The Little Bitcoin Group, the American Original. For over the last 10 seconds, the sharpest Satoshi's, the best Bitcoins, the hardest cryptocurrency talk. We'd like to welcome our panelists. Blake Anderson from Facebook.com slash Got Blake. Hi, everybody. Thanks for having me. Tony Vays from Brave, New Coin. I'd like to be back on the show. And later we'll be joined by Theo Goodman from Bitcoin Technical Analysis. I'm Thomas Hunt from the World Crypto Network. We'd also like to announce that we're being broadcast on the World Crypto Network and Bitcoin.com. Special thanks to Bitcoin.com. Our first issue tonight is the same thing that everybody else is talking about. The resolution of the Bitcoin experiment. 2-1, a devastating article from former Bitcoin developer Mike Herne has wrecked havoc upon the price of Bitcoin, causing the price to drop 10% and allowing the media to bury Bitcoin once again. The article warns of the failure of Bitcoin to scale, and Herne seems fed up about the lack of consensus on how to scale the Bitcoin network. Reddit claims that Herne is motivated by the R3 consortium of banks, which he now works for, which may soon launch their own competing cryptocurrency. Blake Anderson, your thoughts on the resolution of the Bitcoin experiment. Well, you know we had a good run everybody. You know, pets on the back all around. I'm going to be sending out hands as a gift. So if you get a big ass hand from my house, it's because the resolved experiment went good. And I think everybody did a good job. No, I mean, obviously it's very, very much hyperbole to be like my no, my, my no longer being associated with this community and selling my assets means that that experiment has been resolved. I'm like to, to seriously say that it's kind of like really? Wow, that's, you're, that, that's pretty impressive. I'm pretty impressed. So I mean, that was a little bit hyperbolic at the beginning. And then as you go through and you read his criticisms, there are different things that are, you know, tenable criticisms that are more than things that you can just laugh off. So when somebody, you know, slams the glass out of the door if they leave the party and they say something really rude, it's kind of, um, makes it more difficult to put the pieces back together. So when you look at the, the criticisms that he made, they are criticisms that are not things that aren't being worked on or that we're not known about. But when you air dirty laundry to the public and make it seem like, you know, nobody, you know, has their shit together or, you know, their ability to think in terms of like how to, how to solve this. There's just, you know, 11 people pushing through untenable stuff. I mean, that's kind of painting a picture that's not true. And so what this all boils down to is, you know, well, are there solutions to the problem that he's talking about or not? And one of those proposed solutions is segregated witness, which came out of the scaling Bitcoin conference. And it came out as a hard fork idea. And then Luke Dash Jr. actually figured out how it could be made as a soft fork, wherein it will allow the Bitcoin network to basically unzip or inhabit so that transaction data and ledger data are for lack of, you know, extremely hyper technical, verbiage here. They're going to be separated out in a way so that, you know, not all signatures have to be auditable on every single node. And that actually ends up taking out the bulk of the data and the blockchain, making it a stopgap solution for the, you know, full blockchain argument. We're going to be able to get a little bit more wiggle room through that with the segregated witness push through. And then also some other things will come through. So it's basically trying to, at a very, very shallow level here, say, this is what he said. He said that there were no tenable arguments against it. And that's not true because of this. And I could go on and on and on and on and address all that stuff. But as a service level, that's kind of more or less what happened until we get deeper into it. Tony, Tony, this, excuse me. Oh, thanks for that explanation, Blake. So there's a lot going on. There is a, I have absolutely zero respect for my current as a personal opinion. I think he's one of the reasons why there are so many problems in the Bitcoin space right now as far as getting the code straight and getting something proper out. In addition, I blamed my current. I believe on this video back in August when the price fell and that everyone jumped down at me that it wasn't Bitcoin XT, that it wasn't her and now that it's happened again, it seems to be so obvious that it has to do with her and this debate. I don't like her, I don't like his views, I don't like his methods. My most popular tweet of a cent was highlighting some of the work that he did back in 2013, where he basically attempted to create a back door to track everyone's bitcoins, right, to know where it's going in order to make reversible transactions. So basically to me, Mike Hurt doesn't understand Bitcoin and is weird as that sounds considering he's been a Bitcoin core developer since 2009. He doesn't understand what Bitcoin is. He doesn't understand why it's important. He doesn't understand why it's worth $400 today. Well, not today, but yesterday it was. So he doesn't understand any of that, which is why he's explaining it to the SEC as in the first paragraph from this post, which is why he joined R3-7, which is another, I personally think, disaster company that is just going to waste investor money because they're just to waste the time. Recently at a conference, I set out loud, this was like over a month ago, where R3 would resort to hiring failed Bitcoin core developers because that's all they can do because the best developers will be working at Bitcoin core. Now what is unfortunate from what I've read in a New York Times article is that developers like Gregory Maxwell are getting death threats and he's thinking he's either stepped away a little bit or is stepping away a little bit from coding the core. And that is very unfortunate. That scares me. Not anything that comes out of Hurt's mouth. It's somebody like Gregory Maxwell who actually understands Bitcoin and understands that the most important thing to Bitcoin is not how many transactions it has a second. It's not how fast it can scale. The most important thing to Bitcoin is fungibility. The fact that it is not reversible, the fact that it is censorship resistant and the fact that it doesn't have all of these things that Hurt is trying to add and when Hurt couldn't add them, he's joined the company like R3Sep that will try to do everything without the Bitcoin which is again, unless they think they have better developers than Oracle and better finance knowledge than Swift, they're basically wasting their time. As far as segregated witness goals, just a quick comment, I was at scaling Bitcoin unlike my current at both scaling bitcoins I was there. He wasn't. My developer days are long behind me. I do have a background in financial engineering. That's how I started out at Bear Stearns back in the day. I actually understand both coding and understand finance which again, Hurt says he didn't understand finance until he googled what currency was in 2009 after the crisis and that's when he happened to discover Bitcoin which was dumb luck, he still doesn't understand what currency is apparently. He wasn't even there, he's not even part of the solution. They couldn't ram Bitcoin XT through so now they created Bitcoin Classic and the moment I've read the term Bitcoin Classic or I can think of as George Orwell, there was nothing classic about Bitcoin Classic. It's going to be changes. What I feel that is meant to be, so it's like worse piece and all the other ones, there's a part that are plenty. When you start naming your releases, the opposite of what they actually are, that really says something that's right out of the government playbook. I'm already going out a little too long. Let's just say that I think Hurt is the problem and the only reason why people are all up in arms about the transactions is because Hurt told you it's a problem. The real users of Bitcoin, the real users that have to use Bitcoin and don't have any other options, they don't care. They'll just increase their fee from two cents to ten. All right, I'm done on that note. Theo, good luck. I definitely agree with Ton and I like Ton's, you know, he did some tweets with some articles and highlighted some important points. I think that's good. I also find the black listing ideas back in 2013 really disturbing. And back then, I was really confused why someone was proposing this and why they thought it was a good idea. There were the court of developers. But in any case, as far as the article goes, what you know, medium is, medium is tumbler for people that think they're at a TEDx conference. So if you post on tum, if you post on medium, then it's official. And that's really good. So, okay, let's just go over it quickly. A few points in the article, just, you know, be fair. One of the, he says, sites problems couldn't move your existing money. Well, he said he sold all his coins, so he moved something. Had widely unpredictable fees that were high and rising fast. Okay, maybe some argument could be made for that, whether it matters or not. Like Tone said, I don't know. We haven't really, I don't see really any empirical data on that. A loud buyer's to take back payments they made, etc. Blah, blah. This is talking about Peter Todd, this RBF, I believe it's called. And again, there's, if you look closer to the discussion, it's not exactly true, but it is ongoing discussion. I will, I will say that. It doesn't have to do with the amount of money that you pay for a transaction to be at the top. And then if that changes, you need to have the transaction to be reversible until it's actually in the block chain. So Peter Todd is going on, right, destroying those transactions to make it so there's risk here that's not 100% mitigated. I'm going to make it 100% risk. So you do the right thing. Right. And I can't just, okay, get some hands. Something to that. It's also, my current makes it sound like a feature. It's not a feature. It's not a bug. You have to understand what's a feature and what's a bug. My current makes it sound like a feature, which is ridiculous. Okay. So with the whole RBF thing, I hope I'm getting it right. Basically, it's actually replaced by fee. Basically, it's if I send you some coin and it doesn't go through because it's too slow because I didn't add enough fees, I can add to that. That's the real simple definition. Now there are people who are like, I can game it and do all this stuff. Well, okay, let's look into that. But from what I've read so far, it's a little misleading to say that you can just do what he's saying. It's suffering from large backlogs and flaky payments. Sounds a little bit flaky is pretty subjective. But okay, we can take a look at that. Which is controlled by China. So what is real interesting just tonight, there is a, I don't have the link on hand. There's a good, there's a good, believe it or not. There's a good thread at Bitcoin talk and someone is mapping out the hash rate. Who controls that hash rate and where they're located and what it is. And okay, bit main is number two, but there's a lot of hash rate in Sweden. There's a lot of hash rate in Iceland. It's not just China. It's really, I was surprised myself. Now there is a lot in China, but it's not just China. But I don't think, I don't like that argument and I don't see, well, it just says which is controlled by China. That's automatically bad. It's not. And every day I'm talking to people about moving hypermassive amounts of Bitcoin, Acer technology into Iceland every single day they're trying to get more and more and more of it in there. And they're starting to do it in amounts that are starting to become very significant. No, it's somewhere between a mid-fim propaganda that China controls the hash rate. I mean, even if they do, nobody can prove it and I personally don't think they do. Bit, I mean, I- The argument comes from there subsidizing the power. Prove it. No, I did that, but they do subsidize it, but that's where they argue it comes from. They're just, they argue it comes from there, they're subsidizing it. Well, I think that just, I will, I will, I'll try to get the link in the comments, but it's a pretty good thread from what I've read for, read from it. And it's not coming from any direction. It's just like, okay, let's track this down, let's sort it out. And it's really interesting little list there. They've assembled. So I wouldn't say which is controlled by China. It kind of reminds me of the whole like the price is controlled by China because the exchanges in China tend to lead the price, but guess what? Anyone can trade on there. I mean, you can trade on there. So it's not necessarily China. But last, and in which the companies and people building it were in an open civil war. Well, I don't know, maybe you could say that. I mean, so he's basically saying those things, you know, think about it. If you've ever heard of about Bitcoin before, would you care about a payments network that had all those things? So first of all, also a payments network. That's the main thing. I think that is a conflict because he's kind of envisioning it as only or as the main part as a payment network. And other people are thinking of it as something else. Like, tone said, like people that can really need to use it. It needs to work, but it doesn't have to be faster than Visa or something like that. It has to work and I have to be able to rely on it. So is it these fundamental discussions that are coming up? And I think that's where the main discussion and conflict is. I want to do my best to get away from like, you know, saying, I don't like this person or whatever I have never met him. But, you know, yeah, that's that's all I have to say about the article. I'll say it. I'll say it. I don't like this person because he thinks Bitcoin is a payment system. He doesn't see it. Yeah, it's multifaceted. He thinks that Bitcoin is a payment. He doesn't understand that if Bitcoin competes with PayPal on the same just because it's faster and cheaper, Bitcoin will lose. It will lose. It will go to zero. Bitcoin's advantage is the fact that it can't be censored. It's the fact that it can't be taken back. And he doesn't care about those features. He thinks that it's all about micro payments that can be reversible. But that's what he thinks it is. It's a multifaceted experiment. And each facet needs to be weighed for its actual value instead of trimmed the way to try to make it more like Visa. Right. The world has a technology to make instant payments. That's not the problem. The problem is making those payments non reversible and making them censorship resistant. That's the problem. He doesn't see those as Bitcoin's features. He sees those as like, Bitcoin's downfall, which is the complete opposite of what Bitcoin is. I also think that Huron fails to recognize that Bitcoin is an ongoing experiment with her without him. When we fail to meet consensus, we need to keep trying to meet consensus. We can't just give up and take our toys and go home. And I'm very, I don't want to say anything about him personally, but I think this is incredibly bad form. I think he spent a lot of his time working on Bitcoin, much like the developers on Dogecoin spent a lot of time promoting Dogecoin. And then both times the development of the main, you know, we're talking about Jackson. But you know, both times he left, he had to stab Dogecoin in the back. And I was like, why don't you just leave politely? You spent a lot of your time on this project. Why don't you just leave? You don't have to write a big article. You don't have to get in a New York Times saying how much you wasted your time on this project. Leave politely. This is just incredibly bad form. I think it's distastefully working for the banks and he now seems to be sabotaging his own project. And I think that if you give Bitcoin enough time, we will fix this problem. The developers are working on it. The solutions are being put forth. And I just don't think he gave it enough time. He just got tired of it and went home. There you go. I hope I'm on this, sir. I hope you're on this. No, at the great point, I would love to hear you say the same thing in about a year, only instead of Doge, it'll be Ethereum. But we'll save that discussion for the next Bitcoin group. I'm waiting for the next medium article. After all, Bitcoin didn't fail. I'm back. Or something in a year's time or something. I hope to see it. Let's move on to issue two, which is kind of a continuation of issue one. Issue two, many solutions have been put forward to solve Bitcoin scaling problem, including raising the block size, dynamically raising the block size. But both would require the agreement of miners who are opposed to raising the block size out of their own self-interest. But now a new solution is emerged called segregated witness. Tone Vays, what are the basics of segregated witness? And is it the solution to our Bitcoin scaling problems? We know you were there, the convention, what they say. I was there, but I kind of tune out the details of programming these days. I'm beyond that. I'm more of an economics guy, finance guy. I trust core developers, some core developers. I trust Peter Will, who's the original creator of segregated witness. I definitely trust Gregory Maxwell. I trust Van Damier. And I think those guys know what they're doing. I trust that they know what they're doing. I think what happened with Bitcoin XT and now the recent issues, that's what's making their work a lot harder, especially Gregory Maxwell is getting death threats. Blake went over the basics of segregated witness. He's the more over developer. I'll leave it up to him to maybe break it down into more layman's terms. But I can't talk about scaling a little bit, where there are people there cooperating and actually working on the problems. Which again, her and Dindy being care to show up. He could have spoken remotely. I've seen him spoke remotely at other places. Gavin Andreessen showed up their first one, but not the second. There was a lot of collaboration there and people are working together and they are going to solve the problems when it's an actual problem. There's nothing wrong with letting free market do its thing. Even if we don't raise the block size and the blocks are full, the free market will develop a solution. They will push out a two megabyte block and that's it. Nothing else in it. Just as a temporary solution. Or segregated witness is the solution and then lightning network can be a solution. I'll mention lightning really quick because some people seem to think that just because these core developers are now being paid by block stream because guess what? Nobody works for free. You got to get paid somewhere. So block stream took over when the Bitcoin foundation had a lot of issues being core developers. Block stream took over paying them. They're not even the ones that developed the idea for lightning. That came from a couple of other developers. I know Poon was one and I forgot the name of the other one. I know the person. I just forgot his last name. And they go. Thank you. And I think that is a solution and so what if it takes micro payments out of the hands of miners? It's like people are complaining. It's like this is what this I hate. People are complaining that mining is too centralized and it's going to take over the world and at the same time they will they're not getting paid enough. Well, if they're not being paid enough, why the hell is the difficulty going up so quick? Clearly it's not a problem, right? If it was a problem, it was a market to measure something like that like an indicator of price or value. Right. The hash rate is proving that mining is profitable right now. If it wasn't, why the hell would they spoof up more and more computers to buy Bitcoin? It's just completely ridiculous. And micro payments. The experiments concluded paths on the back all around. They're going to shut down the factories making the chips. It's all done. And the whole idea that Bitcoin can be a core can be a both a micro payment and like a global giant settlement for billion dollar transactions at the same time. It's ridiculous. This is what happens when people don't understand economics and finance and only understand one thing and maybe some programming or they don't even understand either. So I do have high hopes for lighting. I have high hopes for segregated witness even though I haven't even had time to like look at the details of it. I trust in the developers because these developers understand that fungibility is more important than the number of transactions in the protocol. And I'll leave it off the blank to fill in some more details. Theo Goodman. Yeah, you know, I'm not going to go into the technicals of segregated witness. But the idea that I read about it because Blake is really excited about doing that. But what I do like about it is that what I've read is the idea is a hard fork intakes a lot of risk. So how can we scale in the meantime and reduce the risk to the network and the network effect? And the idea is, okay, with a soft fork, we can scale and still reduce the risk. It doesn't mean there might not be a hard fork in the future or your number might get picked like 2, 8, 16, 20 or whatever one you're in favor of in the future. But for now, you know, they want to negate the risk of a hard fork and people freaking out and they're being a lot of confusion and anything like that and conflict. And instead, this to a soft fork for now, do this segregated witness thing and then go from there. To me, that makes a lot of sense to scale, but to scale in a way that reduces risk. It does seem much more reasonable than leaving the project and writing an angry article about it. Blake Anderson, explain segregated witness. Try to go slow. Explain it like we're five. So I'm going to get angry now and leave the show and that's how I'm going to help out. And then you'll never tell me to explain it so again. The Bitcoin group has failed. Bitcoin group is because with my exit, I do conclude the Bitcoin show resolved. Let's resolve. So segregated witness is basically an unzippering of the blockchain. And I guess even before we say that because that sounds kind of extreme, the blockchain is like a computer. And it's kind of like you get more installation on it and you're using different stuff and it's almost hacked up. There's lots of software on it. A hard fork is like getting a new computer. You're like, okay, let's resolve this stuff to really good stuff and then we can start to program on top of that and then do some more soft forks and a soft fork is more kind of like a hack. And these are all very, very generalistic statements about very, very technical things. But to bring everybody in, let's just say that it's kind of more like that. So a hard fork to change different things in Bitcoin is difficult because it makes it backwards incompatible and it's forwards incompatible. Everybody needs to agree. Let's go on to this new journey and adopt a whole bunch of changes. So soft forks are very much preferred over that because they are compatible with all previous versions. They're basically invisible to all previous versions. They just, the wallets or the software operates, okay, I'm still getting information through that I can understand. It might be a little bit different, but it's not enough to, you know, wrestle my jimmies and make me freak out and shut down. It's not backwards incompatible. We can still make everything work and we can make it gel. So what we need to do is we need to increase the block size according to Herne because there's, you know, seven transactions per second possible in Bitcoin by a 2011 figure. And now with the different changes in use and, you know, spam, fillers or, you know, adjusting to attacks has now made it so that the protocol operates at closer to three transactions per second according to Herne. I have not tested this, but I do know that that weight as we continue to, a soft fork in can start to build up on the number of transactions per second. So to relieve this, we can increase the block size or we can do something else which is called segregated witness, which basically means separated signatures. It's a fancy way of saying separated signatures. There's no witness in the blockchain or your computer is a witness or a signature. They're all, they're all kind of the same. So let's just call it separated signatures. So segregated witness is a good engineering term, but not a very good term for me off. That one's like segregated witnesses in Bitcoin. So like, it's not separate out minority. The never moving. Yeah. Segregation, segregation is a bad word and witness means you saw something happen. So it's not really a great combination of words. Exactly. Exactly. But all of the, like you have to completely take out all of the, pretty recently associated things with that segregation of the witness. So don't even think about that. Just think about it separated signatures. So the signature on various different transactions and signature data and the way that they're applied when things are actually recorded versus in the blockchain, et cetera, et cetera. There's room to take all that information out for different nodes and then to arrange things in the soft fork so that you get about 75% of that transaction room freed up for just transaction volume and not, you know, record keeping and, you know, basically like, you don't need to see the sign checks on every single time that you're looking at your bank account. You're like, I don't need to put together like a collage of the sign checks and know how much I have in my bank. I just want to know the account statement that other stuff can be stored elsewhere. I don't need to see it every time. It's actually literally useless information to me. Not completely. So we keep the block size is the same, but we put different stuff in them. Is this similar to like a light wallet where a light wallet only reads the headers and we don't have to send around the whole blockchain anymore? Is it similar to that? It's kind of, I mean, like basically wallets can break down or not break down. They can go down into SPV mode where they're not checking everything. They're just checking the information that's verifiable what they have. So without getting too technical, like you've got to write Thomas, you're in the right vein of we don't need all that information for the blockchain to work in a way that is absolutely secure and operational. We can say, you know, some of this audit data can come off of the backend because even having it there causes weird problems like transaction availability where it's like, oh, it's a fingerprint, but you can also re-fingerprint over it and all kinds of weird goofy stuff because the transaction outputs are involved in a way that really is better when separated out. It's objectively and computer scientifically better to have that data not manipulable in the same process that's going on with everything else. So segregated witness is cool because not only is it a stopgap solution for the block size issue allowing for us to continue to use Bitcoin, but it also does other things and solves other problems like transaction availability, like allowing for more complex script languages to be processed into the Bitcoin language so that we can in the future incorporate things like a two-way pegged chains, a chance to forks which will then operate in Bitcoin. Now if you look at the value proposition of XT versus the value proposition of the kind of technology that I'm describing with segregated witness, there was not a lot of reason to be like let's blow it up the scope and have no weight and all that stuff and trust my current with that. There was not a lot of reason to do that. Whereas the value proposition and the way that it's being gone about segregated witness or separate signatures is like, okay, there's a serious value proposition here relative to the ability of this technology to expand the circle of trustlessness. This is way more in the scope of what Satoshi wanted. That all seems good, but it's not all good. It's also you're still going to be soft forking and almost kind of hacking or short circuiting the original sleek protocol to add more stuff into it later, which is a risky thing to do the test net for segregated witness just came out yesterday. What we're looking for in the test net is to make sure that there's not attack vectors that are unknown unknowns. When you have unknown, unknown attack vectors that are coming in in a whole piece of code that's really complex, instead of just adjusting one number, that incorporates a lot of risk. But segregated witness is on the test net. Extremely smart people are working on it. We can do it with a soft fork, over a hard fork, because of people like Lou Fash Jr. And if everybody goes to the test net and continues to test it and we roll it out, it's some time, you know, fourth quarter. That should be plenty of time for lots of testing. And I think that right now a good role for everybody would be to not just say, you know, segwit is fine as the end all, don't worry about anything. But to say segregated witness or separate signatures are a viable solution to this, let's look into the technology, let's all collaborate, let's not be lazy and be like somebody else will do it. And that will really kick this shit into overdrive and will really, really help out. Now the reason to soft fork instead of hard forking is it doesn't require the consensus of the miners. Is it easier to get done? Is that what the reason is here? Well the soft fork has really mainly to do with compatibility. A hard fork is not forwards or backwards compatible. Everybody has to do something at the same time without 95% consensus, which is basically impossible to achieve unless there's like a giant wall of fire coming and it's like, we all move or death is right here. Then 95% of people go, but short of that stuff doesn't happen, which is illustrated by the financial crises, everywhere else, rates and stuff are not adjusted and ceilings are not moved until it becomes crises time. And then actually people show up for the vote and maybe this will be similar, hopefully not, hopefully we're getting smarter about this as a society, but we shouldn't yet be like, oh, we're going to be totally different from all the past shit that we have to look at because that's how it's been running all along. Yeah, let me give you a very layman's example of a soft fork versus a hard fork as far as backward compatibility goes. I have an iPad one, the original iPad one, 64 gig, which was an $800 tablet. This tablet is now a paperweight because Apple doesn't understand softworks versus hard forks. Their latest operating system cannot be installed on the original iPad. But every single app that has been updated in the last year requires one of the later operating systems from Apple. So now, and you can go to the blogosphere and I'm really, really pissed because I was still using that iPad. It was still doing what I needed it to do, like search the web and watch ESPN and play music, which is now complete garbage because none of it works since I can't install the latest operating system and I can't update any of the apps which are not being used. Okay, so that's basically the difference. It's backwards compatibility. That's a good example for backwards compatibility. I mean, when you're breaking things down, it becomes subjective, so I'll just leave that to you and say that's what I'm there's Tom. So because of that, if you create a soft fork and half the minor switch and then not everybody switches, you can still run both things and you can always go back. But it's still not issue free though. It's still not issue free. You want to have a huge consensus, but you're right. There's less risk as far as the compatibility. Well, it sounds like, remember the main thing when we were talking about Bitcoin XT, if we switched to Bitcoin XT, you'd have to move your bitcoins from the old chain to the new chain. So your bitcoins from old Bitcoin would not be compatible with Bitcoin XT, bitcoins. Why don't we tech tech tech tech? We wouldn't have to do that, right? Technically, it was coins and transactions stored in blocks that were larger than one meg. Wouldn't be able to be read by some other things that were existing, so that would actually shatter backwards compatibility with the soft fork. There's technicals. It gets really, really, really semantic. So as a general rule, you can be right. And then there's always like somebody opposed in the comments like, but you didn't say about this. Very complicated issue. Well, let's move on. As we're talking right now, the price of Bitcoin sadly continues to fall, falling to $365. This is pretty sad because I held my paycheck, so I'm taking a loss. By the way, if you have some bitcoins, you'd like to spend them. Go ahead and go over to purse.io, where you can get 20% off Amazon. You can buy some bitcoins right now at Coinbase, spend them at purse.io, lock in your discount. You don't have to worry about the price dropping anymore. Bitcoin still works even while the price is going down. Moving on to issue three. Once promising Bitcoin ATM maker RoboCoin ends Bitcoin services, RoboCoin wants rumored to be working on a brilliant bank and a box solution that would allow you to send money to your friend in Mexico, and they could just pick it up from the ATM, as ended their Bitcoin services, moving instead towards traditional payments. CEO Goodman, your thoughts on the amazing Remittance box that could have been? My thoughts are, I don't know all the ins and outs about why they stopped, but when I talk to other, just to be straight up, but when I talk to other people that operate ATMs, yeah, they had a lot of mixed feelings about RoboCoin, and I would just say, check out a coin outlet. I did an interview with them, and it's on World Crypto Network, so just check out the YouTube channel, scroll down, coin outlet, pretty cool company, Eric is a cool guy, and I did a nice interview with him, and he's doing some pretty cool stuff, even uses blockchain technology to hash the payments. It's really, I mean, he's in the Bitcoin, but actually he uses NXT to hash a record of the payments, and they have it all in their system. He says he's agnostic to whatever, it's not that he likes as a NXT big fan, but he says just keep to use, and so he does some hashing, some time stamping on NXT, and that's built it in their whole systems. I think that's really cool, and I know that he's still around, he's doing a good job, so if you want ATMs, then check them out, and that's all I got to say on that. Blake Anderson. Well, I mean, I think that some people were like, I'm going to get into Bitcoin, I'm going to get into ATM, making and manufacturing, I'm going to make a bank in a box, I'm going to make a billion dollars, and I told everybody I'm going to make a billion dollars, and I got into good evaluations and stuff, and that's Bitcoin is an academic running simulation of hopefully something that's going to rescue all this stuff, but it needs to be constantly updated and maintained, and it's not going to work if nobody cares, so I think it's funny that so many people were like, we're going to build this giant thing, and it's going to be a billion dollars right away, without, I just feel like they were not in it for the right reasons. I think that there's been a trend more and more of companies not going to show like CES and stuff now that they already had a presence there, and now they're not, that it's like, wow, you slap nuts really thought that it's going to be worth a lot really fast, and then kind of got ag on the face of our community, and it makes me unhappy, it makes me feel like they really, really got greedy, and that wasn't a good thing to do, so I think that's probably what happened with a lot of companies in the Bitcoin space, not that it hasn't been turbulent, and then there haven't been a lot of good companies shaking out as well. Tom Vaze. All right, so I believe they started out as the ATM company, and then migrated into remittance when they realized they didn't know what they were doing in the ATM business. So a quick comment on the ATM business, I don't know much about them specifically, I know a little bit about the ATM business, and if you do it right, it could be profitable, but in their case, they probably got all gone whole about it when a price of Bitcoin was like $900, and they probably invested very poorly, then couldn't hack it with dealing with regulations, dealing with banks, didn't have the right relationships, so they realized how they couldn't hack it in the ATM world, because it requires certain skill set, they migrated to remittance thinking, well, that would be a great use case for Bitcoin, and they realized that remittance with Bitcoin is just stupid, which is, I've been kind of saying it for a while, it makes no sense at all. Remittance with Bitcoin is not cheaper, it is way more complicated, it adds an entirely new level of a middleman, because now you got to convert fiat into Bitcoin on both sides. I have friends in the remittance business that are going to listen, hear me say this, that I'm going to get some angry tweets later, it's just silly. The whole purpose of Bitcoin is to eliminate the word remittance out of the dictionary, that's all it is, it's just going to be payments, you can work from anywhere, you can send your bitcoins anywhere, but that requires both sides of the equation to understand and use Bitcoin. If you're going to be an additional middleman, thinking you can compete with Western Union, there's a reason why Western Union fees are so much, because of cost that much, it's not like they're profiting 30% from each transaction. Anyway, I think they realize that it makes absolutely no sense, and now they're out of ideas, because it's really, really hard to come up with a profitable idea in Bitcoin. People keep talking about a Bitcoin killer app, there may not be one ever. Definitely. Bitcoin is the killer app, the fact that you can send it, but it requires an understanding of Bitcoin on both sides of the transaction. It's a profitable business idea to come in and to reduce inefficiency, and when you see a network that's as efficient as Bitcoin, you look at it, you're kind of like, holy shit. How are you going to go in and decimate it, inefficiency in Bitcoin, and adding a layer on both sides is not decimating inefficiency as tone-pointing out. How do you feel about ripple for remittance? Is ripple still alive? Oh, all right. I'll take that as a ripple still alive. I really enjoyed the bank-in-a-box concept. I thought it would be pretty good. You could put your money into a Robocoin ATM in the United States. Your friend in Mexico could go to a Robocoin ATM there, take the money out. I thought it was a good idea, but I guess it's not going to work out. They gave me a shot. We're just going to move on to issue four. You got it, Tom? Go ahead. That could definitely work out. It might have been just too early. It's like pets.com worked out. It's Amazon, right? It was just a little too niche and a little too early. That's all I wanted. So I wonder if they're going to have a Robocoin, if you're going to have an auction of all your surplus ATMs, then get in touch. It might be interested. There you go. You got to buy it, at least for one. Moving on to issue four. Issue four. During the 2016 Internet Media and Telecommunications Conference, Netflix, CFO, David Well, said that Netflix is open to accepting Bitcoin payments. This news may be related to Netflix's continued worldwide expansion, with many noting that the ability to accept Bitcoin payments would allow the streaming giant to move into new markets without sending up bank accounts and may help it avoid regulations. Blake Anderson, your thoughts on the Netflix news? Well, yeah. I mean, definitely everybody should accept Bitcoin everywhere and Netflix absolutely should. I don't know what Netflix is ever thinking or what they're doing. I mean, after the copyright laws were like anything over X amount of time old, there's no copyright laws. You can host it. Why don't they have every single movie or show or everything older than X? You know, hosted. Sadly, a lot of those copyright laws were rewritten by Mickey Mouse, who refused to enter the public domain. And by Mickey not entering the public domain, dozens of other films, many of which are abandoned. No one even knows who own them are instead of being preserved and celebrated, are rotting in their film cans and just deteriorating. Oh, I did not know that. Like in addition, several presidents in recent history have increased the copyright law to lifetime of the author plus 70 years. So when Disney... So, where is my information from? Did I like... Did I like to talk to like some 95 rule person when I was 12? Like, where am I kidding? No, I have no idea. But it's now lifetime of the creator plus 70 years and that is transferable. So when Disney bought rights to all these Disney characters, even if some of the creators, if the creator of Mickey Mouse is still alive, then Disney is probably paying him to stay alive, like paying his medical bills to keep him alive longer and then eventually they'll get 70 more years. And if Walt Disney really is frozen, things get much more complicated. Yeah, Walt Disney is frozen and that was actually why so they gave him that. And so Netflix should definitely be able to expand much easier by having the infrastructural advantages of Bitcoin. I mean, it's an absolute no brainer. They should do it for sure. Tony Vaze. All right. So I actually... I really love this. And not for the reasons that most people think. I've already seen messages like, oh, I will pay for it in Bitcoin. I will pay for it in the other person, pay for it in Bitcoin. Those aren't the reasons. I mean, yes, it will help them expand to markets where there could be banking issues. But again, how many people have Bitcoin, right? That's not the advantage. That's not the advantage. I'll weigh more forward looking in what they've said. And the way I see it is, it would allow Netflix to charge per viewing. No monthly contract, which they kind of like, but it would give the option of pay per viewing. If anybody want to watch one movie, if someone wants to watch one show, a QR code pops up, you just paid with your phone right on your couch and do it. Like, I don't have enough money. I can feel my friend Doug and Skribner right now urging me to cut you off and to not have you give them that idea because he works on watch my bit. So go back in time and say that for my friend Doug Skribner. Yeah, I know Doug. I like Doug. Yeah, so basically, I mean, this is what Doug is doing, right? And these are the companies. I mean, Doug started a company. There's other Doug has some competitors. The problem is Doug created a company that is exactly what we already have plus Bitcoin. These companies are not going to last. It's the Lecrimittance plus Bitcoin. It's your favorite thing to do to add plus Bitcoin. Right. So you're not going to last like anything we currently have plus Bitcoin is not going to last because the moment Netflix adds it, YouTube will think about it and VM will think about it, right? So once Netflix does it, that's it. So I hope Doug is like saving all the Bitcoin that he's making, but that's where we're going to head. So that creates, so that actually brings in new users because I don't have a Netflix account. I'm going to talk about how I watch things, but I don't have a Netflix account because it's an annoyance. I don't want another bill. I don't want another recurring bill. But does it, does it ride with abhorrent? No comment. So, but if I had a very simple way to just immediately pay for something in a reasonable way, the same goes for music, by the way. If I had a very simple way, it's like I always said about music. The main reason why people pirate music is not because they're cheap, it's because it's easier. I bought a guy that I like anyway. Right. And that too. But the bigger reason is I bought like one or two songs from iTunes at one point and I said, what the hell? I got to sign into another iTunes. What if I want to play it somewhere else? What about the hassle if I lose my computer? Forget it. I want to have full access to a song of Faith 4. And it's even continuing now with Apple Music. I thought that everything would be smooth now that I'm paying my monthly fee and I'm doing the Apple Music. It doesn't work with my streaming services. I can't share it with this speaker. I can't load it on that computer. I'm having trouble synchronizing my music everywhere because it won't need to add my personal music. There's no solution. They won't give me a good solution. I'm like, pay. You know? I want root access to a media drive and I want to do with that whatever I want for as long as I want. And the more they move away from that standard that was set by this, the more it's like, we better have some Bitcoin to come in here and disrupt this. Yeah. So that's basically my point is that if Netflix is going to provide an option, I mean, if Netflix is not going to provide that option, if Netflix is only going to allow people to do exactly what they do on Netflix plus Bitcoin, it's useless. But if they actually like add a feature and the only feature I can think of is paying, let's say per one episode of whatever or per one season of a show or I don't know if I'm going to like what are the Netflix shows? What's that president show with Kevin Spacey? House of cards. House of cards, right? I want to watch House of cards. I don't know if I'm going to like House of cards. I want an option to pay for the first three episodes. To pay for the first 170 seconds. Right. Right. Exactly. I want that option. And if they give me that, that means they're adding a new feature and then they're putting Bitcoin to use. Otherwise, if it's just Netflix plus Bitcoin, then I don't really, I'm not as excited. Let's put it that way. I agree, Tony. It would be a really strong new feature. Netflix, Alacart. It would allow you to recommend a movie to a friend. Then the friend doesn't have to join. They just send a dollar in. It also allows you anonymity. You can now watch the movie without having a credit card without being completely tracked although you can always be tracked in other ways. But it does allow that option. Right. You can pay for your friend's show. It's like how many times have you tried to convince someone to watch a show? And then instead, it's like, listen, you open up that show and I will pay for it just so you can watch it so we have shit to talk about later. I think it opens up a whole new avenue if they actually create new functionality. If that's what they're thinking, great. If not, then it's just a little PR stunt and it's not going to bring on anything new or a product. I love your reasoning too. So that we have shit to talk about later because with so many people like with you guys and stuff, I mean, we could talk about anything. But with a lot of people, it's like, we kind of need some shit to talk about. EO, good man. Well, I think a lot has been covered already. But I will think I will add that, yeah, definitely, Netflix, if you're watching, you got to up the game. If just adding Bitcoin is boring, you're going to have to do Netflix 2.0 or 3.0 or whatever pay per view, pay per second, pay on demand, pay while you're walking, and while you're at it, just buy, watch my bit. And then you're already in the niche and they've already know about Bitcoin and there you go. And then you're supporting the whole Bitcoin thing. You've put your foot in the door into the Bitcoin niche. People will know you here. So all the weirdos will start using Netflix with Bitcoin and there you go. Yes, that's a good point to you. Go talk to Doug. Go buy, watch my bit. He understands how it works. Do it. Yeah, absolutely. It's a cheap company. They know a lot of money. They know a lot of stuff. They know a lot of money. I don't know why I said that. You can be able to listen Netflix. Listen. Let me just get my bearings here and tell you what to do after I can't even speak properly. Very good. Well, I think we've covered a lot of topics today. We're up to about 60 viewers. So thanks to everyone for joining us. That's great. It's the beginning of this episode. You can just rewind and go back. And here's talk about Mike Herndt and all the excitement that's been happening with Bitcoin. They were going to move on to predictions or story of the week. Blake, do you have a prediction or a story of the week? Yeah. I have a prediction that the, at least for the first quarter of 2016, the price is going to move up and down with the popularity of segregated witness. If the popularity of segregated witness wanes, then I think that people's confidence in the long-term scalability of Bitcoin will go down. I think as popularity of segregated witness goes up and people look at it and participate and make sure that it's tenable and working well that the price will increase. I also predict that if it works really well and it's implemented and can add some of the features that I was talking about before that that will be a hyper massive value add to Bitcoin. And we also still have the happening out there. All of this news is getting away from our lovely havin'ing which I thought was going to make the price go up anyway, cursing price. Again, I should just publish when I buy and sell and people can do the opposite. Anyway, tone, prediction or a story of the week? I guess I'll go with prediction because we do have videos about Bitcoin's price on the same channel which I strongly recommend. Go check out Bitcoin technical analysis. It's me Theo Goodman and George Sammon. We usually shoot it once a week and more often when things are happening and we shot at the last two days and two days ago I clearly stated why I expected Bitcoin to drop from 4.0 to about 3.15 and today I talked more about that. So that would be my prediction. Bitcoin price hits 3.15 in the very near future and I go back to those videos to see the reasoning for that. Theo Goodman. I think my prediction is that Cripsy reopens in China as a new exchange totally and totally tries to make Chinese addicted to all kinds of crazy and obscure altcoins. They're not already? I don't know. I think they're going to try to do something there. They do have a website. I don't know it off the top of my head. It's been around for a few months and I do believe there's rumors of people belonging to Cripsy being located in China. So I think that's just a prediction. Let's see what happens. Maybe nothing. It's just we forgot about Cripsy and all that stuff because I think we need to change the direction of the show here and we're going to talk about Cripsy. I recently read the blog entry on blog.cripsy.com where I was shocked. Completely shocked. I've been negative against Cripsy for a while. I told people to get out of there. I got out of there. A lot of other people got out of there. But what the blog entry said is that Cripsy lost a great deal of money. They added a new coin called Lucky Seven Coin. Cripsy claims allegedly that this coin included a Trojan. The Trojan stole millions of dollars of Bitcoin and Litecoin. Cripsy then internally, according to this blog post, decided to continue running their exchange with the ideas being that the fees they would raise would help them pay off the money that they lost, which is what people speculate went on inside of Mt. Box. We don't know for sure yet, but that's the speculation. This attempt to turn a normal company into a Ponzi company failed when an article was released by Cloud Fire. I think that's the correct side. I might be wrong. But they released an article. What is it? Cloud Flare. Coinfire. Coinfire. Okay. Cloud Flare is the backfire. Coinfire is making a goddamn sense. Yeah. Coinfire. That article led to a virtual bank run of people taking their money out of Cripsy. Cripsy obviously didn't have the money to cover the bank run. So they decided to put out this very strange article where they request that the Lucky Seven developer, whoever it is, send them the money back. They say everything will be fine. Just send us the money back, which is an interesting idea. Also, I thought it was interesting their choice to run a Ponzi scheme instead of calling the FBI, getting reasonable authorities involved. It seems as they worked really hard to build this technology of the Cripsy website. I think they were worried about that technology being lost if they got hit this way. But now, it seems the technology has lost anyway. What do you guys think about Cripsy? We'll just go around here once we'll start with Blake. Well, I mean, without any kind of emotion or subjectivity flying around when you're paying existing debts with new investor money, that's the definition of a Ponzi scheme. That's tempting to do in the Bitcoin space when you're out of money and you think that it's going to go to the moon tomorrow because you're thinking that for whatever reason that you would. And it happens more and more and it's sad. I don't have a lot more to say beyond that. Tony Vays, your thoughts on Cripsy? Well, I like everything you said except one thing. I have to correct you. You said they spent all this time and built this great technology. Have you traded on that site? I completely disagree with that. No, they didn't build anything for security. I don't think they put any effort into it at all. It was just, I've traded on Cripsy for a combined total of a few hours. I think the most money there was ever held on Cripsy was like 50 bucks equivalent. I never really believed in it. I never really believed in altcoins either. So I didn't really care for it. I knew it was going to end in tears. You believed I had to sit you down and tell you that altcoins weren't real. You cried and I had to get you ice cream afterwards. Let people know that because other people believe and then they can get courage from you. And yeah, so I don't really like, there's nothing unexpected happening here for me. It's unfortunate. I've met Paul Verne a few times. I've seen him like a nice guy. I've met other people that were co-founders of that company. I know they meant well. I'm pretty sure they didn't scam. They probably got scammed and then they got left holding the bag, which is, we don't know if that's what happened to my own gocs or not. It could have. But either way, it's bad, right? This is why from day one until today, I tell it when people ask me, where do I trade Bitcoin? How do I trade Bitcoin? And my answer is, I don't really trade Bitcoin. There is no exchange in the Bitcoin space that I, I trust and be has sufficient tools that I'm used to since I've been trading traditional markets for 10 years. They're just nothing there. I would love for one of my brokers, interactive brokers or one of the other ones to actually make Bitcoin trading reasonable and responsible. Well, there's a value add, how about you and I go and talk to some of these slap nuts and be like, yo, let's build something that's not a middleman or insulting to traders. That is true, but again, right? It's a chicken and egg problem, right? There's a regulation issue. The only exchange is they're successful and they're not going to minimize KY. KYC regulation. If you have a full-blown KYC exchange like itbeth or whatever the winco pipelines are doing, no, the trading there. Yeah, they're empty. Theo Goodman, your thoughts on cryptocurrency? So there's one thing about, we had a topic today about forks. So if you think forks are an issue in Bitcoin, well, just imagine how big of an issue forks are with altcoins that gets crazy. And I'm not even a technical expert, but just imagine how many times altcoins can fork. So then the exchanges have to update their wallets in time and all kinds of other weird stuff. So if I'm pretty technical and I'm clever enough, I might be able to game that and double spend my coins on your exchange and make a whole lot of Bitcoin. Which is why altcoins are inherently risky. That is one among other things. Yeah, exactly. Right. So I think a lot of people don't realize that. I'm not saying that I can tell you exactly how it is, but just put that idea in your mind. So that could have been, of course, it doesn't sound like that's exactly what happened with Lucky Seven. But let's say you're exchanging with 100 altcoins like cryptocurrency. And that's a lot of work to keep track of all these forks and crazy. And you think the Bitcoin devs are crazy. What about all these altcoins? How are you going to keep track of all that? That's just nuts. They're talking about time warps and stuff. Even if the Bitcoin developers are sane. Right. But also keep in mind, like the best developers in the crypto world are working on Bitcoin core or part of block stream. Every layer lower than that is worse developers. And the further down the chain you go, the worse they get. So maybe Ethereum's developers is like the next level down. Maybe. So I'm like, okay, we're going to get a lot of good comments about that. I like that. I like that. I mean, it's like, this is what you ask. If you ever meet an altcoin developer, right? And I've done this. I've come up to altcoin developers or someone told me they're developing this altcoin, you know, better on Bitcoin. I say, if you such a great developer, why aren't you contributing to Bitcoin core and then just watch their answers? Okay, that's fair enough. That's it. I like that question. That's good. So the other thing I want to just touch on that other people touched on is the fees. And earning money from the fees. And let's just take a short trip through crypto history. And so we've got some other altcoin exchanges out there that have come and gone. And they have an interesting theme that they have in common. So there is MCX now, which existed in 2013. And I believe some of 2014 and what's interesting about them? Well, they sold something called fee shares. So it's a share you buy and you get like for each share, let's say, 0.001% of the fees collected that day paid onto your, however many shares you hold. So well, that exchange ended up basically, you know, going away. And I think a lot of people that had shares felt defrauded by the whole system of the fee shares. And guess what? That's not all. There was another altcoin exchange that came up with fee shares. But it turns out that they even made it more interesting. They had an issue with an altcoin called Blackcoin and they lost a whole bunch of Blackcoins. Crypto rush. They had a whole bunch of altcoins. They lost a whole bunch of Blackcoins. Then after that, they knew they lost a whole bunch of money. So what did they do? They sold fee shares because not only did they expect to make money on the fees, they expected to make money on the fee shares themselves and make money on the expectation that you're going to make money on the fee shares. That's like a double whammy there. That's a double dip. Where are you going to? And guess what, ladies and gentlemen, what if I told you that cryptocurrency had fee shares too? But it seems to be that they had fee shares, but it does seem to be that they had fee shares before and or partly during the lucky seven thing because they had fee shares on crypto stock.com, which is a defunct website as well. Are you seeing the repeating theme of defunct websites? In any case, they sold, they did sell fee shares there and it was in 2013 and I believe in 2014 too, but I don't know how long. So it just is interesting. Now, it doesn't mean it's a causation, but I would say it's a point for caution. If you see someone selling these fee share things, then something could be up. It doesn't mean it's for sure up, but we've seen three cases where exchanges had those, all coins, fee shares, and something that happened. Well, let's just even think about it. What is the tentability of having a fee share structure? Okay, you're going to give away the money that you're going to get in the future. That's not usually a very good strategy unless you're going to be really happy. It's a really weird way to raise capital, I guess, with the promise of you getting, but I mean, how long would the exchange have to exist for you to get a ROI? If you sat there and said, I can imagine there are a lot of metrics. It was like, oh yeah, this is all coin exchange. If we're around for 10 years, we get ROI. I can help you answer it. It's basically no different than what the Fiat, a Federal reserves around the world do. Something in the economy is not working. So they come up with a stupid plan and one country does it. The rest follow like a de Ginius and then things just get worse. Hold on, we need a stupid plan. Human nature just doesn't change. It's all the same. If you just step back and look at the similarities between the two worlds, the only thing that has been holding for seven years is the fact that Bitcoin works. I think that's a good note to end on and I just like to remind everyone not to keep their Bitcoin on an exchange, whether it's Coinbase or Cripsy or some other website. I mean, keep your Bitcoin locally. If you're going to spend your Bitcoin, send it to the website, spend it, get some goods. Otherwise, keep your Bitcoin's own your own private keys. I think everyone's homework this weekend is to watch the movie The Big Short and to think about other collapses and crises and how we've weathered them and we survived and someone saw them, someone didn't see them. There's different ways of this going and also... I have a homework assignment as well and I never do this. I've never ever on this show told anybody to listen to any LTV but there's a Let's Talk Bitcoin with Andreas where he talks about segregated witness. Listen to that one and then the next Let's Talk Bitcoin, I believe it's coming out. Andreas is going to respond to what Herndt said. Both of those things are very, very good for anybody that's concerned about the Herndt stuff. My homework for everybody is to go out, find those two Let's Talk Bitcoin episodes and definitely watch both of them. It is incumbent upon you to understand these issues. Then I'm also going to throw one in. My homework assignment is to Google for a recently created podcast called Bitcoin Uncensored. It's another exhibit just like segregated witness. The name is exactly what it is, which is how it should be. It really is Bitcoin Uncensored. If you are sensitive to hearing certain things and you may be a little hard for you to take, but if you want to hear the truth of what some of the projects are and how things are going in the space, pretty much. So go check out Bitcoin Uncensored. That's my plan for the week for something. My homework is for you to go to purse.io and buy a treasurer and store your coins yourself. Discount code in the description. Thanks a lot for watching this week and see you next time.