The Bitcoin Group, the American Original. For over the last 10 seconds, the sharpest Satoshi, the best Bitcoin, the hardest cryptocurrency talk. We'd like to welcome our panelists, Blake Anderson from Facebook.com slash God Blake. Hello the internet, thanks for having me online. Known vase from Brave New Coin. Hey guys, I'd like to be in the first one of these group chats, should be fun. Megan Lourdes from AirBits. It's great to be back, thanks. And Chris Ellis from the World Crypto Network. Hello. And I'm Thomas Hunt, also from the World Crypto Network. I can barely talk today. Moving on, issue one, Bitcoin Civil War. Bitcoin XT, a Bitcoin fork has been proposed. What does that mean? It means that Bitcoin is an open source project and core developers Gavin Anderson and Mike Hurn have broken off to start their own version of Bitcoin. Bitcoin XT has bigger blocks and an IP tracking blacklist to present, deep prevent, de-doss, distributed denial of service attacks. But according to the media, this new development could tear Bitcoin in two. Blake Anderson, your thoughts, is this a Bitcoin Civil War? I know I got my musket ready to do some shankin. I would like to say hello and greetings to David Seaman. He joined us a little bit late, but he's going to be in great addition to the panel. If you're not familiar with the David Seaman, it should definitely check it out. As far as Bitcoin XT goes, I've been trying to be light-handed and real at the fringes and trying to suggest people do things in a certain way. But it feels like there hasn't been a recent real big push of this is final that we do this now and there's a little bit of fud around not doing it, I would say. I think that what we should do is we should illustrate that it's not risk-free to fork over to XT. There are some issues which could be produced there if we fork over to XT just for reasons of increasing the block size and we ignore any other changes that come along with XT. For example, the weighting of tornodes negatively to prevent certain tiles of attack. We're going to have a whole bunch of tornodes and then flood out somebody's client. If we want to fix that, that's fine, but we do not need to fuse those two things together and blow out the scope of the specific change which needs to be pushed through. The conflation of multiple issues being called one issue which is block size being pushed through XT is inappropriate relative to the scale of what we have going here. Risk management would dictate, let's be very, very clear, let's be very, very concise, let's tackle one issue at a time and let's not make that snap judgment to move over to XT to allow my current possibly undue control when some people in the space don't believe that his free market ideals are necessarily as strong as maybe some other people. There is risk in a fork of Bitcoin that is not completely one way or the other. There's a double spend risk. There are risks that Bitcoin XT could fail after a long enough period of time where in the Bitcoin XT blocks that are stored in blocks larger than one meg are not backwards compatible and then coins will not be spendable. To say that there's no risk at all of implementing XT is not the case and I think that people should stop echoing that and that we should focus down on the block size debate specifically and then work out the metrics that we can use and agree upon to solve that specific issue before we bring anything else into the mix. Tom Bees. Got to unmute yourself. Still mute. I agree with Blake. I'm pretty much everything he said. I just want to add that I'm really disappointed in everything that's going on right now. It's basically politics all over the place. More specifically if you're against Bitcoin XT which I actually am everyone makes it sound like I'm against increasing the block size. I'm for increasing the block size but I'm for increasing the block size in a safe way. XT is anything but that. Obviously the whole issue of the nodes being able to be prioritized is absolutely terrible. The thing that Blake said I said exactly that word for word when I had a chat with Garzik in Chicago and I said the only way you're going to really get a consensus and get something through it's just one issue just the block size. There should be no other pork in this in the change and obviously they didn't do that. But more specifically Bitcoin XT they don't even have consensus within a group of five developers and they think they're going to be able to get consensus out of the entire network and 75%. That's not consensus that's a slight majority. That would be absolutely terrible. If they hit their 75% mark Bitcoin can totally fork because the hardcore Bitcoiners might prefer to stay on the 25% side and their hashing power would be great. They're actually going to be making good bitcoins. Just the mere assumption that just because 75% have switched to XT and the smarter group I believe will not switch to XT. It doesn't mean that they're going to run to XT if it does go into full production mode. They might be perfectly happy on the weaker 425% and their hashing power would go up significantly on that side. Some of the guys that went to the 75% side will just say, you know what, we're just going to switch back and there you go. It's a 50-50 split and we have two bitcoins. I mean, the action bias here, don't you think, Tony? It's really like people have the action bias. We need to do so. We need to fork it sooner than later. In an immutable chain, do you think that's a dangerous bias to yield two, Tony? I think it's very dangerous. I don't think, I remember I was on a panel at a conference nine months ago, maybe, and someone asked a question, what are your concerns about Bitcoin? I did say my concern was seven transactions a second. It needs to increase. I am very disappointed at what's happening here and the way they're trying to do it. Not to mention that whole, I don't even understand why people call it a stress test. It was a blatant attack on the number of transactions in a block that happened about a month ago and there was another article. They want to do a much bigger one in September. The network kind of handled it. Yeah, things were down, but now people will know and they're just going to increase their fee. The way you really want to do this, you really want a 95% to 100% consensus when the block size goes up. The only way to do that is to do a definition of consensus. You need for it to be a problem. When it really is a problem, then push it through and then everybody will switch. The only minor problem with that is if you push something through last minute, there might be some extra junk in it. We're witnessing in Bitcoin XT. People were able to spot it ahead of time. You have to let it go. A fee market can also develop. Things need to be efficient. You can't just spam the network. Maybe fees should go up. That's a real free market. I really don't like this. Nothing good can come from it. I don't want to take up all the time. I can elaborate on that later. If people stop using XT now, it is still going to be really bad in the near future. I think the things that Bitcoin has built are consensus. I'm all for competition and options. Especially when it comes to the block size debate, obviously we're going to have to move up at some point to be able to keep up with some of these things that Bitcoin has been challenging or that a lot of people who are ideologically and Bitcoin want to challenge. I think this was really hastily done. There's been a huge lack of consensus and a lot of egos involved. I'm not really liking a lot of the extremist rhetoric that's come out of this saying that people are going to be forced to use XT. No one's forced to use it. It's something that you can choose to use. It looks like there are some serious problems here, especially with the blacklist dig of IPs and things like that. I'm not liking this rollout. I think it's hastily done. I don't know that we're at the transaction volume to really call for it at this time. Yes, I think Blake made a really good point where the block size debate is separate from some of the things contained in Bitcoin XT. I think this is really hastily done. I like to see a little more caution, a little more focus on consensus instead of something that seems a little egos driven. Some of the censorship also that's come out of places like Reddit too. I think this should be a discussion that it's obviously going to be very heated, but it's a discussion that needs to happen. There are options that need to be out there, but I don't think that Bitcoin XT is the best way to go about this change. Will it be a bit more serious? Well, it looks like we're all in agreement on this panel. We have some consensus that stay on the Bitcoin group because I too am very skeptical of XT. I'm actually not on either side. I really hate the populist rhetoric and the PR, the spin and how Bitcoin has ended up generating into mainstream politics, just like it was with the Euro, with the Grexit recently. It just looks like that all over again. However I'm undecided, I'm still learning. I've spent most of the afternoon, even though I'm quite ill at the moment, please forgive me if I'm not my normal self, reading through all of these articles and trying to unfathom it. Because the other day I made a remark, Bitcoin's most prized asset is its network adoption. It's the fact that it got that advantage and no altcoin, not even Ethereum as yet, has been able to catch it. I made a remark that said that it's starting to me to look like XT is an attempt to gain that traction and push it over under these two developers, Mike Hurn and Gavin Andrewsson. You're going to go from something like 10 or 11 contributors on the Bitcoin code down to two and surely that's not a healthy thing. It's clear that Bitcoin needs to evolve new political structures and mechanisms for achieving agreements. Politics is about the balance of power. What do we do now, given the states for fairs? What can we do now, given the states for fairs? I would actually not disagree too much with the summation that Vlad gave. Vlad is the core developer of Bitcoin. He said that there's no patch for this. There's no technological solution for this current problem. It's a social problem that we are facing. I just pinned to my Twitter as well because I'm not necessarily fit enough to talk at any length right now. I posted up an article by David Geri, who's got a blog called Wall Street Technologists.com. He wrote a beautiful article which I really, really loved. It's very lengthy and this is a nuanced debate and I will talk more about why that's important later. He was alluding to, I've just highlighted this quote here, a post that was made under the guise of Stoshien Akimoto back on the 15th about a week ago now. We don't know if this is the Stoshie and a lot of speculation was around because he makes the point very well here, whether it's the real Stoshie or not. It's a very well articulated point that Bitcoin should not be able to be circumnavigated or changed anyway by charismatic leaders. This is about rhetoric. He's talking about the age old way of of of sophistry and using words very cleverly or bombastically or trolling or shouting to try and get your point across in order to control or steer the direction of something as important as this. Whether or not it was Stoshie, this author claims is not important. Let me quote this, this is beautiful. People who harp on about the fact that Stoshie is not made a provably authenticated statement are clearly missing the whole point of this message. If he were to do so, rest assured the whole community will rally with him. But that is exactly what he doesn't want to happen. A whole community blindly following authority consistently so the author points out that if it takes up an evident dictated to pull us out of this mess then Bitcoin as a project is decentralized money, resistant to authority has failed. And he is absolutely right. If Bitcoin requires Stoshie to keep coming back like a father to a child to dig him out of the dirt every time he gets stuck then Bitcoin has failed. And I agree with that diagnosis and it's a very sad time. And no one on either side. When I made that post the other day people kept saying, oh, so you're with Adam back then. And I was like, well, Adam back got to do with this. So then I did a whole bunch of research and all it turns out there's a whole bunch of politics where block streams, a company, have hired a bunch of core developers. And so now if you make a criticism of XT, it's like you're on this other team. And I'm not on either team. I'm on the side of the individual to make their own informed decisions, which is not what currently happens in democratic systems. I don't necessarily disagree that block size should increase. I don't even have a strong objection to gaping and my schedule for that. What I have a disagreement over is their method of doing it, their way of doing it. If I was going to be generous to them, contradicting myself from my tweet the other day, I would say that they're doing this deliberately, benevolently, to test Bitcoin. They recognize that Bitcoin is open source. And I've said all along that that's its most important feature. That anyone, permissionless can come along and make updates to the code and invite miners and merchants and go without lobbying and doing articles in the BPC and the financial times telling people you're selling your Bitcoin. You could do all these different tactics and games. If I was being generous to both Mike and Gavin, I would say that they're doing this deliberately to try and test that online political structure of Bitcoin to see whether or not it can stand up for it. Now if that is the case, then what they are trying to do is a political manoeuvre to force Bitcoin core developers into making a decision sooner than they would have ideally liked to, which will mean that come the 11th of January next year, which is the date when the as soon as possible time at a fork, the event can take place in the network. So you've got plenty of time to do your research, but I wouldn't recommend you delay it. What it would do is it would put pressure on them to release a patch. So that come the 11th of January, Bitcoin core will be able to accept Bitcoin XT blocks and therefore preventing a fork, but this is highly risky. It puts the whole Bitcoin ecosystem into a sort of game theoretic prison's dilemma where everyone's trying to anticipate what everyone's going to do. Then only nodes that can vote in this supermajority that's been proposed are minors, not regular people, not people that are just running a full node. It's only the mining, the hashing power. And what are the miners going to do? Were they going to second guess what they think the exchanges and the merchants are going to do? What's the point in mining on a chain if you can't sell your coins? So you're going to be looking for press release after schools. You're going to be looking to see what's Bitfinex going to do. What are they going to tell all their customers these exchanges? What are the dresses are they going to give them? It's just going to be pandemonium. It's going to be confusion. And again, it's all about amplitude rather than clarity. And people aren't making their own minds up. It's becoming overly polarized. And having said I would keep this brief, I've gone on far too long. So that is my view. I'm still on the side of it. If I'm feeling well enough, I'll try and come back on on something on Sunday when Theo has more index show on the mindset. But I would encourage everyone, please make up your own mind and do your questions. I'll try to tweet. Chris, can I just add on something you said? Go ahead, Tom. We can hear you. OK, here we go. Can you pull up that article one more time? Because I think there was something more important in it. And if you go to the first paragraph that says Bitcoin priorities. Is this the Oscar Emanuele? Yeah, Jerry's article. I was actually in the chat group where Jerry and I were in complete agreement trying to explain to a lot of other people in the chat group what's going on and why this is bad. And then he came out with this article. I actually read it the moments he published it. Right. So in priorities of Bitcoin, if you look at that at the part where it says for this solution to work, Bitcoin holds the following priorities. It's right in the middle. Yeah. In descending order of importance. And he lists the priorities of Bitcoin consensus, decentralization, store of value, and a payment system. And what's happening with Bitcoin XT is they're prioritizing the fact that Bitcoin is also a payment system which I believe is its least important priority. I agree with Jerry 100%. Bitcoin, I believe, is a hedge against government. It's a hedge against fiat currency. It's meant to be a store of value. And it cannot be all those things and the visa and the PayPal. Right. Right. It honestly can't because not only are the mining priorities different for large transactions as small, so are political priorities. So what Bitcoin XT is doing by even jumping to eighth megabytes, it's basically creating a payment network out of Bitcoin which of course comes with a lot of speed bumps and a lot of control because it's a payment network. So that's, this is an article I believe everybody should read. I have a tweet about it as well saying this is still the best article I've read on the subject. Very good. Yeah, it would be the equivalent to like if you have an operating system and you're like, well, I'm going to use an ASIC because I really want Bitcoin to work well and then everything else in your operating system doesn't work at all. You want to make sure that you are looking at the entire system and not one application built for it trying to affect the entire system based on a scope that is inappropriate when applied to the macro situation. It's a little bit complicated but like very well said, Tom. David Seaman. They're still muted. Hey guys, hopefully you can hear me now. My computer must be my computer must be pretty NSAid because it's doing a weird thing where the Hangout works but I cannot access any windows on my web browser like they will not load which technically doesn't make sense to me because I'm getting the video so like why is there only partial internet? But before that happened, I was able to pull up Nick J. Bo's Twitter feed and I like what he said about an hour ago. He said if Bitcoin comes to depend on bureaucrats rather than protocol, he might as well use Visa. They know how to do that far better and I basically agree with that and I don't know that much about all the core developers but I will say that of what I know, I consider her to be the least trustworthy and like the most status and the most at odds with my own values as a Bitcoin user and Bitcoin investor and so if we're just going willy nilly until like a different protocol that he has a big hand in and not Satoshi Nakamoto, I am not in favor of that without knowing a lot more and I don't like the way that this was rolled out and I also don't like the way that our Bitcoin behaves. I mean, Famos seems to be at the heart of so many controversies and like even if XT was the shittiest idea in the world which it might end up being, it should be allowed to be discussed on a Bitcoin subreddit called our Bitcoin. And sorry again that I was so late, I'm in a college town now and it was back to school day, either today or yesterday, so traffic on these small roads has just been really insane to big state school. I can actually recommend just very, I just want to interject there on this book, The Art of Controversy by Arthur Schopenhauer which lists all the ways you can win an argument illegitimately just by how it's not actually the proper book this link but just by you know, brute forcing your argument through or using straw man arguments, all of those kind of favors if you're in philosophy, I highly recommend it. Yeah gaslighting and fallacy, I mean if you want to learn how the demo of dogs master their craft that is a great book but it's also a great book that Galau penises you against bullshit a little bit you'd be like oh I recognize which you did there so it's good for that too and what David said I mean as far as censorship yeah absolutely even if Bitcoin XT is the worst idea ever and you're protecting everybody from it when you create a censorship situation you've created a vacuum of dissent and nobody can express their ideas, nobody can actually logically prove the tenability of their arguments over somebody else's which is a disastrous thing to do especially in the context if something is important is block size XT and all that stuff. All right we're going to move on to the exit question, exit question Bitcoin XT will be the next version of Bitcoin or be nothing Blake Anderson. Oh I think it'll be a headache for sure. David Seaman. I don't think it's going to achieve enough consensus and support. I think this is kind of the dry run for an attempt at it it feels almost like a coup against what Bitcoin is about right. I like that Bitcoin is something where you could get into it even today not knowing anybody who's involved and you could do that and run hundreds of thousands of transactions and not have to get into the Bitcoin political class at all and now like with XT and with future fork ideas people like one of you guys were saying people are going to have to start sifting through press releases and make sure that something crazy is going to happen next week and now it's like every Bitcoin investor is essentially an altcoin investor you got to be on your toes now whereas before you didn't have to know anything you just knew that you owned one of 21 million that would eventually exist and that little marketing point I think we should preserve that because that's really important. Tony Vaze. Oh man that is a really hard question because as much as I'm against XT I think the way it's now done I honestly think it's going to go through or it's or it's going to go through but maybe they can get them to remove the nodes the the censorship of the nodes and the reason why I think it will go through and this is crazy I may not be happy with it then I got to now I'm checking out other altcoins to see what what people what light-minded people like me are going to actually will be considering and here's why I think it might actually go through is because they have to show long time window right in this time window what what Gavin and and her did by giving them like four months for this thing to work itself out it has now prevented the other developers from putting out something better they can't now everyone has to wait for this thing to run its course and if this thing comes close to 50 50 is going to become just like any bill going through congress all we're so close we just have to adjust this and adjust that and then it's going to go through so what they did by releasing this thing so early is they basically um cause so much havoc unless they end the project like tomorrow and they pull it off the table which I don't see them doing um I think that by that time a decision needs to be made there will need to be a reason the transactions and everyone's really going to be used to and sensitize to this thing and it's kind of unfortunate but I maybe I'm being pessimistic about this um but I have a feeling it's going to now the end results are going to be very questionable um will everybody switch to x t or will Bitcoin split uh and I don't know which one I would rather I would prefer uh what I prefer to split or what I prefer everybody to switch to x t um I don't know because even if we go to x t it doesn't stop Bitcoin from going up in price because any large payment processor would love this um a lot of people would benefit from this and it would be easier to adopt Bitcoin globally with ease with such an ease of transactions uh is it good for Bitcoin price sure the more people use it the more I've seen the more useful the more it's valuable but is it good for people that want to use it as a hedge against government and fiat currencies no uh but as long as Bitcoin has a direction um it has a real chance of being something big um I would prefer that direction to be on the side of privacy and a little anti government friendly uh but if Bitcoin is fully government friendly and compliant there's nothing stopping a Bitcoin from going to 20 30 thousand dollars eventually um even though it's fully compliant and the government knows every public and private key uh it can still go up in price doesn't mean I'm happy about it I would rather be on something a little more private Megan lord it's an interesting test and ultimately it will prove uh you know if if Bitcoin can survive something like this and if it can't then maybe it's not what we were looking for uh you know maybe something better will come come along I hope that more of a consensus can be reached and I hope that something you know a better solution than Bitcoin XC comes out and uh you know we'll see it's it's very difficult but um but yeah it's it's a very interesting and maybe perhaps necessary test Chris Ellis Bitcoin has never fought successfully the last time as March 2013 and if I'm right and so um I think my current even took some responsibility for that one and that was an accident um this time he's doing it deliberately and I think it will fail because Bitcoin is not a democracy and you can't leave this to a vote and you certainly can't um get a vote on an immutable ledger like this and such a rash man I'm where you're trying to get 75% of the mining misdemeanor effects so mistake holders in various parts of the world so I don't predict that it will go through I predict the core will be forced to release a patch which will if in the worst case scenario accepts XT blocks and therefore avoid the forkable event but again for your diaries it's the 11th of January 2016 that is the forkable events your safest bet is to do nothing at all if you keep your coins on an existing wallet they after the fork is finished if it happens you will be able to spend on both as long as you import the wallet into whichever network was successful I if I could I just wanted to jump in in the um it's my mic uh all static down now you good all right if I could just jump in what toen said I agreed with a lot of it but um I also want to say as far as if we're going to look at this from a market perspective let's take a motion and psychology out of it I've uh done a lot of consulting for a lot of bitcoin mines large small multiple generations the bitcoin miners have their golden goose laying egg kind of more or less to kill that golden goose laying egg and deploy it because you know another one's coming along is a scary thing to do to fork if you're a bitcoin miner is a very very scary thing to do because if you are mining bitcoin you probably have a vested interest in studying it a lot and if bitcoin forks without a very very very clear need and there's competing forks then you have the possibility to double spend and all kinds of hyper nightmare stuff so I don't think that it's in the best interest of any miner to almost ever fork anything unless it's absolutely necessary which is why why why I give like block streams such a hard time they're going to eventually want to fork in hooks for uh side chains and stuff and I just don't ever see that happening so for those reasons I think it'll be a headache but again I don't think that it's going to come to um the miners actually working in non pragmatic ways to make things happen that are going to hurt them okay can I go yeah I go that oh sorry so actually I'm coming on something you said Chris um I when you said about the fork back in 2013 I think about it in the other way around the fork in 2013 um actually the reason why that fork immediately failed uh was because it was a bug and everyone realized it was a bug and there was an immediate 95 plus percent consensus everybody knew where they should be um which is why um that fork uh it depends if you call it a successor or failure um it's a failure of the fork so that fork failed um the current one is not as clear because uh some people even if it's 20% of the people if 20% of the hashing power completely disagrees and says we will take our chances with a 20% of hashing power but on the Bitcoin uh that we believe is true to Satoshi Nakamoto's original plan that 20% can actually succeed in creating a fork um this is completely different than what happened back in 2013 where it was clear to everyone we need to pick one it's not so clear this time I was going to say the Bitcoin XT was going to become nothing but now tone has me convinced this won't be the last time we talk about it yeah moving on very good you auger crowdfunding success the auger project a decentralized prediction market raised more than 1.3 million dollars in their first 26 hours and has since gone on to raise a stunning total of 2.8 million dollars with their sale of reputation tokens to build their decentralized oracle which is to report on the outcome of events David Seaman your thoughts on the auger crowdfunding i don't know enough about auger specifically i think there's a lot of promise in in prediction markets i think that's a good use case for crypto and i'd like to see it run somehow directly on Bitcoin instead of getting people to buy ethereum and learn about new technologies i think uh this is a problem that could be solved by a startup you could have a kind of cool uh predictive market as long as the user interface is cool and as long as there's like a social media plug-in so you can brag to your friends when you predict something correctly or make money i think that could be really big i don't see if i don't really again i don't know enough about auger but i want things on Bitcoin i don't necessarily want everything in in ethereum's backyard so that's my view on it tone days all right so i'm not surprised that auger made uh i had to have such success uh picking up 1.3 i see auger in a way similar to what fact i'm doing i mean they have a big team they're at a lot of events they're very very visible and auger i don't know enough about the details of auger we know i've seen a bunch of their presentations i fully understand prediction market we've all you know spent our time gambling um but they clearly have a profit model built in right because if everyone is gambling you're gonna take a little bit um to pay yourself so anytime uh people see something with an immediate revenue stream uh they will be more willing to invest in that object now i am very very on our net note um i am very very skeptical of any project with visible people creating tokens um and what i'm gonna say is whether it's ethereum whether it's factum whether it's auger they better have some really good lawyers on retainer because there is uh infinite list of government agencies that are broke they're gonna want a piece of that action and fine and tax and do whatever because the company is fully visible and there's people to go after it doesn't matter that their platform is decentralized the people there are profiting from these tokens are not they're visible they're real people um same thing on the terium same thing in factum same thing and this is what i tell every time i talk to these guys um in private um at these events and i'm like i really hope you got some good lawyers on retainer because the the government will not be will not just gonna sit there and do nothing you unless you're satoshi who was smarter than pretty much everybody in more ways than creating bitcoin um i hope you really know what you're doing mega in lords yeah congrats to auger on the crowd sale that's a great deal of money to raise and it seems like a really interesting project but i would also echo tones um concerns with uh the the visibility and uh government agencies cracking down on i guess they they're calling them reporters or um you know a dick comes from uh basically you know predicting the future the priest of ancient Rome whose role it was to practice augeries so that's really interesting um but yeah i mean i get be really cautious i guess is all i have to say i don't understand enough about auger to give a more detailed answer than that though but i look forward to learning a bit more about it lake anderson well yeah i mean there's just an absolute ton of risk making a token or making a coin or making a share uh securities laws are no joke the government is like oh i see that you're eating my lunch i would like to come punch you in the face as hard as i possibly can with all the authority that's been advocated to me and like they they they will do that that aside hopefully that goes well auger is a great idea it's it's like bringing um gambling and decentralization and prediction markets in a way that i think is really cool they do have the the token thing which makes it it's a double-edged sword risky but people like to see you know an ability to profit off of the idea that you've had um i guess i was shocked that they raised as much money as they did not because i don't think it's a good idea but because i was shocked that so many people were both able to understand and see the value in it it actually kind of was like wow i guess maybe there's like the the masses are more intelligent than i thought maybe it's just a small portion of those masses but either way i was you know i was happy to see that people were excited and wanting to see more from um you know prediction market development i i wouldn't i wouldn't go that far Blake and give so much credit to the masses uh pay coin made a lot a lot on their sale also um it's it's visibility it's promotions it's knowing people auger did a great job um are they gonna come through and um everyone that invested will be well all for it we'll see i hope they do well it is it is but the dumpable aren't they like minimum velocity considerations is like pay like pay coin even if people knew it was a bad idea they're like well i'll just get it in and out i as far as i know auger is not going to be as pump and dumpable but i may be wrong on that uh the time is to you do you have anything on that i think you're going to be able to sell your reputation tokens but a lot of people will want to keep them to make the money from reporting on events if you don't report on events there is a way where you could lose your token so it really is more of an active participant token yeah there's a participation minimum velocity element to it which will hopefully both secure against like it being called a security i don't know how effective that'll be but it also seems to incentivize uh actual reporting in the market which is good incentives are a powerful thing and remember the success of the auger crowd sales shows how much people like gambling and how much people like gambling on gambling which is what you're doing when you buy auger tokens because you hope they'll go up exit question yes or no did you participate in the auger crowd sale david semen no i did not i've been uh pretty quiet on the buying things other than bitcoin and like coin front recently so tone bays uh no i didn't either um i didn't i wasn't paying off attention to it but my general rule is i kind of ignore all old coins and tokens unless they've spent one year in free market mega in lords nope i'm bad at gambling and i'm also bad at predicting things Blake anderson uh i contributed supportive messages to my friend jermy and i'm the only one who participated in the crowd sale and uh you know full disclosure we are friends with jermy chris johy and the rest of the auger team and we do wish them the best as far as the legal issue i have heard that they've retained famous bitcoin lawyer marco centauri so he's a very smart guy and hopefully he's thought of everything and everything will go fine yeah between johy and centauri they have a really really good team and chris c is also one of the most brilliant people i've ever spoken with and he's like a lot younger than me it's like where did you go to learn this stuff they dropped out of college it's their new trick it's like that still a kind of valley show yeah no if i would if i was saying if i was saying out with jermy more recently i probably would have contributed a little bit but just slip my mind he's very convincing there's still a chance to get in on the maximum discount until tomorrow moving on to the plug go to purse.io and spend bitcoins save money you can get up to 20% off amazon.com just for spending bitcoins on purse.io thanks to purse for sponsoring this show issue three bitfinex flash crash on twos day the price of bitcoins suddenly took a tumble with the xbx index falling as much as 13% to 216 dollars while bitfinex broke from the market dropping as low as 162 a 35% decline in just 20 minutes.henny penny the sky is falling what's going on with the price of bitcoins tone veys all right so you go to the trader first that makes sense um so i've actually um i don't put all the blame on bitcoin xt but i'm one of the few people that um says it had a lot to do with it and again there's no direct link but a big seller decided to sell and the problem that we have in bitcoin trading which doesn't exist in the regular stock market is that every exchange has its own pool of liquidity which is obvious right um exchanges don't share bitcoin between them so the price on your on an exchange whether it's bitfinex ptce um uh btc china whatever is basically at the mercy of the liquidity on that exchange so if a big buyer or a big seller comes in it blows through the order book and that exchange goes low bit out of control and now that tends to spread because everyone is running their algo's trying to arbitrage between exchanges um and the reason this doesn't happen the regular stock market is because you have something like apple stock where 90% of it trades on one exchange the nasdaq and all these things you see like fidelity and each trade and all these others they're just brokers uh they're accessing one pool of liquidity so you will need a really big player in order to move that book um so one guy decided to sell and uh boom there you go and somebody else wanted to go short and then and this is what happens now the reason why I'm partially attributing this to xt is that if it really was just one seller the price would have already bounced back to where it was we saw this on btce not too long ago um it traded down from uh oh was it from 280 was it down to like 220 to 30 none of the other exchanges budged the price on btce bounced back within 24 hours and it was businesses usual nothing happened this time yes bit for next crashed the most but everybody's down we are now what 20 30 points slower on price than a week ago um and I think this is serious um and I think the whole debate this whole polar polarization with bitcoin xt is going to continue to weigh on the price um as far as the flash crash just one big seller not the other world but what happens now if we can't get back over to 50 very soon then um then I'm not liking the the near future at all and I thought we turned the corner with uh with all the news out of europe a month ago Megan lords this is not my area of expertise so I think uh tone broke it down really well though and um yeah I think this probably has a lot to do with bitcoin xt and it's unfortunate because we kind of reached a period of relative stability compared to you know the last couple of years in bitcoin um so but yeah I mean I don't think it's the end of the world and I mean we're gonna see uh you know crashes rises here and there so uh but yeah it's not really my area of expertise so I'll let the rest of the guys you know respond every time they say bitcoins gone stable it immediately goes up or down in a radical direction Chris Ellis well um yeah tone subdued up pretty well I do have some things to add I was there when it happened I was uh as therapy for my hearing problems that I've developed I've been on whale club um and listening to flipper and the people sort of talk price action but we also go into philosophy as well which is the the main reason why I'm there and let's talk about the index issues um and it was mentioned today by one of the traders that this is the s the s and p 500 stop market would you believe if that's been crashing today just when bitcoins should be in its element this is what all the bitcoin that has been waiting for bitcoin of course is not at the moment it is currently flatlining this is a daily chart on finnex let's just look at the four out yeah so you see it it almost looks like a patient in a cardiac arrest you know this is the flatline line and what should have happened as Tom mentioned is we should have gone right back up to where we started you'll notice that on all the other exchanges this is also the one day on bitstamp we didn't go down to 162 we we actually bottomed out at at at local bottom with about 120 on stamp and I think on an okay coin it dipped down to 214 now the reason it happened p gp who runs the exchange fill p gp name came on to well club to explain to several hours after it happened and he explained that the obvious but he had sold market sold a big market maker somebody who who holds large liquidity on that exchange have it get sold I actually watched as all the bid walls will pull I could see them in real time coming up on the monitor and I was somewhat anticipating the stroke why because there were 30 million people long on the finnex exchange and there was something like only a couple of short which meant that pretty much everyone who was long was long ready and there were no new buyers in the market there was no urgency market only move when someone puts in a market order the market never moves if everyone just puts in limit orders and so there was no urgency market we were sort of creeping down with a bleeding down and then all of a sudden all the bids got pulled I saw them all go and the price absolutely plummeted and what was happening was there was a gap between the price action that you could see on the chart and what you could see on bitfinex as an exchange itself and people weren't panicking and hitting their clothes buttons to close all that long 30 million dollars worth of long you know worth of you know you think Bitcoin's going to go up and this is borrowed money these traders very different to the other price volatility we've seen in the past when we were going up to 260 and then when we went up to a thousand this time traders are borrowing money in order to trade on the price and this creates extra stresses so the price was crashing the matching engine feels explaining to us has speed bumps in it to slow down the panic why because if you've taken a long position let's say $280 and you're expecting the price to go up but the price class is down a hundred points and goes down to $180 even if finex matching engine had the time to sell your loaned coins out to make the lender whole again it wouldn't be enough to make the lender whole because they would be selling them at a loss so in order for the price to stabilize the matching engine had to wait for the market to come back up again so that it could sell the coins so that the people that lent the money to the traders you know could actually get their you know get all their money back so it was actually caused a lot by the problems with finex's trading engine and a lot of the traders in there were very disappointed as a result could you all hear me okay what was mine my trucking up sounds good just fine Blake Anderson well I did did we go over David yet I can't tell remember now he's next it's like an order all right let's let David go first though because I believe he he's getting short on time so I'm going to go ahead and toss over to him and then I'll wrap up I love you do it have the last one okay cool thank you Blake yeah so I I actually agree with what tone said I think that the drop in value definitely had something to do with Bitcoin xt fears I'm an altcoin investor if any altcoin I'm in suddenly announces a fork even if it's the best altcoin in my my stack of coins I'm instantly reducing my exposure because now there's a lot of uncertainty and I'll just get back in when the dust settles and I think that's what might that's what what could have happened with Bitcoin if you're a big Bitcoin holder you're subject to the same kind of psychology and now you don't know what Bitcoin looks like in a few months you don't know what the path is going to be and so and until there's certainty I think someone just dumped out and even if it wasn't just one person if it was a hundred people making that decision that was market psychology at work so Blake Anderson I mean yeah I think that some whales some market makers decided that the xt turbulence excuse was a good you know a way to create some volatility which is a day trader's best friend into going and make some money I think that some of the whales went in and decreased the price bought when there was blood in the gutter and made a bit of money but I think that what happened after they did that that money has to come from somewhere comes from pigs getting slaughtered bears make money bulls make money pigs get slaughtered the pigs trading on margin that don't have an ability to continue to trade after they get you know if they're out so trading by big dips like that means that there's going to be a slowdown in the total amount of trades because everybody that was on margin is now you know always money will not be trading anymore and it takes a minute for trading to get back up to where it was by either attracting new pigs or having the market makers trade more but yeah I think it's a classic example of what it looks like when pigs get slaughtered exit question forced prediction the price of Bitcoin next Friday will be tone waves you don't need that politics but it makes it more dramatic this way all right I think we can definitely go up a little bit next Friday to be honest I would love to see it go go back up to about 242 50 only so I can you know sell a bunch of my coins and then wait because I am not very optimistic about the Bitcoin price over the next few months Megan Lord 243 Blake Anderson it's tough to know I think that we're getting to a space wherein okay Bitcoin production every 15 minutes we're getting about 25 coins so that's a little bit of an inflationary rate of supply that's feeding the network so people are expecting to see the price dip a little bit before the next block having I think that people right now are trying to decide is this XT uncertainty is this the approaching of the block having how much more time do we have up and down before we see a little bit of a sink before the next halving is that not going to happen are we going to go directly into a an increase from here until the next having so I think that a lot of people are trying to to work those things out and it'll be interesting to see how people deal with the coming information relative to which camp they're in deciding where they think the next value surge or decline is going to come from the correct answer is 245 245 issue four encryption is bad republican presidential candidate John Ellis Bush son of the former president George Herbert Walker Bush and brother of the accused war criminal George W Bush came out against encryption recently saying that encryption makes it harder for the American government to make sure evil doers aren't in our midst adding that they needed a new arrangement with silicon valley and that they need to have more cooperation all the while failing to note that back doors make everyone unsafe and open all of your bank accounts social networks and even email to hackers as Ben Franklin wrote those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety Megan Lorde your thoughts on John Ellis Bush's ridiculous views on encryption pardon my French but I don't think he knows what the heli is talking about I'm rolling my eyes so hard just now I mean yeah they really get elicit these people they don't understand technology and how back doors work they don't understand that this is something that yeah can let anyone in there's no back door that just lets the good guys in that doesn't make any sense and these people don't know what they're talking about and they want to rule over us it's a completely ridiculous concept they're better off talking scams and war and all the other bullshit scams that they're running this is this reminds me of Hillary Clinton got grilled on raising her emails servers are wiping her emails servers recently and she tried to like joke about it like oh you mean wipe it with a cloth or a ha ha and it's like these people are lying to our faces they have no clue what they're talking about they're unfit to rule they're unfit to even I mean in this one you know edgy they're just unfit to exist I mean this bush dynasty these people the bush family is extremely corrupt they have no business trying to run this kind of morality play that they're doing they're they're just disgusting human beings and you know while this whole election thing is is very entertaining none of them are fit to rule over us and Jeb bush is they he's even a candidate like you know I don't have like a whole lot of hope in humanity but they he's even a candidate and that the people even publish what he says is kind of a appalling to be it's like really you guys do remember you know his brother and his father and you know their father and all the bullshit that the bushes have kind of put the people in this country that people around the world really through so uh screw Jeb bush uh that's a horrible name too I'm gonna hate on it personally what a ridiculous name Jeb what kind of name is that that's ridiculous um so yeah now I hate the bushes um but I'm not a bit of politicians in general these people are ignorant of technology and um and just basic human decency as far as I'm concerned you're right you might be of ternst mechanic when he was like these people are the least amongst it go for power and they're not fit to throw guts down to a bear exactly Blake Anderson well I mean yeah it's it's like I agree that he probably doesn't understand what he's saying and stuff like that which is fine I mean it's it's it's some pretty complex stuff it's complication on purpose to secure stuff if he was really wanting to help fight crime shouldn't we stop enforcing victimless crimes and free up our law enforcement to be able to do things that like aren't searching the mail for weed but like maybe actually trying to stop like a dangerous package like maybe if we were to adjust the laws a little bit you wouldn't have to go and try to stop technology from evolving like an asshole and we could actually go through and have you know progress in ways that make more sense so I think it's just indicative of the failure of the system when they're like well technology used to develop more slowly so that we can retain control I mean that's an asshole's maximum advantage tone raise are you ready it's like you're switching to a headset I timed my conclusion right when I knew that tone wasn't ready okay Tony you're ready now let's see nope can't hear you yet we'll have to make fun of tones computer it's a Microsoft surface it's just barely a computer it's better than crap bull right no tone are you with this okay I have to we can hear you now for a second but then you want to wear again Microsoft Microsoft so I hope I hope there's no like echo in your end it's fine I'm not even gonna address the concept whether encryption is good or bad no one listening to this video would um would care because they already know the answer to this but what I will say is that from a government perspective it's actually complete bullshit that they're blaming the concept of terrorism it is always about money it is always about taxes the only reason why encryption and privacy scares them has nothing to do with bad guys they need bad guys they want bad guys it's their jobs um they want bad guys what they need is money so the only reason why encryption scares them so much is just the fact that they need money they need to tax us they need to know exactly how much we have they need to know every penny we make they need to know every penny we spend um and that's the only reason why every going around the world will always be against encryption and privacy there's nothing to do with crime absolutely nothing exit question should we have an IQ test required before allowing someone to run from president should there be a minimum standard of competency to run the free world Megan lords well I have no gods and no masters I don't care who rules over me I don't respect their perceived authority and as far as I'm concerned the bushes and the rest of them are the real terrorists Blake Anderson yeah I mean even if we had an IQ test I mean like the populace giving rights to the government that they don't have themselves to give is that's that's a recipe for bad programming tone days it would be nice to see it but I don't think it'll make a difference I mean you have to be a complete psychopath who want to run for government and rule over other people so it's uh it would be nice I actually would love to see my own IQ test score I've never taken it um it would be nice if people had their IQ scores so you kind of you so you have an idea but obviously I don't see it happening so yeah I would like to see it but I would like to see it on everybody just not not just those running for government all right it looks like the new google format here has a taken away the question and answers button so unfortunately we're not going to be able to take your questions and answers uh google changed hangouts again this week uh they don't send out an email they don't give you any kind of information I just showed the button was gone I found the other button but apparently they've gone back to defaulting question and answers to off which is uh not a good move google but we're going to move on to predictions or story of the week Blake Anderson are you ready with a prediction or a story of the week well um our friend uh Victoria van ike van ack I'm not ever sure how to pronounce her last name it's very uh special and difficult uh she started a new project to try to get um vital nutrients and vitamins to mothers and through countries and stuff I can't remember what it's called Thomas do you recall the name? through direct relief okay so so direct relief and uh I think that that's a good a good project I mean people that have the ability to have extra income because of the stuff that we're working on I think it's really nice when people give back and try to do so in a way that really helps the most possible and helping mothers get the correct nutrients to you know give birth to people that are you know strong and healthy that's going to affect somebody's life positively for a long long long long long long time so I think it's a pretty cool project so my story of the week is that Victoria is doing that and I agree with it and uh that she should be supported in her endeavors only and for only five dollars or 0.02 bitcoin you can buy a whole bottle of those prenatal vitamins and you'll actually save a pregnancy pretty much for five dollars it's a great project tone vays all right so my very quick prediction is that uh this whole bitcoin xt debate will is I think by far the biggest obstacle bitcoin has ever faced in its in its lifetime and it's hard to say which way it's going to go I just see it as a monster polarizing issue for the next three to six months it's going to be a major problem and just quick on the story I just saw coin desk published an article about some university researchers wrote a paper talking about how the fed and government need a control of bitcoin to help in the in the panic and they actually stated that if bitcoin was to collapse in price it could destabilize the current financial industry and I think that is completely ridiculous that is uh I haven't tweeted about this yet but it's just uh it's it's in it's insane what some people will put out bitcoin is too big to fail and if we don't get Ben Bernanke out of his grave to come fix it for us it's not going to work and I know he's not dead but that's what we need to do I was going to say he's not dead Megan Lord I'm sorry that was great um so yeah I guess well my story of the week is I you know I'm back on the bitcoin groove and I'm really happy about that I've been crazy past few months for me um and then also I recently joined the airbid's team as their community manager and I can't be more excited about that I'll be moving to San Diego by the end of October I'll be leaving Florida and unfortunately but I'm really excited to start that and uh I'll be doing basically all the things I have been doing uh you know writing uh speaking conferences event organizing things like that so I'm really looking forward to uh working with airbid's I really think that ideologically we're very well aligned of course we'll payment of the bitcoin group is working with me there too and uh we just added some cool things to the directory we added a bunch of places in Spain Greece and Thailand and uh I'll be keeping the blog up to date and stuff so definitely check those things out and uh yeah I'm looking forward to uh moving out there so yeah very cool and now a prediction bitcoin xt will fail nobody likes your bizarre price destroying fork and it's hidden ip blacklisting the issue is relatively simple do we need bigger blocks how big should they be but now these two former bitcoin core developers have went and muddied the issue by introducing who knows what else into the code without any review or discussion either we all hang together or we all hang separately oh we're out of time until next time bye bye bye bye everyone