The Bitcoin Group, the American original, for over the last ten seconds, the sharpest sitoshis, the best bitcoins, the hardest cryptocurrency talk. We'd like to welcome our panelists, Chris Ellis from Feathercoin. Hello. Megan Lawrence from Bitcoin, not bombs. Thanks for having me. I'm Jeff Stoff, Atlas from Anonymous Bitcoin Book. Howdy y'all. And the Bitcoin Group is live on worldcryptoneetwork.com, thebitcoingroup.com, madbitcoins.com, and now follow thecoin.com. So however you found us, thank you for watching. 1. eBay. eBay. PayPal. Bitcoin. One step closer to total Bitcoin adoption. eBay CEO John Donahue said recently to CNBC that there's no doubt that digital currency is going to play an important role going forward. And at PayPal, we're going to have to integrate digital currencies into our wallet. I know we talk about this all the time, but it looks pretty definite now. How soon will we be using PayPal as our digital wallet for cryptocurrencies and buying things on eBay with Bitcoin? Chris Ellis. I don't know how long, but this story keeps coming up because I think what the market wants is a signal of confidence. They want a big company like eBay PayPal to send a signal to other companies like Amazon that this is okay to make it safe for them to do. So yeah, we've kind of heard a lot from this, but I'll see it when I believe it. Megan Lawrence. I don't know that I have a time span on this side there, but I think digital currencies have been in the process of being adopted for a long time, whether or not that's Bitcoin. We'll see obviously Bitcoin is the most popular, but I think a lot of people have been moving in this general direction towards digital currencies and these companies are going to have to adopt them if they want to keep up. That's just the direction things are heading. People don't like carrying cash around. It's becoming convenient to a lot of people. The markets provided that opportunity. I think it's very exciting. I hope they jump on board quickly. But like Chris said, I think at this one, it's very much a matter of signaling. Who's going to be the first major person to the market to help others, help encourage others to adopt it? So let's see. I'm very excited. Chris, off atlas. I think that there's a bit of a funky timing care with PayPal and Bitcoin. In the long run, I don't see people keeping their bitcoins in institutions like PayPal. I think that cryptocurrency is going to bring a new realm of finance at which people are the custodians of their own wealth. I know that we don't really have the hardware technology to really match that need at the moment, but I think it's coming. There's going to be a bit of a tricky timing for players like PayPal, where it will be to their benefit to act as the custodian for funds. Certainly, that's what people will be comfortable with at first. But in the long run, I don't think that that's what people will choose to do. It does seem like with each announcement, eBay moves closer to this. You really think that they're kind of stalling and buying time for their programmers as they frantically work to develop this website that he keeps talking about, that obviously he wants. You might think eBay would just buy Coinbase or another similar operator like that just to get instantly into this game that they clearly want to be involved in. They keep talking about it. Perhaps they're trying to scare off competitors by talking about it, but I'd imagine what Chris is saying is correct, this is signaling. The fact that eBay is signaling so heavily in this direction means that other companies are going to hear it and they're going to be prepared. If they can't beat eBay to market, they might come out just a few months after eBay. It's going to seem like how they do it so fast, but the real answer is they started working on it now. Exit question, which one of eBay's competitors will be the first to join them in Bitcoin? Will anyone beat them to it? Chris J. Well, their competitors are just starting now, and they're all the little startups that are coming out with gift cards and things like that. I actually see software like Dark Wallet being a genuine competitor, actually. Those kind of browser plugins you get that make it really easy to be able to pay people when you're straight into the browser in context without having to switch to a wallet. It is true. It would be difficult for PayPal to offer anonymous transactions that would be a clear advantage that Dark Wallet or Dark Coin could have. Mega. Lord. When I think when it comes to anonymity, your average person may not care so much about that. They're just looking for an alternative to use, a newer payment system to use, or alternative currency to use. As far as eBay's competitors, I don't know that they have a whole lot of competitors, and I think it would be wise if eBay had to go ahead and jump on the bandwagon before their competitors. I don't know how much adopting Bitcoin would really benefit their competitors. The main competitor I see is, of course, Amazon.com. If you're going to sell a used item like a book or a DVD, you might choose between eBay and Amazon. If you're going to buy a used item, you might be choosing between the two. If one of them accepted Bitcoin, it might make a huge difference over which one you're going to purchase with. Will, Penguin, what about eBay, Bitcoin, and PayPal? Yeah, it's really exciting. This time last year, you saw a different tone from a lot of these executives that these businesses getting asked about Bitcoin. I saw earlier CNBC, took a totally different tone about Bitcoin, a very bullish tone, and a recent article about the venture capital opportunities in Bitcoin and the 2.0 innovations and things. It's very exciting. I'm really glad everything's coming around. It is nowhere to go but up. The rest of the world is catching on. That's exciting. Competitors, I like Chris's answer. I think OpenBizar is the best candidate other than, say, Amazon, which has a slightly different target market, but there is crossover as you pointed out. I'm excited to see decentralized marketplaces come out. The CNBC article is very exciting. We always had the smart people with us, but now we're going to have the smart money as well. Christoph, Atlas. I think that OpenBizar is probably an immediate challenger to eBay, but it's the type of marketplace that I'm the most interested in. Motivates me in the Romantic Bitcoin is not simply that we will gradually overtake other currencies in existing businesses, but that we will forge new types of commerce and new economies and new ways of interacting with each other economically speaking. I think OpenBizar is the spearhead of that effort right now. It does have a way to go. It would take quite a bit of funding and programmer time and so forth to perfect what OpenBizar is trying to do in order to give it a much broader appeal. Still it has, by far, the most promise over something like eBay. Excellent. Moving on, issue two. Coinjar returns to the App Store. Apple's new iTunes Store rules allow for Bitcoin apps as demonstrated by the UK and Australian-based Coinjar, which return to the UK and Australian App Store's. US? No luck yet. Will the other apps return as well? Is Apple's long, dark, Bitcoinless nightmare over? Megan Lords. I think Apple has a pretty good reputation for listening to their customers and obviously when they banned the Bitcoin while it's over, there's a huge outrage over it. I hope they've learned their lesson over that, even though Bitcoin users make up a very small group of just overall iPhone users. I think they raised enough of a ruckus to make an impact on Apple. I really hope that this is a matter of them listening to their customers and really trying to adapt and bring in these new apps because in the long run it's going to benefit them. I think they lost a few people to Android and if they would have continued with the kind of funds that they were going with, that would just keep happening over time. I think there's a huge step in the right direction and I hope all the apps come back. That would be great. Well, Penguin. Yeah, so I see an interesting trend with this. I think we all expected that Apple would at some point turn on their position. It's nice to see them appear to start to do that. A couple of points I'll make about that and then a question I want to submit to the panel just about this thing. I see Xbox Live and Apple iOS 8 also doing similar kinds of things where they're listening to their customers as Megan pointed out and they're kind of like they lodge a product. It's got some features that are somewhat restrictive or sandboxed or things like that. They respond lately, like in the last year or two, I've seen large companies have much more agility in responding to customers demands to reverse some of these restrictive policies or at least open them up slightly. So iOS 8 is an example adopting lots of Android type features which is really great. It's taken them long enough but they're starting to come around on that stuff. Xbox Live too. You no longer need an Xbox Gold subscription on top of all of your peripheral subscriptions like MLB TV, Netflix. So Amazon Prime. You need those subscriptions but you go to the store, you buy the device, you should be able to take it home out of box and if it has apps that support your other subscription services, you should just be able to play them out of box. Now you can, whereas for the previous year, you could not, a previous actually several years, you could not do that. You had to also have the $50 a year or $12 a month Xbox Live subscription. So built-in customers is kind of on its way out which is a good sign. The question I have is, you know, is the reason that maybe some of these Bitcoin apps haven't reappeared in the US because of this whole jurisdictional positioning, you know, in a quick scan of the new rules that they're going by, it looks like, you know, it's all going to be on a state-by-state nation-by-nation basis in terms of who gets access. So is there some, does anyone know? Has anyone heard of anything? Is it like they're not going to allow the US to get their Bitcoin apps back or what? It only seems like the UK and Australia app was submitted first. That's really what it feels like. The other companies are just probably resubmitting their apps. If we hear that they've been rejected, I'm sure we'll hear about that. And it does seem like it's a legal issue. So if New York or Ohio, it's possible that Apple could restrict this and we could go to a state-by-state Bitcoin app basis, which would be really incredible. Any other thoughts on the Apple restriction issue anyone else? Just move on. Kristoff. Yeah. So for me, I'm kind of done with Apple on this topic. As a security professional, I can appreciate some of the benefits of having a wall garden of having a closed app store where the apps are carefully curated. They're reviewed before they're brought onto the store because malicious apps can really be quite a pain in the ass for the users of these mobile platforms. And of course, the people that are trying to run the mobile platforms, it makes the developers and the people running mobile platforms look silly. If it's really easy for people to just get their phones infected and their address, books dumped out and all this other stuff. So I can appreciate the benefit of that, but I really feel that Apple has breached my trust with the bands of the Bitcoin apps in the past with no real legal basis whatsoever. So in terms of me being a customer for Apple on their iPhone, so I'm done with them. I'm moving on to Android. And I wish them all the best for that. Yeah, just to echo, Kristoff, I'm still an iPhone user. I've been plotting my escape ever since they pulled the Bitcoin apps. This has me second-guessing my commitment to leave Apple, but I'm not 100% anymore. It's interesting that with CryptoKit getting pulled from the Chrome extension, they pulled the app just, I guess it was an accident, but some of these third parties, building apps on third parties or allowing third parties to serve access to these apps is really dangerous long-term. You can wake up the next morning and for a mistake, like in the case of Chrome, for example, or even just a new law and Apple stops servicing them. So if it can disappear because it's on a wall garden third party platform like that, that's really dangerous. That's where your money is in some of these apps, in the case of some of these apps. So yeah, Android's certainly more appealing and a completely open source would be of course better. And I think hearing some rumblings about open source phones, so that'll be interesting to see. It's really, it's caused for optimism, but it's also just having any of these things on like with Google or Apple or anything's kind of apprehensive, you know. It's Apple is teaching everyone a lesson about walled gardens and where your software comes from and why open source is superior. And who owns your device? Who owns your device? Chris Ellis, your thoughts on the Apple change of mind? I would have in the past I would have agreed with Christoph, but now I just think that Apple want the monopoly on the malware. Like it's just one big malware experience when you use Apple and I say that as a lifelong Apple user. I am going to be slightly cynical here and say that I think Apple wants a cut of the fees. I think they do that already within app monetization. I think they can clearly see the way this is going as an industry. You've got a lot of banks. I'm giving a talk at Lloyd's, which is a very large UK bank in a couple of weeks. I think they kind of see the rising on the wall and I think that they just want that cut. That's my speculation. If they could get a cut, they'd be brilliant. If they built it into the operating system, if they had their own wallet, if they had a way of getting a cut, but right now it just seems like more like what Will saying, the consumer demand is there and the internet has amplified that. So they hear us and they change things like the Xbox decision and the Apple decision. They're forced to make this decision. They might not want it to do because I think they are trying to protect in-app purchases before and that this has opened up a weakness in in-app purchases. Exit question. We kind of answer this, but you can just answer again shortly. If the apps are restored, will you still go Android for your next phone or is all forgiven? Megan Lords. I am very happy with my Android phone actually. My husband has an iPhone and I hate it. I think it's just not as intuitive as Android and it doesn't have as many options for apps. Yeah, to me, there's not really a comparison. I never liked iPhones that much anyway. So I have no interest in them and I won't be switching over anytime soon. Will, Penguin. I mentioned I was fully committed to switching and I have an opening of doubt here. Mostly it's about saving a bit of money. If I can get, I want to go with Ting as a service provider for cell service and data service. That will save me a lot of money and I don't think they, or maybe they do support iPhone ever yet. That was my plan for the Android move and it's still maybe, I think I'm 80-20 now. I'm going to go Android 80%, maybe stick with Apple 20%. Excellent. Kristoff. No, I'm ditching the iPhone boat and heading it over to Android. I will be quite relieved if we get to a point where we can get the apps back on the marketplace and I can finally explain to people how to get a damn, you know, a Bitcoin wallet without needing to go to their home and mess with their laptop or whatever. Absolutely. The main issue is the damage this has done to adoption. It was a lot harder to tell people about Bitcoin when they have a perfectly good iPhone and you can install a Bitcoin wallet. If they get the Bitcoin apps back, it will be easier. Krist, your choice. Back to Android. Stick with Apple. I'm not staying with Apple. No, my next phone will probably be either an open source phone or an Android. Dark times for Apple. Dark time. Moving on. Issue 3. Silk Road. Argus. Silk Road. Study argues that Silk Road reduced violence in the drug trade. FBI. That cryptocurrency trading, dark market website that you took down last year. Could you put it back up? It was actually doing some good. A new study shows that there was almost no violence involved in the Silk Road drug trade. Unlike the incredibly violent real world one. Should the FBI open a new Silk Road continuing in its mission to reduce violence and protect the American people? Will. Penguin. I don't think that's its mission. Does anybody think it's their mission? Yeah, I mean right now, Silk Road 1.0 is dead, but Silk Road 2.0 is live in kicking and there's at least a dozen other copycats, if you will, that a lot of people are saying are more trustworthy because they have multi-sig and escrow, which the Silk Road 2.0 apparently does not. So yeah, I think that side effect is still happening. There's a demand for safe, non-violent means of trade for these kind of system D, gray market, black market goods. And man, is that wonderful. No more territory wars, no more threats from large cartels or gangs who have a monopoly over territory. There's a lot of accidents that can happen just being in the wrong place at the wrong time when you're in this kind of market and you're operating in this kind of market, you can be the most peaceful actor, most innocent, a one-time trader even and get in some proverbial or literal crossfire. So yeah, it's a no-brainer and they're still here and they're only going to get safer, which is good. And I think it'll be interesting to see how the rest of the black marketplace responds to a much more convenient, much more streamlined, much lower opportunity costs or costs in general from how much money goes into security and physical security, ammunition, armaments for these cartels and large gangs and things a lot. And also enforcement of keeping your minions in check and protection money collection and all this stuff is going away and that's amazing. So yeah, non-violent interactions mean for trade and this is consensual adults doing things consensually. No one is harming anyone who isn't consenting to the instance here. So that's wonderful. I agree, Will, it would be incredibly unfortunate if the Silk Road put all of the violent drug dealers and cartels out of business. So I'm going to be talking about this topic in my presentation at Bitcoin and the Belt Way in a couple of weeks and perhaps some of the thoughts that I provide to you today will give you a sense of the tenor of the presentation that I'll be giving. I don't think that the FBI or the DEA should restart the Silk Road because if you want to remove violence from the drug trade, it's actually quite simple. But all the individuals at the DEA and the FBI should do is they should all go home and go get a real job and burn their buildings to the ground. Pour the gasoline on there, make sure that there's absolutely nothing left, make sure there's absolutely no possibility of salvaging anything that remains of these diseased organizations that exist. Because of course, the drug trade is so violent because of drug prohibition. So the purpose of these agencies is not to enforce laws, it is not to reduce violence, it's not to go after any kind of real property crime. It is to support these cartels in various forms in a variety of different markets and drug markets are just one of those markets that they support. So some of the other findings that were interesting in this report, at least that I found interesting, one was that a lot of the trade, we've been assuming for a while that a lot of the trade was college students who need to smoke weed, buying from drug dealers who get it from who knows where. What they found in the study is that the prices for a lot of these transactions seem rather high for that. It takes you a while to smoke $1,500 worth of marijuana, or at least we hope that it does. It's not a very functional user if you go through that in a month or whatever. So it seems that a lot of the trade that's happening is actually a dealer's buying from distributors and that's why they're suggesting there could be this reduction in drug trade because there may be relatively little violence between the dealers and the buyers, especially you know, like on a college campus is one college student who sells marijuana to the other college students going to stab them in their dorm room for some cash. No, that's not going to happen. But there does seem to be a more plausible story for violence between drug cartels, drug distributors, you know, big time players. And there's more cash on the line and fewer people involved and you know, darker spots, not just on street corners, but in fact, in some really subterranean kind of meeting places. Of course, none of this was backed up by factual evidence in the report. This was just sort of a speculative shown on their part. This was perhaps relying, building on their experience as criminologists and you know, the law professors, the people that co-authored the study. So more data needs to be obtained in order to prove this point. But of course, it makes sense that if you would remove, you would take these kind of drug deals from the realm of the streets onto the internet where you cannot in fact reach through and slap anyone through the webcam, then it would be much more difficult for that to get violent. In a more progressive government, that would be a government program. Chris Ellis. Yeah, it's a bit like when someone starts at your work and they do a much better job than you showing just how bad a job that you've been doing all this time. I've got a theory that the US government is actually embarrassed at themselves and are ashamed of being shown up. And so they I think they arrested dreadfire at Roberts for that purpose because he was doing too good a job and they didn't want the voters seeing how someone could take responsibility and be a role model citizen. I'm not saying he was necessarily because we do need more data to validate it, but that would be my theory. It does seem like we have a perfectly good superior administrator locked up in jail right now. Megan Lorde. So I was really excited when I first heard about the Silk Road a couple years ago because of this very premise of this article, which is of course it reduces violence and the drug trade. I mean, anyone who's ever had to go through this strange situation of trying to use you find a plant from other people that happens to be illegal has been and has been put themselves in a very dangerous situation when maybe they need it for medicine, maybe they need it for perfectly legit reasons. I think recreational use is legit reasons, but you know, you can even look at it from a medicinal standpoint. These people on the Silk Road too, I mean, it wasn't people like Christophe said a lot of people were saying, oh, well, it's just kids buying weed. So there were a lot of life-saving drugs that you could buy that people needed access to. The regulations were preventing others from getting. And as far as the FBI allowing the Silk Road to be back or starting their own, I don't trust the FBI to do anything competent that's not completely evil. And you know, it's so hypocritical that the government stands on this. They've been fueling this drug war that's killed thousands of people in the course of a very short time. If you look back in history, you know, over time, overall, general violence is decreasing, but I'd like to say the numbers for how much the drug war has influenced state aggression on individual people. Our military is literally garden poppy fields in Afghanistan while busting down, while the DEA is here busting down the doors of people who are using the wrong plant. It's hypocrisy and it's fine as the thing is, whether or not the FBI allows their to be a Silk Road or starts their own, there's going to be so many. There already are several black markets where you can gain access to these materials. So let's just go and keep happening. Anytime you try to make something illegal, you're creating a black market. And in this case, it's a much more peaceful black market than what the drug war has basically agitated in the past couple decades. So I am all for alternative and the markets are going to provide these alternative ways to peacefully get these substances. If people are going to use whether or not people want them to use anyway. So yeah, a lot of hypocrisy here, but I think this article shows that it's not really surprising to anyone that, of course, buying drugs online is way more peaceful than having to go buy them on the streets or God forbid, you get caught with a naracuse. You're going to stay or you're going to stay or something and end up killing you or something terrible. So yeah, I think it just showed what everyone already knew. All right. Well, so the articles about reducing violence in the drug trade or drug war, whatever, it occurs to me that so much of the traffic is international in these marketplaces. We have these different laws in different countries. We have medical tourism in America where it's technically legal for people to spend a lot of money, make a trip to San Diego, drive to Tijuana, and come back with a medication that costs one fifth the amount for cancer treatments or severe things like this that they would otherwise, even with full coverage, pre-Obamacare and whatever, we pay five times as much for or more. These markets exist, medical tourism, their companies who are like travel agencies for this in particular. That's expensive stuff. I'm just thinking borders themselves are really a cause of violence here too. We have these different rules for different places with things that are relatively inert, relatively well tested or understood, but in America you can't have it without a note from a doctor. Many other well developed first world countries, they treat you like a responsible adult and you can walk into a store and walk out and pay cash. It's a bunch of silly rules that these kinds of solutions help to get around. The violence that's being avoided isn't only in the interactions with physical proximity to supposed bad actors, but it's also in being able to have access to goods that are otherwise way, way cost prohibitive or just with silly rules where the violence is either from the regulations or the rules or laws or whatever, basically the figure to have gone being pointed at you from Washington. This is just so much more convenient and affordable to buy something that costs even within insurance $1,000 for a bottle you can buy on Silk Road 2.0 or whatever one of these other ones for like $340. Why wouldn't you do that? This is just common sense and it just kind of points out that borders themselves have in here in violence in them too. My idea is we could start a new marketplace called Sheep Road and then see if all the users get fleeced. Moving on. I wanted to, I thought of a quote that I wanted to read. This is from New Jack City and there was this drug dealer in the movie played by Wesley Snipes, the famous tax resistor. Nino Brown in the movie, he has this quote where he's talking to, I don't know, like a courtroom or something like that, and he says, I'm not guilty. You're the one who's guilty. The lawmakers, the politicians, the Columbia drug lord, all you who lobby against making drugs legal, just like you did with alcohol during the prohibition. You're the one who's guilty. I mean, come on, let's kick the ballistics here, ain't no oozee's made in Harlem. Not one of us in here owns a poppy field. This thing is bigger than Nino Brown. This is big business. This is the American way. Excellent. Moving on. Did you know the Bitcoin group is broadcast live on the world crypto network at worldcryptoneetwork.com And if you were watching us live right now, you could make a prediction or ask a question with the Google Hangouts app. Even on your phone. Yes, Virginia. Even on your phone. Write your question or prediction now and subscribe to worldcryptoneetwork today. Enough plugs. Moving on. Issue 4. Can Chinese exchange okay coin rescue mount gocks creditors? It wouldn't be the Bitcoin group if we didn't talk about mount gocks and this week is no different. Carpellis's Frankenstein monster is back this week with a plan by okay coin to rescue the exchange with the goal of returning 100% of the lost bitcoins to users by running it for fees, improving on the mighty ducks plan to restore 60% of lost bitcoins. Both plans focus on the ridiculous idea that people would put their money back into mount gocks. But other than that, which plan do you favor? The okay coin plan backed by the exchange or the mighty ducks plan packed backed by Bitcoin foundation member Brock Pierce, right winger for the mighty ducks. Kristoff atlas. Okay, to me this does not look like Frankenstein. It looks like someone who has dug up a corpse that has already partially decomposed that got like the little chargers and like clear dirt and like there's like smoke coming out of the remaining hair from the corpse. I just don't understand this plan and the longer that it goes on, the more ridiculous it gets. Like they mentioned in the article they're like, oh well mount gocks has all this experience at running a stable exchange. It's like once the last time they ran a stable exchange, they're so far behind compared to the other exchanges that are so in business at this point, it's hard for me to understand exactly what expertise they would be exploding in this situation. So I would just, you know, my sentiment is just let it be, you know, get the get the creditors whatever they can get and let's move on from this. Chris, Alice. Yeah, we're still being trolled, right? I think that still happens. Now I'm kind of bored of this story now. I think they should just give it up. I totally agree. Megan Lord. I don't like either plan. I would very much like to see the people who lost Bitcoin be made whole again, but I don't think either of these plans is good. I further say, everyone else and no one's going to put their money back in gocks. Okay. Like everyone say it with me. No one's going to put their money back in gocks. This is not happening. They've completely broken everyone's trust and numerous times too, numerous times. So I don't think either one of these ideas are good at all. Well, Pang. Yeah. So I have two little like things here and then a question for the panel too. Like, why can't any exchange just take up the philanthropy of making the, you know, the folks who lost money on gocks whole? Why couldn't they donate a portion or all of their fees for any stretch of time or get together as a consortium and do that? I mean, then resurrecting, you know, this corpse is Christophe's so put it. I don't understand why it's got to be Mount Gocks or those servers or something unless that has something to do. And this is where my question comes in with the lost bitcoins. You know, if these coins are lost anywhere between 200 to 800,000, we've heard some numbers in their bitcoins like just lost. I mean, if they were stolen, they may presumably reenter the marketplace at some point as they're liquidated over time or something. If they're lost or destroyed, they're lost or destroyed forever. If they're like seized in some of these subpoenas and ongoing, you know, court battles either in Japan or in Interpol or whatever's going on. Yeah. Does anyone have any thoughts on that? Is this a plan to actually find the lost coins and reconstitute the people or is this a plan to like just, you know, through profits, you know, through some business model of some kind, do some philanthropy and make people hold again because that could be anybody. That could be Sean's outpost doing that. I think you're absolutely right when you say some business model. The business model is a Ponzi scheme. They basically want to rebuild Mount Gocks as a Ponzi scheme for the investors who unfortunately lost money last time. The business would run just like a normal business, but instead of taking that profit and returning it to the employees and the investors or reinvesting it in the company, you would give it to your creditors because you're running a Ponzi scheme for the people who lost money in Mount Gocks. That's why it wouldn't work. There's not enough profit to pay them back and to run a business and to profit normally and all the other things a business has to do. As for the lost bitcoins, the official word from Carpellis is that quote unquote, transaction malability led to users withdrawing more than 200,000 bitcoins that the system didn't register properly. Outside experts have said that's not how transaction malability works. Currently we have no more data where at an impasse there. Andy had a Frappuccino law say addiction remember. Yeah, they were under the cat. They were under the cat. Well, wasn't there some analysis in the Willie report that indicated that transaction malability that could have only accounted for upwards of 30,000 bitcoins and probably far less. So that was some side analysis. There's been reports of possible hacks where bitcoins were taken from Gocks and Gocks attempted to keep running similar to the Ponzi schemes that are being described. Even the desperate actions of the Willie and Marcus bought as the price fell to $300 coin seemed to be attempting to hold on to things. Again, this idea that we could, if we could just make the fees back, if the price would go up or down and we had the right holdings, we could make the fees back, we could cover this, we could get back to zero and back to operating like a business. But the problem is, they're already operating like a scheme. Yeah, so as soon as there's a dishonest or truth with holding type of operation or component to your business model, you have failed. This is again why it's so kind of surprising that an anonymous run business, Silk Road 2.0, would go through so much effort to reconstitute their customers who had Bitcoin stolen in a hack and faithfully do so all the way up until 100% our reconstituted, which is, I'm hearing we're getting close to that. So that's like, it's just appalling, right? That human beings are so terrible, we gotta look out for bad actors, pornographers and terrorists and money wanderers and drug dealers and human traffickers and whatever. Meanwhile, the people who have everything to gain from lying and not getting caught are doing the exact opposite. And there's still people, I guess the car pelises, I don't know the man personally, but don't know the disparaging personally. I think he's deserved a lot of derision. But yeah, I mean, if this scam started, is the willy report alleges, possibly back in April of 2011, somewhere around the first Mt. Gox hack, and then continue through subsequent hacks and ill-equity problems and whatever else. Wow, I mean, just like another level of fevery and fraud, and it really just boggles the mind that perhaps he might not pay the perpetrators, may not pay the piper in this situation. All right, we're moving on to predictions or a story of the week. Chris Ellis, do you have a prediction or a story of the week? Yeah, actually, I wanted to draw people's attention to something that I find quite interesting. I've been looking at the hash rates recently of Bitcoin. Let me just get my screen share ready. Can you see that? Can you guys see my screen? Yeah. There it is. So one of the things I noticed was that we shot up to a high of like 98 petahashes just before the difficulty adjustment. I've been tracking it because I've been looking at the share prices. This is on a website called SexyO, which is gigahash.io, which is one of the largest pools that are used for hashing Bitcoin. It currently takes 37% of the network, according to blockchain.info. And so I was kind of looking at it because these share sites seem to be a bit of a ripoff. You're seeing here that you've got to pay 0.00725 Bitcoin in order to get one gigahash, which, according to my rough calculations in a spreadsheet, is never going to get you your money back. And I'm thinking like, so who is buying this stuff? And so I'm kind of keeping my eye on the hash rate. And I'm noticing that as the weeks go by, I'm noticing that the difficulty tends to go up and down quite violently. You see, we go up to 98. And now we're back down to like 85. And it's almost as if the miners are trying to control the hash rate. I don't know for sure. I just really like to get other people's feedback on it. And this is a website by a friend of mine called CryptoCoinStats.com. And it's really cool because it actually shows you the price in red and the difficulty in blue. And you can see here that this is the Bitcoin one. But if you look at like a smaller coin, and feather coin has a lot of experience with this, but in particular, peer coin at the moment, look at how the difficulty goes up and down, up and down, up and down. And these are the so-called strip miners. These are sometimes the multiples. And what they'll do is they'll turn on their miners really, really intensively, often they collude like in IRC channels or in some kind of back channel. They'll mine the hell out of it. And what that means is all the honest sort of long term miners that are trying to support the coin, they just get lots of orphan blocks. So they're just mining for no profit. They're just burning through electricity for no coins in return. But then the miners just leave the network. They wait for the difficulty to go down. And then they come back and they attack the network again. There are different techniques you can use. You can see this is FeatherCoin's one here. We've got quite a granular difficulty adjustment. And we've had to perfect that over time, just with lots and lots of iterations, lots and lots of changes to the incentive structures and a lot of community building as well. Because a lot of this is actually on the forum and in email and actually going to physical meetups, getting people to sort of mine your coin for the long term. So I'd be really interested to see if anyone has any kind of insight. I mean, that looks like a large drop off to me. That's something like 13 petahashes of mining power, which to me signals something quite potentially quite dangerous really that you could have people look at what we had in the hard thought back in March last year, where there was, I think it was something like a 20 block fork. Can anyone remember? But it felt like a long time when it was going on anyway. And the only way they were able to solve this situation was by going on IRC and getting everyone together and everyone rolling back to the old blockchain, not even the new one. And I believe OK, pay ended up losing quite a lot of money. So yeah, does anyone have any thoughts on that? Maybe Christophe, you're quite technical. Sorry, what was the exact question? So do you think it's possible that someone is playing with the hash rate on Bitcoin? Because everyone talks about how it's the largest network in the world. But everyone forgets, you can turn those miners off anytime. And we see this on smaller coins. And is there a possibility that very, very slowly a company that makes, I'm not going to name any names, so I don't want to bias this conversation. But they could just be amassing lots of chips, not telling anyone about it. And just mining in the background. Meanwhile, that's taking pre-orders that they're mining on Kigahash.io, selling shares at massively impressive prices. Does anyone not see how this could potentially paint quite a dangerous picture? Because we had it firsthand at Feathercoin. We had it all the time. And it was only because we had such a dedicated oil bunch of people that just kept plugging away at the incentive structures. And now we're moving over to NeoHash. We actually have a policy now changing the hash rate periodically when this happens to keep mining on us. Because mining should be a zero-sum game. Shouldn't be a hugely profitable endeavor. And yet we're looking at these share prices. It looks like someone is making a lot of money, no? Yeah, I guess I have two thoughts on that. One is if you have a bunch of mining equipment and you want to use that to disrupt a market for some kind of profit hearing, probably would go after one of the smaller shop 256 markets rather than Bitcoin, because it's harder to move in that regard. If you have enough to move. Well, but I should. The Paycoin is that one, right? Paycoin ratio. Yeah, yeah. And I'm certain that that type of manipulation does go in the smaller coins without a doubt. I would quite agree with that. And it's very interesting data that you're pointing out. The other thing that I'm thinking of too is people, there's often this question about in the future, if we didn't have police forces or whatever, if we privatized more stuff, how it would work out in the future without there being chaos. And there's this notion of a DRO and how they would provide these kind of protections to people that sign up with them. And of course, the first question about any such organization that's going to provide security would be, well, how can I make sure that you're not going to go after me if I'm paying you to buy up guns and stuff like that? And I'm not sure that we necessarily have that kind of critical thinking in place with the mining infrastructure and Bitcoin. I'm curious about that. If people really ask themselves, okay, so we're going to have this company build a lot of mining equipment. We're getting a lot of money. They're going to buy the mining equipment. At some point in the future, they promise to send it to us. And we don't really know what they're doing with it in the meantime, right? And there's these tremendous delays that happen, supposedly because the equipment is not working yet. But what if it is working and they're just using the equipment in the meantime, I think there's the potential for that kind of scenario. And I'm curious what the Bitcoin ecosystem is prepared to do to detect such scenarios. Yeah, you can actually do really, really granular analysis. And there are lots of people out there that do it. But I just think 13 petahashes to suddenly go up that amount and then come back down that amount during a difficulty adjustment. My prediction is that we're going to see a less than 15% increase in the difficulty by next time. I think what they're doing is they're trying to get that best bang for buck on their hardware by turning it off just before the difficulty changes and then ramping it up. You know, you're going to say something. That strategy seems very plausible. Maybe to play devil's advocate for a minute. There's a lot of institutional money coming into mining, hardware manufacturer, and data centers too. And just like the funding and operation of large farms. So if there's large farms upgrading, updating, or coming online for the first time, or maybe moving, relocating, maybe we can see some of this thing. I think maybe this time last year, we saw the news piece. I think it was like Seattle or something. There's this huge mining farm outside of Seattle. It was like, they showed us the one in Hong Kong last summer. They showed us that one earlier in the winter time here. And then I'm reading now of more and more popping up all over the place. So it's accelerating that industry. Maybe that's part of it. I think there's some shenanigans like you're pointing out with the difficulty readjustment timing that appropriately so that you can try to manipulate the difficulty readjustment from going too much higher. On the other side of the coin, the more nefarious side, I guess it makes a lot of sense. I am hearing of people trying to rent supercomputers and things or steer botnets. People who are newly coming aware of Bitcoin having high technical capability and access to resources that maybe they don't cost them very much. They just have their hands on it. They're in touch with it. And they're directing these networks to mine. And we don't find out about this until well after the fact of the operation stopping. So maybe there's some of that stuff going on too where just more and more people are coming to realize this is legit and that they can get away with maybe some kind of manipulation early on and walk away, Scott Freed kind of thing. So that's what I would suspect. I think lots and lots of data centers are coming online or upgrading to Christophe's point about delaying shipping hardware. Of course, we know a couple of names of companies who have been doing that. There are several also who ship very quickly. And at least from what you're looking at in terms of how quickly they can get the materials to build the hardware and then ship it, it doesn't look like they're sitting on the machines for very long at all if at all, because they're shipping them so quickly. Some companies are. And then other companies are changing their business model from manufacturer instead of shipping. And that kind of thing, they're just selling the cloud mining shares. So they're building machines and then just allowing cloud mining contracts and not really shipping hardware out. So maybe some of the adjustments of these large companies business models is affecting it. And I just wanted to make a quick comment too. My technical understanding is probably far below much of the other people on this panel. But I think as far as an understanding of human nature, you have to factor in that there's a lot of incentive to cheat the system and manipulate things. And I think as we, as well as I, as we get more people coming into Bitcoin who have a very good technical understanding and who have a lot of money and power, I think you are going to see that threat become more possible. And I think it could even be starting on a smaller scale right now. So I'm really glad Chris pointed it out. Because I think this is something we should really be looking at and following. And I really hope that there can be some kind of creative solution to it. But I think it's something that we should be keeping a really close eye on. Because I think most people are generally good, not super good people. But people are motivated by their self-interest. So you have to watch that even though Bitcoin is small now as it kind of grows, that's going to become more of an issue. It's so only good and it gets worse as far as being a serious problem. So I'm glad Chris pointed out and it's something that I need to learn more about, first of all, so I can have a better understanding of it. But I think we all should be keeping an eye on it. And I think it's a key point that why we do need these alternative cryptocurrencies, because they're doing a lot of the hard work. And Gavin Andre said mentioned at the conference that you don't really know how to secure something valuable until that valuable asset is on the line. So we're never going to be able to secure the code within Bitcoin unless there is something at stake. And this is a high-stakes game. So I think a lot of these small alt currencies are kind of learning about that. And I think what's becoming evident is that you can't just have an army full of mercenaries. If everyone that's mining on the blockchain is only doing it for profit, no mercenary is going to put themselves into harm's way in battle. You're going to want a breakup of patriots and mercenaries in your army. So I think we're going to have to, people are going to have to mine these coins just because, you know, add some sort of sense of duty until the mining just who comes absorbed into the atmosphere. And it's just space eaters and light bulbs and that kind of thing. Some of the mining problem might come from these companies that are setting themselves up based upon the future value of Bitcoin. They're not mining to break even today. They're mining based upon this idea. If they get a bunch of Bitcoin, they hold them for a couple of years. They could sell them for a lot more. So they're not necessarily dialed in businesses in the normal way of profits. They're more obsessed about getting these miners. As for the super computers, a guy did try that. He was a scientist with access to government computers. And it's really unfortunate because super computers don't mind Bitcoin very well is what we learned. He only made about $8,000. And he's now been banned from using government computers, which was his old career. So for $8,000, he's given up. I presume a doctorate at least several graduate degrees. It's a very bad trade off. But it's probably just Bitcoin got in his head, drove him mad. Like Will was talking about with the botnets, with the technology. When you find out Bitcoin and your technologically superior, maybe you go out there and try to get some for cheap. And just your eyes get bigger than your stomach. And as for the other issue of pre-orders, if we could only agree that if we're going to pre-order something from a company, we kind of need to be monitoring that company now. We need cameras. There's no reason that if you're a Bitcoin mining company selling hardware, and that's what you really want to do, you should have cameras in your entire factory. Yes, big signs on them. We're broadcasting on the internet all the time, tell all your employees, nobody should be up to any funny business, because we're going to be on the internet all the time. And this way we'll know for sure that you're not testing on those miners longer than you're supposed to be. And if you're cloud mining for someone that you do have cloud mining rigs, and that you're selling access to a data server farm, there should just be cameras. It should just be broadcast. Megan Lawrence, do you have a prediction moving back to the show? Well, I don't have a prediction, but I'm still in the midst of showing for Bitcoin in the beltways. So then your microphone for me. No. Can you hear me? All right. All right. So if you're on the West Coast, this might be good for you. You can still get hotels at the rate until the end of this, the last day to lock in the Bitcoin and the beltway rate for the hotel, the Renaissance Hotel, and downtown DC for the conference. So if you're still planning on going, it's going to be a really, really awesome radical conference. And I just got a preview of some of the shirts that D'Auby is going to have there, and they're very cool looking. There's going to be a rebel shirt that we're selling. And we're also going to be selling Killed the Pressive Incherts in DC at Bitcoin in the beltways. So please come by and check it out. And that's June 20th and 21st. June 20th through 22nd. Just a few weeks away. Very good. Will, Penguin. Yeah, I think I would chill for Tatiana again, but I did a good job of that last week, I think. So this week, I'm going to chill for one of my favorite new Bitcoin startups, Bitcoin apps. It's called quickcoin.co. this allows you to send and receive Bitcoins via Facebook. It's relatively secure. I've talked with the developers, and they work with me on some bugs it. I was able to identify and things like that. Minor things. But it's awesome. And again, if we're talking about ways of introducing people to Bitcoin, we need Bitcoin wallet apps on iOS. And we need to be able to send and receive Bitcoin via social media channels, especially Facebook, where the most users reside. And this is a great way to introduce people and show them, oh, it's easy. Oh, and it's cool. And fun. You can tip people that way or just surprise them. I gave someone a birthday present yesterday. Today, I told someone who taught me something that I was going to pay them. And I did. And they were like, whoa, and these are non-Bitcoin centric people whatsoever. So they just have to follow some simple instructions. Link their Facebook account to the quickcoin wallet. And yeah, it's super easy and fun to send people money that way. I highly encourage that if you are interested in spreading adoption or any kind of Bitcoin activism or outreach, whatsoever, that you put this in your arsenal, quickcoin.co, support them. There's actually a lot of really cool services that they're going to be coming out with. And I don't want to take any words out of the mouth of anyone I've talked to. I'll just speak for myself. I think some of these things, I don't even know what they are. But I do know that the big boys in the industry will have to be taking notice to Quickcoin. That includes circle coin based and the like. So keep an eye on Quickcoin. And for now, enjoy tipping people on Facebook. Kristoff, Atlas. Yeah, I think that the Mt. Gox stuff will be settled soon. And what they're going to do is they're going to give all the money, divvy it up, and give it back to the investors. And so take one Bitcoin and put that towards a Marka Palace dunk tank, where all of the people that had an account with Mt. Gox will be able to come to the dunk tank and give them the plunge. That would be good for the end of days he should be there until the end of time in the dunk tank. Prediction. All the dominoes are starting to fall. Bitcoin is surrounded by friends with new businesses joining up every day. Larger and larger corporations are realizing that it wouldn't take too much money to set up Bitcoin. And once it is set up, they could pay less in fees and offer a better payment option to their customers. The internet of money is forming right before our eyes. And the future is so bright. I'm wearing shades. We're out of time. Until next time, bye-bye.