Let's Talk Bitcoin episode 04 - "The Horrible Warnings" transcription

8/13/2019 Let's Talk Bitcoin episode 04 - "The Horrible Warnings" transcription

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Transcription of Episode 4 The Horrible Warnings

Participants:

Adam B. Levine (A.L.) Host

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

Stephan Murph (S.M.) Co-host

!oe Cascio (!.C.) - Bitcoin "# pro$ect% appears in se&ment startin& at ':

Adam B. Levine: (Over intro music) Hi* and +elcome to Let,s al Bitcoin* a sho+/or anone interested in crpto-currencies and the /uture o/ mone. Comin& up on

toda,s sho+:

Pro$ect al 0r11Aid* distri2uted "#* and Bitcoin neutralit. Listener mail

Litecoins* A3* and 2itcoin 2ans. M intervie+ +ith !oe Cascio o/ the Bitcoin "#

pro$ect* +here +e discuss his plan to tae 2ac our identit* eliminate site-

speci/ic lo&ins* and put the spammers out o/ 2usiness* 2 eepin& our online

identit in the 2locchain.

oda,s horri2le +arnin&: Bitcoin AM 2lo+s up4 And 2ecause +e $ust couldn,t not

tal a2out it* toda,s other horri2le +arnin& is: Coinla2 sues Mt. 5o6. 7hat,s&oin& on here8 7e investi&ate.

9isit us at LetsalBitcoin.com to su2scri2e* /or /ree* to our t+ice-+eel sho+.

ou can also /ind us on Stitcher ;adio* or in the ,


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the hosts, section o/ the site. Hosts have individual tip $ars on their pa&es* so i/

ou,d lie to mae sure ou,re re+ardin& the ri&ht individual* that,s our

destination.

And* o/ course* the sho+ is nothin& +ithout an audience. Please share Let,s al

Bitcoin +ith anone ou thin +ould or should 2e interested in the /uture o/mone.

Let,s al Bitcoin is released under an open source license* +hich allo+s /or the

noncommercial clippin&* remi6in& and postin& in an /ormat to an site ou +ant*

so lon& as ou include a lin to our site* letstal2itcoin.com. 7e,re also activel

recruitin& 2oth on- and o//-air talent /or this and other sho+s to come. Dnce

a&ain* i/ ou,re interested* please contact me at adamEletstal2itcoin.com.

M name is Adam B. Levine. ",m a +riter and a speaer +ho lies to e6plain

complicated topics in understanda2le terms. hat,s reall +hat +e,re doin& here

tain& the complicated topic o/ crpto&raphicall secured mone* and helpin&people see +hat it could mean in their o+n lives. !oinin& me in our on&oin& =uest

/or clarit are Andreas M. Antonopolous* an e6pert in decrentraliFed net+ors and

secure sstems -

Andreas M. Antonopolous: Hi4

A.L.: - and #r. Stephanie Murph* a scientist and sndicated radio host.

Stephanie Murph: Hello4

A.L.: hans /or $oinin& me a&ain on another episode o/ Let,s al Bitcoin. his has2een an interestin& +ee /rom a ne+s standpoint% the price has 2een /loatin&

around a lot* and a lot o/ that,s 2ein& attri2uted to thin&s that aren,t reall related

to the currenc so much as the,re related to the e6chan&es and 2usinesses that

are involved in it. 7e,re &onna &et into that a little 2it later in the sho+* 2ut /irst*

let,s tal a2out pro$ects. 7hat,s on our plate toda* Stephanie8

S.M.: ",m reall e6cited to tal a2out this on the sho+ ",ve 2een savin& it a little

2it* 2ut " volunteer and do operations /or a 2itcoin-2ased charit* or non-pro/it

or&anisation. "t,s called 0r11Aid* and +hen ou sa it on the radio it,s a little 2it

+eird 2ecause it,s actuall spelled 0-;-three-three-A-"-#* and that,s the name o/

our +e2site* /r11aid.com and +hat 0r11Aid does is that 2asicall +e &o to

li2ert-themed events* and +e support volunteers +ho provide /irst aid at those

events* and 0r11Aid +ill &ive out stu// that people need sun screen* 2u& spra*

2and aids - /irst aid supplies at those events. 7e also do health and sa/et

outreach to the pu2lic a2out ho+ to use a de/i2rilator* ho+ to do CP;* and thin&s

lie that* and +e also provide a net+orin& space /or healthcare pro/essionals or

people +ho have /irst aid sills that +ant to net+or +ith other /reedom-lovers.

ou can /ind out more a2out us* as " mentioned* at /r11aid.com. 7e recentl

announced that +e +ere &oin& to tae the or&anisation in a Bitcoin direction* and

+e +ere &oin& to do most o/ our 2usiness in 2itcoin use 2itcoin as much as

possi2le msel/ and m parter heresa* at 0r11Aid this is part o/ the reason",m &oin& to 2e at the Bitcoin '1 con/erence* moderatin& this panel discussion
mailto:[email protected]:[email protected]


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a2out non-pro/it or&anisations and Bitcoin* and ho+ those t+o communities can

2ene/it each other.

A.A.: hat,s a reall /antastic pro$ect* Stephanie. " had no idea ou +ere ou +ere

involved in it* 2ut it,s reall e6citin&. ",m an American ;ed Cross certi/ied CP;

instructor msel/* and " +ould love to $oin our team and to learn more.

S.M.: Dh m &osh* that +ould 2e &reat* Andreas4 ",ll have to introduce ou to m

partner heresa at the Bitcoin '1 con/erence. "t,s /unn* 2ecause +ith +hen +e

announced that +e +ere &onna &o in a 2itcoin direction +ith 0r11Aid* +e &ot

some mi6ed responses. 7e &ot does the mainstream ne+s covera&e in the

Hu//in&ton Post% the ind o/ +rote a2out us usin& Bitcoin as a +a to avoid

ta6es. 7e,re a charit4 7e don,t have a lot o/ assets an+a* and +e reall lie

Bitcoin* and +e $ust +ant to use Bitcoin* and +e thin that +ould mae thin&s

easier - +e,d 2e a2le to /ocus on our mission more* o/ helpin& people +ith /rst

aid* i/ +e could do most o/ our operations in 2itcoin So that,s reall +here +e are

comin& /rom* 2ut the reporter inda sensationaliFed it a little 2it* and +e &et a lot

o/ nast con/erence on that article. here +ere lie G comments on the

Hu//in&ton Post piece* 2ut +e also do a lot o/ 2itcoin donations* so* he* ou tae

a stance on somethin&* and some people lie it* some people hate it* 2ut ",m

reall e6cited a2out 0r11Aid.

A.A.: here,s no such thin& as 2ad pu2licit* Stephanie* 2ut there,s plent o/

incompetent $ournalism.

A.L.: " thin the one o/ the thin&s that people need to eep in mind a2out a2out

donations - and a2out charities - +ith Bitcoin* is that +hen ou,re talin& a2out acharita2le cause* in &eneral* the ones that have the a2ilit to raise /unds

e//ectivel are ones that have a lar&e enou&h or&aniFation that the can a//ord to

have emploees* or a//ord to have a structure throu&h +hich the can collect

those donations. Bitcoin,s reall interestin& /rom the charit perspective 2ecause

it removes that minimum level 2e/ore ou can actuall start collectin&* and $ust

maes it a2out our pro$ect instead o/ a2out our structure.

S.M.: eah* a2solutel% +e had some reall 2i& pro2lems +ith some o/ the le&ac

2anin& institutions* too. Papal has loced do+n 0r11Aid,s account t+ice* even

thou&h our treasurers have su2mitted all the necessar paper+or and stu//* 2ut

the capriciousl eep locin& it do+n. "t maes it hard /or people to donate% the

tae /ees out o/ it unless ou have this ";S letter that reco&niFes that ou are

actuall a nonpro/it or&aniFation in their ees. So +e had a lot o/ pro2lems +ith

the le&ac 2anin& sstem* and that +as honestl a lot o/ the motivation /or

usin& Bitcoin* 2ecause it $ust maes thin&s so much easier. 7e don,t have to

/ocus on that stu//. 7e can /ocus on helpin& people.

A.A.: 0rom a practical perspective* one o/ the interestin& thin&s a2out donations

throu&h 2itcoin is that it actuall creates transparenc* +hich is sorel lacin& a

lot the not-/or-pro/its. " also tae donations in one o/ m other pro$ects +hich is

not /or pro/it* and 2ein& a2le to sa >loo* our entire 2oos* our led&er* is on the2locchain - ou can see e6actl ho+ +e,re spendin& our /unds?. hat,s a


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po+er/ul messa&e o/ transparenc and accounta2ilit. Perhaps that should 2e the

/ocus /or $ournalist stories on non-/or-Ipro/its.

S.M.: " totall a&ree* that +as reall important to us too% to have transparenc

and let people see ho+ much +e,re &ettin&* and +ho it,s comin& /rom* and stu//

lie that% and it,s prett neat that 2locchain inda does it /or ou* ou don,t haveto pu2lish a report a2out it* it,s $ust >he* chec out?.

A.L.: oda* /or Pro$ect al* " +anted to &ive a =uic mention to an open-source

pro$ect that,s &ettin& started called the Bitcoin "# Pro$ect. Basicall* instead o/

havin& a lo&in +ith ever +e2site ou +ant to participate on* speci/ic or multiple

2itcoin addresses 2ecome our identit or identities /or an +e2sites that

participate in the sstem. here,s 2een a lot o/ =uic movement on the proposal*

actuall% this $ust came out last month* the ori&inal +hite paper on it. ou,ll hear

more a2out this later durin& this sho+* 2ecause " did an intervie+ +ith !oe Cascio

on the topic* +hich is +here " discovered that it +as such an interestin& pro$ect.

S.M.: #o ou thin that some people mi&ht have some o2$ections to that*

2ecause the +ant to use 2itcoin /or anonmit purposes8

A.L.: " thin that it can 2e used /or anonmit purposes +ith this. !ust lie a

2itcoin +allet* ou can have as man identities +ith this as ou,d lie to maintain*

2ut there,s permanence to them* 2ecause as soon as ou create them and

esta2lish them - lie " said it it,s a little 2it in-depth /i&urin& out ho+ +ors - 2ut

once ou do /i&ure out ho+ it +ors* it it 2ecomes ver clear that it reall &ives

ou complete control o/ our o+n identit* in reall +hatever /orm ou +ant to

have* and i/ ou need to a2andon somethin& and +al a+a it,s not a di//icultprocess to accomplish* even i/ ou,re maintainin& multiple identities - 2ut the

point is that it provides a 2arrier to entr* 2ecause ri&ht no+. i/ ou +ant to si&n

up /or a +e2site or somethin&* reall all ou need to do is $ust have a random

email address and there ou &o% 2ut +ith this* it ties it to somethin& real and it

ties it to somethin& that ou can trac over time* and at the same time it ou let

ou use it an+here ou +ant to as an actual veri/ia2le identit 2aced up 2 the

2locchain.

S.M.: hat,s reall interestin&.

A.A.: he pro$ect ",d lie to tal a2out toda is actuall the presentation ",m &oin&to 2e doin& at the 2itcoin con/erence. his +ill 2e in $ust ' das* and on

Saturda the Jth at ':@* ",ll 2e talin& a2out 2itcoin neutralit. he topic here is

looin& at ho+ to mae Bitcoin as read as possi2le /or mass adoption in a ver

sudden +a* tri&&ered 2 some ind o/ precipitous event a currenc crisis in a

small countr* the devaluation or massive in/lation o/ a currenc* etc. So that the

premise is: Bitcoin has to 2e neutrual so that it can 2e adopted in an &eo&raph*

culture* economic sstem or reli&ious sstem* and there are a lot o/ preconditions

to mae sure that happens% /or the most part* 2itcoin alread meets them. he

tal is a2out ho+ ou have 2itcoin read so that +hen that precipitatin& event

happens* mass adoption can occur and it reall reco&niFes the /act that Bitcoin


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isn,t $ust &oin& to smoothl &ro+ on a nice &entle curve% ou are &oin& to have

this ind o/ tippin& point* in /act.

A.L.: So that,s the tal at Bitcoin Con/erence '1* " hope see everone there.

S.M.: Cool* and in case people can,t mae it to the con/erence* +ill that 2e

videotaped* or are ou &onna recap it on the sho+ perhaps8

A.A.: " +ill de/initel recap on the sho+* and let,s see +hat +e can do a2out video

and audio. ",m not sure +hat the /acilities are lie* 2ut eah* de/initel.

A.L.: 7e,re &oin& to 2e there +ith at least /our o/ us* and +e mi&ht +ind up

2rin&in& one more the con/erence too* dependin& on +hat,s &oin& on* and i/ +e

do then +e +ill 2e havin& more video covera&e than +e +ould other+ise - so ",m

reall hopin& +e can &et =uite a 2it o/ content /rom the Bitcoin Con/erence* and

",ve 2een schedulin& meetin&s +ith various companies in various &roups that are

doin& launches /or the last couple o/ das* so i/ ou,re &onna 2e at the BitcoinCon/erence* and ou,d lie to sit do+n and have a conversation +ith us* +e,re

&onna 2e there the da 2e/ore to have a 2unch o/ meetin&s* so $ust email me at

adamEletstal2itcoin.com.

S.M.: So &us* " &ot an email /rom listener that " +anted to share in the sho+* and

correct a little misin/ormation that " ma have put out there in the last sho+*

+hen +e +ere talin& a2out alt coins and speci/icall litecoins. " said that it

+asn,t reall possi2le to mine litecoins on AS"C miner. hat,s not e6actl true%

AS"C stands /or application-speci/ic inte&rated circuit* " 2elieve* and so the,re

reall desi&ned /or speci/ic tass% the current AS"Cs that are out there on the

maret +ere desi&ned* and are 2ein& used* to mine 2itcoins* +hich are mined on

a di//erent al&orithm the SHA'3 - than litecoins* +hich is mined on the scrpt

al&orithm* so ri&ht no+ there are not an AS"Cs on the maret that use the scrpt

al&orithm to mine litecoins* 2ut there could 2e* and that,s the thin& a2out AS"Cs%

the can 2e desi&ned to do prett much anthin& ou +ant* a lot o/ di//erent

thin&s. So litecoin itsel/ is not reall resistant to 2ein& mined on AS"Cs* 2ut the

+ould have to 2e t+eaed speci/icall /or litecoin* and no2od has done that et.

" thin it +ould 2e interestin& to see +hen that happens* i/ it happens. here have

2een some pro2lems &ettin& AS"Cs out there* $ust /or minin& 2itcoins so /ar* even

thou&h people have 2een reall e6cited a2out it. here 2een a lot o/ challen&es

/or the manu/acturers main& AS"Cs to mine 2itcoins* so ",m +onderin& i/

an2od thins it,s +orth+hile to desi&n one /or minin& litecoins - 2ut the point is

that it could it could a2solutel happen and that +as a mistae on m part* so "

apolo&iFe /or that and ",m &lad that Case emailed to correct us a2out that. 7e

mi&ht 2e talin& a little 2it more +ith Case* +ho emailed on the sho+* at some

point in the /uture.

A.L.: " thin it,s a reall common mistae to mae* and certainl it,s somethin&

that " thin +e,re all &uilt o/ here. his technolo& - there are so man claims

2ein& made a2out it* it,s di//icult to investi&ate them all to the level o/

thorou&hness that one +ould lie to do. M /ocus* certainl* has 2een on Bitcoinrather than the alt coins* 2ecause " thin that the hurdles that are ahead o/


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Bitcoin are re&ulator in nature* rather than rather than somethin& 2ased on the

tpe o/ al&orithm. " don,t thin that 2itcoin is super vulnera2le to 2ein& haced*

2ut itI could 2e attaced throu&h other re&ulator venues. 0rom that

perspective* the alt coins are not that important to me in &eneral* 2ut to this

point* i/ litecoin does 2ecome a plaer* then " thin that it,s $ust a &imme that

+e,re &oin& to see AS"Cs i/ the,re possi2le. " mean* reall* that,s +hat +illhappen an+as% once ou have a main 2locchain* then ou essentiall have an

arms race movin& /or+ard +ith the minin& process* so +hatever the minin&

process loos lie* it,s &oin& to 2e optimiFed as much as possi2le 2ecause that

ma6imiFes the return /or the people involved.

S.M.: And as people start to realiFe the value o/ +hatever the are* 2itcoins*

litecoins or ma2e some other coin* there,ll 2e +a more o/ a pro/it incentive to

up that arms race and mae more e//icient minin& devices.

(Intermission AD)

0emale voice: "/ " sho+ed ou a +e2site +here ou could easil purchase

electronics /rom the +orld,s lar&est distri2utor +ith 2itcoins at K marup* +ould

ou thin it +as too &ood to 2e true8 5ood ne+s: it,s real* and it,s at

2itcoinstore.com. Choose /rom hal/ a million items* save mone over AmaFon and

"

+as thinin&* +hile listenin& to the last episode o/ Let,s al Bitcoin* a2out all thetrou2les that e6chan&es are havin&. Ma2e it,s time to have an actual 2an in the

+ors rather than $ust a simple e6chan&e% somethin& that +ill have relationships

+ith S 2ans and 2e a2le to trade currenc +ith them* 2ut* i/ needed* +ouldI

also 2e located outside the countr* so a re&ulations couldn,t 2e so over2earin&.?

" thin that,s actuall 2een tried a num2er o/ times. here +as pro$ect that came

out called ClearCoin that +as /unctionall a 2itcoin 2an - 2ut the pro2lem +ith

an o/ these 2anin& solutions is that Bitcoin doesn,t act lie a normal currenc*

and so ou can,t have a normal 2an that +ould deal +ith the normal currenc.

Dn the one hand ou,ve &ot the re&ulator issues* +here the S &overnment and

&overnments around the +orld are not reall super e6cited to 2e dealin& +ith it*

2ecause it,s competition to them in a currenc sense* 2ut then on the other hand

ou,ve simpl &ot that a lot o/ the 2anin& pro/it models and 2usiness models $ust

don,t reall +or +ith Bitcoin. "t,s ver di//icult to mae loans* 2ecause people

essentiall ris their 2itcoins in a +a that the reall don,t in a S dollar-

denominated scenario +here ou have insurance 2acin& it up and everthin&

lie that. 7hat do ou &us thin do ou +e,re &oin& to see 2itcoin 2ans8

S.M.: " thin 2itcoins eliminate the need /or 2ans* personall* 2ut eah* there are

certain services that people +ant - $ust havin& 2itcoins on our o+n ma not

provide that. "t,s reall interestin& +hat,s &oin& on +ith ;ipple ri&ht no+* +hich is

this peer-to-peer lendin& credit net+or% that " could represent a decentraliFed2anin& sstem* not necessaril +ith that 2itcoins 2ut +ith all inds o/ currencies.


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Perhaps there are some services that somethin& lie a 2itcoin 2an could /ill* 2ut

",m not reall sure* " thin +e,ll have to see as time &oes on.

A.A.: "t ind o/ depends on +hat ou mean 2 >2an?* ri&ht8 Because i/ ou mean

a depositor institution that eeps our mone sa/e and provides a small amount

o/ interest* that,s reall not necessar in Bitcoin. "/ ou mean a lendin& institutionthat &ives out loans to small 2usinesses and individuals* that could 2e interestin&*

2ut 2ans in the real +orld* as +e call it* don,t actuall do that anmore. 7hat

most 2ans do is the use re&ulation and monopol po+er to suc o// a stead

stream o/ income o// their loans* and ri&ht no+ the,re not reall doin& an loans

- the,re speculatin& on the stoc maret* en$oin& their =uantitative easin&*

unlimited addition* don,t do innovation* don,t do to lendin& and don,t reall

protect our assets +hen the,re sittin& in there. So an old-stle 2an8 7hat ou

onl /ind toda in communit 2ans* credit unions* or&aniFations lie that that

still actuall lend8 hat +ould 2e interestin&. 2an?* at least in the S.

S.M.: Another thin& that 2ans do is provide some level o/ insurance* " &uess*

a&ainst the/t o/ mone* and so " thin people +ould 2e reall interested in that - a

lot o/ people +ould - there 2een a num2er o/ hi&h-pro/ile 2itcoin the/ts in a lot o/

the online +allets* and /rom the e6chan&es. " thin people +ould lie to have a

place +here the could &o and sa >loo* +e,ll store our 2itcoins /or ou* and in

case the,re stolen* ou,ll &et them all 2ac? and so /orth. " haven,t seen an2od

o//er a service lie that et* 2ut " thin that mi&ht 2e interestin&% and it,s done

+ithout the 0#"C* that,s the other thin& a2out Bitcoin.

A.A.: eah* a pooled insurance /und 2et+een the various +allet holders +ould 2e

ver ver interestin&* to cover the K losses that occur* throu&h a pooled

insurance /und% that +ould 2e ver interestin&. "n /act* " thin 2uildin& a Bitcoin

0#"C is more interestin& than 2uildin& the Bitcoin 2ans.


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A.L.: So no+ is our chance to chime in. 9isit +++.letstal2itcoin.com and let us

no+ +hatyouthin a2out 2oth the idea Bitcoin 2an or a Bitcoin 2anin&

insurance /und.

So +e,re here +ith !oe Cascio* o/ $oecascio.net* to tal a2out his pro$ect involvin&

socpuppets on the internet* and ho+ that ties into Bitcoin. 7hen " 2rou&ht thisup +ith some /ols +ho " +as talin& to a2out this intervie+* the said >are soc

puppets on the internet actuall a pro2lem8?

!.C.: "/ ou spend an time on +itter* ever /e+ +ees there,s another round o/

spammers* and the +a the +or is +ith soc puppets. Basicall* +hat the do

is* the have a 2ot that creates hundreds o/ /ae accounts% the &et a2out t+o or

three spam t+eets out* and* o/ course* ever2od 2locs them* at +hich point

+itter deactivates the accounts 2ut* ou no+* the,re disposa2le. "/ the &et

one hit out o/ a thousand* the consider themselves to run +ell. hat,s lie a

direct mail* ou no+* the response rate or the hit rate on direct mails% i/ ou are

achievin& K* ou,re doin& spectacularl +ell - /or most it,s lie a tenth o/ a

percent. And it,s the same spam. he +or on the principle o/ thro+in& millions

and millions o/ pieces out there and hopin& to &et a /e+ hits.

A.L.: So our pro$ect is tar&eted more to+ards reducin& clutter on the internet8 Dr

is it-

!.C.: 7ell* soc puppets* also- people use them to do trollin&* and phishin&* all

inds o/ 2ad activities* and - /or instance - i/ ou are on some /orum - i/ ou have

an account* and there are a lot o/ $ust* reall 2ad actors% ou no+* spe+ 2ile

over ever2od and mae the no6ious comments tr and &et into /i&hts +ithpeople* that,s ho+ the &et their $ollies% i/ ou have the capacit o/ 2locin&

someone* and the &et 2loced enou&h* then the mi&ht &et their account

suspended* 2ut i/ all the have to do is create a ne+ account* the,re o// and

runnin& a&ain. Sites have some limited +as o/ trin& to deal +ith that.

Sometimes 2 "P address tracin&* sometimes it,s 2 cooies% those can 2e /airl

easil circumvented. "t,s $ust a +a o/ main&* creatin&* identities more

e6pensive - so the idea here is that i/ ou have to pa /or an identit* ou,re not

create thousands o/ them and $ust thro+ a+a* 2ecause no+ ou,re thro+in&

mone a+a. ou,re not $ust thro+in& computer time a+a +ith a 2ot. he idea

here is to 2e a2le to* i/ ou +ill* pled&e* or post* a certain amount o/ mone that,s

pu2licl visi2le* that,s tied to an identit and then - one o/ the 2eauti/ul thin&s

a2out 2itcoin is the pu2lic led&er. ou can see ho+ lon& and ou can see the

2alance histor o/ that 2itcoin address* /rom the time it +as /irst seen on the net

until the present time. "t,s possi2le to determine ho+ lon& some2od has had a

certain amount o/ 2itcoin in that address* andI i/ the,ve ever s+apped it out or

tried to pla &ames +ith it - so in other +ords ou can re=uire create an account*

or ou re=uire* even* /or some2od to 2e/riend or /ollo+ ou. "t can 2e used in all

those cases. ou can set our o+n limit and sa >",m not &onna 2e/riend* or let

throu&h* an2od +ho hasn,t pled&ed at least a tenth o/ a 2itcoin /or t+o +ees.

hat reall cuts do+n on the a2ilit o/ people to create these sham accounts.


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A.L.: So +hen ou sa pled&e . o/ a 2itcoin /or t+o +ees* +hat does that loo

lie in practice8 7here does that . 2itcoin &o8 7ho,s holdin& it8 "s this tied to

real names8

!.C.: '? address* i/

ou +ill* /or 2itcoin and then* /rom some other account that " have* " can send

some 2itcoin to it.


10/20

A.L.: "t sounds lie +hat ou,re sain& is that all ou have to do in order to

implement this sstem is set up so that our +e2site is essentiall re/erencin&

the 2locchain and $ust checin& to mae sure the various addresses have* in

/act* the current 2alances as promised8

!.C.: hat,s part o/ it. he other part is usin& that 2itcoin address as our identiton the server.

A.L.: as an address on the server?* do ou mean that that

our pu2lic e +ould in /act 2e 2oth our pu2lic lo&in name and our and our

actual lo&in8 Ho+ +ould that +or8 7ouldn,t some2od 2e a2le to $ust cop our

pu2lic address and then tr to lo&in as ou8

!.C.: 7ell* no* 2ecause onl ou have private e that &oes that pu2lic address*

so $ust lie ou,re the onl person +ho can spend the 2itcoin in there* ou,re the

onl person that can lo&in +ith that "#* 2ecause onl ou can prove that ou o+n

it and it,s a prett simple matter to do that. "t,s much more strai&ht/or+ardpro&rammin&-+ise.

A.L.: Let,s tal a2out it /rom the user side. Ho+ does this loo to the user8 "t

sounds to me lie ou,re sain& that in order to si&n in* ou need to essentiall &o

to our 2itcoin client and send not an amount o/ value* 2ut rather a si&ned

messa&e /rom our 2itcoin client and that +ould lo& ou in8 "s that ri&ht8

!.C.: es* essentiall althou&h ou pro2a2l +ouldn,t use the current 2itcoin

clients% the are oriented to+ards sendin& and receivin& mone /rom other

people. Actuall ",m +orin& on an app /or this* +hich run on our machine. "t

+ould allo+ ou to create ne+ addresses* and it 2asicall +ould eep thatI in a

separate +allet /rom our re&ular Bitcoin client. Let,s sa* ou could create

several identities* one +hich ou mi&ht use and mi&ht identi/ oursel/ +ithI% it

mi&ht 2e a 2itcoin address* and ou mi&ht have supplementar in/ormation on

there% >this is Adam B. Levine* " host this radio sho+? etc. - and so +hen ou

+anna 2e pu2lic. ou can 2e* 2ut ou mi&ht also +ant to have one that +as a

pseudonm that ou mi&ht +ant to use on various /orums +hen ou +anna

maintain a little more anonmit* and ou mi&ht +ant to &et in/ormation that +a

or +hatever it is ou +ant to do 2ut the e /or this is that the identities have

permanence. Dnce ou,re lo&&ed into a site* ou,re not &onna &ive up that

identit easil* 2ecause ou,ve invested time in it and ou,ve invested time to

mae a reputation on that site* so i/ ou have a &ood reputation on that site -

ou,ve 2een a &ood citiFen* ou haven,t trolled people* ou haven,t spammed

people that has value to ou% ou,re not &onna thro+ that a+a easil. "n

addition to its havin& literal 2itcoin value* it has reputation to ou% it,s a +a o/

creatin& an identit that ou are more in control o/* rather than the site +hich

o+ns it. Lie* currentl no+* +itter reall o+ns our identit on +itter* not ou*

2ut this is a +a o/ creatin& an identit that reall puts ou more in control.

A.L.: And it still allo+s ou to do +hat has 2een use/ul a2out +itter. " lo& into* "

don,t no+* pro2a2l a2out a third o/ the services ",m usin& ri&ht no+* usin&some /orm o/ either +itter or another social net+or* that allo+s ou to lo&in


11/20

+ith that. !ust 2ecause it,s so man less steps* ",d rather have m ris associated

entirel +ith this one than spread out all these others that mi&ht not have as

&ood a reputation. here are t+o thin&s that $ump out to me a2out our proposal*

and " +anna &et our thou&hts on it. #o ou have an concerns a2out this

limitin& the amount o/ speech that people +ho don,t have a lot o/ mone can

actuall do8 ven i/ ou,re talin& a2out a relativel small amount o/ mone* itstill is mone that /unctionall $ust has to sit there and sa >" am a real person* "

am not a spam2ot?* and that,s not &onna 2e necessaril achieva2le /or ever

person on the internet* especiall oun&er ids and stu// lie that.

!.C.: Actuall there,s t+p perameters to the permanence part o/ the identit. Dne

is value* and the other is time. "/ ou loo at it as the product o/ the t+o* as

>2itcoin das?* let,s sa - so then ou could put a hundredth o/ a 2itcoin /or t+o

+ees* or ou could put a +hole 2itcoin /or a da. As lon& as the sum comes out

the same* or some com2ination - 2ut ou see m point is that it can 2e a small a

lot o/ mone /or a lon& time or a lar&er amount o/ mone /or a shorter time. So*it,s lie man hours* i/ ou +ill.

A.L.: So* then* +hat a2out the /lipside o/ that8 "/ it,s a sum o/ those thin&s* +hat i/

some2od +ho +ants to sa a lot o/ terri2le thin&s puts on one 2itcoin on a thin&*

the don,t actuall lose that 2itcoin i/ the account is 2anned - the can still &et it

2ac and put it into another thin& so doesn,t it seem lie - " &uess there +ould

$ust have to 2e minimums* there +ould have to 2e minimums on either side o/

that* lie /ive das on one side* and ou,d have a minimum amount o/ value* too.

!.C.: ou,ve &ot it e6actl.

A.L.: he time seems lie it,s more important* reall* than almost the value.

!.C.: hat,s ri&ht* it reall does and* o/ course* ever2od has time* so ou could

in /act create an address and put a ver small amount o/ mone +ith it.


12/20

onl +ithin the domain o/ the particular site ou,re at* so E$oecascio is onl valid

+ithin +itter* 2ecause it,s is the the namespace* or the name domain* that

controls it. Similarl* +ith 0ace2oo or Bitcointal* es* it reall does put ou in

control* 2ut - lie 2itcoin itsel/ - it maes ou no+ much more responsi2le /or it.

ou have to protect our private es* 2ut* on the other hand* ou never have to

+orr a2out a site &ettin& haced and our pass+ord &ettin& stolen.

A.L.: ;i&ht. it seems lie it,s all centraliFed on our local machine* so i/ somethin&

is &onna happen it,s &onna 2e 2ecause the 2ecause our speci/ic machine +as

compromised* and " assume that lie the 2itcoin protocol* ou,re &oin& to 2e

incorporatin& encrption8

!.C.: eah* encrption it is is central to the +hole notion% it,s +hat maes it +or*

2asicall% 2ein& a2le to si&n the messa&e to prove that ou o+n the address is

part and parcel o/ that.

A.L.: "/ some2od,s listenin& to this and thins that this is an a+esome idea the+ant help ou +ith* the can reach ou at $oecascio.net +hich is (spells out)$-o-e-

c-a-s-c-i-o.net -

!.C.: DrI the can &o and drop a comment on the 2lo&* and that +ould 2e a &reat

+a to &et in touch.

A.L.: Bitcoin itsel/ is a reall cool technolo&* 2ut it,s pro$ects lie this that tae it

and appl it in di//erent +as. ou,re levera&in& nearl ever part o/ it* 2ut in a

reall unconventional +a +here no mone and no value is actuall chan&in&

hands* it,s $ust per/ormin& another /unction. "t,s ver interestin&.

!.C.: here are other thin&s that can 2e 2uilt the 2itcoin too* +hich uses

meshnets. 2it internet?* +here instead o/ pain& /or it up/ront* instead*

as ou use +hatever net+or that,s availa2le to ou* ou have a certain amount

o/ 2itcoins that are stored there and /or ever minutes* or amount o/ data that

ou use* it sends . 2itcoins to the actual server that ou,re usin&.


13/20

!.C.: hat,s it4

A.L.: 7ith automated pament sstems* " thin that that could 2e a +a* 2ecause

ou,re ri&htN it,s this chicen e&& pro2lem that ou run into 2e/ore that point*

+here there aren,t people +ho no+ that there are servers to use* so the servers

that are availa2le to use don,t &et used* and then the,re not pro/ita2le to eepup and runnin&* 2ecause no2od no+s +hat the pro$ect is - oh eah* " totall see

that +orin&.

!.C.: As +e +ere discussin& on chat* $ust 2e/ore +e started speain&*

underdeveloped countries reall have an incentive - the have* reall* a 2etter

opportunit to do that than +e do in the developed +orld. As ou pointed out in

our last 2roadcast* i/ ou,ve &ot a ' me&a2it do+nload capacit on our ca2le

modem* +hat the hec ou +ant to use mesh net+or /or8

A.L.: ;i&ht* e6actl.

!.C.: But in places +here the don,t have that* or +here the su2$ect to repression

2 the &overnment* or crime* or +hatever that could 2e a hu&e thin&.

A.L.: erri/ic* than ou /or $oinin& us toda on Let,s al Bitcoin* !oe.

!.C.: ",m ver happ to 2e here* and happ to participate.

(Intermission ad break)

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developers to create /le6i2le* po+er/ul* custom e-commerce in less time* +hile

e=uippin& merchants +ith the /astest checout /lo+ availa2le to their customers.

0o6card is 2uilt /or +e2 pro/essionals. "t can service a /oundation /or advanced

custom e-commerce deploments* or /or =uic and eas sin&le product online

stores- and* o/ course* 0o6card supports 2itcoin4 9isit 0o6card.com to learn

more.

A.L.: Sometimes even the 2est intentions reall +ind up &oin& craF. Dne o/ the

pro$ects that ",ve 2een pain& a lot o/ attention to over the last* " don,t no+* "

&uess it,s 2een si6 months* is the idea o/ havin& 2itcoin driven AMs* /unctionall*

that can accept dollar 2ills or accept some sort o/ pament /rom our phone* and

&ive ou 2itcoins% and then sometimes the +or in reverse too - ou can sendthem 2itcoins +ith our phone* and the &ive ou dollar 2ills. here are couple o/

pro$ects /loatin& around. Dne most prominent ones +as called* &enericall* >he

Bitcoin AM pro$ect?. he,ve 2een &ettin& a lot o/ reall positive attention* 2ut it

loos lie that positive attention has actuall led to parts o/ the partnership

a&reement ind o/ e6plodin&. !e// Ber+ic o/ #ollar 9i&ilante posted a2out this*

a/ter he +as let &o /rom the &roup* and " $ust +anted to read some selections

/rom this* 2ecause " /eel lie it has applica2le lessons in it /or a lot o/ people +ho

are runnin& Bitcoin 2usinesses ri&ht no+. "/ ou,d lie to read the +hole article*

ou can visit dollarvi&ilante.com.


14/20

(Full article is available at http:sgtreport!com"#$%#&my'official'ithdraal'

from'the'bitcoinatm'proect' not in the sho description)

(*eading) +As 2ac&round* a /e+ months a&o " +as approached 2 t+o oun&

entrepreneurs. he had purchased a semi-+ora2le Bitcoin AM o// o/ another

entrepreneur and +ere e6cited a2out the prospects and approached me to help+ith maretin& to the pu2lic and prospective /ranchisees as +ell as &arnerin&

investment interest.

?"t +as a ver2al handshae " had done via Spe /rom the $un&les o/ 5uana

+hile looin& at a &old minin& enterprise. " then set o// on a month-lon& media

so$ourn +hich had me in all the mainstream media promotin& BitcoinAM and had

2een approached 2 numerous investors interested in the pro$ect.

?And then the '1 ear old entrepreneur* van ;ose* +ho +as hal/-o+ner o/ the

BitcoinAM noti/ied me a /e+ das a&o that m participation +as no lon&er

necessar.

?hat +as interestin&* " thou&ht* as +e had an a&reement /or m involvement

and " had done everthin& " said " +ould do. "t turned out that once " had put

BitcoinAM on the +orld sta&e he decided to tae all that " had done and dismiss

me.

?" do not +ish to pu2lish dirt laundr... and +hile the actions o/ the co-/ounders

o/ BitcoinAM +ere incredi2l dishonora2le* " put it do+n it to them 2ein& much

lie " +as at '1... oun&* unI+ise and una+are o/ +hat the are even involved

+ith.

?But it is m 2elie/ that he has no idea +hat ind o/ 2usiness he is trin& to &etinto and ho+ hard it +ill 2e to do +ithout a num2er o/ the ri&ht pieces in place.

?A/ter a da or t+o o/ ponderin&* ho+ever* " have realiFed that this ma trul 2e a

2lessin& in dis&uise. he 2i&&est issue +ith BitcoinAM* and one that " have

stated in the past man times* is that it is hard+are. An &overnment* an+here*

can $ust come and tae it a+a.

?"t +as al+as the achilles heel o/ this product.

?Can it succeed8 Sure* under the ri&ht &uidance and a massive amount o/ capital

o/ la+ers to /i&ht o// ever sin&le countr in +hich the machine is placed. And*

even then* there is no &uarantee. !ust loo at Canada +hich has alread 2e&un toshutter 2an accounts o/ anone even involved in a 2itcoin e6chan&e. As ",ve also

stated numerous times in the past /e+ ears* there is no real la+.

?"/ there is one thin& that m involvement +ith BitcoinAM has sho+n me ver

plainl in the last month is that 2itcoin has the direct attention o/ the

&overnments* central 2ans and 2ans. "t too them nearl t+o decades to /i&ure

out the internet +ould 2e their do+n/all. "n this case* it has onl taen them

months to realiFe that 2itcoin could end their monopol on mone and 2anin&.?

S.M.: " inda +onder* do ou &us no+ i/ the other people involved in the pro$ect

have released an statements o/ their o+n8 ,Cause ",m ind o/ curious to hear

+hat their side o/ stor is.
http://sgtreport.com/2013/05/my-official-withdrawal-from-the-bitcoinatm-project/http://sgtreport.com/2013/05/my-official-withdrawal-from-the-bitcoinatm-project/http://sgtreport.com/2013/05/my-official-withdrawal-from-the-bitcoinatm-project/http://sgtreport.com/2013/05/my-official-withdrawal-from-the-bitcoinatm-project/


15/20

A.L.: #e/initel $ust &ettin& one side o/ the stor here. " don,t need an2od else?* then started pushin& out people

+ere on the peripher.

S.M.: "t sounds lie it,s ind o/ un/ortunate* " mean* and " &uess +e can use this

as the shinin& e6ample or horri2le +arnin& thin& that +e tal a2out o/ten on the

sho+. ou mention that there other 2itcoin AMs* Adam* and " $ust +anted to

point out that eah* that is a2solutel true. his pro$ect +as 2ein& 2illed as the

/irst 2itcoin AM and ",m not sure* e6actl* i/ that,s accurate. ",m a+are o/ another

compan called Lamassu Bitcoin* +ho - &ood luc spellin& that* 2ut - the did

have a +orin& prototpe AM that " actuall sa+ at a con/erence last 0e2ruar*

or this 0e2ruar. People +ere usin& it* the +ere lovin& it% +ith an AM* there,s

&onna 2e the same challen&es as +ith a conventional cash AM* so it has to 2e

impenetra2le* it has to 2e di//icult to move* it has to 2e secure* unhaca2le* "

&uess* even i/ ou,re not &onna move it. "t has to 2e a2le to stop an attacer /rom

2ein& a2le to &et the cash andor 2itcoins that are inside. " haven,t seen that

much a2out the securit /eatures on an o/ these 2itcoin AMs* 2ut ",m reall

curious i/ the pass muster* and it,ll 2e interestin& to see* and " thin it,ll sho+

the value o/ Bitcoin* i/ the are endin& up 2ein& the tar&et o/ the/ts* 2ecause

people reall +ant 2itcoins.

A.L.: Ho+ +ould ou even steal 2itcoins /rom somethin& lie that* thou&h8 " can

see there 2ein& vulnera2ilit i/ +e,re talin& a2out somethin& that is tain& cash

and storin& cash* " can totall see that* 2ut the 2itcoins - it,s not lie the,re

actuall stored on the AM* the,re remotel accessed* and it,s throu&h an AP"* "

believeis ho+ it +ors.

S.M.: eah* " &uess i/ there +as some +a that ou could /ool the machine into

thinin& that ou had put mone in* then ou coulds $ust send the 2itcoins to

our phone* it +ould 2e as simple as that - ",m +onderin& +hat ind o/ securit

/eatures the have. Apparentl* this other compan* Lamassu* has someprototpes that the,re developin& /or commercial use* and ",ve heard - " actuall

no+ the /ounders o/ this personall - and +hat the sa is the +ant to see this

in 2ars and restaurants and the,re &onna let the /ranchisee* the person

purchases their AM* set the /ee on it - so that +ill 2e reall interestin& to see

ho+ that shaes out.

A.A.: here,s a lot o/ potential securit issues +ith this that " thin have not 2een

thou&ht out =uite +ell. Most o/ these e6amples ",ve seen present a O; code on a

screen. hat maes the +hole process o/ simmin& a lot easier% all ou have to do

is put a camera an+here +ithin a2out /eet o/ that screen - that can see the

screen /rom an an&le - and ou can scan that O; code and spend it 2e/ore the

other person,s even had a chance to pull out their phone. here are some


16/20

potential /la+s here* and o2viousl* 2itcoin* 2ein& +here the mone is* +ill 2e

attractin& all inds o/ people +ho +ant to tae that mone. hat is one o/ the

concerns* 2ut " +ould lie to loo 2ac at the lesson o/ partnerships* 2ecause

that,s a lesson " have e6perienced msel/. "t,s a ver pain/ul lessons to learn as

an entrepreneur* and* in m case* a /our-ear protracted le&al /i&ht* in court*

2asicall* over a civil suit - a multimillion dollar civil suit - so eah* it is a2solutela+/ul* tau&ht some &ood license. So herem t+o 2its o/ +isdom on this particular

issue. 0irst o/ all* antime ou have success and +e,re &onna see a lot o/

success and a lot o/ /ailure in Bitcoin - 2ut there are &onna 2e $ust as man

companies that /ail throu&h success. Antime ou have success 2rin&s mone or

the promise o/ mone or the potential o/ increased mone in the /uture* and

suddenl people ou no+ and trust start 2ehavin& di//erentl. Mone chan&es

people. ven &ood people start main& poor choices. he pro2lem is that it,s ver

eas to /ind oursel/ in a misunderstandin& +here people assume the +orst

motivations 2ehind our actions andI ou assume the +orst motivations 2ehind

theirs. +o pieces o/ advice: /irst o/ all* don,t do handshae deals. "/ ou,re &oin&into partnership on Bitcoin that has anychance o/ 2ecomin& success/ul* and

that,s ever sin&le partnership o/ Bitcoin* mae sure ou have clearl set

e6pectation a2out +ho &ets +hat* and +hat the e6it strate&ies are. ou don,t 2e

havin& that discussion +hen real mone is involved later on* and that* usuall* is

ho+ ou destro /riendships and partnerships. Secondl* i/ ou can avoid &ettin&

sued* avoid &ettin& sued. "n the end* it,s $ust &onna 2e a much more e6pensive

+a to sit do+n and have a discussion a2out it so i/ ou can* sit do+n and have

a discussion a2out it 2e/ore ou,re sued.

(Instrumental interlude)

A.L.: So the 2i& ne+s o/ the +ee: Coinla2 is suin& Mt. 5o6 /or 2et+een million

and million S dollarsI. he 2asic /acts o/ the deal: ) Mt. 5o6 +ould trans/er

all S and Canadian customers to Coinla2* and &rant them e6clusive ri&hts to

2oth e6chan&e services and those customers as o/ March ''% and ') Coinla2

+ould serve those customers, e6chan&e needs usin& Mt. 5o6,s service* 2ut

the,re prohi2ited /rom openin& a competin& e6chan&e. Basicall this a&reement

reads lie t+o potential 2i& plaers in the same space partnerin& up to minimiFe

their costs and ma6imiFin& the impact o/ their shared maret. Coinla2 has lo+er

cost and is not responsi2le /or in/rastructure* +hile Mt. 5o6 turns +hat +ould

pro2a2l 2e a /ierce competitor into a dedicated* autonomous maretin&customer service and re&ulator arm. he pro2lem is* this chan&eover +as

supposed to happen on March ''* and /or +hatever reason it didn,t. Let,s al

Bitcoin +ill 2e /eaturin& an intervie+ +ith Coinla2 on the topic* and +e,re still

+aitin& /or response /rom Mt. 5o6. Andreas* ou,ve 2een in situations lie this.

7hat,s &oin& on8

A.A.: " thin the the mistae here is to assume that this is a2out &ettin& the

million dollars or so* +hich is de/ined in the la+suit as the punishment. hat,s the

stic* 2ut the stic is meant to 2rin& 2oth parties to the ta2le to ne&otiate* and

2rin& them to the ta2le to ne&otiate in the conte6t o/ the /ederal courts and

de/ined rules o/ civil procedure. 7hat that &ives it the a2ilit to do is itI /orcesthem inIto ne&otiations in &ood /aith* 2ecause i/ ou don,t ne&otiate in &ood


17/20

/aith* there are penalties% it /orces them to use transparenc* 2ecause i/ ou sa

one thin& and it can later 2e discovered* throu&h discover* that ou actuall

meant another* that hurts. All o/ these thin&s - some parameters. hin o/ it has a

ver ver e6pensive ar2itration over the contract terms. Clearl here there,s 2een

a /allin& out% at least Coinla2 isn,t happ +ith the pace o/ transition. 7e can sa

that at the ver least* that,s +hat,s occurrin&* and perhaps there are some issues+ith Mt. 5o6 and its transition plan* or its +illin&ness to do the transition. At this

point* this isn,t a la+suit +here Coinla2 +ants to &et million. #on,t

misunderstand the &oal here. he &oal here is to settle out o/ court. GG.GGK o/

civil cases 2rou&ht in /ederal courts are settled out o/ court* and all this does is it

provides a /orum that sas >loo* +e,re serious* +e +ant the contract handled

properl* and this is +hat +e,re &onna do i/ ou don,t?.

S.M.: "s an2od surprised that* perhaps* Mt. 5o6 /ell do+n and didn,t do +hat

the said the +ould do* or +ere supposed to do8

A.L.: 7ell* readin& to the complaint* actuall* it looed lie the +ere supposed tohand over one o/ the thin&s that +as reall emphasiFed in the contract 2et+een

Mt. 5o6 and Coinla2 +as that there +as concern on Coinla2,s side o/ +hat +ould

happen to Coinla2,s a2ilit to per/orm services i/ Mt. 5o6* /or +hatever reason*

+as no lon&er a2le to provide them. Mt. 5o6 +as supposed to hand over all o/ the

B es* all o/ the 2asicall* the +ere supposed to mae all o/ the customers

+ho +ould 2e &oin& to Coinla2 into Coinla2 customers* in ever sense o/ the

+ord* includin& access to the entire sstem* 2asicall. Beond that*the +ere

supposed to provide a li=uidit /und so that Coinla2 could have a 2u//er to /loat

+ith a&ain* since the,re not providin& the maret services* the,re choosin& Mt.

5o6,s maretin& services so there are a +hole variet o/ issues +here - it $ustappears /rom this complaint - and 2ecause Coinla2 isn,t operatin& ri&ht no+ in

the +a that the said that the +ould 2e operatin&* that Mt. 5o6 $ust /ailed to

deliver in a num2er o/ these circumstances. Andreas* do ou thin that

somethin& lie this can actuall help the situation* or do +e $ust thin that this is

a continuation o/ that amateur hour thin& +e,ve 2een seen comin& out o/ Mt. 5o6

/or a couple +ees no+8

A.A.: " thin that the the three-ear-old amateur hour sho+ that,s 2een &oin& on

at Mt 5o6 should should concern everone in the 2itcoin environment* 2ecause

this is not $ust a pro2lem o/ /act technolo& that can onl do a2out 1 traits per

second apparentl* or the 2usiness practices* P; practices and other thin&s &oin&on - it,s the +hole 2undle. M account* 2 the +a* is on Mt. 5o6* so " have a

personal account there* $ust as a matter o/ disclosure. " &ot a messa&e sain&

that m account +ould 2e transitioned here* to 2e located +ith Silicon 9alle

Ban.


18/20

understandin& ho+ these tpes o/ /ederal civil la+suits +or - that is the &oal.

his is not a2out main& that punitive. "t simpl doesn,t +or that +a.

S.M.: #oes an2od thin that Coinla2 could start their o+n competin&

e6chan&e8 Are the $ust so sic o/ this partnership that ma2e the,ll strie out

on their o+n8

A.L.: he prere=uisite to that* Stephanie* in /act* i/ ou loo at the contract and

the complaints* ou see that part o/ the reason Coinla2 can,tdo that is 2ecause

that,s +hat the &ave up in this =uid pro =uo. "n order /or them to &et the deal

+ith Mt. 5o6* the,ve 2asicall a&reed not to do e6actl that. ither +a* this is

&onna resolve that =uestion. ither Mt. 5o6 +ill put up* or the deal is invalid

void - there,ll 2e some dama&es some +a* most liel not million* 2ut there,ll

2e some dama&es i/ it ends up voidin& the deal - 2ut +hat that also does* once

that deal is voided* it allo+s Coinla2 to &o out and 2uild their e6chan&e +ithout

&ettin& sued 2 Mt. 5o6 /or 2reain& the e6clusivit deal.

A.L.: Because that e6clusivit deal actuall +ent 2oth +as- on the one hand*

people 2een talin& a2out that million dollar /i&ure as thou&h it onl applies to

Mt. 5o6* 2ut it,s onl applin& to Mt. 5o6 2ecause Mt. 5o6 appears to 2e the one

that 2roe the terms o/ the contract. "/ Coinla2 had opened a competin&

e6chan&e* then the also +ould,ve violated that clause* and +ould 2een on the

hoo /or that million /or e6actl the same reasons Mt. 5o6 is no+ - not /ul/illin&

the terms o/ the contract.

A.L.: 7e,ve 2een talin& a2out this o// air* 2ut " /i&ure it,s $ust time to do it: does

an2od here thin that Mt. 5o6 is lie a honepot8 Because " don,t understand

+h the,re still operatin&* &iven their a2solute continued record o/ /ailure +ith

all the e6chan&es that are closin& do+n around the +orld /or random reasons*

+h is it that Mt. 5o6 is never is never 2ein& touched 2 the re&ulator side8

he &et hit 2 hacers ever once in a +hile* 2ut that,s that,s totall normal* and

et the seem to 2e immune /rom an sort o/ actuall outside-re&ulator

inter/erence. Are there an other e6chan&es in $apan that +e no+ o/ that are

a2le operate 2ecause it,s this &reat environment to 2e in e6chan&e in* or is Mt.

5o6 special8

A.A.: ",m suin& ou?* >/ine* ",ll sue ou 2ac?% and then the sit do+n and have

a discussion a2out +ho dismisses /irst under +hat circumstances. So the

countersuit is comin&. #on,t assume that the million dollars onl &oes one

+a. 7e,re &onna see it in court too. hat,s m prediction.


19/20

sure to &et convictions* and the &et them ever time. here,s no traditional due

process o/ assumption o/ innocence in the !apanese $ustice sstem. !ust so ou

no+.

A.L.: As someone +ho has an account in Mt. 5o6 - and that,s the case +ith me

too* ",ve had an account there /rom time to time doesn,t that mae ou a little

nervous pa&e8

A.A.: l have al+as 2een o/ the opinion that ou never store mone* lon&-term* in

an o/ these accounts. An mone that,s not in m o+n controlled 2itcoin +allet -

" assume itI can disappear at an time* +hether that,s dollars or 2itcoin. So " put

mone into the e6chan&es* trade it* and tae it out +hen ",m no lon&er tradin&*

and " don,t leave much in there. " thin that +ould 2e a sensi2le approach /or

anone. 7hen these e6chan&es &o do+n* the tae our mone +ith them* and

there,s no reason +h the /act that this one,s 2een up /or three ears is an

indication that it,s &onna 2e up tomorro+.

S.M.: " thin it,s amaFin& that the,ve lasted this lon&. he had an advanta&e* "

&uess* o/ 2ein& /irst to maret and &ettin& a lot o/ traction and a lot o/ popularit*

2ut at this point almost everone a&rees that the are not servin& the needs o/

their customers- the,re not even doin& a particularl competent $o2 at +hat

the,re trin& to do - so it,s hi&h time /or another e6chan&e. People 2een sain&

this /or a +hile. here,s &onna 2e some other thin&s that pop up* 2ut the eep

&ettin& +haced do+n 2 these re&ulations* and ma2e 2ein& in !apan is the e*

",m not sure* 2ut ",m reall surprised that Mt. 5o6 is still around and so popular.

A.A.: "t seems lie the the main 2usiness here is to /i&ure out the re&ulations

+hich* i/ ou loo at it /rom that perspective* +hat is the value in the Mt. 5o6-

Coinla2 a&reement8 Coinla2,s alread /i&ured out the re&ulations* the,ve

pro2a2l put do+n a prett serious amount o/ mone a&ainst that* the are 9C-

/unded% and their (incomprehensible) approved and &ot a deal +ith a 2an. Mt.

5o6 2rin&s the ta2le a tradin& en&ine that can do a2out* +hat is it* 1

transactions per second* +hich is a2out * times slo+er than an decent

e6chan&e - so ma2e i/ +e loo at this la+suit* +e have to loo at it /rom the

perspective o/ Coinla2 &ettin& a >out? o/ this contract in order to 2uild their o+n

e6chan&e* 2ecause over the last couple o/ months* +hile the +ere doin& the

transition* Mt. 5o6 lost a lot o/ reputation* a lot o/ credi2ilit in the maret* and

other e6chan&e en&ines are poppin& up. Ma2e the /i&ure it,s not +orth it

anmore.

A.L.: 7e,re $ust &onna have to sta on this topic and see +here it &oes. Looin&

/or+ard to hearin& 2ac /rom Mt. 5o6 reall* the thin& that +ere missin& in this

analsis is their side o/ the stor* and it +ould 2e /antastic i/ +e could have that

" $ust can,t ima&ine - it doesn,t seem lie it maes an sense to enter into these

a&reements* or to sa ou,re &onna do thin&s* or to $ust underper/orm on such a

re&ular 2asis* unless there,s no other option 2ut to do that - and " $ust can,t

ima&ine that 2ein& case* &iven ho+ much o/ the maret o/ Bitcoin the,ve

captured. " reall +ant to tal to some2od /rom Mt. 5o6 and tr and /i&ure out

+hat is &oin& on. 7h are these thin&s happenin&8 7h is this a normal thin&8


20/20

A.A.: eah* their o//icial statement* a&ain* le/t a lot to 2e desired. he reall

improve the P;-

S.M.: verthin& to 2e desired4

A.A.: - >eah* +e,re not &onna comment on these pendin& le&al thin&s 2ecause

+e $ust &ot this* and +e $ust sa+ this?. 7ell* that,s not a ver &ood ans+er* andthe could,ve done 2etter* even in the /irst press release* /rom that. " thin

Coinla2 is doin& the P; +ar release on this la+suit a lot 2etter than Mt. 5o6.

A.L.: Beond that* thou&h* it,s not lie the didn,t no+ a2out this - lie ou said*

this is not a step that is taen $ust 2ecause >he* it,s the most convenient thin& to

do? - this is somethin& that ou do a/ter ou,ve tried to /i6 the pro2lem over and

over and a&ain* and it loos lie ou,re at a point +here it,s not &oin& to &et /i6ed

unless somethin& drastic happens.

A.A.: he /unn thin& is* the /ound out a2out this +hen a C-

Let's Talk Bitcoin episode 04 - "The Horrible Warnings" transcription

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Transcript of Let's Talk Bitcoin episode 04 - "The Horrible Warnings" transcription