#446 - Andreas Antonopoulos

Jan 27, 2014

Andreas Antonopoulos is a bitcoin entrepreneur, he also serves on the advisory boards of several bitcoin startups and serves as the Chief Security Officer of Blockchain.

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so the heart hey everybody what's up how was your weekend don't answer that we're not really talking that's just the awkward thing the the get the get the podcast started words they don't really mean anything takes a few words from here on out everything means something allegedly this episode of The Joe Rogan Experience is brought to you by Squarespace congratulations to all those folks who won the Squarespace contest he should be getting all your goods you're higher primate t-shirt and your swag bag from squares

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spending a lot of money to back up the existing science on nootropics because I know a lot of people fear that things are snake oil and I that's a good fear it's good and it's good because it forces companies who sell legitimate things to do the proper testing and just show you there's plenty of examples of things on late night TV they're telling you that your dicks going to grow or you know this I mean that's just one example of things that you know are dubious and you know they're making money because if it weren't making money they wouldn't be having these

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do that as well use a codeword Rogan and you will save 10% off any and all supplements all right ladies and gentlemen thanks to everybody who came up to Chicago we had a great fucking time this past weekend it was cold as shit but the people are cool as fuck Andreas Antonopoulos is here we're going to talk about cryptocurrency we're going to let some bitches know

The Joe Rogan Experience trained by day Joe Rogan podcast so I love the fact that you can get on the internet and you have a conversation on Twitter with anybody and the word Bitcoin comes up and then this swarm of people from like all these different direct sun dries Antonopoulos just Juju Juju Juju Bitcoin Jesus Juju Juju so you know I contact you you contact me

boom a week later we're sitting in front of each other I'm going to talk about Bitcoin and million people are going to hear about it I mean that's the internet is fucking beautiful it's magic I mean it's just it is what it should have the wood communication with human beings should have been a long time ago I think it would have all the things that took off and gained ground and gain momentum throughout human history whether it's religion or whether it's occult rituals ritualistic Behavior like the all that shit wouldn't have

happened if the internet was around the internet would have been intended to do it's not that it's this what does it does a stop what are you saying look right here here's here's a studies there's so much misconception and so much disinformation that human beings have been fed throughout history I think we're just now starting to grasp how huge it is that this is the first time in history where information just flows just back and forth and the most valuable stuff is free the most valuable information that you can get online

absolutely free which is we don't what's the best thing about the the internet is that it's a dumb Network it transmits information from point A to point B and it doesn't care what that information is hmm so if you come up with a new idea a new application and you stick it on the edge of the network you can transmit that information to anybody else and there's a cherished principle behind it net neutrality that you don't prioritize your content instead of somebody else's you allow equal access to all for all content and the internet doesn't care

it is just IP all it sees is bites and it just moves them and then one day somebody invented a new application and stuck it on the edge the internet of money and that's what I'm here to talk about today because they didn't need to ask anybody permission and they launched Bitcoin and it happened and now that it's here it's enabling other people to launch money applications on the internet and is going to fuel the internet even faster than we've seen before you this is a very strange time in

there's actually people that are just starting to accept Bitcoin when the first cryptocurrencies for solid objects like TigerDirect is starting to accept Bitcoin for computers you can order a computer on Tiger Direct from fucking Bitcoins and I'll send you a goddamn actual computer that you can get online with that starts becoming real well Tiger Direct can very simply take that Bitcoin and immediately converted into dollars so they don't even have any exchange risk and other

people are willing to give them dollars for it because they see it as valuable and that's all money is it's a shared understanding that this thing has value because it's scarce that it's not around a lot it's hard to make you can't copy it you can't fake it and once you have those three things you have money okay it has value but what's explain those how is it possible well what exactly is Bitcoin for people that are completely on the outside on this and they listen to this podcast and like what the fuck

he talking about new money Bitcoin what is what is a Bitcoin so there is layers to this okay I'll start at the top layer at the top layer Bitcoin is Cash on the internet and I say cash because it's not just any kind of money it's not like an account or credit card it's not like PayPal this is Cash which means that when you have it you have it sitting on your computer as digital cash and then when you send it it goes directly from your computer to the recipients wallet

as digital cash now that's the top layer underneath this is basically a shared Ledger that means that everyone can see all of the transactions and the whole network agrees that Andrea sent Joe you know a tenth of a Bitcoin great now the whole network knows it so that means Joe has a tenth of a Bitcoin and simply based on that you can move money around there's a lot of security and some complex math but basically Bitcoin is a standard it's an agreement on how to exchange money on the

turn it just like the web is a standard on how to create pages and view them in a browser there's a lot of skepticism when it comes to bitcoin I've spoken to people that are Financial Wizards that are skeptical and I've spoken to people that are just you know that have just looked into cryptocurrencies because of the rise of the popularity of Bitcoin they said it doesn't make sense there's no room for inflation there's not enough people you know not enough Bitcoins

it's not going to work the how they going to create more there's all these different arguments about why do you think that what we're seeing with the rise of Bitcoin is instead of just addressing all these Financial concerns that all these people are used to the current market in the place that it's at right now the the standards that the way they run things instead of that Bitcoin just creates a completely new network driven community-driven money and

fuck all your old rules its social network of funny it's peer-to-peer money it means direct from one individual to another individual no matter where they are on the world in seconds for almost free and that has never happened before do you think that part of the skepticism though is because of the fact that this other system exists sure on that this other system is our Norm our standard and we don't want to look at like something like Bitcoin objectively just say okay let's pretend that our current system of stocks and bonds and but it's not just its yeah and it's not just the system

it's so much part of our culture money is one of the first Technologies you know Firewheel money money has existed for tens of thousands of years going back to shells and feathers and knots on string and giant rocks in the Polynesian Islands and then through the Iron Age 2 minted coins stamped with Emperor's faces this stuff has been part of our culture for tens of thousands of years and as a result it's no longer just technology it's a cultural phenomenon

and you are steeped in it from the moment you're born and so you acquire certain not Notions of what money is and how it works and you think that the current system by which money works is the only system because we've had it for thousands of years and even in computer science the idea of getting distributed computers to agree on something without cheating we thought that problem cannot be solved until 2008 when the invention behind Bitcoin solve that problem and created a new way of doing money and

it's going to take a lot of time to understand it primarily because people don't really understand money as it is today they don't understand how Banks work they don't understand how the Federal Reserve creates money they don't understand death based system for money I've read about on our standard I've read many things I watch documentaries we understand that most of the people when they first face Bitcoin they start asking questions about money and it quickly becomes apparent to all of us when we do this that we don't know much about money so then we learn about money we start reading about money but

you know it's very much part of the culture to the point where I'll talk to people about Bitcoin in they'll say well it's not backed by gold so how can it have value the dollar has been backed by gold for like 60 years in end and you talk to the average person in the street and they still think there's some gold in a vault and that stuff does it doesn't exist I'm happen all the gold in the vault watches well that's a whole other question I mean the real issue is this Heath we haven't been on a gold standard for decades and all of the

these in the world are created based on the productive capacity of the country and the legal system and because they have value because you pay your taxes with them and then they just float freely in exchange rates so they very against each other and the because the dollar is used to buy oil is the world Reserve currency and all the other currencies are measured against it but there is no gold and and that's fine that doesn't mean it doesn't have value it absolutely has fat fucks up a lot of old action movies man yeah really does those movies where you would break into the Vault yeah loan

injure the bars of gold it would always be brick-shaped well the thing is gold isn't that efficient for building a currency on because the rates at which you can produce gold is fixed and it's hoarded and you know you have certain problems now the nice thing about Bitcoin is that it takes it takes the same concept of scarcity of having something that is a limited resource but it does it by algorithm so you essentially have math that says that every 10

minutes 25 new Bitcoins is created by the network as a whole with all of the Computing capacity of the network and that's fixed and every four years we create half as much every 10 minutes so in four years it goes down to 12 and a half Bitcoin every 10 minutes and then it goes down to six and a quarter and it keeps going down until you meant the last Bitcoin and then you're done 21 million coins it's done and the idea is that you provide a sound basis for money some things that is rare cannot be forged is easily transportable

and that is the form of currency so 21 million Bitcoins and then it's over there will blow there's are you can divide a Bitcoin a hundred million pieces so it goes down to a digits and that means you the lowest unit is called a Satoshi and there's a hundred million satoshi's in a Bitcoin so 21 million times a hundred million Twenty One quadrillion coins I need the coins Jesus Christ why why is it so complicated why is it like a hundred million well I think

part of the reason is that it's easier to write a number without the decimal points and just to write a smaller unit with lots of zeros after it it's easier in computer terms to handle numbers that way but but most importantly it doesn't matter because what you see on your screen at today might be a Bitcoin actually on my wallets I use Millie Bitcoins thousands of a Bitcoin because it corresponds more to my daily purchases you know maybe a few years from now you're going to be using a millionth of a Bitcoin to look at your balance it doesn't matter what you call it

unit the point is what value does it have because someone else is willing to give you that amount of money wherever we have like sort of this established ideal in our head what a dollars worth this is a hundred dollars that looks like a thousand dollar computer sure you know we have this idea in our head and that idea will be completely out the window and you start talking about millions of Bitcoins and trying to like figure out like how much is a laptop from Tiger dropped if I buy a laptop is a 200 millions of a Bitcoin one are we just talking Miller bits a mill a bit is all

most about $1 it's about 800 something today so a mill a bit so a computer with cost you about 1200 millivolts 1200 milligrams all right that seems normal as long as we can get it down to numbers that like correspond with dollars but here's the thing do not I mean this is a global phenomenon and there are so many countries out there whether currency very 30% a year and some now thirty percent a month and in those countries there is no stable anything I mean even the dollar we look at it today and

have this idea of what its value is but if you look back historically its value has been declining for almost a century now hmm and today's dollar is worth the same as you know 13 cents at the beginning of the previous Century we don't see that on a day-to-day basis because it's one of the most stable currencies but there's a hundred ninety three currencies out there and a hundred and eighty of them are far far worse than the dollar in terms of management and a couple of handful of them absolutely horrible and the people trapped in these countries

now use Bitcoin so this is a lot broader than just the US dollar it's not just a matter of is this going to be comfy for consumers this can bring people from countries that have extreme poverty extreme problems that are not necessarily based on a lack of technology that have phones that can use Bitcoin for example but because of politics they're trapped in this situation recently I was in Argentina in Buenos Aires and now they're having an even worse currency crisis they devalued 18 percent last week

locked that lockdown they can't take money out of the country they can't buy things online if they buy something online they have to go pick it up from a customs office and pay 50 percent tax on it the country's trying to lock in the money right and you have these extreme situations and then you have a choice suddenly so Bitcoin is a lot bigger than just you know a consumer thing for here in the US how would someone get Bitcoins from those environments like so let's say you're in some poor third world country with a really incredibly

a corrupt system and fucked up economy how does someone from that that environment get a Bitcoin well so even in Argentina for example which is not a you know it's a second world country that was once the you know the Paris of Latin America and it's still a beautiful place but it has these difficult political problems it's illegal to trade on the black market dollars for pesos right so you can't go in and if you're a tourist and say okay I'm just going to give some dude on the street

hundred that's illegal and yet on every street corner the someone who will sell you pesos and last time I went I just ask them will you take Bitcoin and guess what some of them said never heard of it and some of them said yeah we're trying to do that now can you help us whoa so Futurity have this black market or grey market for currencies and and in the u.s. you never see this but if you travel abroad you see this all the time most places in the world the official currency rate versus the one you can get from a corner unit

no a street seller who's you know selling vegetables and the local currency for dollars you know you can do that to never in so many countries in the world and for them it's a normal thing now this this novel idea of this new currency is this something that anyone right now is leg living off of is anybody getting paid by the coin and paying their rent buy Bitcoin buying their food with Bitcoin so first of all my income is entirely Bitcoin has been for several months now how many months

since October perhaps and your for that I didn't bore have as much income because I've been working on bitcoin you know to a level almost Obsession because it's such a fascinating technology for me and as someone who works in Security in distributed systems this is you know a once-in-a-lifetime opportunity to be involved in something Monumental just like when I was involved in the early days of the internet as as a young scientist and now I can do it again

with Bitcoin so I've been obsessed but since October I've also been making a living off Bitcoin and I get paid in Bitcoin wow and how do you pay your rent I convert some of it to dollars to pay my landlord until I can persuade them to take Bitcoin directly but it won't take that long because every time I pay in dollars I say would you rather take Bitcoin and that's one of the easiest ways to get Bitcoin by the way is so find someone who wants to pay for something with Bitcoin wow and so they're not ready to yet but you think that perhaps they're thinking about it might

pay your rent in Bitcoin I'm always surprised by who's going to take my Bitcoin sometimes it's a taxi driver in Germany sometimes you know it's also give it to them they install an app on their phone I'm going to give you some before the end of the show for sure they installed an app on their phone and I just tap it across just like I could zap it from here to Kuala Lumpur in two seconds I can stop it across the table whoa it's just like sending an email and in fact it's remarkably similar I just get you'll install an app and then you'll give me your

an address which is like your email address kinda and then I'll zap some Bitcoin across the U and a few seconds later you'll see it pop up on your phone and that is real Bitcoin it's and it's on your phone it's not sitting in a bank somewhere you don't have to promise that maybe when you try to withdraw it you can have it this isn't you know a credit or something like that this is the actual digital amount is locked by a key that's on your phone and is recognised by the entire network as a valid transaction if you left your phone behind a drunken stupor someone got a

your phone could they wreck you financially yeah damn it but experts say no no no I'm gonna be I'm gonna be a hundred percent honest there are there are ways to protect yourself so for example on my phone wallet first of all it has my phone has a pin then my wallet has a pin of its own and then there's one thing that I can't do with the wallet right away which is I can't send money I can look at my balance I can receive money all of that just with a pin but if I want to send money I have to enter another password pin but personal identification number yeah for so I got a

a couple of different passwords so that my wallet isn't just sitting there but again as I said this is digital cash so if you had a wallet stuffed with cash and you left us in a cafe while happens to it somebody steals it or you get really lucky and someone gives it back to ya but Anna give them some of that money exactly but most likely you know you don't have someone to call and say hey get that cash back for me it was stolen from so-and-so location and you know a backup like yeah if you lose your phone can you back up from from a cloud well that's a nice thing about it because

like physical money this is digital money you can make copies of it you can't spend both copies you can only spend one but you can make copies so you can make backups you can even backup right onto a piece of paper which is what I do in this called a paper wallet so I have printed pieces of paper with Bitcoin keys on them and I'll make two copies and I put one in a safe and I put the other in a safety deposit box and I send Bitcoin to those wallets and then I basically have my Bitcoin sitting on paper in a bank

what kind of like a bearer Bond it's like a bearer Bond you know or like a stock certificate but the only difference is that that magic number that's on there allows me to redeem that Bitcoin anywhere in the world this is way more sophisticated than I thought it was I thought it was a bunch of dorks running around fake fucking right tons and Dragons money oh no this is this is way more sophisticated will get to talking about how you can use this to do stocks bonds distributed companies autonomous companies now when you pay your friends of things when you pay your rent you take your Bitcoin

converted to money who's giving you money for Bitcoin people want to buy Bitcoin so how do you find these people on Craigslist so there's a number of ways page the the straightforward one if you come from the old banking style world is you open a brokerage account on a virtual currency exchange that will exchange dollars yen Euros whatever to bitcoin or even some other cryptocurrencies and then you can go there and you can wire transfer you know using your bank account you

an wire transfer money into the brokerage account as you would to buy IBM stock you wire some money to your brokerage and then you buy some IBM stock well here you wire some money there and you buy some Bitcoin with it whoa so traditional brokerage is deal in Bitcoin as well no this is a specialized exchange that deals in Bitcoin but it works just like a brokerage account so you have a number of different currencies in it and you can buy one and sell the other are there any brokers who deal in Bitcoins of like traditional

are ya kill no not yet not yet but you think that's coming oh absolutely wow because the thing is it's a it's one of the skills they have right they also have the physical locations and branches to sell Bitcoin and before long we're going to see is the same thing that happened in the entertainment industry when MP3 hit the scene like At first everyone was like whoa we don't want to even touch this and then somebody started thinking hey if I start playing with this before everybody else it's going to hurt

all of us but it's going to hurt me last and I can start taking advantage and they peel off the herd and boom you have adoption and I think the same thing is going to start happening with banking wow some of the bank's perhaps not the big six US Banks they've got a nice comfortable 70 billion dollars a month from the FED right now why would they do Innovation but maybe one of the more Nimble Banks maybe you know in country like Cyprus that's been hit hard by these bail-ins and you have a very open banking environment

I meant maybe Singapore's going to decide this is a good strategic move maybe McCall who knows the point is in an International Financial environment all it takes is one

yeah one ball gets rolling and that creates the Avalanche and then everybody Stampede and then the standard changes right wow this is very exciting it's very complex though and this is what I'm trying to wrap my head around the the amount of this Bitcoin that's created every year is limited in fixed who determined all this who did who created bitcoin who invented the concept was there several people or yeah you said when you exchange money it's almost free I heard

so that money goes somewhere he's getting this money so this is where it gets a bit more complicated and but keep in mind the internet's in 1992 you had to know Unix command-line skills to send an email and it took two days to cross the network we can get simpler and easier for most people over time but it's still a bit geeky so I'll give you one question at a time though who created this so this was created by Satoshi Nakamoto a cryptographer who used

an anonymous Identity or pseudonymous identity he basically wrote a paper and the basic software a scientific paper that explains how it works it's actually the best way to understand Bitcoin if you have a bit of understanding of basic science you can you can read it it's very accessible and if you look for the Satoshi Nakamoto Bitcoin paper or the Bitcoin paper you'll find it online so he wrote a paper and at the same time he created the software that runs the

system right and then gave it out to people and people started running it now keep in mind Bitcoin is an agreement it's a standard it's how you do certain things on the Bitcoin Network that's matters right and then there's software that implements that agreement the runs according to those rules just like the internet doesn't belong to anyone it's just an agreement of how you transmit things across the internet and then everybody can write software that can use that standard so Satoshi Nakamoto created the standard few ideas

to do this one in 2008 2008 the paper came out in 2008 and followed shortly thereafter by the code the discussion actually lasted about a year as he was mulling this over and discussing it now keep in mind digital money is not new we've been doing digital money since the probably the mid 80s I think the first notable one was David charms did you cash and he created a form of digital money using the new technology of cryptography at the time he and cryptography

is a way of scrambling and unscrambling messages and doing digital signatures and using mathematics to to prove things basically on computers it's also what you use to protect your browsing session when you connect to your bank and it puts that little lock that's using cryptography you doing an in Cryptid session so at the time David Cham basically created digital money and what it is is you can have a number that has a signature on it approves who owns it and then you can spend that the problem is

that you because it's digital you can copy it so what happens if you spend it twice well you have to have some kind of central Authority the checks to see the you don't spend it twice and so he put some servers together and they could handle all of the transactions and make sure nobody spent the money twice and issue the money into all of the kind of Federal Reserve Central Bank functions and then ran it on the network and it worked so unfortunately if you have a central server and you try to go against the banking system

they stomp on you now they stomp on you find this case there was a series of legal battles and then eventually the service got shut down and so we've seen this happen maybe four or five times with different attempts to do digital cash with various levels of centralization but the basic problem was this how do you ensure that the network remains trust it and honest

without having someone in the middle who checks everything right and Authority how do you put trust not in an institution or Central Authority as most hierarchical system work but in a bit spread that trust across the whole network and in 2008 Satoshi Nakamoto solve that problem and he solved it by putting together for five ideas that each of them had been done somewhat before but he put them together in an incredible combination that just worked and worked beautifully so

what the system does is it forces everyone who's participating on the network to do a bit of computing with our system which is called Mining and so if you if you just have a wallet you don't do this but if you want to be part of the Bitcoin Network as a minor what you do is you run on a specialized computer and it solves this very difficult problem and it's kind of like a competition it's like looking for a magical number that that if you plug it into an equation

it's the right number it's almost like a global competition like solving a giant Sudoku puzzle so everyone's trying and then somebody every 10 minutes on average finds a solution and that becomes a new block of transactions and when they find that solution they get some Bitcoin which is new Bitcoins is created for the first time I'm confused yeah I know it's on the find a solution for what alright so basically the idea is everybody's trying to find a way to

create a new block of transactions right and in this block they also get a reward for creating the block what is a block of transaction it's basically it's basically a an entry on the lighter so as I mentioned before there is there's a way to have there's a central transaction Ledger where you can see everybody's transactions in order to write on that in order to create a new transaction that the entire network trust you have to solve a very

be difficult problem right but if you do solve the problem you get a reward in Bitcoin okay now when you say you solve the problem is someone physically sitting in front of the computer trying to solve the problem or here's the computer yeah okay so their computer you use their CPU power yes but essentially yes exactly okay so runs in the background it's called computers on work uh-huh you do a you run a program that does proof of work which is basically solving this difficult problem so is this in some way like sort of similar in fact to how Bitcoin how BitTorrent Works we're

corn BitTorrent you leave it on like if you're a file share yes like how bands can spread their music that way they put their files online let people know where there are then people see it and then they all have Rewritten every Bitcoin wallet works like that okay it's like a little bit torrent clients and it talks to all the wallets and confined on the on the network and communicates but there are some specialized systems which which do this computation problem very very fast and they're big and noisy and have lots of fans because it's gotten very

of so people upgraded their stuff and then they upgraded it again and then they upgraded again and it's causes kind of arms race of computing power but the basic idea is that you you you buy a box that has this ability to solve the problem you plug it into the network and it runs and it chews up electricity and a glaze be using a dedicated box to try to help solve this and in the meantime it makes money yeah and it makes a bit of money and people join in groups that are called pools just like playing a lottery put it this way I'll look this guy

this guy is this is his servers these are all Bitcoin solvers and basis if I'm not mistaken this is yeah this is a liquid cool rack system with folks who haven't seen this photo if you're listening to this which is the majority of our people what are they Googling Brian what's the image coin mining it's the first one Bitcoin mining Jesus fucking Christ you have to see this picture folks when you get home Bitcoin mining they have goddamn rooms filled with computers yeah that they're making Bitcoin we're in The Matrix so let

we're here we're in the just damn Matrix holy shit this is crazy this somebody's house so the Bitcoin Network today is bigger than the world's top several hundred supercomputers combined it's the largest single Computing experiment on the internet ever what's using more internet juice Bitcoin or porn at the moment Bitcoin that's not possible son you're talking crazy bit quite it's also it's also generating a

tiring you Economy based on that how much prostitution has been paid for in Bitcoin is that possible I have no idea are you sure I'm sure a hundred percent sure that I had wow no you just guessing you're not a hundred percent sure I bet you're pretty sure no I mean you can't say a hundred of all the people on the road that slut when is there one uses one super deep slut what if you find the first one today all right let me give you an argument for why that might actually make sense if you're a sex worker one of the problems such a better word that hooker have

is you're going to get extorted and exploited for that money and you're not going to get keep any of it yeah with a Bitcoin wallet you can basically hide that money and you can also take it in a way that cannot be taken away from you not easily so you know let's just take your phone nope not so easy no because it's backed up and write exactly pin number yeah I mean you're not carrying physical cash it's a much safer exchange and so there are many reasons why

lying in many different environments where money is difficult the Bitcoin is successful and here's the thing Bitcoin is very efficient money it's a very good system of money if you can send money like an email anywhere in the world well yeah it's tremendously useful and so in places and that includes criminal activities where it's difficult to move money Bitcoins going to be good for that because they're any regular point because at the end of the day there is another six billion of us who want to do good things with it

and just like on the internet you can use it for Crime but it gives so much more to humanity of course you can use Bitcoin for Crime you can use but the reality is US dollars are used for Crime more than a common currency in the Wishin prostitution is the read most ridiculous crime ever it's so should be legal I'm it's so ridiculous that people can have sex for free but they can't have sex for money how come you can give massages for money massage is a prostitution okay they are they might as well be prostitution they're awesome don't get me

wrong I love massages but it's fucking prostitution the person doesn't want to rub you whether it's a guy or a girl you want them to rub you give the money to rub you they even pretend they like rubbing you they bring you water they get you a towel they don't give a fuck about that towel bullshit come on man that's the that's part of the gig part of the that's the part of the prostitution gig the idea that in 2014 it's still illegal to pay someone for sex is so stupid not even hand jobs nothing no penis can't touch

shit it's a bad place it's a bad place you can have money involved in your bad place it's like paying money for Crime you call it crime I just found out yes it's being used for prostitution the first one was a September of this year or last year passion VIP an escort agency and England says they now accepted Bitcoins as payment godspeed to you passion VIP England godspeed to you so now we know that kind of crime but let's let's separate ourselves from such

controversial talk because this could really screw people's up their idea of what Bitcoin really is known about buying here's the thing Bitcoin is not just money but one is an invention and what that invention allows people to do is move value across the internet and that invention means you can do Bitcoin but it also means you can do a lot of other things and Bitcoin is an incredible invention because it for the first time it completely democratizes money it separates money from a function of

power of the state to an individual exchange between people like it used to be when it was shells and feathers right or you know barter exchange but the beauty of it is that it can at the moment if you think about it there's let's say a billion people in the western world who have not just banking facilities but like turbocharged power banking they have international transactions they can buy stocks on any stock market they can do wire transfers some of them are accredited investors etcetera the power

is roof banking there's another maybe two billion people who have a basic bank account and then there's the rest of them right the the Giants majority of the population on this planet has very limited access to banking very limited access to international finance to lending to Capital to the ability to change even change their money to another currency and so Bitcoin is so much more important for them I call this the other six billion just keep the focus on the

other six billion because for the billion in might be a fad but for the other six billion this is an opportunity to change the way we deal with poverty and to change the way we unite the economic system of the planet which is a whole other level of conversation it will look at Bitcoin and we think of it as just money but it's not just money for the internet money for the internet is what it does and it does it very well but it's the internet of money and it allows people at the Edge by downloaded just a

application to join an economy and then to hold their own money without any state or Corporation being able to steal it from them or inflate it out to value and destroy the children's future it allows them to hold and control that money and send it to anyone in the world they want to instantly for very little money I mean that's never happened before and the implications it has for poverty for did the developing world for the way nongovernmental organizations work

work is staggering just take one example International remittances at the moment 500 or so billion dollar sent every year from the first world to countries in the developing world right and out of that money 74 billion gets spent in fees fees as high as 30 or 40 percent in fact the poor of the country the higher the percentage of fee you have to pay so a Somalian migrants in the u.s. who sending $100 home only 70 gets

the to the to the wife or the brother back home or the husband back home and the rest gets chewed out by the money transfer companies now we give the developed World a hundred and fifty or so billion and then we take for it to the richest and hope it trickles down and then we take 74 billion from the poorest what if we could change that what if we could enable Bitcoin remittances and international payments and redeliver that 74 billion of their money and allow them to send that money

he directly home without paying that fee that changes the lives of a billion people wow so you envision Bitcoin as being a universal currency absolutely it already is will it absorb the dollar or the will the dollar go away now with a doll co-exist along with Bitcoin like what is your hope for this well I mean I think that like many disruptive Technologies is going to change the Power Balance it's not that the dollar goes away of the banking system goes away it just has less power and less relevance

new world where people control their own money and can send it to each other so ultimately the grand hope is that the the money the dollar that we see today becomes in the future much like The Written Letter and I fucking need it anymore you can send emails well that's what a text message you have to get on a fucking Pony and carry your mail over to another state yes and the thing is the dollar again as the world Reserve currency in there's only one of it now are there are a hundred ninety three other currencies that some of them may end up getting

placed some of the manned up even converting into cryptocurrencies of a nation-state you know like I don't know Thailand coin why not or fed coin if we're doing it here but the point is that we can't judge Bitcoin on the standard of the most comfortable World Reserve currency that's the most stable currency we have to look at the rest of the world and see what their currencies are like and in many car countries the currency is worth less than goat shit because you can burn go chat longer than you can burn these bundles of

paper money that doesn't burn very well you know and in those countries this is not a matter of shopping this is a matter of the future of their children and it's a matter of development wow that's that's really fascinating it's what are the concerns as far as security what are the concerns as far as if someone steals your Bitcoins as there any sort of a regulatory body that can determine whether or not someone's computer or phones been hacked into and their big toe

Bitcoins have been stolen mean I have as that become an issue yet or is that a potential issue it is a potential issue and it has become an issue and yeah people have had their Bitcoin stolen you how is that happened what is Helder their computer gets hacked and then they have a password on the account but they don't have like you know one of the things you can do very easily is set up what's called two-factor authentication so every time you try to use your Bitcoin wallet it sends you a little text message and you have to enter the secret code like you do with your bank heist slightly higher on the so if your computers

packed they don't get the text messages they can't easily get into your account what is that P that article you just brought up Brian this is the latest hack I know that Bitcoin has been hacked a few times but this last one is 1.2 million dollars and there's an article on wired called 1.2 million hack shows why you should never store Bitcoins on the internet what happens to something like that that they just lost this right there's no there's no getting this back and and is there somebody that like a group of people that that you think is responsible for this or

well no I mean there's always being a thriving hacker underground that that uses the most efficient way to steal money and they stole money from targets by compromising all of those credit cards just a few weeks ago and that affected a whole lot more people than any of these thefts and you know they're gonna go after wherever the money is and if the efficient money is Bitcoin they're going to go after Bitcoin to but here's the trick because this money is controlled through mathematical

Purity and because it's programmable we can actually create new ways of securing money so we can innovate whether it's the paper wallet example I gave you where you can create a physical copy that you can secure old style in a safe deposit box whether it's using multi signature transactions where for example the money is locked and it takes two keys or three keys to unlock it so for example you can have a backup company that provides the second key and so if you lose the primary key you could use the secondary key you can do

no backups you can do you can do time locks you can do all kinds of things now with money because it's programmable that allow you to create new ways of securing it so it's still very early early days you know some some people who don't take care put too much of their Bitcoin in one place and yeah that's not a very good idea they have weak passwords so in this situation where these people lost 1.2 million in Bitcoin there's no bringing that back there's no tracing it there's no finding out where it went or their social securities in these Bitcoin or no

is rather in these Bitcoins that nope like dollar bills you know they trace like batch it's cash no it's it because it's visual I mean this is one of the key one of the key controls in the system is that it's like teleporting the digital cash and you know once it's not on your teleporter pad and it's gone you just hope the other teleporter will send it back to you because otherwise it's gone I mean it's digital cash it can go very easily because it's

flows very easily so what we're doing at the moment is developing new security techniques to make it both harder to steal in the in the first place to have backups so that you can so that you can get back if a key stolen before it's used and there's all kinds of things we can do to make this better it's still early days there was a story about that guy who left his Bitcoin on his hard drive and tossed it out accidentally it's worth nine million dollars yeah right I'm sure you're aware that story what

this is an a this was in England and throughout the actually all that happened is that a lot of people showed up at the local landfill with with metal detectors so a lot of people were looking for this guy treasure Hunters yeah we're trying to steal it well digital treasure hunting is going to be a thing part of our future so you got people are going to like find old hard drives my 2013 and so I look for Bitcoins on them I love stories like this I was hopping rabbit the other day and I was reading this great story to student who said you know back

back in 2010 I did some Bitcoin mining on my laptop and I just found that wallet and it says I have 917 Bitcoin am I rich or am I missing something because this would really change my life I've got student loans and the guy had you know at the time it was a nine hundred thousand dollars worth of bitcoin that he had found from a laptop he left laying around in 2010 and did some mining that story is great and it's happened many many times so did it that guy sell that and become like yeah almost a millionaire yep

insane and this was a student who is like I'm having trouble with my student loans you know this thing really helped me am I do am I sick he couldn't believe he was like I might see that's wrong from mining so okay let's let's get crazy talking monkey studios here we decide to start a mining operation don't don't know I mean it's - I kind of want a million dollars like that sorry what else we don't know so what else I'm I had to figure it out

so the reason people have been successful with Bitcoin is because they got interested in the technology when only a few thousand people knew about it and when they got involved at that point Bitcoins were worth like $100,000 Penny or a thousandth of a penny and now they're worth $800 so if you ended up mining some then even if you only mind a few you know plus it was a lot easier to mind then because over times the network adjust the difficulty so the more people trying the harder it gets so the network is

animus there's no centralized server there's no Central anything it's a series of rules that everybody follows and it's hard to grasp at first because we've never seen this type of distributed organization and is there any organization whatsoever as far as like a CEO or a no so this is so where does that money go then every time the transaction goes it's a good just Satoshi Nakamoto knockers living like a pen if it even exists there's not even a real picture of him anywhere on the internet no one's actually ever confirmed his identity so it could be just the

permitting or number of people man bro or animus with his invisible hacker visit physically invisible so all of the people who are doing the mining who have the the hardware and a using it to mine for Bitcoin what they do is they secure the network by running this very hard problem they prevent anyone else from cheating because in order to essentially they end up voting on every block together with this enormous computing power and that can enormous computing power means no one can falsify the block because

would have to do that much computing power to falsify the The Ledger right right so if you can't falsify without doing enormous amounts of computing power but if you do enormous amounts of computing power you get a reward in Bitcoin well you're going to try and win the game rather than cheat right cheating is extremely difficult to not rewarding whereas participating is rewarding I say right so all of these miners are working and what they do is they verify the transactions and

they secure the entire network which actually if you look at it on the grand scheme of things is a lot cheaper than guards and armored trucks and alarm companies and volts and data centers and fraud prevention centers and all of those things that we have in our traditional payment system it's actually a lot cheaper to do it by proving you're doing all of this computation for the network security now they collect fees so when they verify a block the person who manages the verify it first by finding this little magic number this

into the problem I'll explain that in a second collects the fees that are in the block so all of the transactions that get verified in the next 10 minutes the minor who finds that block will collect all of the little fees 40 cents here 40 cents there are 40 cents there it's about 40 40 cents to send a simple transaction right now and they'll also get a reward of 25 Bitcoin and then everyone will start the race again to verify the next block of transactions for the next 10 minutes of spending and the first part one to find the solution wins gets the reward gets the fees and they all start

repeating again but you don't know who's going to win it and the enormous amount of computation that goes into it ensures that no one can cheat even if you put together a 600 more powerful supercomputers in the world you would not be able to get to beat the Bitcoin system right now what a fascinating element to be added to the idea of economy this this idea of the unified group of computers working on ever increasingly complex computations so the scientific term for it is a consensus ass

lighter which means it's a lighter a list of transactions about Assets in this case Bitcoin that's based on consensus on agreement and the agreement is reached by everyone voting with their computing power and because there's so much of it you can't cheat the election now when you said that there have been other attempts at a new type of currency that have been shut down by the current banking system that was because they had a place where they had centralized servers exactly operator of these centralized servers or

centralized organization or centralized something what did they do to stop them easier any legality issues when it comes to doing something like this or creating a new type of currency oshiro this this enormous legality issues I mean the banking system has this Fortress wall of regulations around it that acts partly supposedly to protect consumers from misbehaving thanks but also serves very well to prevent competition from small Banks because it's very expensive to do too you know

pass all the tests right right so it keeps the raft the rabble out but you know then a lot of the criminals end up being inside this whole system here's the thing that that whole regulatory system comes down hard on people who decide they want to create their own currency and the nice thing about Bitcoin is that there is no one there okay but you say something agreement when you say comes down hard like in what Manner like how would they come down hard like let's say you just sit forfeiture

her seizures lawsuits money laundering charges all kinds of things like that and this is because you're not doing things by regulation is that what you're saying well it has happened that way in the past so you no matter what if you decide to create your own currency and you have an actual business and you're a centralized business the central Ibis centralized business is responsible for following all of the government's standards on banking 100% across-the-board And if you don't that's where money laundering charges that's where larceny a lot of different

charges get brought up that's what's going on yeah now that's a voided somehow or another for Bitcoin because avoided it's simply the Bitcoin is a completely decentralized system it works based on math so there is no there's no one running Bitcoin it was an invention just like someone invented electricity then we all learned how it worked and we all ended up using it but does it matter who you know invented the electricity that makes us like work no Bitcoin is like that it's a standard it's an idea and it runs by people

in the network so there's nothing there's no central location there's no company behind that there's no leader there's nothing inside a decentralized just like no one runs the internet right so if you say I don't want the internet to do this who are you going to sue

it's a Global Network yeah I mean what Al Gore Al Gore for inventing it why it's well that's one of the reasons Satoshi Nakamoto disappeared because he was smart enough to know that you know I'm hearing him would affect weight but couldn't he because since he programmed everything have access to everybody's money if you wanted to so let me explain that the the software itself is so called open source software that means that it's a recipe of code that implements the the Bitcoin agreement

turning to the network standards and you can write your own I mean if you don't want to run that software you can write a version of it in fact there are five or six different you know fully compliant versions that can participate in the network and even if you take the basic one the started with him writing it but since has involved in a community project with lots of people writing code you know just like the internet it you just agree to play by the rules and then you can read the code and you can see exactly what happens there is no controls in there there's no

no magic secret Keys see how it works what do you what do you saying hold on a second there's five or six different types of Bitcoin that's there's five or six different programs that can do the full Bitcoin language on the Bitcoin Network five or six different versions so they all speak Bitcoin so it doesn't matter but they're what are they doing differently than the other ones just different ways different programming languages different ways of implementing them something more efficient in some ways someone more efficient than the others but they don't do

different in terms of Bitcoin so there's just like there are lots of different internet routers and they all speak TCP IP on the internet and you know Cisco make some and Juniper Networks make some others and HP makes them others but they all speak the same I see so there's no concern whatsoever there's any security openings because of the fact these guys are producing their own software that communicates and bit right what caused the trust is based on computation not taxes so this is a key thing to realize

all of our payment systems and banking systems up to now keep trust in the system by keeping people out by controlling very carefully who connects to the network and that means the network is always very small in Bitcoin all of the trust is done by this joint computation right and so who talks the network doesn't matter because the network is trusted and safe regardless of what you try to send to it will receive from it or how you interpret it because there's no Center so this has radical implications

chance because that means you can let anyone talk to the network or rather you can let everyone talk to the network and everyone can be a bank on that Network and everyone can send wires transfers on that Network you have uses power of a bank on your smartphone and as long as it speaks the Bitcoin language and understands it with the rest of the network you don't need to trust

you know that that application is running the trust happens in the transactions in the network you can't cheat no matter what you write so what is the motivation to write a new software what is the motivation and officiants like there are different PCS that are run Windows or you know different clients that are run pick one I see so they just have to sit at decided to run their own program that that speaks Bitcoin yeah but it participates in the exact same fashion right you have a Chrome browser or you have a Firefox browser why there are two right same thing okay

fact it's very similar or like a BitTorrent client there are three different versions but they all speak BitTorrent and your browser's all speak HTTP the hypertext transfer protocol so no matter what website you go to and there are lots of websites programs that made by different companies that speak the server side of the web you know there's lots of different versions but what matters is the little common language they speak and Bitcoin is like that it's a Common Language or protocol or standard and that means that no matter what you attached to the network

whether it's a wallet that's written for Androids or wallet for that's written for iPhone or a wallet that's fancier or wallet that's that's more geeky all of these will speak Bitcoin to the network and will work with the system and and the trust is in the network now when we were talking earlier about the if you had a centralized location centralized server that could be shut down by the Banks and they could charge you with all these crimes is there any concern

legally speaking that if you were a person who has all your money in Bitcoin that maybe one day the government could come along and say Bitcoin is not a valid currency it's illegal to use using it as a crime we find it on you we're going to take it from you and we're going to arrest you well actually the government has already said that Bitcoin is legal and that users using Bitcoin are are doing perfectly legal business Q Jay can you pay taxes and big

not directly no you'd have to convert it to dollars but there's a company that will take your Bitcoin and pay the taxes for you Bingo whoa so back in April the fincen which is the financial crimes enforcement Network created a memorandum where it's explained how which read Bitcoin and it said you know if you're just an individual using Bitcoin to buy and sell things great it's just like anything else you you're going to pay you know you're going to pay your transaction

that's it if you're someone who makes a living in Bitcoin you pay income tax and if you're someone who's mining on bitcoin you pay income tax on those Bitcoins so if you're an investor you pay capital gains its treated just like any other currency so if you make your living off Bitcoin that's how you get paid you convert that to Dollars and you pay a percentage in dollars is that which do you convert like how much you made in Bitcoin per year in the year and what that would be in dollar bills and then pay the percentage on that right

I mean that's not different from what I did before when I got paid in Euros I mean occasionally I get a paycheck from a customer in Europe they going to pay me in Euros right and what do you do you convert it to Dollars you mark the rate at which they paid you you know you invoice them they paid you in Euros you mark what Ray to walls and then you put it on your tax return as income people are notoriously bad about reporting income when you know when it's independent when they're not being taxed by their employer when it's not coming directly out of their paycheck

comedians are terrible about that I know so many comedians that I've had like serious IRS problems because that I would think that that sort of issue would arise with Bitcoin where people are responsible for paying taxes on these and they don't mean how much how much of an issue is that and how much of a criminality issue could that become

well I think as Al Capone found out there's one thing you can't do in the US and that's not pay your taxes they might get they might not get you for anything of you pulling up right keep pulling up his Arsenal I pay my taxes and and if you earn money and pick when you pay your taxes on bitcoin as simple as that and if you think you can get away with not doing that then you'll find out like many people before you is that the IRS will come will audit you and you will end up paying a lot more yeah even if you want to pay them back

and and agree to pay them back they still put you in jail like yeah I don't think my need to sit in a cage for a little while and think about what you did I mean that would simply be a monumentally stupid thing to do to think that somehow that would protect no I mean they're going to track down your accounts just as effectively with Bitcoin as they do with other things they're not stupid one of these articles you keep pulling out Brian I would just keep on finding new things about different news reports like this was a four hours ago where two guys have been arrested a major

prominent players in the Bitcoin Universe Charles Sherman was arrested by federal prosecutors on Sunday and accused of helping Grease the wheels for drug transactions you know using Bitcoins and mr. shrim was also the founder and chief executive of popular website called bit instant where Bitcoins could be bought using dollars and so it's what it seems like there's a lot of people getting arrested though there was another guy that I flashed up earlier that was arrested it seems like there's a lot of Shady

off going on in this universe right now honestly that's the only reason I never went and got into Bitcoins out you don't feel nervous about all these like recent news things at all or because you seem very Pro like I'm not worried about it at all but I think you already stated position that you know people are not going to stop going online and shopping on amazon.com with Amazon gets hacked what you're dealing with is a few people that are scumbags that are operating in this truly revolutionary system that

it is very beneficial yeah but this is here's the council there's Bank this is like robbing a bank you know well knowing this whole so here's my perspective Bitcoin is a technology that is powerful and is being used by school teachers to manage PTA groups it's being used by Churches to manage tithing and their collection plates and there are clubs and it's also being used by criminals occasionally to do crime

just like any other car in see in fact the the point is that compared to another currency like the dollar you know the the money laundering that happens with a dollar I mean HSBC was found and convicted under a consent agreement I think for 17 billion dollars of money laundering with the worst Mexican cartels and they got a minor fine and no one went to jail and Wachovia was money laundering

words of billions of dollars with with various drug cartels and Asia and again nothing happened so let's not pretend that suddenly Bitcoin is like this criminal situation it's not it Just represents just like the internet represent society and you get the whole Spectrum Bitcoin as a currency can be used for economic activity and that means the whole spectrum and you'll have a small subset who are people who take advantage and then you have the

majority increasingly now is getting more mainstream exactly this one possibility of being able to do exciting new things with money the were impossible before and and to enable new forms of Commerce you know there are hundreds of startups that are innovating with new forms of for example how to do settlements and escrow on a real estate transaction and not spend two percent on that but do it with Bitcoin much more safely much more effectively companies that are working

working on doing charitable foundations based on bitcoin endowments Charities that are working to do remittances to foreign countries to help the poor people you know all kinds of activities are happening but what is the primary focus of the media it is to generate page views and you know portraying the sensationalist off always wins out so there's a lot more to bitcoin don't get fooled by the fact that you know some some things are emphasized as if that's the bill

and ultimate goal certainly some things are emphasized but those are legitimate stories I mean that was a legitimate story the story about the guy getting arrested for you can't judge the media on reporting legitimate crimes no I don't think that's the that's the issue the problem is you know you get a lot more of that than is actually occurring and you get a lot less of the stuff that's really interesting and important in my view the positive stories don't generate stories exactly and you know the way I look at Bitcoin I think about the possibility of can create jobs I look at it as

as a technological innovation I look at it as an engine for growth in a stagnant economy you know so those are the things that stick in my mind jobs Innovation and growth not you know the fact that some bad dude used Bitcoin right to do bad things your example of the bank that was laundering money with the drug cartels is absolutely perfect because that barely got a peep out of people and that was a very recent decision and you know I mean I saw some outrage from a few Twitter users I literally I read the story and my

Martha just hanging open I was like how could they get away with that and just get a fine like they dealt with murderers and they laundered their drug money and they did it for a long time and they made a lot of money yeah and they just got a slap on the wrist find wasn't even up to the part of the money they made that's the shocking thing it's not even covering the profits they lost which basically rewards and says Gaggle had do it again you made a great return on that investment there's a real issue with this whole Mexican drug war

is that there's so much money to be made in being a part of it and it leaves so many holes open for corruption and even legal corruption like this type of stuff where it's they do something they get fined by whatever regulatory body but yet they're still in business they're still there in acting and they profited on that decision encouraging literally encouraging people to continue to do business with illegal groups like that if you can make that kind of

of it which you know there's a real issue in this country a massive amount of distrust of law enforcement and there's a big part of that becomes comes out of the War on Drugs it comes out of the war on name the drug you know whether it's cocaine or whether all these different people that are struggling to keep things illegal are pumping up all these businesses that sell these illegal drugs because there's this massive demand for it so when you see a War on Drugs what you're seeing

Ying is is an engine to generate money for Crime that's all it is people are not going to stop altering their Consciousness but you are ensuring that the people that are profiting off of that are going to be criminals and then it leaves the door open for people who are in an actual law enforcement to see these loopholes and see these these ways you can skim a little money take a little bit home for themselves and next thing you know you got corruption and next thing you know you got Bankers going listen I can guarantee you the worst going to happen is we're going to get a fine

files going to be little and we're going to make a fuckload of money and these guys Pedro's coming over he's got a donkey cart felt this at this whole battling part of the story in one of these Bank situations where they had these branches in Mexico and they were putting literally millions of dollars in suitcases is taking them through the teller window they actually ended up designing and mass manufacturing suitcases that fit through the slot because they were doing it every single day so

they had a teller window slot fitting briefcase so they could stop that cash through and no one went to jail wow that's amazing so you know I mean we can talk about money all day and some money will create situations for people to take advantage absolutely well it does that way with guns it's got does that way with everything I mean that's that whole that fast and furious investigation that you know about that there was where the what

our government agency was selling arms to Mexican drug dealers so that they can quote unquote track the guns you know it's ridiculous because those guns actually got used for killing American servicemembers American people that were involved in Border Patrol people that were involved in law enforcement a lot of these these guns wound up being used to actually kill Americans more than one and the idea behind it is so Preposterous the idea that you're going to sell

all weapons to criminals so that you could track where these weapons go like no that's a fucking terrible idea these are the people that are in charge of deciding you know what kind of law is getting forced and what What atmosphere of law enforcement this this country has and you see things like that it's so frustrating and confusing because it seems almost like a blatant crime like someone sold sold some guns to these Mexican drug lords and they did it under the guise of this crazy

and we're just going to sell them guns and keep an eye on them that way will track them and then we're gonna get them that way you're giving them guns like that's what they want that's what they need to perform crimes you're giving them tools it's like a guy who's a fucking Carpenter you're giving him a saw and a hammer you're giving it to him and you're literally telling them to go use them and that's essentially what you're doing and you're profiting off that how is how are you not in jail for selling guns how can you say that that was a an idea a plan that you had I mean it's unbelievable it's unbelievable

Isabel and it's in it's impossible to to read those stories and and understand how we could ever trust the people that are in charge of running this country if this is something you're capable of doing how the fuck would anybody trust you how could anybody ever take your leadership seriously if this is what you do this is madness well I mean that's one of the reasons that I think a lot of people are also passionate about Bitcoin is that they've realized especially since

2008 that these same people cannot be trusted to run the money system and we've seen now for the last for example 5 years the FED has been printing between 85 now tapered down to about 70 billion dollars a month and giving it as corporate welfare and direct subsidies to the banks so we didn't get a stimulus but they are continuing for five years now to remain solvent based on 70 billion dollars a month that's a trillion dollars a year almost

East in dollars generated by the FED most people don't even know this is happening these little people running our money on what it means is that you go out to use your dollars at the store and suddenly you can buy a lot less bread and a lot less milk and a lot fewer eggs but then they take items out of the inflation index so it looks like there's no inflation whereas anybody who's trying to spend their dollars knows that things are getting harder and harder and harder right these are the people running our money so Bitcoin offers an alternative approach

which says let's trust math let's trust that the system runs based on a rule a simple mathematical role and everybody agrees that that is the rule by which money is created and no one can monkey with it and and that's the beauty of it because if you know the rules it reduces the uncertainty it reduces the risk and when you have a simple system where people can interact with each other and exchange money based on simple mathematic rules the system's going to do quite well

well because people no longer trust their governments even here and it's much worse everywhere else do you think that these issues that we have with the financial system and the the law enforcement system are sort of magnified by the solution of Bitcoin that this being the internet of money that really we need an internet of law enforcement we need an internet of of regulations we need what we all agree on we don't need what's been stuff down our throat we need what we

on by consensus based on the information that's currently available which is what we would get if we didn't have some sort of a centralized group that's in charge of deciding what's legal and not legal how things are in force how things are done how laws are are created let's talk about smart law and smart contracts because this is a perfect opportunity Bitcoin the underlying invention the blockchain asset Ledger as it's called basically allows people to agree on who owns Watson to resolve differences through

through this computation but the basic thing that means is that you can start doing smart contracts that means that you can put contracts into the system and then they either get executed because the conditions are met or they do not based on mathematics so you could say for example I'm going to have instead of having a deed to my car that's registered with the DMV I'm going to have a digital deed that's on the Bitcoin Network and when someone pays me the money to buy that car that transaction is married to

do the deed transferring to them and the verification happens by the Bitcoin Network which I trust based on distributed consensus no one at the center no one monkeying with the rules so now you can start doing contracts and using the same basic mathematics to root fully resolved contracts you could have for example a parent setting up a number of transactions in the blockchain in the Bitcoin Network that send money to their kids in two decades

when there are going to be 18 or 20 or 21 right so like a trust fund or a will and you could write that as a contract and then execute it on the Bitcoin Network and then no one can stop it no one can reverse it no one can invalidate it

that's pretty powerful stuff it allows people to have contracts between them between each other that are adjudicated if you like by the Bitcoin network based on the mathematical rules and how would these things be enforced if they had to be in a court of law would that ever be an option would they ever be considered legally binding well simply the simple matter is that the transaction goes through or the transaction does not go through the transaction is ease of valid because you presented the right keys or it is not

valid and once the transaction has gone through it's gone through I mean that's the simple way the network works so you know adjudication is something that you then have to deal with after the fact like if if a parent put a transaction in the Bitcoin Network the gave you no money to their kid as part of a will is that can't be contested when that kid presents the key that transaction goes through done the network has agreed that that money has transferred

it's transferred so it doesn't need a judge has written consent or doesn't need know it's math word articles instead without you know the the benefit of this is that instead of relying on the ambiguity of language which is the basis of most law for many things you will have to but for some simple things like doing an escrow for a house or you know buying a car or transferring property or doing a trust or will you could simply convert those

legal contracts into Bitcoin transactions that then get executed under a certain set of rules and suddenly you've got a form of smart law self-executing law that happens based on the Bitcoin networks ability to agree on what's true it's fascinating to think that this could be one step in an ultimate revamping of our society and the revamping of our society based on the internet and that if Bitcoin or in things like Bitcoin these

the pier used groups these groups of many people agreeing on a standard and subscribing to a system if that can happen with this it can start happening with a lot of things can start happening with education it could start happening with you know with even with law enforcement you know the idea of Community Law Enforcement or or figuring out some way to fund private law enforcement or private contractors based on a situation like this

for for the biggest part of human history a lot of the most difficult problems like communicating a distances or agreeing with lots of different people simply didn't scale and because you couldn't scale solutions to those problems we build hierarchical institutions to solve them representative democracy we built councils and committees to solve decision making we built Banks and central banks in order to solve issuance of currency and other things like that and we built hierarchical media

Nations because we needed a single voice to tell us what to think and then gradually we're seeing the solutions that are decentralized the solve the problem without a hierarchical organization and the scale so the internet was the first decentralized Communications that scales to the whole planet and so suddenly all of the hierarchical solutions for communication are no longer necessary they solve a problem that doesn't exist the problem of it being difficult to transmit information across the

turn into our across the globe once I problem goes away the institutions built to solve it use systems large entertainment and marketing organizations to you know create single output products all of those are no longer necessary and the choice blossoms Bitcoin is simply the same concept of decentralization but applied to money and one of the interesting things is the Bitcoin at its core works on the fact that you can decentralize voting and do voting at scale

and the voting that's happening right now is the voting to agree on who has the Bitcoin but you could do voting for all the things like you know stocks bonds Global lotteries national elections and things like that when you say the Voting is to see who has the Bitcoins like so when when essentially the the mining process that verifies each block of transaction and secures it is like a giant vote an election that happens every 10 minutes and by looking

of the transactions you can tell who has the Bitcoin if the entire network has said Andrea sent Joe a Bitcoin and that's being verified by the network then everyone trust Joe has a Bitcoin and will be willing to accept that Bitcoin and payment for something right so essentially that you have this every 10 minutes you have this consensus where the entire network agrees on all of the transactions that have happened who has Walt what's going on on the system the ability to

at a massive scale have everyone agree on what the truth is that is the core invention behind Bitcoin that makes currency possible but it also makes other things possible including elections so you can do some pretty incredible things because what you've done is you've decentralized decision making the internet the centralized Communications Bitcoin is decentralized money but at its core is an invention that the centralizes decision making

now what are the concerns as far as Bitcoin getting shut down and what repercussions or what kind of blowback if any have you guys received the people that are in charge of you know spreading all of this Bitcoin evangelist as it were is there any repercussions or any blowback or is there any no nothing so far no I mean you know there's there's a little misunderstanding so happen every now and then and you know

people at first who don't understand the technology sometimes sit down and have conversations to understand it better but you know the point is that at the moment Bitcoin is legal to use and it's not just legal to use in the US but it's legal to use in pretty much every country for individuals certainly I think I don't think any country has banned its or has even attempted to ban it Bitcoin is money as a piece of content that you can send on the internet so if

she wanted to ban it would be relatively difficult to do that without shutting down the internet so that's one thing to put out there but the point is the nobody is trying to ban Bitcoin nobody's trying to shut us down I think especially in the US and especially among senior lawmakers like the Senate who had hearings recently about Bitcoin the prevailing attitude is lock this is generating growth is generating jobs it's a huge Innovation and we see that it's

being used in a very broad manner can change a lot of things you know maybe we should take a wait-and-see approach and the price went up quite dramatically after they said that but the general attitude is most most politicians are far more interested in the possibility that this might generate growth and also jobs and as a result votes and campaign Finance money then they are about you know beating this down because it's going to affect different interests so they're still open to it and I think we've got a tremendous

opportunity to educate people about all of the incredible things we can do and also highlight the fact that this Bitcoin economy just in the last year has generated thousands of jobs in an environment where we have economic stagnation we've got this Bloom of innovation and Technology much like the first burst of the internet and you know that's a tremendous thing you don't want to squash that just because of a misunderstanding do you think that there's a lack of blow back because the people

people in the powers of be just having considered Bitcoin to be a threat yet because we talked about like politicians not acting to try to silence it to service their the people that get in the office the lobbyists are special interest groups would have you like that's just because they haven't been contacted by those people to try to do something about Bitcoin I think even the banks are ambivalence on this because while it may be disruptive to some of their banking practices it is also one of the most interesting and Innovative things to happen in finance in the

hundred years and so I think a lot of banks are smart enough to say look we we're good at technology we know money we've got branches we've got customers we've got marketing we've got Brands we know how to do security we could really make a good deal with this Bitcoin thing and use it and make some really interesting Financial things so there's this mixed bag just like you know and I'll bring the same example when entertainment companies were first faced with the possibility of MP3 yes some people would like

like oh my God this is going to destroy everything music will die right which is the same they've said with every previous technology were right though but but but no they weren't because all right but the point is that since then the number of genres a number of artists and number the amount of music has exploded people get a broader range of music than ever before and MP3's have created so much good in the entertainment industry so much more than damage right and I think even in banking environments they

that was Bitcoin there's this mixed bag which is that the good far outweighs the bad and even in a business is going to get disrupted as banking will be just like entertainment and telephone companies were disrupted by the internet those that are smart can take advantage and they can build something good with this and they're going to lose some power and leverage but they can make some good money out of this so I don't think anyone's out to get Bitcoin right now right I think people are are constantly evaluating its and and thinking about

out what opportunities that can bring and I think that's the best approach would you pull up about the taxes because I guess there's this whole thing going on that people need to claim the the stuff that the the purchases or the money that they get from Bitcoin on your taxes but the IRS hasn't said how to do it yet well I mean I've discussed this with my accountants and they gave me a pretty straightforward formula if I earn income on bitcoin I'm Mark how many dollars it was at the time and I pay income taxes on that just like anything else

I've invested in some Bitcoin if I hold it for less than six months I'll declare short term capital gains more more than a year I'll long-term capital gains and pay the difference I mean that's basically how I would work with Heroes that's how I'm going to work with Bitcoin the keyword what you're saying how you're going to that's what's interesting about this is you actually haven't started doing that yet because you've only been started to get paid fully in Bitcoin over the last few months so this is fairly experimental even for you you're basically at The Cutting Edge of this right so

so I mean there are people who have already filed taxes a few times and they've used the same approach I'm going to be filing income taxes in Bitcoin for the first time for 2013 but I mean I'm discussing it with accountants and they think it's pretty straightforward and I think the IRS will give us guidance before April and the reason I think they will is because the IRS is interested in in making revenue and what better way to make revenue from Bitcoin then to Simply explain exactly how people should pay their taxes on it so we can these

gonna get really weird of his takes off they're already weird and it already took off you think yeah yeah absolutely I'm not kind of but I don't know anybody who's using it all the time I mean it might you might say it's if you're you know you're on involved these online groups but the actual percentage of people that are using Bitcoin a regular basis what is it 1/2 of 1/2 of 1% mean is maybe there is there's probably

you know several million is it over 10 countries than 10 this country no worldwide but most of it's in this country there's there's a how many million people in this country that are using Bitcoin on a regular basis well that I don't know and it's and it's not easy to find out but what I do know is that for it to be taking off as what I'm saying well so what so what I'm thinking about is in terms of taking off this has been around for five years it's been a very stable and secure network that has preserved or increased in value at the same time people have

gradually improve the technology now we've got this whole raft to startups that it doing Innovation and delivering better and better products around it more and more Merchants are doing it and most importantly it's gone Global it's now being used in dozens of countries around the world and the network is large and getting larger every day so all of those conditions remind me exactly of what the internet was in 1992 again most people didn't hear about it until 94 95 and at that point you had people go on the morning show and say

you know is internet the email or what's this at sign and they were having that conversation but it had already been growing quite rapidly I think that's where we are with Bitcoin my mom is not going to do you know Bitcoin on her own for another six or seven here's most people won't hear much about it for the next two years that going to hear about it occasionally but in the meantime it's been building momentum and getting better and I think it's already arrived certainly the invention behind it which is also spawned many

other currencies you can't on invent that invention so in whatever form and if it's not this Bitcoin currency which I think is already pretty damn strong you know that's saying invention can be repeated and improved just like you know the internet so the first early versions were really really clunky and gradually it improved and keep in mind currency is just the first application so if you are on the internet and you only knew email you couldn't even imagine

what the web would be like let alone social media or MP3s or digital music and video internet still the Bitcoin is still like that we've got the Bitcoin currency which is just like email and it's the basic application now companies are building the other applications and it's getting really exciting so I think we've got a bit to go into where mainstream but I think it's already catching on now another countries it's the government has been not so sweet about use of Bitcoin and there's an article that came out just a few hours

go from Russia the Russian Central Bank said the Bitcoin users could face jail time they did yeah it's up there it's actually wasn't in Time Magazine this is off Aryan no boesky all right lovely I'd also says the you know that other countries have done the same thing including China and I mean what if you use Bitcoin and then you know two years from now they say it's illegal I mean he's this is crazy this was released right before we started the podcast a couple hours before they we

this podcast they release this story so it's a fairly breaking news so I haven't seen the story yeah what I can say first of all if it's saying that it's the same in China they're wrong so that makes me wonder what else they're wrong about but in China they banned central banks and other banking institutions from holding Bitcoin on their asset Ledger they didn't ban people from trading in fact a Bitcoin is like 60% or more of the trading happens in China they didn't ban people from using it is perfectly legal to use it there as well I think you

be it might be an exaggerated headline but even if it isn't you know if Russia bands Bitcoin I think that probably ends up hurting Russia more than Bitcoin yeah China is limited Bitcoin use for its citizens apparently yeah it's on a few different yeah I'm trying to also limits internet use for its citizens so that doesn't devalue the internet I mean that's the that's the point about this and keep in mind there's also a matter of due process of law and there's also a matter of different legal structures so for example in India the first reaction of the

of The Regulators was well if it's not specifically licensed and permitted it's not legal that's their their legal systems attitude is we say it's legal it's legal if we haven't said anything about it and it's leaking right you need license so it's the inverse of you as Mom right but you know certainly here in the US I'm not I'm certainly not worried about it being pans hair because there's a lot of legal precedent for private currencies in this country and there's constitutional protections and there's

Penny's that can defend themselves against that but we have a lot of people that listen to this podcast from other countries it's one of the reasons why I wanted to bring that up the Russia story but to point out that this is not a universally accepted thing as far as sure governments and the ambivalence of American banks that they've shown American politicians this is may not be the case in other countries what is this Bank of Russia issues warning on digital currencies well you know Russia is incredibly suppressive place we know that you know we know what's going on with them and gay people I mean right it's

a really it's a polling very strange backwards country and in terms of a lot of things that they think in a lot of the ways they behave as a nation and you know it's basically also Run by One gangster it's not a country of laws that's for sure well demean without a doubt Putin whether he's a great leader or not is his gangster you know he's just a super awesome one at it he's running the country used to be the president stepped down put a puppet government in place and then became the president again I mean the

thing is magical and then rode around on a horse bare-chested yeah splendour yeah that was pretty crazy and weird it does a lot of weird things him and Obama were they were both conflicted they were in some area and they were conflicted as far as like when they could use the gym they weren't allowed to use the gym together for some fucking reason like as if Putin and Obama can't work out in the gym together like you know fucking crazy that is like dude I'll be on the StairMaster you hit the weights is that cool

no they can't be in the room together like they were afraid that Putin might beat him over the head with a fucking club or something but so while Obama was in the gym working out Putin jumped in the fucking Lake outside the gym so in clear view of Obama and his you know it's fucking elastic bands that he's doing his little aerobic stretches with Putin swimming in a fucking Lake freezing freezing cold lake like a man like a bare-chested Savage in an Old Spice commercial

should Old Spice master

unbelievable you're just pissed off about Alaska still do you ever hear that old story that about how that we say sold Alaska to us for I think was like 12 million dollars and then we bought it from them like whatever 1817 hundreds and then they we found so much gold in Alaska that they would have you know tripled the amount that we paid for Alaska even just gotten gold just on gold forget the oil and everything else no real ask is amazing they fucked up it's way better than Russia dummies they could have happened

patient spot that will Anchorage is the shit man is one of my favorite places I've ever visited It's amazing And The View that when you drive into the mountains oh my God it's just magical up there it's incredible yeah I don't know Russia is a weird spot man you know Russia has had a long hard history has been a lot of horrible things that have happened to the Russian people both you know World War II and before that they were they were occupied by the Mongols for 200 years I mean it's just a rough country and when it

comes to their laws lime they've got some really fucking shady laws and real weird attitudes on things too man you know they have a habit of shipping people that don't agree with them off to Siberia like that that one really wealthy oligarch fellow is one of the most richest men in Russia but cross towards Putin Putin just sent that motherfucker to jail kept him in jail for 10 years and finally released them have massive public outcry this guy who's you know they trumped-up charge

against him just locked him up in a cage for a decade yeah well here's the here's the other perspective on this which is in places like the u.s. if the if the government ban something they go through a very long arduous process they go through courts they have to prove their case they can just willy-nilly do it and it takes a long process and generally the people kind of agree with it now in a lot of places in the world when something is banned by the government that people go hmm maybe I should look into that

so you know the fact that it's banned in Russia doesn't necessarily mean the Bitcoin disappears it simply means that Bitcoin is more of an underground currency in that place and people have a lot less respect for laws that are arbitrary and capricious so in countries where you have weak rule of law and you have rule of people correspondingly the people don't pay much attention to those you know a lot of things are illegal in Russia including you know buying and selling dollars on the black market and you can do it on every corner in Moscow yeah isn't essentially illegal to be gay

what are the what are the laws on gay people are incredibly restrictive right

yeah I have I don't know what the I don't it's not illegal to be gay but I think it's more there are still sodomy laws and there are still bands on public displays and things like that it's fashion really or even symbols they arrested someone on the Sochi Parade route with for holding a rainbow flag was disgusting that's hilarious The Gaze of taken over the rainbow I love that we rainbows were a kid that's like fucking leprechauns pot of gold

no beautiful sunshine after the rain and now it's gay how'd the fuck did they do that you can't arrested for having a fucking rainbow shirt on I would I'm just a fan of rainbows what if this rainbow shirt you got a leprechaun at the end of it where they say then is electives if you have a rainbow shirt on the leprechaun and a pot of gold I'm sure you get to argue that's in court about three months after you're arrested after spending three months in a dungeon yeah if oh yeah well you have but sex while you're in there so might be great well that's the old Lenny Bruce joke

and you know that was like one of the classic Lenny Bruce chokes I don't understand why they would the laws against homosexuality dig they take a guy who's gay and they arrest him and they put him in jail with a bunch of men when I have sex with them

that was laborious Lenny Bruce laughs yeah that was a classic that was one that people stole an didn't realize they stole it because a lot of people sort of recognize that it's like when I was an open mic night comedian I lived in Boston and Boston as it is of course south of New Hampshire and New Hampshire had a license plate that said Live Free or Die and of course the the old classic story about license plates is that they were made by prisoners

so like 10 guys came up with that joke independently the Live Free or Die well the problem with that is you know they're made by prisoners that's one of those things

yeah Bitcoin what pink where do we go we went off track went into the woods is there any kind of insurance company or a company that's going to backup Bitcoin like an insurance company kind of like you know when a bank it's Roars producted Ashley as in many areas of kind of Emerging Markets one of the first and move in is Lloyd's of London which have historically been involved in in types of insurance that other companies won't necessarily off

first and introduce the new market so there's an organization in the UK that will take where you can store Bitcoin and then have it insured by Lloyds of London for a specific fee and they'll protect it from theft but here's the interesting thing that's our that's a fairly limited approach to it but what you can do with with Bitcoin is you can take insurance contracts and the guarantees of insurance companies and embed them into the transaction system so now you could have for example

let's say when you go and buy something on eBay and you do a PayPal transaction and they give you the ability to do escrow so if the product never arrives at your doorstep you can get your money back right now when you do that you have to use PayPal escrow you don't really have a choice and when you do that with Visa you have to use Visa escrow well on bitcoin you can pick an escrow provider and have them add their own key into the transaction and now they're going to be your escrow and you chose them so you can pick from a market of escrow companies

and they can do it without actually holding your money simply by putting an extra key in the transaction and either authorizing its are not so it opens up all of these possibilities for new forms of insurance new forms of escrow new forms of financial protections that couldn't be done with traditional money that there is news just out that Jamaican bobsled team this wasn't from Bitcoin was it but it was a Dodge Coin or whatever it's called raised $30,000 for this year's Olympics right other

day yeah and I mean here's the other is story that's not told very often which is the charity aspect in study after study after study looking both the charitable organizations and user profiles and questionnaires Bitcoin users have said repeatedly that the number one thing they do with their Bitcoin is donate or give them away charity is very active on the Bitcoin blocks Block Chain on the Bitcoin Network just recently bitcoiners raised a ton

of money for the hurricane in the Philippines there's a number of charts will organizations helping the homeless in Florida there's other organizations doing the same in San Francisco all based around Bitcoin so there's this incredible charitable giving spirit in its own way seeing that replicate with all the coins to one of the other interesting ones is the Wikileaks recently announced that the vast majority of their donations now come in cryptocurrency

he's Bitcoin and Litecoin this is fascinating because on certain payment networks you can't donate to WikiLeaks right you can't donate to WikiLeaks with PayPal you can't donate to WikiLeaks with Visa they ban you from doing that and that's how they've cut off the funding of that organization yet at the same time on some of those payment networks you could donate to the Ku Klux Klan now that doesn't represent my principles and I have a big problem with that well with Bitcoin you can because you simply can donate to whoever you want

I can just send Bitcoin to any address and as a result you know Wikileaks has seen a rise in the donations they receive through Bitcoin but a lot of other organizations to its there's a lot of charitable giving there's a lot of nonprofit organizations using Bitcoin this is a fascinating time how many other Bitcoin like alternatives are available and do you feel that those are competition for big for Bitcoin or they just as valid as Bitcoin is there room for a

bunch of cryptocurrencies what's the what's the attitude about that that's a great question because we generally speaking the term for alternative currencies is altcoins some of them are alternative some of them are more competitive with Bitcoin all of them are based on the same invention so what this shows is that the underlying invention of how to do computational agreements on the network that invention has spawned all of these other currencies some of them are very innovative

some of them are just fads and memes and some of them are pump and dump schemes so there's a whole range one of the interesting things that this is created is that in the past money was trusted and had value because not many people could create it and so we trust governments to create money and money has value because only governments can create money now because anyone can create money how you give it value depends on other things

which is actually a good lesson because government money doesn't really have that much value in a lot of places either it's just an illusion that somehow that makes it valuable in the case of Bitcoin what makes Bitcoin valuable is the enormous amount of investment both in terms of resources in terms of the Computing equipment that people have bought in terms of the investment companies that are in it's in the people who work in it other coins have slightly different variations of the same theme

and some of them are based on memes internet memes but cures I see a future where a five-year-old at school could use a web browser to build a coin in an afternoon and launch it among their friends so will there be more coins yes tens of thousands of them and will those coins have value probably not no more than baseball cards or Pokemon or Tamagotchi but within an environment in with young people you're going to have

if you're going to have people who create them for trading purposes and as memes and and fat and so they'll have a certain kind of value just not monetary value so you have to evaluate which coins have monetary value based on what's running behind them you know the Bitcoin economy has an actual economy behind it it has Merchants it has retail transactions it has startup companies that are investing in developing things with it some of these are the coins have some of those things some of them have none of those things but is

risk of Bitcoin being like the Myspace of cryptocurrencies when you get off to his big head start and you're way ahead of the game but there's holes in your game and write Facebook comes in and steals all your people so one thing to realize is that money is a lot more sticky than a social site and when people invest their skills and expertise and companies into a certain cryptocurrency that carries a lot of weight so Bitcoin has already achieved a very high level of network effect which means that the more people are on it the more people it attracts

is the more people are on it the more people it attracts but at the same time because it's building a capital base that makes it that makes it very difficult to unseat bitcoin I think what we'll end up seeing is one or two major currencies Bitcoin is probably going to be the biggest and then two or three or four or five secondary currencies that do some kind of Niche thing that's useful for some group that Bitcoin can't do it won't do because it's at

like for example Bitcoin has reverse inflation deflation because as a fixed Supply so over time the value is gradually going to increase right other people have created coins where if you don't spend them you lose a bit which is like inflation so Bitcoin is not going to be able to copy that and take take that feature and say hey that looks good let's do it too but for a lot of other things when an alternative coin invent something you Bitcoin can simply pick it up and run with it to be

a coin hasn't stopped moving it was invented in two thousand eight and five years of innovation have gone into it and the level of innovation is accelerating so I think there's a lot of room for a lot of coins in this space and not all of them are going to have value but some of them will have value so are there any that stand down I know Dogecoin dogeee coin is one that keeps getting brought up to me to talk to you about on the internet what about Kanye West's coin Kanye West has a coin so I think there are

a few coins that have interesting characteristics you know they Implement new features they do things slightly better or slightly different in some ways than Bitcoin like what like what are they do better well for example one example is Litecoin and what Litecoin does is it has a different way of having the agreement on the network which is which requires more memory on your computer and less CPU so that makes it more level at the same time it

it does transactions that on a different pace so instead of every 10 minutes it does you know fewer minutes for per block thing is two and a half and then you have a larger number of total coins so it's a few tweaks the idea is if Bitcoin is gold Litecoin is silver but that's the general competitive environments now beyond that Dogecoin is in fact or dog coin or doggy coin whatever I'm not quite sure how it's pronounced is is an enhancement on the original idea of Litecoin so I took

fat and then Twisted it a bit more and then you've got this whole list of other coins that some of them are interesting one discovers prime numbers which are useful in mathematics and other one uses different peer-to-peer system another one is more programmable one of the new coins that's come out now aetherium allows each transaction to be full code for programming language you know all of these may have interesting characteristics and then you know Kanye West cool

then you know whatever and man don't dismiss it no I mean it was a great it comes to gold for Center first of all they got sued I think or they got cease and desist it's because it had nothing to do with him but one of the interesting things is that we don't know if one of these catches on mmm who knows why not a lot of things in life started as a joke and then became huge things that became embedded in time so what let me ask you this what about these massive fluctuations in value like day

day right intense fluctuations yes very disconcerting to people that are looking for a stable investment when you see what are the the I mean several hundred percent right what is the worst day or the best days as far as the variation so I think the best day was a was maybe two and a half years ago which was - -41 minus 50% in a day that was a really big crash and it took it to from above 32 below a dollar and then

there was another crash around a hundred and then there was another one around to 66 and then there was another one around the thousand and so we're now kind of in a relatively stable band between 800-900 somewhere there okay explain the here's the point over time these little hiccups get narrower and narrower and here's why they occur if you look at the Bitcoin the total market capitalization if you take all of the Bitcoins that exists X the value that they have on the market today

it's about a ten billion dollar market right ten billion dollar market might sound like a lot you know certainly if it was a tech stock it would be a nice size text talk but as a currency is puny you know there are hundreds of countries I have bigger monetary base for their currency in this is an international currency it's small so what happens is this is a shallow pool of liquidity and when you have a shallow pool of liquidity like this with a few markets that are not very efficient the end result is that every time

I'm someone sneezes all of the liquidity sloshes around and you get these fluctuations but as it gets bigger in size the waves get smaller right so it's not as volatile and if you look at it if you plot it on a graph and you plot the volatility you'll see that every year it's getting less and less and less and less and less volatile now if at some point it became large you know the reason currencies like the US dollar or are not very volatile is because if you think of a 14 trillion dollar economy

me it's like a Titanic it takes you know three miles to turn 10 degrees right so they're much more stable because they have weight behind them and inertia and even if you want to change it you tweak something now and it changes in six months because it takes time to filter through the economy meanwhile think of Bitcoin it's like a little Zodiac boat picks the Titanic bouncing up and down in the waves very Nimble both volatile over time as it gets bigger

then the waves get smaller by comparison okay what is the cause of these fluctuations to a financial dunce like myself what causes like how can it be worth x amount and then half that in the day so let me start by answering the implicit question of how does it get its value who sets the price okay so it's a free market and so if you go and try to buy Bitcoin online at the moment and you say I'm going to pay 800 for it and someone says yes

and then during the day the vast volume of people are buying and selling for around a hundred eight hundred dollars great that's the price of Bitcoin it's whatever people are paying to buy and sell Bitcoin and so every time the order changes you know if suddenly you can't find anyone to buy your Bitcoin at 800 you're going to discount it a bit and discount until you find someone who's going to buy it and then that's the new price so it will go down a bit but if you are finding people easily to buy your Bitcoin then you increase the

price of it so it goes up a bit just like the stock market who sets the price of IBM no one it's whatever the last deal was on IBM stock so how is that not make it vulnerable for the same pump and dump issues that you're experiencing with all these other cryptocurrencies well it does make it vulnerable but the point is that still a fixed amount of Bitcoin so right now that small fixed amount of Bitcoin with you know very big changes Media news piece comes out

it's like Chinese people are buying Bitcoin woo and it goes you know really high everybody gets really excited this is it Bitcoins breaking through then the next week Central Bank of China won't let Banks hold Bitcoin down we go you know every piece of good news pushes the price up Suddenly every piece of bad news knocks it down suddenly but seems like really manipulative Financial experts would be able to move it left and right to their whim in order to profit off of it yeah on this probably a bit of that going

going on scares but I can tell you that there is a law for of that going on and every other market so that's the interesting thing here we now know that Lee bore the interest rates in the London bank system has been fixed for years and that's the basis for most interest rates we know that the gold markets fix we know that the stock market's they're doing front running on high frequency transactions those of fix every single Market out there is currently rigged

and so the people who are playing with in these markets with like fiber optic connections to this main data center you know and their three feet closer than the other server and can get that transaction in for Nano second sooner are front-running transactions are benefiting are profiting from that distance and these markets are rigged you know you going with your little brokerage account and you trade some IBM and you think you're playing the game right you're the dunce in the room because you don't know who the dunce in the room is where you're talking about with automated

transfers like that where you're dealing with nanosec high-frequency trading as it's called or algorithmic trading unbelievably fascinating status I mean literally they have racks trying to get closer to the rack where the transactions are happening until data centers had to say no matter where you are in the room you're getting 300 feet of fiber and if it's coiled at the bottom of your rack or if it's stretched out if you're still gonna have to go you know Santa Fe so that everybody gets the same deal but right now for example all of the banks are playing this game how can

ask can you do a transaction so what I'm saying is yes there is manipulation in the Bitcoin Market but the manipulation is on the stock on the exchange rate that that happens on a day-to-day basis but it's not on the supply of money whereas in the real economy the stock market the New York Stock Exchange not only is the market rigged and not only is the market being manipulated but the currency itself is rigged and being manipulated the FED is printing money and handing it to the banks so the lesser of two evils

Will's it's definitely the lesser of the two evils and also the larger it gets the harder it is for Outsiders to manipulate it right because they don't control the levers of power of the currency there are no leavers and that's the beauty of it so you create a system that doesn't have levers to control the currency so all they can control is the price and manipulated but that's a dangerous game to play long term because if the market turns against you lose a lot of money too so it's currently worth how much is a Bitcoin worth in American dollars

so one place to look up is Bitcoin average.com and that shows you the average across dozens of exchanges all around the world at the moment it's 700 hang on one Bitcoin is 784 US Dollars on average

at the moment and that's fairly stable because you were talking about it at 800 before so it's pretty close for the last month it's been in that band we have seen some wild swings but it seems to be stabilized around that level now which by the way is three times the level of had stabilized before the Big Bounce and how much Bitcoin is actually available out there in the world

so I'd have to look that up I would say about 11 million or so have been created so far and there's a constant creation of these every 10 minutes 25 and this constant creation will eventually not just level off but one day stop yes now what happens then well the thing is it it starts operating more like a precious metal which is that you know once supply of a precious metal gets restricted it increases in value but the one difference is that

precious metal you can only shave so thin you can't cut it into smaller units and it's difficult to transport and all of that where's Bitcoin you can divide it into a hundred million subunits so basically instead of the money in your pocket losing value over time because the central government is diluting it it's getting concentrated because more people want to use it than there's not enough around so it gains value in your pocket and that's a deflationary currency it creates some interesting savings opportunities

where do you see this going how where do you see like the future not a hundred years from now what do you what do you think Bitcoins place in the world is going to be I think I can make certain predictions for sure and I can make other predictions with absolute 90 percenter from margin which means I'm pulling it out of my ass so let me tell you what I can make for sure cryptocurrencies will be part of our financial future period doesn't matter what form they take this invention has been invented it

will change Finance it will change Banking and it might not be Bitcoin I think it will but it might not be Bitcoin but it will still be a cryptocurrency the idea of having a mathematical currency based on a distributed peer-to-peer Network happened the invention happens you can't stop people from coming up with variations of it you can't easily shut it down if you shut down 100 others are going to pop up in its place now the same time I think Bitcoin has a very good chance of being the

that was good enough that grew fast enough and gained enough traction

that it will actually have as a store of value value for a very long time now didn't someone sell a house and Canada through Bitcoin we've seen transactions as big as a hundred and fifty million dollars by the way guess what the fee was what 0 whoa hundred and fifty million transfer it in seconds for 0 fee well who got a hundred fifty million dollars in Bitcoin Justin Bieber that crazy fuck who's who did that with a drunk we

no idea they must've been drunk as well we don't know I mean you should there's on what look at the text message you met when you were drunk and then look at your Bitcoin folder I did what you think you would know if somebody spent that much money using Bitcoin because they would you know as a Bitcoin user would probably scream I just spent one point five million dollars that's why it's so weird for for me to think that like the guy that created no one knows what he looks like some guys he's spent one point five million dollars but no one knows who this guy it just seems so I mean here's the thing you don't know what's happening in the banking system

system today people are sending billions of dollars around yeah but for Bitcoin users they're all it's almost like buying a cell phone in your advertising like this is the best cell phone ever I love it you know that your cell phone sucks it because they are almost the most vocal about user Bitcoin that you would think somebody that's going to spend 1.5 would immediately go to online you know and just what do you mean hold on Watch and talk until the world I have all this money and then something that's a dangerous thing to say why would you why would you think that that's what they would do and if they didn't do that they wouldn't it wouldn't be real no I didn't

it's not real I just says it seems so suspicious that you know that there's so many see that my biggest problem is I've been people been trying to get me to on bitcoin for a long time is things like this where it's just seems there's so much mystery to it like that especially if you follow the conspiracies of the guy that created it and if and you know you hear reports like somebody just spent what you know all these millions of dollars using Bitcoin but yes I would he said he said someone bought one point five million dollars worth of no no someone know someone someone spread it into one's a five million dollar

Ian there was a transaction from one address to another address 450 million dollars in a single transaction and keep in mind but am in a hundred and fifty million yes and these happen every second not not that big but transactions happen all the time and so as if you were watching the stream and transaction you're like you know $10 $1,000 $500 $10,000 hundred and fifty million you're like what well and you can see that transaction because it's on the public Ledger and it did happen and it has been very

find and the transaction went through and they paid zero fee so this hundred and fifty million dollar transaction was between two people it was between two addresses might have been person moving in from one of their own accounts to one of their own accounts or given it someone else but it's still a hundred fifty million American dollars worth it was about a hundred and forty six thousand a hundred forty five thousand Bitcoin and bitcoins worth $800 each yeah so at the time it was almost a thousand so yeah it's about a hundred fifty million wow

which in the big scheme of things by the way in the global monetary system is peanuts but it's not an individual user though if it's either an individual you or if it's an is it a corporation Ivory Corporation might be the government yet when we seized the Silk Road the government of meeting we who you're working for the government matter the government keeps keep kept that right there they're actually I don't think they want to keep it for too long and I'm not sure they they are allowed by law to keep it for too long so what they've announced

going to do is they're going to sell it they're going to sell Silk Road they know they're going to sell the Bitcoins They seized so and they going to sell them on the on some kind of Market or auction which is which is great because it's going to create some discount opportunity well that's funny so Sydney is a Bitcoin was a key player in that whole Silk Road Scandal and for folks who don't know what Silk Road was it was a website that allowed you to buy a lot of legal illegal things online and some of it was purchased through Bitcoin and those things whereas

as illegal as drugs or as guns I there was a lot of different things right yeah they're well it's it's was mostly drugs and the just today 53 minutes ago or whatever and I don't know the guy that those two people got arrested for that from the they had a company that was laundering money using Bitcoins allegedly allegedly allegedly selling Bitcoin to someone who sold Bitcoin to users who bought drugs right once is not exactly

the laundering for drug let's be clear the allocation I read the indictment on the plane and I'm not a lawyer but what it what it said is that allegedly these people sold Bitcoin hmm to someone who then resold it on the Silk Road to other users some of whom used it to buy drugs so how could somebody responsible for that tip that's like that's a three hop allegation and in my mind if that's the standard then at least half of Wall Street should be in cuffs right yeah

now the thing it's allegedly so let's keep that in there I mean yeah many movie we've used many allegedly it's very important well there's a lot of exaggerated exaggerated claims and statements in prosecution indictments when your career prosecutor and you write up the indictment and decide to take it to the Grand Jury you're not going to just write the littlest thing you do you're going to make it look like you know every person you arrest is the worst person in the world and has massive crimes going on yeah which means that

that and seeing how much of a weak case it is you know allegedly sold to someone who allegedly sold to users who allegedly bought drugs I don't know it seems insane it's almost like your employee buys drugs with money that you paid him so you are in trouble for him buying drugs I'm not a lawyer I'm not going to figure out what let's let this is direct sort of connection the same direct sort of connection let's see them try and prove it I mean that's the that's the justice system you have to

to have to prove it yeah but it's so scary that someone's freedom is on the line for something as ambiguous as that especially when you're dealing with someone selling Bitcoin to someone who used then use that Bitcoin to buy drugs once it's out of your hands scary as he let out a 24 year old sitting in jail for this and you've got the 55 year old CEO of HSBC who didn't even resign after being finds hundreds of millions of dollars for laundering billions yeah what the fuck government don't make us use the internet to

everything that's going to happen right

yeah I mean this is actually probably owned by the government and are you going to use it in voting in the future and like you said that it's probably going to be over here it doesn't matter if it's owned by the government look listen the government the government invented the the basic protocols behind the internet and then engineer's and Geeks took it and turned it into a Global Network and even if the government had invented the math behind Bitcoin we know how it works it's math and we're using it to do things that the government doesn't necessarily control that well so if they did invent it that was a bad idea

some people someone doesn't realize the internet there was a whole point is that the underlying technology there's nothing mysterious about it you can read The Source codes you can see how it works you can understand how it works and you're not trusting anyone specific you're just trusting that you understand how it works and it's math I mean that's the beauty of it and that's why it people are adopting it so easily is because there's no one behind the curtain yeah it's also it's sexy you know the new kid on the Block it's a new exciting thing it's the the as

as you said the internet of money yeah and people want to be the first adopters they want to get on it first that let me know what's happening in this economy I mean really let's think about it what else is happening in this economy not other than the military under other than more derivatives piled on top of more derivatives by the bank's pretty much everything else is at a standstill sell marijuana the money from marijuana yeah well that's the one thing in this economy that's exploded in the places where it's been introduced and allowed to operate in the

market and ironically those the the situation there was that they weren't letting those people who were selling the marijuana put their money in Banks the government has since amended that and said that they're going to now start allowing these people who run these medical marijuana stores to put their money in Banks which is a huge Victory and I think you know ultimately it's unconscionable do anything else because you're allowing an environment where crime violent crime is most likely going to take place

because you are making people targets if you're not allowing them to bank you're making sure they have massive amounts of cash on them in a regular basis and they're going to get targeted it's just a matter of time you're creating you're going to create victims of violent crime so I'm glad they decided to not do that but it's a perfect example of the kind of fuckery that's involved in our government that you could have these people that did pass a law allowing something to be legal and yet still those people are kept

from in prohibited from putting that money in Banks it's not it's Madness I mean the broader scheme of this is understanding that there's ways to deal this through law including the people's propositions in these states and then there's a lot of these extralegal you know shenanigans that happen where suddenly someone gets audited for a dozen years in a row right and yeah J j-- Edgar Hoover had people audited every year

a year of their life because he didn't like them and some of those practices Keno continue to this day now I remove at least like to see the rules followed so I mean that's the whole point of this country as an it's a rule of law equally applied to all at least if we know what the rules are you can follow them or choose not to and then face the consequences but if you don't even know what the rules are because people make them up as they go along that's not a good place to live yeah if a business a private business acted the way the IRS did as far as like handing out audits

people that were political opponents handing out audits to people that were personal opponents of people that were in power if a private company acted out that way they would be guilty of all sorts of fucking violations it probably somebody in jail I mean it would be a really big issue if you found out but they've been auditing people just to fuck with them for the longest time it's pretty gross and scary thing well the good news is our not auditing bitcoiners and so far we have a nice relationship with the IRS and they're looking for ways to help us pay our taxes and I'm looking

word to that time I'm looking forward to filing my taxes and paying them this year I'm fascinated by I mean I pay them every year this is paying paying taxes specifically for the Bitcoin earnings I've had this year I'm fascinated I'm fascinated to see that this yakamoto Nakamoto guys how do you say his name Satoshi Satoshi Nakamoto Satoshi Nakamoto have you met this cat no one's about seduction akimoto I think got real that's right well I mean there's there's a possibility no one's madam there is a possibility that well here's what we know we know what

wrote and based on what he wrote We Know figure out his name by changing it to numbers and doing it backwards and Googling stuff and with so many of you type in his name backwards in a Google it leads you to this whole real long discussion on some board about Bitcoins and it like stealing them and stuff like that it's really weird okay nice please continue sorry about him no no the thing about Satoshi Nakamoto is we he's written a scientific paper right and before that paper and after that paper he participated in the

unity for two and a half years having conversations about how to do this so what we know is he's a scientist he's a scientist heavily involved in cryptography in economics and in digital currencies which is a space that's been thriving for 20 years now and he she they found a way to solve a specific whoa whoa whoa whoa whoa he she they so Satoshi Nakamoto might not be a person Satoshi Nakamoto might be a woman Satoshi Nakamoto might be a group of two or three people collaborating under a pseudonym

creates a scientific solution

it doesn't matter they invented science for sure doesn't matter but aren't you fascinating oh I'm totally fascinated but if you want lifetime here's the lesson we've learned Prometheus stole fire from the gods and gave it to the people and they tied him to a fucking rock and had an eagle eat his liver every day so though she Nakamoto gave money to the people and he disappeared because he's smart enough or she's smart enough not to get tied to a rock that's the bottom line I don't look into it because I think only bad things

can come out of outing Nakamoto I see what you're saying so they are smeared immediately right and there's nothing good that will come out of it because at the end of the day since they control nothing and since what they invented is a mathematical solution it doesn't matter so do you believe that potentially this group of people or individual person whatever it was which ever said scenario whichever sex that they thought about it in advance and they said they spent several years working on the MI

mean they were not given but not just the code I'm talking about the repercussions of their actions and they decided to be anonymous in their delivery of this well I think throughout the 90s a lot of the people involved in digital currency environments because some of them were working in oppressive highly oppressive environment and I'm not you know I'm people may be working from Burma or from China or from who knows where and so it's not a good thing to be doing these with your own name attached so they met they were a lot of people in this space where involved and

mostly to protect their own safety as of working in digital currencies basically doing science work in cryptography and Mathematics and distributed systems that's a very sexy part of the story you can't leave that out anymore when you tell the story you got to tell people that nobody knows if Satoshi nakamoto's even real that's kind of cool yeah it is kind of cool but you know we do know some things about Satoshi for example he puts two spaces after every period or she or she or they were or is that guy that's the Toshi how do you know that's not

Satoshi a lot of people have tried to gas and there's a lot of a lot of digital currency scientists and cryptographers well-known cryptographers who participated in the creation of many of the aspects of Bitcoin and people have fingered them and said you know maybe that's the Toshi maybe that's a Toshi maybe they're all Satoshi I am Satoshi so this is sort of almost like a Jack the Ripper sort of Investigation only he didn't kill anyone who gave science to the people I mean in terms of there's so many different theories of who

ever watch a documentary on right if we solve Jack the Ripper's murder you know they always find out that it's totally different guy that's like a great story I mean you know this person invented a completely new science or people or people and and then disappeared for their own safety and yeah yeah that's pretty cool yeah it is fast and it's going to be ripe for conspiracy theories of all kinds to jump out of that and you know I tried to focus primarily on the technology because I it stands alone that's the key it

not need any of this there is a culture there's a history there is all of that and it's fascinating but the technology just works and it's simple math and people can read it understand how it works and then use it and that's the beauty of it because it doesn't depend on any way you don't have to trust Satoshi you don't have to trust a bank and you don't have to trust that someone's not going to mess it up because you can see how it works that's such a subject is ripe for conspiracy theorists boy they're gonna jump all over that one there's a Bigfoot they're gonna chemtrail a fuck

that one well yeah it's it's already happening I'm gonna Tower 7 this shit out how can we make a connection Bitcoin entire seven there has to be something it's all fun Tower 7 held the original computer that created bitcoin it wasn't done a 2008 it was done in 2001 the NSA the cea and the DEA

I've met that guy Alex Jones was that that's drones I was just guessing that's our Mo Guys like that yeah well there's a lot of those guys yeah boy there's some fucking ferocious conspiracy theorists out there I'm I'm fascinated by these things I'm fascinating by these new avenues that our culture starts going down and these incredible Avenues and branches of possibility off of these new New Paths it's just a really a major

he's an amazing time in so many ways and this highlights just this constant repeating subject that comes up with me and my friends is that it's the internet has changed everything everything and we've pretended that it's only been a little bit oh so you get email now what's the big deal it's it's monstrous yeah it's changed its changed my life 100 percent change the way I think 100% changed my connection with just random human beings I

I interact with thousands of random human beings online on a daily basis and 99.999% of those interactions are positive yes exactly that's the most beautiful aspect about it like I'm Bitcoin is just an expression of that it's a child of the action that you know when people say you know the internet now is so co-opted and restrictive that you can't do anything well I can tell you you can because Bitcoin came right out of that and works on that perfectly today so

you know it's a Bitcoin is one more thing that happened because of the internet and now it's turning around and here's the interesting thing it allows you to do very small transactions micro Nano transactions so for example if you want to monetize your podcast and you accepted Bitcoin and people sent you a tenth of a penny or a penny or a dollar and you add it up over hundreds of thousands of users because it doesn't cost much to send because it's an easy transaction people will make transactions smaller

and smaller and smaller so suddenly Bitcoin can fund all of the independent content providers and all of the independent infrastructure providers on the internet and transform the internet again from the inside out wow like imagine all of these media companies that have gotten so horribly disrupted because it's basically two media models if you make content on the internet you either sell advertising so you're stuffing junk into the eyeballs of your customers or your ears and the bigger the company the more junk that comes out of it

right or you're selling your customer if the products free your the product and write your personal information is what generates the value so if you're on a social media site that's free you're the product and so they're selling your information in order to make money so it's either advertising or selling your information will now there's this Third Way which is you can do transactions small enough

to have value when accumulated in large numbers the you could independently and directly fund content providers and infrastructure on the internet and break the hold of these you know systems of concentration that advertising and social media have become privacy selling privacy and and selling advertising which require concentration they require enormous concentration what do you think we set up a dedicated Joe Rogan Experience Bitcoin server right here

we do not server but computer could head of cated to just crunching just out of respect yes have one running here in the background all the time yeah we joke we go to jail for that so possible no of course not in fact yeah you know at the end of the show I'd like to help set you up with a wallet on your on your smartphone and I'll send you some Bitcoin not so sure about that the other question I wanted to ask you about we spoke about earlier was net neutrality now that that's a huge issue for

anyone who loves the way the internet works in the way the internet does not judge and the internet is freely available to anyone who ports into it at virtually whatever you know you pay for your connection you're going to you know whatever your download speed is but there's no there's no regulation as far as like write it being easier for Walmart to get online or they have more of a percentage of the pipe or what are we concerned about net neutrality being somehow or another

compromised by nefarious sources well I mean that to trial is he suffered a massive setback in the courts just a couple of weeks ago with a decision that allowed Verizon communications so now be subject to the FCC rule imposing net neutrality and that sent shockwaves through the industry because the average or down would what was the the internet lost what was the case the case was the FCC made a rule that said that carriers must support net neutrality and Verizon suit and had it overturned as unconstitutional or out

outside the Mandate of the FCC to be more I heard what did Verizon specifically want what we don't know that they say they want to make the internet better but they just got the rule that says that they have to treat all traffic equally taken out and most people don't realize that the reason the internet allows things like Netflix to happen is because they didn't have to ask anyone's permission now imagine if when Netflix started it had to ask Comcast to run its traffic and pay for a premium well they wouldn't do that because it's a competitor so of course they'd crowd them out of

Market with exorbitant fees net neutrality means that everybody has a fair shake to be heard and it's up to the end user to decide who they want to listen to All of the traffic will reach you if you wanted this listener or as a viewer now can they somehow or another limit where the traffic goes to like what we're seeing in other countries where they have restrictive internet laws is that a potential I think product of this case I think the biggest threat right now comes to companies like Netflix or things like streaming

radio and audio systems Spotify Pandora Etc where by service providers who have their own TV streams or their own music streams that are competing are going to make their experience great and Netflix experience somewhat suckier so they'll limit the bandwidth of Netflix applications they'll choke them right right now I mean they already do in some cases but how to do that

well I mean they all kinds of shenanigans but I mean the bait the basic deal is that this FCC rule was trying to establish a legal framework on the which they'd be obliged to give equal access to all content as long as the viewer chose that's what they want to see or they wanted to connect to all over the Internet they would connect to that with the same bandwidth that they've bought you by bandwidth and you use it for whatever you want and you don't get better bandwidth if you use their shows and Netflix well once they try to put that rule in place you know

the lawsuit started and now we have a very bad decision that could really really hamper Innovation a lot of the things that we see today on the internet would not have happened if net neutrality weren't observed and the Verizon for many people who don't realize this Verizon offers home internet connection as well as 4G and and TV most importantly rights and pay-per-view and video on demand which means that they're directly competing against other content providers yeah Verizon now has a 5

our optic system that's you know incredibly fast and connects to you direct download movies and television shows there's a lot going on right now as far as as far as internet related content things like Netflix and things like I mean Hulu and Hulu Plus and there's these places are now starting to create their own programming as well right getting really fascinating because they're not just competing with Verizon now they're competing with

see and CBS and what have you and if you like that net neutrality is why it happens and therefore we should be defending then you trial so what people should do is probably boycott companies that don't support net neutrality I'm a huge supporter of the FF the Electronic Frontier Foundation that's when fighting for privacy and Liberty and then you travel t on the internet since the early 90s and they've won several substantial cases both against organizations like the NSA but also against service providers to try to abuse their

mission to prioritize traffic and they've promoted the idea of an open independent transparent and fair internet for all with equal access for everyone and that's the thing that's made the internet magic and they've been at the Forefront of doing that DF F dot org I'm a huge supporter that's interesting well we'll look into that and maybe we'll fucking put an e FF sticker on our website or something like that and you can put it on your webcam to the other side wants to sell those though they're the ones yeah well those guys are on the ball yeah that's that's uh

going to really be concerned with it really is the idea that they could limit your experience whether it's Netflix or whatever downloadable Charter does it to Jamie they won't let him go to Pirate Bay anymore and I've heard that before allegedly allegedly to me allegedly he doesn't go to Pirate Bay you fuck while I'm going to download illegal leg oblique legal music legal like nine snails yeah that's and if you're in an area where they have a lockdown on internet providers you know where

people like can only get Verizon they're in an area the only gets Verizon like AT&T doesn't reach their Time Warner's and reach there

that sucks that that's that's so disturbing and it's so contrary to the the trends that we would like to see as far as here's one good idea or one could thought that comes out of this a lot of the problem right now is that you pay for both of your infrastructure and your content in a single payment to your ISP well with Bitcoin you could pay the recipient or the content provider directly in tiny tiny tiny payments so you really are the Bitcoin genius your Bitcoin Jesus because you yes because

Bitcoin as a solution for everything well I mean it's powerful stuff to fix that and Bitcoin can fix the internet and Bitcoin can fix Verizon it's almost and I'm not that it's just you know that it's almost like Evangelistic like it almost like like pyramid like when you go to the pyramid type thing where they're selling like no you know but you know is there anything you don't like about it like what's the number one thing that you're like I hope something changes with this is there anything yeah sure I mean it's got its got some scalability issues that are being solved it

it's it's software so we have to be very careful with the upgrades but you know I mean compared to the existing form of money we have I honestly think it's better money and it's and it's a great technology I've spent 20 years doing security and distributed systems that's my area of expertise as a professional so what I love about this is that I can see the Elegance of the technology and I understand its implications the last time I felt like this was 1992 and it was because I saw the internet and I saw the a

again solve it and I was out telling as many people as I could you know this is really going to change things in ways you don't even expect and I can't even explain to you yet because it's going to unfold in ways no one anticipates because what it does is it democratizes information so yes I'm excited about something that democratizes money but it's because I understand the underlying technology you know I don't profit from talking about this I'm able to build a career on it sure and I love doing it but really at the

at the heart of it I'm a geek I love the technology and that passion just comes through it's obvious it's obvious that you love it you light up and you you when the word Bitcoin comes out of your mouth it comes out discovered and love juice you love it it's obvious and it's interesting and it's you're in a very unique position because you're really at the edge of it and you're sort of at the front of this ever-increasing and mass ship and you're watching a game momentum it's gonna be pretty exciting it's

signing is great it was also terrifying for quite a while I mean I've been in this full time for almost two years and I can tell you that that was not a very profitable job what did you do for a living before that I've been an independent freelancer I've been starting businesses I'm an entrepreneur so I wasn't a independent freelancer liking what is your background your education Instagram I'm a computer scientist with a specialization in distributed systems I've been working in security for just over 18 years in information security systems

and so I worked as a consultant I worked as an advisor I worked as a Chief Information officer for companies I built research companies I built companies that built internet systems and I followed the internet I'm not one of the pioneers of the internet I was a sixteen-year-old kid looking over their shoulder as they were doing these things you know so I was buried in it when I was young and you know so I've I've worked as an independent professional in this space for many years and then two years ago

ice first discovered Bitcoin then it hit me again a second time I read the Satoshi paper and I decided this is the job I'm going to do and right now there is no job so I'm not going to make any money at it but I'm going to do this job until it actually becomes a job and I did that for two years and I almost went bankrupt because there wasn't a job there at the beginning and and now it's a job and it's very exciting so this is a conscious decision on your part back when it wasn't even profitable oh yeah absolutely massive chance and stepped out on the edge of the dock

yes I invested in several companies I drained my retirement account I drained my savings paying my bills and till I could generate income doing this wow and I I mean this is not prudent investment this is not prudent Behavior financially but as a technologist as a person who's worked in distributed systems and and security and computer systems I could see that this was an exciting technology and I want to build a career in it so what I've been doing is swapping

money for skills and experience and the opportunity to be on the ground floor I was too young when the internet started to be influential in that space and I see this opportunity as a second opportunity to do that now how did you know that Bitcoin was the solution what made you so confident that you invested this exorbitant amount of time in Bitcoin and you know back two years ago that there's the future could not have looked nearly as bright as it looks now so the key is the key

or was that I was in distributed systems and security and then the first time I thought I heard about it I thought nerd money and the same like everybody does right that's where Brian is right now possible can't possibly work then I went back and I read the Satoshi paper and I grasped the science and it was confusing that I read it again and I really grasp the science and then suddenly it hit me oh my God this isn't a currency

it's a consensus Network this is the Holy Grail of distributed systems of the last 15 years you can do so much more than currency and once that light bulb went off all I could see was the possibilities oh well now that we have this technology we can do this and this and this and the currency will do these things for us and you know all of these possibilities unfolded in my head and it was it was a really dizzy experience but I

the fundamental building blocks looked so much like the early internet and I knew what structures like that do they create network effect they create this attractive Force where it gets more useful the more people who use it now work in fact was coined first by Bob Metcalfe in 1984 he said the value of the network increases exponentially with the addition of each node because when you join a network you don't just gain that value but by increasing the size of the network to make it more valuable for everyone else because they

have one more person to connect to right and if you keep doing that it achieves a scale where it starts multiply that's how the internet grew and when you have this magic combination of money for the people that can be sent directly between people the forms a network those three things came together in my head I'm like this is this is big and nobody knows it yet and when you see something the big nobody knows it yet you want to tell everyone and you want to dedicate a large part of your time to doing this because it's

incredibly exciting now how did you initially jump in I mean how do you jump in in the infant stages of Bitcoin what's the steps that you took to become a part of this well I spent months and months and months reading everything's that I could the scientific papers the discussions that Satoshi Nakamoto had with the other developers as he developed it I started reading the code I started writing code I started building businesses around it I started talking to people I started meeting up with other Bitcoin enthusiasts and then as soon as I

could I started buying Bitcoin and you know and basically have been doing that since and what is your average day now consists of going on podcast and telling people how awesome Bitcoin is how often does that come up so I have a day job I'm a technical advisor a number of Bitcoin startups I'm the chief security officer for blockchain info which is the largest Bitcoin web wallet in the space and I work every day as a media you know as a media pundits a commentator on

coin I write code and then I comment about it and I do interviews all the time because this is something I believe in strongly I don't get paid for my interviews I have other jobs the that allow me to pay for international travel for a long time that was my savings account until until I was able to get all the beans be able you certainly hope to eventually profit off of this well actually now I'm making income on bitcoin so so let's so things are stabilized you know I'm not a Bitcoin billionaire

I may never be a Bitcoin billionaire but I know what career I want to do for the next 15 years wow so how did you know that Bitcoin was going to be worthwhile and it's so many people are going to jump on the board jump aboard two years ago it seems like two years ago so I didn't know I mean what I knew is this is a very elegant technology the had some implications some geopolitical implications some cultural implications some technology implications and I liked all of those and I was very interested in pursuing it and at the time I hoped it was going to get

and I figured you know if it didn't and and I didn't get anywhere with it I could do something else in a couple of years you got to come on again in a year I'd love to yeah let's let's let's let this think cook out there in the crazy world I mean what we say year but the way things are moving we must yeah might be right it might seem crazy yeah in terms of what happened in the last year alone it's been unbelievable I mean we had our first major Bitcoin conference in April in San Jose and now there is like a hundred conferences going on this year

wow and there's a hundred fifty million dollar transaction right exactly at the price was like you know what I was working on this the price was $15 I if you asked me last year it did I think Bitcoin would be at a thousand I said no yeah maybe in a couple of years I was surprised too but you know it has a way of growing on you and when it does it grows as a network and people find it useful and they try it they understand how it works it's practical they grasp the usefulness of it and they start using it I wish I had you in here when

your shift was in here I'd be like Sikkim Andreas tell him what's up maybe he's right I don't know who's right or wrong you know I don't generally debate on this because the simple truth is that none of us know right and the reason we don't know is because the tools we have to analyze currencies don't apply because it's a completely different type of currency it's not a stock it's not a currency it's not an asset it's not a commodity it's a bit of everything so can I tell you what it's going to do in two years of course not I don't know

no nobody knows what I do know is I understand the technology and what I see is something elegant and practical so I'm interested in seeing where this experiment will go because here's the thing if it doesn't work some people lose money if it does work we change the world of money forever and that's a pretty big thing to say but cryptocurrencies I think are here to stay they offer An Elegant Solutions decentralized money and whether Bitcoin survives or not I want to see where this is going to go because it has the possibility

Leti of changing a lot of people's lives well it certainly does and I want to see them find that Nakamoto thing I want to see who it is try me crazy they never find it yeah cuz you'll your it's like Bigfoot for you it's like search you for Searching for Sugar Man for me I want to find them it's probably some already know to like that did you got Adele guy or somebody it's unbelievably fascinating it's I just unbelievably fast and especially listening to you describe it

your passion for it makes it even more fascinating it's it's really something that I'm going to keep my eyes on and try to follow so I appreciate you coming over here and I appreciate you giving us your knowledge and spending your time and and I guess I'll set up a wallet on my phone now so I'm going to do yeah sure absolutely if we set up Android phone yes right okay so you can you can download blockchain and I said before I work for blockchain is the chief security officer I was a customer long before that but I think it's

one of the better ones okay so you download blockchain from your app store and then you'll get an address and I can then send you some Bitcoin you'll have it in a few seconds and if we wanted to put up a computer here a dedicated computer that runs can help you do that coin computations wouldn't fuck with us in any way right when I don't know mess with our band with your electricity it was on me I mean you can get a little one that's even a USB stick they call it like a Klondike this little stick USB stick you plug it in and you swap

electricity generates a Bitcoin you're not going to generate monster you know I'm not trying to get rich you know Buckle Maybe funny interesting to play with that's cool Bitcoin street cred that's one looking for exactly all right listen man this was very enlightening I'm obviously going to have to read a lot of shit after this there's so much involved in this subject and so much involved in cryptocurrencies that's it's really really interesting stuff but I think it's badass man and I really respect a guy like you who takes a giant leap like that

and and dives into something and something that you believe in and you get really passionate about it it's what life is about to me yeah it's about pursuing passions and and I love the fact that you really into it and I really really appreciate you coming on here and enlightening us thank you so much for having me and you know sometimes you you choose the things you want to do in life but some of the most interesting things in life once you find them you have no choice I had no choice I couldn't sleep at night if I wasn't doing this it's still a choice just such a such a big draw but yeah I mean

mean I hope you see you know I'm not trying to sell anything I'm genuinely passionate about this because I see an elegant solution yes well that is where you know the choice is the choice isn't being that person who follows their passions that's inspirational to me it's one of the most inspirational things I encounter both online and in the real world is watching people who are passionate about what they do right you can recognize it's another yes yeah yes the only way to live your life is so contagious for me like it could be a guy who makes handmade knives

you know and grinds The Blaze and sharpens the handles and you know puts everything together I've fascinating but I'm fascinated by anything that someone is incredibly passionate about and so this this Bitcoin thing now is just what's in there now it's in my list of things I'm fascinated about it let's thank you very much so if people want to get in touch with you they can contact you on Twitter probably the easiest thing is sweater yeah yeah that's the one I can handle the most but listen you're going to get swarmed today so let's try not to pay attention to all

those fuckin psychos okay it's aan t o NOP that's aan t o NOP on Twitter and Pinterest is there anything else you have a website Antonopoulos.com yeah sure that's why media sites and people can book me for engagements there but really on Twitter is where I'm most active my name is pretty easy to Google and thank you so much for having me I really pleased it was an honor I really

we had like a crazy internet Pioneer in here has got some day we're gonna look back on this and say man we have entry - I know we should have bought that going and it'll be like Apple stock let us know what the president told us not to we could have had a whole room full of computers man we shouldn't listen to him back then he didn't have enough Faith thanks a lot man awesome thank you I'm really appreciate it to everyone else next big date I got coming up folks is I am in Dallas Texas with Ari shaffir and Duncan

Russell that's March 14th at the Verizon Theater this weekend this Friday it's sold out I mean New York but don't try to get tickets because if you do get tickets you just supporting scalpers so unless you find somebody online that's that can't go because their pussy got wet but whatever do what you got to do folks so that's the next big one is Dallas Verizon Theatres March 14 can't fucking wait that's the day before the huge UFC event at the

Stadium which is apparently like 50,000 seats or something bananas so that should be a lot of fun that's it all right you freaks will be back this week with many more podcasts to be scheduled and many more conversations to be had much more fun and and much love thanks to our sponsors thank you to squarespace.com the greatest resource online for creating websites go to squarespace.com and use the offer code Joe and the number one that's one word

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