Let's Talk Bitcoin, episode 58, "The Price of Money"

8/13/2019 Let's Talk Bitcoin, episode 58, "The Price of Money"

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Transcript of Episode 58 The Price of Money

Participants:

Adam B. Levine (ABL) ost of LTB

Andreas M. Antonopo!"os (AMA) #o$host of LTB

%tephanie M!rphy (%M) #o$host of LTB

&eor'e Ettin'er (&E) #ontri!tin' editor of LTB

Adam B. Levine

i and *e"come to episode 58 of Let+s Ta", Bitcoin a t*ice$*ee,"y sho*

ao!t the ideas peop"e and pro-ects !i"din' the di'ita" economy and thef!t!re of money.

isit !s at "etsta",itcoin.com for o!r dai"y '!est "o' a"" o!r past episodes

and of co!rse tippin' addresses. My name is Adam B. Levine and today

*e+re ta",in' ao!t the iss!es of no*. Money made of stone mi'ht not seem

"i,e a modern topic !t it t!rns o!t its one of the est a""e'ories for not on"y

*hy Bitcoin is va"!a"e !t the very nat!re of ho* they+re transacted. LTB

contri!tin' editor &eor'e Ettin'er te""s !s a"" ao!t it in the /s"and of %tone

Money. Then the price is 'oin' n!ts and the fren0y in #hina may e to

"ame. 1e *rap !p today+s sho* ta",in' n!mers ATMs the 2!an and the!pcomin' #on'ressiona" hearin's in the 3nited %tates. B!t first /+m -oined

y %tephanie M!rphy and Andreas M. Antonopo!"os to ta", the recent

/np!ts.io *a""et hac, *e *a""et safety as if that e4ists t*o$factor

a!thentication and *onder a"o!d *hat it *o!"d ta,e to see ins!red

rep!ta"e on"ine *a""ets. Another 'ood one dead$ahead $ en-oy the sho*.

%tephanie M!rphy

ecent"y there *ere some thefts of itcoin in the ne*s. 6ne *as the *esite

/np!ts.io *hich act!a""y 'ot hac,ed someho* and it *as a *e *a""etservice and the hac,ers too, a"" the itcoins from there. Then there *as a

'!y -!st an individ!a" *ho had somethin' "i,e 7 itcoins on

B"oc,chain.info and *asn+t !sin' t*o$factor a!thentication and someho*

someody hac,ed his "oc,chain.info *a""et and transferred a"" the itcoins

o!t to some !n,no*n destination. e very fr!stratin'"y 'ot a notification

poppin' !p on his phone *hi"e he *as at the 'ym sayin' 9yo! have sent 7


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itcoins to some address that he didn+t reco'ni0e. e act!a""y posted ao!t

it on eddit and / mean if / *ere him and / "ost 7 itcoins / thin, /+d e

*ay more frea,in' o!t than he *as. e didn+t seem "i,e it *as the end of the

*or"d for him !t he did *ant to *arn other peop"e ao!t *hat had

happened. %o / fi'!red *e co!"d ta", ao!t this on the sho*. 1hat can

peop"e do to sec!re their Bitcoin *a""ets;

Andreas M. Antonopo!"os

2o! ,no* Adam *hen *e first started disc!ssin' this yo! said 9do *e rea""y

need to do another sho* on *hy peop"e sho!"dn+t store a"" of their money on

on"ine *a""ets and on"y !se it for spendin' cash; and the ans*er is yes

apparent"y *e do eca!se that "esson is somethin' *e+re 'oin' to have to

repeat a'ain and a'ain to a"" ne* !sers. /+m not rea""y s!rprised ao!t thefact that the entire on"ine *a""et inp!ts.io *as hac,ed. /t+s not easy to do

information sec!rity on di'ita" money. 1e have < mi""ion years of e4perience

doin' physica" sec!rity *e+re pretty 'ood at that. 1e=ve 'ot "ess than 5

years of e4perience doin' information sec!rity and fran,"y *e s!c, at it. B!t

/+d "i,e to p!t a tiny t*ist on this *hich is if yo! have 7 itcoin in an on"ine

*a""et and it+s "ost *ho+s fa!"t is it; Everyone *i"" '"eef!""y point to this poor

chap *ho "ost his *a""et $ he didn+t ta,e the necessary sec!rity preca!tions

he didn+t have t*o$factor a!thentication etc. B!t at some point / thin, it+s

a"so important to point the fin'er at the soft*are desi'ners !i"din' on"ine

*a""ets and say 9come on '!ys *e can do etter than this or 9come on

'!ys and 'ir"s *e can do etter than this. /f yo! have 7 itcoin in yo!r

*a""et there is no reason *hy if yo! tried to *ithdra* a"" of it the soft*are

can+t say 9*e"" yo! -!st tried to *ithdra* more than > itcoin. 1e+re 'oin'

to either de"ay it for ? ho!rs or yo!+re 'oin' to have to set!p t*o$factor

a!thentication and 'o thro!'h additiona" verification and y the *ay *e

-!st sent an emai" notification that says 9This is yo!r =hai" Mary= emai" a"" of

yo!r money is ao!t to e *ithdra*n. 2o! have ? ho!rs to stop it if it *asn+t

yo! yo!+"" than, !s "ater. 2o! ,no* *e can do etter 3@ desi'n *itho!t

chan'in' the core protoco" *itho!t messin' the reversii"ity of transactions.1e can protect !sers a'ainst their o*n mista,es. / thin, this is an area that is

ripe for innovation and a "ot of the on"ine *a""ets co!"d do a m!ch etter -o

ens!rin' that peop"e don+t p!t themse"ves in that sit!ation in the first p"ace

and 'ive them an opport!nity eca!se !ite honest"y /+d 'o to an on"ine

*a""et that had the ? ho!r de"ay 9hai" Mary emai" if yo! tried to *ithdra*

everythin' *itho!t t*o$factor.


3/28

%M

2eah it seems "i,e ri'ht no* there+s not m!ch diversity in terms of the

services that *e *a""ets offer. / thin, yo!+re ri'ht ao!t that Andreas there

is a "ot of opport!nity for innovation there. A"so yo! ro!'ht !p a rea""y

'reat point ao!t "amin' the victim. / mean yeah of co!rse this poor '!ynoody *e don+t *ant to see anyody 'et their itcoin sto"en !t he *asn+t

as,in' for it eca!se he didn+t have the proper safety preca!tions on his

*a""et ri'ht; There is sti"" a thief invo"ved someody sti"" sto"e his itcoin so

*hy not "ame that person or "ame the peop"e *ho are ,ind of the sec!rity

'!ards *hich is those *ho are offerin' the *e *a""et service.

ABL

/ mean !"timate"y that+s the case is that the peop"e *ho are r!nnin' the

service are responsi"e for it !t does that matter in every circ!mstance;This '!y is 8 years o"d it+s not "i,e it+s a corporate entity that can e s!ed.

1hat can e done;

AMA

1e"" in the case of inp!ts.io that "ost a "ot of these Bitcoin nothin' can e

done. /n the case of the !ser *ho "ost money o!t of a *a""et and y the *ay

this *as on one of the *a""et services that / !se that / p!"ic"y endorse and

that /+m very happy *ith they have very e4tensive sec!rity mechanisms and

if yo! !se them and if yo! !se the on"ine *a""et for petty cash and day to day

spendin' as / do then it is a perfect"y sec!re very convenient very nice

service. The !estion is sho!"d *e desi'n the sec!rity for the e4pert !ser or

sho!"d *e desi'n the sec!rity for the everyday !ser; ere+s the pro"em

one of the most insidio!s and misapp"ied s"o'ans in the Bitcoin space is 9e

yo!r o*n an,. That+s a terri"e s"o'an. /t+s a terri"e s"o'an for a n!mer of

reasons. Cirst of a"" the main thin' that an,s do noody *ants to do

any*ay and don+t need to e done. %o / don+t ,no* *hy yo! *o!"d *ant to

f"eece$$

%M

DLa!'hin' 2eah report yo!rse"f to the 'overnment.

AMA

C"eece yo!rse"fF Go s!spicio!s activity reports on yo!rse"f. Cree0e yo!r

money every no* and then. &ive yo!rse"f co"d s*eats *hi"eH


4/28

%M

Gon+t a""o* yo!rse"f to *ear s!n'"asses.

AMA

Gisa""o* payments to certain types of entities that the 'overnment no /

mean...yo! don+t *ant to e that ,ind of an,. At the same time yo! don+t

have the capita" to e the other ,ind of an, the one that does "endin' and

H D"a!'hin'. %o the on"y part of 9e yo!r o*n an, is the sec!rity and

rea""y yo! can+t do that. /t+s a very ad s"o'an rea""y *ish it+d e 9e *itho!t

an,s $ sho!"d e the s"o'an. 1e *ant to 'et a"" seven and a ha"f i""ion of

!s !nan,ed not an,ed the others. That *o!"d e a first. B!t any*ay ac,

to the point there is a "ot more *e can do in terms of sec!rity and a "ot of it

can e simp"e !ser e4perience and !ser interface desi'n. There+s no reason

*hy that person *asn+t receivin' a na''in' emai" every day after they *entover a > itcoin a"ance sayin' 9yo!r set!p is insane"y insec!re to a "eve"

that *i"" e *ritten ao!t in the papers and e in infamy eca!se it+s so

st!pid. /nsta"" t*o$factor a!thentication no* yo!+"" than, !s "ater. / mean

*e can do etter interface desi'n *e can e4pect more of on"ine *a""ets *e

have pro'ramma"e money peop"eF 3se itF

ABL

/t comes ac, to that f!ndamenta" !estion of are on"ine *a""ets safe -!st at

a""; /s there a possii"ity to ma,e a *e *a""et that+s safe; Beca!se there

have een instances of t*o$factor a!thentication / mean Gavid Perry very

ear"y in Let+s Ta", Bitcoin+s career had t*o$factor a!thentication on his

acco!nt on "oc,chain.info and *o!nd !p / thin, he "ost $ / don+t rememer

ho* many !t it *as a s!stantia" amo!nt of money at the time. 1hat+s the

pro"em here;

AMA

The pro"em is t*ofo"d. 6ne is ass!min' that there is s!ch a thin' as safe.

There is no s!ch thin' as safe. Iothin' is >J safe. 2o! can+t ma,e yo!r

money >J safe it is impossi"e. 1hat yo! can do is yo! can ma,e it more

diffic!"t for the attac,er to 'ain money that is not rea""y *orth it eca!se it

costs more to attac, or to minimi0e the impact a reech *i"" have on yo!r

!se so that yo! can consider that an accepta"e ris,. %o are on"ine *a""ets

safe eno!'h for petty cash and dai"y spendin' !se *ith the correct !se of

the sec!rity feat!res; Aso"!te"y. /+ve een !sin' them for a year or more

/+m very happy *ith the services and they can tota""y e made to e sec!re.


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B!t / never ,eep more than 5 itcoin in there maye >. The rest of my

money is offsite off"ine co"d stora'e paper *a""ets and / !se t*o$factor

a!thentication second pass*ord first pass*ord and / ,eep most of the ,eys

off. %o yeah yo! can do it and they can e safe. Io* the ne4t !estion is

ho* do *e ma,e them safer for roader pop!"ation that is acc!stomed to a

reversi"e c!rrency *here an,s can offer reco!rse in the case of theft

eca!se they contro" the f"o*;

%M

2eah / *as ao!t to rin' that point !p ao!t t*o$factor a!thentication and

*e+ve disc!ssed on this sho* efore ho* sometimes it can e ,ind of a pain.

2o! ,no* *hat if yo! "ose yo!r phone *ith yo!r a!thentication acco!nt on it

and s!dden"y yo! can+t access yo!r itcoins eca!se of that; /s it etter to

err on the side of ca!tion and perhaps have some peop"e not ein' a"e to

access their itcoins not eca!se of theft !t eca!se they for'ot one oftheir pass*ords. 6r they "ost their &oo'"e a!thenticator or *hatever. / thin,

that !estion is some*hat !p to the individ!a" !t it is ,ind of hard to ,no*

*hether yo!r more v!"nera"e to theft or yo!+re more v!"nera"e to

for'ettin' yo!r pass*ord and thin's "i,e that.

AMA

1e"" that+s a diffic!"t !estion to ans*er primari"y eca!se *e don+t ,no*

*hat the c!stomer service capai"ities of these on"ine *a""ets are. 6r rather

*hen *e do have need for c!stomer service in 'enera" most of them haveeen fo!nd *antin' and are not a"e to de"iver the ,ind of c!stomer service

that+s re!ired. %o it+s not !ncommon to have a pro"em *ith *ithdra*a" or

a transaction and *ait for


6/28

%o "et+s ta,e this a different *ay for a second. /s there a niche for a *e

*a""et that act!a""y '!arantees yo!r a"ance in the event of *hatever. /

mean it co!"d e a *a""et that provides it as a service or it co!"d e third$

party ins!rance ro,er that essentia""y "oo,s and says 96, *e"" yo!+re on

"oc,chain.info *ith t*o$factor a!thentication so *e+re *i""in' to ta,e the

ris, on yo! here+s the payment and essentia""y '!arantee yo!.

%M

&ood "!c, findin' someone *ho *i"" '!arantee that D"a!'hs.

AMA and ABL

They set standards

ABL

This is ho* ins!rance act!a""y comes into e4istence it+s the settin' of

standards and the enforcement y the peop"e *ho act!a""y have it to ris,.

The ris, 'oes off of the person *ho is !yin' the ins!rance and onto the

ins!rer *ho it then ecomes the f!""$time -o of.

AMA

L"oyds of London is !s!a""y the first for osc!re and stran'e ne* ins!rance

schemes !t very very !ic,"y thereafter there are do0ens of reins!rance

companies that *i"" act as !nder*riters on different types of po"icies. The

!estion is not *hether yo! can 'et s!ch ins!rance !t *hat it *i"" cost and

ho* m!ch doc!mentation yo! need to provide in order to act!a""y 'et it to

*or, and *e have seen this in the information sec!rity space so 'ettin'

ins!rance a'ainst hac,in' and to cover the cost of reech notification and

restoration and restit!tion of !sers. That has e4isted no* for a"most a

decade and it+s ecome a rather sophisticated *e"" defined and easi"y

avai"a"e type of ins!rance po"icy here in the 3.%. %o / don+t thin, it+s

o!t"andish to ass!me that yo! can have essentia""y private depositors

ins!rance that is !nder*ritten y an ins!rance company. / thin, that is

possi"e and / thin, it+s a very interestin' differentiator of prod!ct.

ABL

This is to oth of yo! *o!"d yo! pay for that service; /f it cost .5J or

there *as H *hat+s a nomina" fee for it;

%M


7/28

/ don+t thin, it *o!"d cost .5J of yo!r a"ance ann!a""y or *hatever. / thin,

it *o!"d e a "ot more than that. 1e+re seein' that thefts are act!a""y pretty

common. / mean for me it *o!"d depend on the cost and / *o!"d have to

ans*er it ased on that !t then a'ain ins!rance companies a"so have an

incentive to prevent crime efore it happens and to so"ve crimes after they

happen and a"so to prevent ins!rance fra!d ri'ht; %o they+re 'oin' to e

"oo,in' into this caref!""y and even if not everyody !ys ins!rance

ins!rance companies for Bitcoin *a""ets co!"d potentia""y have a safety$

promotin' or eneficia" effect on the *ho"e comm!nity as a net.

ABL

That+s the sort of thin' that *o!"d act!a""y ma,e it so that / *o!"d !se a *e

*a""et eca!se /+ve !sed *e *a""ets for incredi"y sma"" amo!nts *hen /

had aso"!te"y no other option. B!t other than that / rea""y avoid and yo!

,no* *hen /+m !sin' android *a""ets and thin's "i,e that. Then a'ain that+s-!st ,eep a "itt"e on there !nti" yo! don+t need it anymore and then move it

off !t if / co!"d ,no* that this is not 'oin' to e a pro"em /+m 'oin' to

have then its more convenient !t "ac,in' that / don+t tr!st it.

AMA

1e"" the !rden of an ins!rance scheme "i,e this "i,e depositor ins!rance on

a road *a""et service *o!"d not fa"" on the c!stomers $ it *o!"dn+t. /t *o!"d

fa"" on the provider of that service and they *o!"d pay for it in order to 'et

the differentiator and competitive advanta'e that s!ch a '!arantee *o!"doffer. The thin' is it *o!"dn+t e a matter of 9here+s o!r sec!rity no* te"" !s

ho* m!ch *e need to pay in order to ins!re this. /t *o!"d e more of a ac,

and forth that *o!"d proa"y ta,e months *hich *o!"d invo"ve 9here+s o!r

sec!rity. 1e"" *e can+t ins!re that. 9ere+s *here yo! need to improve and

if yo! pass these and these standardsm and s!mit to these these and

these a!dits then *e can offer yo! a p"an for 94. Essentia""y the companies

*i"" have to !p$sec!re themse"ves to a "eve" that meets the scr!tiny of the

ins!rer efore they+"" iss!e s!ch an ins!rance scheme. /t+s tota""y doa"e and

it *o!"d e a 'ood competitive differentiator and as far as /+m concerned /

don+t thin, the c!stomer sho!"d ever pay for that. That *o!"d the cost of

doin' !siness and a 'reat competitive differentiator.

%M

B!t they may pass that cost on to the cons!mer and say *e"" there+s a fee to

!se o!r *a""et D"a!'hs ri'ht;


8/28

AMA

They may a"tho!'h over time / can+t see that "astin' very "on' eca!se

someone e"se is 'oin' to offer it for free. And ,eep in mind that many of the

same thin's that ins!rance companies *i"" as, for *i"" event!a""y ecome

re'!"ated constraints and re!irements in most co!ntries. / *o!"dn+t es!rprised if yo! start seein' this. The companies that are interested in

re'!"ation *i"" p!rs!e this.

%M

/ -!st $ yeah / *as *onderin' ao!t that efore. 1hy doesn+t somethin' "i,e

this e4ist yet !t perhaps it+s comin'.

AMA

Even if it did e4ist and they+re c!rrent"y in conversation *ith say L"oyds ofLondon it+s a m!"ti$month or perhaps even m!"ti$year process to reach a

"eve" of c"arity. As "on' as L"oyds !nderstands the ris, and p!t it in a rac,et

and say it+s 'oin' to e no "ess ris, than this no more ris, than that then

they can stic, a premi!m on it. Io matter ho* *eird the prod!ct is. /t *i""

ta,e a time for them to ecome or any re$ins!rer to ecome comforta"e

ao!t the ran'e of ris, they+re ta,in' on in Bitcoin and to !nderstand it.

%M

K!st ima'ine the day *hen L"oyds of London is ins!rin' Bitcoin st!ff.D"a!'hin'

AMA

/t *i"" come soon. They have ins!red everythin' that can e ins!red ever in

the history of ins!rance so *hy not Bitcoin;

ABL

6ne of the thin's to ,eep in mind %tephanie is that a year a'o *e *ere in

sin'"e di'its for the prices ri'ht; /t+s "i,e Iovemer no* a year a'o / thin,*e *ere at or 8 or somethin' "i,e that. %o *e+ve come rea""y rea""y

rea""y far and a year a'o it -!st didn+t matter at a"" eca!se the price *as so

sma"" that the amo!nts yo! *ere ta",in' ao!t *eren+t *orth the attention of

anyone. B!t no* a year "ater this is the sort of pricin' that act!a""y ma,es

somethin' "i,e this e4ist. And these are the sorts of events hi'h$profi"e


9/28

events that ma,e somethin' "i,e this come into e4istence eca!se c"ear"y its

needed and s!dden"y the mar,et is there and *i""in' to pay for it.

AMA

E4act"y. K!st as those itcoin are sittin' in yo!r acco!nt the ris, of ho"din'them increases *ith the increase in price. Price is a"most irre"evant in the

"on' term s!rviva" s!ccess and techno"o'y va"!e of Bitcoin eca!se Bitcoin

is so m!ch more to h!manity than simp"y a c!rrency e4chan'e rate. B!t in

the tactica" short term the e4chan'e rate defines o!r p!rchasin' po*er it

defines the ris, "eve" *e+re facin' and a"so the ris, premi!m *e+re *i""in' to

pay to ins!re o!r "osses. %o essentia""y the increase in price created ne*

mar,ets no* as yo! said Adam.

ABL

And it ,eeps doin' it too. / mean that of co!rse is the other thin' *hen

yo! see this every month somethin' different is happenin' and yo! can

trace it ac, and say 96N that+s the spi,e *here that person 'ot in.

AMA

That+s the aspect of Bitcoin that ma,es it "oo, "i,e an /P6. The e4chan'e rate

price increases is creatin' f!nds amon' many of the peop"e invested in

Bitcoin *ho are 'oin' to t!rn aro!nd and reinvest those f!nds in ma,in'

Bitcoin etter. %o *e are "ivin' the /P6 of Bitcoin and *e are ma,in' interna"

'ains in the c!rrency that a""o* peop"e to reinvest.

DM!sica" Transition

ABL

i "istener. ere at Let+s Ta", Bitcoin *e+re !i"din' a '"oa" net*or, of

correspondents a"e to contri!te on$the$'ro!nd perspective *hen crypto$

c!rrency re"ated information comes across their fi"ters. /f yo!+d "i,e to -oin

o!r '"oa" conversation send an emai" *ith yo!r name and 'eo'raphic or

c!"t!ra" niche to app"y at "etsta",itcoin.com. K!st "i,e Bitcoin the on"y

arrier to entry is yo!r time and 'ood *or,. Than,s for "istenin'.

DAdvertisement

%M


10/28

EasyGI% is the %*iss army ,nife for yo!r domain names he"pin' to meet

their c!stomers= individ!a" needs since >8. EasyGI% has een an

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Bitcoin and no* they are pro!d to sponsor this sho*. Go !siness *ith a

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itcoin 'o to itcoin.easydns.com and e s!re to !se disco!nt code LTB.

&eor'e Ettin'er

9The /s"and of %tone Bitcoins y &eor'e Ettin'er. %o yo!+ve decided to te""

someody ao!t Bitcoin. / for one am '"ad to hear it. 2o! have my con'rat!"ations

and respect. E4p"ainin' Bitcoin is a no"e endeavor. 6ther no"e endeavors inc"!de

athin' a "eper man!a""y c"earin' "oc,a'e from a constipated m!"e and app"yin'

for anythin' invo"vin' the *ords 9phase one h!man c"inica" tria"s. My point is

yo!+re doin' somethin' that is hi'h"y necessary and *i"" idea""y ma,e the *or"d a

etter p"ace in the 'rand scheme /n the immediate f!t!re ho*ever yo! *i"" e

misera"e. 2o!+"" e misera"e tired and rea""y *onder ho* anythin' 'ood co!"d

come of this. Bitcoin doesn+t "end itse"f to cas!a" e4p"anation or a convenient

metaphor. /n fact very fe* comparisons even s!it it. /t+s a c!rrency !t it *or,s "i,e

a commodity. /t+s mined at "imited !antities so it+s a"most "i,e 'o"d e4cept it+s

created in an e4act fi4ed rate and *i"" end at an e4act fi4ed point so it+s not "i,e

'o"d. The *or, of minin' doesn+t rea""y accomp"ish anythin' either. Bitcoin is a

train$*rec, of anachronisms to have to d!mp on any !ns!spectin' novice and

horri"e pse!do$*ords "i,e "oc,$chain and hash$cache -!st ma,e it so!nd "i,e more

of a scam. Ta,e a"" this ins!ffera"e -ar'on and add the fact that any 'iven person

yo!+re e4p"ainin' it too has !sed fiat$c!rrency notes their "ife and yo! have a recipe

for H for nothin'. Proa"y nothin'. There the s"i'htest s"iver of possii"ity they+""!nderstand and ta,e interest and a m!ch 'reater "i,e"ihood they+"" ecome

e4asperated and simp"y hate the st!ff o!t of fr!stration and /+m 'ettin' an'ry -!st

thin,in' ao!t it act!a""y. 2o!+re more "i,e"y to create a frothin' madman *ho ca""s

Bitcoin a pyramid scheme sho*in' e!a""y poor !nderstandin' of Bitcoin and of

pyramid schemes than an e4cited ne* adopter. 1hat *e need is a story. A story

*ith a point *ith a messa'e *ith an i""!stration of *hat *e+re tryin' to 'et across.

/n ancient times efore the cent!ries$o"d c!"mination of *ritten h!man "an'!a'e

*as aandoned in favor of "o''in' this *as ,no*n as an a""e'ory. /n my "ast

artic"e / made mention of a story that he"ped fina""y introd!ce me to the *or"d of

Bitcoin. And the more /+ve "earned the more apt the story has ecome. There+s astron' a""e'ory for Bitcoin in a c!rrency that+s a"ready een !sed efore. That

c!rrency is h!ndreds of years o"d and there isn+t anythin' e"se !ite "i,e it.

Doice$over The primordia" Bitcoin

&E


11/28

6ff in the Pacific ocean amon' the #aro"ine /s"ands is a partic!"ar trio of sma""

is"ands ,no*n to'ether as the /s"and of 2ap. /ts native residences formed severa"

comm!nities amon' the is"ands and n!mer in the tho!sands. Crom its discovery y

%pain in the >?th

cent!ry !nti" the t!rn of the th

it *as a "ar'e"y i'nored %panish

property. 6nce the is"and fe"" !nder &erman o*nership in >8 more detai"s of their

pec!"iar c!"t!re *ere fina""y e4posed to the 1estern *or"d. More specifica""y their

pec!"iar economy. 2ap *as "!sh in ve'etation and fair"y s!staina"e !t had no

precio!s meta"s or minera"s to e fo!nd so for f!nction of c!rrency they made

stone coins. The peop"e of 2ap ,een on not ha"f$assin' the *ho"e coin thin'

decided to 'o i'andto 'o home. They sai"ed !p to feet in

diameter *hee"ed them over to rafts and sai"ed them ac, to 2ap. The men *ho

carved the stone ro""ed it into a convenient p"ace even if it too, a do0en e4tra

hands to do so and it *as ready for trade. After they+d mined and moved the coin

its -o!rney rea""y *as done. 1hen the time came for a "ar'e trade somethin' on par

*ith "ivestoc, or a do*ry the coin chan'ed hands. By 9chan'ed hands / mean thet*o invo"ved parties "o!d"y and p!"ic"y dec"ared that this partic!"ar coin here *as

no* property of so and so and proceeded to "eave it ri'ht *here it *as. Ioody

co!"d e arsed to move the "oody thin's. They *ere massive and the comm!nity

*as ti'ht$,nit so *hy other; &enerations passed and the stones never moved.

Ta""ies *ere never mar,ed or recorded on the stones it *asn+t necessary. B!siness

*as cond!cted and anno!nced p!"ic"y and the ri'htf!" o*ner of any 'iven stone

*as common ,no*"ed'e to anyone "ivin' near it. %o these stone coins *eren+t

traditiona" coins. 2o! co!"d not fit them in the poc,ets of anythin' !t the most

c"o*n"y of pants. 2o! co!"dn+t even p!t them in a va!"t for safe ,eepin'. They

simp"y e4isted and the comm!nity ,ept the ,no*"ed'e of *ho o*ned *hich at any

'iven time. Anyone *ho has arrived at "etsta",itcoin.com thro!'h conscio!s effort

and not via any e"aorate cat$on$,eyoard incident sho!"d e a"e to see some of

the para""e"s at *or, here. To those of yo! *ho see it / say 9sh!t !p it 'ets even

etter.

Doice over The stone "oc, chain.

&E

Cor at "east three 'enerations there *as a partic!"ar fami"y in a partic!"ar home

*hose *ea"th *as ,no*n across the is"ands. The fami"y had "on' een o*ners of

*hat mi'ht have een one of the i''est coins in circ!"ation and not one of thosepeop"e on the is"ands had seen it. Those aforementioned 'enerations ear"ier this

enormo!s coin *as carved o!t and "oaded !p for transport y an e4pedition of

incredi"y amitio!s 2ap residents. Their prodi'io!s ha!" s"ipped from import

manifests and into mytho$history *hen a harsh storm attered their rafts -!st a "itt"e

*ays from home shores. The raft carryin' ,in'$coin or coin$,on'; $$ / didn+t rea""y

thin, this one thro!'h sorry $$ *as c!t "oose and their ne*$fo!nd *ea"th


12/28

p"!mmeted to the sea f"oor. Io* in a orin' physica"ity osessed fiat economy this

*o!"d e the tra'ic end of an other*ise !p"iftin' ta"e of heroic and omeric avarice.

The story *o!"d e eme""ished ta", of sirens and *i0ards *o!"d e peppered

thro!'ho!t the narrative and at the end of the day these men *o!"d sti"" e ro,e.

The peop"e of 2ap ho*ever did not see *hat the f!ss *as ao!t. The men of the

e4pedition a"" vo!ched for the proportions of the coin and its 'enera" "ocation.Addin' to this the fact that it *as "ost on"y in the tan'i"e sense and not in a fisca"

one there *as no reason to 'o on !sin' it. After a"" they "ost their mi""ions to a

storm not to the craps ta"e. K!st "i,e 9that coin et*een those t*o trees or 9that

coin ne4t to Kim+s ho!se or 9that coin of Bos= that "oo,s conspic!o!s"y "i,e a

pha""!s !t he 'ets an'ry *hen yo! point it o!t. This coin entered circ!"ation

ased on rep!tation. /t *as 9that coin at the ottom of the ocean and this fami"y

c"!tched it for years efore spendin' it on &od ,no*s *hat. The stone coins a"ready

e4isted in a decentra"i0ed comm!nity enforced "ed'er. By this precedent they no

"on'er needed to even e tacti"e o-ects. %tone coins *ere simp"y a !nit on a stone

coin "oc, chain trac,ed y 'ro!p verified transactions and *ith on"y so many

coins in circ!"ation the comm!nity ,ept fair"y consistent tas on *ho o*ned *hat.

1hether or not 2ap investors "ived in fear of a 5>J attac, is eyond the scope of

this a""e'ory !t the point itse"f sho!"d e a!ndant"y c"ear y no*.

Doice over %o the stone coins are an a""e'ory for Bitcoin;

&E

The point is that the stone coins are an a""e'ory for Bitcoin. / hope / didn+t ma,e that

too s!t"e $ and this interpretation of the stone money of 2ap as an a""e'ory for

Bitcoins see previo!s sentences the story ecome a f!nctiona" teachin' too". The

story of 2ap and its coins is a p"ace to start *hen introd!cin' ne*comers to the"oc,chain and / cannot emphasi0e teachin' the "oc,chain near"y eno!'h. 2o!

don+t teach a person *hat a Bitcoin is m!ch as yo! don+t e4p"ain the te4t!re shape

and f"avor of 2ap+s "imestone coins. 2o! te"" them ho* they+re recorded and ho*

they+re !sed. K!st as each of !s ,eeps a record of the "oc,chain the peop"e of 2ap

had to ,eep a*are of *ho o*ned *hat. 6*nership *as a matter of p!"ic

dec"aration y spreadin' *ord to others it ecame verification. 2o! didn+t o*n

c!rrency !n"ess yo! 'ot the ma-ority of the comm!nity to a'ree yo! did. 2o! did this

y cond!ctin' yo!r !siness transparent"y and anno!ncin' transactions to the

*or"d at "ar'e. A dea" made in secret or made dishonest"y *as impossi"e.

Transparency *as part of their protoco". Bitcoin and stone coin chan'ed handsa"most identica""y. 1hether "imestone or crypto these aren+t the typica" coins one

r!st"es from sofa c!shions or the poc,ets of p"ay'ro!nd e4tortion victims. 1e don+t

"ay eyes on these coins. 1e -!st a"" a'ree on *here they are and *ho they e"on'

to. A"" o!r Bitcoin are on the metaphorica" ocean f"oor safe"y a*ay from pryin' eyes

and stic,y fin'ers and every memer of the comm!nity is sittin' on a hard copy of

the "ed'er. 1e don+t simp"y tr!st ho*ever. 6!r "ed'er is prod!ced !pdated and

thoro!'h"y encrypted y the same soft*are protoco" that made it possi"e. Pryin'


13/28

eyes aren+t "eft tota""y in the dar, either. The same "oc, chain that trac,s the

"ed'er is protected from ein' a"tered !t is visi"e to anyone *ho *ants to see

*hat coins have moved *here. 1hat 2ap enforced y c!"t!re *e enforce y

encryption. 1hat they c!t from stone *e carve from 'raphics cards. /t+s these traits

that made their stones and o!r itcoins commodities instead of reserve notes. Ca"se

va"!e co!"d not simp"y e printed off a press. Bitcoins and stone coins *eren+tempty promises 'enerated on a *him they are the prod!ct of an investment

*hether its time spent sai"in' or time spent minin' a processor. The story of 2ap

the stone coins and the system they !sed is a 'reat teachin' too" certain"y. B!t it+s

not -!st for the o!tsiders. %ee the story of stone money doesn+t simp"y end there.

A"" of !s *ithin the comm!nity can "earn from *hat happened to 2ap+s stone coins

*hen the ta4 man came ca""in'.

Doice over %tone coin 'oes to 1ashin'ton.

&E

After &ermany 'ot over the nove"ty of havin' their o*n tiny pre$ind!stria"

is"and it decided to move in 'et !npac,in'. They mercif!""y *eren+t to

insistent on disp"acin' or otherin' the native c!"t!re too m!ch !t they

*anted room for mi"itary stations aro!nd the is"ands and they *anted the

infrastr!ct!re to connect them. The simp"e 'rave" *a",in' trai"s connectin'

a"" of 2ap+s vi""a'es *ere a*esome for are feet and atcave$si0ed nove"ty

coins !t "ess than idea" for &erman road vehic"es. The &erman 'overnment

sent o!t *ord to a"" the vi""a'e "eaders that *ider modern stone roads

needed to e imp"emented across the is"ands. /t isn+t in do!t *hether or not

the e"ders 'ot the messa'e it -!st seems !n"i,e"y that many of them 'ave a

damn *hat their asentee forei'n over"oads *anted. There *as "itt"e

incentive to appease these stran'ers and months !pon months *ent y

*itho!t any si'n of the tropica" e4press*ay the mi"itary *as "oo,in' for. The

&erman officia"s reco'ni0in' that no pro'ress *as ein' made resorted to

other means in motivatin' the "oca"s. 9The ca""o!s &ermans s"a!'htered the

is"and inhaitants s*ift"y and r!ta""y is *hat yo! e4pected me to say

eca!se yo! sir are a racist and shame on yo!. These *ere t!rn of the

cent!ry !rea!crats not Ia0is first off. %econd socia" disa'reements didn+t

act!a""y esca"ate into 'raphic vio"ence at the rate modern f"ame *ars *o!"dhave yo! e"ieve. The &erman so"!tion *as so simp"e and non$vio"ent it

made &handi "oo, "i,e Manson. A fe* officia"s *ent aro!nd the is"and spray

paintin' si0a"e "ac, @+s on the i''est stone coins they co!"d find. They

then proc"aimed for a"" to hear that these stones *ere confiscated f!nds of

the &erman 'overnment. The peop"e of 2ap had een fined. G!ra"e modern$

si0ed roads appeared in short order. 3pon comp"etion friend"y &erman


14/28

officia"s *ere dispatched once a'ain this time *ith so"vents to c"ean the

mar,s off the stones. Their "evied fines had een ref!nded. The peop"e of 2ap

*ere manip!"ated of co!rse. B!t *as their money manip!"ated or *as their

e"ief; The &ermans never too, a thin' a*ay from the residents of the

is"and they simp"y preyed on their *i""in'ness to p"ay y their r!"es. /n their

'racio!sness to e part of a "ar'er *or"d their E!ropean masters presented

the peop"e of 2ap mista,en"y e"ieved those paint$*ie"din' officia"+s r!"es

he"d rea" po*er over them for'ettin' that they themse"ves the comm!nity

he"d po*er over their o*n money. They "et the i""!sion of a!thority 'ive a fe*

!rea!crats rea" a!thority. There+s an a"to'ether different m!ch "ess f!nny

a""e'ory at *or, there. /n the *or"d of Bitcoin *e+re eset on seemin'"y a""

sides y the specter of 'overnment intervention. 1e have men and *omen

of o!r o*n comm!nity cryin' o!t for reco'nition permission and re'!"ation

from vario!s po"itica" masters $ a"" o!t of fear. Bitcoin isn+t ein' threatened

y the 'overnment !t *e are. Bitcoin is a protoco"O it+s not a p"ace or athin' and to ca"" it internationa" is !nderstatin' its viri"ity. Bitcoin is

apo"itica"O it transcends o!ndaries as if no o!ndaries e4isted. La* can

c"aim ao!t as m!ch -!risdiction over Bitcoin as it can over *ind and rain. /t

simp"y isn+t a"" the v!"nera"e to 'overnance !t *e are and *e+re

pro-ectin' o!r *ea,ness onto Bitcoin y e''in' for po"itica" "e'itimacy and

threatenin' !sinesses and individ!a"s over Bitcoin !rea!crats are a'ain

paintin' mar,s on va"!es they don+t respect. They can harm !s as

individ!a"s it+s tr!e !t *e can+t 'ive them more po*er than they are d!e.

%o "on' as *e 'o ac, and forth et*een crypto c!rrency and fiat c!rrency

*e+re pinned !nder their th!ms. The more *e trade in Bitcoins as a

c!rrency not as a spec!"ative medi!m for do""ar 'ains the more freedom *e

sec!re. B!siness and va"!e are h!man creations not po"itica" entities and y

see,in' their approva" and p"acatin' their *hims *e 'ive them po"itica"

a!thority over !s. /f *e ,eep vo"!nteerin' to p"ay the Bitcoin 'ame y their

r!"es *e may event!a""y start to e"ieve them and then Bitcoin *on+t e

Bitcoin anymore $ it+"" e theirs. Than, yo! for "istenin'. The story of 2ap and

the eponymo!s is"and of stone money *as ori'ina""y to"d in >> y

anthropo"o'ist 1i""iam enry Cerness ///. The s!se!ent >> revisitin' of

the s!-ect y the oover /nstit!tion *as researched and *ritten y Mi"tonCriedman. This interpretation and commentary of their *or,s is entire"y the

prod!ct of this a!thor.

DAdvertisement

/s the itcoin price in a !"e; 6n"y time *i"" te"" !t one thin'+s for s!reO

Bitcoin video passes are on sa"e. Iorma""y 5 for those payin' in 3.%. f!nds


15/28

visit itcoinvideopass.com and spend on"y .> to . itcoin .> itcoin at

the time this *as recorded to access a"" the ta",s and pane"s from the

6ctoer crypto c!rrency conference. %ee ho* easy !yin' *ith Bitcoin can

e and e4perience instant access as soon as yo!+ve paid *itho!t even

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DAdvertisement

i this is Kason Nin' fo!nder at %ean+s 6!tpost and yo! are "istenin' to

Let+s Ta", Bitcoin. %ean+s 6!tpost is a home"ess o!treach in Pensaco"a

C"orida and *e are pro!d"y po*ered y Bitcoin. To date over thirteen

tho!sand mea"s have een fed to the home"ess in o!r area a"" p!rchased

*ith Bitcoin and thro!'h the 'enerosity of the cryptoc!rrency comm!nity.

ead more ao!t !s at seanso!tpost.com. Cood she"ter Bitcoin everyodyO

seanso!tpost.com.

%.M

/ thin, *e have to ta", ao!t the thin' that+s on everyone+s minds and the

e"ephant in the room even tho!'h persona""y / thin, the three of !s don+t

p!t as m!ch *ei'ht on this partic!"ar thin' as maye peop"e in the

mainstream do and of co!rse /+m ta",in' ao!t the e4chan'e rate of

itcoin or the price of itcoin. /t+s !p !ite a it. My itcoin$paranoid app on

my phone has een !00in' nonstop every >5 seconds *ith ne* a""$time

hi'hs. Bitcoin s!rpassed its previo!s a"" time hi'h of ?? $ that+s the Mt&o4

price of co!rse $ on Iovemer 5th

and not on"y did Mt&o4 price *hich is the

hi'hest e4chan'e rate pass the previo!s hi'h !t a"so the other e4chan'es

too are *e"" over ?? c!rrent"y as *e+re recordin' this. / thin, this is

important for at "east a fe* reasons. / mean price at "east has some re"ation

to *ho+s ta,in' an interest in Bitcoin *ho+s ta,in' a position in Bitcoin and

there+s een a "ot of ta", ao!t interest in #hina recent"y. There *as a

#anadian Bitcoin ATM or Bitcoin vendin' machine that came o!t that did

> *orth of transaction in its first co!p"e of days or over >

*orth of transactions in its first co!p"e of days. Peop"e are rea""y startin' to

notice Bitcoin and the tradin' vo"!me is hi'h too yo! ,no* so it doesn+t

appear to e that the price is 'oin' !p !t there+s rea""y not the vo"!me to

s!pport it. /t seems "i,e a "ot of peop"e are tradin' Bitcoin. Another thin' /

for'ot to add too *as *hen Bitcoin 'oes n!ts a"tcoins a"so 'o n!ts and so

a"tcoins are a"so on the move !p*ards as *e are recodin' this sho* ri'ht

no*. Go yo! '!ys thin, this can "ast; /t seems "i,e a fast increase. 2o! thin,


16/28

it+s 'oin' to crash; Go yo! thin, this price is maye iased; Go yo! thin,

it+s inf"ated; / hesitate to even state those terms eca!se as *e+ve said

efore every price is a rea" price. 1hat do yo! thin, ao!t the Bitcoin

e4chan'e rate ri'ht no*;

ABL

2o! ,no* %tephanie / -!st *ant to say that act!a""y / do care ao!t the

price. / didn+t thin, / cared ao!t the price !t no* / do care ao!t the price.

Beca!se as it t!rns o!t since / denominate a "ot of the rates that *e pay

contractors in itcoin it means my prices have 'one do*n. 1e are ,ind of

*atchin' a def"ationary c!rrency in action !t "itera""y this mornin' / had

one of the contractors reach o!t to offer to c!t his price in ha"f eca!se of

the increase in itcoin+s va"!e over time. %o from my perspective its nothin'

!t a *in. 1hether it+s s!staina"e or not yo! ,no* / mean / don+t ,no*.

/+ve ecome of the %einfe"d schoo" of tho!'ht ao!t itcoin price recent"y*hich is that *hatever / thin, ao!t it proa"y / represent the frin'iest of

the frin'e on the e"iever side and /+m a"e to step ac, / "i,e to thin, and

try to ma,e rationa" decisions !t it+s that ma,in' of rationa" decisions that

is the f!ndamenta" pro"em. %o no* /+ve 'one *ith $ *hatever / e"ieve /

-!st ass!me the comp"ete opposite at this point. %o no / thin, this is not

s!staina"e

%M

%o yo! *ant to e"ieve it is s!staina"e !t yo!+re ass!min' the oppositeand ta,in' a s,eptica" position;

ABL

2eah *e can 'o *ith that. ea""y / -!st don+t ,no* *hat to thin, and every

time / try to ma,e any sort of decisions ased on *hat / thin, ased on "i,e

as far as *hat the mar,et is 'oin' to do /+m -!st *ron'. Even *hen /+m

*ron' and / try to co!nter and 'et ahead of that and e "i,e 96N that+s *hat

/ thin, so that+s 'oin' to e *ron' then /+m sti"" *ron'. %o /+ve -!st

comp"ete"y stopped p"ayin'. / -!st do st!ff no*.

AMA

Listen in order to find the definitive ans*er to *hat e4act"y is happenin' a""

*e need to do is !se the ana"ytic too"s *e have for characteri0in' an asset

c"ass that is a cryptoc!rrency a ond a stoc, an /P6 a commodity

operates on a '"oa" net*or, and is traded


17/28

that spans the '"oe. Io* / don+t act!a""y have any ana"ytica" too"s that

spea, to that eca!se *e never seen an asset c"ass "i,e this efore. 1e can+t

say it+s a !"e eca!se !"es have on"y ever app"ied previo!s"y to

stoc,s or commodities. This isn+t a stoc, or a commodity. /t+s a it of oth

and a c!rrency as *e"" so *e don+t ,no* ao!t that. /t ,ind of ehaves "i,e a

ond there mi'ht e a !"e there !t *e don+t ,no* ao!t that either.

%o ana"ytica""y *e don+t have the too"s / thin, *e sho!"d deve"op the too"s

to start ta",in' ao!t the cryptoc!rrency asset c"asses more inte""i'ent"y. To

!nderstand thin's "i,e not -!st e4chan'e "i!idity *hich is the front end the

on$ramp if yo! "i,e into this economy !t the depth of the act!a" economy

oth in terms of !sers in terms of nodes that are minin' as *e"" as the

monetary s!pp"y $ M meas!re M> meas!re and M meas!re no*. ere+s

the thin' $ *e don+t have the too"s to do this ana"ysis !t /+m foc!sin' on a

co!p"e of the !nder"yin' drivers. Cirst of a"" the r!n !p from > to

*as very s"o* y Bitcoin standards and steady. /t *asn+t one of those yo!,no* $ in


18/28

opinion on. %o one thin' $ BT##hina. 6, so #hina is not yo!r avera'e

co!ntry *hen it comes to ho* yo! can !se and ac!ire their c!rrency ri'ht;

The 2!an is very ti'ht"y contro""ed o!tside of main"and #hina and so *hat

BT##hina is doin' act!a""y is "ettin' peop"e !y itcoin *ith 2!an. /n the 3%

*e have the same sort of thin' $ yo! !y itcoin *ith do""ars !t the other

side of it is that the 3% do""ar is an internationa""y traded C6E@ c!rrency

*hereas the #hinese 2!an is not. The #hinese 2!an is very ti'ht"y contro""ed

and if yo! need to !y "i,e if yo! have a !siness and need to !y s!pp"ies

or somethin' "i,e that from another co!ntry then yo! can 'et 3% do""ars

from the 'overnment or from a "icensed e4chan'e !t !"timate"y it+s very

ti'ht"y contro""ed for those reasons. %o BT##hina is essentia""y a""o*in'

peop"e to ta,e 2!an that sho!"d on"y e a"e to e 2!an and t!rn them into

itcoin and once they+re itcoin then they can 'o any*here in the *or"d and

do anythin' they *ant and its comp"ete"y o!tside the #hinese 'overnments

contro" *hich seems to e important to them. %o / mean is thats!staina"e;

AMA

That+s enormo!s"y s!staina"e. The emer'in' midd"e c"ass and the !ran

midd"e c"ass in #hina is oth very "ar'e and e4treme"y deep in f!nds and

they have a savin's rate that e4ceeds 5J so they have a "ot of spare cash

aro!nd and they have c!rrency contro"s that are restrictin' them from !sin'

that cash and they have fear of 'overnment contro". /f yo! add a"" of that

the incentives are there for a very deep very "on' *ave of #hinese adoption.

The on"y !estion is 9can they do it *itho!t the 'overnment crac,in'

do*n; and *e+ve had the ans*er to that. Cor the "ast severa" months there

have een a n!mer of doc!mentaries on #hinese T essentia""y e4p"ainin'

and promotin' Bitcoin. Those doc!mentaries did not 'et on #hinese T y

accident. They did not 'et on #hinese T despite the censors. They 'ot there

*ith endorsement and approva" from the hi'hest "eve" of the #hinese

#omm!nist Party 'overnment.

ABL

%o is this a po,e in the eye then to the 3.%.;

AMA

Aso"!te"yF Aso"!te"y the #hinese 'et this. They !nderstand the asic

e!ation *hich is *e *o!"d rather have a *or"d reserve c!rrency that no


19/28

one contro"s than one that o!r i''est tradin' competitor and enemy

potentia""y contro"s. %o for #hina this is a very very strai'ht for*ard

strate'ic move. The *or"d reserve c!rrency and petro$do""ar is a strate'ic

disadvanta'e for them $ they+d rather have a ne!tra" p"ayer. 1hat they see is

that they sti"" have contro" over their pop!"ation more so than the 3.%. has

contro" over its pop!"ation so they see that any do*nside that Bitcoin mi'ht

create thro!'h "ac, of contro" *i"" e fe"t more in the 3.%. than it is in #hina

at "east that+s their ca"c!"ation. / thin, this *ave is e4treme"y si'nificant

eca!se it is f!""y endorsed y the 'overnment it is promoted y the

'overnment and it has a h!mon'o!s emer'in' midd"e c"ass ehind it. %o if

yo! "oo, at it from that perspective 7 Bitcoin act!a""y has a pretty so"id

ase from the perspective that this is not ca!sed y sentiment $ this is

ca!sed y e4pansion of 5J of the mar,et of Bitcoin into a comp"ete"y ne*

and !ntapped mar,et *hich is #hina. 6f co!rse *e+ve 'ot >8 co!ntries to

fo""o* and the one to *atch ne4t is /ndia or possi"y one of the LatinAmerican co!ntries !t this is the first non$1estern adoption and *hat it+s

done is its shifted the center of 'ravity of the Bitcoin !niverse firm"y into the

midd"e of Asia *hich is *here the center of 'ravity of h!manity is. /f yo!

*ant to see the f!t!re of Bitcoin the f!t!re of Bitcoin is a $year$o"d 8$

year$o"d ma"e an #hinese person -!st "i,e the avera'e h!man face. %o

Bitcoin if firm"y o!t of the hands of the 1estern 'ee,y fad$chasers "i,e !s

and it is no* firm"y in the hands of the emer'in' economies of the other ?.5

i""ion and that+s the est ne*s *e+ve had so far.

ABL

%o !"timate"y do *e / mean *hether or not the price is s!staina"e / don+t

necessari"y ,no* that it matters !t do *e *ant to ma,e end of the year

predictions or anythin' "i,e that at this point -!st for the f!n of it;

%M

6h 'osh predictions. Peop"e are 'oin' to ho"d !s to them. / have a

prediction in the "on' r!n in the ne4t five years Bitcoin are 'oin' to 'o !p.

o* ao!t that; ery va'!e.

AMA

/ have a prediction. .8J of a"" financia" ana"yst predictions e4pressed on

Bitcoin *i"" e *ron' *ithin 7 months and that prediction is rec!rsive.

%M


20/28

That+s *hy yo! 'otta 'o rea""y va'!e "i,e / did Andreas very -!st

Iostradam!s.

AMA

1e"" / did a""o* for percent ri'ht;D"a!'hter

%M

i'ht.

AMA

H to e correct.

%M

%ome *i''"e room in there.

AMA

E4ce""ent -o yeah.

ABL

/ don+t ,no*. / don+t ,no* if / thin, it+s 'oin' to ho"d / rea""y -!st don+t ,no*.

/+m 'oin' to 'o *ith that. My prediction is / sti"" in 7 months *i"" not ,no*

*hat the price is 'oin' to do.

AMA

Listen. / *o!"d not e s!rprised if tomorro* mornin' / *a,e !p and Bitcoin

is at . / *o!"d not e s!rprised in the s"i'htest $ it *o!"d not !pset me /

*o!"d see that as a nat!ra" part of o!r see$sa* oom$!st cyc"e that *e+ve

een 'oin' thro!'h. 1hat / do ,no* is that the ne* consens!s price is m!ch

hi'her and *hat / do ,no* is that peop"e are no* comforta"e *ith three$

di'it price Bitcoin in 3.%. do""ars and that chan'es the 'ame eca!se in a

"o'arithmic c!rrency the ne4t step is < di'its.

%M

/ '!ess ,ind of to rin' this disc!ssion f!"" circ"e *e started o!t y

mentionin' the Bitcoin machine in #anada that did a h!'e vo"!me of sa"es

-!st in the first *ee, that it *as in operation and *e+re ta",in' ao!t Bitcoin

adoption in #hina and a"" aro!nd the rest of the *or"d $ it+s rea""y a 'reat

e4c!se to 'et o!t of this for those of !s *ho are in the 3.%. it+s a 'reat


21/28

e4c!se to 'et o!t of this 3.%.$centric frame of mind and rea"i0e the *or"d

does not revo"ve aro!nd !s. There=s a *ho"e p"anet o!t there there+s i""ion

peop"e and a "ot of them are 'oin' to e findin' o!t ao!t Bitcoin very soon.

AMA

2es. 1e are no* very m!ch and tr!"y a *or"d c!rrency and / thin, that *as

a very important mi"estone. /+m e'innin' to see a"" of the facts on the

'ro!nd s!pportin' the fact that *e are *e"" and tr!"y a *or"d c!rrency.

1e+ve 'ot ne* ATMs in #anada. EhF 1e+ve 'ot ne* !yers in #hina. 1e+ve

'ot conferences a"" aro!nd the *or"d happenin' *ith 'reat interest

especia""y in co!ntries that are c!rrent"y facin' c!rrency crises. 6ver the

ne4t month or so /+m 'oin' to e trave"in' a"most contin!o!s"y

internationa""y. Cirst D/+m 'oin' to Athens &reece in order to spea, at a

conference there on disr!ptive techno"o'ies and economics. As far as / can

te"" it+s 'oin' to e attended y memers of the 'overnment of &reece.Co""o*in' that D/+m in Mi"an *here *e+ve 'ot the hac,athon "a!nch of

Gar,1a""et. After that B!enos Aires and then fina""y Las e'as ac, here in

the 3.%. The internationa" scene is heatin' !p and / very m!ch hope to spend

most of ne4t year *ith my !tt on a p"ane seat f"yin' aro!nd visitin' Bitcoin

comm!nities aro!nd the *or"d eca!se it+s aso"!te"y not ao!t !s it+s

ao!t the other ?.5 i""ion $ inc"!din' o!r ne* friends from #anada.

%M

2es spea,in' of #anada. There is a"so a ne* service "a!nchin' in #anada*here they 'ot a Bitcoin deitQcredit card $ somethin' "i,e that. /t+s some

,ind of card that yo! can "oad itcoin onto and pay for st!ff *hich *o*. The

3.%. is rea""y 'oin' to e "eft ehind especia""y *ith a"" this re'!"atory fervor

sha"" *e say and !ncertainty. / thin, that+s !nfort!nate !t hey *e can

a"*ays move o!r feet. 1e can a"*ays "eave if *e rea""y don+t "i,e it that

m!ch.

AMA

ey *e don+t *ant no stin,in' innovation in this co!ntry. 1e "i,e co""ectin'fees for doin' nothin'F

ABL

2o! ,no* / *as ta",in' *ith someody ao!t deit cards to do Bitcoin

recent"y act!a""y they+re m!ch easier to act!a""y man!fact!re and have

made than / tho!'ht. / anticipate !s seein' a "ot of these over the ne4t


22/28

co!p"e of years eca!se rea""y the arrier to entry is "o* it+s -!st the

re'!"atory H

AMA

K!st the re'!"atory D"a!'hter

%M

The pro"em is a"" in the re'!"atory. / mean peop"e *ere ta",in' / rememer

Bit/nstant *as ta",in' ao!t havin' a Bitcoin deit card years a'o and they

-!st 'ot he"d !p y the re'!"atory st!ff. There *as no pro"em *ith the

techno"o'y.

AMA

Even in the pre$paid mar,et here in the 3.%. the re!irements for doin' N2#(Nno* 2o!r #!stomer) and co""ectin' identification are so onero!s $ and yo!

can see the difference in re'!"ation. %tephanie yo! mentioned that one of

the #anadian ATM has 7 identity feat!res !t of those are t!rned off.

ABL

/ did.

AMA

6N sorry. 1e"" t*o o!t of the three identity mechanisms are t!rned off andthat+s not techno"o'y that+s a"" re'!"ation. %o a"ready *e+re seein' this

competitive arms race p"ayin' o!t not in the techno"o'y fie"d !t in *ho can

stomach the ris, of a ne* c!rrency *itho!t tryin' to re'!"ate it o!t of

e4istence and the ans*er so far seems to me the 3.%. cannot.

ABL

2eah so act!a""y / have a perspective on that eca!se *e+re act!a""y tryin' to

find o!t ho* onero!s it is to act!a""y 'et some of these in. /+d "i,e to p!t

some of the oocoin ATMs into a co!p"e of "ocations in #a"ifornia *here *e

are. This is of co!rse an impossi"e tas, another one /+ve decided to try and

ta,e on for myse"f. B!t /+ve een "oo,in' into these machines and yeah they

have a n!mer of sec!rity feat!res !t the one in #anada eca!se of the

comp"iance sit!ation on"y !ses the pa"m scanner ri'ht; %o it scans the vein

in yo!r pa"m to ma,e s!re that yo!+re the same person and that a'ain is so


23/28

that they don+t have "imits ri'ht eca!se yo!r on"y a""o*ed to se"" a certain

n!mer in a day so they don+t have to H

AMA

They can p!t "imits per person instead of "imits overa"" for p!rchases ri'ht;

ABL

2eah so they can p!t per$person "imits -!st y !sin' the pa"m vein scanner

!t in the 3.%. *hat *e+"" have to do is a"so have a separate 'overnment /G

that+"" e he"d !p to a camera *here the pict!re *i"" e ta,en then yo!r

pict!re as the person *ho is !sin' it *i"" e ta,en and compared to the

pict!re on yo!r /G. %o those are the other steps that they haven+t had to

t!rn on in the #anadian sit!ation. 6ne of the interestin' !estions that /

have is ho* "on' is it 'oin' to ta,e for these machines to pay for

themse"ves; Beca!se as Dfar as ATMs 'o the oocoin ,ios,s are !ite

e4pensive. ATMs ran'e any*here from "i,e 5 to >5 for rea""y

advanced ones and the oocoins are do""ars.

AMA

/f they did > in -!st a fe* days !mm yeah that+s !ite impressive

tho!'h.

%M

#an yo! set yo!r o*n fee on a oocoin;

ABL

2o! can !t they have standards. The standard fees are J for !yin' and

5J for se""in'.

AMA

6N so they+ve a"ready made 5 on >;

ABL

This is / -!st did the math and it "itera""y is a day t!rn$aro!nd ased on

these initia" n!mers *hich / have to ima'ine *i"" 'et more not "ess ri'ht; /

mean if Bitcoin stops ein' pop!"ar they they+"" have yo! ,no* then they+re

tyin' their fate to that. B!t !"timate"y as a ne* thin'H/ '!ess it 'ot media

attention. / don+t ,no* *e+"" -!st have to *ait and see ho* this sha,es o!t


24/28

!t /+m s!per c!rio!s to see ho* "on' it ta,es to pay it ac, eca!se yo!

"itera""y have to have a mi""ion do""ars 'o thro!'h this machine at the defa!"t

prices efore yo!+re seein' any sort of profit.

%M

The hardest thin' *i"" e ,eepin' it stoc,ed and comp"yin' *ith a"" the

re'!"atory st!ff.

ABL

2eah there+s no stoc,in'. / mean these machines a'ain that+s another

interestin' part is they essentia""y connect direct"y in they+re not "i,e the

Lamass!. The Lamass! machines yo! "oad them !p *ith itcoin and then

they can dispense *hatever itcoins they have !t !"timate"y once yo! r!n

o!t of itcoin yo!+ve 'ot to p!t more in. A"tho!'h / '!ess yo! can do that

remote"y. 1ith the oocoin it+s "itera""y ma,in' mar,et transactions on

Bitstamp for yo!.

%M

B!t *hat if Bitstamp 'oes do*n;

ABL

They have a"ternatives. / mean "i,e they have a co!p"e of others that are

avai"a"e that *as the one a'ain it *as shippin' pre$"oaded *ith.

AMA

And so in fact then the re'!"atory c"imate is proa"y the predominate

factor in *hether yo! rea, even *hether yo! 'et a ret!rn on investment on

these devices *hich is *hy s!ch a thin' *i"" e e4treme"y s!ccessf!" in

#anada and *i"" e e4treme"y s!ccessf!" in other co!ntries that are not

ta,in' an approach to Bitcoin that is simi"ar to that they+d ta,e to syphi"is.

1e+re 'oin' to see in emer'in' economies m!ch more s!ccessf!" than in the

3.%. eca!se ri'ht no* -!st the other day the %enate decided to ca"" for

hearin' on Bitcoin to e4amine the ris, that it poses to the economy. They+rea"ready framin' it as a ris, efore they even have the hearin's.

%M

/t+s the on"y part of the economy that+s act!a""y doin' 'ood. D"a!'hs

AMA


25/28

i'ht and it+s the 'reatest invention of the >st

cent!ry in comp!ter

science. Proa"y the most important economic advancement in the "ast 5

years in terms of di'ita" money !t "et+s ta", ao!t it p!re"y in terms of ris,.

That+s so short si'hted it+s "i,e ta",in' ao!t the /nternet in >< and

*orryin' that it+s 'oin' to a""o* peop"e to see $rated movies that aren+t

s!pposed to see $rated movies.

%M

%atoshi Ia,amoto for a Ioe" pri0e in economics.

AMA

B!t / *o!"d say first the MacArth!r &eni!s a*ard for Mathematics

#omp!ter %cience.

%M

2es.

AMA

2o! ,no* eca!se in terms of #omp!ter %cience distri!ted time$stamped

consens!s thro!'h proof of *or, is the invention of the >st

cent!ry *itho!t

a do!t.

%M

And *e a"" ,no* that the Peace Pri0e doesn+t mean anythin' anymore

any*ay.

ABL

This reaction from the %enate act!a""y "oo,s a *ho"e "ot "i,e the reaction from

PayPa" to me. They+re interested in it they need to chec, it o!t and maye

they+"" have a positive thin' to say ao!t it !t / thin, that if *e "oo, at their

motivations ehind it and *hat they stand to "ose chances are pretty 'ood

*e+re not.

AMA

They+re -!st 'oin' to faff ao!t and ma,e !p some more reasons to protect

the an,s from any types of innovation. / have very "itt"e hope or faith that


26/28

this *i"" prod!ce anythin' meanin'f!" other than more ,nee$-er, re'!"ation.

R!ite honest"y it+s entire"y irre"evant. /t+s entire"y irre"evant eca!se this is

not ao!t payment net*or,s and this is not ao!t movin' c!rrency aro!nd.

This is ao!t re$inventin' money and so far they are not seein' that.

ABL

2o! ,no* the other thin' they are not seein'; They+re not seein' that they+re

provin' the point for *hy %atoshi "eft and *hy %atoshi is someone that can

never come ac, and someone *ho can never ma,e his identity ,no*n

*hatsoever eca!se it+s -!st invitin' this.

AMA

/t+s invitin' ad$homonym ri'ht a*ay yes aso"!te"y. /f yo! can+t attac, the

idea yo! attac, the person *ho created the idea and ri'ht no* they+re

havin' tro!"e attac,in' either. %o yeah %atoshi disappearin' *as proa"y

the est thin' that ever happens to Bitcoin. There *as another very

interestin' para""e" *hich *as a presentation from 1estern 3nion *here

they said that Bitcoin is not ready for mainstream and / thin, that *as a very

ast!te and correct ana"ysis eca!se *hen Bitcoin is ready for mainstream it

*i"" e very ovio!s eca!se then the !estion *i"" e 1estern$*ho; 1estern

3nion is 'oin' to e the B"oc,!ster of this 'eneration of disr!ption. They

*i"" e disr!pted o!t of !siness simp"y eca!se !n"ess they co$opt and !se

Bitcoin their very reason of e4istence $ *hich is the transfer of s!ms of

money internationa""y $ is comp"ete"y so"ved y an a"'orithm. They+ve eenrep"aced y a script and that script costs a "ot "ess to operate than 1estern

3nion.

ABL

%o / mean -!st "i,e B"oc,!ster yo! ,no* / *ent somep"ace recent"y and /

act!a""y sa* a B"oc,!ster eca!se they so"d off a"" the stores at a fraction of

the asset va"!e and in some niches act!a""y they have s!rvived. %o it may

e that+s the f!t!re for 1estern 3nion and these other types of money

transfer thin's is -!st areas *here for *hatever reasons Bitcoin simp"ycannot reach. / mean maye 1estern 3nion "itera""y 'oes ac, to horses and

p"aces *here there simp"y are no roads and are no phone "ines.

AMA

R!ite honest"y /+d "i,e to see 1estern 3nion as the p"ace *here yo! find the

oocoin ATMs.


27/28

DM!sic

ABL

Than,s for "istenin' to episode 58 of Let+s Ta", Bitcoin. The se'ments T*o$

factor %ec!rity and Bitcoin Price *ere prod!ced y Adam B. Levine edited yMatthe* Sip,in and feat!red Andreas M. Antonopo!"os %tephanie M!rphy

and Adam B. Levine. The /s"and of %tone Money *as prod!ced and edited y

Adam B. Levine *ritten and read y &eor'e Ettin'er *ith additiona" voice

*or, y #rysta" Levine. M!sic *as provided y Kared !ens. R!estions or

comments; Emai" adam"etsta",itcoin.com. ave a 'ood oneF
mailto:[email protected]:[email protected]


28/28

Documents

Let's Talk Bitcoin, episode 58, "The Price of Money"