let's talk bitcoin, episode 15, "trust but verify"

8/13/2019 Let's Talk Bitcoin, episode 15, "Trust But Verify"

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Let's Talk Bitcoin

Episode 15 Trust But Verify

Participants Adam B. Levine (ABL) Host

Stephanie Murphy (SM) Co-Host

Andreas M. Antonopolous - Co-Host

Gavin Andresen (GA) Lead Developer o Bit!oin-"#

$eter Bushnell ($B) Lead Developer o %eather!oin

Alan &einer (A&) Lead Developer o Armory 'allet

ABL: Hi and el!ome to Let*s #al+ Bit!oin. #oday*s episode is all a,out developers. $eterBushnell Lead Developer o %eather!oin tells us ho %eather!oin puts the un ,a!+ in!rypto!urren!ies their ro in !ommunity and their ,i plans or the uture. #hen Stephanieand Andreas oin me or the !on!lusion o our !onversation on the potential or mi!ro-transa!tion po ered ,usiness models ollo ed up ,y a !hat ith Alan &einer LeadDeveloper o Armory allet ho helps me understand the potential o a ne te!hni/ue !alledmi!ro-,illin . But irst Stephanie Murphy !au ht up ith Bit!oin Lead Gavin Andresen on thesho loor at Bit!oin 0123 last month. #hey dis!uss ori ins e4pe!tations pro e!ts andpit alls. 5n oy the sho .

SM: &i ht tal+in ith Gavin Andresen. He*s the Lead Developer or Bit!oin. Hi Gavin.

GA: Hi.

SM: So you 6 uess on a personal note to start o ith you live in Massa!husetts is thatri ht7

GA: 8eah 6 do 6 live in Amherst Massa!husetts.

SM: 9:. 6 ent to !olle e at ;Mass Amherst so 6*m very amiliar ith that area.

GA: 9h did you ta+e any eolo y !ourses7

SM:


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GA: My i e*s a eolo y pro essor there hi!h is hy...

SM: 9h ot!ha. 8eah 6 really li+e the area as someone ho*s very anti- ar personally myselthere ere al ays pea!e demonstrations even almost ten years a o hen (lau hs) 6 as anunder raduate so do you li+e the livin there7

GA: 8eah Amherst is a reat pla!e to live. 6 have 0 +ids. 6t*s a onder ul pla!e to raise +ids.6t*s a !olle e to n so there*s al ays interestin thin s happenin there. 6 hi hly re!ommend it.

SM: So 6 irst ound out a,out you a !ouple o years a o ,e!ause you 6 remem,er had lun!hith 6an and Mar+ my !ollea ues at %ree #al+ Live and you ere tryin to sell them on theidea o this Bit!oin thin and they ere li+e ='hat the hell is this Bit!oin thin 7 But this uyants meet us or lun!h so 9: e*ll listen to him > so do you remem,er that7

GA: 9h yeah 6 remem,er that lun!h. 6 drove up to :eene and met ith 6an and Mar+ hoere late i 6 re!all. 'e had a very ni!e lun!h and 6 tal+ed a,out this !ra?y e4periment !alledBit!oin that as ust startin to ,e!ome interestin and i 6 re!all !orre!tly Mar+ paid or mylun!h and 6 paid him in ,it!oin.

SM: 9h !ool 6 ,et he*s happy ith that no .

GA: 8eah 6 thin+ i he +ept them and you !an as+ him i he +ept them then it turned out to ,ea pretty ood deal or him.

SM: 8eah a,solutely so ho did you irst et involved ith Bit!oin7 'hat as your storyrom the very ,e innin 7

GA: Sure. 6 as a!tually loo+in around or an interestin pro e!t to et involved in and 6tal+ed to a !ouple o riends in Amherst a,out potential start-up ,usinesses and nothin reallystu!+ ,ut hile 6 as in the pro!ess o doin that 6*ve done startup ,usinesses in the past 6stum,led a!ross this really interestin open sour!e pro e!t !alled Bit!oin - 6 ust sa a lin+ to a,lo @that as tal+in a,out it. 6t !au ht my interest. 6*ve ,een interested in e!onomi!s in!rypto raphy in peer-to-peer te!hnolo ies and so 6 read everythin 6 !ould a,out it. Ba!+ thenyou !ould a!tually read everythin pretty mu!h that had ever ,een ritten a,out Bit!oin,e!ause it as still pretty small. #his as in May o 0121.

SM: 9: yeah.

GA: #hen 6 did the simplest possi,le pro e!t 6 !ould possi,ly thin+ o ust to you +no 6 am apro rammer so 6 otta try it to see i it ill or+ and et my eat et ith it hi!h as this


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e,site that ,e!ame amous !alled the Bit!oin %au!et.

SM: 8es 6 remem,er that and it as ivin a ay ,it!oins or somethin .

GA: 'hen e started yeah 6 spent 1 hole dollars and ,ou ht 21 111 ,it!oins.

SM: 9h my osh

GA: Ba!+ then you !ould ,uy or 1 and then 6 ave them a ay at a time until 6...

SM: Did that !han e over time7 Did it et less7

GA: 9h yeah as the ,it!oin pri!e ent up 6 had to de!rease it repeatedly ,e!ause it turnsout that i you ive a ay more than a !ertain amount it ,e!omes pro ita,le or people to try toreally !heat it and et more than their air share.

SM: &i ht (lau hs). #hat*s really interestin you started the Bit!oin %au!et and that as yourirst Bit!oin pro e!t. 'hen did you start or+in on the !ode7

GA: 6t as a!tually ri ht around that same time 6 started to !ommuni!ate ith Satoshi the!reator o Bit!oin and started to help out ith maintenan!e o the !ode su,mit improvementsto the !ode and... that ,e!ame ust my ull-time o,. #hat as all 6 as doin . Doin it as avolunteer or the open sour!e pro e!t. Got su!+ed in deeper and deeper.

SM: So you !au ht the ,u rom the very ,e innin . 8ou !au ht the Bit!oin ,u . 'hat didyou see as a potential ,a!+ in 011E as it7

GA: 0121.

SM: 01217 54!use me. Ba!+ in 0121 hat did you see as the potential or Bit!oin or did you

not really +no ,ut thou ht it as really e4!itin hat ere you thin+in as ar as the uture7

GA: 'ell 6 thou ht that there as a small possi,ility that it ould ,e!ome really really really,i and you +no or+in on thin s that have a potential o ,e!omin really really ,i that*sthe de inition o an entrepreneur ho*s interested in ,i ideas.

SM: &i ht.


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GA: 6t*s a!tually ,e!ome mu!h ,i er mu!h /ui!+er than 6 e4pe!ted. 'e have over athousand people here at this !on eren!e. 6 you*d as+ed me ,a!+ in 0121 i there*d ,e aBit!oin !on eren!e attra!tin over a thousand people 6 ould have lau hed at you and saidnah it*s onna ta+e at least or 21 years ,e ore e et to that level o interest. But no it*sreally e4!eeded my e4pe!tations.

SM: 8ou said you ere interested in e!onomi!s ,e ore this. Can you tell me a little morea,out that7

GA: 8eah 6 am mostly a li,ertarian. 6 say =mostly> ,e!ause 6 am not all the ay a li,ertarian,ut...

SM: 'hat are your sti!+in points7 Fust !urious.

GA: 6 do thin+ there is a role or overnment. 6 even thin+ that there mi ht ,e a role oreali?in that people !an ,e lu!+y and ma+e a lot o money. May,e there is a role or ta+insome o the money that people ma+e merely ,e!ause they are lu!+y and may,e heard a,outBit!oin hen it as really early and ivin that to people ho may,e eren*t so lu!+y so 6 do,elieve in a minimum so!ial sa ety net to a point set ,y...

SM: 8ou did that voluntarily.

GA: 6 did ith the Bit!oin %au!et ri ht and that as the idea o spreadin the ealth.

SM: 8ou didn*t need a overnment to tell you you have to do it.

GA: #hey didn*t and 6 thin+ you !ould have a !ompletely voluntary system ,ut 6 thin+ there*d,e a lon ay to et there.

SM: 8eah so apprehensive. Did you +no that 6*m oin to ive a moderated panel tomorro

a,out non-pro its usin Bit!oin and e*re here ith three non-pro it or ani?ations todaytal+in a,out hy Bit!oin is reat or non-pro its and non-pro its are reat or Bit!oin too,e!ause it sho s that this does have totally !harita,le le itimate uses...

GA: A,solutely.

SM: ...used to help people.


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does the 5!onomi! $oli!y Fournal 6*ve never seen a de lationary !urren!y in my li e time. 6have al ays lived in the ;S 6*m around thirty and 6*ve al ays ro n up ith in!entives tospend the money 6 have ,e!ause it*s oin to ,e loosin it*s value and also to ,orro /uiteran+ly ,e!ause hen you repay that de,t it*s oin to ,e !heaper. 6*ve never really hadstron in!entives to save and ith Bit!oin there are stron in!entives to save ,e!ause it!ould ,e orth a lot more in the uture ri ht7 Some people mi ht thin+ o that as hoardin ,ut

you !an also thin+ o it as savin ri ht as a!!umulatin ealth that you may,e ant to dosomethin ith later ri ht7

GA: A,solutely yeah and it is interestin 6*m paid in ,it!oin so my salary is no paid ,y theBit!oin %oundation...

SM: Cool

GA: ...in ,it!oin and 6 don*t spend all those ,it!oin ri ht a ay and so 6*m re arded ordelayin rati i!ation ri ht7 Be!ause ,it!oin tends to ,e!ome more valua,le over time youthin+ t i!e a,out do 6 really need that !andy ,ar or hatever7

SM: 8eah.

GA: So..

SM: Do 6 really need that 21 111 ,it!oin pi??a7 (lau hs)

GA: 8eah e4a!tly. #he hoardin thin is interestin ,e!ause there is another dynami! hi!his that i you*ve ,een holdin or a hile you et ree money and so you*re li+e aah 6 had 21,it!oin 6 had a pi??a orth o ,it!oins no it*s orth t o pi??as 6 mi ht as ell ,uy a pi??aand...

SM: &i ht.

GA: ...still have a pi??a orth o ,it!oin.

SM: 8eah e4a!tly.

GA: So 6 thin+ the hole system ill or+ itsel out.

SM: #he other interestin thin a,out that pi??a thou h. #here is a sort o parado4 there


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,e!ause that uy helped ma+e Bit!oin hat it is today. He helped le itimi?e it and ma+e it+no n that it !an ,e used as a medium o e4!han e. %rom hat 6*ve heard he*s not upsetthat he spent 21 111 on a pi??a ri ht.

GA: 'ell 6*m the uy ho ave a ay 21 111 ,it!oins...

SM: 8eah that*s ri ht.

GA: ...throu h the %au!et. So you +no 6*ve iven a ay 2.0 million dollars orth o ,it!oinsand...

SM: #hat*s ama?in .

GA: 6 don*t re ret it either ,e!ause i 6 hadn*t have done that you +no it ,ootstraps thee!onomy and spendin your !oins ma+es any !oins you still hold more valua,le.

SM: 8eah a,solutely. 6 thin+ those t o in!entives to save and to spend are ,alan!ed ,y ,otho those a!tors so yeah it*s interestin to tal+ a,out that. So are you or+in on any otherBit!oin pro e!ts ,esides ust the !ode or is that ta+in up your hole time7

GA: &i ht no 6 am a 211 on !ore development on the !ode on ,ein the Chie S!ientisto the Bit!oin %oundation and thin+ a,out hat pro,lems e are oin to en!ounter ne4t asBit!oin ets even more ildly popular.

SM: 'hat are the ,i est pro,lems on the plate7 'hat do you thin+ are oin to ,e the ne4t!hallen es7

GA: S!ala,ility so s!alin up to handle more transa!tions re/uires some !han es to theso t are that e*re runnin . 'hi!h is you +no - s!ala,ility is a really ood pro,lem to have.

SM: 8eah de initely.

GA: So that*s a ,i issue. 6*ve ,een or+in on allet se!urity a lot. 6 thin+ e need to ma+e itmu!h harder to either have your ,it!oin stolen or to lose your ,it!oins. So there is a!tually alot o or+ on top o the lo -level Bit!oin to ma+e that happen. A lot o user inter a!e or+ to

ust to ma+e Bit!oin easier to use so there is plenty to ,e done.

SM: 8eah. 6 am sure.


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GA: 6 am not Satoshi.

SM:


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loo+in or as simply a !oin that !ontinued hat Lite!oin started. A !oin hi!h has J timesmore !oins than previous one. 6n my mind it as li+e the denomination o !oins. 8ou otBit!oin 02 million !oins you have Lite!oin - KJ million !oins and let*s ta+e it urther - the!opper hi!h is J times as many !oins a ain. 6 sort o sa a spot or that. 6t*s reat havin!oins ith reat e4pense ,ut some people li+e to deal in hole !oins. 'ith %eather!oin youot lots o hole !oins to deal ith. 6 started in this as a ho,,yist as an enthusiast. #hat*s

ho 6 started minin and or me it as un. 6t as un to et in and ,e !hallen ed ,y theo,sta!les that !oins ere a!ed and these o,sta!les and !hallen es have one to an e4tentand 6 anted to ,rin it ,a!+ to the enthusiasm o a ne !oin. #he !hallen es that you a!e allover laun!hin a ne !oin hi!h is pretty mu!h hat 6*ve tried to do. 'hen 6 laun!hed this!oin 6 a!tually.. one o the thin s that ent into that little ,lur, hen 6 laun!hed it as =let*shave some un> as ell as tryin to laun!h a !oin that*s oin to o out there and ,e a,le to!ompete let*s have a !oin that the enthusiast !an et a hold o . A lot o people a!tually rea!tedne atively to that hi!h 6 thou ht as a ,it sad. 6t*s ot to do ith money so there is nothinun in it ,ut no there is. 6 you*re a ho,,yist i you*re ust startin out you*re ust tryin tomine !oins or oy %eather!oin has a pla!e or you. 'e are very a!!eptin o people. 'ehave a really antasti! !ommunity that em,ra!es every,ody ho !omes alon and as a lot opeople are ust startin out ith this ho have really rallied ,ehind us. 'e have lon -standinmem,ers as ell hi!h is reat to see ,e!ause these uys sometimes it*s hard to et them toa!!ept the ne . 'e have su!h a varied !ommunity. 6t is a lot o un ri ht no . #his is hat eanted to do to re!reate the spirit that e have ith a ne venture a ne !oin to etevery,ody rallyin to ether et every,ody or+in on pro e!ts and there is so mu!h oinon. 6t*s su!h a e4!itin thin to ,e part o . 6 am really enthusiasti! a,out hat e are doinhere.

ABL: So you said a !ouple o thin s there that 6 thin+ ma+e sense to me. 8ou said asadoption has hit these other primary !hains you +no li+e Bit!oin and Lite!oin it ets harderto mine so hat you*re sayin is that %eather!oin as !reated initially ,e!ause it ,rou ht theun ,a!+ into it hi!h means that it as easy to mine at the ,e innin hen it asn*t orthvery mu!h ,e!ause not many people ere on it ,e!ause it as a ne !oin. 6s that ri ht7

PB: 6n part. 6t allo s the miners to a!tually mine and et some !oins... it seems a pe!uliarthin . 'hen 6 started 6 started loo+in at minin Bit!oin all that time a o - a year and a hal orso and 6 !ould mine 1.2 ,it!oin a day hi!h seemed pretty unsatis a!tory to me. So ormysel 6 a!tually started minin Lite!oin ,e!ause 6 !ould mine 011 a day and they eren*torth anythin ,ut or me it as a oy to mine these !oins they had some value and 6 asoin to start a!!ruin these. 6 uess 6 as a spe!ulative miner. 6t !ertainly paid o . #he a!tas that the Bit!oin !ommunity there asn*t as mu!h un there or me. 6t as a lot harder toet in as some,ody ho had ust !ome alon in Lite!oin. Lite!oin as ne . 5very,ody as+een or+in on it tryin to develop servi!es every here tryin to et mer!hant adoptionand it seemed li+e a mu!h more un !ro d to ,e a part o . ;n ortunately all that seems tohave one and to me it*s let*s et that oin a ain hi!h is hat 6*ve tried to do. See you !an!ome to %eather!oin @and you !an mine more !oins. #he di i!ulty shouldn*t ,e as hi h it isand it*s !omin do n. Be!ause e had su!h a rush at the ,e innin . So many people minedit. 'e ot pushed up to a very hi h di i!ulty hi!h ri ht no slo ly !omin ,a!+ rom. 6t*sta+in a hile. %e more di i!ulty !han es under a,out and e*ll ,e ti!+in alon ni!elya ain.


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ABL: 6 do anna et into the spe!i i!s o the !han es that you have made ,e!ause 6 thin+those are important to hi hli ht ,ut 6 anna as+ - are there any reasons ,esides the a!tthat*s it*s easy to mine7 Let*s say e are si4 months do n the road and it*s ust as hard tomine %eather!oin as it is to mine Lite!oin. 6s %eather!oin still un to mine at that point or doyou have to start another !hain in order to ,e a,le to have un7

PB:


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that the %eather!oin as it is ri ht no is not the %eather!oin that ill ,e in the uture so itma+es sense to ,uy %eather!oin no ,e!ause in the uture it ill ,e ,etter and ill have moreadvanta es that ill... you*re onna pi!+ and !hoose rom thin s that or+ and add those onto the e4istin really ,asi! stru!ture o %eather!oin. 6s that ri ht7

PB: 8eah e are oin to !herry-pi!+. 6 you see a antasti! idea you*d ,e da t to i nore itreally. 8ou see..

ABL: #hat is the plan. #hat*s the plan is to a!tually innovate and to ta+e all these eatures andput them into %eather!oin and throu h doin that ma+e %eather!oin stand on its o n asopposed to ,ein li+e you said the !opper to Lite!oin*s silver.

PB: 'e ant to ,e so mu!h more ith this !lient. Certainly e are hopin that some o theeatures e implement other people ill use. #here*s ,een various attempts at some eaturesover time hi!h haven*t or+ed out e ant to ta+e a loo+ at those a ain - try them a ain -and then o !ourse it*s all open sour!e so every,ody else !an ta+e our reat ideas as ell,ut e anna ,e there e anna ,e there irst. 6 thin+ e !ertainly its - e !omplementBit!oin and Lite!oin. 6 thin+ Lite!oin has proved that there is room or more than one alt. A loto people are ust sayin e only need one !oin. #hat*s not the ay it*s oin to ,e. #here*sal ays oin to ,e... people ant more than one option. 8ou don*t put all your e s into one,as+et. #he innovation !omes rom the other !oins. 6 thin+ you have to try harder and that*s!ertainly hat e*re doin .

ABL: 6s %eather!oin !urrently traded on any e4!han es7

PB: 6t is. #he irst e4!han e e ent on to as Cryptonit*s hi!h is a!tually reat ne s or us,e!ause e i ured e*d end up on the smaller e4!han es irst the unheard-o ones.$eople @have heard o Cryptonit. #hen e ent on to irtual Curren!y 54!han e and noe are onto the Bit!oin 54!han e hi!h is the lar est alternative !rypto!urren!y e4!han eout there. #he only pla!e to o rom there is really on to Mt. Go4 (lau hs). #hat*s a lon ayo . $eople are still aitin to see Lite!oin et on to Mt. Go4.

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ABL: 5veryone +no s that o line stora e is the only sa e ay to store your ,it!oins.


12/26

o ers sponsors an attra!tive ay to rea!h a tar eted and savvy audien!e. %or morein ormation email sponsorsIletstal+,it!oin.!om

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ABL: So no outside o Lite!oin and Bit!oin is there any,ody else out there in this spa!e

that you thin+ is really doin an alt-!oin that is an impressive thin and that is a,solutely doinit ri ht7

PB: 6*ve al ays ,een very impressed ith Sunny :in . 6 am not sure his real name or herehe is or any details a,out him ,ut Sunny :in he*s the !hap ,ehind $$ !oin. $$ !oin is the!oin that implemented proo -o -sta+e. #hat is su!h a reat idea it*s an idea that !ame up inthe early days o Bit!oin here rather than re/uirin miners to !reate ,lo!+s !oins ill !reatemore ,lo!+s. 8our !oins ill enerate an additional 2 every year hi!h ill enerate !oinshi!h means you don*t need all the miners. 6 thou ht that as a really novel idea. 6t*s still... 6thin+ it still has to prove itsel ho pra!ti!al it is ho orth hile it is ,ut it*s a reat idea

and he*s done a ood servi!e ,y ,rin in that out and allo people to trial that.

ABL: 8eah it*s ni!e to see the innovation. 9ne o the thin s it*s !riti!i?ed a lot a,out alt-!oin!hains and 6*m not sure hat the situation is ith %eather!oin is that they are o ten pre-mined and the ar ument that e usually here a,out hy their pre-mined is ,e!ause it*s =theonly ay to in!entivi?e the development team to push or ard ,e!ause other ise minersould !ome in and o n the hole thin and then the developer or development team has nosta+e in it and so they*re...> - so any ays that*s the lo i! e usually hear to usti y pre-minin .Does %eather!oin pre-mine and i so hy and hat*s the thou ht pro!ess7

PB:


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to ,e done. 'e did e,site or+ e needed raphi!s ,ein doin e needed to approa!hso many people li+e or stats pa es online !al!ulators e4plorers so idea as let*s et this,ounty and start payin people hi!h is hat 6 did and it as.. it made it in!redi,ly popular,e!ause so many people !ould ta+e part ,e!ause 6 as ust ivin a ay thousands o !oinsat a time and that really ot people enthusiasti!. Sin!e then 6*ve !han ed over Lite!oin to ,uy,a!+ %eather!oin.


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@ ho or+ on e4!han es mer!hant servi!es is a very ,i thin ri ht no there*s $& amesand musi!ians. 'e*re really tryin to pull in so many di erent people to loo+ at so manydi erent aspe!ts. 'e need more people all the time. #he orum itsel has ust ot over athousand mem,ers. 'e*re not that old. 'e*re in in an!y still ,ut e*ve ro n so mu!h. 'e*rea,out to really ma+e a ,i push. #his theme is e are out to start !hasin a lot o mer!hants@and servi!es seein hat e !an provide @and hat people need ,e!ause a lot o the time

you o to these mer!hants and they say e*d love to support you ,ut e don*t have !ertaintools. #he uys on the orum they*re oin out there they*re spea+in to the mer!hantsthey*re indin out hat the mer!hants ant they*re relayin that and that*s the sort o thine !an or+ on providin . 'e are a,out to o ith a press release e are hittin K 111 radiostations K 111 ne spapers 2 111 online ne spapers ust to try and et the ord out there.'ith mer!hant adoption eed,a!+ is !omin ,a!+ or the need or %eather!oin !arts or an

A$6 or mer!hants they ant the art or+ and our team is ,usy !reatin all o this and there*sroom or more people. 8ou @!an !ome alon and spea+ to mysel or ust spare the time - e*llind or+ or you i you really ant to ump in ,ut ust !ome alon !he!+ it out see hate*re up to you !an see e*re ,usy you !an see e*re very a!tive. 9ne !riti!ism 6 heard theother day is that e*re tryin too hard. 6 didn*t +no you !ould try too hard ,ut any ay e*rereally or+in hard to ma+e this or+ or every,ody.

ABL: 6 thin+ there*s a lot o suspi!ion a,out mar+etin ri ht no . 6t seems li+e a lot o !oinsout there are... a ain...your !oin no doesn*t seem to have a tremendous num,er oadvanta es ,ut it does have a!tive development it does have a!tive !ommunity and you dohave plans to develop it so it*s almost... it*s eird ,e!ause a lot o times hen you thin+ a,outli+e Bit!oin or e4ample you*re thin+in o+ay this is Bit!oin it*s onna +eep oin up in pri!e,e!ause o the de lationary aspe!ts that ill play out over time ,ut you*re not really loo+in atit you*re loo+in or servi!es on top o it not or the !urren!y to !han e. 6t sounds li+e hatyou*ve told me here is that that is an in!orre!t assumption a,out %eather!oin. %eather!oin ill,e !han in ill ,e implementin ne eatures as time passes.

PB: #hat*s ri ht. 'e anted to evolve. Certainly 6 thin+ e need to et more a!!eptan!e outthere. 'e oin to need to et more adoption ri ht no ,e ore e do anythin else. 'e ustent throu h one hard or+. 'e don*t ant to hard or+ a ain. But there*s !ertain thin s e!an do and that*s implement ne eatures into the !lient the "# !lient. #he "# !lient is very,asi! that*s the raphi!al user inter a!e o the allet -- and there*s so mu!h or+ that !an,e done there that people are as+in or ust to ma+e it more o a !onsumer produ!t. 6t*s notparti!ularly riendly ri ht no . 6t doesn*t ne!essarily ive you a lot o in ormation either. "uiteo ten 6 have... 6 have all the in ormation in the orld in my Bit!oin Lite!oin %eather!oin!lient ,ut 6 still have to o to e4ternal sites to ind out the in ormation rom that !lient li+e the,lo!+!hain e4plorer. #here is so mu!h that !an ,e ,rou ht do n to stop people havin to oelse here or in ormation and ust to ma+e it more aestheti!ally pleasin even. $eople li+ethat.

ABL: 8eah. 'ell $eter rom %eather!oin than+ you very mu!h or your time.

PB: #han+ you Adam.


15/26

(short pause ith musi! playin )

ABL: 6n the last episode o Let*s #al+ Bit!oin e tal+ed a,out the idea o runnin #or nodesand ,ein !ompensated ith Bit!oin so that made me thin+ o another pro e!t e*re oin to

,e tal+in ith the prin!ipals o a little ,it later in the month - 9pen Garden ri ht7 #his is amesh net or+ so ri ht no they don*t have any moneti?ation methods ,uilt in and i youremem,er ay ,a!+ and 6 thin+ it as episode 3 or episode J o Let*s #al+ Bit!oin 6 tal+edith Foe Cas!io ho in our !onversation mentioned that you !ould use automated Bit!oinpayments mi!ro-transa!tions o Bit!oin payments to pay or your 6nternet servi!e ,asedon use rather than ,ased on a lat ee and so the ay that he envisioned this as you*d havea mesh net or+ setup here there are people ho run nodes - run routers that provide6nternet !onne!tivity to any,ody ithin the transmission ran e o the thin . &ather than havinto et a lo in and have an a!!ount instead it ould ust ,e this proto!ol that sayso+ay ell you ant to use the 6nternet so here*s your 6nternet a!!ess in e4!han e or thiseither on a per minute or per hour or per ,its o data> - hatever rate that it as set up or on

that lo!al server and it ould ,e as simple as a reein to that !ontra!t and then as lon asyou ere usin that net or+ ,ased on hatever those metri!s are it ould pay in. you ust ive a!!essand then minutes later 21 minutes laterP hen the transa!tion !on irms then you say 9:you !an +eep havin a!!ess ,ased on this relationship e*ve no developed ,ut even i thetransa!tion !omes ,a!+ and it*s de!lined and no that didn*t a!tually happen or it as a+e orhatever you ust !ut o a!!ess at that point and there is no real loss to you ,ut you*vesolved this usa,ility pro,lem that e4ists ri ht no here you !an*t do these thin s in othersenses.


16/26

SM: 6 as thin+in a,out that too.

AMA: 6 thin+ you are a,solutely ri ht - the opportunities or moneti?ation are ratherinterestin and it*s very di erent i you*re loo+in at a predominantly anonymous anddesi ned or anonymity and denia,ility and priva!y net or+ li+e #or versus an open meshnet or+ hi!h is eo raphi!ally o!used li+e i 6*m sharin my 'i%i there is no /uestion oho 6 am or here 6 am ,e!ause you have to ,e ithin 311 eet o my lo!ation to use it. %romthat perspe!tive there is opportunities to do other interestin thin s hen you don*t !are a,outanonymity and that is you !an ,uild reputation systems so you !an e4tend me a me a,yte odata trans er and then have me pay it later and i 6 am ,ein an ass and 6 don*t pay or ityou*ll +no . So ill the rest o the net or+ or rather i 6*m ood and pay or it you ill +noand so ill the rest o the net or+ and so as a result 6 !an radually ,uild trust andreputation ust ,y payin my ,and idth ,ills that are e4tended to me and as lon as 6 +eeppayin those 6 ,uild more and more trust hi!h !an e4tend me more and more ,and idth.#here*s some really ni!e me!hanisms there that !an also use reputation and previouspayment history to ,uild a lot o momentum ,ehind this.

ABL: 6t*s not really a,out anonymity sin!e you*re name !ould ,e a Bit!oin address. 6t doesn*treally matter hat you*re atta!hin the reputation to it only matters that hatever it is hasreputation.

AMA: 'ell yes ,ut hat you*re doin there is asso!iatin previous sessions to uturesessions ,e!ause you need to repeat that or you*re trust a!!ount or your ne4t session andhat that does is that it taints ea!h o your ,and idth sessions ith the identity o theprevious one. 5ven i that is a pseudonymous identity you !ouldn*t do that on #or it ould,rea+ the entire model. 6t ould mean that everythin !ould ,e tra!ed ,a!+ to the irst timeyou paid ,e!ause your reputation ould ,e li+e a !oo+ie that taints every transa!tion andtra!+s you or ard.

ABL: 'ell it ust sounds li+e in some situations you don*t ant reputation. 6t sounds li+e insome situations li+e the #or one here anonymity is in a!t the oal there reputation isanathema to that.

AMA: %or those you ould really do somethin li+e hat you dis!ussed. More !har in onthe honor ,asis ith the understandin that i you e4tend ,and idth that*s not paid or it*s not

a hu e loss as lon as you don*t do it too o ten.

SM: 6 am tryin to thin+ o ays that some,ody !ould ame that system potentially and oneo the ays that 6 thou ht o as umpin on until they et +i!+ed o and then si nin on as adi erent identity hile their aitin to et veri ied and so orth and... 6 don*t +no ho that!ould ,e prevented. 6 also don*t +no i there*s anythin mali!ious they !ould potentially do inthat time that they are on or perhaps they only need 21 minutes to do hatever they*re ointo do or hatever ne arious thin s they are onna do (lau hs). #hey only need 21 minutes o


17/26

a!!ess to hatever net or+ it is to do it. May,e those !ould ,e some !on!erns.

AMA: Compare it to the !urrent state o a net or+ li+e #or here that*s all that*s happenin .8ou never +no . #here is no !uto . 5veryone*s anonymous. 5veryone*s usin the ,and idthor ree. 'hat is today the norm ,e!omes an ed e !ase i you have a level o moneti?ationand 6 ouldn*t orry a,out it. 6 you !an ta+e the norm o the and the most a,usive ,ehaviorand turn it into an ed e !ase you*re ood ,e!ause the rest o the moneti?ation opportunityyou*ve opened up !reates all +inds o in!entives or !reatin more #or nodes hi!h solves thepro,lem.

SM: 8eah it*s a reat point.

ABL: %urther to that point 6 ould a!tually say that you !ould turn it around and say ella!tually i someone ust has to do 21 minutes orth o stu on hether it ,e a 'i%i net or+or not it seems li+e so lon as Andreas - as you said that ,e!omes an ed e !ase and mostusers are parti!ipatin ,e!ause there is no real disadvanta e to not parti!ipatin i you aretal+in a,out a !ouple o !ents per minute or ho ever you anted to do it. By ma+in it reallyranular you !an ma+e it very ine4pensive and /uite reasona,le a!tually and a ain ,e!auseyou are ta+in models that have no moneti?ation in them at all and addin or a ay it to ,eeasy and opt into that moneti?ation and providin some sort o sti!+ ,e!ause ultimately ri htno ith that ree a!!ess you don*t et +i!+ed o ,ut ith this you et +i!+ed o a ter the minutes or 21 minutes or hatever o the ra!e period here the transa!tion is e4pe!ted too throu h then i it doesn*t o throu h then you ust +i!+ them o at the end o that. 6t seemsli+e... yeah... so... 6 am repeatin hat you said Andreas. 6 thin+ 6 a ree.

SM: $erhaps there is some advertisin ,uilt in their too durin that ra!e period or hateverso at least i the person doesn*t pay then they*ve ,een e4posed to hatever ad has ,eensho n to them or hatever.

ABL: 6 thin+ yeah a !ustom landin pa e !ould or+. 6 thin+ you !ould o too ar in thatdire!tion. 'hen e are at Bit!oin 0123 6 as on Marriott*s 'i%i Hilton*s 'i%i and those areairly honorary systems or the =!omplimentary> a!!ess and even then they didn*t...

SM: 'ell it as provided ,y Mt. Go4.

ABL: (lau hs) 'ell there you o 6 didn*t +no that.

SM: (lau hs) 6 am sorry. #hat as a mean o+e. 6 ust should !lari y that. So 6 stayed at theMarriott durin Bit!oin 0123 and there as a paper at the ront des+ that said !omplimentary6nternet provided ,y Mt. Go4 and my partner and 6 loo+ed at ea!h other and said =o+ay it*soin to ,e do n a lot over the ee+end 6 uess.> (lau hs) But no they did provide!omplimentary 6nternet and that as very ni!e. 6 appre!iate that.


18/26

ABL: 8es.

AMA: 6 li+e your idea a,out advertisin and you !ould ma+e some reat in!entives li+e that soi you use it or 21 minutes and you don*t pay you et Fustin Bie,er ads in e!ted into your

stream...

ABL: (lau hs)

AMA: ...at hi!h point you o 6*ll pay 6*ll pay ma+e it stop

SM: 9h God stop (lau hs)

(short pause)

ABL: So there is a ne player in to n that*s tal+in a,out minin e/uipment that per orms ata very hi h level. #his is... a ain !ontinuin this thread a,out minin innovation that e*veseen over the last months really start to +i!+ in and lots o ne AS6C manu a!turers!omin out. So there*s a ne one !alled Cryoni+s spelled C-&-8-9-


19/26

thin s to loo+ at ne produ!ts !omin out and say o that*s really reat 6*d li+e to invest inthat ,ut there needs to ,e some s+epti!ism applied so e*re all puttin on our s+epti!al hatshere and e*re oin to ta+e a little ,it o a loo+ at it. Stephanie you ant to tal+ a,out this7

SM: 8eah 6 try to +eep my s+epti!al hat irmly atta!hed to my head at all times and this one isno di erent. #here*s a!tually an e4pose on &eddit ,y a person named Ha!+Kor (lau hs). Hereshe oes throu h and de,un+s point ,y point some o the thin s that ere in the :i!+starteror this %rost,it thin . 9ne o them is that it !laims to use li/uid nitro en to !ool the !hips thatthey use ,ut to +eep nitro en li/uid and that*s at -K1 de rees Celsius appro4imately thatre/uires a really an!y !ompressor and a lot o po er hi!h this does not appear to have inthis ,o4 ith ans in it. #hat as a pretty eye,ro -raisin point 6 ould say. #here*s also a!ouple o other thin s that are pretty shady a,out this. #hey say on the %A" or this:i!+starter that they*ll ,e sellin up rades that ill ena,le you to use it to mine Lite!oinpro!ess video and do other thin s ith it ,ut AS6C !ir!uits are Appli!ation Spe!i i! 6nte ratedCir!uits ri ht7 #hey are desi ned or somethin in!redi,ly spe!i i! and the S!rypt al orithmhi!h is hat Lite!oin is mined on is very di erent then the SHA0 al orithm hi!h is hatBit!oin is mined on so really it seems li+e you ould need !ompletely di erent !hips to dothose di erent appli!ations. AS6Cs are not really desi ned to ,e un i,le li+e that so thisloo+s very s+et!hy. 6t seems li+e they*re ust tellin people hat they ould li+e to hear and iit sounds too ood to ,e true then it pro,a,ly is.

AMA: Bit!oin is the ultimate non-reversi,le transa!tion and so !aveat emptor -- ,uyer ,e are-- is a prime prin!iple hen transa!tin in ,it!oins. 6*ve ,een inspired ,y this to release myne produ!t !alled the $erpetuaMiner and hat it does is it ta+es the heat output o yourminin ri and usin a Stirlin en ine it uses it to po er the ri itsel and as a result !utsyour ele!tri!ity !ost ,y a 211 and you only need po er to start it and then you !an unpluit and it ill then run on its o n heat.

SM: (lau hs)

AMA: #his is $erpetuaMiner !omin soon and 6*ll ,e sellin those o !ourse on pre-order or,it!oin ithout re unds.

SM: Ho mu!h are you !har in or this Andreas7

AMA: 6 don*t +no . 6t depends ho reedy 6 am eelin that day may,e !ouple o hundred,it!oin to start ith yeah 6 am oin to et a really ood desi ner to ma+e a very an!y ,o4ith ,lue li hts ,e!ause ,lue is in and...

ABL: Blue is ast ,lue means ast. Let*s +eep that in mind.

AMA: And !old.

ABL: 8es.


20/26


21/26

ABL: #rue Bit!oin mi!ro-transa!tions have ,een on my mind or the last e ee+s and hileBit!oin !ertainly sho s promise or ena,lin !ommer!e in ays never ,e ore possi,le at thisearly point development there are still some ma or pro,lems. %ees are ,ased on per-transa!tion ,asis and so very small transa!tions !an have outsi?ed ees hi!h ,rin s us ,a!+to the $aypal pro,lem - ees too hi h to usti y the transa!tion in the irst pla!e. Listener

Fusti!e rote in a ter our last episode to tell me a,out mi!ro-,illin - a proposed te!hni/ue to!reate a transa!tion ee redu!ed pay as you o ,illin solution or ell lots o thin s. #o helpme ill in the ,lan+s Alan &einer oins me this mornin . Alan ho are you doin 7

AR: Hey doin reat.

ABL: 8ou +no 6*ve ,een readin throu h this thread on Bit!ointal+ rom a,out a month a o.6tRs !alled rapidly ad usted mi!ro-payments and multi-si N$0SH. 'hat does $0SH mean7#hat*s the one thin 6 don*t +no .

AR: 8eah $0SH is a me!hanism that as introdu!ed to the net or+ a,out a year a o. 6t*sreally not all that... it*s a deeper te!hni!al meanin ,ut the idea is that it ma+es it a lot easieror parties to e4e!ute multi-si nature transa!tions and a!tually more !ompli!ated thin s thatyou !ould do on the net or+ ,ut other ise mi ht ,e ,ul+y or in!onvenient. $0SH is enerallyspea+in you !an ust asso!iate that ith multi-si nature transa!tions.

ABL: &apidly ad ustin mi!ro-payments and multi-si nature transa!tions so li+e 6 said thepro,lem is that as you et do n to these really really really small transa!tion levels - li+e oneo the e4amples e*ve ,een tal+in a,out on the sho is i you had li+e a mesh net or+ -router nodes that ere providin these lo!ali?ed 6nternet !onne!tions - a,le to ,e!ompensated on li+e a per +ilo,yte or per minute or per se!ond even rate - that doesn*treally ma+e sense to have a transa!tion oin every time that pin s ,e!ause the transa!tionees are too hi h so it seems li+e that*s the sort o situation that this te!hni/ue aims to solve.Can you e4plain ho that or+s7

AR: #here*s a!tually another reason hy that*s in easi,le hi!h is the ay the net or+ or+s. All transa!tions ta+e 21 to 1 minutes or you to et some !on iden!e that the transa!tiona!tually happened and it doesn*t matter hether that transa!tion is or a tenth o a ,it!oin oror a million ,it!oins it*s still oin to ta+e the same amount o time or the net or+ to rea!h!onsensus that a!tually happened and hile this or+s very ell in eneral itRs o+ay oronline orderin or ma or settlement transa!tions ,et een !ompanies and so orth andthere*s a lot o pla!es here it does or+ it really does inhi,it this mi!ro-transa!tion !on!ept,e!ause you are not only payin a ee hi!h normally is small ,ut is ,i relative to thesemi!ro transa!tions ,ut you also !an*t rely on sendin lots o these mi!ro transa!tions everyminute ,e!ause you need time or those to !onver e in an hour. #he net or+ isn*t ell-suitedin its simplest orm or these mi!ro-transa!tions ,ut usin the stu that you re eren!ed - therapidly ad usted mi!ro-payments - you are usin a e4tension o Bit!oin that allo s you to usesome o the deeper eatures o the net or+ - e mentioned $0SH and multi-si naturetransa!tions - to !reate one transa!tion usin the net or+ as es!ro and then revisin thattransa!tion over and over a ain ,e ore it a!tually hits the net or+. #he ni!e thin a,out it isthat ,oth parties !an see that this transa!tion that you are doin is valid they have !on iden!ethat this transa!tion ould o throu h i it as ,road!ast and all you*re doin is you*rerevisin that ,e ore it ets ,road!ast - meanin ,e ore it*s inali?ed - and that*s very !heap


22/26

you*re ust sendin them 011 ,ytes o data hi!h is very small in the rand s!heme o thin sand ea!h one is very !heap or them to veri y - to see that it*s valid - so you !an +eep revisinthis say every se!ond every minute every +ilo,yte hatever you ant and they !an have!on iden!e that the last revision is valid.

ABL: Both parties ,oth the one that is ,uyin and the one that*s sellin you !ould !all it li+e

ele!tri!ity or somethin li+e that i you are tal+in a,out payin or ele!tri!ity on li+e a +ilo att-hour level instead o payin or it at the end o the month. At the ,e innin o the relationshipyou setup a !ontra!tual relationship throu h this system that says that... oh shoot 6 am doina ,ad o, o tryin to simpli y this.

AR: 8eah 6*ll ive you a ood analo y or it.

ABL: $lease do.

AR: Lets say 6 o to the ,an+ and 6 try to e4e!ute a ire trans er and this is a eird ire,e!ause it*s a!tually oin to t o people ,ut 6 o to the ,an+ and say 6*d li+e to trans er 01and 6*d li+e 21 o that to ,e ired to you and 21 o that to ,e ired to my other a!!ount...

ABL: 9+ay.

AR: ...and that 6 ant that ire to o throu h in the ne4t ive days.

ABL: 8es.

AR: #hey*re oin to !har e me a ee or that ire and it*s not ri!tionless it ta+es time ,ut inthe ne4t ive days 6 !an !all the ,an+ and say QHey 8ou +no hat a!tually hy don*t yousend Adam 22 and send me E instead - ust !han e the num,ers on that ire Q they !an dothat - the ire hasn*t a!tually one throu h yet 6 haven*t ,een !har ed a ee all 6 have done is6*ve revised that - so i 6 ant to ive you another dollar 6 ust send another messa e to the,an+ that says =Hey A!tually !an you revise that ,e ore it oes throu h and send him 20and me K>. 9ther ise ea!h one o those transa!tions or a dollar ould ,e ettin sent overthe ire and assessed a ee and ta+e time ,ut ,y doin it this ay you !an instantaneously

ust !han e the num,ers ith your authori?ation and the rest o the net or+ doesn*t have tosee that.

ABL: #he ,an+ that e are tal+in a,out that ould a!tually ,e !ondu!tin this is the,lo!+!hain7

AR: #he ,an+ is the net or+.

ABL: #he ,an+ is the net or+.

AR: Holdin your 01 ,u!+s and sayin that it is oin to send it on in the ne4t ive days...

ABL: 9+ay.

AR: ...,ut it*s not inali?ed yet and you have a !han!e to revise it ,e ore it a!tually oes outand in this !ase the ,an+ is allo in you to revise it ithout a!tually !har in you or it.


23/26

ABL: 9: and so in the system e are tal+in a,out you*ve ot the person ho is doin thepur!hasin you*ve ot the person or the or ani?ation or hatever that*s doin the sellin andthen they*re ust ne otiatin ith ea!h other. #hey*ve already ot this a reement and it*s ustthe di eren!es the /uantity that ea!h one ill ,e sendin versus re!eivin and then at thepoint that it*s inali?ed it*s ,road!ast to the ,roader Bit!oin net or+ as one transa!tion ,ased

on hatever the inal settlement as is that ri ht7AR: #hat*s !orre!t and ust or re eren!e it !an o ,oth ays. 6 no you o e me 6 !an!all the ,an+ and say QHey lets revise it a ain and send Adam K and me 20.Q

ABL: 'hat i 6 disa ree ith that7 Ho does that or+7 6s this entirely ,ased on rules hereit*s also an advan!e7

AR: 6n that !ase the analo y is allin apart ,e!ause you ould need your authori?ation onthat too. #he analo y isn*t per e!t in that !ase ,ut on the Bit!oin net or+ the release o thatmoney it does re/uire ,oth my authori?ation and your authori?ation and hen 6 de!ide 6 antto ive you money 6 si n a ne version o the transa!tion that*s avora,le to you and henyou ant to ive me money you si n a ne version o the transa!tion that*s avora,le to me -hoever has ot that last version !an si n it and ,road!ast it.

ABL: 'hen you*re sayin the last version you mean the last version that pre era,le to ,othparties7

AR: 5a!h time you issue one o these revisions that supersedes all the previous ones andthe net or+ is !apa,le o re!o ni?in that one transa!tion !ame a ter the other and it*s otrules in pla!e to say... to ,e a,le to re!o ni?e hi!h one is the last one. 6 you try to ,road!astthe last one that*s avora,le to you ,ut not the a!tual last one then 6 !an ,road!ast the lastone hi!h 6*ll pro,a,ly ,e doin any ay. #he net or+ ould say that one is the !orre!t one.

ABL: 9ne o the interestin parts a,out this that 6 ori inally hen 6 as readin 6 thou htas onerous ,ut no it*s startin to ma+e a little sense to me is that this relationship re/uires!ollateral ,ein put at ris+ ,y ,oth parties so even i you are in this relationship here you*re,uyin po er rom the po er !ompany in order to ma+e this or+ in a ay here every,odyis in!entivi?ed to play ,y the rules ,oth sides ind up puttin up !ollateral. Can you e4plainthe thou ht pro!ess ,ehind that7

AR: #here is multiple ays to do it and i you are onna have a t o ay relationship here 6mi ht ,e ivin you money and you mi ht ,e ivin me money then yes ,oth sides have toput money in. 9ne o the ni!e thin s a,out this te!hni/ue - the rapidly ad usted mi!ro-payments - is that rom the moment that the !ontra!t is started - that relationship is initiated -even i ,oth parties died or lost their +eys or hatever the transa!tion ill !omplete. #he lastrevision ill ,e a!!epted ,y the net or+ and every thin ill ,e returned so 6 put in 01 intothis transa!tion 6 should ,e usin ,it!oins 6 put 01 ,it!oins into this a reement and the aythat e do this dan!e ith si nin transa!tions and a reein on ho they loo+ and ho itor+s i e do nothin else that 01 ,u!+s is ust onna !ome ,a!+ to me. 6tRs only i ede!ide to move more money to e4!han e money that e ould revise that ,ut lu!+ily theay it*s setup there*s not a!tually a ris+ o someone losin money there as lon as the dan!eis done properly there is a ,it o !ommuni!ation that the !lients have to do to set this up and


24/26

it may involve ,oth sides puttin money in ,ut the out!ome is the same hi!h is that moneyis al ays onna o ,a!+ to the 0 parties you*ve insured that ,y the ay that you*ve set-up thetransa!tions .

ABL: 'hen e tal+ed last time e tal+ed a,out multi-si nature transa!tions and e tal+eda,out ho that as somethin that*s oin to ,e ma+in its ay into Armory over the ne4t

months and year 6 suppose in a variety o orms is this the sort o thin that ill ind up in a!lient li+e Armory or is this somethin that*s entirely separate7

AR: #his is somethin 6*d really li+e to support ,ut the !omple4ities o it are onna re/uiresome !are to implement - te!hni!ally implement it !orre!tly - and also you +no ma+e aninter a!e that*s reasona,le ,ut it is somethin that 6*d really li+e to see. %or instan!e one othe appli!ations o it hi!h is one o my avorite appli!ations is i you*ve ever spent a lot otime loo+in at say #he


25/26

AR:


26/26

B6#C96

let's talk bitcoin, episode 15, "trust but verify"

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