The American Original for over the last ten seconds, the sharpest Satoshi's, the best bitcoins, the hardest cryptocurrency talk. The Bitcoin Group today would like to welcome Andreas Antonopoulos, Bitcoin developer and commentator. Hi everyone. Javi Barker from shinybadges.com. Hello again. And Will Pengman from Bitcoin, Milwaukee. Hey there. Issue one. Miami based Tiger Direct announced Thursday that it is now accepting Bitcoin for more than 200,000 products. The Miami based company said it is the first major US electronics retailer and the largest company to date to accept the digital currency Bitcoin via BitPay. Just in time for the Miami Bitcoin conference. Bitcoin and online retail is really taking off in 2014 with Overstock and Tiger Direct both on board. Who's next? How long will it take? And Andreas Antonopoulos. I think what's going to be interesting is when we stop paying attention to these, we're already getting to the point where the PR advantage of being first mover into Bitcoin adoption is getting somewhat diluted. A lot of these companies are going to see an early rush of purchases as they announce and then that's going to tail off. So really the question is, what are the real reasons you'd adopt Bitcoin and companies need to be focused on those instead of PR, focused on no chargebacks, low risk, ease of use for the end customer and all of those things. And if they keep adopting for those things, we're going to see more and more companies doing that because Bitcoin has compelling utility. The FAD value is going away. Dauvi Barker. I've already stopped paying attention to this. I think we need to move out of the realm of which specific companies have adopted Bitcoin and into the direction of developing and prioritizing directories so that I can go to one website and do all of my shopping on exclusively Bitcoin vendors rather than paying attention to individual adopters. Will Pagman. I'd like hearing these stories of merchants, large merchants coming out and announcing that they're accepting Bitcoin. What I like more is to see that the last two largest ones, Tiger Direct, this week, over stock a couple of weeks ago, each shows a different merchant processor. Of course, there's more than enough love to go around for the merchant processing companies like Vittey and Coinbase. The thing that I think should be to take away for people watching this from the sideline to are not necessarily ankle-deep or anywhere to neck deep in the Bitcoin space is how easy it is to do this as a business, how quickly and nimbly you can integrate Bitcoin acceptance as a business. That's encouraging to me, but like the other two panelists, I really like to encourage at this stage, more user adoption than merchant adoption. That's where my focus lies. I think that's where the real thrust of our attention should be put. Strategies to get merchants on board are kind of hit and miss, but strategies to get users on board, there's some really intriguing fail-safe ways to get people to accept Bitcoin without much resistance at all. I agree, it's definitely a time of expansion, and it's starting to get less special. As each new retailer gets on board, it's a little less exciting. I mean, I don't know if Tiger Direct's going to get the same boost that overstocked.com got, and by the time it gets to Amazon, will we really be excited? Not sure. I think it's exciting when there are competitors in the Bitcoin space that are both large firms. That way we can really determine which one of these firms is doing it because they want the Bitcoin and which one of these firms is doing it for the publicity of it. Because once you get Amazon competing with overstock, then you see who's putting out the sales, who's putting out the promotions, who's offering something better to the consumer. To encourage and be excited. I know Tiger is large. Sorry, go ahead, Will. Yeah, it's not too encouraging things regarding advertising Bitcoin. First stock has a television ad, and they did have not necessarily in fine prints slightly larger than that, but they accept Bitcoin, and then there's information to learn more about that on their website on a television ad. That was cool. I did read recently that it apparently Tiger Direct has purchased the top search result for the term Bitcoin in the Google search engine, and that Tiger Direct shows up on top on search results. Number two, encouraging signs in terms of advertising that I like seeing. I also like the way that Tiger Direct did it. They changed their whole web page to Bitcoin. They had Bitcoins in the background. It was really clear that they were accepting Bitcoin. Overstock, it was a little more like you weighed all the way through the site and you get to the checkout, and then it says they're accepting Bitcoin. So it wasn't quite as flashy on overstock, at least when I checked it last. You mentioned the tapering off, Andreas, of the excitement for the first 24 hours or week of Bitcoin sales when these announcements come through. From my quick search, it looks like Tiger Direct and their first 24 hours nearly doubled the amount of sales as overstock had, and their first 24 hours of their announcement. Maybe that's a sign that maybe the large online merchants are gaining traction with the consumers. I think that mostly reflects the fact that Tiger Direct appeals to a more technology-oriented audience. So there was both more Bitcoiners among their customer base, but also Bitcoiners want to spend more on technology. Overstock is a mainstream website that sells mainstream goods across the board. One of them is I'll be really excited to see Amazon join us simply because of the breadth of products they sell. But here's the point. Right now, if you own Bitcoin, you can buy from any of these stores using GIFs or many of the other outlets that allow you to convert easily and buy. So we have as many outlets as we want to buy products. So I think what we're going to see, as you said, user adoption is key because user adoption is what drives these merchants to want to add Bitcoin because they know there are customers out there who are going to spend more money than they'd otherwise spend in dollars. And more easily than they'd otherwise spend in dollars and with lower risk for the merchant. And that's exactly the kind of momentum we want to create. Exit question, what will the landscape look like after total Bitcoin acceptance, TBA, online, Andreas, and to Nobles? I have no idea because I think total Bitcoin acceptance, really by that point, we've moved to a completely different conversation. By the time we get the currency broadly approved and adopted by mainstream people, at that point, we've already moved to dealing with smart contracts and digital autonomous corporations. That's one of the interesting things that's happened is people are still trying to get used to Bitcoin as it was in 2008 and the idea of digital cash. And we already have five years of innovation and evolution on top of that. Most of the forward-looking Bitcoiners already well-passed to the concept of Bitcoin as a currency. And by the time the rest of the world figures it out, we will have moved even further beyond that. So Bitcoin broad adoption means we stop talking about Bitcoin adoption. Dovey Barker. I think it will be like when the world went from black and white to color. No, I'm just kidding. I actually don't think it'll look that different. I think we're all accustomed to online commerce. And once Bitcoin reaches full adoption, it will be as comfortable to the end user as using a credit card. It'll be part of society and fully integrated and it will be like a fish is to water. Will Pangman. Yeah, I tend to agree with both the panelists. I think it'll be so seamless and easy. Most users probably won't even recognize the wallet software operating in the background as they're making their payments. People can take a credit card and swipe to make a payment. It's relatively quick when they're in person. You might have some mechanisms and innovations come out where there's no copying and pasting of addresses. There's no making sure that you have the transaction fee in your amount on top of the sum total of your bill for whatever store you're checking out of. It'll all go on in the background and most people won't notice it. And it'll be total Bitcoin acceptance will look like older generations having no confusion, relatively little confusion and difficulty using. Absolutely. And it's not far away. Issue to Google, thinking of Bitcoin. Google, the search data, eyeglasses, self-driving cars giant, is looking into Bitcoin. Looking to an email sent to a persistent Bitcoiner. Good for you, Google. Pop quiz. How would you integrate Bitcoin into your favorite online site? Google, Facebook, YouTube, Amazon, Davy Barker. I was having this conversation about Yelp. There are certain services online that are very popular that wouldn't even need to integrate any part of the Bitcoin protocol to integrate Bitcoin into their tools. So imagine if, when you were searching on Google and you clicked the shopping tab, you could specify in their advanced settings only show me vendors that take Bitcoin. Google would not have to integrate or take any sort of speculative risk on Bitcoin to do that. That's just sort of another function of their search engine. Yelp could do the same thing. Yelp already suggests or you can specify do they take credit cards or are they cash only. Well, imagine if Yelp created a Bitcoin icon and allowed you to search for businesses that took Bitcoin, I think that that is going to be the most powerful thing that Google has to contribute to the development of Bitcoin. Well, Penguin. I'd really like to see micro-payments enabled on sites that use paywalls for their content. It'd be great to have a really smooth implementation where you can toss a nickel, a quarter, 50 cents, where it's worth a Bitcoin. I think we'll see subscription models change to temporary one time hourly access to some of this content on various sites. I know I stopped reading the major publications like New York Times and Wall Street Journal and things like that when they introduced paywalls on their websites and I found better news outlets elsewhere anyway. I might read their articles again if I could toss a nickel or a quarter toward the author and the curator of those sites. Andrea Santanopoulos. Well, I think what Google is saying, which is we're looking into it, is what any responsible multi-billion dollar behemoth would say, which is of course, they're looking into it, they're looking into everything. Recently, I had an interesting experience, tried to send email and bought them from my email client in the Compose window. There's a little dollar sign icon, so I clicked on that and it's for using Google Wallet to send money by email and I clicked on it and it said, error, no more than one recipient is allowed. Error. I was like, no, that's not an error. That's a problem with the currency you're using because I wrote 40 lines of Python to send micro payments to 507 recipients on Twitter and I sent that in three transactions for less than a dollar. You know where the error is? The error is in the choice of currency. You can do better with Bitcoin. I think gradually more and more companies are going to realize that. One of the most interesting things about the previous adoption by Overstock also was the time it took from announcement to adoption and it really shows how much easier it is to implement Bitcoin payments or gateways or information, gateways without much technical effort. As compared to setting up a complex large scale merchant account with one of the payment processors. Exit question, time for grades. Which dream scenario will happen first? Davi Barker. Which dream scenario would what what what what what what what is between wills and yours or Andreas's idea to pick one? I like mine. Will Pagman happen. It's just a matter of time. Will Pagman. Yeah, I see all of these coming. Certainly I like the fact that any entrepreneur developer inventor can get on and create some code to solve a problem at any given time and if it works people will use it. That's what I like. Micro payments. It's a fantastic idea. We've heard a number of people if you're paying attention to Bitcoin you're you're consuming the content that the creative bitcoins and media producers are cranking out then you know that micro payments are something that people have an appetite for. I'd love to see that first but it seems to be a bit more complicated and requires another whole change in how we think about subscriptions or revenue models in general. Much like Bitcoin requires a whole new way of thinking about money and finance. I guess probably not micro payments. One of you know Andreas or or Davi's scenario probably first. Andreas your idea. I'm going to go for nano payments micro payments with will I think that's probably the most interesting one and I think it can really revolutionize content providers. Here's the deal right now on the internet. There are only two basic plans from monetizing content. The first is advertising which involves injecting crap you don't want into your stream of consciousness to make you buy crap you don't need. That doesn't work for the advertisers. It doesn't work for the consumers and it doesn't work for the content providers. They don't make enough money. The other model is where it's free and it's free for you because you're the product. That involves taking what's in your mind and selling it to creeps so they can sell you more crap you don't want. Basically taking your private information and broadcasting it to as many creeps as possible to monetize it. I think both of those models are broken. With nano transactions you can actually choose to pay for the contents you consume and therefore you won't have to either buy the crap or sell yourself in order to achieve that. I want to just build on what Andreas said there. There's all of these surveillance of consumers that some of the major corporations that major retailers are using. I know the one that most people know about is Target. If you have a smart phone and the Target app is on there and you don't even need to have ever bought something using the Target app on your phone. If you've been in any Target stores they will advertise particular products to you. A lot of these products are things I don't want. I would love, I think in a more heavily widely used Bitcoin world, more targeted marketing that actually helps the consumer. I would like to be advertised products that I have thought about buying in the past but have since forgotten and then some smart application on my phone shows it to me again and reminds me that this is something I've thought about needing or wanting to use and I can buy it then because it reminds me that I'm in the store. Hopefully you can turn these settings off and customize that but that's the kind of advertisement that I would appreciate not being forced to purchase garbage nonsense. Because I would never use it. They should know me better if they're surveilling me so well, right? You know, why don't we go to see targeted consumer reports? Imagine if this sort of atmosphere of directed advertising said, oh I see you're thinking about buying this. Well, here's the review for that. You might prefer this. Interesting discussion and I like all the ideas. I think that nano payments are a good idea for the future but Davi's idea of Yelp changing over to become a Bitcoin map seems way simpler and Yelp could even buy the existing coin map just to get the domain name and pretty much supplant what they're doing in a better way. Yelp should get on this right away. They wouldn't even really have to accept the currency Bitcoin just advertise that businesses do. Speaking of advertising, the Bitcoin group is now accepting Bitcoin donations at the Bitcoin group dot com or by scanning the QR code on your screen. We're also accepting altcoin donations with a cryptocurrency trade key. Send any altcoin you'd like to the Bitcoin group using our cryptocurrency trade key at the Bitcoin group dot com. 2-3 Vegas casinos now accept Bitcoin. Hotel rooms, gift shop items and food at the restaurant are all open to Bitcoiners. Only the gambling floor remains closed. What will Bitcoin gambling be like? How long will it take? Will we even need casinos? Will Pangman. Yeah, we'll need casinos. We'll need all the real life accommodations that people currently enjoy and they'll grow and be enhanced as technology goes. I'm interested in a startup called bitmarkers.com. I've some close friend and an acquaintance who are building that company and they'll provide real time gambling using bitcoins on the floor of various casinos in Vegas and also be able to kind of provide traveler support too. You can book your hotel room and your flights and your vacation in Vegas that way. I'm interested to see that service rolled out here. Hopefully this year still. I'm going to check with them on their timeline. That's an exciting relationship for Bitcoin and lots of different casinos in Vegas and hopefully beyond eventually too. And Reyes and to Nobles. I think casinos are not going anywhere. People need the social aspect of gambling. Gambling on your laptop at home. When instead you can sit in a smoke-filled room in front of a slot machine for eight hours not talking to anyone. That's a much better environment to do it. Honestly, I think Bitcoin might actually make Vegas palatable to me and make me want to visit it and not just have to visit it for conferences. Oh, hang on. Nah, it's not going to make it palatable. It's still Vegas. Nevermind. Scratch that last one. Dovey Barker. I see that's a little bit like Barnes and Noble adding an audiobook section. I feel like Bitcoin is going to make Vegas pretty much obsolete and this is a defense measure. So Vegas is largely what it is because Nevada has more liberty-oriented laws towards vices than other states. And so they get a lot of vice tourism. Bitcoin makes gambling possible everywhere. And we've already seen this. We've got, I mean, gambling websites with Bitcoin were one of the first things that came onto the market. So Bitcoin is going to take away a lot of the... We're friendly. It could be enabled there, relatively, you know, under the table or through the back door, so to speak. And I agree with you. I like seeing disruption like that. But I do think that it would mean that Vegas would turn more toward the entertainment side of the reason that people go there. And you might see more comedians or more concerts or more... So it's so kind of stuff. Yeah. So it seems our on-air live presence has disappeared while Tom gets back to it. Oh, no, it's back. Yay. All right. I think we're still on the air. I was going to say, I want to agree with Will's point about casinos going Bitcoin. They've already practically gone cash-free. If you try to stick a dollar into a machine or a quarter into a machine, it just doesn't work anymore. They don't have the slots. And if you look at the bottom of this slot machine where the money's supposed to come out, it just blinks a little light at you. It doesn't actually eject any coins. It's all done on cards now. So I don't think it's that big of a difference to switch from putting a dollar on that card to putting part of a Bitcoin on that card. Perhaps the casinos could gain some kind of leverage in the laws. I know they're already tracking everyone from seat-to-seat machine to machine. The cards are an incredible trove of information for the casinos. Remember, every slot machine is now plugged in like a network card. It's just a part of a network. They know exactly how much they're losing from where at all times. It's an amazing amount of information that they're managing. Exit question, will the rest of the casinos fall like dominoes? Is there any reason for the hospitality industry? I'm talking every hotel and motel in the nation not to take Bitcoin. Yes or no? No, there's no reason they shouldn't. If they want to attract tourism or international customers, it's a great way to do it. I know personally, tons of people who travel internationally regularly, they no longer do the travelers checks thing. They've totally gone Bitcoin for at least that aspect of their expenses. Yeah, casinos will jump on board with startups like Bitmarkers. I think they'll be first to market and they'll show that they can have partner and casino. With some of the bigger name casinos, the win casinos, the MGM grand casinos, and enable people to fly in land in Vegas, spending only Bitcoins and never have to use US dollars. As you mentioned, Thomas, they've phased out the US dollar in the city of Vegas anyway. This is just a natural fit. It's going to be exciting to see companies like Bitmarkers scale. And Jerez and Tenoppelis. Yeah, I think the hospitality industry is rich for the use of alternative currencies, especially the parts of the hospitality industry that are catered to international travelers where the exchange between currencies has to already happen anyway. Because I travel internationally, I only use Bitcoin now as much as I can, partly because I don't have any dollars left, partly because if I have to change to dollars, I might as well change directly to the country's final currency destination. But more and more, I just ask people, would you be interested in taking Bitcoin? Can I just wait for you to take Bitcoin? Will you please, for the love of God, take my Bitcoin? And eventually I wear them down and they take my Bitcoin. And I'll be barker. We went to Portland recently and we didn't have anything specific we were doing there. But I looked up places that took Bitcoin in Portland and there were quite a few and I actually ended up at a Bitcoin meetup in Portland. And what it really said to me was there is a demand or at least an opportunity for Bitcoin tourism. And one of the cool things about going to the Bitcoin accepting locations while we were there was that we immediately ran into friendly people who were of like mine who had topics we were interested in talking about. And so it was more than just meeting sort of local strangers. It was almost like walking into establishments where we already had friends. And so I think that there is definitely an industry for that, a demand for that. And if you had a travel agency that booked and bundled rental car places and hotel places and restaurants and said look here is a Bitcoin vacation in this location that there would be a huge demand for that. Sounds pretty good, Dolly. Moving on issue four, Dogecoin Olympics. Dogecoin sponsors the Jamaican Bob's Lead Team for $30,000 in Doge. The popular doge meme to coin, shot up and value this week and up in respect. An organized action by the are Dogecoin community raised more than $30,000 for the Jamaican Bob's Lead Team, a popular and press friendly move. Reminding everyone of how great the movie Cool Runnings with John Candy is and how much of a legend Candy was in general. Candy, a true loss, left us far too soon, is greatly missed. Plains, trains and Doge is Doge the new coin of charity is Doge the future. I ask you. What do you want to do with the Drea Centinopolis? I'd like to keep an open mind and I think there's a lot of room in the space for a lot of coins. I think at the same time it's easy to get distracted by some of the coins that get a lot of temporary attention and perhaps that doesn't translate. I like to see a coin that's gone through at least four crippling, crashing, burning, doom, inspiring crashes and survive them before I give it much thought. That's why I like Bitcoin. It's been through the ringer and it's still come out four times. Listen, in the same week that they raised $30,000 for the Jamaican Bob's Lead Team, which I think is a wonderful move of charity and organized giving and all of that. Someone donated $46,000 in Bitcoin to WikiLeaks and $24,000 to Sean's outpost and single donations in Bitcoin. These things are happening every single day in Bitcoin. I don't think those replaces Bitcoin as a charity coin. I think all cryptocurrencies encourage charitable giving, especially when they're increasing in value rapidly and making people feel like they have disposable income. It's all good. Giving is what we do. It's a lot more than drugs. Dovey Barger. Put on them for finding a way to keep the Olympics relevant. I don't follow the Olympics. I don't care about the Olympics. When I look at the Olympics, I see bread and circuses without the bread. I'm very happy that they've found a way to achieve a goal to make some headlines, to inspire some attention in cryptocurrency. I don't care. I'm not even going to watch. No payment. I think Andreas is right. The point to take away from what these stories is the charitable giving aspect of cryptocurrencies. The reason these things are so easily giveable or giftable is because the person doing the gifting knows that they're giving a future value increase more often than not. I'm sure that most of the people who donated what amounted to $30,000 of dog coin, they knew that there would be a bump from this news story. The other thing that I really like about this experiment, all the experiments going on with all the alt coins is dog coin to me looks like the most extreme experiment of them all just because it started as a joke. It gained all this traction. It's got some viability it would seem. What else is a huge extreme experiment but winter Olympics team from Jamaica? It's kind of a perfect match. They're both funny and they have a measure of seriousness to them because I know that Jamaican Bob Slade team is going to compete. They're there to compete. Dog coin is there to compete in the alt currency markets and they're doing a darn good job with PR campaigns like this. You don't see this kind of organization for the other alt coins. That's interesting. You know what would make this exciting for me is if when they went to the Olympics they said we are the dog coin Bob Slade team as opposed to the Jamaican Bob Slade team. We saw a trend of people going to the Olympics not sent by governments but sent by organizations or sent by currency projects or sent by independent organizations because you cannot go to the Olympics without a flag. If we saw that precedent set that would be exciting to me. You can go to these Olympics with a flag as long as it's not a rainbow flag because you can't go with a rainbow flag even if you have a flag. This year I'm going to be not watching the Winter Olympics because of their treatment to LGBT people. I can't remember quite why I didn't watch the last Winter Olympics but it must have been something like that. It would also help your argument that the internet is a geographical area if we had representatives at the Olympic Games which would help some of the countries who are having trouble understanding where this internet currency comes from. Exit question other than Doge name an alt coin to watch make it something obscure. Pick an underdog and tell us why it's a winner. Andreas and Tenoppelis. I'm interested in seeing what Ethereum can accomplish if I see the source code which I'm hoping to see soon. But I like the idea that during complete scripting language just because it's so different from what's come before and I would like to see if it can gain any traction as a completely separate chain without being tied to Bitcoin at all. So that I'm very intrigued by that concept but most importantly I want to see the source code and not just white papers before I can decide for myself. I'm a little confused by the question are you asking me to be interested in a coin that does exist or to invent a coin that doesn't exist? Either way. Okay I think I'm excited to see I don't know what they would call it maybe common coin or Fedcoin Fedcoin.gov would be exciting because I think that when the government realizes how dramatically cryptocurrency is going to change they're going to have to launch their own version and watching that crash and burn and fail will be very exciting. Well Pagman. Man both of you guys stole my A and my B option here for an answer to this question. I'm really interested in the Ethereum project. Interested to hear Andres's take when he can read the source code since I'm not fluent in those languages but yeah I wanted to see a govcoin too. What will happen with govcoin? Who knows. I guess those aren't fair answers. I've heard more things about Fedorcoin. It sort of went into obscurity a little bit. The first three cryptocurrencies I had ever heard about were Bitcoin, Litecoin and Fedorcoin and didn't hear anything about Fedorcoin for several months and more recently it's popping up on my radar so I'll just say Fedorcoin. Excellent guesses. The correct answer is particles. Particles is one of a new breed of asic resistant altcoins which will be very popular in 2014. Moving on to questions and answers. Let's see if we have any questions. If the Google questions app is working. I'd like to fantasize a bit more about govcoin while you're looking for questions. I think the key characteristic of govcoin will be that 98% of it will be pre-mined and handed over to the six bake banks. They will promptly rename it bank coin and then proceed to bankrupt to everybody else by using it. Oh wait, we already have one of those. It's called a dollar. Boom! Fedor, watch out when they start printing that dollar digitally. You never know how many of those they're going to print. I'm not comfortable investing in the dollar. I'm really worried about what would happen to the dollar if the internet collapsed. Yeah. I don't know. They're testing that one out with a Verizon decision. Yeah, it's also susceptible to a 1% attack. In fact, that attack happened in 2008. So in 2008, there was a 1% attack and unfortunately, they got to wait with it. They got to wait with it to the fact that now you go to big developer conferences like Davos and they invite one of the attacking mining pool owners, Jamie, on to the stage, to talk about how bad Bitcoin is. And he sits down with another semi-criminal who had a past experience working for a big mining pool who was also complicit in the 1% attack. And they chuckle amongst themselves about how crazy Bitcoin is while they're trading in dollars. And none of them has gone to jail. I don't understand this. It's been an amazing couple of years. It's been amazing advancements for their work. Yeah, if the most hated mega-criminals on Wall Street don't like Bitcoin and most people don't like the most hated mega-criminals on Wall Street, what does that mean about how most people feel about Bitcoin? Yeah, exactly. Go come around. All right. The first question is we kind of talked about it earlier, but if you'd like to go over again, what are your thoughts regarding Ethereum? And what do you think its effect will be on Bitcoin? Andres? Let me just clarify that all I've seen so far is I've read several of the white papers. I've looked at some of the documentation and I've talked to some of the developers behind Ethereum. I have not seen the source code and I have not used it. So I'm still farming an opinion. I think it's useful to explain to people what Ethereum is. Essentially, I guess you can call it an altcoin in terms of it being an alternative blockchain to Bitcoin's blockchain with its own proof of work algorithm and its own currency. But it's designed more as a platform for running contracts that are expressed in a bytecode like assembly language for which you can use a compiler to compile code from a higher level application or domain specific language. A DSL is its call. So essentially, you can encode contracts as simple as currencies and as conflicts as you can imagine. Any transaction is executed, essentially as code by every verifying node. I think it's very interesting. It's a very different approach. The Bitcoin transaction scripting language is churing in complete on purpose. And this coin takes a very different approach by making a language fully churing complete on purpose. And that's a refreshingly different approach to the problem. Now who's right? Who's wrong? Can an altcoin really create enough momentum by bootstrapping its own chain without using some of the network effect of Bitcoin? I think those are all open. I'm very interested in seeing how we could use something like a churing complete scripting language to basically encode complex legal contracts. So interesting stuff, but not ready to express any opinion about what it will do in the future. Very good. Anyone else like to comment on Ethereum? Yeah, I got a chance to talk with the core developers last night. There's a video on YouTube from our Meetup group we've been broadcasting live conversations with different Bitcoin personalities and developers, entrepreneurs in the Bitcoin space that call in and talk to the members that are Milwaukee Meetup. And that's also broadcast live for the viewing public. And the whole crew was in Miami and they all joined in for the call. Having gotten acquainted with some of them in the last several months, I certainly am a big fan of the projects that all those guys have been involved in prior Ethereum. And then learning about Ethereum is very exciting. I guess I don't have the high technical aptitude really to analyze its guts and analyze and look at its efficacy for the future. But I certainly think that this is just another step in the right direction in terms of trying to bridge the gap, solve some of the problems that Bitcoin didn't conceive of or supposedly didn't conceive of that we're experiencing today that perhaps he didn't envision when he wrote the script five years ago. So that's really exciting. It's also, I think I mentioned the guys who are working on it. I appreciate their work on previous projects and I trust them as an acquaintance and friend of some of them. That's exciting to watch and be a fan of what they're working on. Everyone should get involved and check out, you know, read the wallpaper that Vitalik Booter in wrote. If you are so compelled, you know, get involved in the crowdfunding, the IPO. But certainly as soon as the blockchains released and people can start mining, I'm going to try and mine some ether and just watch the developments that can happen. We centralize autonomous contracts and things like that. That's stuff I really want to study a lot harder. I see this solving so many things that need to know so much more before talking big dreams to the general public out there. Very exciting. Moving on, next question. Do you think in the future it will be possible that people will run their own Bitcoin items, giving us more BTMs than ATMs, planet wide? I would gladly invest in it, do it yourself, open source BTM in my house and in a theft truce structure just off my driveway for the public. Dovey Barker. No, I think by the time it's that popular, no one will have any dollars to put in a BTM. It's just a matter of time before the last few dollars or that came up by these machines. Right. That's an interesting question. I don't know when we're going to see the first ATM in the United States. I used one that was in the United States but I think it was an experiment, a trial sort of environment. I know many people who've tried to get a Bitcoin ATM in their local area and they've done all their due diligence and then gave up because of the regulatory concerns just being an overburden for the process. I'm not optimistic about seeing any ATMs in the United States at least until quarter three, maybe not in 2014. There's a sense in which anybody with a smartphone is a Bitcoin ATM. If you come up to me and hand me a wad of cash, I have the means with my phone to send you Bitcoin and you can watch it happen. Some of the machines aren't much more advanced than that. The Skyhook ATM is a sub $1,000 ATM and it's just a little silver box with a cash reader and what looks like an Android phone inside. You push the buttons on the machine, you scan your QR code and it converts your dollars to Bitcoin. It's a very small show up to a meeting, show up to a restaurant, kind of a portable ATM machine. I'm really interested to see if they start manufacturing it, what that'll do. I like the idea of human Bitcoin transaction machines because they create community. One of the advantages of buying from the Davi BTM is that you get a full blown Davi smile when you do it. You can ask questions. You can ask about what this QR code is. You'll get a mini tutorial. I do that a lot. I mean, every place I go, I give people a bit of a point. I don't charge them for it. I just give them a dollar. I think that's an effective one. On the other hand, there are circumstances where you don't want that smile. For example, Davi gives you the nice smile but there's other people who give you the creepy smile and then try to give you the gropey hands or pull out the Maggie Stabberson knife. For those environments, maybe you want an ATM. One of the advantages of an ATM is that it won't stab you and it won't try to run away with your money and you can do it in a public space. For some people in our community, safety is a really critical consideration. ATMs provide a really safe environment for exchanging with Bitcoin without having to deal with any of the people in the community. Sometimes that's nice too. Just a little anecdote on what Andreas was mentioning. I for a long time was a fan of using the traditional legacy banking systems weak innovations for facilitating my ease of making Bitcoin transactions and creating new Bitcoin users and things. I live about 30 or so miles outside of Milwaukee and if someone requests a trade with me on local Bitcoins and just can't fit it into the schedule to meet them in person, I of course love to meet people in person for the reasons Andreas mentioned. But if I can't because of time, if they have the same bank account as I do, if we work with the same bank for our Piot balances, then they can send electronically branch to branch and it's very instant. As long as it's Chase or Bank of America to Bank of America. But I just recently learned that in person cash deposits by people who are not on in the case of Chase Bank who aren't listed as account, their name's not on the account, they won't be able to make that cash deposit anymore. So maybe these banks are catching on to kind of how, why on earth would they not want private depositors to come in and load up accounts of those who hold them? The people coming in and depositing the money may or may not be Chase customers or whatever. But why would they not want the deposit in the first place? Maybe it's a KYC thing, but might it be that they see this stuff going on with local Bitcoins and off market Bitcoin transactions or gray market sort of activity like that, which is why I'm really excited about Skyhook. If you could have a very vulnerable ATM portal that could very feasibly operate in the gray market with very low risk of consequence to the operators there, then that's really exciting to me too. I hate to see the disruptive potential of these technologies forced underground, but maybe that's necessary. We've got another question here about Litecoin. Where does Litecoin stand into the relation to the growing number of altcoins? The network cash raise and price is dropping rapidly as miners desert Litecoin for more profitable altcoins. Does it still have a future alongside Bitcoin and Dress? Oh, yeah, give me the easy one. Thank you. I think there's something to be said about the stability of a coin over the long run. That has a lot to do with developers, with maintenance, with the seriousness of the effort. Litecoin has already been through several cycles of booming and then crashing and then booming and crashing, and it stayed consistent with its roots. Charlie Lee does a very, very good job of keeping right up to the latest maintenance release of Bitcoin and including feature parity. Now many coins are going to be able to do that for the long run. I'm not quite sure that the new coins that are attracting some of the attention are really that long-term resilience, but we'll see. This is an open competitive market. I think people don't realize how incredibly competitive it is. The barrier to entry is very low. At the same time, we're seeing all of this innovation. There's a lot more in terms of proof of work, algorithms and proof of stake algorithms and key algorithms and various algorithms for the monetary base and supply. There's a lot more going on in those spaces that present some very serious innovation and some key features that make these coins very appealing. We'll see what happens in the free market. I think what's interesting though is it seems to me that one coin that you can use to buy all of the other coins is Bitcoin. Bitcoin has already become the de facto reserve currency of the cryptocurrency space. That's an interesting development. Absolutely. It does seem like Bitcoin is the bridge to all the other altcoins because you certainly can't seem to get there without Bitcoin in most cases. Not unless you're a miner. That will always be a niche application and a niche community. Unless you make it so that mining is so decentralized because the proof of work is so asic-resistant that essentially mining on a smartphone or even a feature phone or even an air conditioner or the chip on your vacuum cleaner is profitable enough in terms of electricity cost that it's worth doing. That would be a very compelling feature again. We're beginning to see in some of these new coins proof of work, algorithms, the really attempt to address that issue by making it so inefficient to mine on Asics because of the memory requirements that it's reenables not just GPUs but also CPUs in some cases. It does look like they're getting a lot tougher with multiple hashing functions, different types of security and even features designed to thwart multi-pools which go around mining coin to coin. They'll react. They'll raise the difficulty when they're mining and then when they leave they'll drop the difficulty back down. So the multi-pool can't seem to gain any advantage over these new coins. Next questions for Dovey. So if my mom buys a toaster from a seller on eBay who takes her money but doesn't send the toaster, PayPal and Visa offer security for her. Does Bitcoin just say to her, buyer beware? If so, that's a hurdle. Yeah. Sorry. No. No. Okay. So here's the thing. eBay has the ability to offer an escrow service and to offer. So the way that bitmit work and bitmit is gone for all intense purposes but I'm sure that something similar will happen is that it offered an escrow service where a person was able to say, I've received the product and then bitmit releases the Bitcoin. So what eBay does is it makes it reversible. The transaction, you can dispute the thing after the fact. So it just means that there have to be other ways of coming up with protections. It doesn't mean that there are no protections and it's some sort of wild west on the internet. So I don't think it's that big a problem. Yeah. Andreas, yes, do you own the front row? So I think there's a fundamental misunderstanding here which is the idea that by removing mandatory counter parties, that means you have no counter parties at all and that's not true. You have taken out mandatory counter parties but you have the ability to inject voluntary counter parties in any transaction. Let's see how this works. Well, that's what bitmit was. Yeah, but not just bitmit. Let's take it as step broader. So if you buy something with Visa and you have a problem with a merchant, there is only one company you can take your complaint to and that's Visa. And if their arbitration proceeding isn't to your liking, you get screwed as many merchants do and as many customers do. The same thing applies when you take it to PayPal. You only have the choice of one arbitrator and that's PayPal in that transaction escrow. But with Bitcoin, you have a choice. You can either go directly from sender to recipients with no counter party and then it's completely buyer beware and if the seller doesn't send you something, you've got a problem. Or you could select a counter party and inject them into your transaction with a multi-signature M of N transactions where it requires two out of the three signatures in order to execute the transaction. Now, in that case, you could pick an escrow provider based on their arbitration policies and fees and you can pick them from a giant marketplace that already has six or seven providers, some of which actually rely on independent arbitration by volunteers who put their credentials up and you can pick which volunteer you want to arbitrate the transaction. And that's step one. Step two, you can use M of N transactions and multi-sign to not just inject counter parties but to create a decentralized counter party strategy. For example, imagine if you had a system whereby all of the buyers who buy from a specific marketplace on Amazon combined in multi-sign transactions so that their reviews of the transaction acted as escrow releases for future payments, which means that you didn't just get a bad review but your bad review actually removed the signature from future escrow payments that you might receive so the market will punish you by arbitrating against you in these escrow's if you cause problems for more than one customer. You could also have merchants spending together where essentially you have a bunch of competitors who each act as escrow's on each other in a massive multi-scrow capability which means that if Amazon screws you over then you can get overstock and tiger direct and eBay and someone else to decide how to arbitrate that and a consortium of merchants therefore would act not only in their own interest but in the interest of the market as a whole because the competitors have no reason to let you get away with fraudulent practices that are going to beat you up on it but if they don't act fairly then you're going to retaliate in kind so it creates a market dynamic and you can even have a combination where both consumers trusted third parties and merchants spend together and have multiple transaction signatures you know maybe you need 40 different signatures to release a transaction out of 80 signatures that are on it. We can do so much with programmable money so it's not buyer beware. It's a matter of how many services can you build how decentralized can these services be how competitive these services are giving the consumer an enormous range of choice as to how they protect their purchase much more than you can get with a single arbitration single escrow system such as VSO PayPal. That's fascinating I am so excited for that future that Andreas just described I hope all the viewers out there heard that that's really exciting you know the only thing I'll add is we see free marketplaces such as the Silk Road and the like being able to innovate these kinds of things and at the very earliest stages of the problems arising you know so the innovation without permission that I know Andreas talks about so frequently is what's what should draw people to the Bitcoin ecosystem in mass and I hope it does. Very good. We've also got a comment. I just like on top of all of that I don't think that that removes the precaution buyer beware because you were also the buyer of whatever escrow services whatever arbitration systems you want to use like you are also the consumer of those products and in that sense yes it is incumbent upon the purchaser to do their due diligence in any marketplace and that includes whether or not you're happy with eBay and PayPal's resolution system. Right where you only have one single choice and that is to take their resolution service or not and it depends on who the merchant has chosen as their payment provider not who you have chosen as your trusted escrow party so essentially you've got a much wider choice which of course means you have more responsibility over the choice you make and a free market you're going to have a broad range of services not everyone's going to be trusted. The median will probably fall right about where it falls with PayPal and Visa but you're also going to have much better escrow providers and you're going to have much worse escrow providers within that range and you have to very carefully pick them with the opportunity of picking much better escrow providers who give you much better services you also have to avoid the risk of picking the worst ones. So this choice gives us it opens the range of choice for the consumer which means they have to exert more responsibility in that action. So hopefully the consumers out there this can show you all how little consumer choice exists in the current marketplace right now and how much is possible and perhaps we shouldn't call it buyer beware but buyer due diligence. Maybe this will bring upon people the compulsion to actually make wiser consuming choices. I think Bitcoin's deflationary nature does that too very effectively. People talk about you're not going to spend it because they're going to appreciate it in value. Can't tell you how many times I feel that rebuttal and I ever have to say is well that's not what I'm seeing. Commenter says, Andres it sounds like an evolving color coin based on user reviews. Is that a fair analogy? Yes, I mean colored coins are one of the ways to do smart contracts and smart transactions and create programmable smart money. So whether you use color coins or master coin open transactions or Ethereum or any of a dozen other possibilities and we're still seeing this market develop and it hasn't coalesced yet. So we're going to see how this plays out. But colored coins are one option of doing this and I think we haven't even yet imagined the types of possibilities that exist when you start combining financial services and review services and customer service reviews into new financial instruments where programmable money is influenced by things that are not necessarily in the financial department. We've got a lot of innovation here that can cross between completely artificial silos. So why are review ratings separate from the payment system and the reason is because the payment networks are insular. They cut out all possibility of innovation that's not sponsored or acknowledged or permitted by the person who owns the payment network. But now we can start crossing silos. So why not have for example a lower cost arbitration fee and escrow fee on merchants that are higher rated from users and have a better history of supporting good escrow results. You can do that. So essentially ratings now have a direct financial impact on the transaction fee you pay for escrow. That's a whole new financial product. The next question I'm not sure if this is related. Can you talk about what Reggie Middleton is doing with Altrakoin? Everyone heard of Altrakoin. I'm not familiar with Altrakoin. So I was on a program with Reggie Middleton three days ago. The Rainmaker program. Let's make it rain. It's rain making. Something like that. I hope I didn't mispronounce it or misconstruely the title of the show. So he talks a bit about essentially developing a coin that allows for smart contracts. So this is very much something that's focused on the layers above currency and the possibilities of doing various transactional contracts in a complex way within a coin. I'm not sure if it's an altcoin, a meta coin or not. I haven't studied it beyond that. The next comment is back to colored coins. How about a time to live colored coins? What comes from a trusted user makes that coin green for one transaction. Maybe I don't know enough about the color coin idea though. So time limits certainly are part of contracts. And in fact they're a very critical part of contracts because many legal contracts and many legal transactions have requirements around time of delivery and they have expectations and contractually guaranteed expectations around time of delivery. There's also things that have the inverse where you have essentially a time period where the contract cannot be executed until some event happens. An example of that would be a trust fund that only starts distributing money after the named trustee reaches a certain age or fulfills a certain obligation required by the trust fund. It's constrained to very common in contracts and doing smart contracts requires that. Another possibility is a whole separate layer of this is the use of articles. Aracles are described in the contracts page on the wiki for a bit point if you want to look. But essentially what this is is an address or key pair that delivers a signature based on an algorithmically defined outcome. So you can say here's an address that only signs transactions if Dow is over 15,000. Here's an address that only signs transactions after July 30th 2014. Here's an address that only signs transactions if the moon is full. And so therefore you can take all of these addresses and by composing them into a multi-sick structure what you then have is a multi-sick that expresses conditions that have nothing to do with a coin and that are all externalities and then you trust that Oracle address or key pair to only sign under those exact conditions. These are essentially algorithmic guarantees expressed as a key that can be simply freely embedded into a contract to generate smart contracts. And you can use that with color coins but you can even use it with simple straightforward multi-sick transactions within a bit point. Excellent. The next question, the Pine Ridge reservation is talking about making a sovereign currency, Maza coin I believe it's called, coming in March. So that sounds like a Native American Indian reservation making their own coin. So that's definitely a very interesting idea. That's not the first I've heard of this particular topic. So I've already had discussions with a number of people who have told me about different American Indian tribes and reservations and nations that are doing this. Someone doing this in order to support casinos as we talked about in our previous segment about Las Vegas adopting. But some of them have nothing to do with casinos and they have a lot more to do with expressing an asserting sovereignty. And sovereignty is the magic work here when it comes to Native Americans. They have sovereignty which has been very limited in scope in terms of the land because the treaties were written by white people. But the point is that in economic items, as we've seen with the development of casinos, that sovereignty has had much more reach and much more power behind it. And a currency would be the kind of thing that might be a very interesting way to assert sovereignty in a way that regulators can't shut down. So I'm looking forward to all of the Native American crypto coins that can come out of that. It's an interesting idea and kind of connects to the next question. Can you touch based on certain myths starting their own digital currency like the Canadian Mint creating CC coin and how this can impact the P2B trusted currencies? It sounds like an incredibly crowded market with Native Americans, Canadian Mint and also all the other altcoins. Once you create the possibility of a free market for currencies, there will be tens of thousands of currencies and most of them will be crap and some of them will be great. And some of them will be absolutely insanely amazing and awesome. And so you're going to get the full spectrum there from the invention that makes Satoshi's Bitcoin look like a small toy of cryptocurrencies and in fact revolutionizes things even further. To your average run of the mill scam coin, pump and dump hoax coin that's equivalent to a 419 scheme, you're going to have the whole range of those. I don't think any of these really compete effectively and certainly the idea of a mint being able to compete by producing a cryptocurrency. The problem with the mint is that it still has the same counterparty risks of a national coin and so unless they remove their own control from the mining of the coin, which I doubt they would do, then it's really just another fiat and if they do remove control then it's just another cryptocurrency. So I don't see what the compelling differentiator is there, other than they get permission to use the logo of the government. It's also unclear that the mint would have the brain power to make a really interesting cryptocurrency whereas someone like Google or Microsoft or even Oracle would have probably the right brains to get it done if they wanted to. Well, that's a really important point because think about it. It's not just the brains that you put in at inception. It's also your ability to continue to innovate. So any centralized Fedcoin or any mintcoin that has centralized controllers going to innovate slower than completely open network, open standard, open source coin like Bitcoin, which means that even if at first they produce something that is compelling, at that point they remain stagnant whereas the rest of the cryptocurrency world advances at ridiculous speeds until it makes them irrelevant. And that's why I don't think these central coins, non-decentralized coins or copycoins really can compete against Bitcoin or any of the other serious cryptocurrencies simply because they'll dry up for innovation. You create the Compuserve walled garden and the problem is that you're never going to have as good content and as good innovation as good as solutions as the wide open internet and they're going to have to learn the lesson of Compuserve all over again. Another issue might be they're a defense to hackers. They could be like Humpty Dumpty up on the wall, look really good till they fall off and then how do you ever put them back together again? Sorry, will you say something? Yeah, I mean I just see any of these sandboxed cryptocurrency idea or gov coins that might come out there, whether they start off centralized and decentralize the mining process or vice versa, all of these ventures will ride on the co-tails of the reputations backing them. And it's kind of what we were getting at earlier with the dispute resolution and arbitration schemes or escrow services that should emerge in a freer market to resolve consumer complaints or just provide more security for more high risk transactions or whatever it might be. As long as governments or mints or other proprietary organizations with their centralized coin continue their trends which is their reputation doesn't necessarily improve over time. I don't see how any of them could usurp or compete at all. They'll be interesting experiments but they'll just verify kind of what at least all the panelists here know and many many other fans of cryptocurrency know which is the freedom component involved with the technology here and the necessity of reputation with integrity that is backed up, that walks the walk. It's going to be really amusing to watch because I think there's an aspect here of living in their own little bubble and some of the central bank regulators who truly believe that their currency strength lies in the fact that the governments, the country, backs the currency and therefore has credibility and they can continue to believe that because they operate in an environment where the use of that currency is mandatory to all of their citizens where taxes can only be paid in that currency. Now they're trying to compete in an environment where choice is the only thing that determines adoption and suddenly they may realize that this illusion they had that they're the trusted currency evaporates before their eyes as people say you know what? No it was really because you were pointing a gun at my head. I think I'm going to go with these nerdy people over there. They haven't pointed any guns at me yet. You know and what we see with all the capital controls being imposed in various nations you know whether it be its cypress or Argentina or others those are all doors being slammed shut with you know guards and guns in front of them and where do those people go? I mean they have options now. This isn't five six ten years ago when there were no options and people cout and you know just cross their fingers and hope that you know something would change their predicaments. So with these options I mean it's I'm really enjoying seeing the veil kind of come kind of dissolve in front of the eyes of the general public about the trust that they put in the reputations of these central authorities you know it's it's slowly but surely dissolving away as it should be and I don't think the lies of you know trust us can can continue much longer when there's such an obvious and open alternative that people are hearing more and more about. This is what's exciting to me. This is why I think user adoption is more important than merchant adoption. Yeah it was funny to watch Jamie the not yet convicted criminal crook talk about how you know Bitcoin he doesn't get it but eventually eventually it's going to be regulated like any other payment system and brought into line. Yeah I bet you hope it is Jamie because if it isn't then suddenly regulation is something that's an anchor hanging around your neck and not something you can beat competitors over the head with fancy that. Excellent questions today a lot of interesting answers about ethereum which will definitely have to look into more and now we'll move on to predictions. This is the part of the show where I ask you to predict the future. Are you ready Andreas and to Nopolis? No I'm never ready haven't you noticed we do this every week and every week I am so far for being ready so right to dovey go dovey go dovey I predict that one day brick and mortar establishments like restaurants and bars will begin framing their last dollar instead of their first dollar. Well Pangman you know these predictions are just so difficult because they're so so much uncertainty you know in a good way out there with regard to nobody knows what's going to cause the price of dog coin to go skyrocketing in the past week or whatever it may be. Institutional money we're seeing that happen I think I'll kind of stick with what I said a little earlier it's unfortunate I've been efforting myself to have one in Milwaukee but I don't think we're going to see a United States Bitcoin ATM until at the soonest the third quarter of this year and maybe not in 2014 at all I just I'm not encouraged by what I'm seeing by the folks who are efforting this to you know bring a bring a an ATM into their locale. And Andreas and to Nopolis. So in looking about all the naysayers of Bitcoin one of the considerations that has sprung up in my mind is that while Jamie has probably already escaped the statutes of limitations for some of the earlier crimes committed by his bank and they have committed more but they they keep escaping the statute of limitation. The politician sitting next to him however have to get reelected next year and the year after that and the year after that so the more we adopt Bitcoin and the more pressure there is the more businesses have their livelihood depending on Bitcoin the more lawyers those businesses can afford and the more we see Bitcoin starting to have an impact and campaign finance and in paying for the campaigns of these politicians the more we're going to see them to start play to a different tune one that respects the will of the voters the young voters the voters who have already decided that the banks are toxic institutions that are in bed with government and get whatever they want and never go to jail and want an alternative. So you know don't think that Mr. Lewnext you is going to be your buddy forever because one of these days you're going to find that there are no buddies next to you. Excellent prediction. 2014 will be the year of the asic resistant altcoins like particles and vert all altcoins are not created equal and they're not going away they'll be more and more of them and they'll be much more complicated. We're out of time until next time bye bye don't forget that you can sponsor the Bitcoin group by going to the Bitcoin group dot com or scanning this QR code or you can use our crypti trade key to send us any kind of altcoin that's used like that's right send your altcoin to the Bitcoin group and increase its chances of being talked about on this show until next time bye bye