LET’S TALK BITCOINEpisode 91 – CoinLocks, Comics and Merchant Banking

Participants:

Adam B. Levine (ABL) – HostAndreas M. Antonopoulos (AA) – Co-hostStephanie Murphy (SM) – Co-hostJonathan Mohan (JM) – LTB Correspondent Ray Duran (RD) – LTB CorrespondentMatt Branton (MB) – Founder of CoinLockFrancisco Dominguez (FD) – General Manager of Meltdown ComicsJeremy Kandah (JK) – Founder of AppCasherDanny Wettreich (DW) – Chairman & CEO of GreenBankJustus Ranvier (JR) – Organizer of Texas Bitcoin conference

Today is March 11th 2014 and this is Episode 91.

This episode is intended for informational and educational purposes only. Cryptocurrency is a new field of study. Consult your local futurist, lawyer, broker, therapist, investment advisor and private corporate banker before making any investment decisions for yourself.

ABL: Welcome to Let’s Talk Bitcoin, a twice weekly show about the ideas, people and projects building the digital economy and the future of money. Thanks to everybody getting involved over at LTBcoin.com. If you’d like to learn more about LTBcoin, the upcoming crypto-token that will power the LTB Let’s Talk Bitcoin network, there’s a video Q&A open to everyone on Saturday 15th March 2014 at 9.00am Pacific Time. To RSVP, visit LTBcoin.com. [0:50]

My name is Adam B. Levine and today, we’re hopping.

Ray Duran is a new LTB correspondent based out of Los Angeles. He caught up with the folks at SoCal nerd Mecca, Meltdown Comics for a chat about Bitcoin’s past and future

Then, Jonathan Mohan sat down with Jeremy Kandah from AppCasher, an app putting Bitcoin earning potential in the hands of normal people, who don’t want to drop dollars on Bitcoin but have some time available for spending

Later, my interview with Danny Wettreich, a long time investor, founder and CEO of GreenBank who aims to be the first publicly traded company investing in Bitcoin. We talk merchant banking and the attributes of better money.

Finally, Stephanie Murphy and Andreas Antonopoulos are joined by Justus Ranvier for a Texas Bitcoin conference wrap up.

First, Bitcoin and content – I’m definitely not the only one with that bug in his ear. Jon Mohan and Matt Branton talk CoinLock.com, basically, a vending machine for your content where you upload the file, set the price in your address and ... I should just let them explain.

Enjoy the show! [1:52]

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Jonathan Mohan interview with Matt Branton

JM: I’m here at the Miami Bitcoin conference with Matt of CoinLock. Matt, what do you guys do? [2:01]

MB: We let anyone sell anything, any digital content with Bitcoin, as fast as possible. It’s a very fast, content selling platform that lets anyone sell anything, put a link in their blog or wherever and sell without any infrastructure, without any overhead, without any programming, without really anything at all. [2:21]

JM: I remember reading... there’s an IBM article, written in the 90s talking about how micro-transactions will reinvent currency and how digital content, for micro-transaction, would be the savior. It wasn’t until Bitcoin that anything like that was possible because of legacy banking getting in the way. [2:38]

MB: Yeah, absolutely. I mean, it’s amazing... I think the types of applications we’re going to see, around micro-transactions and around instant payment with Bitcoin, are going to be very interesting. I’ve tried to think of CoinLock, at its very base, as something that’s kind of like micro-transactions for files, where it’s like what’s the base unit of digital data that we pass around all the time? It’s the file. We just are producing all this content all the time and how do we monetize individual pieces of content? How do we share it and monetize it and just create that type of pipeline in the system? That’s kind of what I set out to do when I built CoinLock. [3:16]

JM: Take me through how CoinLock works. Essentially, you’re monetizing online content through a paywall, right? [3:22]

MB: That’s exactly right. [3:23]

JM: How does that work? I have my QT wallet, I have Bitcoin - what do I do? [3:28]

MB: What do you do to sell stuff? [3:30]

JM: What do I do to buy stuff? [3:32]

MB: What do you do to buy stuff? Let’s say you go to someone’s blog and they have their music blog and they’re trying to sell you their hot new single and they say – Hey, click this link and buy my song. You click the link, it takes you to CoinLock and you can instantly buy it. It basically pops up a QR code, an address and a price. If you pay to that address that price, it unlocks the content and delivers it right to the browser. [3:56]

JM: It sends you back to the website? [3:59]

MB: It doesn’t. It’s a delivery mechanism. [4:01]

JM: It’s a delivery mechanism. OK. [4:03]

MB: It basically will do the delivery, let’s you download and save the content and that’s it. It’s like a one-time transaction. [4:10]

JM: That’s awesome! If I were a merchant, what would that look like? [4:12]

MB: If you were a merchant and you wanted to sell something, all you have to do is, basically, specify what content you want to sell, the music file in that case, put a price and you can peg it to USD or some other currency, you put your receiving address. You can use one address for all your payments or if you wanted to do more fancy accounting, maybe an address per thing that you’re selling and you publish it. When you publish it, you get a link back and that link represents both the file and the payment mechanism. You put it right in your blog or wherever and that’s it. [4:44]

JM: I have a friend who’s in a band and he kept saying, a year and a half ago, how in the hell do I sell my music for Bitcoin? We were like – Oh, you get a BitPay account. He was like – Yeah, but how does that distribute the digital content? [4:57]

MB: It doesn’t, that’s right. [4:59]

JM: We were like – You need to buy a... this... that... He got so overwhelmed. [5:01]

MB: The point is that right now the eco-system and ecommerce, in general, is all about the shopping cart experience and about third party integrations with shopping carts. I think that the entire shopping cart concept is very much a remnant of this whole credit card thing. They needed a mechanism to integrate traditional payments. [5:21]

JM: Credit cards were so bad... [5:23]

MB: Yes, exactly, you needed... [5:25]

JM: ...that in order to deal with how horrible it was, you needed to do it all at once because if you had to do it every single time you bought something, it was such a disgusting experience.

MB: Right. It makes it... the experience is bad and also there are a lot of reasons around it, right? [5:35]

JM: With Bitcoin it’s so easy... [5:36]

MB: It’s so fast that it’s just... [5:37]

JM: ...that you might as well just do it every time you want to buy something and not worry about it. [5:39]

MB: Right. If you think of it that way, I’ve tried to think of CoinLock as being something where it’s almost ubiquitous where if you want to sell something and get paid in Bitcoin, and you don’t want to broker that transaction yourself, which is pretty labor intensive if you’re sitting there and taking Bitcoin and sending people files all day long, you don’t want to do that, so CoinLock does it for you. That’s pretty much it. It’s a very quick way of selling whatever you want. [6:03]

JM: How long have you guys been around? [6:05]

MB: The current platform has been around six months – it launched six months ago and I built it, probably, nine months ago. It’s been chugging along doing its thing. There are certain aspects to it that we haven’t really touched on with respect to anonymity and encryption and things like this because it’s a zero trust, or close to zero trust system, in the sense that the content that I receive is encrypted by the user in the browser and decrypted by the user in the browser. I’m just like an intermediary for content. [6:35]

JM: You’re kind of like MegaUpload. [6:37]

MB: Yeah, absolutely. In many traditional ecommerce systems, you’re kind of concerned with what if someone takes your content. What if this guy, this guy running this service, just runs away with whatever it is that you’re trying to sell? [6:49]

JM: Right. [6:49]

MB: In CoinLock’s structure, I can’t do that. It’s structurally not possible because of the way that it’s been built. [6:56]

JM: What’s been the reception thus far? [6:58]

MB: It’s been pretty good. It’s interesting because it’s kind of divided into two camps. There are people who immediately get it. They look at it and they say – Oh, I can’t believe you built this, this is awesome. [7:08]

JM: Yeah, we call them content creators. [7:09]

MB: Right. (Laughter) They get it right away. They’re like – Oh, this is awesome. Now I can finally make money in Bitcoin. I don’t have to do anything and this is great. There are other people who are... they fall into the – Hey, well this is cool but I need a marketplace. I need to drive traffic to my site and marketplaces help do that and you don’t provide that service. You really just provide this platform for selling without having all the other trappings of ecommerce that we... [7:35]

JM: It’s a commercial sale solution. [7:36]

MB: (right!) ...come to expect. My new site, the CoinLock 2.0 really addresses that, where it’s really about the merger of being able to instantly sell content and also being able to instantly create feeds, stores around that content so that you can syndicate it and you can manage it in a central place. [7:56]

JM: If I’m a content creator and I want to paywall my stuff and make some money off of it, sell it for Bitcoin, pretty much the easiest way to do it right now is CoinLock. I haven’t heard of another way that was... [8:07]

MB: This is hyperbole but I think it’s the easiest way that’s ever been invented to sell content. [8:13]

JM: You know what? I’ll go one further – will ever be invented. There will never be a superior... CoinLock 2.0 won’t even be better than CoinLock 1.0. (Laughter) [8:21]

MB: Nothing in the world will ever be better. I’m sure no one smarter than me will come up with anything better. [8:26]

JM: Come on. You have to upsell it some more. [8:27]

MB: It is really fast. I mean it’s really remarkably fast. If you want to sell something... I don’t know... I’ve done a lot of ecommerce and I can’t think of a faster way to do it than this. You have to understand how Bitcoin works – you have to have an address. [8:38]

JM: Right. I think that’s within the reach of most people. [8:41]

MB: I think so too. I think it’s getting easier and easier and easier. [8:44]

JM: That’s what we need. [8:45]

MB: Absolutely. We need simple services that people can use and understand and they realize, functionally, how they work and what they’re trying to accomplish. [8:53]

JM: If I’m a merchant and I want to learn more, how would I get in touch with you? [8:57]

MB: CoinLock.com is the main site. You can go there and actually immediately sell whatever. I’ve tried to preserve the anonymity around it. I don’t make people sign up for accounts, I don’t make people enter information about themselves or what they’re doing. It’s a very free forms way of selling and dealing with content. You can always reach me; if you want to talk with anyone at CoinLock, there’s support at CoinLock.com. Send me an email; I’m very responsive to issues and questions and definitely just want more people to try it out and give me feedback. [9:31]

JM: That’s what we need is content and sell it for Bitcoin. That’s where it all begins. [9:35]

MB: I think so. I think that we need the eco-system to expand and anything that helps do that, any type of service or system on top of the existing economy that lets people do these things is a big deal. It helps the entire eco-system grow when these types of tools are built. [9:52]

JM: Thanks Matt. [9:53]

MB: Thank you. [9:54]

(Song in background: ‘Use Bitcoin whenever you pay, use Bitcoin whenever you pay, use Bitcoin whenever you pay’.

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Ray Duran interview with Mr Francisco Dominguez

RD: Hello everybody. This is Ray Duran corresponding for Let’s Talk Bitcoin. I’m sitting here with Mr Francisco Dominguez. [10:15]

FD: How are you doing? [10:16]

RD: Yes. Hello. We are here at Meltdown Comics in beautiful Los Angeles - head of Nerdist Industries, the core of the nerd movement in Los Angeles. Francisco, we’re excited to hear about what you’re doing as far as Bitcoin goes. Can you explain what the operation here at Meltdown is? [10:32]

FD: We started researching Bitcoin a couple of years ago and I kept my eye on it and trying to see where it was going, where the market was heading with it and if it was a valuable thing that I should be accepting. First of all, knowing that the processing fees are a lot less than a credit card machine is because with a credit card machine, I’m paying 3. something % for the processing and with Bitcoin I’m paying less than 1%, which for me, it helps because brick-and-mortar shops are really not making it in this business any more. Digital media is coming in and paper media is really going out. We stock a lot of paper and a lot of books, comic books – we deal with all those things and we’ve been seeing the hit. Anywhere we can save some money, which Bitcoin allowed us to do, by the processing (even though I’m not taking that many right now), eventually hopefully it will catch on where I can either phase out of taking credit cards or maybe the credit card companies will see that with Bitcoin, a lot of merchants are moving on to that because of the lower fees. Maybe they’ll start lowering their fees and help us all around because it’s a hard business right now. My strategy here is accepting Bitcoin and teaching people how to use Bitcoin. Hopefully, they’ll go out and start asking other merchants to start accepting Bitcoin so there’s a buzz that will go around and people will grasp onto it and other businesses will accept it like we are. I was scared for about a year. I had to do my research and I talked to Pinguino, who taught the class today. She kind of helped me along a lot of the way. She held my hand and taught me this about BitPay, about Coinbase, where to check how Bitcoin is doing, where it’s at in the market, when to sell, when not to sell, when to hold on and just to watch the whole thing. To me, that’s exciting. I’ve always liked technology and this is something new. For us, technology is a fun thing to do. [12:22]

RD: Yeah, she was great. Just so everyone knows, we just attended a class where she gave a Bitcoin one-on-one thing. Is this the first class that she did today? [12:32]

FD: This is the first class. This is actually our first week taking Bitcoin. [12:35]

RD: OK. [12:36]

FD: We saw a few clientele come in and other people were asking – How do you use Bitcoin and what’s this deal with Bitcoin? How does that work? Me and Pinguino, we got together and said – Hey, maybe we should teach people how to use it and how the process works and start getting them comfortable with it. That’s where this class came about. [12:51]

RD: One of the biggest things that is very exciting about Bitcoin is the fact that it stands to, from a political standpoint, be a way to break free of other monetary systems that have other issues, be they political issues, be they what have you. I know that you run a really awesome comic store and that’s all really what you’re concerned about. As a merchant, here in Los Angeles, what else have been any concerns of yours in moving to this currency? Are there any things that you’re worried about? [13:18]

FD: At this moment, no. I’m really not worried. I see bigger companies starting to accept Bitcoin, like the Kings up in Sacramento was kind of a push for me to like – OK, I’ve got to start moving ahead with this. As soon as Overstock started accepting it, I was all in. There is really no going back – there are some banks started accepting it. Now there is word around that the government is going to start accepting Bitcoin. With all that buzz, it was kind of a no brainer for me to jump in. To me, it wasn’t risky waters any more. [13:49]

RD: OK, OK. [13:50]

FD: There is still some sort of a risk because it keeps going up and down lately. A couple of nights ago, it dropped to $600 and right now, it’s starting to climb up again but there are those risks. There’s a risk with everything. I think I’m willing to take it with Bitcoin and see where it goes because it’s new, it’s new. We’re pioneers. [14:10]

RD: The class that went on today was, basically, talking about... we went over blockchain, we went over Coinbase, some of the more common Bitcoin systems out there. Do you think that, as a merchant, you would be interested in hosting more classes that expand upon that, as far as teaching people what Bitcoin is and what it can do? [14:30]

FD: Oh yeah. I would definitely love to do more classes and just bring more people in. There was a great turnout today. I’m sure now word will get around. You will go out, this will get out in the air, people will start noticing that Meltdown is doing some classes; they will teach you about Bitcoin. Hopefully, that gets to take it away but my plan is to have more classes, to have more Bitcoin events, to embrace the Bitcoin audience. The audience is out there, you’ve just got to cater to them and let them know that we’re here. We’re here for you guys. [14:58]

RD: In the Los Angeles area, there are several up and coming Bitcoin events; some things on meetup.com. Do you find yourself needing to reach out to some of those things as well to kind of get more of an audience? I know you mentioned you had a few people that were getting excited about it here, where do you see, as far as how you feel within your power, to expand word about this? [15:19]

FD: Doing the events is one way of me doing it and getting the word out. These meet up events are all local in LA. I will go there myself, I will talk to people, I will talk to other merchants as well and just let them know the process is kind of scary but once you dive in, it’s a fun thing to handle and to do. Also, you know, the benefits... the benefits of where you’re cutting your fat and trimming the fat is taxes that you’re paying and all the overheads that you have and if there is a way to cut it, small business owners want to know those things because they want to stay open. [15:50]

RD: Do you find that because of the clientele... I mean, this is a comic book shop... at the heart of the clientele... [15:56]

FD: I think the clientele... yeah, yeah, yeah. We were talking downstairs – the scifi, the comic book clientele, all of those people are deep into computers. Everybody’s got a computer, everybody’s got a laptop, everybody knows a hacker, everybody’s deep into that world more so than the general audience out there, especially in our realm. I think for them to accept Bitcoin and as a currency, they’re more open arms about it than it is your grandmother that lives down the street and that’s never had internet. [16:21]

RD: That’s cool, that’s cool. Do you see, as far as what Meltdown is going to be doing... I mean, the potential to reach as many people as possible, you’re obviously starting to build it in a comic book store so for you, do you have any concerns about any limitations for advertising for it? [16:38]

FD: As the ball keeps rolling and the snowball keeps getting bigger and hopefully, as the snowball gets bigger, those are just dollar amounts. When that dollar amount comes in, then yeah, of course, I’ll do more advertising with Bitcoin and see if it even needs it. We’ve run our business for many years... 20 years now. Our policy has always been no advertising. We’ve never really reached out to papers and put out ads. It’s always been a word of mouth, we’ve always tried to give people that experience at Meltdown that they take away and talk to people about it. That’s where we get most of our clientele. [17:11]

RD: Awesome! Awesome! [17:13]

FD: Yeah. Definitely, if it’s something that I need to advertise and it’s something that I need to move out and for people to know, it’s a step that I will take. I’ve got my sandwich board sign out with a B on it. [17:23]

RD: (Laughter) That was cool. That was cool. [17:24]

FD: That announces and lets people know that are walking up and down the street that don’t normally come into the store and which most of my Bitcoin users have not been to Meltdown before. [17:33]

RD: Really? [17:34]

FD: They just heard that we were accepting Bitcoin and they needed somewhere to spend it. They were looking for comics, they were looking for toys, they were looking for everything that I stock and they couldn’t find anywhere else to spend it so they came here and they were... transactions are sweet, they’re clean, they’re easy, they’re fast and yeah, the audience is there, you just got to let them know that we’re here. [17:51]

RD: Awesome! Awesome! Thank you. It’s good to know as well; it’s also very, very good to... [17:56]

FD: Thank you. Thank you very much. [17:57]

RD: Thank you and this has been Ray Duran for Let’s Talk Bitcoin. Thank you very much. [18:01]

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Jonathan Mohan interviews Jeremy Kandah

JM: I’m here at the Miami conference with Jeremy Kandah and he is the founder of AppCasher. What is it? [19:41]

JK: AppCasher.com is a mobile rewards platform that people get rewarded for discovering content on their mobile device. Go to AppCasher.com and you get to discover free apps and other content like videos and surveys and you get rewarded for doing so. Once you earn the reward points in the app, you can cash out for bitcoins, or gift cards, or other rewards. [20:03]

JM: Everyone keeps complaining how the heck do I get some bitcoins? How do I do this? Pretty much anyone with a phone could just get on this and start making them millibitcoins? [20:11]

JK: Yeah. I had a guy I met in Austin. He started on the platform, after I talked about it at a meet-up there, and he made $65 in a week. He bought a domain on GoDaddy and I think he made $20 doing that and he cashed out. I really want, one day, for him to make $1000 when the bitcoins appreciate and make $1000 for somebody. That’s really cool to empower people in that capacity. [20:37]

JM: On the Android phone, I install this kind of like a Glu game where you do the apps and the games and you do other stuff, except in this case, instead of just game tokens, you’re actually giving us cold, hard Bitcoin. [20:47]

JK: Exactly. [20:48]

JM: You were actually telling me that there was an interesting percentage of your company that started shifting into Bitcoin when you made the announcement. What was it before, in terms of distribution and what was it after? [20:57]

JK: Sure. It’s been live for 45 days now. Day number 1, I didn’t announce it or anything – 15% of my business was given out in bitcoins. It’s just been slowly climbing over time and now it’s 50%. We’re giving over $1000 in bitcoins a day to people. [21:11]

JM: You’re giving, pretty much, 1.2 bitcoin, as of this recording, per day out as rewards? [21:16]

JK: Yeah. [21:16]

JM: That’s across how many users? [21:18]

JK: That’s thousands of users. [21:20]

JM: OK. Pretty cool. Is this a good way for teenagers, who have mobile phones, to get in on getting some bitcoins? When I was a teenager, I really wanted to send some money to Stefan Molyneux, he’s like a podcaster, and I really wanted to send him $5 but I couldn’t get a bank account because I was 17 and it was just totally impossible. I was like – How the heck do I send him money so I actually started doing online surveys because they send it to a PayPal account and I was able to PayPal the money. He sent me an email and he was like – Hey, thanks for the donation but why $3.47, I just don’t understand where you came to that. I’m like – Hey, I’m not allowed to be in the banking sector and this is the only way I could send you funds. Is this kind of a cool way for kids to get their hands on Bitcoin? [22:05]

JK: Yeah, it’s more powerful than that. We’re pretty global. We’re big in Vietnam, for some reason and there are people all over the world that get small amounts of Bitcoin and get into it. We see the name Bitcoin and they get to learn how to use it and you empower some people that like mobile applications and like playing games and they get to earn a couple of milliBits around the world. [22:26]

JM: I think that’s fascinating. You’re saying that people in Vietnam are making a good deal of money off of this because $1 in New York isn’t what it is $1 in Vietnam. [22:33]

JK: Right. [22:33]

JM: Is it the same amount of money or is it the rewards are different proportionate to what nation you’re in? [22:38]

JK: We make money in US$ so we do everything related to US$. [22:42]

JM: What I meant was is a user in Vietnam paid the same amount, in terms of reward, as a user in America? [22:49]

JK: A lot of that is supply based so when the app developers decide to go distribute their app, they probably will spend more money in the US and so it’s easier to earn more money in the US. [23:00]

JM: Right. [23:01]

JK: It doesn’t mean they’re not interested in other places. [23:03]

JM: This isn’t a cure all but it is a way to get money into countries to which there isn’t really a Bitcoin exchange out there. [23:11]

JK: This isn’t going to be the next thing that drives Bitcoin home and spreads the wealth around the world but it’s just an interesting way to something you’re probably already doing, playing games on your phone. Now you can make a small amount of money doing it and so it’s fun for a lot of people. [23:25]

JM: Everything is better when you make Bitcoin doing it, right? [23:28]

JK: Exactly. [23:29]

JM: Cool man. What’s the name of the app again? [23:31]

JK: It’s AppCasher.com. [23:34]

JM: If we can, let’s make 99% of that business in Bitcoin. [23:38]

JK: I’d love to do that. The other rewards I give out are PayPal and Amazon and PayPal takes 2.5% and so I’m happy to not give that money to PayPal. [23:48]

JM: I think we’re all happy with not giving money to PayPal. (Laughter) Talking to you Peter Thiel. One of the problems with these sorts of models is the fear that by the time you reach the minimum payout amount that it’s not going to be there. What struck me about your model was that you’re actually paying people out. You’re not really fly by night, you’re part of the BitAngels network and you’re not going anywhere. You’re really a believer in this economy and you actually hit the milestone of $2m. What was that? Over the course of like... [24:17]

JK: Yeah, it was a year and a half. We’ve been slowly, steadily giving out money and people have been sticking around and really like the service and the product. We’ve tried to be a great customer service industry and help anybody out if you have any questions. We’re completely transparent and will respond to every email that we get sent. [24:31]

JM: Thanks. [24:32]

JK: Yeah, thanks. [24:33]

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Adam B. Levine interview with Danny Wettreich

ABL: Danny Wettreich is a venture capitalist, chairman and CEO with GreenBank and has over 30 years of experience in merchant banking and capital markets. Danny, thanks for joining us today on Let’s Talk Bitcoin. [24:58]

DW: My pleasure. [24:59]

ABL: In December of 2013, one of your projects, GreenBank as we mentioned, spun off a pair of investment vehicles specifically targeting Bitcoin. What were you trying to achieve with these and do you feel like you’ve accomplished it or do you feel like you’re going to accomplish it? [25:12]

DW: We do believe we’re going to accomplish it. We have yet to do is yet to spin it off. It’s an objective of ours. What we’ve done with GreenBank, which is an investment company, publicly listed on the CoC with a symbol GBC, we’ve announced two subsidiaries – one called Bitcoin Canada and one called Bitcoin Angel Capital and they will be investing in the Bitcoin space. We are the first public company in the world that’s investing in Bitcoin. Bitcoin Canada will be investing purely in Bitcoin as a long term investment play. Bitcoin Angel Capital will be investing in small Bitcoin start-ups. There is a lot of money going into the Bitcoin space at the end of last year from the Silicon Valley venture capital guys but we feel that a better way to do it is to incubate these small companies and help them go to another level. I don’t think they need $25m if they’re a couple of kids with an idea. What they need is some guidance and some incremental capital to feed their business plan. That’s the kind of approach we’re taking. [26:15]

ABL: Many of the people that I speak to in cryptocurrency start with a problem and then it gets solved by cryptocurrency and so they build something around cryptocurrency. What you have is, you’ve got a structure GreenBank that was already in place before you were interested in cryptocurrency. It seems to me that many legacy players, many existing companies view Bitcoin as a risk and yet, your company is in here. You have a merchant bank model. Can you explain to our listeners how a merchant bank works? [26:43]

DW: Merchant banking is investment banking with a twist. Basically, what we do is we take equity positions in our clients and help them grow to the next level of size and that sometimes requires capital, that sometimes requires management expertise, often it requires both.

Merchant banking is a focus on that. Investment bankers, basically, raise money for public companies. We take a long term equity position in our clients and help them to go to another level and we feel that the Bitcoin space is particularly appropriate for that. There are a lot of small, young companies getting into the Bitcoin space, largely run by tech savvy youngsters who don’t have a lot of experience in running a business and we feel that we can help on that side and we can help them raise capital to get to another level. [27:36]

ABL: Is there any reason surrounding Bitcoin or cryptocurrency that has GreenBank formed out of Canada, as opposed to the US because I know you’re a US citizen and yet this is a Canadian institution, right? [27:48]

DW: That’s correct. I am a US citizen but I’m now a resident of Canada for the last three years. I live in Toronto and I moved to Toronto because I wanted to get into the natural resource space initially and the reason I wanted to do that was because I wanted to get away from fiat currency. The US dollar has declined 95% in my lifetime. That’s not a very good track record and I feel that the right thing to do is to make investments in hard assets – gold, silver and now Bitcoin. I think Bitcoin is digital gold and it has the same attributes as gold, in terms of finite amount of the asset and being totally unaffected by fiat money printing by the central banks and the major countries who have a tendency to print money to resolve their debt problems. They don’t solve their debt problems by reducing their debt, they solve their debt problems by printing paper currencies and clearly, since the world is stuck with a system whereby paper currencies are the medium of exchange worldwide, if there is a possibility of a new currency that doesn’t have the same attributes as fiat currencies that is independent, that has relatively small cost in transactional terms that can cross international boundaries that by passes the banking system, and that’s clearly for me, Bitcoin, then I don’t see how we can not get in that space. I believe Bitcoin is a revolution in the financial payment system. I think it will transform the financial system over the next decade. I think it’s a major threat to the banking system because over $7 trillion worth of fiat currencies goes through the banking system, simply being moved from one location to another location and the banking system charges huge fees for the luxury of moving that money around. I can do the same transactions using Bitcoin and the costs are infinitesimally small and the speed is incredibly faster. [29:59]

ABL: Basically, you’ve just identified Bitcoin as something that is a more efficient way of doing it and therefore it makes sense to get involved before everybody else realizes that too. [30:07]

DW: That’s correct. As I said, it’s digital gold, in my judgement. It has the same attributes plus a great deal more. The main thing is it’s not affected by money printing and inflationary trends. The whole world is printing money like crazy. It’s a race to the bottom, in my judgement. It cannot continue in a positive way and I think if there’s an alternative, and Bitcoin is that alternative, then I don’t see how we can not get in that space. I think it’s a very dramatic space. I think it will increase significantly over the next few years and we want to be in it. [30:37]

ABL: Have you made any cryptocurrency investments besides Bitcoin or is it purely Bitcoin for you? [30:42]

DW: For the moment, it’s Bitcoin. We’re not turning away the possibility of investing in other coins like Litecoin and others. As you know, there are lots of currencies out there,

cryptocurrencies. I don’t believe that most of them will survive. I think you’ll have two or three survivors. The main thing about a currency is it needs to be widely adopted. I don’t see how you can adopt dozens of different currencies on a worldwide basis. I think you’ll end up with two or three currencies that will be the winners, whether you like it or not, Bitcoin is definitely one of them. It’s like the early days of Windows. You may have critique about what Windows does and the latest versions of Windows have generated lots of criticism but the fact of the matter is, most of the world is on that operating system. When you have widespread adoption like that, it’s basically a fait accompli. I think the same applies with Bitcoin; it is, and will continue to be in my judgement, the number one cryptocurrency which is not to say that others won’t also have a part to play. [31:41]

ABL: Let me push back on you a little bit with this. I agree with you about the momentum thing where once people get used to using something, then they’re more likely to keep using that unless there’s a really good reason to change but, at the same time, something like Windows for example... my mother recently switched from Mac to Windows and was not happy with the transition. This was switching to Windows 8 too which is supposed to be very, very new user friendly. The only element that I think is missing from your analysis is the lock-in factor. I don’t see a tremendous amount of lock-in when it comes to Bitcoin relative to other cryptocurrencies, whereas the barrier from switching from Windows (if that’s all you’ve been using) to anything else (and what few options you have available) is quite substantial. [32:21]

DW: I agree with that switching analysis but I do think that widespread usage is the key to any currency and I think Bitcoin is way ahead of the game in terms of widespread usage which is still not to say that it’s not early days. It clearly is early days for Bitcoin as it is for cryptocurrencies. Bitcoin is, by far and away, the most widely utilized cryptocurrency and the fact that it’s getting mainstream acceptance like, for example Overstock.com recently started accepting Bitcoin – they took $130,000 on that first day in the States. When you get that kind of widespread usage, it’s very hard to turn the clock back and say – Well, wait a minute, I have a cryptocurrency too and it’s got a better attribute. [33:04]

ABL: Let’s take a step back from Bitcoin and cryptocurrency for a second and talk about investing in spaces like this because you said that the other area that you invest in is in gold and silver – hard assets. What’s different about looking at a gold or silver company, or any sort of thing that you would want to invest in on that side of it, relative to looking at some type of investment on the Bitcoin side of the companies? What are the differences in how you assess those things? [33:30]

DW: Gold and currency have their part to play and, basically, they’ve been around for centuries and what they represent is a medium of exchange that holds its value and that has a finite amount in existence. It’s hard to mine gold and silver, it’s expensive to mine gold and silver, therefore the process of taking it out of the ground has established in itself a value of some description. Ultimately, the value is a function of usage and why people take it on is because they see it as a way of retaining value at a time when paper currencies continue to depreciate and a 95% reduction in the purchasing power of the dollar is a perfect example. The additional attributes of Bitcoin are that it has the same qualities of gold and silver, in terms of retaining its purchasing power irrespective of how much money printing is going on in fiat currency terms but it’s also a methodology of transferring wealth from one location to another. It’s hard to take a gold bar and take it across international borders and give it to somebody as a medium of payment. It’s not impossible but hard. Bitcoin takes minutes to do

the same transaction, across international borders, costs very little, by passes all currency controls and, in addition, is anonymous and comparatively easy to utilize. You don’t need to be part of the banking system. There are hundreds of millions of people worldwide that are not part of the banking system but do have a mobile phone so all they need is a Bitcoin wallet, which you can obtain online relatively easily, you need to be able to buy some Bitcoin, obviously but you can also receive Bitcoin from someone else. Either in buying or receiving Bitcoin with a mobile phone and by pass the banking system, they can either send or receive value relatively quickly and very inexpensively. That’s a huge attribute which gold and silver do not have. Clearly, there are other attributes to Bitcoin that gold and silver don’t have, which is not to detract from gold and silver – they have a part to play too. [35:35]

ABL: Bitcoin 2.0 has become something of a buzzword lately. As we talked about earlier, this doesn’t suggest that Bitcoin is going to be overtaken by something like Litecoin, which is superficially different but basically identical once you look under the hood. What do you think about the money plus cryptocurrencies, like the Mastercoin protocol, BitShares, Ethereum, Nxt, eMunie, Counterparty and it seems like there are more every day. Do you have any thoughts about any of these or the metacoin movement in general? [36:03]

DW: I think they’re fascinating. I think they represent the next generation of how the Bitcoin network will be utilized and I think that’s another reason why Bitcoin will continue to be the market leader in the cryptocurrency space. Basically, you do have in existence a worldwide network which not only can be utilized for money transmission by way of Bitcoin but can also be clearly utilized for other things and that’s happening as we speak. There will be other methodologies of attaching things like contracts and verification of deals and all sorts of possibilities to the Bitcoin network. I think that will happen and I think it’s like the early days of the internet, whereby before HTML, people were scratching their head to figure out how we can use this new medium and when HTML came along, all of a sudden, it’s become the norm and people don’t think twice about it anymore. [36:58]

ABL: One of the new technologies that’s coming in these cryptocurrency 2.0 implementations is the ability to create custom cryptocurrencies that don’t necessarily have to try and do everything that Bitcoin does. Bitcoin represents a very broad market. You can think of it as representing the global market for cryptocurrencies almost because it’s the primary highway into and out of them but there is this idea that you can issue company specific cryptocurrency that, basically, acts as an equity token through which you can do all of the things that you can do in a conventional stock market but that doesn’t have the barrier to entry. This is probably illegal, of course, but in much the same way that Bitcoin is probably ‘illegal’ just because it doesn’t fit within the current paradigm. You have a lot of experience in things like reverse mergers and have been in this space for quite a while, I’m wondering do you think that this is going to be an important innovation to the world or is this just local to Bitcoin? [37:54]

DW: I think it’s important innovation. I’m not sure I agree with you about the illegality aspect of it. It’s just that most governmental regulations just don’t know how to deal with Bitcoin. It doesn’t fit under any parameter that they’re used to seeing. The US, particularly, is struggling with money transmission rules. There are 48 states that require licences for money transmission, as well as a federal requirement, just to get the ability technically to be legal takes an awful long time and an awful lot of money. Technically speaking, a lot of the transactions that would be occurring today in the States are ‘illegal’ because they don’t have the money transmission licence. Even when you make application, even if one makes an

application through the system, the regulators themselves don’t quite know how to deal with the application because they have no experience on Bitcoin. It’s a learning curve for everybody concerned. I think regulation will come and I think it’s to be welcomed and not to be concerned about. I think taxation will come and I think that’s fine too. There is no reason transactions can’t be taxed but the bottom line is Bitcoin is here to stay. In terms of your other question about other cryptocurrencies having very specific usages from a corporate perspective, that may or may not take hold. I’m not certain about it. You certainly can’t behave like a stock market without being regulated like a stock market so those hurdles have to be crossed so these are good innovative ideas but it’s too early to make a judgement I think. [39:25]

ABL: The last question is about regulation. You said that it’s a good thing and I think that I agree with you on that. Any sort of certainty, whether rules are good or bad, it’s probably better than no rules at all. Can you paint a picture for us? Where do you think we’re going to find ourselves, just in terms of the eco-system and how regulation plays into that, in a year or five years, whichever one you’d like to pick? [39:47]

DW: I think it’s a disadvantage to the Bitcoin space to have all this constant stream of bad news with bad players being either arrested because they’re dealing with drugs through Bitcoin or their online exchanges are crumbling for one reason or another or Bitcoin wallets get hacked into and the bitcoin is stolen. All these things are negative vibes for Bitcoin and we need to get over that early stage scenario and we will. The systems will improve, the security will improve and I think what will also improve is the regulatory framework within which Bitcoin can operate. I’m not one of those who profess to say – No rules are good rules. I think, on the contrary, I think we need to be working in a regulated environment. I don’t think we need to be in opposition to government. I think we need to be working with government and I think that will happen. It’s inevitable and I think it should be welcomed. What’s the timescale? I would guess within the next two years. Most central banking systems and most governmental authorities will get their head around the Bitcoin space and introduce legislation, one way or another, to control it. I think as long as Bitcoin is accepted for what it is, a cryptocurrency, in opposition to or in competitive terms with fiat currencies, the fact that it has to be regulated, I don’t think is a threat, I think it should be welcomed. Once that certainty framework is in existence, I think the widespread adoption worldwide will accelerate dramatically and with widespread adoption, you will get price increases for Bitcoin because the more it’s utilized, as it’s a finite quality, the more the price will go up which is I think why the price of Bitcoin in 2013 went up so dramatically from the teens to over $1000 (although clearly it’s had a pullback since then) but I think that long term price increase will continue because you do have a finite asset and as it’s more and more widely utilized, naturally speaking, the price will tend to go up. [41:55]

ABL: Danny, it’s been really great having you on. I appreciate you sharing your perspective with us. Let’s get back to GreenBank for just a second. I know that you’ve got a project that you’re working on. Can you share that with us? [42:04]

DW: We’re in the process of raising $5m in a secured convertible debenture for our two Bitcoin companies. The monies will be utilized equally between investing in Bitcoin and investing in Bitcoin start-ups and our intention is, at an appropriate time, to convert that debenture into common stock [allowed?] to subsidiaries and then spin those out as stand alone public companies on the CoC. It’s a very unique way of getting into the Bitcoin space and we believe for accredited investors, which is what we’re focused on, this will be a really

good way to get into our diversified Bitcoin portfolio without ultimate liquidity being available because it will have free trading public stock, when and if we spin it off. Our objective is to spin those companies off on or before December 2015 and time will tell as to when exactly we will do that. We think once we raise the money, we’ll invest it relatively quickly and once we invest it, we feel that we’re going to be moving forward to a public listing scenario. [43:07]

ABL: Now, to be clear, I am not an accredited investor so I can’t do this but for someone who is and would like to see a prospectus, is there a site to go to? [43:14]

DW: Yes, you can go to our website GreenBankINC.com and the documentation is on there and you can download it and look at it. Also, if you’re not an accredited investor and you want to have a little piece of us, you know, we are a public company – you can buy our stock, the symbol is GBC and it’s a way of indirectly participating in our Bitcoin investments. [43:35]

ABL: Danny Wettreich, thank you very much. [43:39]

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ADVERT:

This is Chris Joseph bringing you news on Nxt, the first true second generation cryptocurrency for March 11th, 2014. Elections were held this past week to select community members for three committees. One dedicated to Nxt infrastructure, one for Nxt technical development and one dedicated to Nxt marketing. Elected members for these committees are now getting set up to help manage project and bounty funds for Nxt projects. Anyone with a project proposal can apply to these committees for funding. The committees will assess the submitted proposal and vote to award funds for projects. In other news, testing on the Nxt decentralized asset exchange is continuing. As confidence in the exchange grows, a release date within the next month or so is becoming very likely. For more general information on Nxt, head to NxtCrypto.org or MyNxt.org and stay tuned for more news on Nxt in the next Let’s Talk Bitcoin broadcast. [44:54]

__________________________________________

Stephanie Murphy and Andreas Antonopoulos interview with Justus Ranvier

SM: We’re actually after the Texas Bitcoin conference and this is Let’s Talk Bitcoin with me, Stephanie. [45:05]

AA: Hi, this is Andreas Antonopoulos. [45:07]

SM: We’ve got Justus Ranvier with us. Hi Justus. [45:10]

JR: Hello. [45:10]

SM: Thanks for being our guest host. Andreas has to go to the airport soon but we really wanted to make sure that we did a conference wrap up, as we always do when we go to conferences. We got here to the hotel. The hotel is not where the conference is. It’s true what they say about Texas – everything is bigger so we had to drive from the airport to the hotel, then from the hotel to the Circuit of the Americas where the conference was held. Everything was kind of spread out; there was a lot of different rooms where the speakers were speaking. [45:39]

AA: I like the fact that the other thing that was bigger was the speed limit and nice straight roads and when you’re driving to a race track, you take certain liberties. I don’t know, I was in the mood from the moment I left the hotel. (Laughter) Plus, they rented me a Mustang at Enterprise so that was a lot of fun. [45:54]

SM: Oh my. Well, you got a good deal there. During some of the talks, I was hearing cars doing (SM makes revving noises) (laughter). [46:01]

AA: There were a couple of Ferraris and a Lamborghini doing laps behind us and unfortunately, they wouldn’t let me get on there with a Mustang, otherwise rental car – who gives a s**t! (Laughter) [46:10]

JR: I’m pretty sure that Lamborghini was the first Lamborghini ever purchased with Bitcoin. [46:14]

AA: Oh really? [46:16]

JR: The yellow Lamborghini that was at the show. [46:18]

SM: I heard it was purchased with Bitcoin but the person wanted to be anonymous or something. [46:23]

AA: So he brought a Lamborghini to a Bitcoin conference and drove it around the track to be anonymous? [46:27]

SM: Mhmm. [46:27]

JR: I don’t believe he’s anonymous according to his forum profile. On the Bitcoin Talk Forums, he’s... I guess I would call him, formerly known as Goat because he’s changed his username but... [46:39]

SM: That’s Mr Goat to you. [46:40]

JR: Yeah. Very few people know his real name. I don’t know his real name. I didn’t even get a chance to meet him. Some of our other organizers did but that was his yellow Lamborghini that was out on the site. [46:49]

AA: That was a lot of fun. [46:51]

SM: What were your overall impressions of the conference? I guess we should say Justus was helping to organize the conference? [46:59]

JR: The conference was originally a meet-up plus. I’m a member of the Austin meet-up group and we have weekly meetings and last summer,... [47:08]

SM: Very active. There are a lot of people that come, right? [47:10]

JR: Yeah. 40-60 people every week. Last summer, we were doing a thing where once a month, we would have a slightly more formal meet-up, a little bit better than our weekly ones. We were on hiatus for the winter holiday. We were thinking in October – maybe in the spring, we should do something a little bit bigger than normal. Maybe a few hundred people and once the ball got rolling, it turned into the size of the conference that we’ve had now. [47:38]

AA: That’s a theme for Bitcoin - once the ball got rolling... (Laughter) [47:43]

JR: Yes. We were not really prepared for this scale of conference. We knew that we were about... we should have started planning six months before we did and even then, we got off to a slow start but even with all the problems that we had, I think it turned out very well. Our professional organizers, that we hired to help, did an excellent job. [48:02]

SM: They really did. I mean, everything was taken care of. I felt very welcomed and... [48:07]

AA: Yeah, no it was a great conference. I really enjoyed it. I mean, you guys set the tone. Community organized, community sponsored and you picked the right set of speakers. It was about the community, from the community... [48:20]

SM: That was the best part about it, I think, was just there was a theme of – these are people who really care about Bitcoin and are invested in it and these are not people who have found out about Bitcoin two months ago and want to make some money off of it. These are people who are true... they truly care. [48:35]

AA: Charity was a very big part of the theme of the conference. There were a lot of panels on charity. There were a lot of charitable organizations that were present. The Charity Luncheon. [48:46]

SM: We had a Charity Luncheon. A lot of the attendees went to the Charity Luncheon and there was performance there and put on really well by Sean’s Outpost, organized by Michele Seven who was working with them. [48:54]

AA: Sean’s Outpost, Fr33Aid [48:57]

SM: Bitcoin100 [48:58]

AA: Bitcoin100 and... [48:59]

SM: Bitcoin Not Bombs [49:00]

AA: Bitcoin Not Bombs [49:01]

SM: Antiwar.com [49:02]

AA: Oh and Antiwar, yes of course. It was a great line up of charitable organizations. [49:06]

JR: I would say that the one thing... my biggest takeaway of where we were weakest is we didn’t really take care of our exhibitors as well as we thought. We didn’t drive enough foot traffic through there because everybody was at the speakers. We had the two level setup where the exhibitors were downstairs and the speaking was upstairs. [49:27]

SM: They were kind of in the basement and... (laughter) [49:29]

AA: From a market perspective, that might suck a tiny bit but, at the same time, a conference that focuses on content, that focuses on having great speakers, focuses on community and then kind of forgets the exhibitors on the sidelines is maybe a bit better than the other way around, which is what I’ve seen in a lot of the commercial conferences, right? [49:48]

SM: Some of the exhibitors were like more community organizations. [49:52]

AA: I went through the Expo Hall and I saw both of the rooms, visited all of the booths. [49:58]

JR: There were three rooms. [49:59]

AA: There were three rooms. (Laughter) I visited both the rooms in a two of three pattern (Laughter) and missed one of them. [50:08]

SM: It was a multi-sig transaction. [50:10]

AA: Yeah, whoops! [50:11]

SM: m-of-n rooms. [50:13]

JR: That’s kind of exactly... the weather contributed to it because the exhibitors were in the bays where the actual race cars go to... [50:20]

AA: The pit stops. [50:21]

JR: The pit stops. [50:22]

AA: They were at the pit stop bays, the garages. [50:24]

JR: Because of the weather turned cold over the weekend, we couldn’t leave the doors open so a lot of the exhibitors they couldn’t see in. Our plan was that the doors would be open and it was going to be a nice, March spring day and so that would have driven more foot traffic. In the end, a lot of people just didn’t know they were down there because we had to bring in space heaters and shut the doors to keep the exhibitors warm. [50:45]

AA: Yeah. The space was a bit difficult to get to and a bit difficult to work in but the energy of the community was so awesome and the concert, at the end, was really great too. [50:57]

SM: One thing I thought was really cool that was different from a lot of other conferences that I’ve been to, most conferences they usually have a main speaker and that’s the only person who’s speaking at that time, or maybe one, maybe two tracks but this had five tracks and they were sometimes five speakers on at the same time, or panels, or whatever that you could choose from. There was a strict time limit on the speakers’ talks to 20 minutes, with 20 minutes for questions and then another 20 minutes to get to the next room. I thought that format worked really well, especially with the venue and it was cool because, being a speaker, sometimes I feel like – Oh god, I have an hour and what am I going to say in an hour and how am I going to fit that in and do questions? Having it limited to 20 minutes, really took the pressure off and it became a little bit more of an informal thing where people could really ask a lot of questions if they wanted to and get to know the speaker. [51:49]

AA: It was managed very well. It was very strictly managed... [51:53]

SM: Moderated, yeah. [51:54]

AA: ...in terms of managing the time. I feel like if you have something you can say in an hour, you can say it in 20 minutes. [51:59]

SM: Sure. [52:00]

AA: You could probably say it better and more focused if you do it in 20 minutes, so the rest is extraneous. It gave us more time for doing questions which was a 50/50 split which was much better. [52:09]

JR: I’m glad you two liked that. That came out of our very first planning session, when we were sitting at the Central Market where we had our weekly meet-ups. A lot of us had been to Bitcoin conferences before and we were trying to think of what are the things that we could improve on and we all knew there was never enough time for audience questions because at Bitcoin conferences, the audience always wants to participate. We said at our first meeting – Let’s do equal time for audience questions just to make it more participatory. [52:36]

AA: It was great; it was a lot of fun. I think a lot of the audience really got a lot of value out of this. [52:41]

SM: Yeah, absolutely. I think they felt like it was focused on... it’s for them. Another thing that you did that went along with that theme was sort of the general admission track, the free admission track where anybody could go to certain talks, like for instance I gave a talk, the very first slot of the conference called ‘Intro to Bitcoin for Newbies’ in 20 minutes. People could come to that that were just Bit curious and they did. [53:07]

AA: Oh without even paying a fee for the conference – that’s brilliant. [53:11]

JR: Well, it wasn’t quite like that. We started out planning just three tracks and there was one ticket price. As the scope of the conference expanded, we added... one of our sponsors Mastercoin wanted the Hackathon and they gave us some extra sponsorship to extend to two

days, then we had more content to fill. We had lots of speakers pouring in and we had more rooms so we said – These other two tracks that have just shown up, we’ll let the people who pay for the Hackathon also go to those. The highest ticket price included the three main tracks, which were going to be the only tracks. The extra tracks turned into be full tracks in their own right and we had a general admission price that would get you those but not the first three because we didn’t want to upset the people who paid full price, initially, when we first announced the conference but we also wanted a lower priced option for people who wanted to come but couldn’t maybe afford the $300 for the full access. [54:14]

AA: That’s nice. You didn’t do the usual Bitcoin thing which is take payments in Bitcoin, then delay delivery for nine months and then give free funds in dollars. (Laughter) That’s a good thing. Let me ask you something else. How many people do you think came to the conference? Do you have any numbers at this point? [54:29]

JR: I didn’t check the numbers. Not as many as what had space to accommodate. [54:34]

AA: OK, but more than you expected for a meet-up plus for sure. [54:37]

JR: We didn’t get as many people as we hoped. A rough, back of the envelope guess... I would say we got about half of the people we were hoping to see. Our hopes were formed when the Bitcoin price was over $1000 and that was bringing a lot of excitement in. Now that there has been a bit of a slump, we didn’t get as much buzz as we thought we would. There were enough people there to make it a successful event. [55:04]

AA: Yeah, I think it was great. Can you say if you’re going to break even on this? [55:09]

JR: Well, personally, I was not involved in any of the financial aspects but as far as I can tell, everything is taken care of. [55:17]

AA: Great. [55:18]

SM: Excellent. [55:19]

AA: That’s good news. [55:19]

SM: Yeah, that’s good to know and do you think there is going to be another one next year? [55:23]

JR: Yeah, the Texas Bitcoin Association was formed to do more of these events and they’re definitely planning more - maybe one a year, maybe more than one a year. [55:34]

AA: I have one request next time for... if the speaking calls are not called ‘paddocks’, I would feel more comfortable. [55:42]

JR: Alright. [55:43]

SM: Not so much like a horse. (Laughter) [55:45]

AA: Yes, I felt that name complies with the Austin, Texas theme of cowboys. [55:54]

SM: You didn’t know that extra 20 minutes was for giving horsey rides around the room. (Laughter) [55:57]

AA: No, well I was expecting my breakfast to be in a trough and I wasn’t into that. [56:02]

JR: That’s the Circuit of the Americas term for those rooms and we just kind of kept with it. [56:07]

SM: Let’s talk about the themes in the conference and what some of the talks were. I was really pleased to see that there were talks about Bitcoin privacy and anonymity; there were talks about Bitcoin as an experiment in anarchism; there were talks about liberty and freedom explicitly, that’s what I spoke about in my second talk; there were panels about... you were both on a panel about what happened with MtGox. [56:32]

AA: Two panels – one where we talked about what happened and the environment within which it happened and then another panel where we talked about the next steps. How we can look forward and improve things, as an industry, so these things don’t happen again. We talked about cryptographic proofs and open transactions and things like that; better ways of doing this. [56:51]

SM: Yeah, we had a focus on solutions for using Bitcoin, basically, as a tool for freedom and bringing us forward into the future of Bitcoin. I think that was a tag line of the conference, right? Racing into the future. There was, I think, a real focus on where Bitcoin is going and some of the things that were highlighted, I was really pleased to see the history of Bitcoin, the roots of Bitcoin and where it’s going in the future. [57:16]

AA: I would say this is probably the most libertarian-heavy Bitcoin conference I’ve been to. I think partly because it was in Texas, partly because of some of the speakers who were invited and that was kind of fun. It was a different environment. It was a slightly different feel to it than some of the other conferences which were more commercial. I’m not saying that all should be libertarian but that way, you get a bit of variety into the various conferences that bring different points of view. [57:44]

SM: It’s not an accident that you came here, Andreas because you said you were going to boycott North American conferences if they had that special corporate feel to them, right? [57:53]

AA: As I said to Justus, the reason I came to this and I’m going to be doing a couple more North American conferences is because it’s organized by the community; it’s a grass roots event. It’s not organized as a corporate theme to accommodate the sponsors; it’s organized by the community to accommodate the community and their views. I got a feel for this; it had a very specific point of view. I’m also going to Toronto to do that conference with Bitcoin Decentral up there and that’s going to have a very different feel. I don’t think it’s going to be as much about libertarian ideals as this one was but we’re probably going to talk more about Ethereum and we’re going to talk about a few other things like that. You really get to get the different point of view from the different communities. [58:38]

JR: I would say there was definitely some tension in choosing who we were going to invite as speakers. There are the kind of speakers that the sponsors might want to hear and there are the kind of speakers that will engage the community and get them excited, especially if we

want them excited to ever come back to Austin. It just so happens that the libertarian leaning speakers are, let’s say, just better at engaging an audience. People will say – Oh, I had so much fun listening to Jeffrey Tucker and Andreas and Stefan Molyneux. Those are the speakers that really get the audience excited for having come to the conference. [59:17]

AA: I had one of my most memorable moments was watching Stefan Molyneux and cracking up laughing when he was discussing how the libertarian movement had been trying to fight the state for a very long time and then suddenly Bitcoin is this technology that comes out of leftfield and offers just a straight forward solution to bypass the state. He does this little comedy skit where he says – It’s like trying to fight Mohammed Ali and you step into the ring with a blow dart and just go pffffft! (laughter) and drop him. He’s like – He spent all this time training and there’s no way you can compete and you just pull out the blow dart and that happens to be Bitcoin. I love little things like that. It was a very nicely done speech. [59:59]

JR: Stefan Molyneux is someone you bring to a conference if you want the audience to have fun. [1:00:03]

AA: Yeah, exactly. It was a lot of fun. [1:00:05]

AA: We might have had an easier time attracting sponsors had we had a lot of regulators and lawyers on the panels but nobody goes to a Bitcoin conference and said – Wow! I had so... [1:00:16]

SM: I want to see that regulator. (Laughter) [1:00:17]

JR: I learned about the definitions of money service businesses and I had an awesome time and I definitely want to come back to Austin for that. That doesn’t happen. [1:00:25]

AA: Actually, you had one regulatory panel. I did go in to watch that. I lasted about 45 seconds before narcolepsy took over (laughter) and I ran out but, here’s the thing, there were four other tracks happening at the same time and that was one of the few panels that bored me... actually, the only panel that bored me throughout the entire conference which was the exact opposite of some of the other experiences I’ve had where there was only one or two exciting sessions. Here, it was all exciting sessions. You can’t make them all perfect. Some of them are going to be boring to some people. For me, that one was one of them. I had so many choices and really enjoyed it. [1:01:02]

JR: I’m glad you two liked it. I heard a lot of people enjoying themselves at the conference and that’s really what it was about. [1:01:09]

SM: Often, when you go to a conference, it’s about the people that are there too, not just the speakers but just the attendees and it was a great group of attendees. Everyone was friendly. I had zero bad experiences. Everyone was just super nice - kudos on that for attracting a good group of people. Andreas, do you have to get going? [1:01:29]

AA: Not yet. [1:01:30]

SM: OK. [1:01:30]

AA: I’ve got five more minutes. [1:01:31]

SM: What would you like to add in the last couple of minutes that we have about your experiences at the conference or anything else you want to add too, Justus. [1:01:39]

AA: I think one of the things we saw at this conference, which was really nice, was a focus on the future and looking at a lot of the new technologies that can allow us to turn programmable money into a safer experience than fiat, whereas right now, we are having some security issues. We’re having security issues that are kind of obvious like putting your trust in organizations and giving them the contents of your keys which can only end badly. There are other problems in the industry with phishing and compromised machines and users who are really... it takes a lot of experience and expertise to properly secure your Bitcoin, paper wallets, offline storage – all of this stuff is way too complicated. We saw a conference where a lot of people, a lot of companies, a lot of coders were talking about solutions that can make it easy, seamless, intuitive to just secure your Bitcoin by default and get to a place where Bitcoin is more secure than banks. I think we’re going to get to that place pretty soon in 2014. I was very excited to see that. That provides a wonderful answer to all of these regulators who are saying – You trusted the wrong people, now trust these people. We look at those people and say – That’s the same people who lost trillions of dollars in 2008 and didn’t go to jail so, how about no. How about we trust some algorithms instead? That’s an OK argument to make and the libertarian crowd will cheer you on but the problem is that argument has no backing. If instead, the argument is – Well here is some technology solutions; here’s how they actually work and here’s how they make this type of regulation unnecessary. That’s a winning argument and we can have it. In fact, I tweeted about some algorithmic approaches to regulation to Ben Lawsky, a few days ago, and they contacted me back from his office and they want to have a serious discussion about how to implement these. If we take, at least, some of the regulators at face value and say they’re interested in protecting consumers, we can challenge that idea and say – You’re interested in protecting consumers, here are some technology solutions that don’t involve regulation through institutions that will protect consumers. Put your money where your mouth is. Put your regulation behind us and we can solve this. [1:03:55]

JR: I love that approach. I also want to say a quick word about security, since you brought it up. It’s not just about securing bitcoins, it’s also about individual PC security. [1:04:08]

AA: Yeah. [1:04:08]

JR: We had at this conference, in the month leading up, one organizer’s Gmail account password was compromised and one of the volunteers and the attackers used those compromised Gmail accounts to send out very specific, personalized, spear phishing emails to some of our sponsors and speakers. [1:04:25]

AA: Yep. Got one. [1:04:26]

JR: That was extremely scary because this wasn’t just drive-by malware, this was the advanced persistent threat targeted at our conference and then going after our speakers and conferences. Secure your PCs. If you’ve been procrastinating, don’t procrastinate any more. [1:04:44]

AA: Yeah. Put two factor authentication on your primary email. That’s probably one of the most important things you need to do right now because you could protect everything else and then people send password resets to your primary email and take over every one of your accounts. [1:04:57]

JR: I’ve actually gone to the step of where I don’t browse outside of virtualized environments anymore. My web browsing is split between four virtual machines. I have one virtual machine for Google sites and it is the only browser that can accept Google cookies. I have one virtual machine that runs a browser that only accesses Facebook and no other virtual machine’s browser can have Facebook cookies. I’ve taken it a few more steps because I’m increasingly paranoid – people who are known to have been in Bitcoin for a while are going to come under specific, professional, highly targeted attacks, so take the precaution sooner rather than later and don’t put them off. [1:05:39]

AA: Yeah. As I’ve said for a very long time, I keep the vast majority of my Bitcoin offline... [1:05:45]

JR: As I do. [1:05:45]

AA: ...on paper wallets and now BIP 38, encrypted paper wallets distributed in multiple continents. The point is that this is not a solution that the mainstream can use yet... [1:05:58]

JR: Right. [1:05:58]

AA: ...but, we’re getting better. I see it very similar to where the internet was in 1992. You had to have UNIX command line skills in order to send an email and it took two days to cross the internet and my mum was never going to do that. Guess what? My mum now has an iPad and she can do all of that. Will my mum have a Bitcoin wallet? Not in the next five years but we’re going to get it to the point where it’s going to be easy enough and intuitive enough and fully secure that yes, she will have a Bitcoin wallet at some point. [1:06:28]

JR: The last point was, it’s not just your bitcoins that you have to protect, it’s also your reputation. Somebody who can get access to the same email as you, will use your name to make their spear phishing more profitable and give a higher chance of success. That’s what we saw with the attacks on the conference. [1:06:46]

AA: That’s a big problem and I’m worried about that, for sure. [1:06:52]

SM: It seems like we are getting to the end of our time. Justus, I just want to thank you and all the other organizers at the Texas Bitcoin conference for putting on a great event and I really enjoyed this. This was definitely a lot more enjoyable than other Bitcoin conferences I’ve been to in the past, frankly, because of the community focus and because of the explicit libertarian bent. I really appreciate all your work on that. [1:07:16]

JR: Thanks Stephanie and I’m glad everybody had a great time. [1:07:19]

_________________________________________________

CREDITS:

Thanks for listening to Episode 91 of Let’s Talk Bitcoin.

Content for today’s show was provided by Stephanie Murphy, Andreas M. Antonopoulos, Jonathan Mohan, Danny Wettreich, Jeremy Kandah, Matt Branton, Ray Duran, Francisco Dominguez and Adam B. Levine

This episode was produced by Adam B. Levine with additional production by Stephanie Murphy and Jonathan Mohan

This episode was edited by Denise Levine, Matthew Zipkin and Adam B. Levine

Music for this episode was provided by Jared Rubens, Tatiana Moroz and General Fuzz

Any questions or comments? Email adam@letstalkbitcoin.com.

Have a good one! [1:07:58]