The Bitcoin Group, the American original, for over the last ten seconds, the sharpest satosis, the best bitcoins, the hardest cryptocurrency talk. This week we'd like to welcome the panelists. We've got Chris J from Feathercoin. Hello. Megan Lourdes from Bitcoin, not Bombs. Greetings, bitcoins. Derek J. Freeman from Peace News now. What a week in Bitcoin. And Will Pangman from Bitcoin, Bill Wacky. Good morning, bitcoins. Screen share is instantly broken, so so much for all my graphical work this week. Issue one, Bitcoin, New York hearings. The wired magazine headline that you can't see, bitcoins fade as in the hands of clueless regulators, says it all. New York development of financial services held two days worth of hearings, despite never bothering to try Bitcoin for themselves. They don't understand Bitcoin at all, and yet they're in a rush to regulate. Do we need the state of New York to regulate Bitcoin? Is Bitcoin regulation good for the state of New York or the United States? I ask you, Chris J. I think right now you either treat Bitcoin as a learning opportunity or you treat it as a threat. And I fully expect them to do the most logical thing. The biggest downfall that regulators and governments have is that they behave in predictable ways. The one thing we have on our side is that we have a goal. We actually have something that we're working towards. All they want to do is maintain the status quo. So yeah, I think that this is just a lot of posturing and I don't see it as a particular threat. America is just one country among many. Megan Lorde. It was painful watching that. They don't know the first thing about Bitcoin and they're trying to control it anyway. So I think it's kind of amusing to watch. It's funny because there's this kind of air condescension towards Bitcoiners, especially the anti-regulator side of things. Very condescending, kind of like, oh, we don't need you once we get our regulation on. But I think it'll be really interesting how it plays out and how much it'll come out that we don't need them as much as they're probably going to need us in regards to explaining it to them. So they'll understand what exactly it is they're trying to regulate. So no, we don't need the state of New York to regulate Bitcoin. I don't think it's good for anyone. And I think they're going to have a hard time doing it anyway. Derek J, no relation. Well, regulation is about monitoring and enforcement of rules and rules can be enforced by markets. So when people don't like a particular company or exchange, they'll switch to alternatives that they prefer. And no, we do not need the state of New York to regulate Bitcoin because when government regulates, there's an implied threat of force, meaning fines or jail time. And this force is not necessary and can actually be harmful not only to individuals but to the entire industry. Well, Pagman. Yeah. Regulators are very busy trying to get their grubby mitts all over this technology. And like you said in your opening, they don't understand it at all. It's something that has inherent qualities about it that it appears they ignore completely. And you know, decided to apply their whims for certain inherent qualities they'd like it to have or they're going to force upon it. Bitcoin's core belies those central inherent qualities they'd like to impose on it. And this went over their heads despite the best efforts of all of the witnesses or panelists at the hearings who were basically cheerleading for regulation and trying their best to help the regulators understand the technology while still explaining the underlying feature set of Bitcoin that belies their traditional methods for regulation. So yeah, it seems like they just won't achieve their goals and they'll spin their wheels. And meanwhile, the light speed pace of innovation in Bitcoin and decentralized technologies and cryptocurrencies in general will just continue to accelerate far past them. Absolutely. I agree with Will. The inherent qualities of Bitcoin, the ability for one person to send part of a Bitcoin from one address to the other address, are unregulatable. It's math, it's cryptography, it's a network. What you say in New York has nothing that can affect that transaction. This is a holy new market that you've never seen before and you didn't even do your basic homework. You didn't even learn how to send Bitcoin. You didn't even sign up by $10 worth, buy a book on Amazon, send some to a charity. The briefest and most minimal amount of research necessary to understand Bitcoin is to try it out. Try it out for yourself. It's not theoretical. It's like email. You can log in, get an account, send some around. It's kind of magical. You can't take it back. Once the email is sent. It's gone. Once your Bitcoin is sent, it's gone. You should try it out. Regulators of New York who are obviously in a big hurry to regulate this. I don't know who asked them to regulate this. The other word of the hearing was clearly hubris. As Andrea said, and we all agreed in our chat earlier this week, hubris, like the gods, the regulators of New York, the financial former financial capital of the world, are now here to regulate us. They don't seem to care what we think at all. Exit question. Which state will attempt to regulate Bitcoin next and will they do it better? Of course, we're asking Chris J from London, England. Pretty much never stayed. I'm holding out for Hawaii. I really love the look of it in the brochures and I'd love to live there. I'm really hoping that they're going to be dropping a ton of libertarianism on that state and then I can go live there with them. All the way to the end. I don't know about it. Great decision. Choose your state based upon travel plans. Megan Lords. Well, I think the next state to regulate it or to attempt to regulate it may be New Jersey. I think they're really desperate for any kind of revenue right now. There is also a recent report that came out that I believe it is New Jersey that has the highest amount of people on government assistance already. I'm if they're smart, I'm sure that those new Bitcoin is a way to get their hands on that. Derek J. You're all wrong. California will be next. The fact that Silicon Valley is in California rather than New York, that's any indication. California will not regulate as harshly and will be all the better for it. Will Pangman. I tend to think Derek's probably right. But I'm just going to throw a wild card in there, Florida. The conference was just in Miami and it was very well received by all of the business culture in general, the entrepreneurs down there. Miami is closer to I think a dozen national capitals. It's closer to 12 foreign national capitals than it is to Washington, DC, which just makes it a prime spot for the international potential that Bitcoin can provide. New Zealand answers all. I appreciate you enjoyed Megan's answer of New Jersey because it gives me the chance to mention that Christie's right hand man, Wildstein, at the Port Authority has turned over on him today saying that Governor Christie knew about the bridge closing. Of course he knew about the bridge closing. So I think New Jersey is going to be shopping for a new governor. They might be a little busy and unable to regulate Bitcoin. I'm going to have to side with Derek on this one. California will be the next. They'll regulate lightly. They'll have a wait and see approach. They'll use logic. They'll maybe they'll even try Bitcoin out before they regulate it. I would be blown away if they did that. Even just the smallest bit of trial would before regulating, before talking about it publicly, just the smallest bit of trial would be really amazing. And what California has the potential to do is to do the opposite of what New York did and to provide a safe haven for Bitcoiners to provide safety for their companies and their employees, which is obviously not going to happen in the state of New York. Issue 2, and everyone at home needs to imagine that there's graphics over the screen. Bitcoin, Civil War. In a highly regarded article written earlier this week, business insider declared a Civil War between pro-regulation bitcoins and pro-freedom bitcoins and had the gall to claim that the pro-regulation bitcoins were winning. Isn't business insider missing the obvious point that Bitcoin, the protocol like BitTorrent before it is a network and doesn't care about your regulations? Megan Lors. I saw some of this at the Miami conference actually. There was a lot of tension between the pro-regulatory side and the anti-regulatory side. And there was a lot of representation though on the pro-regulatory side. Carol Van Cleef, one of the women at the New York financial services hearings, the one who was pushing for that really dinosaur currency, like, oh, you got to need this currency back by gold. It's kind of like Bitcoin, but we can kind of regulate it. She actually told my friend Michelle very stoically, very eerily, a lot of you are going to jail. A lot of you people in this room are going to jail. And yeah, I mean, that's a reality that I think we may have to be facing. But yes, there is some tension there. And I don't know as far as who win or I'm sorry. I don't know. I don't really think it can be regulated. I mean, they're going to try. I don't know if the pro-regulatory side is winning necessarily. I don't know if that's the word for it, but they're trying really hard and very much have this air superiority and very pompous. But I don't think they know what they're up against. Derek J. Andres Antonopoulos said it best in his tweet earlier this week, which was retweeted by Matt Bitcoins, quote, Bitcoin will not be what you want it to be or what you regulated to be. Bitcoin is governed by consensus. And you're not part of that. Bye. Will, Penguin. I think it's interesting. I wish there wouldn't be a so-called civil war. I can understand why the two sides would conflict, you know, the capital investment camp and the early adopting libertarian crypto-anarchy camp. They should really work together, in my opinion. Here's a strategy that I think was kind of underlying the hearings, because I was ruminating on it after they were over. These well-funded, large Bitcoin businesses that many of which had representatives at the hearings are asking for regulation and telling the regulators, please pay attention to us. Please watch us like a hawk. We want to play by our rules and spend tons of money doing so. I think they want that because they see, you know, even though there's a huge cost there, that once they get the COLO approval, so to speak, there's a 10X, 100X, maybe more addition to their bottom line in doing so. So they see the ability to make much more money by getting that seal of approval from, you know, the iron fist, if you will. Meanwhile, I think the state, if you will, the bureaucracies will be far too focused and paying way too close attention on the very superficial aspects of regulatory compliance of these big, well-funded businesses. On the other hand, the crypto anarchists out there aren't going to stop what they've started since 1992, and it's only gaining so much demand. It's going so fast. I know all of us who live in Bitcoin can feel the pace, the breakneck pace of this innovation, and things like Ethereum, color coins, master coin, and so on, decentralizing everything, making any attempt to, you know, squelch creativity and freedom of interaction, essentially, freedom of association, freedom of speech, and so on, making it impossible to stop the way that the state and bureaucracies are used to doing so over the last, you know, 100 years, 200 years, 2000 years. So I think they could kind of work together, you know, if there's more decentralization and more innovation in Bitcoin, these well-funded businesses who obviously understand the technology, whereas the regulators don't, they certainly see the potential to make more money through the newer innovations coming out, as well as through the seal of approval method from the state. So it's a win-win for both sides if they can kind of like, you know, play the foil for each other, so to speak. Yes, Jay, was the article that highly regarded? I thought it was link bait. I thought that publication basically just wrote headlines to get people to click on the link so they could view the ad so they could turn to their appetizers and say, look, we are getting the metrics we told you we were. No, it was just they were deliberately trying to create division and they were just trying to get people to click on that article. I didn't learn anything from it. I think it's a false dichotomy. Anyway, I think that right now the access is tyranny versus freedom. And the only thing worse than a dictator is a slave in a system who wishes he was the dictator. That's what I can't stand. So when I do hear fellow Bitcoiners talk about, you know, wanting regulation, what I'm hearing is you want to make money and you don't want to wait. You don't want to have to do the hard work necessary. What you want to do is waste your time jumping through hoops. These people have rules that enforce past actions. They don't actually bake the regulation into the code. And so all you're ever going to do is be playing catch up. That's why I think that we've got the edge here because the faster we change, if we increase our rate of change, they're never going to be able to catch up because you're just going to get this red queen effect where they're just running in order to stand still. So I think that the people, the entrepreneurs that want regulation, I kind of sympathize a little bit because they just want to go out and make money. But there's a wider and permission to be a bit philosophical. I would say that there are two types of rules in the world. Okay, there's the rules we can break, which we call human rules. And then there's the rules we can't call physical rules. And the point of justice is that it sets us free because it gives us a set of rules that helps us navigate the ones we have no control over. So choosing the right rules at the outset, like something like a fixed issuance currency does where everything's based into the design is a very good system, in my opinion. I don't think it's a very good system when people start writing rules that make it very convenient for them to, I mean, maybe we have to put this bit differently. One thing you can always rely on governments to do is disagree with each other to maintain the status quo within their borders. Right, that's what the UN is about. That's what all those meetings we watch in the news, all they ever do is disagree. But what Bitcoin enables us to do is reach a global consensus and an unforeseeable way because it's based on the universal language of mass. That's got to be a much better starting point. We can actually circumvent governments altogether by reaching a consensus without their permission. Like Paul Stopper, and that, I think, is the work that needs to be done. I agree. It does stretch a lot further than what they're looking at. The ability to build a distributed voting system with Bitcoin, the ability to send deeds, contracts, wills and trust are far beyond what they're thinking about and what they're really trying to regulate. That's probably what they're afraid of. That's what you just said there. That's what they're afraid of. It's our ability to cooperate with one another with our own voting systems. That's what scares them, I think. Absolutely. Derek J. Absolutely. In the question being, which side will win the Bitcoin Civil War? Yes. Which side will win? Well, unlike the movies, the good guys don't always win. If pro-freedom bit-coiners can get Bitcoin into the hands of the masses and get them using it without the regulation, they'll resist future intrusions by government. The fact that Ethereum has already been released shows that pro-freedom bit-coiners already have a clear lead in this war. It's worth noting that while we may call it a war or a battle, only one side is fighting with guns and cages. Shame on them. Well, Penguin. Who will win? Definitely the pro-freedom bit-coiners, the pro-freedom tech innovators. The speed is just far too fast. Regulators are still working in a paper world. Derek mentioned it earlier. Ethereum and these next gen technologies are going to eliminate any possibility for external laws to be applied on. I really liked what Chris said, making the distinction between natural law and man-made law. Man can't thwart the law of gravity. If you bake regulation or rules into the code of a particular innovation, that's all that's needed. That can be arrived at it by consensus. Network effect will show the winner. I think what we're seeing here is the future of money or of economic interaction is in cryptocurrency. We're all ahead of the game right now. Eventually, it will be like Teflon. I completely agree with Derek. Shame on those who would fight this altercation with violence. Chris, Jay. I think that ultimately when a king starts stealing from his people, the people are incentivized for change. I think the mistake that a lot of these governments made was they got greedy. They didn't cut us in on the deal. They didn't give us anything back and just kept taking and taking. My knee-jerk reaction would be to say it's up to us that the futures don't invent themselves. But yeah, I think the freedom is going to win. Megan Lorde. Bitcoin will win. Whoever is on the side of innovation and not just Bitcoin, cryptocurrencies in general, I'm very excited about the Ethereum project. Whoever is on the side of innovation is going to win this. Whoever is thinking ahead and I'm not talking about a year ahead, five years ahead, I'm talking 50 years ahead to the future. Megan's asking the right. And she stole my answer. Bitcoin will win. The protocol will win. The network will win. TCPIP will win. Whoever can deliver money fast under a consensus in a trusted network is going to win. That seems to be our system. Their system is cash. Their system is control. It's banks. While I don't exactly see Will's rosy vision of the crypto anarchists, the libertarians, and the capitalists all getting down for a tea party, I do think that the war analogy is a bit overblown, but I enjoy the media hype of a good war analogy. And I was quoted in the article, so I had to go with it. Moving on, issue three. And again, you're visualizing graphics here. But instant CEO arrested Charlie Schrum, partner of the Winkelvi, a six million dollar man, was arrested at the JFK airport upon his return from the Miami Bitcoin conference. Not at his office, not at his home, but at the airport. What is the government trying to say with his arrest? No, the charges hold water. Derek J. Now, Cajing Charlie, who's not even been accused of hurting anyone or creating a victim, is simply an intimidation tactic. His charges were one count operating an unlicensed money transmitting business, one count of money laundering conspiracy, one count willful failure to file suspicious activity report. Essentially, he's being charged with not being paranoid enough about reporting his customers to the authorities. He hasn't done anything wrong and the authorities who are charging him with so-called crimes, even admit in their charges that he hasn't created any victims. Will, Pagman. Yeah, I was not happy to hear that one of the pioneers of the Bitcoin, making Bitcoin accessible to the masses was taken off our hands here temporarily. I don't think the charges will stick. That's just my initial gut reaction. These thought-crimy charges. I got to think Charlie has several lawyers on retainer who've been preparing for such a thing to come up as him being arrested or linked to the Silk Road or whatever. It's all spurious allegations. It sounds like if you read the indictment, and yeah, I mean, if you were a user of Bit Instant and you realized how creative he and his company had to be to make Bitcoin accessible to people as instantly as possible, going through like three or four different proxies to make it available to anyone who could get close to a money gram red phone or whatever. I often like buying Bitcoins through Bit Instant, going to the red phone, the bat phone, I would always call it. I have some fond memories of that from the spring time. I think Charlie will be back. It's too bad that this might spoil some of his associations. He had some good things in the works and not seeing him on the Bitcoin Foundation board anymore is again a little bit disappointing. But I think ultimately what we'll see is hopefully he'll be exonerated of all or most of these charges. The veil of authoritarianism will fall. We'll pull back the curtain on the wizard here for all to see and more people who've been looking at this from the sidelines thinking, I really like the idea of Bitcoin, but I'm too scared to get involved because I think the government is going to shut it down or whatever. When they see kind of the more of this behavior from the state and we had this discussion in the last topic too, these actions are just making these hypocrites out themselves as hypocrites. More and more people will see this. I think this is unfortunately these are steps that have to happen and there's pain that we have to go through along this process. There is a light at the end of the tunnel. The Rosie view that I often espouse, I think will be the one that we all end up seeing that the credibility of the state regulators and governments in general is falling dramatically day by day and cryptocurrencies are accelerating this process. Chris J. Yeah, I think all governments really do is postured, aren't they? I just felt like they don't know what to do. They just do what they know how. They just do what their rule of tell seems to do. I don't know too much about the details because I wasn't there. I didn't see what crime he committed. I can't really comment on whether he's done anything wrong. I agree with Derek though that it doesn't appear as though he's created any victim. That's why he needs to be put in a cage. I'm not sure unless they feel he's a flight risk or something. So yeah, I don't have much to add to what the other guy said pretty much agreed. Megan Lorde. We have to assume that we're being targeted for being a multibit coin and I think the more high profile you are and the bigger your organization are, the more that you're probably being spied on. I mean, it's not any secret that the NSA is spying on everyone. They're probably especially scrutinized and big winters. It's really unfortunate though because this is someone who hurt nobody who does what the government does all the time. I mean, I think it's showing the government's own hypocrisy and at the same time, I think I lost my shame that's not there. I don't know if the charges will hold water. I really hope they send a free obviously no one's been harmed, but the government needs a bogeyman this week. It's drug trafficking and they're probably going to go with the drug trafficking thing for a while until they find something else that they can negatively associate Bitcoin with. Maybe it'll be something else, but we have to be prepared for these things. It's very easy to demonize Bitcoin and but it is up to us to kind of be a counter force against that demonization and show all of the awesome things that Bitcoin is being used for. One of the most popular things Bitcoin is used for is charity and helping people directly. That's what I especially like to focus on. I think if we get a lot more of this kind of positive message out to your average person, it's really going to be a foil to the hypoxic government throwing someone in a cage for completely nonviolent activity. This up to us to kind of put forth positive propaganda, if you will, and be careful about our actions with Bitcoin too. We have to assume we're being watched. We have to assume even there's even some infiltration or something. Being cautious but also showing the world what Bitcoin can actually do. I agree, Megan. There's a lot of great examples of Bitcoin charity such as Jason King from Sean's Outpost who's running across America at Bitcoin across America.com. He's got an RV and he's also running. To raise awareness for homelessness and charity, you can check that out at BitcoinacrossAmerica.com. If you really look at the Charlie Schrem arrest and what he's accused of doing, they're accused of selling Bitcoin's to the users of the Silk Road via the forums of the Silk Road. It does look like some of the users were able to get Bitcoin's without entering any of their personal information and that may be some kind of a small regulatory issue. But as far as the core issue of giving someone money and then being held responsible for what they did with that money, I really don't see how they can hold Schrem responsible for that because if that's true, every ATM in America that gives someone money that presumably could be used on a drug deal is guilty. Every bank is guilty. Every person that you give money to, you don't know what they do with it. They could go skydiving. They could drink a fifth of whiskey. There's a lot of horrible things that people can do to themselves and giving them money should not be a crime. It's money. Moving on, exit question. Much ado about nothing. Spot judgment. Forced prediction. What is the outcome of Schrem's trial? Derek J. Well, it's not much ado about nothing. It's very serious, but it's not what it appears on face. The Magna Carta 800 years ago gave us the principle of habeas corpus or show me the body it is. We've all mentioned Schrem's actions hurt no one. So there is no victim or body to present. And conspiracy furthermore is a near impossible charge to prove. So the point is really not to convict him. The point is to intimidate others who want to innovate in the world of Bitcoin or other cryptocurrencies. If the government were to apply their charges consistently, you're right Thomas. They should be charging the chairman of the Federal Reserve Board because people use their dollars to buy drugs in black markets. And furthermore, the government is still operating on the old world principle that you can cut off the head of an organization to kill the whole thing. Bitcoin is bigger than any one person or group of people. It won't go away even if all the regulators put us all in cages. Well, Penguin. Derek's exactly right. It's funny to watch these decapitation attempts. Maybe it's working for the Silk Road because that was a centralized marketplace itself. Maybe it's working for people who are unscrupulously operating a Bitcoin business in New York City and things like that and have some bad associations or whatever. This is what was done to Bernard von Noethaus of the Liberty Dollar and Goldmoney, E. Gold. When there are these competitors that are acting lawfully, hurting nobody, but cutting into a closed system that's monopolized, they cut off the head and everyone goes back to business as usual and everyone who might have been interested in doing business with that enterprise is scared off from doing so. Not just in the moment, but for years on. We have no head to cut off with cryptocurrencies and it's hilarious. The hypocrisy is really hilarious to watch. The outcome of Shrems Trial, I don't think there will be a trial. It won't even get that far. There's a great clip of the upcoming rise and rise of Bitcoin documentary where Charlie Shremm is quoted as saying that he spends thousands of dollars a day on lawyers to keep him out of jail. I'm taking him at his word for that. I think we've all discussed. If you've read the indictment, you can tell how spurious and he's tertiary-erally charged with conspiracy, it's not going to stick. Chris, Jay. Yeah, I've actually had some more thoughts since what's already been said. Bitcoin is a complex adaptive system. It's anti-frightial in its nature. When we say it has no head, that statement doesn't even make any sense. It doesn't need one because every single node in the network is a head. Every single node in the network is a master node and every single piece of software that's out there has the seeds for its own regeneration. You're not going to be able to take it down. I think that the government are scared. I think that they don't know quite what to do. I think they've seen this kind of thing before. Like I said before, yes, I think it's much to do about nothing. I think that they're doing what they know how to do. I am Spartacus. I am Spartacus. I am Spartacus. Megan, Lord. I think that he's got a great team of lawyers on his side. I think that's going to be very beneficial for him. If any of the charges stick, it'll be the failure to report the suspicious activity report. They take that shit really seriously. It's total. I mean, it's ridiculous. It's absolutely ridiculous. The whole idea is the suspicious activity report. But if any of the charges stick, I think it would be that one. Issue four. BTC China accepts deposits and perhaps they never should have stopped. BTC China now believes that the December 5th advice issued by the People's Bank of China only applies to banks and not to exchanges. BTC China has reopened for business. It is if the last few months didn't mean anything. Is the two one fear over Bitcoin to the moon? I ask you. Will Pangman. I think they found a loophole and I'm really close inspection of the guidances or announcements to come out of the Chinese central bank and stuff like that. They found a loophole and we always will. As long as we need to interface this new form of transaction, a value system with the legacy system, we're going to have to find these loopholes all along the way because these dinosaurs, they're lazy. They don't want to innovate. We're using the same system that existed. You could argue 5,000 years this system has existed. But let's just say 100 years. The birthday of the Federal Reserve was just a few weeks over 100 years ago. It's like this iron fist is squeezing a fistful of sand and the sand is sifting through the knuckles and that will continue to happen. There's incredibly creative geniuses that I'm always in awe of. The ideas that they talk about in forums before they get to work and then they get to work. Days or weeks later, very short periods of time, they've created new things that this can't be stopped. It's exciting. I just can't wait to see what 2014 has in store for the exchange in China, other exchanges in that country, Bitcoin businesses in that country and other oppressive regimes around the world and also what we might see in the US too. Chris J who appears to be muted. I have lost count of the number of times that China kept banning and unbanging Bitcoin, didn't you? I don't think the market, if you look at the price, it's more stable than it's been for a very long time. I think this is probably the longest period of stability that we've ever seen. I think that the market is not stupid. I think that information was priced in to the function quite a long time ago. I would say that one of the best attributes of an entrepreneur is to break the right rules in the right order in order to get yourself out of some kind of bind. If you look at all the great innovators in history, like Da Vinci or I don't know, of course my mind goes blank now. What they do is they acknowledge the reality of their situation, it all gets somewhere more exciting. They learn how to work within their framework. I think that Bobbi Lee has done that beautifully. I also quite like the other one is it called HuBee, who the actual CEO started taking deposits personally in his personal bank accounts. That kind of thing is very good. I think we need to move on from China anyway. I think I'd like to see India, Africa and South America come on board next. Megan, Lord. I think the guy is pretty much said what I was going to say about Bitcoin and China. Yeah, I pretty much agree. I think it was a little bump in the road there for a while, but yeah, it can be stopped. This is just indicative of the long run. Bitcoin to the moon. I hope so, but I really enjoy this stability and I kind of hope it stays stable for a little bit longer, too, because it's a lot easier. What I've been doing is talking to business owners in Pensacola, trying to get people, sorry, it's a lot easier to say, hey, look, this has been stable for a while. They're going to be more comfortable accepting it for their business if it's stable. Yeah, I hope it stays for a while. And yeah, sorry, China can't be stopped. It's a honey better money. Derek J. Yeah, BTC China accepting deposits again shows us that the world is changing in a really exciting way. I always hoped, but I never imagined in my lifetime it would be possible to disobey governments with near impunity. The Chinese government can pound sand when it comes to Bitcoin regulation. It doesn't matter what they say. The people using Bitcoin won't research the rules before researching how to use Bitcoin. And once they know, the rules don't matter. Bitcoin to the moon. Excellent. Exit question. Price check. What is the Bitcoin price? One month from now. March 1st, 2014. Bill Penguin. I think we start to see a little creeping increase, but not any of these crazy, volatile, major spikes. So maybe we're back over a thousand by then or getting close to it in terms of the average price across the exchanges. Chris, Jay. I don't know what the price is going to do. Neither does anyone else. I'm terrible at making predictions, but I don't think it will be lower than word is today. Megan Lorde. 873.5. Derek J. You've seen a lot of stability of these past months. I imagine that will continue and I predict a price of $850. Well, I'm going to continue to lead the pack and I'm going 1200. Issue 5. Visa, CEO, doesn't see Bitcoin as a business threat. Chris seems to be the theme of this show. First the NYDFS, then the pro regulation crowd and now Visa. If you can't say something nice, isn't it better to say nothing at all? Or have they opened Pandora's box? Chris, Jay. Remember that these companies have quarterly earnings reports. They have shareholders. They've got to be seen to be doing something. Otherwise, it will be looked upon as a sign of weakness. They were increasingly reticent and I think they were being made to look irrelevant. I wasn't surprised at what he said. What else do you expect him to say? Megan Lorde. He's right in the short term. People are going to be using credit cards for a very long time. I think in the long term, Bitcoin is definitely going to take over. It's just way easier to use. It's inconvenient for me. Type in my credit card. I'm going to have to buy something if I'm not buying it with Bitcoin. It's like I get irritated by that. I get spoiled by Bitcoin. Think of how long people took to adapt to the internet. I know people who still refuse to use it, who are still very terrified by it. You're always going to have that small percentage of people who are hesitant to use it. I think credit cards are going to be dominating for the short term. In the long term, I think Visa is going to regret it. Derek J. Yeah, Sun Sioux wrote in the art of war, quote, if your enemy thinks you're strong, appear weak. If your enemy thinks you're weak, appear strong. Visa is appearing strong and that should tell us all we need to know. Well, Pagman. Well, put Derek. Yeah, I agree with Megan. We still have a long way to go before some of these companies are made to be obsolete if they don't adapt. There's a lot of people who put up with the irritation that Megan described that she has. That's the vast majority of people who are irritated with entering their credit card information or subjecting themselves to identity theft risks and things like that. They still put up with it. Even though it might be the height of irritation meeting their threshold for them, they're still going to go lockstep for a long time. Just because I think mankind has been beaten into shape by governments for so long that it's going to take a long time before the general public loses enough faith in these older legacy businesses. We've heard Jamie Diamond in his opinion on Bitcoin, Western Union in the last quarter of last year issued their little findings on there, not seeing Bitcoin as a threat. If anyone should be worried, it should be Western Union. But yeah, Visa doesn't surprise me. I don't think Bitcoin should be seen as a threat by any of these businesses. They should totally adapt and fold it into their model and slowly grow. I really like the approach that we've seen from some freedom-minded CEOs out there. I'm thinking of Patrick Bern and I'm thinking of Fred Wilson, who are out there leading the charge and not afraid to take the plunge, so to speak. It's not that big of a plunge. I think I said this last week. For a company, his big is overstock. It took them a few days, a couple of coders and some business strategists. They figured it all out. They accept Bitcoin six months ahead of schedule. Fred Wilson forward thinking the same thing. He wanted to invest in Bitcoin businesses as soon as he could and he did. Hopefully we see some more forward-thinking entrepreneurs who have had lots of success in the past. I'd like to see Richard Branson do more than just Virgin Galactic integrate Bitcoin into his other Virgin properties. I agree with what Megan said. There was a great comic strip that came out this week. I meant to cover it on the show, but I haven't gotten to it yet. It was from I can barely draw or I can barely draw something like that. One of the points of the strip was how different the credit card industry is from Bitcoin. They said, well, in Bitcoin, the person who has the money sends the money. Then they said, in the credit card industry, they have your secret code and once you give it to them, they initiate the transaction. Know your permission or knowledge and that's why you can have wrong amounts charged or multiple amounts charged, double charges because the system is completely backwards. Bitcoin restores the system to the way it's supposed to be. You keep your money. If you want to buy something from someone, you send them the money. They receive the money and that's that. You don't need anything else. I really think these businesses are in for a surprise. As for Chris J's point, they did have a choice. They could have said nothing. If you're like Derek was saying, if your opponent is superior to you, you should have vayed him. They had the evasion option but now they've identified their opponent which I know maybe Gandhi stole this from Schopenhauer but first they ignore you, then they fight you, then you win, whatever. They've stopped ignoring us. That's a mistake. They've entered a whole new phase. Does that mean they're laughing now? They're laughing. They're laughing. I think they're done laughing. They're laughing is over. There's no more laughing but we'll see what happens next. Exit question. Western Union, Visa and PayPal have all mentioned Bitcoin. Which one will fall first? Chris J. Western Union. I hope that PayPal will, I'm optimistic. I think those guys are going to win a bet in a dot Bitcoin. Megan Lourdes. Oh, I hope Western Union just crashes. I'd love to see them go down. Derek J. I rely on Western Union sometimes so I don't want to see them crash but they will be the first to fall because they rely too heavily on brick and mortar institutions. That carries too much overhead. The other companies can integrate Bitcoin but they can't. If they do that, people will just switch to using Bitcoin because it's easy enough. Will Pankman. Um, any country's central bank. Any country's central bank should bite the dust first before some of these private businesses do that would be that would be a huge promotion right there for Bitcoin adoption. And I'd like to just amend the Gandhi Shopenhauer quote. I think what we're going to see is first they ignore you, then they laugh at you, then we laugh at them, then they fight us but we're not there anymore because we've won. Absolutely. It's impossible to fight someone that won't show up on the battlefield. The British had that problem during the Revolutionary War. Oh yeah, I agree. It'll be Western Union that goes down first. They've been overcharging in fees for far too long. And Dreas' favorite example is always that they charge you more to send money to a poorer country. And that kind of vampire capitalism is the thing we need to get rid of first. And that's exactly what Bitcoin is against. Bitcoin would never charge you more dependent on your geographic location. It's address to address. It doesn't discriminate that way. And I think Western Union will be punished for their discrimination. Now moving on to questions and answers. The part of the show where you ask questions and we get answers. Let's see. The protocol can now process on average 500 transactions every 10 minutes, less than one transaction a second. To match Visa in the USA, the protocol would have to be able to process 2,000 transactions a second. And average block would be 600 megabytes. What would be the impact? Slash solution. Well, first of all, I'm not sure there's a problem. I mean, I think we can handle 600 megabyte blocks if it goes along the lines of the blockchain getting too large. People having to buy real hard drives. And I'm talking about miners or people who need a synchronized wallet. Obviously, the idea of the users who have their current computer wallets, synchronizing them, is going to be increasingly difficult if the block size gets larger. But that again leads more towards paper wallets as the better solution than a computer wallet. Paper wallet can't be lost in a landfill in the same way, forgotten on an old machine, although I think we'll see less and less of that in the future. Any other thoughts on the transactional issues if it gets too large? Yeah, I do actually. I think that one of the issues here is this directly relates to people's personal data management. There's a concept known as data proliferation, which if you just use your favorite search engine, you'll see quite a lot of literature comes up there. So what I do think it's a real concern, I think blockchain bloat is something we should be thinking about now before it really does become an issue. Because most people are lazy and they're just going to adopt thin wallets, which then undermines the whole network, because there nobody's downloading the blockchain and it leads this distributed nature. So I do think this is something we need to address. Excellent. Next question from Colorado. There's a huge turn for certain businesses moving to crypto since the banks will not accept their money. More of just a statement, but I agree with a statement and it is a large advantage for marijuana dispensaries, both recreational and medicinal, etc. to switch to this superior form of money and a great chance to turn all of their customers onto Bitcoin as well. I think they all could benefit not just from investing, but just from the convenience of using Bitcoin and the pseudo anonymous nature of Bitcoin, we're making that kind of transaction. I want to say something about that. I think when I first read that story that they were having trouble finding places to deposit their cash funds, their cash businesses, they can't accept credit card payments. So I would think one way ATMs would be great inside of a dispensary. They could accept Bitcoin and cash and then the dispensary to bank themselves could deposit the cash essentially into the ATM as well and take Bitcoins. I'm sure they could have, there's plenty of people who would love to help those kinds of businesses hedge their risk to the exchange rate through any number of different, trading practices that could help them do that or trading crypto to crypto. It seems like an easy answer when the story first came out and I think it took two or three weeks after the legalization went through for people to start people out there who are running those businesses to start considering Bitcoin. It just is a perfect fit. Absolutely. Let's see. More questions about paper wallets. I did cover that slightly in my How to Buy Feather Coin episode but I will cover the second half of it how to get your money back from the paper wallets. That's still going to be an issue. Let's see. We've got a fan who listened to the New York City hearings three times. Thanks for watching. Let's see. Why is Derek J so cute? How much of the 35 minutes I missed going to cost me? You can always watch back the show on YouTube. It will be on later. Question about the penny alt. Does anyone have a pick or a guidance to very low priced alt coins? No, it's not in the slot machines. It's super risky stuff. Talk to anyone who's mining. I forget what kind of a mining pool they call it but it's a mining pool. Chris, maybe you can help me out with this. It's a mining pool that essentially mines what's calculated to be the most profitable alt coin at the time. It's called multi-pools. The problem with those is that it encourages the kind of parasitism and leaching fact. It's not good for the blockchain security either because you then get peaks and troughs. We had to put in a new difficulty adjustment algorithm just in order to allow for it. I'm not a big fan of those. I would say that I do like Dogecoin. Not please don't buy it because I said so. I like the team. I thought it was a joke at first but then I actually got to talk to the developers through Reddit and I saw some of the two and fro between Ad developers and theirs and I have to say those guys are serious. They really are giving us a good go. Good luck to them. I wanted to add on that about Dogecoin. Sean Zalkoz takes Dogecoin to feed the dogs of homeless and has had some really good luck with that. The community of Dogecoin has been very, very supportive. Excellent. We have a question about Ethereum. Isn't Ethereum a competitor to Bitcoin and isn't it inflationary? Does anyone have an answer to that? My understanding is that it's, I don't think it's inflationary but there is no cap. It's a steady rate of inflation so it's not arbitrary like we're used to experiencing. Just maybe this is kind of getting at the question the viewers asking. The reason I confront so many people who decry Bitcoin's deflationary nature as some impending tragedy, the reason people think that way is because that's how every other deflationary currency or deflationary situation in our past has gone because of human error or human intent. As soon as there's manipulation going on that starts a deflationary downturn, it becomes a spiral because of human beings. If you have something controlled by mathematics and transparent to everybody, you're not going to experience that same panic environment because everyone can see what's going on. It would be like having a seat on the floor of Congress and in every single congressional committee, hearing and everything being able to take in all that information and have all those processes be fully transparent to you and then you can go and behave based on all of your analysis of all that intake. Think of it like that and if that's so whether an currency is deflationary or inflationary as long as it's a fixed rate and fully transparent and open source code, then I don't really see a problem. Is there anything to add? I think that's right. The point of fixed issuance is that everybody knows what to expect. What's bad about the current inflation in the current markets is that Ben Bernanke wakes up one day and isn't bad moving and just prints. It rains inflation. It's great for his friends in the banks but it rains inflation and everyone else. I don't know enough about Ethereum as a leavens in the source code or enough about it but I do look forward to learning more. My understanding of Ethereum is that you can put a computer code on top of Bitcoin so that you could have a social contract like a will or a trust represented in code. If the person is over 55 years of age then pay them $500 a month from this trust and now it's not a lawyer or a banker or an accountant making up this trust. It's a computer programmer probably selecting from a GUI that creates a mathematic unbreakable code that is now your will and your will is now carried out by the blockchain. If it's anything like that I'm really excited for it and I can't wait to see what they do next. I don't know if it's inflationary. I do think the US dollar is inflationary and it robs from people's savings. The more you save in an inflationary system the more you lose. That's what's so great about Bitcoin being deflationary. The more you save in a deflationary system like Bitcoin the more you win. There's only 21 million Bitcoins. It's pretty nice just to have even one of them. I don't think Ethereum is a competitor to Bitcoin at all. If anything it's a parallel blockchain, a parallel service that can also ride on top of Bitcoin like you were talking about there. I would think of it like an old Corvette. You still want to drive the old Corvette sometimes but you might still want the newest model of Mercedes whatever. They all have their place and without Bitcoin we wouldn't have any of these other things. Bitcoin I think will be around a long time barring any internal failures. You might have more technologies like MasterCoin, colored coins and open transactions in Ethereum might have more wide use decades from now than Bitcoin will but it will still be there. I agree. It's time to stop thinking of altcoins versus Bitcoins. It's not a parasitic relationship. It's a symbiotic relationship. Bitcoin is the bridge by which you get your money to the altcoins. Maybe you win in the altcoins, maybe you get killed, maybe with Ethereum you get a contract. There's a lot of different things that the altcoins are going to offer and it seems like Bitcoin having its existing relationship with the legacy currency system is going to be the bridge to get there. There's definite value on both sides and I think most everyone is going to go up Bitcoin and the altcoins. We'll see what happens. Next question, discussion about which state will regulate next is wrong. The state that doesn't regulate at all will win. That's an interesting point, Shilia. The entrepreneurs do want some kind of a regulatory framework. They're the ones that really want this because they're the ones like Charlie Schrim that are out there trading and dealing with large amounts of Bitcoin that can obviously piss the regulators off. Certainly none of us has ever moved a million dollars worth of Bitcoin like Mr. Schrim. We're not in the same league but obviously the more you move, the more you're participating in this market, the more solid footing you want underneath you. I think if California lightly regulates, it's still going to be more likely to go to the California rather than say Ohio or Idaho or somewhere that doesn't regulate at all. We'll see. It's a good point. I want to point something the viewer said in the statement, not really a question. At the risk of feeding myself to the crypto anarchist and Derek J in particular out there, I think that the state that doesn't regulate winning is so is 180 degrees false. I've seen maybe some freedom-minded states like perhaps Florida or certainly New Hampshire maybe coming out with some just basic guidance like basically saying Bitcoin is defined as such and we will have it fit into our existing framework as such is plenty and that might constitute quote unquote regulation and really allow the floodgates to open for businesses to start innovating and opening their doors with Bitcoin related services. So the reason we haven't seen all these great ideas that we've read about for if you've been around for six months or more, you've read about things on the forums of all these great ideas that never hit the floor because entrepreneurs don't know if they are setting themselves up for being caged or worse. They need some sort of answer out of Washington for lack of a better term in order to proceed whether that answer is sure everything's kosher go ahead or it's illegal or it's kind of illegal and here's a bunch of legal jargon that you have to sift through thousands of pages of stuff. So whatever the answer is they just need an answer and we haven't really had that yet. But will that's the whole point they can't. The whole world view is broken and they don't want to fix their world view they just want to fix the world. And so yeah that's defining all of these governments. Look at what they're all doing they're pervaricating they're procrastinating they're putting off the inevitable and yeah it's quite sad it's quite desperate because we don't get our expectations well handled you know we just don't know what to expect. So you're right yeah whoever said that the state that doesn't regulate will win I agree with that. I mean it is a bit like marijuana legalization where even just Bitcoin decriminalization where they say it's okay and you can grow it if you find it you're all right. And if you use the Bitcoin or if you use the plant that grows on the side of the road you're fine whereas marijuana legalization is a lock step law where it becomes more like tobacco and more like a regulated crop. And I'm not sure if that's going to be good for Bitcoin but certainly the decriminalization if New Hampshire wanted to say Bitcoin whatever you want to do is legal here that would help them out that would cause a floodgate. But Hawaii. What about Hawaii it looks like. I agree with you there Chris and Thomas you know that's a good analogy the different marijuana regulations or even any scheduled regulations for you know there are certain rules and Indiana that you know just by driving through the state you'd be violating even if you're not even going to stay there. And maybe by creating and you know maybe I think you're right any amount of regulation isn't isn't good but we might you know it might still allow for businesses to be able to open their doors and we can see some experiments begin maybe. But yeah every state has a different set of rules for cryptocurrencies or you know like they do for let's say you know cannabis or whatever then it really muddies the water and nobody knows where they can go or travel and what they can do in each place and it's all word of mouth you know you learn by word of mouth by talking to people on the street whether or not you'll be able to conduct yourself the way you're used to conducting yourself in your home area. So yeah that is a huge problem that I see that could really slow things down and just frustrate people and that might be enough to slow adoption or lower trust or you know acceptance of this new technology. All right our final question today if the dollar crashed like many believe in 2014 would it be a run to Bitcoin or a run away from Bitcoin? I'm not sure the dollar is going to crash so I want to put that out there first. I want to yeah can I say something about that because I've been watching some of those videos on YouTube with those dollar crash because they come up as recommended if you're into Bitcoin don't they? You probably don't want it and really I know I it's like this morbid entertainment that these that these people have we've been fantasizing about apocalypse for many decades now we've been making lots of films about it in the 90s and then we had a few more with Cloverfield in the Norties and I'm not so sure you really really want this it's very hard to make money in an army garden like that because what exactly are you planning for the whole point of those kind of catastrophes is that notoriously unpredictable and so you plan for one thing and then something else is what gets you so yeah it's I don't think that's a desirable outcome and yes I do think that Bitcoin will go up I don't see why it would go down in a situation like that absolutely I agree I think Bitcoin is a new safe haven for problem currencies Argentina Iceland Cyprus yes we saw already yes I mean I can go ahead Thomas if you're if you're a country if your banks are in trouble and you have this new option of Bitcoin even though it's a new option it's a bit untested a new options better than no option I mean we've all seen what can happen with runaway inflation Y-Mart Germany wheel barrels full of doish marks exchange for a loaf of bread it's not unrealistic it has happened before I'd like to add that it's possible that the creation of Bitcoin and its propagation has even staved off a dollar collapse and provided more of a soft landing for these ultimately doomed currencies we have the same I always make that argument Derek oh sorry I make that argument in our meetups all the time when you know we have new members come in and they are they have this very concern you know or fetish if you will like Chris was pointing out wanting this ultimate collapse you know because they're fed up with the system I understand that I completely sympathize with that and wanting to see that happen and I like the Derek you brought that up because I often say to those folks you know we could see a nice little soft landing or a bridge using cryptocurrency out of an old failing economy it's that would be that would be great but as far as if there is a dollar collapse you know overnight or something like that something horrific nobody's going to be worried about cryptocurrencies they're going to be worried about food toilet paper and water so those will be the you know the most sought after assets out there so you know hopefully it doesn't come to that I don't have that preoccupation hoping to see these kinds of disasters just to see so and so burn at the stake or whatever you know it's that's not a good way it's the innocent that get that get caught up in those things it's it's it'll be your granny it'll be the the older generations that feel alienated by things who perhaps whose objective concern wasn't ours they didn't have time to spend on niches net forums okay they they had other priorities in their life so yeah this is going to have lots of lots of unintended consequences and right now our priority should be inspiring at an educating people about Bitcoin so they can make a new form decision one thing that does worry me is oil dependency and also water too because you can only buy oil with the petro dollar and that does give us cause for concern because we are so very very dependent on that black stuff and so that that could be a concern for me I don't know what would happen like if you went to an opaque nation no right now maybe you've got a you know tens of thousands of bitcoins I wonder what would happen if you did actually offer them okay let's have this morbid fantasy then what would happen if you went to an opaque nation and offered them I don't know a hundred bitcoins for a barrel of oil i.e. orders of magnitude above the dollar value that would reveal their preference in economics that would force them to show their hands and the table and go yeah all right one barrel sure why not and then of course well we'll three with breakout that wouldn't be so good yeah yeah well and so far it hasn't been so great with a lot of these countries wanting to take gold or other things for oil that definitely has a farewell for those people but I really try to encourage people who are in that kind of fear based mindset that you know we're heading towards this imminent collapse the Bitcoin is kind of this you know light at the end of the tunnel kind of like it you know it's something that they can get into now if they do have that concern because it's a proactive solution it you're when you're sitting around thinking and watching these YouTube videos all day and you know worrying about oh this collapse is coming it's imminent it's imminent you know I you get paralysis analysis you can't do anything and Bitcoin is a way to kind of end that and kind of I think give people hope who are in a more kind of fear based mindset about the dollar and moving on to predictions this is the part of the show where I ask you to predict the future it's everyone's favorite part are you ready Chris Jay not really it's my worst this is about hey all right we'll come back to you but you'll be next Megan lords yes let's see by the year 2017 Pensacola will have been taken over by Bitcoiners and it will be renamed crypto cola okay I predict the IRS will continue to remain silent on the tax rules it will later attempt to enforce on individuals the longer they wait the less enforceable these rules will be well penguin oh Chris Jay exactly that's exactly what is this part of the show I know all right this is what I just go with it you know you know what I you know what I think I'm gonna I'm gonna try and fudge it and hopefully whilst I'm fudging I'll come up with something I would say it is a lot easier to predict the next 10 years than the next 10 days and getting there is always the hardest part that's why I think we enjoy doing these predictions so much I think that I'm anticipating there being a lot of confusion and I'm anticipating my email inbox getting bigger and bigger and bigger with friends of mine getting in touch with me saying oh you seem to know about this Bitcoin thing can you tell me how to do X or should I buy some I'm getting more and more of those emails I expect those to go up I do not know what the cusp is gonna look like I do not know what point we reach a tipping point quite what the impact I'm desperately desperately hoping that this is non-violent which is why I think education is probably the most important thing because what we don't want is to send it see into mop-rule that's what we've we've seen happen before when people try to take things into their own hands without taking personal responsibility so that's my half-fudge answer well dang it I'm kind of gonna fudge along too but I'm gonna maybe pick up where Chris left off a little bit more and more people will who you'd least suspect to be interested in something like this are going to be interested in it and they're gonna reach out to those of you who have been you know so-called sharing the gospel with with them over you know the last year or however long you've been acquainted with this this revolutionary technology and I guess the prediction there would be that the first two topics I really held back a little bit on how much I think the the powers that shouldn't be are revealing their hand too much and exposing themselves as the authoritarian tyrants that they are to even their most content lap dogs and those dogs will start to realize that bony ribs don't need to be so bony and that the reason they are that way is because of their master whose boots they've been licking all along and the prediction would be that that they're gonna more and more of them will not only be attracted to Bitcoin but they'll be disgusted or dissuaded from you know their old home finally I used to think that there were too many altcoins now I know there's not enough 2014 will be the year of the altcoin more than 300 will be listed on cryptsy by year's end hang on to your hats we're out of time until next time bye bye on