E46 Transcript - Life in the Cloud

8/13/2019 E46 Transcript - Life in the Cloud

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Let’s Talk Bitcoin

E46: Life in the Cloud

Participants:

Adam B. Levine (ABL) – Host

Andreas M. Antonopolous (AA) – Co-host

Dr. Stephanie Murphy (SM) – Co-host

Benny – (B) –Guest / CloudHashing.com Admin

Emmanuel - (E) – Guest / CloudHashing.com Admin

(INTRO MUSIC)

ABL: Hello, and welcome to episode 46 of Let’s Talk Bitcoin for

October 1st, 2013. Visit us at letstalkbitcoin.com for our daily guest

blog, all our past episodes and, of course, tipping options. We’ll be

in Atlanta for their CryptoCurrency Conference, 10/3/2013 –

10/6/2013. If you’re going to be there, make sure to visit

letstalkbitcoin.com/meetup and say, “Hi.” For those of you unable

to attend, video-conference passes are available at

bitcoinvideopass.com and, of course, both streaming passes and

DVD sets are cheaper when you buy with Bitcoin. My name is Adam

B. Levine, and today, we’re talking about the realities of thesituation. Falkevinge, controversial author of Swarmwise and

founder of the pirate party has done the math, and thinks the price

of Bitcoin is off, way off, orders of magnitude off. Andreas explains

his logic and talk about how value is relative and determined by

what you want to get from your money. Then, I interview Benny



and Emmanuel of Cloud Hashing, a hosted mining service that aims

to give would-be miners instant gratification and positive return-on-

investment (ROI) for a nominal fee. In our continual quest to

discover if mining is really suitable for anyone without five figures

to invest, these guys hope you think they’re the answer. Some ofyou love altcoins, some of you hate them, but the fact is that lots of

different coins are offered up as donations to Let’s Talk Bitcoin and

we wrap up today’s show with a discussion about how to pick which

ones to take versus not. But first, Local Bitcoins, for better or

worse, is a high-traffic and influential source of in-person Bitcoin

sales. Stephanie shares a recent story about what Andreas calls a

cross-site scripting attack that drains your Local Bitcoins account of

funds. Once again, I’m joined by Andreas M. Antonopolous and Dr.

Stephanie Murphy.

SM: There was a scam recently on Local Bitcoins that was going

around and, of course, Local Bitcoins is not free from scammers just

like anywhere in the Bitcoin world. But, this was a scam that hadn’t

really been pulled off before and what was going on was there was a

user who was messaging sellers on Local Bitcoins and saying, “Hey,

you know, I have low feedback but just to put your fears at ease I’m

sending you a picture of my passport photo,” and there was an

attachment to the message. First of all, that’s pretty strange that

somebody would send you a picture of their passport photo. If

you’re a seller on Local Bitcoins, you’re probably not going to be

doing the whole KYC (Know-Your-Customer) thing and requiring a

picture…two forms of government ID, or whatever. There’s a redflag right there. However, some people clicked on the picture and

what happened was it took you to a very blurry looking scan of a

passport photo where you couldn’t see any details anyway, but it

was meant to distract you from the fact that all of your bitcoins on

your Local Bitcoins wallet were being stolen. *(chuckling)*



AA: Ouch.

SM: And what happened was, this somehow, clicking on this picture

– and I don’t know exactly the “computer science-y” details, but

basically, what happens is if you click on this attachment (and) openit in the same window as your Local Bitcoins window, it executed a

Javascript that would initiate a withdrawal from your Local Bitcoins

wallet.

AA: That’s known as a cross-site scripting attack or XSS. That’s

basically when software running in one of your windows or tabs is

attacking software that’s running in another one of your windows or

tabs. In this case, the passport Javascript Trojan, essentially is

attacking the Local Bitcoins tab.

SM: Right. So, a lot of sellers on Local Bitcoins keep their coins in

their wallet on Local Bitcoins because, basically, from there it’s

pretty easy to fund escrows that later go into transactions. So, it’s

convenient to have bitcoins already loaded into Local Bitcoins for

the purpose of trading, but in this case, this person exploited that

fact. Now, there is a bright side to this. Of course, we can learn

from this attack. Don’t click on any attachments in Local Bitcoins,right, and watch out for Javascript. Those are the two lessons I

think we can take from this. But, Local Bitcoins has a security

feature called two-factor authentication which you can use (with)

an app like Google Authenticator, which creates tokens that expire

every 30 seconds. In order to login or withdraw bitcoins from your

account, you’ve got enter the token and the token is on another

device, perhaps, like your cell phone or something or a different

computer. It’s a little bit of a way to ensure that you are actuallythe person who owns the account and you’re approving any

withdrawals that happen. In my mind, this is a big plus in the

column of two-factor authentication, and also, just being really

careful and watching out for scammers and being super-skeptical of

any kind of attachments like that on a site like Local Bitcoins.



AA: Let’s try some advice for security newbies when it comes to

Bitcoin. First of all, advice number one, I think it’s great to be

careful but it’s very difficult to not click on things when you’re on

the web. One of the ways I’ve found to protect myself against those

kinds of attacks is to have my browser in, essentially, Javascript-denial mode by default. I run some software called NotScript or

NoScript; on Chrome, it’s called NotScript; on Firefox, it’s called

NoScript. Basically, what this is, is a Javascript-whitelisting service.

If you visit a page you’ve never visited before, by default, all the

Javascript, Flash and other executable content is disabled. Only if

you select to enable programming and code on that page can you

see it. That’s going to break things like your online banking, which

you can then selectively re-enable, but it’s also going to break like

this cross-site scripting attack. Generally speaking, you do not go

running around the internet without wearing some kind of

prophylactic and NotScript is, essentially that. The second piece of

advice, of course, is don’t keep cash on these services. Online

wallets suffer from this risk because the keys are not in your control

and they’re protected by a simple password. They’re very easy to

get out. Use paper wallets, distribute your funds between multiple

services, (and) try to keep it offline as much as possible. The third

piece of advice is multi-factor authentication. Quick primer, multi-

factor authentication means using more than one way to

authenticate yourself; something you remember or something you

know, which is a password; something you have, which would be a

token such as a smartphone application, key fob or something like

that. Perhaps, even a USB keychain and then, something you are,

which is the third factor of authentication you can use. That would

be a biometric like a fingerprint. Something you have, something

you know, something you are or as Chris Hoff puts it, “Something to

beat out of you, something to chop off you and something to steal.”

ABL: (*laughing*)



SM: Yikes!

ABL: So, I am going to make a confession here. I am currently, not

using multi-factor authentication. I sort of made a decision that I

just wasn’t going to use web services so I don’t keep money inanything online and the thought has been that for the most part,

that’ll protect me. I also have paper wallets, of course, and things

like that, offline backups, but I’m not actually using two-factor

authentication. Andreas, do you think given my particular use

cases, I should be?

AA: If none of these services have access to either your Bitcoin

funds or your U.S. dollar funds for a bank account then (it’s) really

not a problem as long as you keep the funds limited and you only fill

them up when you’re doing a transaction. It’s not as good as using

two-factor authentication, but actually, I think it’s a better solution

than using two-factor authentication, having 100% of your money on

online. I’d rather have 2% of your money on online and not use

two-factor authentication.

ABL: So, two-factor authentication improves the situation by

making it so that someone has to compromise two separate devicesor two separate vectors as opposed to being able to just stumble

across one, compromise that one and take everything you have.

That’s the advantage. It doesn’t make it impossible to have money

stolen from you it just makes it so that it’s more complex.

AA: It makes it so that the one-factor that most people use which is

something you know, the password. The problem is that can be

very easily captured from a weak endpoint through a keylogger.The advantage of having a token like Google Authenticator is that

it’s much harder to break into that. Generally speaking, when you

see compromises that involve two-factor authentication, it’s

because the service itself was broken. There was a bug somewhere

else or in the last case we saw in was a RNG generating poor quality



sigatures, but effectively, I don’t think we’ve ever seen a service

protected by two-factor authentication where somebody’s had the

second factor compromised. If you use it right it is secure.

SM: There is a small cost to using it though, right, and that is that ifyou use two-factor authentication, it can take a little bit of extra

time and effort. It’s not really as though there’s another password

to lose because all you really need to do is be able to have access to

Google Authenticator or your YubiKey or whatever. It’s not like

there’s an extra thing to forget like a password, but it is an extra

step and any time you introduce an extra step there’s something

else that could potentially go wrong.

AA: Right, absolutely. Though I think what we’re seeing again and

again the lesson is that without two-factor authentication, money

stored in an online account, whether that’s Mt. Gox or Coinbase or

Local Bitcoins or any of them really, is not safe. It’s not safe

because these companies are not doing a good job with security.

They’re doing a relatively good job with security. It’s not safe

simply because your computer is not safe and no one can protect

against that except for two-factor authentication. So, the problem

here is that the endpoints are woefully insecure and we’ve reached

a point in society where we have invented the digital currency that

can be stored on anything but we haven’t yet invented anything

that can store digital currency securely.

ABL: This kind of brings us naturally into the topic of hardware

wallets which, there have been a few…I think I’ve seen one

powered by a Raspberry Pi and I know that there’s a concept

floating around called the Trezor that actually is slated to ship atthe end of October.

AA: I’ve pre-ordered and I’m expecting to receive two of those. As

soon as I get them, I’ll let you know.



ABL: What is it that a hardware wallet does that is substantially

different from…A hardware wallet is not two-factor authentication,

a hardware wallet is a distinct device that is only for Bitcoin and,

therefore, can be treated as a secure environment, right?

AA: Well, a hardware wallet could be two-factor authentication or a

hardware wallet, essentially is a second factor in the authentication

scheme. However, a true hardware wallet is one that processes

transactions. So, it signs stuff. It has keys on it. I think that’s

really the issue is being able to store keys in a tamper-proof

environment that can be controlled by the user and usually, when

you have a hardware wallet it has another factor. It’s not (that) the

one factor is better than the other it’s that two factors are betterthan one. If you have a hardware wallet you still need the PIN or

password to protect that hardware wallet. Otherwise, it gets

stolen, so does your money.

ABL: I see, so it’s just that the device in that case is a factor and

the other…

AA: Exactly.

ABL: …ok, I see, I see.

AA: The device is the something you have and you need the second

factor which is something you know and if it had a fingerprint

scanner you’d have a third factor which is something you are.

ABL: One of the natural things that comes up with either a

hardware wallet or a second device used in a two-factor

authentication scheme; what happens if I’m on a boat and I lean

over the side and my phone falls out of my pocket and then, myphone is gone and that’s my second authentication device. It’s not

like I can just load Google Authenticator on another one of my

devices. It was tied to that specific device, right?



AA: Yeah, you’re going to have to go back and use the reset

mechanisms on each one of those sites to reset the two-factor

authentication system and usually, that will involve providing some

other proof of proof of identity. Then, it gets into the manual

process and it’s not easy.

ABL: Do you think that this is, I mean, the direction that we’re going

now where we’re essentially adding additional layers to try and

make it so that you can’t just get through one layer and be there.

Do you think that this is the correct direction to go? I had a

conversation with Jeffrey Paul a couple months ago where he told

me about Sneak’s Law, which is that users cannot or will not adhere

to operational security, basically. (They) will not secure theircomputers because they either can’t or they won’t.

AA: That’s absolutely true so the way you resolve that is you take

operational security and you weave it into the normal workflow or

function that the user is doing so that they don’t know they’re

doing operational security. They simply do it. I think in the case of

these hardware wallets, what you’re doing is you’re making the

two-factor aspect disappear of it into the background because

you’ve physicalized the money and provided a second factor at the

same time. By hiding the security we can get users to adopt it, by

making it a part of the normal interaction of money so you apply the

security without even knowing it is just part of the cultural norm or

the protocol if you like.

ABL: Well, I look forward to hearing what your thoughts are on the

Trezor wallet once you get your hands on it, Andreas. That sounds

pretty exciting.

AA: Yeah, I’m looking forward to it and you know, what’s

interesting about this is that these devices are really enabled by this

parallel revolution that’s happening in amateur hardware in the

ability to take an OLED screen and a Raspberry Pi or a small



microprocessor and throw something together like the Trezor with

some 3D printing. You couldn’t really do that ten years ago. I think

it’s really exciting how those spaces are converging with Bitcoin.

ABL: Just as in a side here, Chris Abrams just $287,859 refundedfrom BFL against their will to Paypal over the last two weeks.

AA: Oh-h….

(Musical Interlude)

AA: This week I was reading an interesting article from Falkevinge.

Falkevinge is the founder of the pirate party and pretty well knownlibertarian freedom pundit. He’s writing about Bitcoin and the core

underlying value of Bitcoin and his basic premise is that Bitcoin

seems to be vastly overvalued and partially caused by illegal price

fixing. His premise is that the current valuation of about $1.5

billion at about a hundred-and-something dollars per bitcoin is

actually vastly inflated and does not represent the underlying value

of Bitcoin. He bases this argument on doing an analysis of money

velocity by looking at the transactional velocity of Bitcoin andlooking at how these bitcoin(s) are being spent. I think the

equivalent in Bitcoin terms is “bitcoin days lost”; I think is the

statistic that we see most often. So, based on his analysis the

bottom line is that Bitcoin should be valued at about $1.20 instead

of $120. He’s saying it’s valued two orders of magnitude higher

than it should be and that the real economy is only about $13

million U.S. dollars not $1.5 billion U.S. dollars.

ABL: Isn’t that speculation? Isn’t the whole price that Bitcoin has

under it right now based on speculation?

AA: I think that’s really the argument that Falkevinge is saying.

He’s saying there is no market behind it, (that) there is no



transactional velocity to Bitcoin. It’s really speculation. It’s

basically price-fixing speculation more than anything else without

any underlying fundamentals. Here’s the thing though. He very

conveniently excludes, right off the bat, drugs and gambling.

ABL: (*Laughing*) So, the two biggest parts of the Bitcoin

economy…they’re not the biggest parts, but they’re primary

components for sure.

SM: They’re significant.

AA: I think he’s talking about the relative volatility and liquidity of

the market and dismisses drugs and gambling as illiquid, lacking in

velocity, lacking in stickiness, lacking in true value. He goes on totalk about, “What about new products and services…?” By the way,

I am horribly paraphrasing and probably butchering his argument

and obviously, I disagree. The bottom line is that he’s talking about

the market being overvalued by two orders of magnitude.

ABL: I think that this is how markets behave. Markets look to the

future and say, “Ok, well, it’s not about what it’s worth today, it’s

about what it’s going to be worth later.” Obviously, the price that

we have now takes into account a lot of people who have bought

with the idea that they’re holding as an investment. I think that it’s

hard to make the argument that it’s not justified when so many

people are using it as a means of savings. I think that savings has its

place in a system like this and it’s not manipulation or speculation

even really. It’s savings.

AA: Yes. Basically, I could take this exact article and do “search

and replace” “Bitcoin” for “gold” and based on Falkevingearguments, gold has zero velocity because it’s not really used to

transact on normal products and services and is entirely a stored

value. On his basis, I guess gold would be overvalued by three

orders of magnitude, not two but does the value of Bitcoin really

demand on the velocity? Because, I think that’s the assumption at



the core of this article. If you accept the assumption that the value

of Bitcoin does or should depend primarily on the velocity of the

currency then yes, Bitcoin is overvalued. I think that really reflects

the fact that most people don’t think that velocity is the only core

value characteristic of Bitcoin and that the savings effect, thefuture potentials, the innovation premium, if you like, looking at an

event like a tech IPO – all of those factors play into the price in a

way that they don’t in other traditional commodities or stocks or

other types of assets.

SM: You know, I’ve seen a lot of articles in the past. It’s kind of

interesting to see Falkevinge writing about this because I’ve seen a

lot of articles in the past, including from people like Max Keiser,who say “No, no, no, Bitcoin is vastly undervalued by at least two

orders of magnitude.” So, maybe the truth somewhere in the

middle and that’s what we’re seeing right now in the current price.

I mean, there’s lots of people who say, “Oh, look at the amount of

bitcoins that there will ever be in existence and look at the world

population and look at the percentage of the world population who

are Bitcoin users, currently, and the potential for new users.” And

suddenly, you’ve got $10,000 bitcoins, for one Bitcoin. The price ofa bitcoin is what somebody is willing to pay for it. We’ve said that

over and over again on this show. There are lots and lots of people

determining that price every moment of every day through Bitcoin

trading, buying, and selling. That’s the current spot price, the

market price, that’s what the price is.

AA: Part of trading on that price is reading articles by Falkevinge,

deciding that you may agree with him and selling lots of Bitcoin ordisagreeing and buying Bitcoin. Falkevinge is doing the job of

adding more information to the market here.

SM: Right, but most people, it seems, either don’t agree with him

or there are enough people who disagree with him that it’s holding

up the market for bitcoins at the current market price. Not enough



to hold it up at $10,000 per Bitcoin, but some of those people as we

said before, are banking on that in the future that bitcoins are going

to worth $10,000 or at least more than $140 - wherever they’re

currently at.

AA: I’d love to think it’s rational pricing that has put the price of

Bitcoin at $125 but then I look at the Dow Jones Industrial Average

at 15,000 (pts.) and I know that people are insane.

ABL: (*Laughing*)

SM: (*Laughing*)

ABL: You know that people respond to stimulus and that sort of

brings up an interesting question.

AA: (*Laughing*)

ABL: Yes, in both ways.

AA: Was that a QE two pun or QE four (pun), wherever we’re at

now?

ABL: It was accidental, but yes, indeed. How we get the price inBitcoin anyway it goes is a total…it’s like a black box, right? Mt. Gox

has one price. When I was talking with Josh Rossi, he’s talking

about his Buttonwood software and how he wants to essentially

collect prices from all of the Satoshi squares live, that are going on

everywhere all the time and also Local Bitcoins and use that as a

way to aggregate and generate a spot price. Really, with

conventional markets, you have to use these broad measures. You

have to pay attention to the entities like Mt. Gox because they’rewhere all the trading happens but in a decentralized network and

especially, a decentralized network like we have with Bitcoin where

regulation is constantly spreading out. First off, regulation is doing

it and then also, companies failing under the weight of their own

success, as we’ve seen with Mt. Gox. It seems like the market is



almost anti-monopoly and is continuing to spread out despite the

fact that the incentives normally would have as large a

concentration of traders on either buying or selling as possible.

Here, that’s not the case.

AA: Here’s the thing though. Even if you look at these price

fluctuations or price differences between the various exchanges,

they all cluster around the midpoint and they all form a very

beautiful Bell curve over time. I know I can’t say with extreme

accuracy what the current price of Bitcoin is. I can discount or

rather, dismiss a(n) overvaluation by two orders of magnitude and I

can dismiss that with a fair amount of statistical certainty. I can

say, for example, that if all of these exchanges are telling us thatthe price at about $130, the chance of the price being $1.30

instead, is 1 in 10,000,000 ( one-in-ten million). Simply, by looking

at the Bell curve you can do that calculation. You can see what the

probability is. It’s four standard deviations off the core. You can

say there’s uncertainty in the market and there’s price fluctuation

in the market and price uncertainty but it’s not in the orders of

magnitude we’re talking about here. There’s no chance of that.

ABL: Is this people picking their favorite reason….because some

people look at savings like hoarding. Some people look at hoarding

like savings. It sort of is just semantics about how you’re going to

represent it. Is this people…is this Falkevinge picking the thing that

he most wants Bitcoin to be? Which is transactional because if it’s

transactional then it’s ubiquitous that means it’s changing the

world, whereas, if it’s savings, then maybe that’s not so true.

Maybe he’s just focusing on that and to him that’s the only validsort of reason why there can be value where in reality, Bitcoin as a

protocol just like the internet, is super-agnostic and doesn’t care

what goes on. It doesn’t care what you do with it and frankly, it

doesn’t care what metrics you pay attention to it. Whatever

metrics you’re looking for, so long as it’s something that’s



your bitcoins to real-world items. You can even buy with privacy.

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ABL: Over the last few months, we’ve been watching the network

hash rate skyrocket as ASIC manufacturers ship overdue product to

anxious customers. As the network passes the one Petahash (PH)

mark, we’re joined by Benny and Emmanuel, two of the minds

behind the Cloud Hashing project. Gentlemen, let’s talk Bitcoin.

The first question that I have is, is there still an opportunity inmining? It seems like the cost of participating in that network is

getting increasingly high and the time-frame to actually recoup your

investment is getting even smaller.

E: If you’ll allow me to answer that question, it’s Emmanuel

speaking here. Absolutely, what we’re seeing is a bit of a shift in

the usual mindset of miners where they used to ROI in the space of

two to four months, depending on delivery. We’re seeing that shift

towards the latter end of the calendar. Depending on when you

receive your hardware and depending on when you made the

purchase, the network difficulty could have literally overtaken you.

In terms of, is it profitable to mine? We’d say, absolutely, it is

profitable, it’s still profitable to mine. It depends on your strategy.

It depends on your capital and it depends on who you decide to

partner with to be successful. If we look at what people have been

doing in industry as things stand now, people will be making ordersfrom the four major manufacturers. There will be more coming

online soon. They would wait a period of three to four months.

What our model is and the way in which we’ve approached that is to

essentially use economies of scale to our advantage to purchase a

large amount of hashing power and then, to redistribute that to



customers. We will be, probably, one of the first companies to

literally, enable you to logon and make a purchase of hashing power

and to be mining within ten minutes. That’s a complete shift from

what the market is used to and I think that that’s a model for years

to come. Another thing as well is, people say that the money to bemade in mining is within the first two to three months. Well, that is

true, depending on what your model is but also, if you have the

ability to consistently or constantly add to the armory of your

hashing power that you have, it gives you a much better stance to

pretty much fight the network difficulty and you can’t do that as a

solo miner. The whole market is going to shift. We believe mining

belongs in the cloud just as supercomputing does. We’ve been

pioneers in that field and we believe it’s pretty much, the way to

go.

ABL: Let’s back up for a second here. Can you tell me how you got

into the space and if you’ve had any ventures in Bitcoin things

before? Have you been mining before you got into this Cloud

Hashing business?

E: Oh, yeah. I started off mining with my CPU when it was

interesting. Then, I got bored of it. Then, I kind of left it alone.

Then, the GPUs came into business and I gave that a bit of a go.

Then, my wife started getting a bit annoyed from the heat and the

noise and the lack of spare room when people came to visit. So, I

kind of parked the mining project to the side a bit. When ASICs

came online I thought maybe I could venture there because the

hardware was smaller, it was supposedly less noisy and you could

get more density out of it. As time elapsed, more people becameinterested. So, I began actually, selling ownership of the machines

to friends and family who were interested in Bitcoin just to be able

to give them the ability to do so. I’d manage it. They’d just have to

pay the bills. That was the initial Cloud Hashing model and it burst

itself onto the internet in April (of) this year. We started selling



contracts online and the rest is history. We pretty much grew

organically, from running mining equipment in the bedroom to

running an organization now who have 1,300 individual customers.

ABL: Alright, sound like you’ve made some pretty fast inroads intothe space. Let’s talk mining for a second. The point of mining, I

would argue, is to incentivize the distribution of the Bitcoin

network to the greatest extent possible, but in the few years that

we’ve gone from 2009 to the point that we’re at now, that really

hasn’t been the experience. It seems like because we’ve gone so

fast through the generations of hardware, it’s been very difficult for

people to keep up and essentially where a couple of years ago, you

could mine with your CPU as you started out. Now, someone whowants to experience it for the first time just at that sort of curiosity

level doesn’t have anything like that, doesn’t have anything near

like that. Your service aside, what do you think of this trend,

generally speaking? If you hadn’t been able to access it in the way

that you did, do you think that you would’ve started mining?

B: Yeah, I’ll go into this a bit. The advent of CPU mining was,

essentially as most people involved in Bitcoin mining are aware, to

verify the transactions on the Bitcoin network and incentivize

people to be connected to the Bitcoin network. The entry into that

market was largely in the tech field in the beginning because the

configuration of mining software was not exactly user-friendly or

ease of entry was quite high for the average individual that doesn’t

have background experience working from a console or something

of that sort. In the beginning, people started developing GUIs to

make it easier to begin to configure a mining-platform softwareprogram and then, from there it began to scale to more

sophisticated tools and now, monitoring tools and things of that

sort. But, it still has a large learning curve for people and so, one of

the ideas that we had in the Cloud Hashing model was, how do we

ease the entry point into mining and at the same time help people



understand what Bitcoin mining is and why it’s still advantageous to

the Bitcoin network that people still are mining bitcoins. The

incentive is there. People don’t necessarily mine just because

they’re spirited to be miners. They do want to be rewarded. The

long-term plan for Bitcoin was that people were going to be miningbecause they’re rewarded on the transactions that are taking place

in the blockchain. In essence, you are still incentivized in five

years’ (or) ten years’ time. To get into that market as an individual

that is looking to get familiar with mining and jump into it. It’s not

as simple as just, “Go download a program and start running on your

CPU,” if it becomes quickly evident that there’s no reward there for

you. We wanted to make it possible for people to understand that

the reward is still there, you just have to be able to see how to get

to it. The Cloud Hashing design is to be able to able to bring a

person into mining, show them that there’s an estimated ROI that is

potential and then, that there’s a difficulty that you’re running up

against. We’re trying to make some of this more transparent to

people that are walking into this and going, “Oh, mining, this makes

sense. Just throw some machine on and I should be making

money.” Well, with the cost of power versus the difficulty rising

and the amount of equipment you need to overcome those costs,

we believe that there’s a scalable model that can work and we’ve

implemented that into the business model of Cloud Hashing to

benefit the customers. Ultimately, we have a goal of benefiting the

Bitcoin network alongside that.

ABL: It seems like one of the biggest challenges that you run up

against in mining however you’re going to do it is not necessarily

the fact that the difficulty is going up so much as it is how you’retiming your purchases relative to the rest of the world’s release

schedules because now there are several manufacturers in the

space.

E: Obsoletion, yeah.



ABL: Yeah, so if you get a whole bunch of hashing power in the

beginning then, two days later there’s a giant release and suddenly,

you’re swept away. Have you been able to counter that risk?

E: To some extent, we were absolutely affected by those risks atthe advent of the company. We made substantial orders of

equipment that we were waiting to be delivered. Customers were,

obviously, frustrated by the delays. Being a cloud company and

being able to have the capital and the liquidity to go onto the open

market, we’re able to still service our customers because of a skill

that we have. Now, in respects to individuals to make those kinds

of purchases and waiting three to four months where the ROI,

literally, dwindles away; now, we believe that that model willeventually die out because people might not be able to stomach the

risk. A lot of money has gone into pre-orders and a lot of people

are still people are still waiting for delivery and a lot of people have

lost money and a lot of people have been dissatisfied with how it’s

been handled and might not even play again. The model we’re

offering is very different. Essentially, the kind of orders we make,

it gets peoples’ attention. It gets the attentions of the

manufacturer so you can work closely with them to ensurecustomers are not burned by those kinds of delays. If you’re an

individual making an order through the website, you’ll be treated

differently from if you’re a large organization looking to have a

long-term business relationship to pretty much service your

customers and at the same time benefit the manufacturer. I think

the manufacturers themselves, they would be prefer to deal with

larger organizations rather than loads of customers constantly

getting back to them, “Oh my ASIC doesn’t work. Oh, the powerunit has blown up, how do I sort this out?” Those kind of issues will

pretty much be dwindled away if you just took it to the cloud.

They’ll be dealing with one entity or, sorry actually, four or five

entities instead of the manny(manufacturer). That’s how we’ve

mitigated our risks, working with the manufacturers ourselves



directly and being in the know of the project scope and any

potential delays so that we can adequately make ultimate

arrangements for any delays. That’s kind of where we are now and

that’s where we’re seeing that mature as a model.

ABL: Do you see basically have units standing by so when people

buy them they just switch over to their account instead of crediting

you? I assume you’re running them yourself when you don’t have

customers to run them for, right?

E: Yeah, the way in which we work – I’ll give you a small

background of our model without selling. We’ll purchase large

quantities of ASIC hardware. We’ll put them in data centers and a

data center will have an agreement with us to manage them or we

have our own person to manage it depending on which city it’s in.

Now, the equipment we’re mining (with) constantly. A customer

would go through our website to make a purchase for hashing

power. Now, for the 30th of September this year, as soon as they

make that purchase, within ten minutes they would be mining

automatically because our hardware is already available, it’s

already there. So, there is no delay. There is no pre-order. There

is no wait. It’s instantaneous. That’s what people are used to in

the cloud space. They’re not used to making a purchase and

waiting three to four months or not (being) given a definite time for

delivery. They’re used to making a payment and getting what

they’ve paid for, instantaneously. That’s the model that we’ve

switched to and that’s the model we believe is palatable for the

mass market. Another thing is (with) regards to difficulty increases.

How do you deal with customers worried about the day-to-day,well, sorry, the bi-weekly difficulty increases and how do you pretty

much keep them motivated to mine or to keep them motivated

to…they’ll know that they’ll actually get an ROI. What we do is

we’ll essentially only sell up to 60% of any capacity that we have.

At the end of each month, what we do is we purchase on the behalf



of the clients that hashing power that we have as a reserve so that

they get an increase in hashing power so that it allows them to

either stay online or at least not feel the mass effect of the

difficulty on their returns. That’s a better model than sitting on a

piece of hardware that every two weeks the returns are dropping by20-30%. That’s the model we’ve adopted and that’s the model the

market will be used to. That’s what we’ve worked out with talking

to customers, giving them an idea of the kind of things that tick

them off and try to adapt to the needs of the customers on our

front.

B: I’ll also comment on the network hash rate unpredictability that

a lot of miners are seeing. This is clearly a risk that miners aretaking when they’re buying hardware on the market that has the

pre-order basis. We’ve often said to people that it’s a lot easier to

look at the network hash rate to determine what your potential

return is because the network hash rate is in flux on a constant

basis, whereas, your difficulty changes are built into the algorithm

of the Bitcoin design and so, if you’re in the know in terms of

research and discussing and finding out what the supply chain

challenges are of various manufacturers, it’s a little easier topredict what the network hash rate might look like at a certain

point in time in a given period. We don’t know in a year from now

but we might be able to say in three months, based on these

companies, we can somehow gauge that the network hash rate’s

going to be between X and Y. Then, if we say that your hash rate

with Cloud Hashing is this and that based on our model the hash

rate of your account will increase based on the estimates of the

network hash rate increasing in a proportionate way, you have away of being able to calculate, with some degree of accuracy, what

your ROI could be. Now, we don’t know if a company is going to

come out of the left field that no one’s heard of and dump an

enormous amount of hashing power onto the network. Perhaps, an

ASIC manufacturer that nobody saw coming. That’s always a



possibility. There’s nothing anyone can really do to prevent those

kinds of things happening except for be prepared. That kind of

preparation that we take is in the accumulation of good business

partnerships with ASIC manufacturers that want to support not just

us, but the fact that we are redistributing this hashing power to thecustomers. This is a really key point in one of the reasons why ASIC

manufacturers have worked with us so closely because they believe

in the business model that we have. Sure, there’s a lot of

companies that just want to make a profit. There’s a lot of

individuals that just want to dump a lot of money into mining

hardware and immediately mine for themselves. We get that. We

understand that there’s always going to be that market out there

where there’s people that are very bull on the long-term of Bitcoin.

They’ll put money into mining and take the risks but the attitude

that our customers have is that Cloud Hashing is going to support

them and that the manufacturers are going to support Cloud Hashing

and, in turn, everyone should benefit. We found that the

manufacturers who understand our business model want to keep

our customers in line with the network hash rate increases as much

as possible. (The) reason being is that, like any manufacturer, your

goal is not to sell a product to somebody once. It’s to sell a second

and a third and a fourth time. We believe in the same model. We

want our customers to be return customers, repeat customers. We

want them to tell their friends that this is working for them. For us

to sell one contract to one person is not our ultimate goal. We want

people to believe in the model and understand that there is a long-

term benefit to cloud mining and that it actually has a benefit to the

Bitcoin network, because what we’re doing is making possible that

one or two or a small group of individuals do not have all of this

mining power for themselves. As a result of that, more people are

involved in Bitcoin. It’s distributed as a currency to more

individuals out there and hopefully, that will help the Bitcoin

network thrive.



ABL: Okay, I have a couple of questions off of those two answers.

(*Laughing*). First off, is the increase of hashing power standard or

is there a cost associated with it?

E: The way the model works is we essentially…the customer wouldmake a payment for the contract. In the contract, we specify the

two different costs associated with a contract. One is a

management fee then, the other is a reinvestment (fee). We

essentially enable the customer to make a payment of up to 30% of

whatever the mining revenue is. We’re soon going to allow that be

variable, make a payment of what they would want to reinvest in

hashing power and that would automatically be deducted from the

payouts. So, that would automatically go into hashing at the end ofeach month. If they made $100 and they’d set it 30%, they’d take

$30 and use that to buy more ASIC miner hashing power for

themselves.

ABL: I’m just wondering what the ratio is there because it seems

like…as someone who might be interested in one of these, I’m trying

to figure out if that actually is even something that would actually

be beneficial for me to pursue because 30% of what we’re…

E: Oh, absolutely.

ABL: …so, 30% would be buying you more than just taking the

payment would be?

E: Oh, absolutely. The price that you’d be paying with a

reinvestment is a lot less than you would be paying with a contract

so there’s a massive benefit there. If you bought in at the

con(tract)…one thing people need to be aware of as well is themassive increase in hashing power but also the cost per Giga-hash is

dropping. If you look in January we’re looking at cost down by

maybe 80% per Giga-hash. We could buy, in the future, on the

behalf of the customer. So, maybe, in three to four months’ time,

they’re going to get multiples of what they started with as a miner.



How would do that as an individual mining and how could you

ensure that you have the hardware on the day you want the

hardware to start mining without making a loss. You couldn’t do

that as an individual unless you have a lot of capital and a lot of

patience. Doing it in the cloud gives you that benefit because it’smanaged on your behalf.

B: One of the things that allows industry to scale is to have a lot of

people backing that industry and we looked at that as part how the

model has to integrate. When we designed Cloud Hashing, we

realized something that was very critically important and that is

that it’s not all about how much hashing power you have. The

number specifically isn’t that important. It’s about how manypeople are part of something that are collectively working towards a

goal. Because the Cloud Hashing customer base is well aware that

when they sign-up, this is something that they’re signing into, that

is a collective initiative in a sense, to be able to increase the cloud

mining capacity for the benefit of all customers. Even though it’s

30% as an individual, that 30% goes a lot further than that same 30%

that you would be taking in as an individual miner and then,

hopefully, taking that money and putting it towards, say, your nextpurchase of an ASIC when you reach the ROI point that you can now

afford your next one. On your behalf, every month, this increase is

taking place. It’s adjusted in your hash rate in our system. It’s

visible to you as a client and you’re immediately mining with that

adjusted hash rate as soon as soon as it takes effect, whereas, as an

individual miner that’s buying hardware, you’re actually sitting and

waiting for that hardware to reach a ROI point where you can now

go and buy the next thing. With us, thirty days later or however,maybe less, you have immediately taken some additional hash rate

and put it into your account and now, you’re mining with that. This

is the ability to scale with the network hash rate increase better

than waiting on the next hardware to show up at your doorstep.



ABL: So, I hear the decentralized argument and I think that I agree

with you on the decentralized argument but don’t you as the

service provider actually control all of these? It seems like people

aren’t actually mining, they’re more the recipient output. Instead

of it going to your wallet it goes to their wallet.

B: Right. Sure.

ABL: Isn’t there a differentiation? Do they choose what pool they

participate in or is there any control?

B: Well, I’m glad you asked that question. One of the things that

will be rolled here with the next September mine is the cloud

hashing technology which is going to offer a pool technology tominers in a very innovative way. It’ll be the first mine that we’re

aware of that allows people to both mine in the cloud based on the

Cloud Hashing model as well as allowing those customers as well as

others that are not customers of Cloud Hashing to mine through the

Cloud Hashing mining portal. That will essentially make it possible

for anybody that wants to mine within the Cloud Hashing cloud, you

might call it. We’re kind of dropping the cloud word a lot here but

(it) allows people to access this cloud and be able to participate in itas well. On the topic of decentralization, one of the sticking points

that has been often debated is what makes it decentralized. If you

were, for example, a large pool and we’ve seen this out there with

other mining pools. What happens if you reach 51% of the network?

There’s a very common concern amongst miners out there about

the 51% attack potential that a mining operation could achieve if

they had so much hashing power that they could overtake the

network and do what they call a double-spend. One of thetechnologies that we’re implementing into the mining design that

makes this very advantageous for the technical miner is the ability

to select transactions that a person wants to mine within our

system. This is something that we haven’t seen out there done

before by other mines. This allows people to select the transactions



and, in essence, makes it a truly decentralized model from the

outsider connecting to our mine which means that, in essence, a

51% attack would be highly unlikely if not next to impossible.

We’re taking the power away from ourselves and putting in the

hands of people connecting through our portal. It’s become verycommonplace now that we’re often asked by customers and

engaged by people in general conversation in Bitcoin about these

Bitcoin mining calculators. For example, one of the more popular

ones that has become almost a staple in conversation as of late is

the one on the Genesis block which is thegenesisblock.com. They

have a mining dashboard where they are allowing you to look at a

matrix of all the different manufacturers and their hardware and

their costs and so on. What these tools are essentially designed to

do is give a person perspective on what their potential ROI is. What

these things fail to do is give a person a perspective on what

changes based on new hardware being introduced on the supply

chain basis that we talked about. The miners have just a few fields

to fill-in and suddenly, they’re able to predict, based on these

calculators, what their ROI is. It’s a little deceptive to people

because what your ROI is is largely based on your scalability not just

based on the fact that you can plug-in a number and that the

network is going to scale based on X, Y, and Z. The Genesis block,

for example, shows the average over some period of time of

difficulty increases and then, comes up with a prediction of the

difficulty in the next month or the next couple of months over what

they believe will be, you know, some period of time. Well, there’s

also a supply chain aspect to making that even a probable

possibility, you should say. You can’t continually increase the

network over and over and over again without having some pretty

massive supply chain issues that will be hard to overcome for all

manufacturers once the network reaches a certain size and the

difficulty reaches a certain size.



E: Can I also add to that? There’s also an economics aspect to that,

in terms of if we’re talking about the network being at 15 PH/s, for

example, or 20 PH/s. How many millions of dollars will need to be

spent to cover the difficulty rises of 80% when we’re talking about a

51%-style attack every thirty days or so. On top of that, we’retalking about an infinite amount of money being able to be thrown

into a market. Right now, there’s worth $1.4 billion and I’m talking

the Bitcoin as a whole. I’m no longer talking about the mining

market. I mean, that’s probably $100 million. Who knows, maybe

less. It’s not…I don’t think the tool is meant for exact calculations

of what hashing power is. It gives people an indicative figure, but at

the same time, it’s deceptive because people don’t know what

other factors are necessarily going to affect the growth of the

Bitcoin network. For example, if we’re going to have consistent

growth above 50%, we’re going to need to new technology, maybe,

14nm technology that costs $16 million just to get to the foundry

and to make an ROI, how many millions of dollars more do you have

to sell? Things about this haven’t been thought of and I think

people need to be aware that just plugging into the Genesis block is

not a sure thing to be saying that you will not make a profit or you

will make a profit.

ABL: Do you think that this is a one-way trip for us and that the

difficulty at this point, because there are so many players involved,

can only go up or do you think that the price, actually, is going to

play a role at some point in that the price, actually, needs to go up

in order for mining to continue to be profitable?

E: Well, price is always a thing. There are three things here. One,the cost of electricity so if you can get electricity dirt-cheap then,

you could mine with…if you mine with the best equipment and you

get electricity really cheap then you could run your hardware as

long as humanly possible compared to having another piece of

hardware that’s less efficient in a state like California where you



E: Thanks, Adam.

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ABL: So, guys, we have to have a meeting about this because I’ve

been trying to figure out how to proceed and it’s really hurting mybrain. I got an email from, I don’t recall his first name - his last

name is Franko. He’s the creator of the Frankocoin, basically. He

has let us know that he wants to donate to us in Frankos. I looked

into his currency a little bit. It’s derived from Litecoin except it has

mailto:[email protected]








a fewer number issued than actually even Bitcoin does. I think it

has half the number issued that will ever be issued of bitcoins. In

theory, it’s going to be quite rare and it has a very fast transaction

time. It has about thirty seconds per block. I emailed him back and

asked what advantages his currency has that would make it so weshould want to accept it besides the two technical differences that

he had done and I hadn’t heard anything back from him, but it kind

of has brought up a larger point. We get these requests sometimes

from people who have alternative cryptocurrencies and I don’t

really know what standard we should be setting for when we should

accept something for donations for the show. Because, on the one

hand, they’re not really buying anything from us and they want to

donate to support what we’re doing, but on the other hand, it’s

definitely a marketing move on their part where they want us to

say, “We accept this.” Then, that adds to the utility of their...so,

it’s not like it’s a selfless thing. I’m wondering, when you guys are

looking at what new alternative cryptocurrencies to pay attention

to or to setup a wallet for, what are the criteria that you use?

SM: That’s such a great question. I wish I could say I actually had

some hard and fast criteria. It’s more like, I have to see it becomea blip on my radar more than a couple of times. I made a fortunate

investment in Litecoin about a year ago which ended up doing really

well, but I’m kind of skeptical about a lot of the other

cryptocurrencies especially, since now there are so, so many of

them and Altcoin really has to differentiate itself to stand out in the

current climate. I just don’t know if we’re at the point where

that’s really likely to happen yet and I can’t see the clear leaders in

the pack. I haven’t been super, super buzzed about altcoins lately,except for maybe, maybe Litecoin, because it seems to have

cleared a certain bar. As far as accepting donations to the show, I

wish there was an easy way you could have a multi-currency wallet.

I know people are working on that but I don’t know of one that

exists yet. If we could have that, it would be easy to administer.



We could just have a wallet and when some Frankocoins come in,

we’ll see a little notification and we could do basically whatever we

want with those Frankocoins. Save them, spend them, give them

away; convert them to bitcoins, whatever we want. We’re just not

there yet.

AA: This question that you’re asking, Adam, is the same question

that plays out thousands and thousands of times every time an

altcoin comes up for any buyer, any seller, or any user. This is the

fundamental adoption question, the balance between the network

effect, convenience, and the existing value of Bitcoin versus the

value of an additional coin and in that you have to balance out the

network effect. As I said, you have to balance out the adoptiondifficulty, the technical difficulty of charging in multiple currencies.

You have to balance out the foreign exchange risk of converting it,

how convertible it is, what kind of liquidity there is in the market in

order to convert it, how many access points there are. You have to

look at the history of the currency and how stable it is in terms of

fluctuations or also in terms of mining difficulty because that’s

another aspect of cryptocurrencies that plays on and determines

stability. All of these, essentially compromises or trade-offs happenin the mind of any consumer who’s deciding between Bitcoin and

another currency and I think this all goes to demonstrate why it is

so difficult to unseat the king of cryptocurrencies, why it is so

difficult to say, “I’m going to go with a completely different

alternative.” And the reason is that it has a lot of cost to do that.

As a result, it has to have a really compelling reason, and quite

honestly, I don’t think you have that.

SM: But does that mean they don’t have any value? I mean, I don’t

think so. I think there could be some…

AA: They have dump value.



SM: Yeah, they have dump value but I don’t know, there’s part of

me…I know I just said that I’m not like, super, super excited about

any of the altcoins but there is a part of me that kind of sees like,

“Okay, like, yeah there’s some Primecoin, it’s fun in prime numbers

and PPcoin, it’s got the proof of stake and Feathercoin, has like,great promotion and that might be interesting. At times, I do feel

excited about altcoins and it doesn’t hurt to diversify, you know. If

somebody wants to give us some…some, uh, you know, pick your

favorite coin then, I don’t really see the problem with that. Maybe,

it feels like a headache because we’re kind of trying to decide,

“Well, what do we actually think about all these altcoins? Is this

going to require me doing research on them and do we convert

them to Bitcoin, and essentially cash out, or do we hang on to

them?,” and that decision feels overwhelming and we just don’t

want to deal with it. Could that be sort of what’s going on?

AA: It’s enough to make that decision with Bitcoin.

ABL: (*Laughing*)

SM: (*Laughing*)

AA: (*Laughing*) - You know?

SM: Right, right.

AA: We’re running multiple shows just to decide if we’re holding

Bitcoin or what even the value of Bitcoin is. I think then,

multiplying that by a whole set of other coins…it can really be a

huge headache for merchants. So, it’s easier than adopting multiple

Fiat currencies but it’s not as easy as just having one. ABL: I see a couple of options here for how we could push forward

on this because Stephanie, to your point, I think it really is a

usability thing. When I installed the Feathercoin wallet because we

had a listener who wanted to donate to us in Feathercoin; that was



the fourth wallet that I had setup on this particular computer. In

addition to that, I had Primecoin which I was playing around with

because I was trying mining with it actually which was quite

interesting. Bitcoin, Litecoin, and then, Feathercoin - and when I

setup Feathercoin, I actually had problems with my computer. Notthat it was a problem with Feathercoin, just that like, that was,

apparently, the number of wallets that my computer felt

comfortable running and the number of blockchains that it felt, you

know, so, I really think that so long as you need a separate

installation for each new cryptocurrency…

SM: The feather that broke the camel’s back. (*Laughing*)

ABL: (*Laughing*) – Yeah, exactly. Yes, exactly. When I run three

of them at once it’s all fine, but when I run four of them I tend to

get some instability in my system. I see a couple of ways forward on

this. I can either see setting up a bounty system where we have a

minimum value threshold where people can send their whatever-

coin-it-is to an escrow address that we have setup and at the point

that we reach whatever the threshold is, say it’s like, one Bitcoin

worth of whatever the Altcoin is that we’re talking about. Then, we

go through the trouble of setting up a full wallet for the show and

doing all that stuff or I could also see us partnering with…or it being

a service that’s provided by an exchange like Vircurex, where

they’re already dealing with all of these altcoins and they deal with

a lot of altcoins. As a result of that, they could essentially give us

an application that would let people send something to a show

account that would be able to be denominated in any of those

things and then, we’d have the ability to change it into othercryptocurrencies or keep it in that but not have to maintain all of

the wallets on a series of actual computers that we have to control.

SM: Right, because the exchanges right now, like BTC-E or Vircurex,

they do sort of have multi-currency wallets where you can login and

see your finances and it has a wallet for each of the altcoins that’s



on that exchange and people, you know, you can send funds to it or

whatever. Then, you can easily trade because they’re already in

the exchange. I guess I see a problem with storing the coins on an

exchange because that’s basically, a web wallet, and they’re

vulnerable to hacks, but I really like the idea of, “Hey, let’s have anaddress for each of these coins,” once we reach a certain threshold,

and I think one Bitcoin equivalent of those altcoins is a good

threshold to have. Then, we’ll put that up as a donation address.

I’m all for, like, please, if somebody wants to give me money, I

would like to make it convenient for them to do that, you know

what I mean? If someone wants to support Let’s Talk Bitcoin, let’s

make it easy for them to do that in whatever way they want to. I’m

kind of, erring on the side of, “Yeah, let’s put up an address for

every coin,” but I realize that might look a bit cluttered potentially,

on the website.

ABL: I don’t think it’s a problem with the cluttered look. I just

think that there are so many of these currencies that are going to

fail because they don’t very many fundamental advantages to them

and they don’t have…you need something. It almost doesn’t matter

to a certain extent what angle you’re going to approach theproblem of cryptocurrency from, but you need to do something that

is different; Be it, how you market it or be it how you, you

know…the innovations of the currency, fundamentally, itself. You

still need to have those differentiations and I feel like a lot of those

currencies that are out there, it’s very difficult to make that claim

to. Beyond that, I don’t think that it’s workable, Stephanie,

because we’re talking about…there’s more than 150

cryptocurrencies out there right now and I have to imagine thatthat’s going to continue to expand.

SM: Right, absolutely, but I mean we’re only getting donation

requests for maybe, ten of those, right?

ABL: Right now. (*Laughing*)



SM: (*Laughing*)

ABL: Right now, you know, while we accept…this, of course, brings

me to the other part of this conversation. We started accepting

Litecoin donations I guess about three months ago and the firstcouple of shows were pretty successful and I can look back and

actually, show 11 and show 13 were two of our highest-tipped

shows because we got single donations of 100 litecoins to each of

those shows. That actually, was more substantial than the Bitcoin

donations, at that point. Since then, we get probably between 0.5-

1 litecoin per episode, on a good episode and sometimes, we don’t

get any litecoins. So, the question becomes, is there a minimum

threshold beyond which we should not be generating, I should notbe spending the time to generate the addresses to run the client if

we’re getting these small amounts? Should there be a minimum

threshold?

SM: Maybe, we don’t have an individual…Bitcoin, Litecoin,

Frankocoin, PPcoin, every single coin address for each show.

Maybe, we just have a general show fund for the altcoins that are

not Bitcoin or maybe, not Bitcoin and Litecoin.

AA: Yeah, we can have three-dimensional wallets. Essentially, the

bottom line is that all of these coins at their core use the same

elliptic-curve-cryptography system for the public and private key.

The only difference between a Bitcoin address, a Litecoin address,

and a Feathercoin address is what prefix you stick in front of the

address before you send it out. You can take a single private key

and from that you can generate a public key, which is a point on the

curve, for Litecoin and encode it for Litecoin and then you can takethe same key and encode it for Bitcoin and the same key and

encode for it Feathercoin and the same key and encode it for

PPcoin. Essentially, what you would do is you would have one

wallet with one private key that unlocks all of the public keys of all



of the other coins. I think we’re going to solve this problem over

time and the default will be multi-currency systems.

ABL: So, when can I have that?

AA: I wrote to Protech Implementation, (which) works on top ofBIP-32 but unfortunately, turning that into a business…we need one

of those opportunistic entrepreneurs.

ABL: (*Laughing*)

SM: (*Laughing*) – Yeah, I just googled that, “multi-cryptocurrency

wallet” and I found a thread on the Bitcoin forum that was

suggesting some software for Windows and then, the next post was,

“Yes, complete with wallet-stealing Trojan free of charge.” So,

we’re not there yet.

AA: By the way, that’s one of the disadvantages, right? If you solve

the key-management problem by tying all the keys to a single

private key then, if you lose that one, mmm-hmmm, you’ve lost all

of them.

SM: Right. Adam, maybe what we need is a(n) Altcoin-enthusiast

treasurer for Let’s Talk Bitcoin and I would be happy to be that.

Why don’t we just have everybody send their altcoins to my wallet

on Vircurex and I’ll be the administrator of that.

ABL: Okay.

SM: No, I’m just kidding about that but…

ABL: Ultimately, if it’s not you doing it, it’s me, Stephanie. Yes, to

a certain extent, there’s a little bit less trust, I guess, but it doesn’treally matter.

AA: Yeah, I’d like to also start considering taking other forms of

payment as well so I will be the treasurer for beer and pot and, uh…



ABL: (*Laughing*)

SM: (*Laughing*)

AA: …I will convert those in my digestive system.

ABL: Thank you, Andreas. Thank you very much.

AA: You’re welcome.

SM: Has anybody…actually, that’s a great point. Has anybody ever

offered to donate physical stuff to Let’s Talk Bitcoin? Maybe, other

things like gold or silver or stocks or I mean, I know some

organizations have offers of those but we’re having the problem

where, “Hey, take my altcoins,” right?

ABL: Yeah, no, we haven’t, uh, there’s been no physical offers,

yet. It’s been altcoins and again, the other thing about altcoins of

course, is that it’s not just a donation. It’s a donation because they

want to donate to us but they want us to care about the

cryptocurrency. That’s the fundamental thing. It’s not like they’re

donating because we’re the best people in the world. They’re

donating because there’s an advantage if we get interested in it and

start talking about it with our audience. So…

AA: You mean like, spending ten minutes talking about Frankocoin

that does ADD blockchain confirmation every thirty seconds?

ABL: Exactly. (*Laughing*)

AA: Yeah.

ABL: Exactly, there’s a really fine line to walk here, I think. I’m just not sure how to approach it, yet.

SM: Well, I don’t know if we’ve resolved anything with our on-air

meeting but it’s a good problem to have, right? People are offering

us donations like, yeah, that’s great. Even if there’s strings



attached to it, even if they want us to promote their coin or

whatever; Okay, fine, I’ll take your money, right? (*Laughing*)

ABL: (*Laughing*) – Fair enough. I mean, this is a problem. That’s

the fundamental part here is that this is a problem and Andreas,whether it’s solved in the manner that you described or whether

it’s solved in a manner we can’t even conceive of here, I think it

will get solved and that makes me feel good.

AA: That’s the beauty of frictionless currencies, right? The fact

that all of these coins have very little friction and are very fungible

and very easy to transport and trade is what makes them very easily

transferrable or convertible from one to the other. The advantage

is that unlike the enormous friction we have converting Fiat to

Bitcoin and back. Converting Litecoin to Bitcoin, you know,

Freecoin to Bitcoin? Ah, that’s easy. One of the advantages…what

we’re seeing here is this proliferation of coins is also a symptom of

the fact that you can convert them more easily so it’s easier to

adopt.

(Outro Music – Fade In)

ABL: Thanks for listening to episode 46 of Let’s Talk Bitcoin.

Content for today’s show was provided by Andreas M. Antonopolous,

Stephanie Murphy with Benny and Emmanuel from Cloud Hashing.

This episode was edited by Matthew Zipkin. Music was provided by

Jared Rubens and Jazztown. If you can’t get enough original

thought and discussion, read our daily blog at letstalkbitcoin.com.

Sign-up for our weekly newsletter at theweeklybitcoin.com. To get

in touch, send me mail directly, at [email protected] orvisit letstalkbitcoin.com/talk to be directed to our listener sub-

reddit. See you next time.

(Outro Music – Fade Out)





E46 Transcript - Life in the Cloud

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Transcript of E46 Transcript - Life in the Cloud