The Bitcoin Group, the American Original, the Bitcoin Group, the American Original, for over the last ten seconds, the sharpest Satoshi's, the best Bitcoin's, the hardest crypto currency talk. Issue 1 Bitcoin anonymity, some say that Bitcoin is like electronic cash, but cash is truly anonymous. Unless you're using sequentially numbered bills or someone marked them with a die pack, your cash is ready to be spent and will never lead the heat back to you. Is this true for Bitcoin? I ask you, Adam B. Levine. Bitcoin is anonymous in the same way email is anonymous. If you take precautions, it's very difficult to positively tie your real life identity to a given email address. Now, if you go and post your email address all over the place along with your real name, or send overly familiar messages to your friends, it's not very anonymous anymore, but that's your fault, not the email addresses. Bitcoin is the same. Take basic precautions, and it's as good as cash from an identity perspective, while being much easier to use when not standing in front of the person you'd like to spend your Bitcoin with. Andres? Bitcoin is probably a few hundred to a few thousand dollars worth of forensic investigation anonymous, meaning that's how much time and money will take to break your anonymity if you have an average level of operational security in your day-to-day practice. Now, if you want to get the kind of anonymity to protect you against the, let's say, the intrusion or inspection or forensic analysis of a national government or a very large corporation, then you would have to do something more. It is not enough. So if someone's willing to spend tens of thousands or hundreds of thousands of dollars to do the kind of data analytics, they will be able to find and tie your identity eventually somewhere, because perfect operational security doesn't exist, perfect security doesn't exist. It's a risk-warward strategy. If you don't care about your identity more than a few hundred to a thousand dollars, but coins anonymous. If you care about it to the point where someone will spend that money, it's not. Dovey Barker, your thoughts. Well, one of the things I think is pretty exciting about Bitcoin is that it is completely customizable. You can go from complete transparency to near-complete anonymity anywhere on that spectrum. So, for example, when Bitcoin now bombs is doing a fundraiser and we say send your donations to this address, somebody can go to blockchain.info, see exactly how many donations we got in that amount of time, and that audit says it's like having a third-party auditor, but anybody can do it. So, like anonymity has a value, but transparency has a value too. And I think that Bitcoin encompasses that entire spectrum, and I'm really pleased with that. I like what Adam and Andreas had to say that it's anonymous up to a point as long as you don't go giving out your address. What Forbes did where they gave the investigators their addresses, made it real easy for them to trace it, right? Right. While I'm saying that the opposite is true, if you want to offer people transparency, can publicize their address? In terms of the overall range of anonymity from complete transparency that's extremely useful in a charitable organization, or even in a publicly managed organization that needs to respect the voters and provide transparency in their accounts, all the way up to complete, strong anonymity with perfect forward secrecy. The kind of anonymity that even if you had the most determined adversary with an almost unlimited budget and a complete copy of everything you've ever done still can be broken We have a gap on the top end. We do not yet have the technical means nor the institutions and organizations, nor the software to implement strong anonymity. But we can develop them on top of Bitcoin either as a meta coin, which is what Zerocoin does as an additional application service, which is what remixers do. An altcoin, if it becomes obvious that Bitcoin can't encompass this capability and needs to be served elsewhere, or a myriad of combinations of those. We're still developing this stuff and I think it's going to be one of the areas where these services will be developed because there's demand for them. Exit question, which will be more anonymous in the future? Cash or Bitcoin? Adam? Cash probably will be more anonymous. Cash or Bitcoin? Dovy? Bitcoin. I'm going to go with Bitcoin. Issue 2, Zerocoin. Is this the solution to the lack of Bitcoin anonymity? Zerocoin. A digital money laundering pool that could allow users to trade their bitcoins for new bitcoins, making the currency truly anonymous. Is Zerocoin or something like it vital to Bitcoin's success moving forward? I ask you, Andreas. Zerocoin fits a very specific niche in the anonymity services market. The way I look at it, you're trying to decide whether you need absolute anonymity, sum anonymity, how much anonymity you want. At the same time, you're making compromises. An anonymity doesn't come cheap. The cost of anonymity is that you have more complex off-wear, more complex transactions, and in the end, also slower to execute transactions. About Zerocoin will give you anonymity, will take it away in transaction time. Zerocoin is a good solution for those who are not worried about transaction time and making lots and lots of quick transactions, but are more worried about anonymity. There are other services that might actually provide a more consumer-friendly solution, and I would like to see some of those services incorporated in every client so that anonymity and remixing is a default option. Coin join is one of those. You can run a coin join server and use that to just arbitrarily mix coins on every transaction you make. With enough of those services, we can have a more consumer-friendly level up anonymity, which is good enough for most consumers, but also provides a nice level of noise into the system that protects everyone who's not even using it just by tainting every coin with every other coin. Dovy, your thoughts? Well, this is certainly not my area of expertise, but I see a lot of different people working on it. I came across a video by Cody Wilson recently, he made me on him from Defense Distributed and the 3D printed gun. He's working on a project now called Dark Wallet, which is essentially it's very similar to Zerocoin, but it's designed to have that sort of user-friendly interface like any other Bitcoin client. And if Zerocoin doesn't work Dark Wallet will, and if Dark Wallet doesn't work something else will, it's something that people want. And so somebody is going to eventually design the market standard. Adam, what do you think? I think that Zerocoin is not vital to the success of a Bitcoin, but if we don't see something like that make its way into Bitcoin, then we're probably going to see it make its way into an altcoin that specializes in privacy. One of the most interesting things about cryptocurrency and something like Zerocoin is you don't actually need to implement it into Bitcoin for Bitcoin users to get the advantage of it. So long as it's part of a cryptocurrency, it'll be easy, cheap, and fast to move your money from Bitcoin to a Zerocoin and able cryptocurrency, wash everything and then trade it back into Bitcoin. Users could do this once a month, just on a regular basis, and like Andrea said, you can add a lot of noise into the signal to further make this happy. You know, you could see services like Web Wallets or Hosted Wallets Solutions do this automatically just as a service to their customers. That's the real question, though. Is this kind of anonymity something that needs to be added or should it be mixed in on the side? Is on the side good enough for Bitcoin? Absolutely not. This is a big problem we're going to be facing with this issue, which is it's not important just to look at the range of anonymity that's available to the power users and those with a very specific agenda or need to apply strong anonymity because the problem is that if all those are the only ones who apply any level of anonymity and it's strong, not only do they get singled out and their activities draw scrutiny, but also the rest of us then remain unprotected. What's more important is within this range of anonymity, where does the average user doing a normal transaction of buying a coffee, what does their application do? What I want to see is a much higher level of anonymity and default remixing happening for the average user because if we elevate the anonymity of the average user, it actually improves the anonymity of the entire network by default and makes a much more robust, also makes a better playing field for those who want to try more extreme versions of strong anonymity. So what matters is not the range, what matters is the average baseline. I totally agree, Andreas. It would be really disappointing if the only people using zero coin were criminals, so you were trading your clean bitcoins for other bitcoins that are also tainted. And if you want to see the difference between those two approaches, in email, we have a broad range, but no one uses PGP. On HTTP web surfing, everyone uses SSL. I'd rather see that. Exit question, will zero coin be added to the Bitcoin protocol? Adam? No. Andress? Perhaps as a medical. Davi? No, I don't think so. I'll also say no. Two, three, altcoins. Lightcoin, feather coin, prime coin, name coin, PPC coin, many other coins. There are so many. Are altcoins analogous to the states, that is to say laboratories of democracies, many altcoins to Bitcoin's one federal government, or are altcoins the real future of cryptocurrency? I ask you, Davi Barker. And now, guys, with the federal and stat mix, no sense to me at all. It's not like Bitcoin gets to pass laws that Litecoin has to abide by. It's much more like Copper and Silver to Bitcoin's gold. It's that there is an entire ecosystem of modernies, and their relative liquidity and stability is going to change the way that users in the market prefer them. And all are welcome. It's not like in a primitive barter marketplace you couldn't show up with a measure of barley and traded for copper because it was a silver market. That doesn't make any sense. No, it's nothing like a federal government. It's just many competing ideas, and that's perfectly fine. Adam, I think that altcoins are what happens when you have something that's interesting and unknown with almost no barriers to entry. The cost to start an altcoin is basically nothing, a little time from a developer to change some parameters, and that's pretty much it. That low barrier to entry is really empowering, but it means that the vast majority of altcoins out there are kind of valueless because when people take the easy path out, it's generally not even worth learning about the new cryptocurrency, you know, what small amount of changes were made. On the other hand, that also means that we should eventually see some really great new currencies coming out because there's nothing to stop that from happening. And even people who create altcoins that are sure to fail, ultimately are probably learning from those experiences so their projects over time should improve. I think it's great, honestly. I don't have a bad word to say about altcoins, and while I keep the book of my cryptocurrency investment in Bitcoin, you know, if something comes along with promise, I'm all about it. Andres, I look at altcoins in two different ways. First of all, in terms of the long term, I think it is rather unlikely that there will be one cryptocurrency that rules the global currency market. I think it's equally unlikely that there will be no cryptocurrencies. The most likely scenario in my mind is about 150 national currencies with perhaps three or four cryptocurrencies, Bitcoin being the predominant one, and then a long tail of niche altcoins that serve particular functions. And altcoin designed for shipping wire transfers between large organizations because they have a very weird, particularly needed Bitcoin doesn't fail or whatever. Who knows? On the other hand, I look at altcoins as a great laboratory. I study it as an analyst. I look at it almost like a biologist. I'm looking at these altcoins, and I'm looking at what things emerge, why they emerge, and whether they get adoption. Simply looking at the names tells you what features people are most concerned about in Bitcoin. Like coin says the transaction speed is important. If we start seeing things like dark coin stealth coin, crypto coin, go to hell government coin, then we'll know that the fitness function in that evolutionary environment has changed to becoming more stealthy, and that would be a very important move. If we see anonymous coin, that means something else. If we see long term value coins or names that imply that, again, that indicates a different direction in the market. So first we see these features tried, and then the adoption of the coin tells us how much of a compelling feature that is and whether people think it's important. Now, most important of all, don't underestimate the network effect and stickiness of Bitcoin. This is a non-silent global network that can support payments and interactions from micro transactions, the billions of dollars, and no one is going to unseat that currency anytime soon with any level of easiness. It's not easy to just jump in and compete against Bitcoin. There's a lot of established momentum. Andreas makes a great point there. We talk about the idea of shining examples and horrible warnings. Right now, what's happening with altcoins is there is very... There are some that are being innovative and doing new things, but a lot of them are, like Andreas said, making changes around the edges. Bitcoin is a shining example. Bitcoin is the thing that everybody wants to emulate. Until that stops being true, you're probably going to see a lot of new altcoins come out that try to follow on with what Bitcoin did. But if at some point something bad happens to Bitcoin, then I think you'll see it go the other way. Bitcoin will become a horrible warning, and people will go out of their way to fix the problems with the altcoins rather than trying to emulate what Bitcoin is succeeded with. Ironically, the most successful coin at the moment, which is Litecoin, is primary reason for existence is fast to block and transaction times. And just because of the complete over development of basics right now, Bitcoin is almost reached parity with it. We're now doing blocks in seven minutes, which is already 25% less than the 10 minutes we started with. So the other situation is where Bitcoin simply co-ops the feature that seemed to be a problem. And if it does that, the network effect will completely take over from the altcoins. So Bitcoin can also cherry pick features and co-opt them. And that's going to be very interesting to see. That's why I think it's so interesting what you said about the evolutionary aspects of altcoins. It really is kind of a development center where if the coin needs to be faster, if the coin needs to have more development support or more time, less blocks, whatever the issue is, it's being tried now in altcoins. Well, a lot of the margins, clones, just copy a coin, change a few numbers. There are some really interesting ideas coming out. It's just a total wash as to which one will rise to the top. Well, it's mutation and survival of the fittest. So that's how things evolve. So I think it's important to point out that we're looking at a very young industry, even when we're talking about Bitcoin. And even though Bitcoin has this huge head start as far as like market adoption, even if down the road, somewhere long-term, some other altcoin becomes superior to Bitcoin or preferable to Bitcoin for some reason, it's going to be much easier for us to transfer from Bitcoin to that new leader than it is going to be for people to transfer from dollars to that new world. Because whatever altcoin is competing for market share in the digital currency industry is going to be targeting Bitcoin users more than they're targeting dollar users. So even if you've got most of your cryptocurrency share in Bitcoin, that's still an easy thing to get out of when the time comes. Absolutely, Davi. Most of these markets measure the value of these altcoins against the value of Bitcoin. And whenever anyone's trading in and out of them, they're usually doing it from Bitcoin, not from Fiat or an older money source. Let's also think about something else, which is we've so far talked about the success of altcoins vis-a-vis the success of Bitcoin. But actually one of the very important lessons that altcoins have delivered is different failure modes that they actually play out in full for everyone to see. And some of these failure modes are absolutely spectacular and very important lessons for Bitcoin. Probably one of the most interesting scenarios that cannot be tested out on Bitcoin without a massive loss of wealth is the scenario of a sudden and large withdrawal of cash and capacity from the network, leaving the network unable to retarget the difficulty because it can generate the 21106 blocks required to do the retargeting. This happened in Terracoin. It was a very important lesson both in terms of how it happens, how it plays out, and what it can do to the network, very bad things. And it also taught us how to recover from it. So we learn all of the horrible pitfalls and edge scenarios of failure within these altcoins. Conversely, if Bitcoin was ever to play out one of these massive failure scenarios, then the altcoins would jump into replace it. So the other reason altcoins are very important is because if Bitcoin fails spectacularly and that is possible on the certain scenarios, then an altcoin would replace it very, very quickly because cryptocurrencies are not going anywhere. Exit question, quickly, what's your favorite altcoin? Adam B. Levine. I'm going to go first. Okay, I'm going to say prime coin then. I've been enjoying that. And dress like coin. Dovey. You know, I actually have not used any of the altcoins. So I'm going to go with silver. The correct answer is feather coin. Issue four, Bitcoin ATMs. The first Bitcoin ATM opened recently in Vancouver, Canada. It did $10,000 worth of business on the first day, 30,000 on the second. Are Bitcoin ATMs the future of Bitcoin allowing your average Joe easy access to Bitcoin? Or are they just another speed bump on the highway to Bitcoin's future? I ask you, Adam B. Levine. The toughest part about Bitcoin right now is getting your hands on someone. All you have is legacy funds. Bitcoin ATMs take that process, which usually takes days or weeks, and they replace it with an intuitive in-person process that takes seconds or minutes. This is a huge step up for accessibility and usability. But at the end of the day, these machines are another layer of bandaid on the problem of exchanges. So long as the problem of getting Bitcoin's for your local currency is a barrier, these machines let you route around that damage. So I think that Bitcoin ATMs are going to be huge over the next two years. And Dress. I think Bitcoin ATMs fit a very important need as a bridge solution over the long term. In the end, I would like to see ATMs as in just regular ATMs that also do Bitcoin because there's no reason to have a completely separate network just for Bitcoin. However, for the time being, they serve a very important need. And to me, that need is this currency is a viral currency. And by getting it into the hands of as many people as possible, we ensure the currency is survival. And in Bitcoin term, survival is winning. And so right now, I think we have one major outlet for achieving that as local Bitcoins. I use local Bitcoins to sell Bitcoins to people at least a couple of times a week and I've been doing it for a year. I've introduced more than 100 people to Bitcoin of all walks of life. If every one of them introduces two more, that's how you get viral. Now, Bitcoin ATMs offer an easy way for people to be introduced without having to interact with me. And when they don't know me, that's potentially a scary situation because when they look at those interactions in person or the banking interactions that worried about giving their bank details for Bitcoin, they worried about interacting with someone in person and getting potentially mugged or meeting with shady characters or whatever else they might be thinking. Bitcoin ATM is impersonal, it's clean, it's safe, it's right there and it works. And I think it's going to be a major accelerant to Bitcoin adoption. Dovey? So I want to dispute the Nominclature a little bit because I think it was RoboTak or RoboKoin, I forget the name of the company that is calling itself now the first Bitcoin ATM. And this has been like a hotly sought title. Bitcoin now bombs sort of regards itself as the world's first Bitcoin world's first officiating committee. And we've awarded that title to Rommasoo Bitcoin because of their, they're calling it a vending machine for reasons that are silly. But the thing is, they're calling it an ATM because it takes dollars and distributes Bitcoins and it takes Bitcoins and distributes dollars. And people are disputing the title ATM with Rommasoo Bitcoin because it doesn't take Bitcoin and distribute dollars. But the need for it to take Bitcoin and distribute dollars is really nothing but a comfort level for the, for the new user. Most people don't want to use it for that reason anyway. They want to use it to buy Bitcoin. So I think, and Andreas mentioned this, two regular ATMs should be able to do that. They should be able to take dollars and distribute Bitcoins. And there's a way that you could do that now with just a small, a small modification. If you've used cash into coins.com is a place where you can take dollars to a bank and with no idea paperwork deposited into cash into coins account and cash into coins will send you Bitcoin. You can't use an ATM to do that. You have to go to the teller. But they also work with credit unions and credit unions are a lot easier to sort of put market pressure on the big banks. So if you can convince a credit union to allow you to make anonymous deposits at their like co-op ATMs or shared branches ATMs, it would become possible to donate cash and receive Bitcoin with a service like cash into coin. And there's, I don't see why that's not possible now. Well, I mean, a big reason, I don't know if necessarily that's possible or not. But I do know that compliance is another major thing that the Lama Sue machine has some problems with because in the United States, you need to ascertain affirmatively. And for sure, know who you're dealing with so you can make sure that they're not buying too much from you through multiple transactions. And that's something that the Lama Sue machines aren't able to do right now. And that has caused some problems in California, things like that. Well, that's a regulatory problem. That's not a technological problem. But all of these are regulatory problems. I mean, you want to look at the problem of the ATM, you know, for Bitcoin and all of these things. They, they, they, yeah, all of these are problems of permission rather than problems of technology. That's a constant Bitcoin. I don't disagree. All right. And what about the idea that if you were homeless and you had access to a Bitcoin ATM, you could actually change your cash into Bitcoin. It seems like a major option for that without having any internet access. You could just go to a physical location and trade them in. Sure. Or anybody, a waiter who doesn't want to declare his tips could just deposit in the ATM sitting, you know, next to the jukebox in his restaurant. What? You know, absolutely. So basically the issue is that everyone's money laundering and no one wants to say that they're money laundering. So how are we going to stop that? I think the issue is that everybody I have ever heard from who is involved in this domain of Bitcoin, whenever you tell a new person, the first thing they ask is, how do I get some? And the second thing they tell you is, why is it so hard for me to get some? So whether it's Bitcoin ATMs or local Bitcoins and a lot of us doing the work needed to bring new people on board, bringing new users into the Bitcoin industry is the most important task that any Bitcoiner has today. And I applaud anyone who uses these Fending Machines or ATMs or call them whatever you want in order to bring you users in. Well, certainly a lot of people are using them with 10,000 the first day and 30,000 the second, even if you have to put your hand in and get a Palm Print identification, people are still going through it. Again, that Palm Print isn't necessary. I just didn't interview with their CEO, RoboCoin Kiosk. And it's not a Palm Print. It's a Palm Vein scan. And again, the whole point is to be able to show that you are the same person. And so what they do is they have a database that is built around those Palm Vein prints rather than using something else where there's already an existing database. So I mean, it's not a great solution. But again, if you're talking about the problem of compliance, then it's a better solution than the other ones on offer from where I'm sitting. I've been looking at this problem for the last couple of weeks. Well, agreed. And I read that even in Canada, they don't necessarily have to comply yet because Bitcoin's not a currency, but they have to comply in advance in case it does become a currency. So I love that expression, complying in advance, complying in advance and you will be assimilated. Absolutely. So let's move on to predictions. This is the part of the show where I ask you to predict something about the future of Bitcoin. Are you ready? Adam B. Levine. Yes. Go for it. Oh, right. I have to actually think of something to predict. Right. Well, come back to me. Andreas and Tenoppelis. Bitcoin is poised on the next major rally. What's happened in the last couple of weeks was we experienced the exuberance and disappointment and exuberance again from Silk Road and various other announcements. The public heard the message and that public is gradually coming back to Bitcoin. The price we have at the moment reflects where we stabilize, but from here on, it's going to be up for several several weeks. Dovey Barker. So I've been thinking about this and I think I have a good one and I don't know how long this is going to take, but I'm certain this is going to happen. There is going to be some technological advance, some new product, some new innovation that doesn't exist, like flying cars or something. And it's going to run into such heavy regulatory burdens that it becomes impossible to ship to sell for dollars. And the inventor of that technological advance is going to then say this is only available for Bitcoin and that new technology will only be available in the Bitcoin economy and that will draw millions of people in the Bitcoin economy. Say now that's a drug prediction. And it won't be drugs this time. It won't be drugs this time. Adam B. Levine. I'm going to go ahead and say it. I think we're only 18 months away from Amazon getting on board. 18 months still Amazon. Write it down. Bitcoin prices will continue to climb. There may be future buying opportunities, but the price will always trend upwards. There are only 21 million Bitcoins and there are less every day. Got to collect them all. Well, we're out of time, but I see four people watching live. So I'm going to push the buttons and see if we can talk to them. Until next time, bye, bye. And now question and answers. So let's see. That's a 400% increase from last week. Yeah. That's awesome. Opening the audience button. You can turn this on and off. And this rate will have 16 people next week, which is almost a party. You continue our exponential ride to the top. It says I can only turn this on and off before the broadcast. So I guess we'll do this next time. Or we could stop it and restart it. I don't know if we can restart it. All right. I'm gay with stopping it restarting to see what happens. Can our four viewers please hold on? Hold on.