinking this like you remember the old days of DOS and the the early versions of Windows like with the command line prompt and you know the people who knew how to use it and people didn't.

[557] It was very prohibitive for people who were uneducated in code.

[558] And then came along the modern graphic user interface.

[559] And essentially what you're doing is you're hiding all that secret shit behind it and you're creating something that's much more simplistic.

[560] Is there a way to do that with Bitcoin?

[561] To take away all these weird fucking numbers and zeros and ones and point this and point that and break it down to something or would it have to be stabilized first where the actual the the price of bitcoin or the value of bitcoin would be stabilized to the point where something like that would be applicable i think you you nailed it we are in the doss days of digital money and a lot of things need to change so what you have here three things that are happening simultaneously one is the evolution of the user interface and user experience the other one is the one is user adoption, how many people are using it and how many new people are using it every day.

[562] And the third one is the price volatility.

[563] And those three are tied together.

[564] You can't really get one before the other.

[565] You can't really design beautiful user interfaces if you have no users and no value in the money.

[566] You can't get users if you have no beautiful interfaces and the money is too volatile.

[567] And the money won't become more stable until you have more users using easier interfaces.

[568] So all three of these move together.

[569] And all you need to get to that is time.

[570] So over time, if you look at Bitcoin today versus Bitcoin five years ago, enormous progress on the user interfaces, enormous progress on the adoption, and enormous progress on the stability.

[571] And if you then say, well, it's a five -year -old now, what will Bitcoin look like five years from now?

[572] I think you're going to see Bitcoin addresses are going to disappear, just like IP addresses, we don't see them on the internet anymore.

[573] Right.

[574] The user interfaces of QR codes and barcodes are going to disappear.

[575] We're already seeing protocols that allow you to do tap to pay and swipe to pay like Apple Pay with Bitcoin with Bitcoin.

[576] With Bitcoin quite easily.

[577] That's already happened?

[578] Yes, absolutely.

[579] You can do NFC, as it's called, near field communications.

[580] Like Apple Pay, you can do tap to pay with Bitcoin.

[581] But here's what you can't do with Apple.

[582] You can with Bitcoin.

[583] I can do tap to pay between two phones.

[584] Oh.

[585] Like I could say pay you.

[586] with Bitcoin and with two phones.

[587] Now, do you need, without you being a merchant, right?

[588] Do you need a cell service to do that?

[589] Or can the phones communicate with each other?

[590] They can communicate with each other offline.

[591] So you can be on the fucking North Pole.

[592] Right.

[593] With no self -service and you could swap Bitcoin.

[594] Right.

[595] Back and forth like you're playing ping pong.

[596] Yes.

[597] And all I'm doing is the same thing I'm doing by scanning a barcode, only I'm using the NFC protocol to do it.

[598] So you can, you can see how this technology is going to get smoother and easier to use as we have more adoption and at the same time the price stabilizes and all three of those metrics if you like will move in parallel and they'll gradually get easier.

[599] I remember a time of the internet with IP addresses.

[600] I remember a time with DOS and Unix command line.

[601] I remember a time when sending an email you needed to have those skills and you know you just watch that progression of the technology.

[602] The most important thing is not only will these things happen but the companies that build these things are building billion dollar industries.

[603] So the company that figured out how to find things on the internet became Google.

[604] Some company is going to figure out how to make Bitcoin easier to use for addresses.

[605] Some company is going to find out how to make Bitcoin easier to use for retail, for music payments, for social media, for international remittances.

[606] And each one of those companies is going to build a billion -dollar industry.

[607] Yeah, it seems like that is really the next step, figuring out a way to – do you remember IRC, chat clients?

[608] You know, like, that's like Uber Geek shit, man. You know, I used to use those when I was in my quake playing days.

[609] We'd all meet on IRC channels and we'd all completely dorks.

[610] Yeah, that little thing that would do.

[611] The train sound.

[612] I mean, there's things like that where only the Uber geeks adopt them and they just stay that way.

[613] Like IRC chat clients still to this day, you bring up IRS.

[614] There's people that are on IRC right now.

[615] The entire Bitcoin developments.

[616] happens in collaboration over IRC.

[617] And there's a reason for that, because it's global, it's open, it's transparent, it's free, and it's scalable.

[618] And so no one has built a better chat widget yet.

[619] Yeah.

[620] So my, yeah, there really hasn't been, I mean, a Google Hangout, those things did, I mean, they were trying to come up with something along those lines, right?

[621] But it didn't really take a, is that still around that Google Plus?

[622] Eh, sort of.

[623] kind of.

[624] I mean, it is, but I don't think, I don't know anyone that really uses it.

[625] It's hiding behind all the other Google products because it's now used as the main account and profile page.

[626] I have a friend who's fucking, she works at Google, she's an exec at Google and you bring it up and she's, she'll look millions of people use Google, hang out, millions of people are on Google.

[627] Plus right now.

[628] It's because they force you to sign up every time you, like, go to YouTube and shit like that.

[629] Exactly.

[630] In that way, it's very similar to serious satellite radio, subscription number, Because you know how when you buy a new car, it comes with a car radio that has serious on it, and you're subscribed for 90 days.

[631] Like, we added 50 ,000 new subscribers.

[632] Right, but how many of them are giving you any fucking money at all?

[633] Like, how many of them are just getting their subscription as a 90 -day free trial from, you know, buying a Chevy or whatever?

[634] It's even worse than that, because then they say we've got millions of subscribers on Google Plus, well, you're a billion user company.

[635] So that means only one in a thousand is using it.

[636] I don't even think it's that many I mean I go on Google Plus every now and then And it's like a fucking It's like one of those buildings that they build in China Where no one actually moves into them You ever see those?

[637] Yeah, the empty megacities, the ghost towns That's what Google Plus is like I mean maybe I'm wrong Maybe I'm just tapping into the wrong Google Plus communities And I'm just missing a whole vein of interaction That's incredibly enriching and amazing and magical But I'm not saying, seen it now no no but everyone's trying to come up with something like the irc like something let some or any other social media platform any any other place where people can communicate and make it easy and make it less forbidding and i think there's something about irc that like to some people it's like it's just too fucking crazy i think the new in uh where they take like at least with apple Mac where they now have like chat on your phone like now if you get a phone call it will ring on your computer and it will ring on your phone and you can yours rings on your yeah you can set it up now with uh...

[638] yosemite or whatever the new operating system is that's annoying it is it isn't like but it's great when your phone's dead and you just want to like answer a phone call real quick on you know you're like hey what's up uh wait a minute wait a minute so if your phone is dead your computer will ring your computer will ring or your iPad will ring and you can set it up for anything but but the thing I use the most is the chat now is on all of them so you can uh I can like chat on my computer like IRC and be like sending you files and videos and stuff like that I'll get it as a text message yeah and you'll get it as a text message and then I'll just go on my yeah the bad thing also with that is uh you know you go to work and then you leave your iPad open and your girlfriend can see every single thing you're always your girlfriend what about anybody or your mom your mom seen your dick pictures yeah exactly Exactly.

[639] Now, if that's the case, like, can you use your computer to make phone calls if there's an internet connection, but there's no cellular connection?

[640] Yeah, absolutely.

[641] And certain, like T -Mobile does, where you can be on your phone at your house on Wi -Fi and then leave your house and it will just jump to cellular service.

[642] So you're not using your minutes when you're at your house, but then it goes right to your cell service right when you leave your house.

[643] so it's handing off from Wi -Fi to LTE or whatever you...

[644] Right, but that's amazing that they can do that because you remember how it used to drop off when you switch towers?

[645] Yeah, it still does that on some networks.

[646] Really?

[647] Yeah.

[648] So, like, as you're driving down the highway, it's still disconnects when you...

[649] And you have signals, it's just switching from tower to tower.

[650] Yeah, the handoff technology is still pretty shitty in a lot of cities.

[651] That's crazy that they can use that technology to go from your cellular connection to your internet connection seamlessly.

[652] But they can't figure that out yet.

[653] Right.

[654] Google Voice does that for a number of customers.

[655] And it's a product they've never really advertised.

[656] I've been a Google Voice customer now for six years.

[657] It's a free service.

[658] I have a phone number that's Google.

[659] Rings my cell phone.

[660] Rings my desktop.

[661] Rings every device.

[662] I'm near.

[663] I can forward it and do all kinds of interesting things.

[664] Here's what happened there.

[665] You took a telephone call, which used to be a network, and you turned it in.

[666] to a content type that rides on top of the internet.

[667] So now it can ride on any network, right?

[668] So you separate the medium from the message.

[669] You separate the content type from the thing that's running on top of it.

[670] And now you can take that same thing a telephone call and do it independent of telephone networks.

[671] It can be on the landline, cellular, Wi -Fi, any internet connection, anywhere you have TCP.

[672] And the argument I've been making about Bitcoin recently has been this.

[673] That what we're just doing that for money for the first time, So up to now, money has had networks, and the type of money you use and how you use it and what it can do depends on the network.

[674] So if you want to do consumer to business, you can use Visa MasterCard or American Express.

[675] It's going to come with a certain specific fee.

[676] It's going to work only in some countries.

[677] You can only move a certain amount of money.

[678] If you want to move money between banks, you're going to use SWIFT, the worldwide interbank fund transfer.

[679] If you want to move money between checking accounts, you can use ACH, the clearing house here in the U .S. So that's how you move money between checking accounts.

[680] If you want to move money between one of these things, then it gets complicated.

[681] So like if you want to move using a visa card to a consumer, you can't really do it.

[682] You'll have to use a check and things get really hairy.

[683] So you have these islands, networks that can support small payments only or large payments only.

[684] They can do fast money or slow money.

[685] They can do government money, business money, or consumer money, and none of them mix.

[686] So you can't switch between them.

[687] Well, Bitcoin does small and large, fast and slow, government and consumer, and it spans all of these networks, exactly like the internet took photography and moved it across all of the networks, took video, and now there's no difference between cinema, TV, you know, all of these different formats, and took telephone calls and moved them outside of their own networks.

[688] Now, we're doing that to money.

[689] It's a pretty weird thing because when you turn money into a form of communication, it unshackles it from all of these restrictions.

[690] You can now do any amount.

[691] Well, as soon as you can send money to a person and not have any intermediary, you not have any third party, that third party's got to get pretty fucking nervous.

[692] And what has been the reaction as far as, like, banks or propaganda or any negative reaction from the powers of B about this possible technology?

[693] For the most part, it kind of depends what kind of bank we're talking about, because there are different types of banks.

[694] Like, there are banks that are primarily focused on consumer services, checking, savings, payment systems.

[695] Then there are banks that are mostly about playing the market.

[696] some of the big six banks they've actually pulled out of doing consumer checking city for example recently pulled out of 12 different countries no longer do consumer banking at all it's too complicated has too many people involved who cause problems whereas if you do regulations like what is it well no i mean it's not a very profitable business because you have to deal with customers and they're fickle but instead if your only customer is the federal reserve and they give you free money, why on earth would you do consumer checking?

[697] It's not profitable.

[698] So some banks will look at Bitcoin and either think it's a threat, but most likely at this point still think it's a joke.

[699] Like they can't possibly imagine any way that this little experiment could ever threaten serious banking.

[700] Right.

[701] So now they're looking at like little kids that are trading marbles or something.

[702] Right.

[703] It's what I call the idea that a lemonade stand is going to threaten Walmart.

[704] That's what it appears to be to them.

[705] Then you've got banks that deal with consumer checking.

[706] And I've talked to a lot of banks that look at this and say, for example, I talk to a bank in Brazil and they have about 80 million people who have very little access to banking.

[707] And the reason they have very little access to banking is because the nearest bank branch to their location is 100 miles up river on a canoe, right?

[708] In the Amazon basis.

[709] It's the opposite of Bitcoin.

[710] It's one of the most, you know, sparsely populated countries in the world.

[711] So Brazil is an enormous country.

[712] It's a third of the continent of South America.

[713] And some of the places are really, really very remote.

[714] But even though the bank branch is 100 miles downriver by canoe, there's a cell phone tower in the bush.

[715] There's a cell phone tower in the middle of nowhere.

[716] Why?

[717] Because you can airlift it in.

[718] You can.

[719] You can plant it, you can put a microwave link that goes 20, 30, 100 miles, and you can power it with solar.

[720] So they've actually planted cell phone towers.

[721] Now, if you could, so they look at Bitcoin and they think, you know what, the villages have a cell phone tower and they already have a Nokia 1000 that does text messaging.

[722] Can I use Bitcoin to turn that into a bank terminal?

[723] Now I can get 80 million new customers and give them banking that they've never had before.

[724] So some banks are thinking that way, right?

[725] banks in South Africa and Brazil, in India, in China, in Indonesia, in places where you have very sparse remote populations.

[726] And then there's other banks here in the U .S., the smaller ones.

[727] They can't compete on marketing, they can compete on market size and economies of scale, and they can compete on buying politicians faster than the big banks.

[728] So they need a secret weapon.

[729] And they look at Bitcoin and they think, well, you know what?

[730] This is a settlement and clearinghouse network.

[731] And there's these companies that do settlement the charge of 3%.

[732] Could we take them out of business?

[733] Could we disintermediate them?

[734] So there's all of these companies that are private but effectively have monopoly positions that do all of the clearing.

[735] The only banks know about them.

[736] The Depository Trust Corporation, clearinghouse corporation, which basically clears all equity settlement.

[737] So when you buy stocks on the stock, stock market, you buy the stock and three days later, that goes through a batch process that clears that stock, exchanges the money, and gives you ownership.

[738] That's run by a company called DTCC.

[739] That company charges a lot of money to do something very slowly and inefficiently.

[740] And the banks look at that and say, hey, could we use Bitcoin to take DTCC out of business, to take SWIFT out of business, to build our own networks that don't have a middleman?

[741] Because to us, the bank is a third party, but to a bank, there's another third party, right?

[742] And they can take them out.

[743] That's fascinating.

[744] So in a sense, what these banks can use and even the people in Brazil that are setting up these towers can use Bitcoin for is it's almost like ability to send an exchange money without using the money itself.

[745] They do it through Bitcoin and then that money can be transferred back and forth from Bitcoin to money.

[746] or to whatever their local currency is or not.

[747] Either that or use the underlying technology for Bitcoin to build their own parallel networks.

[748] So just like, for example, in the first few years, the big phone companies were terrified of the internet and things like Skype because it threatened their long -distance market.

[749] The smaller companies that didn't really have a lot of revenue from long -distance saw this as an opportunity to link together calling cards and long -distance offers and things like that.

[750] and run backbones over TCPIP to cut their costs.

[751] So here they had a more efficient transportation network for transporting voice data.

[752] So now they could compete against AT &T.

[753] So even though the big companies may see it as a threat, the smaller companies see it as a weapon they can use in competition.

[754] It's fascinating that when you have companies that are worried about their businesses becoming obsolete, when technology renders almost anything that's not up to snuff, obsolete.

[755] Do you remember when they used to have calling cards?

[756] They used to get a calling card and used to have to punch in the number when you would go somewhere and you would use the local pay phone and that's how you used to...

[757] Nobody has a fucking calling card anymore.

[758] Does anybody what is...

[759] Is it even one tenth of one percent of the population that uses one of those fucking things?

[760] In the U .S., yes.

[761] But in the Philippines, in Indonesia in Africa, there's a lot of calling cards.

[762] Really?

[763] Because the main phone company still maintain monopolies, but gradually the internet has been breaking down those barriers and rendering even calling cards obsolete.

[764] Here's the interesting thing.

[765] The companies that are submerged in their existing technology paradigm, they're submerged in this technology that's becoming obsolete, they're blind to it.

[766] They cannot possibly imagine a time when this enormous edifice that they've built will come collapsing down.

[767] Kodak could not imagine the fact that film photography, would become obsolete.

[768] Because of phones.

[769] Because of phones.

[770] And the funny thing is, it wasn't a smart move by Fuji film or Nikon or one of their existing competitors.

[771] One day, they were King of the Hill and a year later, a little company from Finland they'd never heard of became the largest camera manufacturer in the world, Nokia, and started putting out more cameras than any camera manufacturer in the world in a year.

[772] that was a transition in 1995 and Kodak suddenly got competition from a completely unexpected thing and what did they do?

[773] They ridiculed it.

[774] They said, well, they're grainy, they're shaky, you'll never get a real quality camera photo out of that.

[775] People will still love their crisp, clear, 24 exposures of film, there's artistic value to it, blah, blah, blah, and three years later, they're facing bankruptcy.

[776] Now, that's incredible.

[777] After that happened.

[778] They went bankrupt.

[779] They went bankrupt.

[780] I mean, three years, three years after the ascendancy of Nokia, they were facing bankruptcy.

[781] And eventually, despite all of their efforts to go digital and all of that, crashed and burned.

[782] It's amazing.

[783] And this has happened throughout history.

[784] The companies that are best positioned, like you would think that Kodak could do digital photography better than anybody else.

[785] I mean, they understood photography.

[786] They had the brand.

[787] They had the market recognition.

[788] Photographers loved them.

[789] So why couldn't they make a plane?

[790] this space.

[791] And history shows us that the companies can't.

[792] They can't turn around fast enough.

[793] They underestimate the risk.

[794] They overestimate the value of the old technology.

[795] And we see this again and again.

[796] Remember, you know, Tower Records, MP3s are never going to replace vinyl because vinyl has this depth and richness of sound and people will always go for quality over this cheap, metallic, crappy digital music.

[797] Well, bye -bye, Tower Records.

[798] Bye -bye.

[799] And this happens...

[800] Blockbuster video.

[801] Blockbuster video.

[802] And if you go further back, you know, it's like...

[803] People will not drive these internal combustion horseless carriages because they're dangerous, they're noisy, they're smelly, they break the roads.

[804] There's no roads.

[805] There's no gasoline.

[806] Only crazy people would use them.

[807] Trust in the horse.

[808] It's always worked for you.

[809] It's worked for thousands of years.

[810] And the interesting thing is, even though the...

[811] companies that made horse buggies had all of the manufacturing to make buggies and could theoretically just pivot slightly stick an internal combustion engine they already had all of the relationships with the wheelmakers with the spring makers with they understood how to build vehicle worthy road worthy vehicles all of them went out to business except for one Stu DeBaco was the only, after less than two decades, Stu DeBacon was the only U .S. horse buggy manufacturer that survived the transition into the automobile.

[812] I wonder if it's possible at this point in time for bank manufacturers.

[813] I mean, you know, people who are creating banks, you know, people, Citibank and Bank of America, to look at all that.

[814] Is it possible to look at all that history?

[815] and see that you've got something coming up, just like the Nokia camera, you've got something coming up, like, it might take a few years to settle in.

[816] But once people realize that you can do pretty much anything, right now you can't, but once you can start buying cars and homes, vacations, paying for all these things with Bitcoin, how much money are people going to want to put in banks?

[817] How much are they going to want to deal with the idea of these third parties?

[818] And if that starts to happen, how about the fucking Federal Reserve?

[819] That's where things get really squirrelly.

[820] Because what is that weirdo fucking institution, that Jekyll Island fucking strange institution that we've been relying on for so long?

[821] Well, to your first point, the people who are involved in the present day model of banking, the three to five business days to clear your check, the fees, the banking hours, the slow obsolete and ineffects.

[822] efficient, they're never going to change that.

[823] And the reason they're going to take that all the way to a bust.

[824] And the reason for that is because they can't possibly see a world where the alternative really does win.

[825] And it won't happen gradually.

[826] It won't be like, oh, well, you know, Bitcoin's getting closer or digital currency is getting closer to taking our business.

[827] Maybe we should now start changing things.

[828] It happens like with most technologies.

[829] Nothing happens for a while and the interest builds up.

[830] And then one day, something clicks, something changes, and the entire industry flips.

[831] You know, for Kodak, this happened in about a year and a half.

[832] So the first camera phone came out, and you cross the megapixel barrier, and boom, the entire industry flipped, and nobody bought film anymore.

[833] And so, and especially with banking, the crazy thing is that there's four billion people out there who have never had banking.

[834] And that's great because they don't ever have to.

[835] experience that mess.

[836] They can go directly to a digital currency.

[837] Just like they never had landlines, they went directly to cellular telephony.

[838] And so you see this leapfrogging of technology.

[839] Now, as to the Federal Reserve, and most people don't even know what this is and how it works.

[840] You know, the Federal Reserve Bank, the name is on the dollar bill.

[841] So it's a government organization, right?

[842] It's a government institution.

[843] No, it's not.

[844] It's a private company run by the banks that has the right to create money out of nothing and then sell that to the US government in exchange for debt.

[845] And if that doesn't sound crazy to you, I mean, what does?

[846] That is insanity.

[847] And that organization has the ability to create an infinite amount of money, set the interest rates between bank lending, and is completely independent of government control and that was considered a good thing because government manipulated money now money manipulates government that's incredible isn't it it's incredible they're allowed to use the word federal i'm gonna i'm gonna start calling my comedy federal comedy it's a government -approved comedy but it's not it's federal comedy right this is a this is a federal podcast like what the fuck is federal is supposed to mean the federal government that's what everybody automatically assumes.

[848] Right.

[849] The time in which the Federal Reserve was created is a very strange time in the history of this country.

[850] All of this is an experiment that's less than a hundred years old.

[851] And I think in retrospect will appear to most people to be a failed experiment that made no sense from the very beginning.

[852] Well, to hustle.

[853] I mean, that's really what it is.

[854] It's a money grab on a large scale, an incredibly large scale that includes the politicians that were involved in allowing it to form, the people that are.

[855] allow that are allowing it to continue the amount of money that's being exchanged over between these banks the amount of influence these banks have the decisions that have been made directly because of the influence of these banks that have not benefited the American people in any way shape or form all those things when that's taken into consideration in history we're gonna look back and go what these were mad times these were crazy people and and the thing is there's this illusion of stability there's this illusion that because this system is so big, it can't possibly be fragile.

[856] But the truth is exactly the opposite.

[857] It has become incredibly fragile.

[858] It is extremely overextended and extremely fragile.

[859] And you see the Federal Reserve at the moment has been pumping money into the economy like crazy for five years.

[860] And as they do that, you get diminishing returns.

[861] So every year they put the same amount of money in and they move the economy, they move the stock market a bit less.

[862] And then they put more money in and it moves a bit less until they're putting money in just to keep it stable.

[863] Now, I've seen that pattern before.

[864] I mean, that looks like a cocaine habit.

[865] Right?

[866] It does look like a coke habit.

[867] In the first year, right?

[868] The coke addict is snorting a lot of free federal reserve money and the stock market is getting really high in deeds.

[869] By By here five, it takes a big fat line of Federal Reserve money just to keep the stock market from crashing in the morning.

[870] And then one day, which happened in mid -October, the Federal Reserve turned off the tap a month ago.

[871] Federal Reserve stopped giving out free money to the banks.

[872] We haven't seen the effect that we'll have in the stock market.

[873] But if you follow your cocaine addict analysis, right now that act, addict is jonesing for a hit and is really, really cranky.

[874] Yeah.

[875] So some bad things could happen.

[876] Yeah, they're about seven to eight months away from sucking trucker dicks.

[877] I mean, that's really what's going on.

[878] I mean, they're about that far away.

[879] But the amount of power that the bank has, that's the Federal Bank, the World Bank, the amount of power all of them have, is really incredible.

[880] And it should have never taken place.

[881] I mean, the power is always supposed to have something that was, you're supposed to have the people who choose a representative, the representative looks after the will of the people, the people talk, they have discourse, there's debates and discussions, and we take into account social welfare and education and all these things that you would like your money to be distributed to.

[882] And instead, what you have is the money itself having this massive amount of power.

[883] and the people who print the money having this massive amount of power and generating printing the money but generating incredible sums of money because of the fact they print the money which is when you see these fuckers these wall street fuckers that are living in these hampton these they have these houses in the hamptons that are i mean they're not they don't even look real have you ever seen some of those guys that they have these a thousand fucking acres or hundreds of acres giant fucking palatial compounds and you find out what does this guy do oh he's just moving numbers around you got to realize joe they're not rich by world standards they're not rich the people who are really rich they own islands and countries and they don't even mingle with these little small time bankers here's the thing sometime in the 20th century the this idea of governments being able to print unlimited money was considered the scientific approach to money that if somehow we could control things a bit better in terms of tweaking interest rates and balancing unemployment and inflation, we could use the scientific method in terms of monetary policy because gold was too inefficient and you had to ship it across the waters in big barges and things like that.

[884] If we could use a scientific method for economics, we would see prosperity and we would see growth and things like that.

[885] Instead, what happens, governments had the ability to print unlimited money, so now they could go to war without raising taxes.

[886] And what they did is they went to war again and again and again and again and again and again.

[887] And a lot of the money in the 20th century was pumped directly into war, war on scale that had never happened before, and spending for war on a scale that had never happened before.

[888] And now you end up with economies like the U .S., the U .S. is addicted to war.

[889] We've been at war continuously since 1938, pretty much continuously in dozens and dozens of countries.

[890] And it is the machine that creates stimulus.

[891] So any time the economy starts weakening a bit, we start another war and we get another enormous amount of stimulus money.

[892] In fact, we saw recently the third quarter and fourth quarter results for GDP are presumably a bit better in the U .S. happened to coincide with a massive influx of money to fight ISIS, you know, the latest bogeyman.

[893] By the way, ISIS is the same organization we funded against Hafsal -Assad just a year ago.

[894] So ally, enemy, very quick transition and now all of this money going into fighting a new enemy on a new battlefront.

[895] But none of that money is going to improve schools, roads, health care, or other things in this country.

[896] All of the government, gets to print money, they use it for war every time throughout history.

[897] And so the fact that governments were freed from sound monetary policy and were given the ability to print infinite money has ended up being a scourge on humanity.

[898] It's ended up creating war just for profit because you don't need to tax people to go to war and now you don't need to conscript people.

[899] You can make it just the only employment opportunity that exists in some states.

[900] And bingo, you've got remote -controlled, highly profitable war that doesn't affect the vast majority of the population, and that has become the new form of economic activity.

[901] That's one of the reasons why I think that the same reason why states can't be trusted with religion, and you need separation of church and state, because when they take religion, they use it as a form of power to beat down people for the very same reason you need separation of state and money.

[902] When state and money became one, only bad things have happened.

[903] And we need to go back to some of the earlier times.

[904] In fact, that's a weird thing about Bitcoin.

[905] It's this tremendously futuristic technology, one that neither Star Trek nor Star Wars know that Jetsons predicted like all of these truly disruptive technologies.

[906] It wasn't even imagined in sci -fi.

[907] But it's origins and its basis is actually pretty conservative and traditional.

[908] It's the idea of money by the people and for the people without it being nationalized state money.

[909] Ben Franklin, as one of the founding fathers, was a printer, right?

[910] His main business outside of, you know, being a revolutionary one of the founding fathers, was he ran a print shop, he printed stuff.

[911] He run a whole empire of print shops all across the United States.

[912] And one of the things he printed was money.

[913] Because at the time, money was made by banks and by states.

[914] So it wasn't made by the federal government.

[915] The federal government didn't have one money, right?

[916] Every state had its own.

[917] Virginia money that was, you know, New Hampshire money, there was Maine money, that was Rhode Island money, there was New York money.

[918] And there was also corporate money being printed by companies.

[919] And that was one of the main reasons that the British crown was pissed off was because all of these little free state money printing operations were sucking taxes out of her queen's money.

[920] Big part of why the war started, right?

[921] Ben Franklin was the original peer -to -peer money printer.

[922] That's funny.

[923] And now Bitcoin is doing that again only in a digital form.

[924] And governments tell us that can't possibly work.

[925] What I would say, the evidence is the opposite.

[926] In fact, that worked pretty well for many, many centuries, and this current model is less than 100 years old and has resulted in perpetual war and terrible inflation on employment and depression, that model can't work.

[927] Well, that model not only can it not work, the people that are a part of that model actively campaign against it.

[928] I mean, everybody that runs for president talks about how they want to stop war.

[929] We're going to pull out of Afghanistan.

[930] We're going to close down Guantanamo Bay.

[931] We're going to do this and do that.

[932] We're going to bring back peace.

[933] But meanwhile, the very machine that puts them in the place is a machine that relies on war.

[934] It needs war.

[935] And it's one of those things where you have a path that is so deeply carved into the ground that it's almost impossible if you're traveling next to it, not to slide into it.

[936] It becomes just this, there's money.

[937] It gets generated.

[938] This is a way to get that money.

[939] This is a way to figure out a way to put it all together, and it's just, it's a pattern.

[940] It's a pattern that's repeated itself over and over and over again to the point where something disruptive has to be introduced into the system in order to stop that pattern and create something new.

[941] And we begin to see that because in the past, even the very communications of political campaigns and elections were channeled through a few very now and our channels like TV, right, and radio and those gave the gatekeepers a hell of a lot of power because if they didn't like a political candidate they could just silence them what the internet did not successfully yet but what it started doing is changing that equation and allowing candidates who otherwise wouldn't have a voice to have a voice so for example the rnc broke their own rules at the convention in order to keep Ron Paul from speaking back in 2008, right?

[942] But they couldn't stop him from speaking and raising a lot of advocates and followers on the internet.

[943] They could keep him off TV, they could keep him out of the debates, they could keep him out of the convention by breaking their own rules, but they couldn't keep him off the internet.

[944] And so the internet allowed candidates to communicate directly with our constituents.

[945] Well, now with internet money, you have the ability of those constituents to follow him.

[946] the campaigns directly.

[947] And I guarantee you it's going to be a tiny, tiny, tiny amount at first.

[948] Just like initially, internet communications were negligible, trivial compared to TV spend, right?

[949] And then a couple of candidates started changing that.

[950] Howard Dean started running an internet -based campaign, run an internet -based campaign, and even Obama himself eventually ended up using the internet to run his own campaign.

[951] And suddenly the internet.

[952] had influence in communications.

[953] You're going to start seeing some politicians taking Bitcoin and other digital currencies for the campaign finance.

[954] And at first, we're going to laugh at it, right?

[955] It's going to be ridiculous.

[956] It's going to be like a lemonade stand taken on Walmart and then give it a decade.

[957] And you could see a significant shift in the source of money for campaign contributions.

[958] I think that's, you know, kind of interesting what could happen there.

[959] If you shift both the power of communication and the power of fundraising for a, collections to the people.

[960] Well, and whenever you have new variables that people start adopting, they get thrown into the system and become a part of the system and then become commonplace, it shakes things up.

[961] I mean, just like the cameras that Nokia created, just like the internet itself, essentially 1990, what, four -ish, people started adopting it.

[962] I mean, when was like, what was that back then?

[963] It was CompuServe and AOL, just a few companies.

[964] And Netscape, followed by Yon.

[965] and Alta Vista, which started creating things that were more interesting.

[966] And 20, that's 20 years.

[967] It's a blink, a blink in time.

[968] And the world has changed so incredibly much, so much different than 1994 when it comes to access to information.

[969] It's impossible for someone who is grown up.

[970] You talk to a 20 -year -old kid today and explain to them what it was like to be a 20 -year -old kid in 1985.

[971] And they'll laugh at you.

[972] They can't imagine the world.

[973] How could they?

[974] How could they?

[975] Right.

[976] When I tried to explain what it was like for me to be 20, I'm like, I was like a monkey.

[977] I was like some dummy with books.

[978] Like that was where you got your information from books and from like things that you would see on television.

[979] That were on television.

[980] Like you couldn't stop them.

[981] You couldn't rewind them.

[982] You couldn't DVR them.

[983] Like the idea, the access to information, the idea of information had shifted so radical.

[984] to Google on your phone.

[985] I mean, that is, that's so Jetsons.

[986] It's so beyond anything anybody comprehended.

[987] But Jetsons never imagined that.

[988] That's the interesting thing about it, is that if you look at some of these disruptive technologies, things like the Jetsons and Star Trek and Star Wars and things like that, they anticipate the current technology and they just extrapolate it linearly.

[989] And if the person is really a visionary who comes up with it, Sometimes they take a slight twist and amplify one side of it and create something exciting.

[990] And then they miss the simple things.

[991] They miss the really obvious things.

[992] Like they figured out mobile communicators, but they didn't figure out email or social media.

[993] I was talking to someone who was saying they wrote a book on the Jetsons, Jeffrey Tucker from Liberty .me. He was saying that one of the fascinating thing about the Jetsons is that they would have flying cars and pneumatic tubes.

[994] and robots and all of these things but when the kid took a note from school back to his parents would be written on paper yeah because they couldn't imagine email whereas it seems obvious to us now it wasn't simply a continuation of the past it didn't have it was completely new and all of the really interesting technologies are ones that don't just take what you have now and extrapolated they break that mold completely and you see like look at Star Trek, right?

[995] They just gave up on money.

[996] They just gave up.

[997] They just don't talk about it at all.

[998] There is no money in Star Trek.

[999] That's so true.

[1000] Why are they fighting so much?

[1001] What do the Klingons looking for?

[1002] Like crystals, right?

[1003] Well, I mean, there's energy.

[1004] There's all kinds of things, but, you know, they kind of gloss over money entirely, and that's because money is a difficult, technology to imagine where it's going.

[1005] And the same thing.

[1006] In a lot of sci -fi, you know, you don't see social media, you don't see email, and you certainly don't see digital money as much.

[1007] Or if people see digital money, it's effectively Apple pay, right?

[1008] You have a thing and you go and it pays in galactic credits.

[1009] But that's not very imaginative.

[1010] That's just our current money on a phone.

[1011] Right.

[1012] Yeah, they're just using placeholders.

[1013] Right.

[1014] But the truly interesting technologies start happening when you break that mold and you create forms of money that didn't exist before and ways to use money that didn't exist before.

[1015] So the ability, for example, one of the really revolutionary things about Bitcoin that I find fascinating is the ability for machines to own money.

[1016] So up to now, only people can own money or through legal fictions like corporations, groups of people can own money.

[1017] But machines cannot own, operate, and exchange money on their own.

[1018] software systems cannot own money on their own.

[1019] They have to have a human paying for things, right?

[1020] So think about this concept, which is being discussed a lot in the Bitcoin community, called the Distributed Autonomous Corporation or Decentralized Autonomous Corporation or Organization, DAO, DAC.

[1021] Imagine a software agent that is able to maintain a Bitcoin balance and uses that to pay for its own hosting.

[1022] on say a web service so you so it rents its own computer power so you essentially empower the the software company you servers you write software right so that it can manipulate a bitcoin account and then use that bitcoin account to buy hosting to copy copies of itself onto that hosting isn't that like auto is an auto pay similar but hang on a second now imagine taking that a step further now imagine if that software system could create two varieties of itself, like by making a small change, and one variant of the software gets hosted here, and one variant gets hosted there, and say it does an activity, like it creates content on blocks by aggregating news, and sells advertising for Bitcoin.

[1023] And if this one's successful, it buys more hosting for itself.

[1024] And if this one isn't successful, it shrinks the amount of hosting.

[1025] So now you've got almost a fitness function, evolutionary effect, going on.

[1026] So now, now the first.

[1027] the most successful versions of the software grow in size and fund more of themselves.

[1028] Now I could go out on Craigslist and hire some software developers to make its software better.

[1029] You've essentially got an autonomous agent that's acting with money to propagate its own existence.

[1030] That's never happened before.

[1031] And I don't know what you could do with that.

[1032] Probably some very weird, some very bad, some very good things all mixed together.

[1033] But it opens a door to something that is completely crazy sci -fi level.

[1034] And when you take that and you connect it to, I'm sure you've been paying attention to the Elon Musk statements that he's made recently about artificial technology, that it's, you're summoning the demon, you know, and he believes that within five years.

[1035] I mean, this is, ordinarily, I would read things like that and go out of some crazy futurist guys, really not, doesn't have his finger on the pulse of the actual technology itself.

[1036] But when you've got a guy like Elon Musk who obviously is a fucking super genius and he starts saying things like that, you might take any consideration, hey, maybe this guy is thinking about some possibilities, some variables that other people are just trying to ignore.

[1037] Because we ignore a lot of variables automatically.

[1038] We ignore the variable that we're going to die.

[1039] We like to ignore that one.

[1040] We sort of know it exists, but we try to put it away.

[1041] We ignore the variable that the earth itself doesn't have a very long life.

[1042] I mean, in terms of cosmic viability.

[1043] It's like, we've got like another billion years and we can't support life anymore because the sun's going to be too hot.

[1044] It'll fucking eventually supernova.

[1045] The whole, you mean, there's, there's only a certain amount of time for everything.

[1046] Right.

[1047] Now, when you're creating intelligent life forms and you are creating essentially some sort of autonomous physical thing that is going to be able to think for itself, You're going to have some sort of thing that can mimic thinking or actually has the ability to think.

[1048] Propagate ideas, push forth its own agenda, and do that on its own, and it has Bitcoin.

[1049] It has money.

[1050] It can think, and it has a bank account.

[1051] And it can think how to generate income.

[1052] And it can think of what it could do with that income to ensure that it keeps its existence.

[1053] Well, there are ways you can think about it.

[1054] And, you know, for the time being, the amount of action such an entity could take in the physical world is very limited.

[1055] It needs people to act as its agent.

[1056] So some of the applications you can put it to are really interesting.

[1057] For example, you can create a distributed charity organization that has charitable members and builds an endowment fund and then can use a vote among its members to execute charitable action.

[1058] So you can essentially have a corporation.

[1059] that is programmable, where it doesn't depend on what a board of directors does, but instead it has a code basis, and all of the shareholders get to vote directly on what that does.

[1060] And all of the members say, oh, there was an earthquake in this place in the world.

[1061] 75 % of the members voted to send part of the endowment for charitable contributions.

[1062] And now you have a charitable organization that acts directly in the interest of its members and contributors without any influence by a board.

[1063] That's kind of an interesting concept.

[1064] You can use transparency and accountability and governance in interesting ways if you do that.

[1065] There's a whole section of development here called Bitcoin 2 .0.

[1066] And the 2 .0 version of Bitcoin, and I hate the term 2 .0 because, you know...

[1067] It's so overused.

[1068] It's so overused.

[1069] You know, Web 2 .0 with social media was kind of a deviation from the standard pattern of making publication -centric sites to making people -centric sites.

[1070] So Bitcoin 2 .0 is moving from currency -centric applications to contract -centric applications, where instead of running a currency on the network, what you're running is a contract.

[1071] It's basically a piece of code that can execute contracts, such as an agreement between two people to buy and sell a house.

[1072] And you can now take that and run that as a contract on the network and it can handle not just the payment but also the registration of title the escrow things like that you could have a contract here's one other application as a company called airlock which makes a digital lock for Airbnb locations brand new company based on the bitcoin 2 .0 technology and the idea here is that you put a digital lock on the door and when you sign the contract to rent an Airbnb location or something that taxed like Airbnb, you send a payment of Bitcoin and the payment itself authorizes the payer to unlock the door.

[1073] So the same Bitcoin keys you use to make the payment now authorize you to open the door to that property so you can go and enjoy your stay for as long as you've paid.

[1074] So you've combined a smart currency with a smart contract and a smart asset, which is the door lock.

[1075] So now you can open anything.

[1076] Another company has built a fluid dispenser.

[1077] So it's a fluid dispenser where for a fixed price you can buy certain number of gallons of something and then dispense them simply by sending a Bitcoin payment to that pump, essentially.

[1078] You can imagine this for a gas pump, a water pump, a hydrogen pump, you know, whatever you want.

[1079] anything that you can pump, oil, high fructose, corn syrup, coffee, whatever.

[1080] And it's regulated by the amount of Bitcoin that you've spent.

[1081] Yes, so there's a ratio of milliliters, liters, gallons, fluid ounces, or whatever you want the unit to be, and a price for that particular substance in that particular volume.

[1082] And you pay for the volume and you then put a cup or a car or bucket underneath and dispense.

[1083] Have any gas stations adopted Bitcoin yet?

[1084] No. That would be fascinating.

[1085] But you can see where the possibilities go.

[1086] Oh, yeah.

[1087] Finally, there's this concept of smart property, which I think we touched on before.

[1088] Now, in June of this year, I sold my car for Bitcoin.

[1089] And that in itself was a very instructive transaction, because if you want to sell a car, you have a couple of really big risk areas.

[1090] If you're the buyer, you're going to a transaction with a whole bundle of cash with you, right?

[1091] And that means you can get robbed.

[1092] And so it's pretty dangerous when you're buying a car.

[1093] You don't just randomly pick up an ad, go to a remote parking lot with a bundle of cash.

[1094] That's how people get killed, right?

[1095] If you're a seller, if you receive cash, you've got to make sure it's not counterfeit.

[1096] And most people can't tell the difference.

[1097] So there's a big risk that you're going to receive a bunch of, money, but that money isn't going to be real, you give your car away, you have fake money, you're in trouble now.

[1098] Or if instead of taking cash, you want to take a check, that check could bounce.

[1099] If it's a bank draft, it could be forged.

[1100] If it's a money order, it could be faked.

[1101] So what you now need to do is arrange to meet the car buyer near a bank branch, go in with the car buyer, have them deposit the check or bank draft, have the bank validated, have the bank and confirm the amount.

[1102] Now you can only do this between 9 and 4 .13 the afternoon, Monday to Friday.

[1103] I sold my car at 11 p .m. on a Wednesday night, and I sold it to someone who wasn't in the same state as I was.

[1104] Buying the car on behalf of his brother, who was a student in the state where I was, California.

[1105] I meet the brother.

[1106] They do a test ride.

[1107] They call up their brother and say, yeah, I really want to buy this.

[1108] Can you send the Bitcoin?

[1109] I send them the Bitcoin address.

[1110] We're in a parking lot in the middle of the night.

[1111] They're not worried I'm going to rob them because they don't have any cash on them.

[1112] I'm not worried they're going to cheat me because I'm going to see a Bitcoin payment.

[1113] So easy peasy.

[1114] Really late at night.

[1115] The brother does the transfer of Bitcoin.

[1116] I tell them, okay, wait here.

[1117] I'm going to go grab a sandwich.

[1118] I'm going to be back in about 45 minutes.

[1119] Once the Bitcoin transaction is confirmed fully and settled, can be reversed, nothing.

[1120] I'll be back.

[1121] 45 minutes later.

[1122] Later, sandwiched done, I'm back.

[1123] I give them title and key, and they drive away.

[1124] Transaction was safe.

[1125] It happened outside of banking hours.

[1126] Now, here's a twist.

[1127] Bitcoin 2 .0, you know, a lot of cars today have digital ignition systems, electronic ignition systems.

[1128] So your key isn't just a metal key.

[1129] It's also a radio transmitter that has a special chip inside it to identify itself to your car.

[1130] So if you just, you know, break the lock with a screwdriver, you're not going to start the car because the electronic ignition system is not going to recognize your key and it's going to say, no, sorry, right?

[1131] So the key itself is a digital key.

[1132] Imagine if you could do the following.

[1133] If I make a transaction that transfers money, Bitcoin, to the owner of the car, and the owner of the car in the same transaction transfers a digital token.

[1134] back to me. And that digital token unlocks the car.

[1135] So now I, I execute the transaction.

[1136] The owner receives Bitcoin.

[1137] I receive the digital token.

[1138] I get into the car.

[1139] I push the start button.

[1140] And because it can recognize that I have that digital token, the car says, oh, you're my new owner.

[1141] Welcome.

[1142] And I drive away.

[1143] How do you stop all this from getting hacked?

[1144] Well, that's the beauty of it.

[1145] The security isn't in the phone.

[1146] Right.

[1147] That's what the Bitcoin network does.

[1148] It offers completely.

[1149] decentralized security so in order for the bitcoin to be received by the owner and the token to be transferred to me that transaction has to be verified by the bitcoin network and that bitcoin network puts an enormous amount of computation behind it to make sure it's secure who's running that network all of the participants so like right now when you did this car thing yes how long ago did you does this was in june um you said it take about 45 minutes for everything it took 45 minutes to settle i saw the transaction instantly seconds right seconds and then i needed to make sure that it couldn't be reversed so there's like for example when you deposit a check your balance updates immediately but it takes three to five days to settle in bitcoin it takes six confirmations which is 60 minutes on average in my case it took about 45 it was run network's running a bit fast that day so when that happens you say everyone on the Are you talking about all the people that are mining Bitcoin?

[1150] All the people that are mining Bitcoin are participating and securing it.

[1151] And everybody else in the network also independently verifies it.

[1152] So after 60 minutes, everyone on the global Bitcoin network knew that that Bitcoin for the car was now mine.

[1153] And that has done how?

[1154] Like, what is the actual process?

[1155] What is it that goes through?

[1156] So you get the Bitcoin.

[1157] It goes on to your phone.

[1158] Then it gets verified.

[1159] What's happening?

[1160] How is it getting verified?

[1161] So what the network verifies is it verifies that Bitcoin was transferred to an address that I control.

[1162] And in that transaction, there's a signature by the original owner.

[1163] And that signature transfers an existing chain of Bitcoin.

[1164] And the network verifies that the Bitcoin that they're transferring to me exists and has not been spent and has already been recognized by the network.

[1165] So it's basically building a backwards chain.

[1166] My Bitcoin exists because it was properly signed from a piece of Bitcoin that the person who sent it to me existed, which was properly signed by the previous owner, which was properly signed by the previous owner, which was properly signed by the previous owner.

[1167] You go back in time, back to the point where that Bitcoin was mined for the first time.

[1168] And because the network validates that entire chain, once it's validated it, now I can spend it because I can sign it over to someone else and they can trust that that Bitcoin is good.

[1169] Wow.

[1170] And it's some complex math, but you know, here's the point.

[1171] If I try to explain to you how a webpage loads on your browser, I would have to spend 20 minutes describing the Border Gateway Protocol Routing Algorithms that takes the TCP IP packet that your browser sends, uses the IP address to recognize the global route, also known as an autonomous system.

[1172] And based on the subnet of that autonomous system, sends that packet to the nearest routing system where a routing table routes it to the next router, et cetera, until it arrives at the web server.

[1173] The point being, you don't see any of that.

[1174] Not only that, I would still not get it, and I would just nod and pretend I understood what you're saying.

[1175] Like a dog, you're showing card tricks, too.

[1176] But it's the difference between using the technology and understanding exactly how it works.

[1177] The truth is, most people don't even know how to grow a cucumber, let alone how a web server works.

[1178] Well, even if they know how to grow a cucumber, they probably have no idea what is going on inside the cucumber that's turning a seed into a piece of vegetable.

[1179] But you can still eat it and you can still use a web browser and you can still know the simple rule, which is this.

[1180] After six confirmations of my Bitcoin transaction, I can trust that I've got that money in my account, done.

[1181] So at that point, I can give the key over.

[1182] Even better, if you take that to the Bitcoin 2 .0 smart property, my car can recognize that it has a new owner after six confirmation.

[1183] the car itself can independently calculate and say this transaction that transferred my title as a car to a new owner has had six confirmations therefore i have a new owner and if that owner shows up with a key i will drive them away i will start my engine for them and now the property itself the asset is smart enough to track its owners through a chain and that means it's it's much much harder to steal that car.

[1184] Is this something that the car owners or the car dealers or creators of the cars would have to implement their own operating system?

[1185] Or would this be using the same Bitcoin operating system inside the actual car for it to recognize the handoff?

[1186] Yeah, you would be using the block.

[1187] You would replace the part where the car recognizes a specific key.

[1188] Hang on a second.

[1189] Yeah, I have a little key that when I get in my car knows that I'm there.

[1190] This key actually has an RFID chip or some other challenge response mechanism in it.

[1191] So instead of the ignition system interrogating this key, the ignition system would interrogate an ownership record on the Bitcoin blockchain.

[1192] When you see something like Apple Pay with the thumbprint security and stuff like that, do you see in the future Bitcoin adopting some of those kind of, you know...

[1193] A Bitcoin can do NFC already, so it can already do the same thing as Apple Pay.

[1194] The big difference is you're not putting 300 million credit cards into the ownership of a single company that...

[1195] Lost Jennifer Lawrence's butt pictures.

[1196] Right.

[1197] So, exactly.

[1198] I mean, that represents a systemic risk.

[1199] And that risk has nothing to do with whether Apple is good at what they do or not.

[1200] It has to do with the fact that credit cards are broken by design.

[1201] The fact that the number on a credit card that you give to every merchant allows them to go back into your account or anybody who grabs that can go back into your account, that's a broken.

[1202] design.

[1203] Essentially what you're doing is think of your credit card as a password and you're telling the password to everyone when you buy something.

[1204] You're giving people a key.

[1205] Yeah, exactly.

[1206] You give them a key to your house.

[1207] Right, whereas Bitcoin is fundamentally different because when you sign a transaction, if they can't change that transaction and all they can do is take that amount for that payment.

[1208] Well, that was why the issue of banking online or doing anything online was a huge deal just a decade ago.

[1209] Like anybody would talk about buying, like I used to buy things online in the early 2000s, and people would look at me like, oh, it's crazy.

[1210] Like, I'd buy a t -shirt online.

[1211] Use your credit card online.

[1212] Well, because it depends on a centralized model of trust, where you have to trust each intermediary in the chain.

[1213] That's one of the magic things here, which is that on a credit card, if I transmit my credit card from here to there, that has to be encrypted, then that system transmits it to a merchant processing system.

[1214] That connection has to be encrypted.

[1215] then the Mochant ProServe transmits it to the originating bank that has to be encrypted.

[1216] Everybody keeps a copy of that credit card number on a database that has to be encrypted surrounded by firewalls and monitor 24 -7 because otherwise Target, Home Depot, JPMorgan Chase, you know, again and again and again we see these hacks.

[1217] When I transmit a Bitcoin transaction, there's nothing secret in it.

[1218] I can transmit it over unencrypted Wi -Fi, I can send it over Bluetooth, I can play it as a music tone, I can send it as a series of Skype smileys.

[1219] That's my latest example.

[1220] I can encode a Bitcoin transaction as 15 emoticons in Skype and send it.

[1221] What?

[1222] Anyone can, it's just...

[1223] You can send it as a song?

[1224] Like, you could send someone a million dollars in Bitcoin through a song.

[1225] Yes.

[1226] Like, send them Pink Floyd's money and have Bitcoin a million dollars in Bitcoin encoded it.

[1227] It's just a message.

[1228] And the message itself can't be stolen.

[1229] So that's the beauty of it.

[1230] it now there's a protocol for phones called chirp which converts data into a sound and you can go into a store that supports chirp and there are implementations of bitcoin for chirp where you go up to the merchant and you press a button on your bitcoin wallet and it goes and that's your payment it should always go to do do do do do do don't do don't do instead of a cat sound well yeah it's a little modem It's like a modem, right?

[1231] You remember the old monum screeching?

[1232] Yeah, exactly.

[1233] So 14 .14 .14 .4 bought.

[1234] I have one of those bitches.

[1235] Damn.

[1236] Old school, son.

[1237] Sending money where you don't need to encrypt the money means that you can transmit it over anything.

[1238] So you've opened up all of the communication media.

[1239] When the merch room receives it, they don't need to protect it.

[1240] Because if they have a bunch of Bitcoin transactions on their database, those are the same Bitcoin transactions that are on.

[1241] on the public ledger.

[1242] I don't need to go to the merch.

[1243] I can look them up on the public ledger.

[1244] There's nothing secret about them.

[1245] Everybody knows what they are.

[1246] And so you don't have to hide them.

[1247] They can't be forged.

[1248] They can't be stolen.

[1249] There's no information by the consumer transmitted.

[1250] That actually becomes, I mean, correct if I'm wrong.

[1251] I mean, it might be thinking about this incorrectly.

[1252] But if someone sends you, like say, like, you know, that U2 album that got stuffed into everybody's iPhone, if somebody sends you.

[1253] you an album, those songs themselves, you can have those songs have the actual value of the song embedded as Bitcoin.

[1254] Like, it could be a thing that you have.

[1255] Yes.

[1256] And instead of it being something you can copy.

[1257] Money is content.

[1258] But you know what I'm saying?

[1259] Yes.

[1260] If it's completely embedded and intertwined, if they're symbiotic, if it's something that cannot be copied, Like, you can't take, like, say, the big issue with digital downloads is that you make an album and someone rips your album, puts it online, and anybody can make infinite copies.

[1261] But if it's digital money incorporated into the actual song itself, then that cannot be done.

[1262] Then each individual one would be something that is unique and unto itself.

[1263] Does that make any sense?

[1264] Possibly, although you could probably just strip out the music and then copy just the music.

[1265] sound.

[1266] That's like DRM, right?

[1267] Yeah, exactly.

[1268] Yeah, it's like DRM.

[1269] So, so DR, it's not really useful for DRM, but it, but it is, uh, but you can now embed money as a content type.

[1270] So people who say, you know, we're going to stop Bitcoin transactions from being transmitted.

[1271] Bitcoin transaction is 250 bytes of information.

[1272] Skype has 128 smiley emoticons.

[1273] That means I can confer to Bitcoin transaction to 16 smileys.

[1274] And as long as you have the same code on the other end to convert them back to a Bitcoin transaction, and you have access to a Bitcoin network, I can send you the 15 Smilies, you can take them, turn them into a transaction, put them on the network, and that transaction will go through.

[1275] So it's a code.

[1276] I could be living, it's a code.

[1277] I could be living in the most oppressive country in the world, and as long as I can transmit 15 Smilies across my border, or 24 words in English, or some pixels in a picture, or, you know, a slight modification of the red coloration of the Mona Lisa in a JPEG, I can transmit money.

[1278] Whoa.

[1279] Porn can be money.

[1280] Any information can be any information.

[1281] You can put a song in a picture.

[1282] You can put a picture in a song.

[1283] You can put a video in a...

[1284] Do you see what I mean?

[1285] Right.

[1286] So now money is one more type of information that can be transmitted across any communication medium that can support the transmission of information.

[1287] Because that was an issue that we were having with uploading things to iTunes and including the image of the podcast image itself, right?

[1288] We're having an issue with that?

[1289] Yeah, older MP3 players didn't understand extra information in the MP3.

[1290] They didn't understand the digital information of the photograph of the cover.

[1291] Cover art. Right.

[1292] Which is a matter of simply having the right encoding and decoding on the two ends of the transaction.

[1293] But yeah, here's another really cool one.

[1294] You can now create a Bitcoin wallet as represented by either 12 or 24 words from an English dictionary.

[1295] Specific dictionary, it has, I don't remember how many words it has.

[1296] I think it's like several thousand words.

[1297] specific dictionary of words where each word has a specific number and with that dictionary if you have that dictionary which you can download as a PDF and it exists online 12 words create a Bitcoin wallet so it's not just a matter of transmitting a single transaction you can transfer the entire contents of your wallet or backups your wallet as 12 English words so now potato asparagus army caravan door carpet screwdriver, lemon, you know, Ficus is a wallet.

[1298] And if I say those 12 words to someone who knows that it's a wallet, they can take that to recreate not just one transaction, but all of the transaction, all of the addresses, all of the money that's in that wallet, I can transfer the entire account or millions of accounts under the same system in 12 words.

[1299] That's fucking insane.

[1300] Where can I put those 12 words?

[1301] I could spray paint them on the wall.

[1302] I could put them on a poster.

[1303] I could transmit them.

[1304] Now, obviously, that's a secret.

[1305] You don't want to tell everybody.

[1306] But I could just simply send you a book and then send you a series of coordinates, you know, page 35, second word, first paragraph.

[1307] And now you have a Bitcoin wallet in the form of a book.

[1308] I just think it's incredible.

[1309] You could send me a photograph.

[1310] Like, you could be on vacation and send me a photograph, and Bitcoin money could be embedded in the information of that photograph being sent to someone else's phone.

[1311] In just a slight hue variation in the red coloration of a photo, yes.

[1312] That's amazing.

[1313] Or any of the colors.

[1314] You could just modify a couple of the pixels.

[1315] You could do that with anything, though, if you have the code.

[1316] It's just like Morse code.

[1317] It's called steganography.

[1318] It's secret writing within some other form.

[1319] And it's been done actually for a very long time for centuries.

[1320] Well, that was an issue with supposedly with Osama bin Laden and how they were transferring information online.

[1321] that they were doing it through JPEGs, right?

[1322] Wasn't that like one of the big ways that they were...

[1323] Yes, among others, I think they used it.

[1324] Actually, the first people to do this were Franciscan monks who would write, you know, copies of the Bible, and that they'd write it so that the first letter of each sentence vertically spelled something else.

[1325] So they put a hidden message within the Bible.

[1326] Right.

[1327] So it goes back a bit further than Osama bin Laden.

[1328] Isn't that like some part of what the Da Vinci Code is based on?

[1329] Yeah, secret writing is an old dart.

[1330] Well, I mean, that's essentially how they got away with transferring information during the World War I, World War II era, right?

[1331] When they were like, they had to decode a lot of what their Morse code was, what they were actually saying.

[1332] Mm -hmm.

[1333] Yeah, all that I knew, but for whatever reason, this has blown me away.

[1334] This idea of taking information and betting it in either.

[1335] a song or a photograph and that becoming a bitcoin transaction yeah that's freaking me out and you could put it anywhere you could put a bitcoin transaction into anything um so for example imagine if you have an oppressive government and they're trying to block all external internet how about this how about imagine if you don't is there is there a fucking government that isn't oppressive anymore okay you know i mean everyone's imagine an oppressive government But imagine one that's completely banned all internet, right?

[1336] And you've shut down the internet.

[1337] And you want to do Bitcoin transactions in that country.

[1338] You're really motivated, right?

[1339] You want to buy spray cans to spray your revolutionary message on the wall.

[1340] Let's use a non -violent example.

[1341] So now what you can do is, as long as you have a country next door that has a shortwave receiver with someone willing to put messages on the Bitcoin blockchain, you could transmit a Bitcoin transaction over a shortwave.

[1342] with a, like Morse, with a radio.

[1343] Wow.

[1344] And you could do it in a matter of seconds.

[1345] So you could make your entire transmission in 25 seconds.

[1346] So now you start going into, they did this in France.

[1347] During the Nazi occupation, the Allies dropped, tens of thousands of shortwave radios with parachutes to the partisan resistance, the French resistance.

[1348] And the partisans would, you know, go out into the middle of the woods, hook up their radio antenna to a rail line, a railroad line, line, a long piece of steel that acts as an antenna, burst the short -way transmission, transmit for a few minutes, disconnect, disappear into the woods.

[1349] There's no way you can find them or stop them or do that.

[1350] Then you could do that with money.

[1351] Wow.

[1352] That is fucking wild.

[1353] That's a, boy, that's something I never even took into consideration.

[1354] And that's something once money starts being adopted by more and more companies and more and more people start using it for more and more transactions, that's something that could be real paradigm shifting.

[1355] There's a, I mean, that's, this is the idea of the rabbit hole.

[1356] You know, Bitcoin is at first, it strikes you as something very simplistic.

[1357] It's a series of digital information, it's some numbers, and you send them and you, and you make a transaction, and so it's money as email.

[1358] Okay, fine, but then if you go deeper and you see the, the way it's structured without no intermediaries, the way it works is a decentralized network, the way it turns, money into information.

[1359] The more you think about it, the more you go down the rabbit hole, the more you realize that structures and constraints that exist today are wiped away, are blown away by this thing.

[1360] And it opens up these possibilities.

[1361] And the really interesting ones are the ones we can't imagine.

[1362] The ones that are not an extension of what we do today, but are completely novel, have never happened before.

[1363] In a sense, it parallels the internet itself in that regard, right?

[1364] And that's the main argument I'm trying to make, that this not money for the internet.

[1365] This is the internet of money.

[1366] Whoa.

[1367] It is a platform on top of which you can build applications.

[1368] Currency is just the first app.

[1369] There will be more apps.

[1370] There'll be stock apps and bond apps and smart property apps.

[1371] Okay.

[1372] So to use the internet as an analogy, like what year are we in?

[1373] Are we in the 1995 of the internet?

[1374] My estimate has been consistent over the last year I've been talking about this being the 1992 to 1994 period.

[1375] The interfaces is a pretty rough.

[1376] The major paradigm shifting companies and innovations haven't happened yet.

[1377] The web hasn't happened.

[1378] We're still on IP addresses instead of DNS names.

[1379] That's why the Bitcoin addresses looks.

[1380] A real dramatic user interface hasn't been developed yet.

[1381] Right.

[1382] It's gnarly.

[1383] It's weird.

[1384] It's esoteric.

[1385] It's geeky.

[1386] Most people haven't heard about it.

[1387] The big money hasn't come in, but all of the technology potential is already there.

[1388] And the adoption has already reached.

[1389] technology critical mass meaning that as someone said recently at the conference we're not the early adopters we're the lunatic fringe the early adopters come later but we're beginning I gotta turn higherprimate .com Bitcoin I'm writing a note right now you can just use PayPal you might be able to you might be able to just do it by turning on PayPal now I don't know if their beta program is ready for that but it's not that hard sons of bitches and I'm going to get on on it as well get on it to start going i can't do anything about comedy central about my new special but those things i can do something i don't know man you have you you have as a content creator i think you'll find that uh publishers are open to new exciting and um out their ideas i think you have the opportunity to go chat with some of them and say hey you want to try something new i definitely have the opportunity to chat to them and then they go oh there's that fucking podhead cage fighting commentator idiot who's covered in tattoos let's just not listen to him and keep making millions get out of here kid they're not going to listen to me that's certainly a familiar sentiment for me because i felt that before you can now pump gas for bitcoin in the rocky mountains powerful rocky mountains where is this that's happening uh the gas station in greeley color of course it's called the cosmic market well you know it's interesting Really Colorado is one of those towns that doesn't want marijuana.

[1390] Those fucking dummies.

[1391] One of the towns that's trying to keep marijuana out.

[1392] Yeah, well, you know, they're worried that it's going to be a bunch of hooligans and their dwells.

[1393] Meanwhile, that has changed Colorado in a goddamn dramatic way.

[1394] It was beautiful being back there and seeing all the businesses that are spawning out of this legalized marijuana movement.

[1395] And again, it's another, it's another example.

[1396] of what happens when you give people freedom, you know, can you buy pot with Bitcoin?

[1397] God damn, that would be revolutionary.

[1398] Really?

[1399] Oh, absolutely.

[1400] Does L .A. Speedweed use Bitcoin?

[1401] You know, I don't know.

[1402] Gino needs to get on that shit.

[1403] You could buy gas cards also at coinfuel .com.

[1404] You can buy any kind of gas card.

[1405] Any kind of gas card with Bitcoin.

[1406] Look at the, did you know about this?

[1407] Yeah, so the real question now is can you buy X with Bitcoin directly?

[1408] Or can you buy X with Bitcoin via an intermediary.

[1409] That's the only difference because you can pretty much buy anything with Bitcoin now.

[1410] The question is how many conversions do you do?

[1411] Do you need to convert Bitcoin to a currency or a gift card or a reward point Miles or something else system or some kind of customer loyalty program or does someone else buy the product for you and you give them Bitcoin an intermediary?

[1412] Or can you give Bitcoin to the merchant directly?

[1413] So there's all of these shades.

[1414] But in terms of can you buy X with Bitcoin?

[1415] The answer is yes.

[1416] There's an escort for Bitcoin time?

[1417] It's still not open yet, escort for Bitcoin .com.

[1418] They're trying to figure it out.

[1419] Meanwhile, those are some digital bitches.

[1420] They're very shady.

[1421] But you can trust them.

[1422] You know those aren't undercover cops because why would they go through the extra?

[1423] Like, hey, we're going to make it only Bitcoin guys.

[1424] Because they're trying to crash Gamergate.

[1425] I don't know.

[1426] They'll be the first digital STDs that you get.

[1427] They'll get into your Bitcoin wallet and funk it all up.

[1428] I think it's amazing.

[1429] I mean, since you started coming on.

[1430] here, which was over a year ago, so the very first appearance, we've seen quite a shift in the accessibility of Bitcoin, the ability to buy things of Bitcoin, the people accepting Bitcoin, the acceptability, and the discussion of Bitcoin is escalated.

[1431] It's elevated.

[1432] I think the discussion is less about, I think there's less ignorance and less just blatant misrepresentation.

[1433] So a year ago, I was having these discussions, and people were asking questions like, well, why can Sotia Komodo just?

[1434] come in and take all the Bitcoin and, you know, won't this only be used by terrorists and pornographers?

[1435] Oh, my people.

[1436] And, you know, that was the conversation.

[1437] Now we've elevated a bit.

[1438] So the funny thing is that people are beginning to recognize that they can't simply dismiss Bitcoin out of hand.

[1439] So what they do is they try to split hairs.

[1440] They're like, yeah, well, you know, the technology of the blockchain is really fascinating, but Bitcoin, the currency will obviously fail.

[1441] So they're splitting hairs now.

[1442] Give them another year we're going to come around.

[1443] Of course, those of us who have been in this for a while understand that the technology and the currency go like hand in hand.

[1444] You can't have a successful technology without a valuable currency and vice versa.

[1445] But you're beginning to see the naysayers, try to split hairs because they can no longer say there's nothing there.

[1446] They can no longer say this is just a joke because many, many, very smart, intelligent, well -educated, well -informed people are saying, hang on, this isn't a joke.

[1447] There is something interesting about this technology.

[1448] There is something disruptive about this technology, and we're looking into it seriously.

[1449] And after you see a bunch of, you know, we shouldn't do appeal by authority.

[1450] This should stand on its own.

[1451] It either is or it isn't.

[1452] But the truth is that in our culture, we do appeal by authority.

[1453] When PayPal comes along and says, there's something here and we're going to invest in it, Toverstock, Dell, Tiger Direct, you know, one after the other, these companies turn around.

[1454] You say, well, you know, these are not dumb people.

[1455] These are not people who don't understand money.

[1456] These are not the lunatic fringe anymore.

[1457] They're the early adopters.

[1458] And the conversation has changed.

[1459] Do you remember when we did our first show, Apple banned Bitcoin applications?

[1460] Yes.

[1461] Oh, they reverted that.

[1462] Yes.

[1463] Four months ago, five months ago, they had to change their stance.

[1464] and now there are dozens of Bitcoin wallets.

[1465] And I predicted that they would switch their...

[1466] You did predict that.

[1467] But I read that the reason why they did was because there was some fuckery involved in the actual coding of the software itself and that they weren't being entirely accurate about what the software was capable of doing.

[1468] Oh, there was a...

[1469] I mean, when they were being very difficult about Bitcoin applications, a lot of the Bitcoin applications were kind of trying to find loopholes here and there.

[1470] One of the funniest I saw was that Apple had a whole different set of rules if you have a co -op.

[1471] So if you have a co -op, you can distribute software to your co -op members without putting it through the Apple iTunes store.

[1472] So someone set up a Bitcoin wallet that you sign up by email to become a member of the co -op.

[1473] And they sent you the app by email, right?

[1474] So people were doing all kinds of shenanigans like that.

[1475] But really the real reason for this, and we said that six months ago, was Apple was going to launch Apple Pay.

[1476] and they didn't need a whole bunch of insurgent little weirdo applications ruining their announcement.

[1477] So until the last moment they resisted, they wanted to keep control over payments, both in -store payments, where they make a very healthy 30 % cut on every app and every in -store purchase.

[1478] And they wanted to introduce their own payment and wallet technology.

[1479] And so they did that.

[1480] So now Apple has created CompuServe, and we still have the interest.

[1481] internet.

[1482] Now we can play on a level playing field.

[1483] Let's see who wins.

[1484] I have my bets on the internet, not commserve of money.

[1485] That's what Apple Pay does, right?

[1486] They have a number of 300 million credit cards subscribers who have the sterile curated walled garden controlled experience.

[1487] And then there's Bitcoin that works internationally that is wide open that doesn't do all of that.

[1488] What do you got there?

[1489] I have my credit cards on my my wallet.

[1490] I used a the other day for my first time.

[1491] This is the Apple Pay thing?

[1492] The Apple Pay thing, yeah.

[1493] Jamie, can you get some whiskey and ice?

[1494] I'm trying to, like, do something in my voice here.

[1495] Put it in the microwave a little.

[1496] No, no, I don't want it cold.

[1497] That's why I had ice, you fuck.

[1498] Put it in the microwave.

[1499] Yeah, it's good for you throw it warm.

[1500] It'll melt the ice.

[1501] Who are you?

[1502] So.

[1503] Then when you use this, did it do anything?

[1504] It was just, you just kind of swiped it over the thing and it just, yeah.

[1505] And only certain vendors it works on.

[1506] You can't do it everywhere, right?

[1507] It's any of the credit card machines where you usually swipe your own card.

[1508] Most of the newer ones have a little symbol on it that means it has the...

[1509] Like a little Wi -Fi thing.

[1510] Yeah, yeah, it has the remote control, NIS or whatever it's called.

[1511] Right, that's NFC.

[1512] It's the payway system or tap and pay.

[1513] Now, here's the interesting thing.

[1514] Apple launched Apple Pay.

[1515] And Google, which has Google wallet, had seen very few subscribers.

[1516] And as soon as AppleP launched, Google's subscriber numbers shot through the roof because you can do the same thing on Android.

[1517] And I'm really banking on that effect because Apple will make people familiar with mobile wallets the idea of tap and pay with their thing.

[1518] But they still have many of the same problems.

[1519] Apple has all of these credit cards that are vulnerable.

[1520] They track all of your purchases and everything you do.

[1521] And they're going to impose restrictions on what things you can pay and what merchants you can pay.

[1522] And you've still got all of the old players, Visa MasterCard American Express, all of the problematic payment networks that are restrictive, they have $5 minimums, they're very expensive for merchants, you can have fraud, all of these things.

[1523] But what they're doing is they're familiarizing people with pay and NFC, and we can do that with Bitcoin too, only we can give them the full experience from micro payments to cross -border transactions to countries they've never heard of to the full Bitcoin experience.

[1524] So that's why I say it's Compuser versus the Internet.

[1525] Or AOL.

[1526] CompuServe and AOL internet got people used...

[1527] You want some of this?

[1528] No, thank you.

[1529] You want some booze?

[1530] Got people used to the idea of email in a safe kind of curated environment, like a sandbox.

[1531] And once they did, what they really wanted was the full Internet email.

[1532] Because the open technology innovates faster.

[1533] It has broader scale.

[1534] It's less fragile.

[1535] And it has more participation.

[1536] And so same thing applies to Bitcoin.

[1537] Do you think iPhone is going to be the platform of choice for the 4 to 6 billion unbanked people in Indonesia, in the Philippines, in sub -Saharan Africa, in South Africa, and Latin America?

[1538] Hell no, it's going to be Android with Bitcoin.

[1539] It's not going to be Apple Pay.

[1540] And that's fine, because Apple Pay has a role to play and will familiarize people with this technology, it'll get people to start thinking of money as a purely digital thing.

[1541] And then we come along and we deploy Bitcoin, on $20 Android phones and saturate the rest of the world and give them that experience.

[1542] You say that with such passion.

[1543] I say that with passion.

[1544] Saturate the rest of the world.

[1545] But, I mean, you can...

[1546] Five billion people having international banking for the first time in history.

[1547] I mean, that gives me shivers.

[1548] It is, it is, that is the most revolutionary aspect of this technology.

[1549] It's not making, like, right now, instead of swiping my card, I can waive my phone.

[1550] I've saved 150 calories in my consumer spending experience.

[1551] That's bullshit.

[1552] That doesn't do anything for anyone.

[1553] But you allow someone who's never done banking before to send money internationally to get loans from anywhere in the world, to start a company and sell a product anywhere in the world.

[1554] And to do that for 4 billion people, 5 billion people, 6 billion people, that stuff changes the world.

[1555] It's not going to be about shopping.

[1556] No, no, it's going to be about getting rid of.

[1557] the existing system that many people find intrusive and oppressive but I mean in this you know and in the third world you're talking about in the second and third world so there's according to the World Bank there's two and a half billion people who are on banked that means they have no banking facilities whatsoever they have no money they can't deposit stones no not true they live in cash they live in cash in barter -based societies they do have money they exchange labor products and services with each other all the time eggs chickens beans farming carrying water whatever it may be post apocalyptic type money they have an enormous productive potential but barter makes it very difficult to trade right barter if you if the other person wants chickens and you have a goat yeah you got to give a lot of fucking chicken you've got to find someone who wants a goat and so and so what that does is you have a very high friction economy and it reduces everybody's productivity, to do anything you have to walk 10, 20 miles to transact.

[1558] Now, these people have productive capacity, and that's a 2 .5 billion.

[1559] Then there's another 3 .5 billion people who have banking, but it's very basic banking, which means it's in their own currency only, no international markets, no credit all liquidity, no credit history, no ability to wire money.

[1560] And their nearest bank branch is usually very far away.

[1561] So they primarily use it for savings.

[1562] They don't use it to do, you know, point of sale visa swiping debit cards and things like that.

[1563] And together, these two constituencies, these two populations, many of them have cell phones.

[1564] They have text messaging cell phones.

[1565] So you bring together those two technologies and you can create essentially a revolution in financial economic inclusion, in international trade, in productivity, where instead of now walking 15 miles to market, you can do a transaction on your cell phone.

[1566] Well, especially since all that money is interchangeable internationally.

[1567] Yes.

[1568] It's all the same.

[1569] This happened in Kenya.

[1570] In Kenya, in 2001, local phone company SafariCom, one of the telcos in that space, created a program where people could exchange cell phone minutes with each other.

[1571] And so that system initially started being used informally as money.

[1572] So people would be like, give me eggs, I'll give you two cell phone minutes.

[1573] Because it was equivalent to money.

[1574] People couldn't afford to have a bank account, but they could afford to have a cell phone contract.

[1575] This is how messed up the banking system is around the world.

[1576] And so they would exchange minutes for products and services.

[1577] Eventually, the phone company, a couple of years later, recognized that they called this thing M. Pesa from mobile Pesa, which is the currency of Kenya.

[1578] And they started broadening it.

[1579] It now spans three or four countries in the region.

[1580] Here's what happened.

[1581] 11 years later, M -Pesa is 40 % of the GDP of Kenya.

[1582] 4 .0%.

[1583] 40.

[1584] And this is not GDP that got converted from Pesa to M -Pesa.

[1585] Most of this is completely new economic activity that previously existed as gray markets, barter markets, cash -only societies, it was inefficient and slow.

[1586] So it actually generated growth and economic activity in this country.

[1587] We've seen this happen in one country.

[1588] You can't transfer and pay outside the country.

[1589] You can't use it for remittances.

[1590] It's specific to one currency.

[1591] And it's still heavily taxed and manipulated.

[1592] Now imagine what we could do with Bitcoin.

[1593] Now, a few months back, there was some controversy online, and you made a statement that you were resigning from some sort of organization.

[1594] Yeah.

[1595] What was that all about?

[1596] Well, there's an organization which is kind of like a membership association called the Bitcoin Foundation.

[1597] And it sounds to a lot of people that this organization has some kind of role or authority.

[1598] They really don't.

[1599] It's just a member association, right?

[1600] They don't control Bitcoin.

[1601] They don't have any role to play in the code.

[1602] They do collect money from members and they use that money to pay some of the main developers so that they can focus full -time on Bitcoin like a foundation.

[1603] foundation, for example, Mozilla that makes Firefox.

[1604] They have a foundation, they pay a lot of developers.

[1605] Linux, the operating system, has a foundation, pays a lot of developers.

[1606] So it's kind of like that, but they don't have any control over anything.

[1607] They just collect member dues and they do some lobbying, they do some public relations, they pay some developers.

[1608] I had some problems with the transparency and the way the organization was being run.

[1609] I participated in the early days in the election process.

[1610] I helped with that.

[1611] I was one of the people moderating the debates between various candidates, was hoping to see some reform.

[1612] Some of the original members and some of the charter and the rules were such that it was highly, highly compromised from the beginning.

[1613] And for example, one of the founding members is Mark was, Mark Carpellas, the guy who owned and crashed M .T. Gawks.

[1614] He was one of the founders.

[1615] The guy of the big five?

[1616] face right so when you have like two or three of the directors in that facing massive lawsuits or indictments or how's that guy still alive that seems like some i mean didn't like a lot of money vanished with that hundreds of billions of dollars and he's like running around buying noodles at a market right he can go anywhere he wants i'll put that down to the fact that japan has very very effective gun control oh that does that the reason why he still but i you know i mean i'm a So I would like to think that what should happen to him is we should have a full and proper accounting of what happens and then he should pay the appropriate price through the judicial system.

[1617] Well, that's impossible, though.

[1618] I mean, the amount of money that you would have, I mean, he would have to generate some ungodly amount of money.

[1619] No, people are never going to get paid back for the money they lost.

[1620] But at least you could see at first, truth, then justice.

[1621] You need truth first.

[1622] Like, let's at least find out what actually happened.

[1623] People need to know the truth.

[1624] Somehow or another for folks who don't understand this.

[1625] situation or are not aware of it.

[1626] Mount Gox was about so it was an exchange it would buy and sell bitcoins for US dollars Japanese yen and euros and it was the first exchange so it was the first place where you could trade your bitcoins for something else but it was originally it was established from a website that was about magic the gathering right correct it was for trading playing cards because they had they already had a market -based trading mechanism right so they just converted it to Bitcoin, which was a very smart move, but it wasn't up to the job.

[1627] The problem...

[1628] What is it a scenario?

[1629] I'm sorry to interrupt you, but it was a scenario where the landscape had changed so quickly, so radically that they couldn't keep up and they couldn't possibly have foreseen it when they started trading Bitcoin, and then it just got out of hand?

[1630] Among other things, yes.

[1631] So how responsible would a person be in that sort of scenario?

[1632] Well, there's more than gross incompetence there.

[1633] And I, for a long time, thought it was just an incredible.

[1634] amount of incompetence and lack of due diligence.

[1635] Oh, so now you think.

[1636] But there's evidence, well, there's the classic evidence where a mistake in certain problems caused money to be lost.

[1637] And then, instead of coming clean about that, we now know that Carpellus continued to run the operation where he would pay old customers out from the money coming in from new customers.

[1638] That's the definition of a Ponzi scheme.

[1639] Yeah.

[1640] And most Ponzi schemes don't start because someone says, let me run a Ponzi scheme.

[1641] start because they start trading customers money, they lose too much, and they don't want to admit that they lost the money.

[1642] So they start using the new customer's money to pay off the old customers, the lies get bigger, the numbers get bigger until one day the lies and the numbers get too big to hide.

[1643] It all comes out in the open and collapses.

[1644] That's exactly what happened.

[1645] The lesson to learn from MTGox is when you have a decentralized secure solution like Bitcoin and you give all of the keys to one person, what happens is exactly what has happened for the last several thousand years of history, that person takes the money and runs.

[1646] Yeah, you've said on the podcast previously that you think it's probably a good thing that this crashed, and it's a good lesson for the rest of the Bitcoin community.

[1647] It's a very painful lesson.

[1648] I wish people had been able to learn it.

[1649] I mean, a lot of people were blowing the whistle long before it collapsed and saying, including myself, saying, do not put your money in this system.

[1650] And it in many ways highlights the positive attributes that Bitcoin share peer -to -peer the way it's being done now has.

[1651] So you know the expression, possession is nine -tenths of the law, and Bitcoin possession is ten -tenths of the law.

[1652] If you have the keys, it's your money.

[1653] If you don't have the keys, it's not your money.

[1654] Yeah.

[1655] And people did not control the keys at Gox.

[1656] They gave them to Carpellus.

[1657] Anyway, just to wrap this up, okay.

[1658] I resigned from that association saying, I wanted to, I tried to make it, you know, I don't want to make a big deal out of it.

[1659] I just say, I disagree with the way this is being managed.

[1660] I don't like the transparency.

[1661] It hasn't been reformed enough.

[1662] I'm out.

[1663] It was turned into a very big news story.

[1664] I'm hoping that nothing bad happens within the foundation, but I still have concerns that because of a lack of transparency, because of a lack of reform, there could be opportunities there for shenanigans.

[1665] What is the best resource besides listening to you on podcast, which is excellent, for people to research Bitcoin, to find out where they could get more information, where they can assimilate into maybe a community, a message board, where they can exchange ideas?

[1666] So there's a couple of really good sites where you can go and learn things about Bitcoin.

[1667] Bitcoin .org is one of those.

[1668] It has information about how to get into Bitcoin, what it is.

[1669] That's run, again, by an association of users.

[1670] It's a non -profit style thing.

[1671] It's one of the things that Bitcoin Foundation does relatively well.

[1672] And you can find information about Bitcoin there.

[1673] There's various online communities, massive community on Facebook.

[1674] I'm really, really very excited about the meetup community, meetup .com, local grassroots meetups all around the world.

[1675] So when I go speaking, like I went to Australia, I went to the Sydney meetup group and I said, tell all your members, let's have a meetup.

[1676] I'll come talk about Bitcoin.

[1677] and they sold out 250 seats in a room instantly.

[1678] So these things didn't exist a year ago.

[1679] There weren't enough Bitcoiners in one place to get together.

[1680] Now there are in hundreds of places around the world.

[1681] So meetup .com.

[1682] Go and meet people who are into Bitcoin and learn about it.

[1683] There are also meetups for Bitcoin developers to learn how to do software development.

[1684] I started one of those in San Francisco, the second of that type, and one of the most successful now has more than six.

[1685] members, I believe.

[1686] And I'm going to do a very brief but shameless plug.

[1687] How dare you.

[1688] On December 27th, O 'Reilly Media, which is a software and development publisher, technical publisher, is publishing my book.

[1689] It's called Mastering Bitcoin.

[1690] And it's a book for software developers to learn how to use Bitcoin.

[1691] I spent a year and a half working on that.

[1692] I just finished.

[1693] I got an email this morning.

[1694] The final copy went to print.

[1695] So is it actually going to be a book book or is it going to be a digital book as well?

[1696] it's a digital book it's a print book audio cover I'm I should be I'm trying to get Morgan Freeman to read the audio book I'm just kidding I'll read it hilarious I'll read it with my weird Greek British accent you're gonna read it right you're not I don't know I don't know if there's going to be an audio but it's it's a technical book it's got code segments in it it's not exactly geared to be an audio book but okay we'll see ebook print it's also on an open source license So I'm a huge believe in open source.

[1697] I use the Creative Commons licensing system.

[1698] So it's Creative Commons with attribution, share like.

[1699] It's available online.

[1700] The entire book was developed online with contributions from hundreds of people who corrected things in the book.

[1701] All of the editing process was public.

[1702] You can download it for free.

[1703] So it's for free or is there?

[1704] No, it's published by a mainstream software and technical publisher with a lot of cloud who are taking it to a mainstream audience because we needed that in this space.

[1705] and that's coming out to imprint Amazon Barnes & Noble O 'Reilly .com and every other book publisher and book distributor out there will have a copy of this book you can buy it it's 30 to 35 bucks retail approximately 28 I think on Amazon you can buy an e -book for about $25 but it's also available for free online as a PDF or as a source code kind of crazy you're selling it and you're giving it away at the same time.

[1706] Yes, and I will tell you that as many have discovered in this space, open source content does not diminish retail sales.

[1707] In fact, it grows them.

[1708] Really?

[1709] Yes.

[1710] The people who can afford to buy the book will buy it to put it on their bookshelf and have a paper reference, to put it on their Kindle in a nicely formatted, convenient way.

[1711] It's easy, it's convenient one click.

[1712] If there is value people will pay for convenience and packaging and and just kind of the quality of of printed colored paper honestly they will um that's why you're drinking a bottle of water when you can get free water from the tap no because the government fluoride and black helicopters okay but people pay for quality and packaging and convenience right and so at the same time people who couldn't afford to buy the book, we'll download it and use it as a resource to learn these skills.

[1713] And to me, that's the most important thing, because if you want to invest in Bitcoin, you don't invest in the currency, you invest in the skills.

[1714] This is like learning how to make a website in 2000.

[1715] It's like learning how to make an iOS app in 2005.

[1716] This is a skill that will give you a job.

[1717] And so that's - A skill that'll give you a job.

[1718] Yeah.

[1719] Like what kind of job?

[1720] We're hiring thousands of people in this industry in order to do the software development.

[1721] development.

[1722] What kind of software development are we talking about?

[1723] There are now some 800 startups being tracked by, I think it's called VentureScan, which is a company that tracks funded, venture capital funded startups.

[1724] There are more than 800 companies in the space doing startups around Bitcoin building applications, user interfaces, new financial services, exchanges, wallets, you name it, someone's building something.

[1725] This is a new industry blossoming and creating.

[1726] thousands of jobs.

[1727] And this industry is now hiring thousands of people in the U .S. especially with skills around software development, accounting, finance, marketing, public relations, operations, management, the entire spectrum of things you need in a startup.

[1728] Wow.

[1729] And so this book that you wrote has a lot of coding and coding instruction in it.

[1730] The first two chapters are accessible to anyone.

[1731] They explain how Bitcoin works at a level that someone who is not, who is a bit technical, but not a program I can understand.

[1732] The other eight chapters are how Bitcoin works in detail for a programmer to get a complete soup to nuts overview of how the entire system, not just Bitcoin, but the blockchain technology and all of the other currencies that are based on that model, how it works, how to write software to it, how all the data structures work, how all the protocols work, and to get a complete understanding of it.

[1733] So, so it's really for programmers.

[1734] So you immersed, you've immersed yourself in this over the period of X amount of years.

[1735] How many, three years?

[1736] Three years.

[1737] And what, what knowledge base of coding did you have before you got into it?

[1738] I started coding when I was 10 years old.

[1739] So you just been doing this from it.

[1740] I'm not a professional programmer.

[1741] I'm a passionate amateur, if you like.

[1742] I've been paid a few times for writing code, but I'm not as productive and disciplined as a professional coder who only does coding.

[1743] I code for fun.

[1744] I code because I'm fascinated by it.

[1745] And when I started this, I knew quite a lot about coding and a bit about Bitcoin.

[1746] And I started writing a book.

[1747] Honestly, the best way to teach yourself, a technology is to try to teach it to someone else.

[1748] And I learned more about Bitcoin by writing the book.

[1749] And, you know, when I started, I knew a bit.

[1750] Now I know a lot more because I had to find ways to explain this technology in simple terms.

[1751] You know, that's so fascinating that you say that because that's a truism that is often expressed in martial arts.

[1752] You know, one of the ways that I got really good at martial arts is I taught from the time I was 15 years old.

[1753] I taught, I taught at Boston University.

[1754] I taught at my own school.

[1755] I used to teach all of the private lessons at my...

[1756] And because of that, my technique got very clean and sharp.

[1757] Right.

[1758] And I think that that...

[1759] I've often thought about doing that with even with stand -up comedy.

[1760] Although I don't think you really can teach stand -up comedy.

[1761] You can kind of exchange information and go over the facts of it or the building blocks of it.

[1762] So I find that really amazing that you say that about...

[1763] as well it seems to be you could teach improv right um not really well you can teach people to never do it again okay fucking i need a genre well i would sign up um yeah it applies to coding it applies to book writing it applies to it applies to public speaking um i'm learning how to be a pilot now um so i love flying planes it's one of the things i'm really into and as soon as i'm complete with my training, which should be in the next month or so, I'm going to start the next stage to become an instructor, because if I want to get really good at that, I need to start teaching other people how to do it.

[1764] Wow, that's interesting.

[1765] If you want to learn something, well, teach it.

[1766] And maybe at first, it's hard because in teaching it, you realize how much you need to learn in order to be more crisp and to be able to create explanations that are simple to understand, you first have to understand it in depth yourself.

[1767] Yes.

[1768] But it focuses you.

[1769] And so that was part of how I wrote the book, was I understood it, but I understood it at a relatively superficial level just to use it.

[1770] In trying to explain it, I had to learn it a lot deeper.

[1771] That is so true and so interesting about knowledge, about information, is that a lot of people develop a cursory or a working knowledge of something.

[1772] but in order to really explain it you have to have a full foundation you have to have you know every you have to have the foundation the blocks the structure you have to have the whole thing in order to explain what a house is you know and then that's a that's a really amazing thing about information it just it really fascinates me how the mind works and how just absorbing information and the the depth of that absorption like there's some people that I could talk to.

[1773] I'm sure that know Bitcoin, but don't know Bitcoin like you.

[1774] And I can have a conversation with them and come away with some misconceptions, perhaps, but then talking and talking to you, especially since you teach it so much.

[1775] And I mean, essentially what you're doing when you do podcasts is you're teaching us what the potential or the future applications for Bitcoin can be.

[1776] And in doing so, you know, I get a much deeper sense of what it is because you're so used to teaching it.

[1777] Yeah.

[1778] And I have to say, you've got to realize there's a lot of people who know Bitcoin a hell of a lot better than I do and know how to apply it.

[1779] Who the fuck are these people?

[1780] They must be weirdos.

[1781] They're all the technical geniuses who spend most of the time making the Bitcoin code better and building applications around it.

[1782] I'm not a professional coder, and I don't spend most of my time doing that.

[1783] It's important to realize what they do is orders of magnitude deeper than what I do and understand about bitcoin but i have one skill yes i have one skill i think that skill is necessary and valuable and this is what i do i took my skill which is explaining and teaching and public speaking and applied it to bitcoin um and i'm i'm not the most knowledgeable i'm not not even close to being the most knowledgeable what is what are you missing a lot of nuance that they have well first of all um the focus on on code and and and and developing.

[1784] I mean, I don't write code 24 hours a day.

[1785] I don't write code all the time.

[1786] They write code all the time.

[1787] The algorithms, issues of scalability and optimization, understanding the really subtle technical nuances of the protocol and developing a consensus protocol, those are really subtle.

[1788] I mean, you can find tiny, tiny bugs in Bitcoin, which under certain conditions, if you write a transaction with certain script operators, it can cause this to happen and that to happen.

[1789] And you've got people who are way out ahead who are finding these things, figuring out, oh, here's something that could go wrong in a transaction, and here's some code that ensures that we check for that from now on.

[1790] I mean, I don't have that depth.

[1791] I can understand what they're talking about, but I wouldn't have figured that out by myself, because I don't spend the time analyzing the code like they do.

[1792] Well, that's one of the weird things about being a human being.

[1793] It's just, it's so cool that there are so many different people and that the spectrum is so broad.

[1794] Right.

[1795] That there are some just very bizarre people that are just sitting in front of a computer, just banging out numbers and staring at lines of code.

[1796] And those are super important.

[1797] If those people weren't here, we wouldn't be doing this.

[1798] We wouldn't be doing this.

[1799] There's no question about it.

[1800] We wouldn't be online because there'd be no online.

[1801] Right.

[1802] What I do by comparison is an afterthought.

[1803] It's a layer that only happens because other people did this work at first.

[1804] That's what really amazes me about working in this space.

[1805] Over the last three years, I have met some of the sharpest, smartest, most intelligent, most incredibly complicated thinkers in terms of coding, technology, databases, protocols, finance, economics, monetary policy.

[1806] some of the best thinkers of our generation have fixated on this little project and are doing things that are incredible and I meet these people and I say there's a reason why when smart people figure out what this is they get fixated they get really really obsessed about this technology so you go from skeptic my first reaction when I came across Bitcoin was nerd money like just completely ignored it six months later I read the paper light bulbs start going off in my hand.

[1807] I'm like, oh, distributed control system, security model, this is not just a currency, wait, hang on a second, this is content, now it has these implications, and you just go straight down the rabbit hole.

[1808] I went down that rabbit hole so far four months later.

[1809] I had lost more than 20 pounds because I was spending 18 hours a day, reading everything I could about it, writing code, you forgot to eat?

[1810] Communicating, I forgot to eat.

[1811] This has happened.

[1812] to me three or four times in my life.

[1813] That's a particular personality quirk.

[1814] I call it, yes, I call it a state of fugue.

[1815] My first fugue.

[1816] F -U -G -E.

[1817] F -U -G -U -E.

[1818] It's disassociation with reality, and you can go all the way pathological and just run into serious trouble.

[1819] I did it on a relatively heavy basis for most people, but still survivable.

[1820] My first computer, when I got my first computer, It just, it's completely transformed my life.

[1821] It's opened up a space of imagination that I didn't know existed.

[1822] And I started programming and I realized what you could do with programming.

[1823] And my mind as a 10 -year -old just went, p. And what year was this?

[1824] This was 1982.

[1825] So you got in way early.

[1826] It was one of the first, like, before the Atari, like, this was a ZX81, Sinclair.

[1827] microcomputer from Britain, you connected it to your TV, but you could program this thing, and you could write basic software, and you could even write assembly code on it.

[1828] And within six months, by the time I was 11, I was writing assembly code on this thing.

[1829] And I didn't even understand the mathematics behind it.

[1830] I learned those mathematics in high school, but I already was practicing that stuff.

[1831] When I got my first modem and I connected to bulletin board systems in Los Angeles, in fact, from Greece over long -distance phone calls, my family was not happy about that phone bill.

[1832] And I communicated with geeks on another continent for the first time.

[1833] It blew my mind.

[1834] I opened a door to an entire reality that was impossible for a Greek team to experience.

[1835] And when I got my first internet connection, again, Bitcoin is like one of those events.

[1836] And when I first started, I dismissed it, but when I took a slightly deeper glimpse and I saw what it was, straight down the rabbit hole, forgot to eat for four months, lost a ton of weight, just became completely obsessed, completely, I mean, you know, you go out for dinner with your friends and you bring up Bitcoin in every single conversation before long.

[1837] You're not invited to dinner anymore.

[1838] But after that, I managed to find a more healthy balance, I'm still absolutely fascinated about this technology.

[1839] I don't forget to eat anymore.

[1840] I'm still fascinated by this technology.

[1841] And every day, I learn something that opens up even more the possibilities.

[1842] And now I'm not longer thinking, what can we do in two years?

[1843] And now I'm thinking, this is still going to be changing things two decades from now, three decades from now.

[1844] Wow.

[1845] Listen, dude, guys like you are very important.

[1846] really crazy fucks that will not eat for months at a time and lose 18 pounds because you find the viability and the potential and something like this.

[1847] It's very important.

[1848] The world didn't change because someone who was already an established researcher in an established space made a tiny incremental change.

[1849] The world has changed numerous times because someone from the lunatic fringe refused to accept that their idea was stupid and crazy and would never work and persevered regardless and ended up changing an entire industry.

[1850] When Einstein was a patent worker in the Austrian Patent Office or Swiss Patent Office, I don't remember even, he wasn't part of the physics community.

[1851] He was the lunatic fringe and he came up with an idea that was ridiculed for a good decade before anybody figured out that there was something there.

[1852] And we see the same thing in history again and again.

[1853] We rewrite and whitewash the history of innovation to say And then Ford created the car And everyone went, good job, Ford, we'll all buy Model T's No, they didn't.

[1854] What they said was, you car enthusiasts, you're insane This is crazy, it's dirty, it's noisy, it will destroy our roads, it will never work When Edison discovered and created all of these wonderful things around electricity people didn't say, that's amazing, let's all electrify everything.

[1855] The media said, anybody who puts electricity in their house will burn it down, and only the rich and crazy would dabble in this technology, and it will soon go away and pass as a fad.

[1856] And why don't you use traditional, good, working kerosene?

[1857] Well, that's what they said about everything.

[1858] That's what they said about computers.

[1859] It takes the people who refuse to accept the vision they're seeing is crazy.

[1860] Now, Carl Sagan said something very important.

[1861] He says, yes, they laughed at Christopher Columbus.

[1862] Yes, they laughed at Edison.

[1863] But they also laughed at Bozo the Cloud.

[1864] You have to be fairly confident that there's a there there because you might end up just being Bozo the Clown in which case they're right to be laughing at you.

[1865] It's a matter of subtlety.

[1866] I think there's a there there and every day I meet more astonishingly intelligent people who have fallen down.

[1867] the same rabbit hole as me in exactly the same way and have come out of the other side transformed and have decided to dedicate their life or part of their career at least their focus their energy their passion their work to seeing how far we can take this little experiment because we all realize the simple equation underneath it well they can be no doubt if i'm wrong i lose some money and some of my time if i'm right we're going to change the world it's as simple as that and if I'm wrong nobody gets hurt the people who got into this they understand the risks this is fringy stuff this is out there you go invest all of your retirement savings in Bitcoin you're an idiot you're gonna lose a lot of money that's not how you do it but the people investing their blood sweat tears and knowledge and passion and enthusiasm into this if they lose they've had a fun ride I'm enjoying this but if they're right we're changing the world well I don't the question of whether or not there's a there there, I don't think that's a valid question.

[1868] There's unquestionably a there there.

[1869] It's already there.

[1870] We can say that now.

[1871] A year ago, it was really hard to even make that argument.

[1872] Well, now you can say it.

[1873] Now you can say it.

[1874] Now you've got PayPal.

[1875] Now you can buy a Dell computer.

[1876] If you can use Bitcoin, you send off and then you get a laptop, and then you're online with this laptop.

[1877] You got this laptop from Bitcoin.

[1878] There's a there there.

[1879] That's a there.

[1880] It doesn't matter how many PhDs in economics, write very long papers telling me it's not money.

[1881] If I get a laptop in the mail, it's money.

[1882] It's there.

[1883] Yeah.

[1884] There's no question about it.

[1885] If you use Bitcoin to get an escort, that escort, as soon as that website is up and available, right now it's not.

[1886] I mean, Brian refresh all day.

[1887] When that website comes online, Brian will be one of your biggest evangelists.

[1888] You will come on, right now, I'm sure you look at Brian like, oh, this crazy fuck that Joe hangs out with, you will have a newfound respect for him and his ability to spread the knowledge and power of Bitcoin once these escort sites go up.

[1889] Because then things will change, like rub maps.

[1890] 40 % of all rub maps customers go to rub maps because of Brian, because they found out about Brian.

[1891] I have a serious point to make about that, and I don't want to minimize what you're saying.

[1892] Please do.

[1893] I wouldn't.

[1894] I would never imagine.

[1895] The ability to control your money in a way that is entirely personal, the fact that you can memorize a Bitcoin address, the fact that you can control that money, the fact that no one can take it from you, in that industry is an incredibly empowering process.

[1896] Because it would actually allow the women who are in that industry to get the value of what they're doing instead of being exploited mostly by men and mostly through violence.

[1897] So surprisingly enough, you can make a very strong argument that the self -determination and control aspect of Bitcoin has a very significant empowering effect in that space.

[1898] You can't get robbed at knife point for money that's sitting on your wallet with a PIN number or that's being transferred to a service that you don't have access to and your Pimp can't steal your money.

[1899] It's a very good point.

[1900] It's a very good point.

[1901] And, you know, not getting deep down into the rabbit hole of social norms and why laws exist in the first place and what is and not empowering to any person takes on any job.

[1902] You know, it's our societal constructs that make it illegal in the first place.

[1903] A woman should be able to do whatever she wants, including giving massages or kicking men in the balls for money.

[1904] I mean, there's women that do that.

[1905] I mean, there's a valid fucking job to that.

[1906] There's an occupation.

[1907] Dominatrix, there's not just one of them.

[1908] I mean, there's thousands of them all across the country, maybe even more than that.

[1909] I mean, I don't know how many dominatrix there are, but I've met a bunch of them.

[1910] Well, you like this story.

[1911] The idea of money is not an idea that just exists in humans.

[1912] In fact, money exists in every culture and is created by every culture.

[1913] Even by children, toddlers create money spontaneously as a cultural expression when they don't know what money is.

[1914] They'll trade rubber bands and wooden blocks and things like that.

[1915] But, in fact, it's an idea that even goes beyond humans.

[1916] You can teach primates what money is.

[1917] You can teach them the idea that the abstract token can be exchanged for value.

[1918] So, for example, they've done studies where they teach...

[1919] It's in my act, 2009, talking monkeys in space, had a whole bit about chimps.

[1920] Chimps.

[1921] And the first thing they did is the female trump chimps took the male chimps money and fucked them.

[1922] Right.

[1923] So the two most traded, well, I would say the three most traded commodities in the world are food, sex, and recreational narcotics.

[1924] They have been the three most traded commodities in the world since the beginning of time.

[1925] The accusation that Bitcoin is used to buy drugs or buy sex is a ridiculous accusation on its face.

[1926] If it couldn't be used to buy those things, arguably it's not money.

[1927] Yes, you're right.

[1928] Because anything that cannot be used to buy the three most traded commodities in the world is not money.

[1929] The point is that money represents the buying habits of the population using it.

[1930] If you want to see mainstream values in Bitcoin, wait until Bitcoin becomes mainstream, and then you will see mainstream values in Bitcoin.

[1931] It's as simple as that, you know.

[1932] Well, it's about personal freedom when it comes to any form of pleasure.

[1933] What people enjoy, whether it's the pleasure of having someone cook your meal for you, the pleasure of having someone give you a back rub.

[1934] I mean, all those things are legal because, It's a skill.

[1935] These are services that people provide to people.

[1936] We just have this weird idea of deciding what is and isn't acceptable as far as a service.

[1937] And as far as I'm concerned, everything should be legal.

[1938] If it's not harming someone.

[1939] If sex is legal free, if it's legal for a woman, and it should be, for a woman to go into any bar and choose a man that she decides to have sex with, ask the guy, you want to fuck?

[1940] And the guy goes, yeah.

[1941] And then she takes them home and has sex with them.

[1942] That's totally legal.

[1943] But if money is exchanged somehow that woman is a criminal, that we live in a crazy world.

[1944] We live in, we're insane.

[1945] And we're only insane because of these echoes of the puritanical values of the dipshits that were dressed up like pilgrims that got on fucking rafts and floated over here from Europe.

[1946] It's an even crazier idea to say that you're going to control social interaction and behavior, not by controlling the act or by making the act illegal, but by making the act illegal.

[1947] making the transaction of money itself illegal.

[1948] Controlling the money is a very dangerous road down, which if we go, people will use it to control all kinds of other behaviors that perhaps they shouldn't.

[1949] There lies totalitarianism.

[1950] Here's the point.

[1951] The fact that Bitcoin can be used for these kinds of activities is not something special about Bitcoin.

[1952] All money can be used for these kinds of activities.

[1953] What is special about Bitcoin is that you can remove violence from the equation many ways.

[1954] The reason people buy drugs online is because you can't get stabbed over TCPIP.

[1955] And that is a very callous and throwaway quip to make, but it is true.

[1956] Fundamentally, if you remove violence from the equation, that increases the value.

[1957] And so that's why people use this money.

[1958] That's what's special about Bitcoin is that it allows individuals to retain control and it removes the possibility of violence.

[1959] I think that's a good feature.

[1960] huge feature.

[1961] Listen, man, we're out of time.

[1962] Thank you once again for illuminating us.

[1963] And, you know, it's funny, you said the first time you came on, you'll be on in three months or four months, and things have changed so much.

[1964] And I keep saying, at what point time is it going to not change?

[1965] But this, it changed more in this one than the last one.

[1966] So, come back at a few months again and we'll figure out what the fuck is happening then.

[1967] I don't know what you foresee taking place on the horizon, but I'm in.

[1968] I'm in.

[1969] March 20.

[1970] 2015.

[1971] Joe Rogan experience Bitcoin Round 4.

[1972] I'm in.

[1973] I'm in.

[1974] I'm in.

[1975] I'm full in on Bitcoin.

[1976] I believe in it.

[1977] So does Shooter Jennings.

[1978] So fuck it.

[1979] So does Tiger Direct and Dell computers and PayPal and Brian is still unconvinced.

[1980] But once that fucking escort site is up, he's in.

[1981] A -A -N -T -O -N -O -P on Twitter.

[1982] That's the ad sign.

[1983] A -A -N -T -O -N -E -N -E.

[1984] O -P.

[1985] That's very confusing.

[1986] It's my first initial in my last name.

[1987] Well, part of your last name.

[1988] Yeah, that's all I could fit.

[1989] There's a lot.

[1990] You got a long...

[1991] That's true, because you don't want...

[1992] Use that at sign.

[1993] It eats up a lot of your 140 characters.

[1994] Thank you very much, sir.

[1995] Thanks so much for having me. Brilliant talking to you.

[1996] Always enjoy it very much.

[1997] So, all right, we'll be back tomorrow, you fucks.

[1998] So enjoy.

[1999] Go get yourself some Bitcoin and be cool with each other.

[2000] See you soon.