let's talk bitcoin episode 42 transcription

8/13/2019 Let's Talk Bitcoin episode 42 transcription

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Transcription of Episode 42 NSA It Ain't So!

Participants:

Adam B. Levine (A.L.) Host

Andreas M. Antonopolous (A.A.) Co-host

Stephan Murph (S.M.) Co-host

!endell (!.) - Hive"allet# $uest in second se$ment at %&:''

And Schroder (A.S.) - Bitcoin luid ispenser Pro*ect# $uest +n third se$ment at

,,:'

Adam B. Levine: Hi# and "elcome to episode & o/ Let0s 1al2 Bitcoin# a t"ice-

"ee2l sho" a3out the ideas# people and pro*ects 3uildin$ the ne" di$ital

econom and the /uture o/ mone. 4isit us at letstal23itcoin.com /or our dail

$uest 3lo$# all our past episodes# and# o/ course# tippin$ options.

M name is Adam B. Levine and toda the /ocus is on utilit# securit and the

international picture. 1he 5SA has 3een in the ne"s a lot# most recentl "ith

concerns that the Bitcoin protocol could 3e /undamentall compromised. 1he lastse$ment o/ toda0s sho" has an in-depth conversation "ith msel/# Andreas and

Stephan a3out the particular al$orithms that mi$ht 3e a//ected and "hether or

not the are.

But /irst# "e0ve $ot a *am-pac2ed sho" /or ou toda. 1he host and + tal2 re$ional

alt coins in Marra2esh# intentional communities and the e6plosion o/ con/erences

+ have intervie"s "ith !endell /rom the upcomin$ ease-o/-use /ocused

Hive"allet# and And Schroder# the drivin$ /orce 3ehind the Bitcoin luid

ispenser pro*ect# 3rin$in$ cash-li2e transactions to a li7uid dispensin$ operation

near ou.

+0m also pleased to announce that a/ter several "ee2s o/ "or2 3 Michael Sullivan

and the team at BitCredits# video con/erence passes are no" availa3le /or pre-

order at earl-3ird prices in 3oth 8S dollars and Bitcoin. !e0ve partnered "ith

9e//re 1uc2er to capture# in hi$h-de/inition# and ma2e availa3le the entire Crpto-

currenc Con/erence# set to ta2e place in Atlanta# eor$ia on ;cto3er . Prices

are# o/ course# less /or the Bitcoin option# 3ut i/ ou0re at all interested in the

Bitcoin con/erence e6perience# this is an a//orda3le and on-our-schedule "a to

$et /ast access# and support Let0s 1al2 Bitcoin at the same time. 1han2s /or

listenin$# and en*o the sho".


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Stephan Murph: !hat i/ ou could live in a 3itcoin intentional communit#

"here ou are livin$ amon$st people "ho ou ma3e 2no" /rom the Bitcoin

/orums# "ho ou 3u and sell 3itcoins "ith ever da< ou can $o to 3usinesses

around ou that accept Bitcoin# and ou can $et a *o3 that pas ou in Bitcoin. +s

that somethin$ ou0d 3e interested in doin$=

Andreas M. Antonopolous: + thin2 that "e0re increasin$l livin$ in a "orld "ithout

3orders that actuall matter so much anmore. + mean# it0s di//icult to travel# 3ut

once ou $et to places# it matters a lot less. + spea2 /rom an outsider0s

perspective 3ecause + don0t travel unless + a3solutel have to mostl it0s 3een

*ust to spea2 at these con/erences 3ut the concept o/ a$orism and 3

>a$orism?# essentiall + mean participatin$ in sstems that our outside o/ the

normal /lo" o/ commercce# li2e these intentional communities i/ the intentional

communit has an econom unto itsel/# and people do 3usiness "ith each other

in this communit# then that is a /orm o/ a$orism# 3ecause ou0re 3passin$ "hat

"ould 3e the standard methods /or doin$ that same tpe o/ 3usiness.

Bitcoin is such an interestin$ currenc 3ecause it levera$es the $lo3al# on the one

side# 3ut it0s also ver much a3out the local and especiall once ou $et do"n

to the phsical 3itcoins# li2e "e "ere tal2in$ a3out a couple o/ episodes a$o# +

thin2 that the chances /or doin$ somethin$ li2e this# and et havin$ all o/ the

advanta$es that Bitcoin o//ers in the $lo3al sense# are reall interestin$.

S.M.: Bitcoin is decreasin$ the importance o/ 3orders# ri$ht= Li2e# ou can send

Bitcoin all over the "orld# 3ut i/ ou "anna $et a ham3ur$er and ou "anna pa

/or it "ith 3itcoins# ou reall have to have people around ou "ho are "illin$ to

help ou /acilitate that 2ind o/ transaction. So + can see the value o/ intentionalcommunities# and reall *ust livin$ "ith people "ho are more li2e-minded# and i/

Bitcoin is reall important to ou li2e# ou mi$ht "ant to 3e around people "ho

share our love o/ Bitcoin# and the other ideas that sometimes $o alon$ "ith

people "ho love Bitcoin.

!e see some o/ these intentional communities comin$ up< i/ ou $o to Berlin or

some other parts o/ erman# there are "hole nei$h3ourhoods "here all these

3usinesses accept Bitcoin# and o/ course Ar$entina0s 3ecomin$ reall 3i$# and

certain places in the 8S... + mean# all over the place# there are these Bitcoin

hotspots that are poppin$ up. !e0ve 3een invited to several Bitcoin con/erences

since Bitcoin 3e$an# 3ut no" the0re 3ecomin$ "orld"ide. Li2e# Ar$entina# 9apan#

@n$land# Austria... ever"here has a Bitcoin con/erence# and it0s impossi3le to $o

to all o/ them oh# Manila in the Phillippines there0s *ust so man o/ them

(laughs) and it can 3e a /ull time *o3 *ettin$ around the "orld to $o to all these

Bitcoin con/erences. + thin2 it0s a positive si$n to see them poppin$ up all over

the place# 0cause some people *ust "ant local interaction# and the0re not al"as

$onna $o to the hotspots to 3e a3le to $et that.

A.A.: + spent a3out a decade *ettin$ around the "orld# spea2in$ at con/erences /or

technolo$# and + a3solutel loved doin$ that# meetin$ people apart /rom the

con/erences# "e0ve also had this rich tradition o/ intentional communities# "hiche6ist 3oth in the cipherpun2 - as "ell as the c3erpun2 and hac2er - communities


3/22

"ith places li2e the Chaos Computer Clu3# and 5oise3rid$e here in San rancisco#

so there0s also this con/luence o/ Bitcoin and other communities that are comin$

to$ether< *ust li2e our Porcest Li3ertarian $roups up in 5e" Hampshire# here in

San rancisco there0s 5oise3rid$e and thin$s li2e that# and in erman# the

Chaos Computer Clu3. + thin2 there0s a lot o/ overlappin$ communities# and + "ant

to visit all o/ them# so + "ill happil pac2 m 3a$s and visit an con/erence "herepeople are "illin$ to pa m /ares to $et me to spea2 "ith $reat *o

A.L.: And there are a couple o/ other con/erences# too# there are t"o scheduled

/or Canada one in ;cto3er# and then another one a/ter the /irst o/ the ear. 1his

mornin$ + spo2e "ith the /ol2s /rom 3ehind the Bitcoin Cprus Pro*ect# actuall#

and the0re $ettin$ read to put on a con/erence in 5icosia that0ll pro3a3l also

3e ne6t ear. So the con/erence scene has a3solutel e6ploded "e "ent /rom

one a ear# t"o ears a$o# and then "e started havin$ a couple a ear# and no"

there0s literall at least one ever month throu$h March o/ ne6t ear that + 2no"

a3out# and "e0re still hearin$ a3out more on (nearl) a "ee2l 3asis. So on theone hand# it0s $reat that all these con/erences are happenin$# 3ut on the other

hand + "onder i/ people are $onna $et 2ind o/ 3urnt out 3 them# 3ecause there

are *ust so man.

A.A.: + don0t thin2 so.

S.M.: eah# + don0t thin2 so either + mean# the e6ist 3ecause people are super

e6cited and# ou 2no"# some3od "ho0s 9apanese doesn0t necessaril "ant to $o

to Canada to attend a Bitcoin con/erence the "ant to 3e a3le to $o to 1o2o. +

thin2 that ma2es sense< "hat "e mi$ht see is a little 3it more o/ a >splittin$ up?

o/ the Bitcoin communit - people are more li2el to $o to a con/erence that0smore local to them# and so as a result# ma3e the "on0t meet the people that

live hal/"a across the "orld - 3ut as the communit $ro"s# ma3e that0s the

direction it0s naturall $onna $o in an"a.

A.A.: + thin2 "e also have to consider the /act that the $eneral purpose

technolo$ con/erences thin$s li2e +nterop and SA /or securit and various

other con/erences involved in teechnolo$ies and telecommunications and

pament sstems have not et started havin$ dedicated Bitcoin trac2s or

dedicated technolo$ sho"cases around Bitcoin# and Bitcoin presentations. Ma2e

no mista2e a3out it: "e0re $oin$ to 3e in SA# at the con/erences# tal2in$ a3out

Bitcoin0s securit# and "e0re $oin$ to 3e at the technolo$ con/erences

demonstratin$ Bitcoin hard"are. So "e0re $onna start seei$ Bitcoin also "ithin

the conte6t o/ other technolo$ and $eneral con/erences.

A.L.: So one o/ the other thin$s that "e do here at Let0s 1al2 Bitcoin is "e

inter/ace "ith reporters "ho are /rom outside o/ the Bitcoin space# and *ournalists

"ho are outside o/ the Bitcoin space# and are loo2in$ /or e6pertise so that the

can e6plain this complicated issue to their audience# "ho has even less conte6t

to understand it than the did and it0s 3een interestin$ to "atch ho" the

various pu3lications have morphed over time in terms o/ their approach. A couple

o/ months a$o# there "as a 3i$ rush C5BC# and BBC# and a couple o/ other vermainstream pu3lications the "ere incredi3l concerned a3out it 3ein$ a PonDi#


4/22

and immediatel /rom moment E%# "hen "e $ot on the phone and started

tal2in$ to them# the vi3e + "as $ettin$ /rom them "as that the /elt li2e + "as

trin$ to sell them somethin$# and trin$ to $et them to put their reputation

3ehind somethin$ Fthat "asG $onna 3e a 3i$ scam# that + "as $onna ma2e a

3unch o/ mone o// o/ it and that reall has $one a"a. +ncreasin$l over the

last# ma3e# t"o months# the reporters have 3een $enuinel interested in trin$to understand ho" the sstem "or2s and "h it0s somethin$ that their readers

and listeners should appreciate. So that0s 3een a reall interestin$ chan$e to see.

1he /lipside o/ that# o/ course# is that a lot o/ them still reall don0t understand it

ou tr to use analo$ies that people can relate to< one o/ the $ood ones /or

descri3in$ ho" Bitcoin as a protocol "or2s relative to Bitcoin as a compan

"hich# o/ course# it "hat most *ournalists thin2 it is is to tal2 a3out 5apster and

Bittorrent# 3ecause 5apster "as 3asicall a centraliDed version o/ Bittorrent# and

Bittorrent is# o/ course# no" the most commonl used protocol /or sharin$ media

/iles on the "e3# i/ +0m not mista2en. +t has no structure# in much the same "athat Bitcoin is a protocol# a set o/ rules that one opts into# rather than 3ein$

somethin$ "here the have o//ices and have revenue and can 3e shut do"n.

So# the pro3lem# o/ course# is that then the "ind up comparin$ it to 5apster#

3ecause their readers 2no" a3out 5apster# 3ut the don0t 2no" a3out Bittorrentnovice user?. 1he Mac is ver popular# especiall in 5orth America#

and ri$ht no"# "henever + sho" the e6istin$ Bitcoin "allet apps to m Mac-lovin$

/riends# the0re immediatel + don0t "ant to sa >turned o//? 3 it# 3ut the

pro3lem is that the don0t reall re/lect all o/ the Mac user inter/ace $uidelines

and all that# and "e *ust sa" that as an opportunit# as a startin$ point. But

certainl# i/ there is an opportunit to 3uild Hive# speci/icall# /or FotherG

plat/orms# then "e0ll loo2 into it# 3ut the /irst step is to see ho" this $oes# "ith

the Mac side o/ thin$s.

A.L.: ou0re doin$ some de/initel innovative and interestin$ thin$s here# in termso/ inte$ratin$ other applications into our "allet application# and /ran2l 3ein$


7/22

proactive a3out as2in$ users "hat it is the "ant< as2in$ them i/ the have

3itcoins# or i/ the "ant 3itcoins# and then trin$ to connect those dots /or them#

or at least help them do it. ou mention that ou have 2ind o/ an interestin$

3usiness module +0m curious# ho" are ou plannin$ to monetiDe this=

!.: Actuall# +0ll caveat this 3 sain$ + 3elieve this0ll 3e some"hat controversial inthe Bitcoin communit# 3ut our /irst idea "as that "e "ould 3e a3le to actuall

ta2e transaction /ees /rom the activit that happens "ithin applications. + "ill

admit to ou that all o/ the details ri$ht no" "e0re still "or2in$ all that out# ho"

that "ould 3e done# especiall since "e don0t "ant to centraliDe that0s one o/

our mantras# to 2eep this ver ver decentraliDed. So "e0re loo2in$ at that# and +

don0t 2no" that that0s necessaril "hat0s $onna 3e the end$ame /or us# 3ut it0s

"hat "e0re $onna 3e trin$ ri$ht no". 1he other possi3ilities that e6ist "ithin this#

o/ course# are i/ "e $et some traction "ith it "e can do man other thin$s. But

/or no"# this is 2ind o/ "here "e0re at "ith 3aseline.

A.L.: !ell# that0s certainl an innovative model + don0t thin2 "e0ve heard o/

anone doin$ that 3ecause ou0re tal2in$ a3out 3ein$ almost li2e a utilit here#

"hat tpe o/ level "ould these transaction /ees# i/ that0s the "a that ou $us

decide to $o /or monetiDation# "hat "ould that loo2 li2e= Are "e tal2in$ a3out a

small percenta$e-3ased thin$# or "ould it 3e /lat and ver ver small# li2e the

transaction /ees are no"# or ma3e it0s .'''=

!.: !e thin2 that# pro3a3l# a percenta$e-3ased model "here it0s a tin

percenta$e is "hat "e0ll end up pursuin$. Havin$ said FthatG# + have reall no idea

"hat0s $oin$ to 3e accepta3le to the communit# and + hope that "e "ill end up

actuall "or2in$ "ith the communit to /i$ure that out. 1his is $oin$ to 3e anopen-source pro*ect# so + am actuall $oin$ to 3e completel transparent a3out

all that 2ind o/ stu//# and + reall "ould li2e to hear /rom other people a3out "hat

e6actl it is that the thin2 "ould 3e /air< "hat e6actl it is that the "ould li2e to

see i/ the have an ideas a3out "as that "e can 3uild a 3usiness around this

it0s Bitcoin# so it0s all ver open# and it0s all in/inite possi3ilit as /ar as +0m

concerned.

A.L.: + understand "h some pro*ects approach this /rom an open-source

perspective# 3ut +0m a little 3it surprised that ou0re approachin$ it# $iven the

model ou0re trin$ to pursue# 3ecause it seems li2e the natural ne6t step a/ter

ou0ve done "hat ou0re proposin$ to do here is /or someone to /or2 it# as ou

said# and then ta2e o// the /ees and sa >here0s the version /or /ree?. And there0s

nothin$ actuall stoppin$ anone /rom doin$ that in this situation.

!.: eah# that0s completel true< people could actuall /or2 this application

someone could ta2e it# and remove the /ees# and have the /ree version# 3ut m

assumption is that there is enou$h $ood"ill in the Bitcoin communit to

understand especiall i/ "e0re transparent a3out it that this is ho" "e0re $oin$

to ma2e our mone< that i/ ou do end up $ettin$ the version that actuall has no

/ees# then ou do mana$e to $et around the small /ees# 3ut "e also hope that the

/ees "ill 3e small enou$h that it0s trivial and that people "ill "ant to support this.


8/22

A.L.: our /irst version isn0t out et< "hat0s the timeline on this# and "hen can

people e6pect to $et their hands on it to pla around "ith it= Because +0ve seen a

video o/ it# and it loo2s li2e it /unctions# at least in the e6ample that ou sho"ed

to me.

!.: eah# "e0re actuall $oin$ to 3e pushin$ this thin$ out in mid-Septem3er# andthe initial release "ill 3e totall tar$etin$ the Bitcoin communit< +0ll pro3a3l put

a discrete post on Bitcoin1al2 as2in$ people to test this and tellin$ them "hat

"e0re up to# and then + hope that "e0ll have a 3roader push# includin$ a ne"

"e3site# comin$ at the end o/ the month.

So another thin$ "e0re doin$ that0s reall help/ul /or the user is automated "allet

3ac2up. As ou use Bitcoin# one o/ the 3i$ pro3lems "ith local "allets is that ou

can end up in a reall 3ad situation# so# /or e6ample# msel/< +0m prett savv# 3ut

+ damn near lost a "allet "ith a reall su3stantial amount o/ mone in it 3ecause

+ didn0t 3ac2 it up properl# and 3 the "a# this is a note to all Bitcoin-7t users

do not *ust cop our "allet.dat /ile# use the 3ac2up "allet /eature 1han2s to

Peter !eller /or recoverin$ that "allet.

!e0re ma2in$ it reall eas to 3ac2up our "allet. 1he process is completel

automated. +t ma2es multiple local 3ac2ups# inte$rates "ith iCloud# so our

"allet.dat /ile "ill 3e ver secure and sa/e# ou "on0t even have to thin2 a3out it.

And there are multiple recover methods as "ell.

A.L.: !ell# !endell# sounds li2e Hive is $oin$ to 3e a reall interestin$ product. +

can0t "ait until it comes out and + $et to tr it on m various devices. +/ some3od

is interested in the pro*ect and "ants to either learn more or $et involved# areou loo2in$ /or anthin$ in particular# and ho" "ould someone do that=

!.: !ell# i/ ou0re an active i;S %' developer "ho0s "or2in$ on hi$h pro*ects#

please $et in touch "ith me at "K$ra3hive.com. !e0re also loo2in$ /or a hand/ul

o/ testers# so i/ ou0d li2e to 3e one o/ the /irst people to tr it out# please $o to

$ra3hive.com and *ust drop our email address in there# and "e "ill send

somethin$ out shortl.

A.L.: !ell# "e reall appreciate ou doin$ this open-source "or2 /or the

communit# and li2e + said# reall loo2in$ /or"ard to seein$ "hat the results are.

1han2s /or *oinin$ us toda on Let0s 1al2 Bitcoin# !endell /rom Hive

(INTERMISSION ad break)

@MAL@ 4;+C@: More than three hundred thousand users and countin$ trust

Bloc2chain.in/o. +t0s a 3itcoin "allet service# and a "ealth o/ Bitcoin in/ormation#

and it0s completel /ree to use. !ith a Bloc2chain.in/o "allet# ou0ll $et the

convenience o/ a "e3 "allet# and the securit o/ a des2top client. Bloc2chain.in/o

is also a 3loc2 e6plorer< ou can use it to see 3itcoin transactions in real-time#

chec2 the 3alance o/ an 3itcoin address# and vie" man hand 3itcoin charts# all

/or /ree. See "hat the have to o//er toda at Bloc2chain.in/o.

(DIFFERENT MUSI NE! "D#ERT$ S"ME #OIE)
mailto:[email protected]:[email protected]


9/22

@MAL@ 4;+C@: @as5S is the S"iss Arm 2ni/e /or our domain names# helpin$

meet their customers0 individual needs since %. @as5S has 3een an

outspo2en critic o/ S;PA and C+SPA. @as5S "as an earl supporter o/ Bitcoin#

and no" the are proud to sponsor this sho". o 3usiness "ith a compan that

shares our values. et a %, discount "hen ou pa "ith Bitcoin. o to

3itcoin.easdns.com# and 3e sure to use discount code L1B.

A.A.: + "as tal2in$ "ith 5ilam octor "ho0s one o/ the candidates "ho is runnin$

/or the Bitcoin oundation seat# and he0s "or2in$ on a reall# reall interestin$

pro*ect that + "anted to tal2 to ou $us a3out. 1he0re puttin$ to$ether#

essentiall# an alternative crptocurrenc that0s 3ased o// o/ Bitcoin# 3ut is

essentiall $oin$ to 3e le$al tender in the re$ion o/ Marra2esh. So he0s "or2in$

"ith the /inance minister to create this# and the reason "h the0re $oin$ "ith

that versus a sstem that is 3ased o// o/ Bitcoin is 3ecause even thou$h the

avera$e transaction /ee F/or BitcoinG that + pa is some"here 3et"een cents

and N cents on a per transaction 3asis eah# that depends on "hat thee6chan$e rate is at the time that ou ma2e the transaction that amount is still

7uite lar$e "hen ou compare it to the relative siDe o/ the avera$e transaction

that ta2es place in this re$ion. And so /or them# Bitcoin solves some pro3lems#

3ut it creates other pro3lems 3 ma2in$ it so smaller transactions da-to-da

transactions aren0t reall tena3le. So the0ve ta2en the opportunit the0re

still in the process o/ doin$ this to tr and /i6 that# and + thin2 that there0s one or

t"o other thin$s that the0re t"ea2in$ a3out it. !hat do ou thin2 the /uture is

/or decentraliDation o/ Bitcoin= o ou thin2 it0s possi3le to have a one-siDe-/its-all

approach "ith re$ard to thin$s li2e the transaction /ees= !e don0t see it as a 3i$

deal# 3ut then in other parts o/ the "orld Fit0sG actuall a real pro3lem.

S.M.: Are "e tal2in$ a3out an alt coin here=

A.A.: + 3elieve so. + haven0t intervie"ed him et speci/icall a3out this topic# 3ut

"e had a conversation a3out it# and that0s "hat it sounded li2e the0re tal2in$

a3out an alt coin that0s# a$ain# 3ased o// the Bitcoin# and the 3eaut part /or

them is 3ecause the0re 3oth crpto-currencies# once mone $oes into their local

alt coin# it can *ust as easil 3e s"itched to 3itcoin# so ou0ve $ot the a3ilit to

save most o/ our mone in 3itcoin i/ ou thin2 that0s the crpto-currenc that

has the most potential# 3ut then "hen it comes to local transactions# ou can still

have this Falt coinG essentiall availa3le to ou# and it has all the advanta$es that3itcoin has# 3ut it is also more tailored to our local environment.

S.M.: 1his reall reminds me o/ an article ou "rote# actuall# Adam# on Let0s 1al2

Bitcoin# called >1he ;pportunit o/ Alt Coins?# and 3asicall correct me i/ +0m

"ron$# 3ut it sounded li2e our "hole point "ith that article "as FthatG there0s a

hu$e opportunit to levera$e the po"er o/ alt coins /or e6amples *ust li2e this#

"here# /or instance# ma3e "e don0t "ant these hi$h transaction /ees li2e# /ive

cents is a hi$h transaction /ee# relative to the local thin$s "e0re doin$# so "e0ll

*ust ma2e an alt coin that 3etter suits that purpose and that "ould 3e e6tremel

use/ul to a certain su3set o/ people# 3ut then it "ould also have the advanta$e o/

3ein$ similar to 3itcoin and 3ein$ compati3le "ith 3itcoin i/ ou "anted to# /or


10/22

instance# have a savin$s account "here ou saved our mone in 3itcoin + thin2

that0s the per/ect e6ample o/ "h alt coins could 3e reall use/ul.

A.A.: So localiDation and internaliDation are some o/ the aspects o/ Bitcoin# + thin2#

"ill 3e 2e drivers /or developin$ speci/ic alt coins 3ut# at the same time#

there0s an enormous 3arrier to adoptin$ an alt coin 3ecause o/ the net"or2 e//ectand the incentive to *oin the net"or2 e//ect o/ Bitcoin. Bi$ net"or2s have a

net"or2 e//ect< mone net"or2s have a 3i$$er net"or2 e//ect. Bitcoin has this

almost insurmounta3le net"or2 e//ect# "here in order to introduce an alt coin

that0s popular# + thin2 ou have to have a ver compellin$ di//erentiator either

a massive /la" in Bitcoin that ou0re /i6in$# or somethin$ that0s compellin$

3ecause o/ its localiDation# local culture or "hatever local application.

S.M.: !hat i/ the compellin$ thin$ is /orce= Because that0s "hat le$al tender is

li2e the $overnment sas >ou have to accept this mone?# so "ould that 3e a

valid thin$=

A.A.: orce overcomes all 2inds o/ incentives< it0s the most po"er/ul incentive# so

es# o/ course. !hat +0m sain$ is# ou have a "orld "here 3eatin$ Bitcoin "ill 3e

di//icult 3ecause o/ the net"or2 e//ect# 3ut at the same time ou have these

incentives to do some customiDation /or local reasons# and + thin2 in the end

that0s $oin$ to result in essentiall havin$ a ver lar$e Bitcoin and ma3e three#

/our# /ive other alt coins survivin$ alon$side o/ it in a $lo3al mar2et. ou0re $onna

reach an e7uili3rium "here there aren0t 3i$ enou$h /la"s or incentives to leave

Bitcoin# other than the e6istin$ t"o or three alt coins that are survivin$.

A.L.: !ell# since "e0re tal2in$ a3out that article + "asn0t actuall intendin$ total2 a3out the article# *ust that e6ample# 3ut Andreas m ar$ument in that

article is 3asicall that ou0ll have all those pro3lems so lon$ as ou0re mar2etin$

to someone "ho0s alread usin$ Bitcoin or is alread a"are o/ Bitcoin. But that

onl encompasses# ou 2no"# less than a /raction o/ % o/ the "orld population.

So i/ ou $o into a situation "here there is no a"areness o/ crpto-currencies#

and the /irst crpto-currenc that0s introduced is# in /act# one that is more tailored

to our environment as in this e6ample# the transaction /ees ma2e more sense

relative to ho" ou "ould actuall 3e usin$ it on a da-to-da 3asis then

doesn0t that overcome some o/ the net"or2 e//ect# 3ecause simpl put the

net"or2 e//ect doesn0t e6ist there=

A.A.: +t "ould overcome some o/ the net"or2 e//ect# and "ith su//icientl stron$

local mar2etin$# ou could de/initel have this island o/ an alt coin ta2e o//. + thin2

that0s a $reat opportunit# 3ecause "hat + predict "ill happen is that as that ta2es

o//# it "ill 3ecome e6chan$ea3le /or Bitcoin# and as people 3ecome com/orta3le

"ith crpto-currencies and understand "hat the mean# ou should /or3id coin to

ta2e advanta$e o/ the net"or2 e//ect and so# that alt coin "ill eventuall

disappear. +/ the onl compellin$ ar$ument /or 2eepin$ it /rom convertin$ to

3itcoins is that people don0t 2no" a3out Bitcoin# then it "ill survive /or as lon$ as

people don0t 2no" a3out Bitcoin. +t "ill 3ecome the per/ect mar2etin$ vehicle.

And then= @verone "ill convert to Bitcoin.


11/22

A.L.: Since "e0re tal2in$ a3out that article# ou 2no"# there "ere a couple o/

thin$s that listeners 3rou$ht up and readers 3rou$ht up that + thin2 it0s important

to address# and +0m ver curious /or our /eed3ac2.

1he /irst pro3lem "as that "hen ou0re startin$ an alt coin# especiall i/ ou0re

3ased o// o/ an e6istin$ piece o/ "or2 li2e the same one that Bitcoin uses# oreven the same one that Litecoin uses at this point ou sort o/ /ace a ver

di//icult 3ootstrappin$ pro3lem "here an3od can devote some o/ their minin$

po"er that comes /rom a much more po"er/ul net"or2 to"ards our net"or2

and# in doin$ so# ou can actuall 3e vulnera3le to % attac2s /rom ver lo"

levels o/ hashin$ po"er# relative to the siDe o/ other crpto-currencies.

+ /eel li2e# in an environment "here ou have a local /ocused alt coin# that0s so

much a pro3lem# 3ecause the 3ootstrappin$ should happen prett 7uic2# i/ ou0re

$oin$ a3out it "ith a mar2etin$ campai$n# and it has all o/ that same earl-

adopter incentive that Bitcoin has had historicall. But ho" much o/ a ris2 do ou

thin2 is there= +s that enou$h o/ a ris2 to sa that it0s 3etter to use another

situation that levera$s Bitcoin and /inds another "a around the pro3lems rather

than creatin$ an alt coin=

A.A.: + "ould sa es# + thin2 that unless ou have a reall compellin$

di//erentiator# all o/ these little incentives# ris2s or motives "ill $raduall start

addin$ up until the 3ecome insurmounta3le and ou are essentiall s"itchin$

3ac2 to Bitcoin.

A.L.: ;I# so let0s sa that "e "anted to do this pro*ect in Marra2esh and "e didn0t

"ant to use an alt coin# "e "anted to use Bitcoin. ;ne o/ the proposals that +0veseen is to do it entirel in o//-3loc2chain transactions# and essentiall to have

$eo$raphic re$ions "here the have a couple o/ pament processors that

actuall send the 3loc2chain# 3ut /or the most part# da-to-da transactions are

happenin$ o//-3loc2chain some3od0s private data3ase.

1hat has advanta$es in that ou can do essentiall instant transactions 3ecause

there0s no con/irmation time# and there0s no /ees "hatsoever unless the0re put

on 3 the plat/orm# 3ut it also has some disadvanta$es# ri$ht=

S.M.: ;r# ma3e# a lot o/ the currenc "ould 3e phsicall represented# so

essentiall people "ould 3e handin$ around paper "allets< there0s no realtransaction /ee /or that. Honestl# "hat + "as picturin$ F"asG >;I# there0s $oin$ to

3e this $overnment o/ Marra2esh and the0re $onna sa their alt coin is le$al

tender? "hat + "as picturin$ "as almost li2e a central 3an2 administerin$ the

net"or2< almost completel ta2in$ out the decentraliDed aspect o/ Bitcoin and alt

coins. And that0s not Bitcoin. 1hat0s not a conventional alt coin 3ut that does

sound li2e somethin$ that the "ould do. +/ the0re $onna sa >ou have to use

our alt coin?# then there0s pro3a3l $onna 3e some /ederal reserve or "hatever in

Marra2esh that0s runnin$ a 3unch o/ computers and creatin$ the net"or2 or

somethin$ li2e that# or that no3od has to run a net"or2 or somethin$ li2e that. +

have a hard time 3elievin$ that a $overnment is $onna sa >;I# this is le$altender< no"%&uma2e the net"or2 o/ people#%&u $o ahead and create this


12/22

net"or2?. + *ust don0t thin2 that "ould /l. So there0s pro3a3l $onna 3e

somethin$ a3out it that0s ver si$ni/icantl di//erent /rom Bitcoin# and to me# that

"ould not 3e m pre/erence. + li2e decentraliDed net"or2s and + thin2 that0s a

hu$e stren$th o/ Bitcoin 3ut + could see a $overnment "antin$ to remove that

portion o/ it.

A.A.: Let0s also connect this 3ac2 to the idea that people in other countries are

much more com/orta3le "ith /inancial uncertaint "ith multiple currencies. !hen

+ "as in Marra2ech# " traded in dollars# euros# and the local mone# 3ut that "as

onl the 3e$innin$ o/ it. +n /act# Marra2ech "as the /irst place "here + "as o//ered

camels in e6chan$e /or m "i/e# and that "as as a result o/ her incredi3le

ne$otiatin$ pro"ess. She 3asicall sat do"n "ith a 1uare$# and# a/ter t"o and a

hal/ hours o/ ne$otiatin$ in rench# "ore him do"n to the point "here he $ave up

and *ust discounted everthin$# and the "ere so impressed "ith the idea o/ a

"oman outne$otiatin$ a 1uare$ that the o//ered to 3u m "i/e /or camels# so

there ou $o.

S.M.: id the thin2 she "as $onna ta2e the /irst o//er=

A.A.: 1he didn0t as2 her'

S.M.: id the thin2 ou "ere $onna ta2e the /irst o//er=

A.A.: 5o# a3solutel !ell# /irst the /lattered me 3 tellin$ me 7uite clearl that

there "ere not enou$h camels in the "orld /or such an incredi3le "oman# 3ut

then the o//ered me a more speci/ic price. +0m not *o2in$# this is a true stor#

a3solutel.

S.M.: !ell# it does ma2e sense that people around the "orld are more

com/orta3le "ith multiple currencies# and-

A.A.: Camels.

S.M.: es# and camels.

(INSTRUMENT" INTERUDE)

A.L.: 9oinin$ us toda on Let0s 1al2 Bitcoin# And Schroder is the $u 3ehind the

Bitcoin luid ispenser pro*ect# "hich sounds a little 3it# uh... rudimentar# 3ut +thin2 it0s actuall a reall e6citin$ pro*ect and +0m e6cited to have him on the

sho" this mornin$. And# than2s /or sittin$ in "ith us.

A.S.: F+t0sG $reat# than2 ou /or havin$ me.

A.L.: So# /rom ten thousand /eet# "hat is this pro*ect and "hat does it do=

A.S.: M Bitcoin luid ispenser pro*ect is 3asicall *ust the /irst o/ its 2ind< an

automated sstem that can dispense a certain 7ualit o/ /luid# or "hatever ou

ma li2e to sell. M present demonstration uses diesel /uel. Basicall# it accepts

pament /rom the customer in Bitcoin# and 3ased on ho" much the0ve paid to

the vendor# the dispenser dispenses that 7uantit o/ /luid to them. +t has an


13/22

inte$rated /lo" measurement device# as "ell as pump controls. +t 3asicall

replaces thin$s li2e card readers in traditional /uel pumps at /uel stations# and

also provides man interestin$ /eatures such as remote pament and mo3ile

pament and thin$s that aren0t necessaril eas to do "ith traditional credit card

3ased sstems. +t also provides the a3ilit to return chan$e to the customer i/

the have overpaid or "eren0t necessaril sure ho" much /uel the "anted topurchase.

A.L.: So one o/ the applications ou0re tal2in$ a3out here as /ar as the diesel-

pumpin$ is concerned Fis thatG this "ould replace the credit card reader and the

/lo" mechanism at the $as station. But it0s di//erent. !ith Bitcoin# it0s almost li2e

a cash purchase# "here ou have to $o and tal2 to the attendant# pa him the

mone up/ront ou 2no"# sa >+ "ant /ort dollars on that pump?# and then

"al2 3ac2 out and pump to it e6cept there is no attendant# 3ut ou do have to

/i$ure out ho" much ou0re $oin$ to 3u 3e/orehand# ri$ht=

A.S.: Ah# es# ou do have to ma2e an estimate. As lon$ as our 3alance in our

"allet is not ver lo"# ou0re $oin$ to immediatel $et the unspent 7uantit 3ac2

too# so in m opinion it0s not too 3i$ o/ a deal. + mean# "henever + $o to a /uel

station and purchase /uel# + tpicall $ive the attendant either a /i/t or a hundred

dollars and + $et that chan$e 3ac2 as soon as +0m done. Pumpin$ it does re7uire

some estimation 3 the customer# 3ut + don0t thin2 it0s too 3i$ o/ a deal#

especiall since it0s automated and so 7uic2.

A.L: i$ht# +0m trin$ to "rap m head around "hat this sort o/ transaction# i/ +0m

doin$ it# "hat that loo2s li2e and "hen ou loo2 at ho" it happens# it loo2s more

li2e a cash transaction than it does li2e a credit card transaction# 3ecause FinG thecredit card transaction# ou0re essentiall 3ein$ metered as ou dispense#

"hereas in the other hand ou prepa and then are re/unded "hatever ou don0t

spend. But li2e ou said# it0s automated in this case# so that0s a reall interestin$

approach to it.

!ith thin$s li2e remote pament# "hat do ou see as the use scenarios /or this=

+s this# li2e# +0m sittin$ at m computer and m "i/e calls me and sas >+0m at the

$as station# +0d li2e to $et some $as? so + send mone to her $as pump /rom

"here + am= +s that ho" it "ould "or2=

A.S.: 1hat could 3e a ver use/ul situation. 1he 2e ones that + /irst identi/ied

"ere: sa an emploer has their emploees - "hether the0re re/uellin$ their

vehicles or purchasin$ some other /luid the can send them out to the location

"here the ac7uire that ra" material# the /luid# and "hen the $et there the can

*ust call up and contact some representative at their place o/ emploment and

re7uest them to ma2e pament /or them and this doesn0t re7uire the

emploees to carr around lar$e 7uantities o/ cash# or credit cards# or have a

speci/ic account set up at a place "here the repeatedl do 3usiness. +t provides

sa/et to the emploee# 3ecause the don0t have to carr around somethin$

valua3le "ith them it also provides sa/et to the emploer# 3ecause sometimes

ou mi$ht have untrust"orth emploees.


14/22

+t also saves time FasG the drivers don0t have to chec2 in "ith someone or do an

2ind o/ paper"or2 the paper"or2 could all 3e done 3 someone remotel. ou

also could 3e mu$$ed or somethin$# that0s an un/ortunate situation# 3ut# ma3e

a more leisurel application sa ou0re travellin$ to some e6otic location# ou0re

on another part o/ the "orld# ou don0t even necessaril "ant to have access to a

lot o/ /unds# 3ecause ou ma 3e in a ver dan$erous location. And i/ ou canonl contact someone and have them ma2e a pament /or ou# that mi$ht

provide some additional sa/et to ou that is almost preventative o/ actual the/t.

1hose are *ust some ideas that +0ve come up "ith. Ma3e others can come up

"ith somethin$ else# 3ut those are *ust m initial thou$hts.

A.L.: So this is a 3asic in/rastructure-level service# and et# as ou mentioned# +

thin2 ou0re the onl person "ho0s actuall "or2in$ on a solution to"ards it. Ho"

did ou orient on this as a pro3lem that ou "anted to address# and ho" did ou

come to the solution that ou did=

A.S.: ou are correct# + don0t 3elieve anone has done this 3e/ore. Basicall# /rom

m perspective# F+0mG e6tremel enthusiastic a3out Bitcoin and there0s a certain

point "here ou read a lot o/ ne"s articles# and tal2 to everone ou 2no" a3out

it# and tr to $et them e6cited and there0s a certaian point "here ou /eel li2e

ou0re not reall doin$ anthin$# and ou have to ta2e it one step /urther. 1his

particular pro*ect "as somethin$ that + /elt li2e m s2illset "as /airl "ell-suited

to ta2e on. + had 7uite a 3it o/ e6perience in mechanical en$ineerin$ and

electrical en$ineerin$# computer net"or2in$# so/t"are development. +0m also ver

interested in the ener$ industr# /uels# /luids. 1his *ust seemed the 3et to move

the coin closer to mainstream# and + reall thin2 it0s critical that people start

loo2in$ at commodities that are not collecti3les thin$s that are consumed< +

"ould love to see $rain or coal or man other critical ra" materials in societ

availa3le via Bitcoin# and this *ust happens to 3e one that + /elt + could ma2e a

dent in.

A.L.: ou identi/ied consuma3les speci/icall. !h are consuma3les speci/icall so

important /or Bitcoin=

A.S.: !ell# consuma3les are somethin$ that humans need to survive. + didn0t

reall mention produce# or corn on the co3# or peaches# 3ut these are thin$s that

people need to survive. +/ Bitcoin is $onna have an use/ulness# then it needs to

provide people the option to trade /or somethin$ that the need dail. 1here are

companies out there# + 3elieve# that have online 3usinesses "here the "ill trade

$old or silver /or 3itcoin "hich is de/initel a $reat commodit to 3e a3le to

trade 3itcoin /or 3ut at the end o/ the da# $old doesn0t help ou surivive. 1hat0s

reall "hat humans need to do. 1he can0t live o// o/ $old# it *ust happens to 3e a

mechanism /or tradin$ /or necessities o/ survival. Beaut can 3e o3tained

throu$h *e"eller 3ut it0s not a primitive part o/ human societ. + see commodities

to 3e so important# speci/icall consuma3le commodities.

A.L.: So it has to 3e normal= Am + ri$ht# in a nutshell= +t has to 3e normal and

part o/ everda li/e.


15/22

A.S.: eah# + mean# "hen + tr to convince people ho" a"esome Bitcoin is# the

sa >"ell# "hat can + do "ith it=? - it0s li2e# >"ell# ou can 3u stu// online# ou

can post an ad on Crai$slist and tr to 3u or sell somethin$# do a 3utter

transaction "ith 3itcoin? 3ut the don0t see it as somethin$ that can provide

them sustenance and that0s reall "here + thin2 "e need to 3e $oin$ to ma2e

this somethin$ that is reall inte$rated into societ.

A.L.: ou have a /unctional prototpe ri$ht no"# Fo/ "hichG there0s a &'-minute

demonstration that ou0ve put to$ether that "e0re $onna lin2 to in the sho"

notes /or this. ou0re demonstration unit loo2s li2e it0s /unctional# it loo2s li2e it0s

not held to$ether "ith strin$ and 3its o/ tape. So "here are ou in our pro*ect#

and "hat0s our ne6t step=

A.S.: Somethin$ + can de/initel sa +0m doin$: + "ill 3e at the Cincinatti Ma2er air

ne6t month# sho"in$ m demonstation that ou can see in the video in person. +

tried to ma2e the video as detailed and 3elieva3le as possi3le# 3ut + 2no" that

people "ant to come see thin$s in real li/e# and touch it# /eel it# hear it# see the

/luid movin$# near the pump ou can /eel the pump vi3ratin$ as it0s spinnin$...

the prototpe demonstration is /ull-/unctional. + mean# it0s de/initel not

production-read# it0s *ust a demonstration# 3ut all the critical /eatures do "or2.

+0m also loo2in$ into developin$ a second prototpe that more resem3les a

traditional /uel dispenser# "ith 3etter inte$ration into the e6istin$ in/rastructure

o/ a /uel station. + do see /uel stations to 3e a critical application< + mentioned

man more possi3ilities in m video# and +0ve also demonstrated man mo3ile

/eatures# 3ut + "ant to move to an isolated ne"s case# "hich "ould 3e a /uel

station# and + thin2 this de/initel can 3e inte$rated into that e6istin$

in/rastructure.

A.L.: So "hen do ou thin2 "e can e6pect to start seein$ these= ;3viousl#

there0s a 3it o/ a "as to $o 3et"een here and there# 3ut do ou have a

time/rame# or are ou loo2in$ /or partners in this= !hat are ou loo2in$ /or to

ma2e this happen=

A.S.: +t "ould de/initel 3e $reat to hear /rom a /uel station o"ner "ithin m

$eo$raphic re$ion "ho ma 3e interested in demo-in$ this 2ind o/ sstem at their

store locations. ;3viousl# + "ould "ant to have the /irst unit dedicated to Bitcoin

onl F3utG +0m sure that production units "ould re7uire traditional credit card# as

"ell as cash# pament options as "ell Fas 3itcoinG# and that0s $oin$ to ta2e a 3it

more time to inte$rate three pament options into t"elve /uellin$ units at a

station.

+0d li2e t hear /rom someone "ho is interested in ne" technolo$# "ho is

interested in Bitcoin# someone that + can connect "ith "ithin a reasona3le

distance /rom m location. +0m currentl in ort Mitchell# Ientuc2# "hich is ver

close to Cincinatti# ;hio and the reat Cincinatti Metropolitan Area. 1hat0s "hat

+0m loo2in$ to hear /rom. + "ould li2e to see some sort o/ demonstration availa3le

to consumers "ithin the ne6t ear# 3ut ou never 2no" "hat could happen there.

+0m not sure i/ there are $oin$ to 3e an unseen 3arriers to puttin$ more o/ these


16/22

into a 3eta production tpe o/ application + don0t 2no" "hen "e can see these

mass availa3le# 3ut + "ould hope sooner rather than later.

A.L.: !ell# "e loo2 /or"ard to chec2in$ in "ith ou as this pro*ect continues to

develop. And Schroeder# the Bitcoin luid ispenser pro*ect# than2 ou ver

much /or our time.

A.S.: 1han2 ou# it0s 3een an honour 3ein$ on the sho".

(INTERMISSION ad break)

MAL@ 4;+C@: Bitcoin has sho"n us that mone and paments can 3e improved 3

the same application o/ human ener$# creativit and cro"dsourced real-time

in/ormation that has made everthin$ else 3etter. And this is an epic insi$ht# one

that /undamentall sa2es up monetar economics# pament sstems# and even

the involvement o/ all peoples in the "orld in the $lo3al division o/ la3our. And

this is the reason /or the Crpto-Currenc Con/erence in Atlanta# ;cto3er th

&'%,. 1he event 3rin$s to$ether le$al theorists# monetar economists# hostin$

visionaries# 3an2in$ pundits# heinous sstems analsts and dorm-room miners#

/or the purpose o/ ma2in$ sense o/ Bitcoin0s rise# and to /oresee the ne6t steps.

!e are /ortune to 3e alive to see this happenin$ in our time# and no" is the time

to learn# cele3rate# colla3orate and have /un. !e0ll see ou at the Crpto-

Currenc Con/erence in Atlanta.

A.L.: Can0t ma2e it to Atlanta= Let0s 1al2 Bitcoin has ou covered. !e0re capturin$

the "hole event in hi$h-de/inition# "ith pac2a$es availa3le in either dollars or

3itcoins cheaper# o/ course# "ith 3itcoin. or more in/ormation# visit

letstal23itcoin.comOevents.

(End & ad break)

A.A.: !e0ve 3een /indin$ out# on a dail 3asis# almost# the revelations a3out the

5SA0s involvement in su3vertin$ the underlin$ encrption al$orithms that ma2e

the /oundation o/ securit /or the internet. So this is ne"s. ;3viousl# the 5SA

3rea2in$ ciphers is nothin$ ne"# 3ut actuall su3vertin$ and introducin$

"ea2nesses to e6istin$ ciphers in order to ma2e them easier to 3rea2 that is

ne"s. 1his is not somone ma2in$ sure the can 3rea2 into our house< this is

someone /orcin$ all o/ the loc2 /actories in the "orld to ma2e su3standard loc2sso the can 3rea2 into ever3od0s house.

1his is a rather serious pro3lem. But does it a//ect Bitcoin= 1hat0s the 7uestion +

set out to ans"er last "ee2# and did 7uite a 3it o/ research to /ind out "hether

the underlin$ encrption schemes in Bitcoin "ere a//ected# and "hat the

e6perts had to sa. So /irst o/ all# $us# are ou "orried at all a3out this= +s this a

concern /or ou=

S.M.: +t *ust seems li2e it 2eeps $ettin$ "orse and "orse. !hat could ou ima$ine

a3out the 5SA 3ein$ a3le to sp on people= +/ ou can dream it up# the0re

pro3a3l doin$ that. So + can0t reall sa +0m surprised concerned= eah#de/initel.


17/22

A.L.: 1his is 3een one o/ the +S;@5 scenarios# ri$ht= + mean# the "hole idea

3ehind "h Litecoin mi$ht potentiall succeed# is >"hat happens i/ the encrption

al$orithm# the hashin$ al$orithm# that "e use to store 3itcoin is compromised=?.

!hat does that allo" ou to do# Andreas= Are "e tal2in$ a3out dou3le spendin$#

are our 3itcoins $onna 3e ta2en /rom ou= + don0t thin2 that0s the case.

A.A.: So /irst o/ all# let0s tal2 a3out the t"o di//erent al$orithms that are most

a//ected here. irst# ou tal2ed a3out the hashin$ al$orithm# that0s SHA-&N# the

Secure Hashin$ Al$orithm &N that al$orithm produces a &N-3it di$ital

si$nature# or hash# that summariDes the inputs in a crpto$raphicall secure

manner. And that0s used throu$hout Bitcoin< it0s used as a proo/ o/ "or2# it0s used

to produce the pu3lic addresses< it0s used in a num3er o/ di//erent places.

1he other al$orithm that0s used is elliptic curve crpto$raph# speci/icall

asmmetric pu3lic 2e encrption usin$ elliptic curves. 1hat is used in order to

$enerate the relationship 3et"een the private 2e and the pu3lic 2e. 1hat0s

essentiall the underlin$ securit that 2eeps our mone loc2ed in the

3loc2chain.

A.L.: ;I# so "e0re de/initel $onna have to stop there and $o 3ac2 throu$h that a

little 3it.

A.A.: So# "hat a hash al$orithm does is it ta2es an document# 3inar /ile#

anthin$ ou "ant# and it provides a si$nature. 1his is a di$ital si$nature it0s

3asicall a di$ital hash# it0s a /in$erprint# i/ ou li2e# a 3inar /in$erprint o/ that

/ile. So in proo/ o/ "or2# "hat ou0re doin$ in Bitcoin is trin$ to /ind the speci/ic

/in$erprint "hich has characteristics less than a tar$et0s di//icult# and i/ ou /indthat# then ou can create a ne" 3loc2< ou have the proo/ o/ "or2. So#

theoreticall# i/ SHA-&N "as 3ro2en# that "ould allo" the 5SA ver easil to pull

out a % attac2. @ssentiall# ou "ouldn0t need hashin$ po"er to /ind the 3loc2"ea2 curve?# "e mean 3asicall that the 5SA or an

other real a$enc out there that is /ocused into this c3er-securit area has a lot

o/ horsepo"er# /rom a computational standpoint# that the can thro" at these

thin$s< and so# i/ the can thro" a "hole 3unch o/ computational po"er at one

curve the 2no" to 3e "ea2# the can essentiall map it out# and then i/ that

curve $ets adopted then it 3ecomes much# much easier to compromise anthin$

that has used that curve in its securit# is that ri$ht= Because it 3ecomes a

2no"n part o/ it.


20/22

A.A.: !ell# map it out= 5o# 3ecause it0s a ver lar$e curve# mappin$ it out is not

possi3le. Ho"ever# the idea o/ a "ea2 curve is 3asicall that the curve itsel/ has

some characteristic that can 3e e6ploited in order to arrive at a mathematical

solution that is less hard than the 3rute/orce solution# so i/ it too2 ou a

7uadrillion ears to do it 3 3rute /orce# i/ ou can /ind a shortcut that is /aster

to doin$ this in less than 3rute /orce that0s a "ea2 curve.

S.M.: + have a 7uestion that0s related to this. +0ve heard that 3ecause o/ these

revelations a3out encrption "ea2ness that have come out *ust recentl# SSL is

no" considered not secure. + thin2 that could potentiall a//ect a lot o/ people

usin$ 3itcoins# li2e /or instance "e3 "allets# or even the online 3an2in$ and the

le$ac 3an2in$ sstem that the do# or an num3er o/ lo$ins to di//erent sites. +s

that ri$ht# Andreas=

A.A.: SSL "as not secure a$ainst the 5SA. + thin2 that0s important to understand#

and primaril# the attac2s a$ainst the SSL securit have not 3een technolo$ical

as much as perhaps or$anisational# political and technolo$ical at the same time.

Steal the 2es# /orce the compan to $ive them to ou# 3lac2mail them into

$ivin$ ou a 3ac2 door# etcetera etcetera. 1here0s a 3i$ di//erence# 3ecause in

this case "e do not 3elieve that SSL "as made deli3eratel "ea2er. !e 3elieve

instead that the0ve used various e6trale$al techni7ues to 3lac2mail the

certi/icates authorities into handin$ over si$nin$ 2es# and as a result# the can

3asicall spoo/ an SSL site the "ant and do man in the middle attac2s. 1he

onl $ood ne"s# the silver linin$ out o/ that cloud# is that i/ that0s the case# that is

a capa3ilit that0s uni7ue to the 5SA 3ecause o/ its political clout in the 8S# and

there/ore not eas to replicate 3 others< "hereas i/ the0ve "ea2ened the

underlin$ securit primitives then that can 3e replicated 3 anone "ho has

mathematicians.

A.L.: So /rom a certain point o/ vie"## it0s actuall 3etter that the resort to

3lac2mail# or threats# than to actuall compromise the standard

A.A.: A3solutel# a3solutel Because in /act# loo2 at this /rom a practical

perspective< resortin$ to 3lac2mail is part o/ their institutional mandate. +/ the

did it to /orei$ners# perhaps that mi$ht even 3e accepta3le. !ea2enin$ the

securit standards is stupid on so man levels 3ecause it violates the 3asic social

contract and the 3asic trust 3et"een the 5SA and the American people# that the

second part o/ their mission "hich is ma2in$ the American in/rastructure more

secure has e//ectivel 3een compromised 3 the /irst part o/ their mission# so

that0s the pro3lem.

S.M.: So ho" could "e $et 3etter standards /or encrption= Are there people "ho

are not a//iliated "ith the $overnment# "ho are $onna audit each other0s "or2#

and mi$ht 3e a3le to put out ne" encrption technolo$ies /or us to use=

A.A.: eah# that0s a $reat 7uestion# Stephanie. 1he other silver linin$ that has

come out o/ this. 1he entire encrption and securit communit is pissed o//.

4er# ver# ver an$r. 4er 3etraed# ver an$r and ver resent/ul a3out this.

S.M.: !hat did the e6pect=


21/22

A.A.: !hat the e6pected "as that the 5SA "ould /ollo" their mandate and act in

$ood /aith# at least vis a vis American in/rastructure# American technolo$ and

American citiDens. 1hat "as the social contract# and in /act the 5SA has 3een

"or2in$ "ith technolo$ companies since its inception# 3ased on that social

contract. And the 3ro2e it And the0re $onna pa the price. Because ri$ht no"#

a 3i$ chun2 o/ the +@1# a 3i$ chun2 o/ the securit communit and a 3i$ chun2 o/the crpto$raph communit has made it their li/e0s $oal to re"rite the internet

/rom the 3ottom up and ma2e it 5SA-proo/. 1he pissed o// the "ron$ people. +

thin2 ou0re $onna see the internet chan$in$ over the ne6t couple o/ decades.

!e 3uilt the internet as an open# $ood-/aith net"or2# and no" "e0re $oin$ to

have to re3uild it as a dar2net o/ dar2nets.

S.M.: on0t mess "ith the hac2ers.

A.A.: on0t mess "ith the hac2ers

A.L.: on0t mess "ith the crpto$raphers So# Andreas# *ust to "rap this up# itsounds li2e ri$ht no" there are concerns# 3ut it doesn0t loo2 li2e either o/ the

standards that are actuall applica3le to 3itcoin have 3een 3ro2en# or it0s ver

unli2el that the0re 3ro2en< there are other standards that are much more li2el

3ecause o/ the random num3ers in the elliptic curve# as "e "ere tal2in$ a3out

3e/ore. + "anted to 2no": one o/ the thin$s that people tal2 a3out /or Bitcoin is

the idea that i/ and "hen "e arrive at a 7uantum-computin$ realit# then SA is

3asicall out o/ the "indo" 3ecause o/ order o/ ma$nitude< it F"ould 3eG easier

than it is no" to compromise that standard. +s there somethin$ to that= +s this

somethin$ that "e should 3e concerned a3out=

A.A.: !ell /irst o/ all# "e don0t use SA "ithin Bitcoin

A.L.: + 2eep sain$ SA instead o/ SHA.

A.A.: + don0t thin2 SHA "ould 3e a//ected 3 7uantum computin$ as much as

some o/ the other crpto$raphic primitives "ould 3e. Listen# at the moment#

"e0re alread in a 7uantum-computin$ "orld# i/ ou 3elieve the technolo$ical

analsis o/ the -"ave sstem# "e alread have &N- and even possi3l %&-

cu3it 7uantum computers# and $uess "ho has those= ;/ course# the 5SA. +0m not

"orried 3 7uantum computin$ at all /or t"o reasons. 1he /irst one# as + said

3e/ore# is that i/ an attac2 is speci/ic to a certain adversar# and that adversarhas other "as o/ ta2in$ Bitcoin do"n# then that0s not reall causin$ a pro3lem.

1he advanta$e ri$ht no" is that the onl people "ho can 7uantum crpto$raph

are those "ho can 3u 7uantum computers# and luc2il there aren0t that man

around. +/ that 3ecame a 3roader pro3lem# and everone could 3u 7uantum

computers# then "e could chan$e the encrption al$orithms and use those

7uantum computers to do crpto$raph as "ell as decrption. So this is an arms

race. +/# and "hen# 7uantum computers 3ecome "idespread# then "e "ill use

those to 3uild 3etter crpto$raph# as "ell as 3etter decrption.


22/22

A.L.: 1han2s /or listenin$ to episode & o/ Let0s 1al2 Bitcoin. Content /or toda0s

sho" "as provided 3 r. Stephanie Murph# Andreas Antonopolous# !endell

/rom Hive and And Schroeder. Music "as provided 3 erard u3ens. +/ ou

can0t $et enou$h ori$inal thou$ht and discussion# read our dail 3lo$ at

letstal23itcoin.com. Si$n up /or our "ee2l ne"sletter at the"ee2l3itcoin.com.

1o $et in touch# send me mail at adamKletstal23itcoin.comor visitletstal23itcoin.comOtal2 to 3e directed to our listener su3reddit. Have a $reat da.
mailto:[email protected]:[email protected]

let's talk bitcoin episode 42 transcription

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