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Transcription of Episode 80 Beyond Bitcoin Uncut!

Participants:

Adam B. Levine (AL) Host

Charles Hoskinson (CH) Ethereum.org

avid !ohnston (!) "astercoin #oundation

aniel Larimer ($) $nvictus $nnovations

!ason %ing (!%) &ean's utpost

oda* is #e+ruar* ,st-,/. 0elcome to episode 1 o2 Let3s alk Bitcoin4 a t5ice

5eekl* sho5 a+out the ideas4 people and pro6ects +uilding the digital econom*

and the 2uture o2 mone*. 7isit us at letstalk+itcoin.com 2or our dail* guest +log4

all our past episodes and o2 course tipping addresses8

"* name is Adam B. Levine and toda* 5e3re visiting the 2uture4 o2 5ell4

ever*thing. 0e3ve talked +e2ore on LB a+out "etacoins and 2or the last several

months $ have immersed m*sel2 in them. here is reall* no 9uestion in m* mind4

these tools to create decentralied consensus +et5een people a+out an*thing

represents the ne;t great leap 2or5ard and 5hatever the release o2 Bitcoin

started.

he a2ternoon +e2ore "iami3s recent

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privileged to meet *ou and intervie5 *ou gu*s. D0h* don3t *ou all introduce

*ourselvesF

aniel Larimer: "* names aniel Larimer4 $3m CE o2 $nvictus $nnovations.

avid !ohnston: avid !ohnston4 $ serve o2 the e;ecutive director 2or the

BitAngels and $ sit on the +oard o2 the "astercoin #oundations.

Charles Hoskinson: $3m Charles Hoskinson4 $3m the director o2 the Bitcoin

education pro6ect and a core developer on the Ethereum pro6ect.

!%: Alright4 these are our 5onder2ul guest speakers tonight. 0hat $3m going to do

is go do5n the line and give each o2 *ou three minutes to descri+e to me 5hat

*our pro6ect is 5hat *ou think the core value proposition is. nce ever*+od*

has had a chance to introduce themselves 5e3re then going to Dhave more in?

depth discussionsF a+out ACs as a 5hole4 ok

L: he pro6ect $3m 5orking on is called Bit&hares. Bit&hares is a ver* +road

concept4 instead o2 looking at a Blockchain as a currenc*4 5e look at it as sharesin a decentralied autonomous compan* and that changes ever*thing a+out ho5

*ou design and +uild these decentralied s*stems. Like all companies *ou need

to 2ocus on doing t5o things ma;imiing revenue and minimiing e;penses

and to that e;tend ever*thing 5e3re doing is eliminating mining 2rom the

e9uation to minimie e;penses. he transaction 2ees are the revenue o2 our

s*stem so 5e 5ant to ma;imie the incentive 2or there to +e transactions and

the value provided +* e;ecuting transactions in our decentralied +usinesses.

ur Gag ship +usiness is 5hat 5e3re calling Bit&hares4 it3s a +ank and e;change.

$t allo5s *ou to earn >I or more on an*thing4 5hether it3s gold4 silver4 Bitcoin4

mastercoin or ether. hat is in a nut?shell 5hat 5e3re doing and 5e3re ver*e;cited in the potential 2or using the Bit&hare concept in ever* industr* 2rom

smart propert*4 +anking4 insurance4 gam+ling4 voting. Jou name it4 there are all

kinds o2 applications that can +e developed using that model.

!: he "aster protocol is +asicall* a protocol +uilt on top o2 Bitcoin4 $ think !@

used a reall* good analog* in original paper a+out thinking o2 Bitcoin as CPK$P

and thinking o2 "aster Protocol as HP. "eaning that Bitcoin gives us a lot o2

things automaticall*4 it gives us a time stamping service4 it gives us a universal

token s*stem. $t gives us this +ack?end that solves a lot o2 these +asic cr*pto?

graphic pro+lems and like an 5as mentioning4 i2 *ou3ve got an application

5here *ou don3t necessaril* need mining po5er4 such as smart propert* or *ou

5ant to issue digital tokens to keep track o2 an asset then *ou don3t need *ouro5n Blockchain4 +ut *ou need these +ack?end services.

he goal 5ith the "aster Protocol is to create these 2eatures to allo5 people to

easil* do this on top o2 Bitcoin. he rst couple o2 2eatures that are reall*

important to emphasise areM rstl*4 the distri+uted e;change that lets *ou trade

"astercoin 2or Bitcoin4 2or an* user generated token that people have created on

top. he thing $ 5ould emphasise is that this is a +ig de+ate in the communit*4

5hat is the right approach &hould 5e +uild this on top o2 Bitcoin &hould 5e

+uild something else as a Blockchain

he approach o2 the "aster Protocol is to +uild on top o2 Bitcoin and this is reall*possi+le no5 thanks to a recent update o2 the Bitcoin core client4 descri+ed +*

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avin in his updateN>4 it talks a+out prova+l* pruna+le outputs. 0ithout getting

into the tech4 Dthe updateF makes it easier 2or *ou to encode this meta?data on

top o2 the Bitcoin ledger4 that3s the approach o2 the "aster Protocol.

CH: o understand 5hat 5e3re doing 5ith the Ethereum pro6ect it3s reall* use2ul

to think a+out the histor* o2 Bitcoin and 5here 5e started. 0hen 5e started

there 5ere three things *ou could do and &atoshi *ears there has +een a tremendous amount o2 innovation4 the market

cap at O, Billion. here is a lot o2 companies across the 5orld and there are

5onder2ul entrepreneurs in this space 5ho are doing great things. &o no5 people

D5ant toF go +ack to that4 let3s go ahead and nd a 5a* to put uringcompleteness +ack into the s*stem. here are a 2e5 5a*s that *ou can do that4

one 5a* is to la* it on top o2 Bitcoin4 5hich 5ould re9uire *ou to change Bitcoin

and it3s a time consuming process and reall* respect the amount o2 eort that

"astercoin has put in4 !@ and these other gu*s have done some a+solutel*

amaing 5ork. Another option is to take the Bit&hares approach4 create *our o5n

Blockchain4 *our o5n paradigm. But 5hat 5e see in the ecos*stem is a lot o2

isolation4 a lot o2 2ragmentation and a lot o2 cost 2or innovation4 5henever *ou

5ant to do something it costs hal2 a million dollars4 *ou have to get a team

together and it takes months i2 not *ears to develop as there is a lot o2 testing.

hose are usuall* the s*mptoms o2 a DdiseaseF4 and the DdiseaseF is that *ou

don3t have a proper 2oundation to go ahead and do this. he general concept4

the notion o2 Ethereum is to thro5 a5a* all the 2eatures4 5e don3t 5ant to

release an*thing 5ith 2eatures4 +ut rather let3s have a +eauti2ul 2oundation that

has a uring complete scripting language4 has the idea o2 the contract a

2undamental computational unit. hen give that to people like *ou 5ould give a

programming language to some+od* and let3s use Ethereum to ena+le people

like "astercoin4 colourcoin etc to +uild an*thing that the* 5ant.

he second part o2 that pro6ect is kind o2 a social contract to have a ver* strong

user e;perience. Jou can3t 6ust go ahead and +uild some protocol that has

elegant and +eauti2ul code4 avin has +een 5riting amaing code +ack there. Jou

have to actuall* have a 2oundation that ever*da* people can use and ever*da*people can develop 2or 6ust like the Android e;perience. he second part o2 the

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pro6ect is to +uild a +ase 2oundation so that 5hen 5e3ve launched 2or mining it3s

like a large catalog that has one?click installation 2or ever*thing. ne?click

installation 2or Bit"essage4 one?click installation 2or pen ransactions 5ho is a

partner o2 ours4 one?click installation 2or @ipple4 +asicall* an*thing *ou 5ant even

a 5allet is one?click installation.

$2 *ou 5ant to +uild apps 2or this catalog4 to have the same application

development e;perience that people have 5ith i& or 5ith Android. hese t5o

things together4 this +eauti2ul 2oundation that is 2eatureless and uring complete

5hich removes the isolation4 2ragmentation and reduces the cost o2 innovation as

5ell as a reall* nice user e;perience. $ think it3s going to give us a proper

direction 2or a +ase 2oundation 2or the Cr*pto?Currenc* space.

!%: Dka*4 thank *ou gu*s ver* much 2or descri+ing *our pro6ects. $n all three o2

*our descriptionsF $ think 5e kind o2 5ent high level on 5hat *ou gu*s are

speaking o2. 0h* don3t 5e pretend in this audience that *ou need to e;plain

5hat the value proposition is o2 A3s in general to people 5ho have no idea 5hat

*ou3re talking a+out. Andreas Antonopoulos has this great thing4 *ou gu*smentioned the CPK$PKHP thing4 $ think that3s a great analog* +ut he said that

5ith Bitcoin technolog* currenc* is the rst app. $t3s ever*thing that3s coming

a2ter that4 that is going to +e the game changers 2or ever*thing and *ou gu*s are

5orking in that space. Let3s talk generall* a+out A3s as a 5hole and $ 5ould like

to hear *our thoughts a+out 5hat the ne;t killer apps are that are coming out 2or

this and 5h* *ou think there is value to them in the s*stem.

L:$3ll start4 generall* speaking it3s a +etter idea to look at 5hat3s +een done in

societ* and an ecos*stem rst and sa* 5hat can 5e do to improve 5hat is made

instead o2 5hat3s the ne;t revolutionar* 2eature. $t3s hard to kno5 ahead o2 time

to kno5 5hat3s important4 $ kno5 not ver* man* people 5ould have predicted5itter. 0hat3s +een done is 5e have organisations like 0ikiLeaks4 0ikipedia4

$CA

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government4 6ust like China. here is a lot o2 gre* area +usinesses +ecause i2 *ou

actuall* 5ant to do +usiness *ou have to +e an insider. Jou have t5o options

right no5 i2 *ou3re an entrepreneur in a developing nation4 the rst option is to

+e cos* 5ith a politician and get the +ri+es done. r the other option is to go o

the +ooks4 5hich is no good 2or an*+od*4 so 5hen *ou have the idea o2 a

decentralied autonomous organisation4 *ou no5 have a third option. nce all o2the tools and user e;perience is correct *ou could 9uickl* create an organisation

that outsources the trust o2 the operation o2 the +usiness and makes that

+usiness transparent4 +ut it removes it out o2 the 6urisdiction o2 the countr*

that3s not 2avoura+le.

$ think this is going to +e a god?send 2or a lot o2 developing nations.

!: &ure4 $ 5ould denitel* echo that. $ think *ou3re right a+out 5hat Bitcoin

accomplished4 5hat Bitcoin accomplished 5as it created this open?source

program that couldn3t +e glo+all* censored. "eaning that *ou had enough copies

out there in the ecos*stem that people can adapt it to their particular

6urisdiction4 2or e;ample people +uilding an e;change in the & could take adierent approach than people +uilding an e;change in China etc.

he core protocol 5ouldn3t +e shut?do5n +ecause it3s +een distri+uted. #or me4

the ne;t thing that $ 5ant is a distri+uted e;change4 5hich is the ver* rst

2eature that $ see as the ne;t killer app +ecause this is alread* a pro+lem 5ith

the eco?s*stem. Bit2under has closed4 BC has closed4 all these dierent central

approaches to =$ 5ant to +u* some tokens in this particular application have

closed do5n +ecause ho5 do *ou do regulation glo+all*. $t3s reall* tough +ecause

ever*5here has dierent rules4 that3s a pro+lem as long as *ou have a central

server.

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!%: ka*4 $3m alread* a little +it con2used on it. Let3s go into the ne;t part here4

5h* don3t *ou descri+e to me e;actl* ho5 Bit&hares is going to implement that

in a 5a* so 5e can all grasp the concept.

L: 0ith Bit&hares *ou 5ould use it 6ust like *ou 5ould a Bitcoin 5allet or online

+anking4 it3s the e;act same user e;perience. Jou sa* *ou 5ant to send dollars to

someone4 *ou send dollars to someone4 i2 *ou 5ant to send ounces o2 gold to

someone4 *ou can send the value o2 an ounce o2 gold to someone. hese are not

de+ts that cannot +e de2aulted on +ecause the*3re +acked +* the Blockchain

5hich can do margin calls 6ust like a +ank 5ould. he user e;perience o2 this is

like Bitcoin e;cept 5e3re com+ining it 5ith another product 5e have %e*hotee

5hich eliminates the need to use Bitcoin addresses4 it3s an identit* management

application 2or the Blockchain technolog* and has a glo+al consensus on 5ho

o5ns 5hat name.

#rom a +anking perspective it 5orks 6ust like a +ank4 5e can use the same

+usiness model to implement other t*pes o2 +usinesses. $2 *ou have a compan*4

a ver* traditional compan* that3s doing a lotter*4 it sells lotter* tickets4 puts themone* the pot4 dra5s a num+er ever* no5 and then and *ou have a 5inner. 7er*

traditional +usiness model4 it makes millions or +illions ever* single *ear4 *ou

can implement that on a Blockchain. he characteristic o2 ever*thing that 5e3re

doing is that 5e vie5 the Blockchain as shares4 5e pa* dividends to the

shareholders so 5e tr* to ma;imie the value proposition to the shareholders o2

the Blockchain and 5e tr* to minimie the e;penses.

!%: k4 this is the part $3m getting con2used 5ithM $n a +ank $ can go in and put

cash into m* +ank4 $ have handed over ph*sical control o2 m* cash and the* can

no5 make representations o2 that dollar and lend them out ho5ever the* 5ant

to. $n *our e;ample o2 gold or oil4 sa* $ have , +arrels o2 oil4 $ 5ant toimplement them in Bit&hares. Ho5 does that transaction take place

L: #irst o2 all4 the s*stem 5orks even i2 *ou don3t have a thousand +arrels o2 oil.

$t3s like i2 *ou 5ant to +et 5hether or not gold is going to go up and do5n relative

to Bitcoin. &o *ou +oth put ,Bitcoins into a pot and 5hen the price moves one

direction or the other4 *ou eventuall* make or lose mone* proportional to the

price movement. Jou get the purchasing po5er o2 a +arrel o2 oil or an ounce o2

gold 5ithout actuall* depositing an ounce o2 gold4 +ut 5hat it allo5s *ou to do is

a s*stem like LocalBitcoins.

he pro+lem 5ith LocalBitcoins is that *ou3re tr*ing to simultaneousl* match a

+id4 an ask and a location. 0e match all o2 the +ids and asks on the Blockchainautomaticall*4 so *ou have a +it asset 5ith Bit&.

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names. 0e don3t 5ant people to +u* a name and to then s9uat on it4 5e 5ant to

auction it o 6ust in time. hat3s another 5a* *ou can implement something on a

Blockchain 5here ever*one doesn3t 5ant to o5n a name4 the* 5ant to o5n all

the names. &o the names can +e allocated the most eQcient application.

he core thing that $ 5ant ever*one to take a5a* 2rom this is that *ou have to

vie5 Blockchains and decentralied applications 2rom a +usinessKeconomic

perspective. $2 *ou take the +illion dollars a *ear that Bitcoin is currentl*

spending to mine and secure the net5ork and *ou 5ere to appl* that to

development o2 decentralied applications4 think o2 all the good things that could

happen. Bitcoin as a +usiness model is going onl* so long as a ne5 capital is

2unnelling into Bitcoin4 it3s +eing diluted at ,-I a *ear right no54 paid to ne5

miners. $n the 2uture ,I o2 all revenue4 the transaction 2ees are +eing paid 2or

securit* +ut i2 *ou can turn the Bitcoin model into something that is prota+le4

5here ,I o2 the revenue goes to the shareholders as dividends *ou eliminate

the need to dilute the shareholders4 *ou increase the value proposition. $t3s a

sel2?sustaining s*stem.(Intermission - advertisements)

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!%: Let me 6ump in here4 $ think it3s a good 6umping o point 2or something that $

5ould like to talk a+out +ecause *ou3re talking a+out prot4 revenue4development e;penses. Jou gu*s are all 5orking on the ne;t?generation o2

Blockchain technologies4 the successor to Bitcoin in terms o2 2unctionalit* here.

L: $3d also sa* the augmenter.

!%: he augmenter4 ok4 that 5orks 2or me. Jou gu*s are all doing 2undraising o2

some sort4 $ think 5e can all agree that &atoshi

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2or the development o2 *our pro6ect and *ou gu*s all have dierent 5a*s o2

2undraising. Let3s talk a+out 2undraising right no54 5e3ll start 5ith Charles4 5e3ll

talk a+out ho5 *ou gu*s plan on 2unding *our model.

CH: 0e looked at this 2or 9uite some time4 there are certainl* a lot o2 economicmodels that can +e em+raced. here is the lets start mining and tr* to ac9uire

some o2 it and sell it 5hen the market is high 2unding model4 5hich in practice

doesn3t 5ork terri+l* 5ell. here is then the ,I pre?mine model 5here *ou sell

out4 there is something to +e said a+out that model 2or +oot?strapping an

ecos*stem4 +ut not 2or long?term dura+ilit*.

0e took a step +ack and asked4 ho5 2undraising has +een done over the last >

R *ears in general. $2 *ou look at &ilicon 7alle*4 7enture Capital4 generall*

speaking *ou have some 2ounders that initiall* have a large amount o2 control o2

the compan*4 the ecos*stem. he* then give a slice o2 that to the people that

initiall* invest and overtime the investors and the 2ounders divest. 0hat 5e did5as sa*4 5e 5ant e9uita+ilit* in our mone*4 5e 5ant a large distri+ution o2 our

mone* and 5e don3t have a situation 5here one person o5ns , or ,>I o2 the

currenc* +ase 5hich has implications across the +oard.

&o 5e rst 5ent ahead and em+raced a persistent linear inGation model4 5here

5e create a ;ed amount o2 coin per +lock indenitel* so over time *our inGation

rate decreases +ut *ou have a linear increase in suppl* so all o2 the sins o2 the

2undraiser disappears over a > ,*ear period. #or the most part S>I o2 the

coins in distri+ution 5ere mined4 produced and the opportunit* to ac9uire coins

in *ear , or *ear ,> is the same as the opportunit* to ac9uire coins in *ear , or

-. 0e em+raced that4 5e3re also going to go ahead and do an $P st*le

2undraising starting #e+ruar* ,st4 and it3s inspired +* "astercoin4 5hich $ think is

9uite good 5ith a couple o2 modications. 0e3re going to run a t5o month

2undraiser and 5e have a hard?cap o2 T4 Bitcoins4 so i2 5e raise that much

mone* 5e3ll stop.

(Laughs + inaudible)

CH: u*s to +e 2air it 5asn3t too long ago that 5e 5ere +u*ing pias 2or ,4

Bitcoins.

!: $n Bitcoin time4 that 5as a li2e?time ago though.

CH: 0ell +asicall* 5e have t5o options4 5indo5 A is R?da*s 5ith a cap o2 T4and 5e3ll have a 2ull prospectus read* to go #e+ruar* ,st5ith all terms and

conditions and ho5 the investments are going to 5ork. he* should +e availa+le

2or li9uidit*4 meaning *ou can actuall* trade them and sell them 5hen the

enesis +lock launches 5hich should +e UT or U/ depending ho5 long it takes to

vet our securit* model amongst other considerations.

he important thing to take a5a* 2rom this is that the insiders4 the 2ounders o2

the organisation 5ill have R VI o2 the currenc* +ase at *ear >. &econdl* 5e

have endo5ed an organisation that 5ill turn into a decentralied autonomous

organisation 5ith enough reserves so that 5hen the Bitcoin suppl* runs do5n it

can pa* 2or long?term development o2 the ecos*stem.

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!%: 0hat3s the time 2rame4 5hen do *ou plan on Ethereum actuall* +ecoming its

o5n AC

CH: hat3s a great 9uestion4 un2ortunatel* the in2rastructure and technolog* to

+uild a proper decentralied autonomous compan* is not 9uite 5here it needs to

+e *et. Especiall* not i2 *ou 5ant to stick O->million into it4 *ou3d 5ant a little +it

o2 certaint* +ehind it so *ou have to do things the traditional 5a*4 at least 2or

no5. 0hat 5e3re going to do is start an organisation in a 6urisdiction or it might

+e some5here else 5e3re still in talks 5ith la5*ers a+out 5here the +est place

to do this is. hen 5e3re going to +e 5orking 5ith %*le and a couple o2 other

partners and over and ,- -/months period 5e3re going to convert that

organisation s*stematicall*4 step +* step4 into a decentralied autonomous

entit*Korganisation. 0e 5ill produce a documentar* and a manual4 give it to the

communit* and sa* pick 0ikipedia4 pick all these other gu*s and sho5 them the

merits o2 5hat 5e3ve +een a+le to do here.

$n the meantime 5e3re ver* concerned a+out transparenc*4 5e have Anthon*

iorio 5ith us 5ho has kind o2 set the gold standard 2or the Bitcoin alliance o2Canada. 0e3re going to su+mit 9uarterl* audits +* independent accounting and

5e3ll also have in?house council and house accounting 5ith the organisation. 0e

2eel it3s the +est +alance that 5e can provide toda* and it3s something that3s

productive +ecause 5e can partner 5ith ever*+od* 5ho is interested in ACs

a+out this process to +uild that.

!%: Let me stop *ou here4 5e got o topic a little +it +ut $ 5ant to talk a+out the

2undraising model o2 the t5o other gu*s then $ 5ant to come +ack and talk a+out

6urisdiction4 ok

CH: &ure

!%: Let3s go 5ith "astercoin4 *ou gu*s have alread* done some 2undraising right

!: $t3s alread* out there on the market.

!%: Jeah4 5h* don3t *ou go through ho5 that is and ho5 $ can ac9uire "astercoin

toda* i2 $ 5anted to +e involved 5ith it.

!: &ure4 the 9uestion is4 i2 *ou don3t need mining then ho5 can *ou 2airl*

distri+ute tokens. he 5a* that !@ set it up 5as to create this almost kickstarter?

like T?da* period 5here an*+od* could send BC to a particular address4 the

genesis address or the e;odus address as the* called it.

(Laughs someone says exodus address name is funny)

uring that period an*+od* that sent BC 2rom August ,st T,st-,T to that

address 5as pu+licl* advertised Dand the all the Bitcoin communit* comesF... $2

*ou +elieve in these 2eatures4 i2 *ou 5ant these ne5 pro6ects to succeed4 send

Bitcoin to this particular address4 that generated , "astercoins 2or ever* ,

Bitcoin. At the time the price o2 Bitcoin 5as a+out O, so it 5as O, per token o2

"astercoin. $t create t5o pools4 an*+od* that contri+utes the*3re going to get a

set amount o2 tokens and then 5e3re going to create an additional pool on top 2or

developers called developer "&C and it3s given out on a regular predicta+le +asis

+ased on an algorithm to developers ever* month that contri+ute to the open?

source implementation.

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hose are the t5o pools4 people that provided value and mone* to develop this

stu and then a long term pool o2 tokens 2or ever*+od* that contri+utes over the

*ears in the 2uture to the 2urther development. hat3s ho5 5e have +oth those

sets o2 tokens out there. &imilarl* to 5hat Charles 5as descri+ing is that our goal

is to have this done in a completel* decentralied 5a*4 5e don3t 5ant a

2oundation that has an* control 5hatsoever over this process.

0hat 5e said is that 5e certainl* don3t 5ant it centralied around !@4 so let3s

create a non?prot 2oundation. he 2oundation 5ill hold the 2unds and distri+ute

them to developers4 5hat 5e3re implementing is a proo2?o2?stake s*stem that lets

ever*+od* that holds "astercoins vote on the ne5 version o2 the protocol. he

second part is a distri+uted +ount* s*stem4 so an*+od* could put up =0e have to

code this ne;t and the communit* can decide +ased on consensus 5ho should

get the developer coins4 5hat should +e paid out4 5ho should get roll?+ased

+ounties.

All o2 things that the 2oundation is doing right no5 +asicall* dissolve as it goes

2or5ard4 it3s the same as Bitcoin that the 2oundation has no more control overthe protocol than sa* the Bitcoin 2oundation.

!%: &o a >,I attack on "astercoin 5as 6ust +u*ing a shit?load o2 Bitcoin right

CH: Jou 5ould have to +u* >,I o2 them +ecause it3s on a proo2?o2?stake s*stem.

$t 5ould +e reall* e;pensive i2 *ou tried to +u* all o2 them and *ou 5ould drive

up the price.

!%: 0ell $3d +e happ* a+out that 2or a 5hile4 that 5ould +e cool.

(CH+JK share laughter)

!%: Let3s move onto Bit&hares.

L: 0e actuall* have a h*+rid model4 5e started 5ith one model and 5e pivoted

to a "astercoin st*le model 5ith some changes. he initial model that 5e had is

5hat 5e 5ere calling Bit&haresP&4 it3s a ne5 Bitcoin clone 5ithout an* pre?mine

that an*one can go and start mining. hat took o 5hen 5e launched th4 it3s +een 5idel* success2ul4 and 5e reached - million W market?cap. 0e

+rieG* hit T,mil 2or Proto&hare 5hen Bitcoin 5as at O,-. $t used to +e

Proto&hare4 5e no5 call it Bit&haresP&.

hat 5as good4 it allo5ed our communit* to go 2rom nothing to a+out ,4

people. Hal2 in China4 hal2 at our 2orums on Bitsharestalk and pro+a+l* man*

more that 5e don3t kno5 a+out that are involved +ecause the* learned a+out

Proto&hares. 0hat Proto&hares allo5 *ou to do is the* allo5 *ou a stake o2 at

least ,I in ever* 2uture decentralied s*stem that 5e produce4 5e3re tr*ing to

encourage others to do the same thing to get the communit* support.

hat didn3t reall* help us all that much4 5hat 5e realised 2rom that 5as that 2rom

mining people spending O,4 a da* 2or Amaon cloud service or their

electric compan* to mine these Proto&hares4 all that mone* is +eing +urnt up.

$t3s ridiculous to destro* *our (see money? 0:32:21.in the allocation o2 *our

shares. hat gave us the idea o2 5hat i2 5e could capture all o2 the mone* that is

+eing spent in mining and repurpose that mone* to the development o2

decentralied +usinesses that actuall* give value to the Proto&hare holders.hat3s 5here 5e came up 5ith Angel&hares or Bit&haresA&.

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Each and ever* da* *ou mine 5ith *our mone*4 instead o2 2or *our mone*4 there

is a ;ed allocation o2 >4 2or Bitcoin and >4 2or Proto&haresKBit&haresP&

holders. he more mone* that is contri+uted to the Angel addressKthe e;odus

address on a given da* sets the price4 so there is an actual market operating

each and ever* da* that3s esta+lishing the price and it3s got the same social

contract as Proto&hares at least ,I o2 ever*thing that 5e do in the 2uture.0ith the initial Bit&hares4 our +ank and e;change4 *ou3re going to get >I

going to Proto&hare holders and >I going to the Angel&hare holders.

$t has +een 5idel* success2ul4 depending on the price o2 Bitcoin4 5e3ve pro+a+l*

raised O-million in the month o2 !anuar* alone through the com+ination o2

Proto&hares and Angel&hares.

!%: Cool4 ok so 5hat $ 5anted to come +ack to 5as 6urisdiction4 so $ rst $3d like

ever*+od* to give a short ans5er o2 5here *ou3re +ased.

CH: 0e reall* don3t have a geographic location4 $3m in Colorado.

!%: 0hat $3m sa*ing is *our compan* is going to +e 2ormed some5here4 Canada

right

CH: Jeah4 the holding compan* that3s managing the mone*4 the duciar* entit*

5ill most likel* +e in Canada4 5e3ve looked a couple o2 other alternatives such as

&5iterland 2or e;ample. 0e reall* 5ant to go to a place 5here the rule o2 La5 is

strong and the regulation is coherent.

!%: k4 so "astercoin

!: &ame kind o2 deal4 there are a lot o2 "astercoin 2oundations around the 5orld.

here is one in China4 the nited &tates4 one in $srael4 +ut the one that holds the

original e;odus 2unds is a non?prot incorporated out o2 ela5are.

!%: k.

L: $nvictus is a 7irginia compan* and 5e3re looking to nd the +est 6urisdiction

6ust like Ethereum.

!%: k so 5h* $ asked that 5as and 6ust like *ou 6umped into4 5e3re +ased

ever*5here. 0e talk a+out all o2 these 5onder2ul things4 distri+uted autonomous

corporationsKorganisations that *ou have to create too. !ust like 5ith Bitcoin4

2acilitating so called (didn3t hear 5ord:T>:,.T) evil. here is the a+ilit* in these

things to create some horri+le shit4 5e 6okingl* talked on the 5a* over here o2 a

distri+uted autonomous assassinations. Like 9uad copters 5ith ip guns or smallamounts o2 e;plosives4 put in an address4 pa* some coins and then +u* and +lo5

up.

L: $ think the & government is on +oard no5 (laughs)

!%: (laughs) Jeah4 e;actl*. hat3s real things4 $ +elieve that i2 there are to +e

e;ploits then let3s talk a+out the e;ploit no5 +ecause it3s going to happen

eventuall*. ne o2 the things that3s going to happen is that 5hen someone

utilies one o2 *our plat2orms 2or something terri+le like this4 +ecause it 5ill

happen4 is that someone is going to 5ant someone to hang 2or it. 0e had a long

talk last night a+out this4 &atoshi didn3t have to deal 5ith this4 he 6ust

disappeared. 0e can3t go =H let3s go get &atoshi4 damned Bitcoins +ecause

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he3s gone4 *ou can3t do that. But $ can gra+ Charles and shake him real hard and

do stu that the & governments do.

!:Let me address this one 5ith a couple o2 things. #irst4 as a 2oundation4 5hat

5e3ve said is that 5e3re never going to get involved in an* o2 the operations.

0e3re not going to run an e;change4 5e3re not going to +e a market maker or

an* o2 that. 0e onl* and purel* support the open source development. &tep t5o4

$ +elieve ever*+od* on this panel is a mem+er o2 the ne5 CA organisations4

5hich is an*+od* hasn3t heard o2 it it3s the Consortium o2 ecentralied

Applications and it3s a legal entit* that 5e3ve created 6ust to 2ocus on the

regulator* issues that *ou3re +ringing up and the legal issues.

he*3re creating papers on 5hat3s the legal vie5 o2 this4 the*3re talking to the

regulator* agencies so 5e3ve put some o2 our 2unds aside 2or that issue to get

5a* ahead o2 it +e2ore R?months 2rom no5 5hat *ou descri+ed happens.

!%: @ight and 2or R?months $ think that pro+a+l* makes sense and $ think that3s a

good Band?Aid. But ultimatel* $ think the reason that all o2 *our plat2orms e;ist is+ecause 5e all realise that 5e need something that can3t +e stopped4 that is

6urisdiction less4 something that doesn3t e;ist in one 6urisdiction and something

no one can actuall* have control over.

L: 0ell luckil* our mone* doesn3t sit in a 6urisdiction4 it3s in Bitcoin.

(Intermission - advertisements)

his is Chris !oseph4 taking a minute to tell *ou a+out

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launch a ne5 AC. $2 *ou have a high +arrier o2 entr*4 2or e;ample re9uiring

millions o2 dollars3 5orth o2 A&$Cs to mine or hard5are4 *ou can3t release another

&HA?->R +ased coin 5ithout e;isting po5ers in the mining 5orld controlling it. $t

doesn3t matter 5hat *our proo2?o2?5ork is4 that3s going to +e the case.

0e 5ant to lo5er the +arrier o2 entr* to allo5 an*one to launch a decentralied

application. hen the 2ree market is the ultimate 2orm o2 decentraliation and i2

5e provide the tools then the market 5ill do the rest.

CH: $ love providing the tools4 in 2act 5e can do

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+ut inter2aces usuall* 5ith a decentralied application that runs on the client?

side 0e3ve +een talking a lot 5ith (Johan) and Chris dom a+out integrating

pen ransactions into our ecos*stem +ecause the*3ve done some a+solutel*

phenomenal 5ork4 the* have reall* 5orked hard.

he* have this pro+lem 5ith voting pools and *ou have to audit the voting pools4

that3s a trust 2eature and the argument the* give is that i2 *ou have enough

pla*ers in the pool it eventuall* keeps people honest. $2 *ou look 0all &treet and

other entities that3s not necessaril* completel* true so *ou sa* 5ait a minute

here4 auditing can +e done +* the Ethereum Blockchain. hat3s ver* eas* to

implement4 it3s 6ust a 2e5 lines o2 code. Jou can take all o2 *our decentralied

trading4 the price discover*4 *ou can take all o2 the +loat that *ou 5ould normall*

incur 5ith running an decentralied e;change and outsource it to open

transactions +ut have the same level o2 trust as *ou 5ould have i2 *ou ran

ever*thing on a Blockchain.

hat3s the ke*4 to nd the value points and sa*ing 5hether it3s going to live on or

o chain and 5here is the application going to +e. he philosoph* 5e take 5ithEthereum is 5e have no 2eatures4 5e3re like "inecra2t4 it3s 6ust a +ig open 5orld

that *ou can +uild on top o2. $2 *ou 5ant to +uild a Computer in "inecra2t 5ith

redstone *ou can do that.

!%: o *ou have creepers at Ethereum

CH: Jeah 5e have creepers at this space man4 its great8 But an*5a* that3s the

approach 5e take4 5e sa* he*4 it3s this +ig open ecos*stem. $t3s a Lego in a

sense that *ou use to +uild on top o2 and the ke* is incentiviing people like

"astercoin and Colorcoin to see the value proposition o2 eventuall* developing

on top o2 our plat2orm4 it3s sho5ing the Bit&hares gu*s that the* can do a AC a

minute. $2 *ou 5ant to use proo2?o2?stake4 *ou can use proo2?o2?stake. Jou can run

all o2 that logic and connect it in a ver* creative 5a* so that the +loat either lives

on a small Blockchain that is onl* handled amongst the people 5ho are relevant

or i2 *ou 5ant to pa* the e;pense it3s handled on the Ethereum Blockchain so

there is a lot o2 options that ever*+od* has.

$2 5e give good tools and 5e3re ver* diligent 5ith this process4 eventuall* those

options 5ill +ecome ver* satis2*ing to people and our goal is to reduce the

2ragmentation4 reduce the isolation in the s*stem. 0e 5ant people 5orking

together4 it makes no sense to me that ever* time 5e 5ant to do Bit"essage 5e

have to re?5rite Bit"essage. 0h* not 6ust have Bit"essage as an app and have

an AP$ to talk to Bit"essage4 5h* re?implement open transactions. !ust haveopen transactions as an app and talk to it through an AP$. $t makes a lot o2 sense

to do that +ecause then ever*+od* can 2ocus on the user e;perience4 the core

mission and the duciar* duties the* have to the people 5ho the* have taken

mone* 2rom.

!%: Jou 5ant to 6ump in

!:

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that3s alread* +een +uilt 5ith Bitcoin. Jou kno5 and trust it3s going to have the

largest net5ork aect.

hat3s the immediate approach4 *ou have these tools4 let +uild on top o2 them

and it3s not as e;perimental as some other approaches. hough the e;perimental

approaches ma*+e more po5er2ul in the long run4 that3s 5hat 5e3re

e;perimenting 5ith. 0e kno5 5hat Bitcoin can do toda* so $ see the "aster

protocol as a +et that the Blockchain 5ill continue to dominate as a plat2orm and

these other pro6ects that are e;periments can +uild dierent plat2orms 5ith

dierent attri+utes.

$ think someone +rought up the great analog* that the 9uestion is4 is Bitcoin

CPK$P or is it &"P $s it a protocol that 5as +uilt 6ust 2or email or is it general

enough that 5e can use it as CPK$P and that remains unans5ered. &o it 5ill

depend on 5hat the core developers do4 i2 the core developers decide that

Bitcoin is onl* going to +e Bitcoin4 then it ma* end up as &"P. $2 the* decide

that the* D5ill allo5 metadata em+eddedF 5hich seems the direction the*3re

going in 5ith update .S4 the* are no5 support em+edded metadata in a 5a*that doesn3t +loat the Blockchain and an*+od* can prune out those records i2

the* don3t 5ant to store the e;tra data. $t seems as though the*3re slo5l*

moving in that direction 5here Bitcoin can not onl* +e a pa*ment net5ork and a

store o2 value +ut also a general ledger. hat3s 5hat 5e3re going to nd out.

L: 0hat 5e3re +uilding is a so2t5are li+rar* 5hich is in a uring complete

language that allo5s *ou to +uild an* t*pe o2 AC ver* 9uickl*. ne o2 the things

5e3re 2ocusing on is the economic eQcienc* o2 the s*stem4 recogniing that *ou

cannot maintain a decentralied s*stem processing all o2 the transactions 2rom

e;changes 2rom ever* single +usiness model on a single chain using a single

currenc*.

But i2 *ou provide the tools4 AP$s and so2t5are *ou can +uild an entirel* ne5

Blockchain ver* 9uickl* and i2 *ou don3t have to depend upon mining 2or securit*

+ecause *ou have proo2?o2?stake com+ined 5ith ripple st*le consensus then *ou

don3t have all the e;pense or the need to centralie into a single Blockchain. Jou

can achieve much 2aster transactions4 much lighter 5eight transactions4 5hich is

a critical reason 5h* i2 $ 5as going to +uild a decentralied +ank and e;change

and $ had to pick a plat2orm4 5ould $ +uild it on a li+rar* that 5ould eliminate all

o2 the other overhead4 the 2ees $ 5ould have to pa* to process transactions

through the Bitcoin net5ork4 pa* their miners or the 2ees $ 5ould have to pa* to

pa* the Ethereum miners. r create a 5hole ne5 Blockchain that doesn3t have

those 2ees and there2ore $ can oer greater value proposition to +oth the user

and the shareholders in the decentralied +ank and e;change4 so the ke* is to

ma;imie competition.

$nstead o2 tr*ing to +uild one Blockchain to rule them all4 5hether it3s Bitcoin or

some other Blockchain. 0e 5ant to have man* Blockchains4 each o2 5hich is

ver* light 5eight so that someone 5ho onl* cares a+out pla*ing a Blockchain

+ased game or gam+ling or voting doesn3t have to process all o2 the Bids and

asks o2 the

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dangerous concept to a degree +ecause *ou gu*s are taking a great amount o2

risk4 putting a great amount o2 eort into it. Jou gu*s are4 2or lack o2 a +etter

5ord4 ho5ever *ou gu*s 5ant to phrase it4 in *our 2undraising model there 5as

some amount o2 pre?mine o2 5hat *ou gu*s 5ere actuall* going to have value in

on *our s*stem. Jou3ve got an auction 2or it right

CH: here 5as no portion that 5as set aside 2or 2ounders that 5asn3t a part o2

the auction. Ever*+od* e9uall* participated. $ do think that3s an important

connection.

!%: hat3s great4 $3m going to ask *ou gu*s to come in and *ou can talk a+out the

specics o2 it. #or Ethereum *ou gu*s have +een ver* open a+out ho5 *ou gu*s

are going to do the distri+ution o2 this initial portion4 $ 5orr* 5ith ever*one4 that

*ou gu*s are relativel* small companies (Although *ou3re rather large pla*ers in

this space) and then another compan* comes in4 gra+s all o2 *our hard 5ork4

cutting out all o2 *our 2undraising portion o2 it and taking the value proposition4

moving it4 putting a lot o2 scale +ehind it and creating a 5onder2ul ecos*stem

that 5e all 5ant and *ou gu*s are no longer reall* a part o2 it. 0hat are thereasons that make *ou think that3s not going to happen to *ou4 ho5 *ou3re going

to mitigate it or ho5 it3s irrelevant

CH: ka* 5ell 5e can take a look at it 2rom a couple o2 dierent angles +ecause

it3s a ver* good and poignant 9uestion. #irst 5e look at incentives4 5e pro+a+l*

don3t like the & government ver* much (Interru!ted by JK")

!%: $ love the & government4 2or the

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oes that matter to an*one 5ho is using the ecos*stem $t reall* doesn3t matter

to an*+od* 5ho is using the ecos*stem4 the onl* gu* that gets sha2ted is me4

and $3d pro+a+l* +e a little pissed o a+out it

!%: $ 5ant to +ack up to 5hat *ou 6ust said 5hen *ou 5ere talking a+out the

read Pirate @o+erts coins and ho5 5e could technicall* cut those coins out and

2orce them out. $n that e;ample that *ou give *ou3re talking a+out actuall*

messing a+out 5ith the 2ungi+ilit* o2 Bitcoin +ecause i2 5e have coins 5e have

control o2 and the core team at some point in time can decide that 5e can no

longer have control o2 those and the* reallocate the coins. $ think the eect o2

that3s our mone*4 it 5ould pro+a+l* desta+ilie the entire net5ork +* doing that4

+ut 5hat *ou gu*s are +uilding 5ith ACs is that the core value mone* is not

as important as all o2 the application stu that *ou 5ere talking a+out. 0hereas

5ith Bitcoin and ho5 it stands right no54 the mone* is 5hat it3s a+out4 so there is

a dierence there. $ 6ust 5anted to point that out so 5hen *ou3re talking a+out

let3s cut that portion out o2 it4 *ou can3t +ecause Bitcoin operates dierentl* right

no5 +ecause it3s currentl* a+out the mone*. et those dollar +ills *a3ll4 stack+its. o 2or it !.

!: $ 6ust 5anted to sa* $3ve spent a lot o2 time thinking a+out this 9uestion. his

is the 9uestion $ had to ask m*sel2 as the lead 2or BitAngels4 $ led the due

diligence 2or the "aster protocol 5hen it came to our process. $ ask to ask m*sel2

reall* hard4 is this going to have an* value r is some+od* going cop* this4 2ork

it and create another version that 5ill have all the value. $t took me a 5hile to

5rap m* head around that 9uestion +ecause *ou can sa*4 is Bitcoin 6ust this

oddit* $s it the onl* use?case 5here creating a 2ork isn3t as valua+le +ecause all

o2 the value is in the in2rastructure and not in the code. r can 5e appl* this

model generall* and 5hat $ eventuall* +ecame convinced o2 is that 5e can appl*

this model generall*.

he value is not in the code4 the value is in the people 5ho +uild on top o2 the

code it3s in the in2rastructure and that 5as a +ig revelation to me +ecause it

opens up this model 2or all kinds o2 things that aren3t cash4 currenc*4 a pa*ment

net5ork. $3m not sa*ing that this model 5ill 5ork 2or ever*thing4 $ think there 5ill

+e small enough niches 5here i2 *ou cop* it and there isn3t much in2rastructure

on top then ma*+e it doesn3t make sense. But 2or an*thing that is 5idel* used

enough that there is in2rastructure +eing +uilt on top4 people 5ill sa*4 5ell should

$ go 5ith the one 5ith the nice in2rastructure4 the li+rar*4 the tools and all these

+usiness that are integrated in it or should $ go 5ith this ne5 net5ork that has

none o2 that.

$ think rational actors 5ould pick the one 5ith the in2rastructure4 +ut 5hat that

tells me is the rst mover advantage is enormous in this area +ecause i2 *ou3re

the rst one to do a 2air distri+ution in a transparent 5a* and +uild a ne5

technolog* then people are going to opt?in to *our s*stem over some+od* else

that comes later. hat3s 5hat $ encourage people to do4 people think this

revolution is going to take T4 / or > *earsX his revolution 5ill take ,- ,1

months4 ever*thing that *ou can imagine decentralied the rst version o2 that

is going to +e +uilt 5ithin the ne;t ,1months. $3m 2ollo5ing -R?protocols under

development right no5 using this ne5 model. his is going to move reall* 2ast4 $

don3t think people appreciate ho5 2ast this is going to move.

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$t3s a process4 it takes a lot o2 eort. here are some philosophies on ho5 to do

that +ut ulimteal* $ think +est value proposition that oculd +e oered to the

cr*ptocurrenc* space right no5 is unit*. 0e need to start 5orking together4 5e

need to start ackno5ledging that the pro+lem 5ith BitPa* are similar to the

pro+lem 5ith CoinBase4 are similar to the pro+lems that 5e have4 that Bit&hares

has4 that ave has. $t makes sense to me to rall* +ehind some core principles4our principles are reall* simple4 and simplicit* is one o2 them. "odularit*4

universalit*4 non?discrimination4 agilit* these are principles that $ think

ever*+od* in this space can like.

$ also think that 5e recognie that Bitcoin is 9uite valua+le +ut it still has a ver*

small ecos*stem compared to glo+al population. he real gro5th hasn3t

happened *et4 5e3re not at the +illion person stage *et. &o ho5 do *ou get

+et5een - million people and - +illion people hat3s the user e;perience and

*ou3re never going to get a 5onder2ul user e;perience i2 *ou have -R?procotols4

-R standards and ,> coins Goating around. 0hether *our approach is to have

licensed li+rar* or *our approach is to +uild the Android o2 the cr*ptocurrenc*space like 5e3re tr*ing4 one o2 these 5ill eventuall* 5in. &omething 5ill solidi2*4

then the user e;perience 5ill ver* rapidl* get +etter and eventuall* *ou3re going

to have all o2 the creativit* coming in.

!ust think a+out ho5 man* reall* +right people are in this space 5ho are not

phenomenal coders4 5ho aren3t reall* hard?core programmers 5ho 5rite

assem+l* code ever*da* +ut the*3re great designers. he magic o2 the 5e+

5as to give these +eauti2ul tools to people to +uild amaing 5e+siteK5e+pages

5ithout having to +e a hard?core developer4 5e gave them that. hat3s kind o2

the goal here4 let3s give these amaing tools 5hether it +e a li+rar*4 a plat2orm4

a reall* ro+ust protocol or ma*+e a composition o2 all three4 so that *ou can 5alk

in there in a ver* small period o2 time4 T5eeks R5eeks 5hatever *our dream is4*ou can get it done. hat3s 5hat $3m tr*ing to get done in this ecos*stem and m*

hope is that Bitcoin starts competing 5ith us +ecause in the process o2

competing 5ith us it3s actuall* going to make the Bitcoin protocol signicantl*

more ro+ust that 5a* ever*+od* 5ins4 the 5hole ecos*stem is going to 5in.

7alue goes up4 it3s a rising tide eect.

(%usi$al interlude)

!: $ 5ould agree 5ith Charles on a lot o2 points and $ think the goal here is to

+uild these ne5 s*stems in a 5a* that conserve the most people. $ think he

made a reall* good insight into user levels4 this is sort o2 ho5 technolog* 5orks

toda*4 m* o5n vie5 is that 5hat 5e3re going to see is more and more protocols

+uilt on top o2 each other. &o *ou +u* a computer4 the computer is hard5are it3s

a plat2orm itsel24 *ou have an operating s*stem that 5orks on top o2 the

computer hard5are.

he operating s*stem has a num+er o2 dierent technolog* stacks4 let3s sa*

*ou3re in the Apple technolog* stack or *ou can use the oogle technolog* stack

that3s sort o2 a third la*er. n top o2 that oogle oer a huge plethora o2

applications 2rom its app store and most people are here at the 2ourth level.

he*3re not in the hard5are4 the*3re not in the &4 the*3re not even in the tech

stack +ut the*3re using those end user applications.

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hat3s 5hat $3ve descri+ed 2or those that have read m* decentralied

applications 5hite?paper is that $ have seen these dierent la*ers emerging 2or

the Bitcoin ecos*stem. 0e can think o2 Bitcoin as that +ottom la*er4 5e can +uild

things on top o2 that4 that makes things easier to +uild. hen most people 5ill +e

at the third or 2ourth level 5here the users end up going and that3s 5here it

reall* gets e;citing. 0e3re reall* earl* da*s concerning Bitcoin as that rst la*erand here 5e3re reall* talk a+out the second la*er on top o2 that technolog*. $

think in -,>?-,R 5e3re going to get to that third and 2ourth la*er and that3s

reall* 5here *ou hit mass market.

!%: $3m actuall* going to 6ump into another 9uestion and $3m going to get *ou to

go ahead and ans5er it aniel. 0hat $3d like to talk a+out is4 let3s sa* that this

,1month period has gone +* and 5e have this mass adoption some5here o2 the

ACs. ive us a look into the 2uture4 let3s look at ve *ears do5n the road4 5hat

is it going to look like 0hat are 5e going to see here in the 5orld Because

someone is going to 5in4 this technolog* is out o2 the +o; ? 5hat are 5e going to

see4 5hat is going to +e dierent 2or a normal person and ho5 is this going toaect them

L: $ don3t think someone is going to 5in4 $ think ever*+od* is going to 5in. Jou

asked earlier 5hether or not 5e 5ere 5orried a+out some+od* replacing us and

m* primar* vision is to teach ho5 to make all o2 these things happen. $ +elieve

that there are so man* creative ideas4 it3s like going +ack to the +eginning o2 the

$nternet and imagining oogle and #ace+ook and all o2 the things that happened.

Jou can3t predict >?*ears out +ecause things are moving so 9uickl*4 m* personal

mission in all o2 this is to secure the li2e4 li+ert* and propert* o2 ever*one through

decentralied solutions and 5e3re all going to 5in no matter 5hat.

!%: $3m not going to hold an* o2 *ou gu*s to this4 +ut 5hat $ 5ant here is $ 5antsome pie in the sk*4 +ig ideas o2 ho5 this is going to make it all +etter. ake it out

as 2ar as *ou need to > *ears in advanced tell me 5hat li2e could possi+l* +e

like i2 ever*thing 5ent 5ell.

L: 0here $ am going4 is a 5orld 5here all interaction 5ith our 2ello5 man is

entirel* voluntar*. 0here *ou no longer need to rel* on government to settle

disputes4 in 2act decentralied technologies 5ill make governments entirel*

irrelevant and ineective in +eing a+le to do an*thing +ecause 5e no5 have the

a+ilit* to communicate 5ith ever*one on the 5orld4 the a+ilit* to reach a glo+al

consensus a+out 5ho o5ns 5hat4 ho5 to settle disputes and ho5 to do co?

ordinated decentralied 6ustice 5ithout having to rel* on ta;ation or 2orce.

CH: HEA@4 HEA@8

!: $ can hear the cheers 2rom

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!%: Jou gu*s can3t tell this over the radio +ut 5e have a +ig cro5d here4 5e have

packed this studio out4 people are interested in this and that3s 2antastic.

!: &o let me imagine 5ith *our 5orld4 5here the idea i2 *ou have one 6o+ is

anti9uated4 in 2act even the idea that *ou 5ould go to one place or 5ork on one

pro6ect 2or *ears at a time is entirel* anti9uated to the 5a* 5e think in this 2uture

5orld. Because i2 $ can immediatel* earn tokens 2or 5hatever value $3m

contri+uting. $2 $3m contri+uting to a decentralied rop+o; +* the Ttera?+*tes

sitting on m* desktop or i2 $3m contri+uting to a ne5 application +* 5riting some

o2 the code. $3m immediatel* getting compensated 5ith those tokens 5hich

unlike stock in a compan* are immediatel* li9uid4 $ can sell them on an*

e;change in the 5orld and it can immediatel* turn into an* other asset or an*

other 2ungi+le currenc*.

&o imagine a 5orld 5here *ou don3t need to have a 6o+ in the traditional sense4

or earn e9uit* in the traditional sense +ut *ou can participate in all o2 these

decentralied communities and all o2 these decentralied applications4 5hether it

+e the decentralied rop+o;4 the decentralied Amaon4 the decentralied5hatever *ou3re doing *ou can +e universall* compensated 2or that in a 5a* that

*ou3re talking a+out 5here ar+itration and courts +ecome a thing o2 the past.

hat3s4 $ rml* +elieve 5here 5e3re headed. he rst people that are going to get

there are the programmers and the people that have these a+ilities that can

immediatel* +e put into use. As this gets to higher and higher levels *ou have

more and more ever*da* things +uilt on top o2 all these la*ers that ever*+od*

can participate in4 5hether the* kno5 a line o2 code or 5hether the*3re 6ust doing

their ever*da* thing that3s 5here $ think 5e3re going.

CH: $ have no idea. (Laughter)$ 5ant to +uild tools that give the 5orld the a+ilit*

to tell 5hat3s going to happen. $ don3t have an economic philosoph* here4 5e3ve

tried to pick a +alance in +asicall* ever*thing that 5e3ve done and ever*thing

that 5e3ve designed. 0e have no 2eatures4 the goal here isn3t to remove

governments4 the goal isn3t to change the 5orld4 the goal is to give the people

5ho 5ant to change the 5orld the a+ilit* to do that.

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But something *ou all have said and it3s cool +ecause it makes things a lot

simpler here. Jou3ve all used the term ="e4 $ and stu like that +ut *ou all have

a5esome teams. Jou gu*s all have people that *ou3re 5orking 5ith4 can 5e 6ust

take a minute to talk a+out the people that *ou gu*s 5ork 5ith that are helping

to +uild these pro6ects.

$ run into this all the time4 $ am !ason %ing 2rom &ean3s utpost so people think

&ean3s utpost is !ason %ing and that3s not true. &ean3s utpost is a ton o2

people4 !ason %ing is not in Pensacola right no5 and guess 5hat people are still

getting 2ed right no5. &o let3s talk a+out *our teams i2 that3s cool4 6ust take a

minute and talk a+out that.

CH: 0e have a reall* 5onder2ul team4 on the duciar* mem+ers?side there is

m*sel24 Anthon* iorio 5ho is the e;ecutive director o2 the Bitcoin Alliance o2

Canada4 he created &atoshiCircle4 he created %r*pto%it 5hich +* the 5a* is one

o2 the most amaing applications *ou need to do5nload it4 it3s incredi+le. 0e

o+viousl* have 7italik 5ho $ guess has developed the reputation o2 some sort o2

android 2rom the 2uture sent +ack in time to save us 2rom the d*stopiangovernment. He3s an amaing gu*4 it3s true4 7italik1-,T/ the*3re going to make

a graphic novel.

hen 5e have "ihai4 he 5orks 2or Bitcoin magaine4 he does Egora4 he is a reall*

phenomenal person. he ecos*stem that 5e3ve surrounded ourselves 5ith is that

5e have a reall* health* +alance o2 people. 0e have some 9uantitative anal*sts

such as r DEmmanuel AcostaF 5ho 5orked 2or oldman &achs4 he is running a

hedge 2und in Asia. 0e also have !oe Lu+in 5ho is also helping us out on the

nancial side4 the*3re actuall* stud*ing ho5 to implement clearing houses and

do ever*thing *ou 5ould 5ant to do on 0all &treet on Ethereum to see i2 the

scripting language is ro+ust.

0e have some great marketing people like !on "ohan 5ho is reall* helping us to

+uild a communit*4 5e thought that it 5as reall* important 2rom da* one to +ring

people in to inter2ace 5ith communities. here are so man* people on the list4 $

think 5e have a total o2 ,> - core developers. here is r avin 0ood 5ho is

a game developer4 he has +uilt game engines4 $ think he got his Ph Computer

&cience and specialiing in +asicall* taking algorithms to visualie music and he

has done some a+solutel* amaing things. He 5rote our entire CWW client in the

period o2 R or V da*s 5hilst drinking some @o+ert "ondavi4 he3s the kind o2 gu*

*ou 5ant to get to kno5.

0e even have a 2e5 philosophers and 5e even invited atiana4 she did theBitcoin song. &he 5as at the +each house that 5e rented and 5e had some 2un.

$t3s +een reall* an amaing e;perience to +e on this team4 in 2act $ think it3s the

+est team $3ve ever +een on in m* entire li2e 5ith an* pro6ect that $3ve ever

5orked on. !ust +ecause there is so much passion and diversit*4 there is so much

clarit* o2 thought and there is so much vision4 5hich is so rare. here is so much

vision in this team and m* hope is that 5e can continue to attract that as 5e

move 2or5ard and 5ork 5ith people 5ho have vision like the people here.

!: hat3s a5esome4 *eah $3ll give a 9uick shout?out to Peter odd4 our chie2

scientist at the 2oundation. A lot o2 people kno5 Peter odd 2rom his 5ork as a

Bitcoin core developer4 $ reall* respect a lot o2 things that he has done and hehas +een going a2ter this 9uestion o2 Bitcoin scala+ilit* and ho5 to properl*

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em+ed metadata4 $3m reall* glad to get him involved in the 2oundation. ur

e;ecutive director 2or the 2oundation is @on ross4 a lot o2 people kno5 him as

@ipper-T/ 2rom the Bitcointalk 2orums. Based in $srael4 a reall* great gu*4 ver*

passionate and ver* e;perienced in the space.

$ 5ant to talk a+out !.@ 0illet o2 course 5ho 5rote the original paper4 it3s +een

e;citing to see4 he has recentl* +ecome 2ull?time on the pro6ect and has +een

a+le to leave the da* 6o+ 5hich is the vision o2 ever* 2ounder ever. $ also 5ant to

talk a+out &am Jilma4 he sits on our +oard and he is one o2 the co?2ounders o2

BitAngels. "ichael erpin leads all o2 our media stu4 he is also another co?

2ounder o2 BitAngels. He 5as the gu* that +ack in the ,. da*s o2 the $nternet

2ounded "arket5ire4 the rst internet compan* to do P@ stu.

$ also 5ant to talk a+out a 2e5 o2 the other +oard mem+ers4 a lot o2 people kno5

Brock Pierce 5ho is sort o2 the grand2ather o2 virtual currenc*4 he3s +een doing

this since the late S3sKearl* -3s. !onathon Jantis and Anton*?7o are all ver*

passionate.

$t3s +een great as 5e3ve +rought on more and more core?developers4 Craig

&ellars recentl* came on as the C o2 the 2oundation 2ull?time. he team has

+een e;ploding and 5e3ve no5 go north o2 , ,> 2ull?time developers. "arin4 a

lot o2 people kno5 +ecause he has created the most popular "astercoin 5allet

and there are three or 2our other great core developers. $3m going to 2orget a 2e5

names +ut it3s reall* +een e;citing to 5ork 5ith a team that had varied and

interesting talents.

L: $3m 5orking 5ith a great team that3s gro5ing ver* rapidl*4 5e3ve got so

man* people $ can3t even name them all 5orking all over the 5orld on man*

dierent things. Bo &hen is a Chinese partner o2 ours4 he is head o2 all o2 the

China aspects. 0e have a huge communit* in China and he3s doing it all on his

o5n. $t3s 5onder2ul to +e a+le to 5ork 5ith people that are autonomous and 6ust

make things happen4 the*3re great partners.

@ecentl* Brian Page 6oined us4 5e met him in 7egas and he has +een completel*

revamping our marketing in a 5a* that *ou gu*s are going to appreciate in the

coming da*s and the *ear ahead. Arlen has come on?+oard and he3s going to

help us manage all o2 our +ounties and organise all o2 our technical teams. 2

course an Dunintelligi+leF4 he is a CE 2or another compan* that has a 5hole

team in Poland that he is heading to help develop and manage %e*hotee and

Bit&hares etc.

0e have got an incredi+le team4 it3s gro5ing and $3m ver* e;cited.

!: $ can3t 2orget D*rik LuisF 5ho is in the audience4 our smart propert* lead

other5ise $ 5ould +e remiss.

L: Actuall* $ 2orgot to mention 0endell 2rom Hive 5ho is also in the audience

and he has +een 5orking ver* closel* 5ith us4 $3m sorr* 0endell 2or not

mentioning *ou4 $ 2eel reall* +ad.

!%: $3d like to take advantage o2 the 2act that 5e have a +unch o2 great in the

audience right no5 too4 so i2 *ou gu*s are cool4 $3m going to open it up to some

9uestions and 5e3re going to take some 9uestions4 is that cool Has an*+od* gotan*thing

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&tan Larimer: $ 5as ver* impressed 5ith each one o2 *ou 5ho 5ere +asicall*

talking a+out ho5 5ell *ou co?operate together and $ am 6ust 5ondering ma*+e

5hether *ou can talk a+out4 is there some 5a* this 5onder2ul Dunintelligi+leF in

here can put together some t*pe o2 a 6oint pro6ect that can sho5 ho5 *ou can

5ork together

!%: k4 $ 5ant to restate this +ecause $ don3t kno5 ho5 5ell that3s getting picked

up on the mic and m* o5n piece o2 mind. &o +asicall* the gentleman said he 5as

ver* impressed 5ith all three o2 *ou4 i2 there some 5a* 5e can get a super?group

together and *ou gu*s can all ri and *ou gu*s can 5ork on a pro6ect together.

CH: A 2e5 months ago $ did have a plan to esta+lish the cr*ptocurrenc* research

group 5ith 7irginia ech +ut 5e could never 9uite get that accomplished. $ think

there are a set o2 common pro+lems in this ecos*stem4 no matter 5ho *ou are4

Bitcoin4 Bit&hares or Ethereum such as Blockchain +loat4 coin 2ungi+ilit*4 the idea

o2 the user e;perience o2 mo+ile clients ho5 *ou 5ant to handle mo+ile clients

in that trust model that 5e all suer 2rom.

1I o2 the 5orld is on mo+ile and Bitcoin doesn3t do mo+ile ver* 5ell so $ think

that3s a reall* natural place o2 colla+oration 2or ever*+od* in this space. o invest

some mone* into resolving these kinds o2 pro+lems4 5e3re pro+a+l* going to take

the lead on that and 5e3re going to make it ver* eas* 2or people to 6oin 9uickl*

and a 5a* that 5e can distri+ute these costs.

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5ere talking a+out decentralied communities4 A consensus mechanisms and $

think that important 6ust to spend a moment on and this is something 5e3ve all

+een talking a+out. $t3s part o2 5h* $ put m* 5hite?paper out there and made the

argument 2or decentralied applications and 5e need to +e care2ul4 language is

reall* important and setting precedent is reall* important. hese are entities that

have no emplo*ees4 the* have no shares4 the* make no prot4 the*3re notincorporated an*5here other than the protocol itsel2.

&o $3m tr*ing to move it to a 2rame 5here it3s something more tangi+le to people

and something more accurate4 so applications given it literall* is a piece o2

so2t5are $3m do5nloading onto m* computer and using it like a regular

application is a good 2rame to use.

here is not a per2ect consensus *et on 5hat the heck 5e3re going to call these

things +ut $ think 5e3re moving to5ards the right 2rame and 5e3re all thinking

a+out that. Charles highlighted the CA partnership and that3s reall* important4

$ 5as 6ust speaking to Peter odd *esterda* a+out the research 5e can do

together on the consensus stu so $ think there is going to +e a lot o2 cross?colla+oration +et5een the pro6ects.

CH: $ like A +* the 5a* so $ can 5rite the +ook the A o2 A.

!: he ao o2 ao

CH: he ao o2 ao4 it3s +etter than the ao o2 poo.

(Laughter)

L: 0hat $ 5ould like to see us 5ork together on is to 2ocus on taking these reall*

good ideas and making them sel2?sustaining. All living organisms need to

produce more than the* consume or the* eventuall* consume themselves anddie4 there2ore all o2 these decentralied autonomous companies $3m calling

them companies +ecause that3s a concept rather than a corporation 5hich is a

legal entit*. he* do earn a prot +ased upon services the* provide and the

transaction 2ees the*3re charging so $ +elieve 5hat 5e can +ring to the ta+le is

taking some o2 our so2t5are tools that do ripple st*le consensus com+ined 5ith a

ne5 2orm or proo2?o2?stake 5ith something like the Ethereums uring complete

pa*?as?*ou?go calculation engine.

Also to +uild more eQcient s*stems that are actuall* as prota+le as can +e so

that the* can +e as viral4 sel2?sustaining and economicall* eQcient as can +e. $2 $

can +ring an*thing to the group4 to the communit*4 it3s actuall* to teach theeconomics o2 +uilding sel2?sustaining s*stems.

!%: *ears could merge4 gro5

and +ecome the ne;t &k*

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is a dierence +et5een 5hat $ like to call a vending machine 5hich can +e

thought o2 as a centralied ro+ot that goes and has some +usiness and 5ith

these decentralied autonomous companies4 the* are all a+out consensus and

in2ormation. he* can do nothing on their o5n e;cept allocate or reallocate

+alances 5ithin their Blockchain. he goal is to engineer economic incentives to

motivate people to take the actions necessar* to implement the +usiness 5ithouthaving an* one person in control

A s*stem that *ou3re talking a+out 5here it +ecomes an articial intelligent4

taking over the 5orld &k*net t*pe situation is more like a vending machine run

amok rather than a decentralied autonomous compan*.

CH: Jeah *ou 5ould totall* need a uring complete scripting s*stem and a

decentralied currenc* to do that.

(Laughter)

!: $ have actuall* thought a+out this a lot4 ma*+e this is a controversial idea +ut

m* idea o2 A$ is that people 5ill still +e at the centre. 0e are giving the A$ a 5ill4

5e3re im+uing it 5ith goals and desires and the A$ development that $ have seen

+e2ore no+od* has solved the hard A$ pro+lem. &o 5e3re getting +etter and

+etter and more advanced languages and more computational po5er and $

actuall* do think that in the ne;t -KT *ears 5e 5ill actuall* cross that point

5here the ma6orit* o2 the 5orld3s thinking is done +* machines. Pure num+er o2

calculations in +rains versus the num+er o2 calculations in machines Dthe

machines can out?calculate our +rains.F

$ actuall* think that3s a good thing4 that3s similar to the tipping point o2 the

industrial revolution. Be2ore the industrial revolution the ma6orit* o2 la+our on

Earth 5as done +* people or done +* livestock and toda* the ma6orit* o2 thinkingon Earth is done +* people even i2 it3s repetitive4 ver* manual or a ver*

rudimentar* sort o2 thinking4 people 5ill still have to do +ecause computers 6ust

aren3t that good *et.

$ think that 5hen 5e cross that4 it3ll +e a huge +enet to humanit* +ut $ think

5e3ll still +e at the centre and 5e3ll +e im+uing it 5ith goals and 5ill etc.

L: $ 5ould like to sa* one more thing on that topic. A+out people +eing in the

centre4 a lot o2 the technologies 5e 5ere +uilding 5ith Bit&hares involves

prediction markets. Jou can think a+out it as a glo+al human mind 5here the

prices are the co?ordinating 2actor. 0here *ou can price an*thing 2rom a+stract

ideas to patents4 *ou can gure out ho5 to allocate resources. All o2 human eort5ill no5 +e co?ordinated +* a decentralied consensus mechanism +* prices. $t

takes the intelligence o2 each and ever* human4 com+ines them all together to

+e something more intelligent than an* articial A$ could possi+l* +e.

!: But truth2ull*4 isn3t that 5hat the ro+ots 5ould tell *ou to tell us.

L: $3m actuall* a ro+ot.

CH: $ 2or one 5elcome our machine overlords.

(Laughter)

L: here is a lot o2 5onder2ul pro6ects in academia and in private industr* that

have done some amaing things like eepUA 5ith avid #errucci over at 0atson

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5e got to 5atch a 5onder2ul 6eopard* episode. Pete "organ is doing great 5ork

at Carnegie "ellon niversit* 5ith

8/12/2019 LTB E80

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L: As long as there is enough prot motive4 $3m sure someone 5ill come up 5ith

the Gu;?capacitor and solve the time issue. But $ +elieve that human demand is

insatia+le4 there is al5a*s going to +e scarcit* 2or 5hat people actuall* 5ant.

here is going to +e scarcit* to spaceships to go travel the universe and

there2ore that3s 5hat people are going to +e 5orking to5ards4 so $ think that3s

the case.

!%: k that3s great $ said $ 5as going to end it there +ut $ 5ant to do one more

thing. $ 5ant *ou gu*s to go through real 9uickl* and sa* *our compan* again

and tell me ho5 $ can get involved4 tell me 5hat $ can do right no5 to get a stake

in *our compan*.

CH: Hi $3m Charles Hoskinson4 $3m a core developer on the Ethereum pro6ect.

0e3d like *ou to go to Ethereum.org

!: $3m avid !ohnston and $3m one o2 the people on the +oard o2 directors 2or the

"astercoin 2oundation4 *ou can go to mastercoin.org to go to the communit*

5e+site. 0e have a separate 2oundation 5e+site 5hich is 6ustmastercoin2oundation.org

#or those that 5ant to see all the transparent records4 ever*thing is pu+lic

records 5ith the 2oundation4 5hether it3s our +ooks4 the developers 5orking on it

and all the developer discussion. $ reall* encourage *ou to engage4 5e don3t run

an* e;changes ourselves4 *ou can3t get "&C through either o2 those 5e+sites +ut

there is a link to the 0iki that lists all o2 the dierent e;changes that trade

"astercoin 2or Bitcoin. All those links are at "astercoin.org

L: "* name is avid Larimer 5ith Bit&hares and $nvictus $nnovations4 *ou can

visit us at $nvictus.io check out our ne5 5e+site4 it3s +een dramaticall*

improved 2rom 5hat 5e3ve had in the past. $2 *ou 5ant to get involved in the2uture o2 decentralied +usinesses then *ou should look into our Angel

addresses.

!%: u*s this has +een a lot o2 2un4 thank *ou all 2or coming out here. #or

ever*one that3s here $ 5ant *ou gu*s to realise that 5e3re on the cusp o2

something here. Jou3re going to look +ack at these conversations this 5eekend

>?,*ears 2rom no5 and *ou3re going to +e like =0o5 that 5as it4 5e 5ere right

there4 right +e2ore ever*thing 5ent cra*.

hanks 2or ever*one 2or coming out4 this has +een a Let3s alk Bitcoin production.

AL: hanks 2or listening to episode 1 o2 Let3s alk Bitcoin. his episode 5as

entitled Be*ond Bitcoin4 and 2eatured !ason %ing4 Charles Hoskinson4 avid

!ohnston and aniel Larimer. hanks to ustavo "atamoros o2 the &u+ropics.org

2or providing the space at the Audiothe9ue 2or the panel and &teve "alagodi o2

&pectacular &ound 2or the recording. "usic 5as provided +* !ared @u+ens4

eneral #u and Calvin Henderson.

An* 9uestions or comments Email adamYletstalk+itcoin.com. Have a good one8

mailto:adam@letstalkbitcoin.commailto:adam@letstalkbitcoin.com