The Bitcoin Group, the American original. For over the last 10 seconds, the sharpest satoshi's, the best Bitcoin's, the hardest cryptocurrency talk. We'd like to welcome our panelists. Alex Sturk from BlockTalk. Greetings. Hello. Thank you for having me on for the first time. Theo Goodman from HAST online. Good evening everyone. Gabriel D. Vaughan from Future Rant. Hello Internet. Hello Posterity. Ton Vays from Liberty Life Trail. Hey everyone. Back in NYC. And I'm Thomas Hunt from the World Crypto Network. Moving on to issue one. Issue one. BitFinex Hacked. BitFinex was hacked this week for more than $72 million in Bitcoin. The funds disappeared in an instant. Despite the presence of a Bitcoin multi-signature wallet, which apparently was set to auto-sign all transactions, the companies responded that hacked by socializing losses and giving all the users a 36% haircut. Just a little off the top. And repaying the rest of their debt with BFX coin. A new debt instrument that they created out of thin air. Alex Sturk, your thoughts on the Bitcoin BitFinex Hacked? Just businesses usual in the Bitcoin space or something more? Well, it seems to be a forest ICO for their exchange. You know, I don't think anyone really appreciates that having their exchange fees and now the third largest hack in the Bitcoin space, this represents, you know, 125,000 Bitcoins, which is just after Silk Road and Mount Goss for that's from the space. As for socializing the losses, I think that was a major mistake and it might come back to them legally. I think a lot of users who use an exchange actually probably keep more USD on the exchange just for the risk involved with having USD on exchange are very low. Like we don't really hear a lot about USD getting stolen from these exchanges. If you have Bitcoin, you can send it to and from the exchange quite quickly. So why would you keep that on exchange? So socializing the losses definitely makes for, I guess, a really poor judgment on looking at all the decisions that have come after this parent hack we've seen. You know, time are pretty much a potter, I guess, what's the name of that? Drunken Rand the other day on Whale Club. I think it was. You know, that just goes to show the professionalism we've seen from the FedEx in the space. It's really been a real struggle. I have that kind of stain on the community and I don't think it's going to turn out well for anyone involved. It is an unfortunate decision that they decided to socialize the losses, especially taking the USD values as well. I know Adolf Hitler in his recent video announced that he had lost USD that he just deposited on the exchange. It's also quite an exciting ICO, right? We've never had someone publicly say we got hacked and we're going to have an ICO. We have theories that Carpellus may have had some kind of a Mt. Goxon ICO with the Mt. Gox coins and all that, but this is the first time it's been public. Theo Goodman. Okay, I think I'm going to address the BFX coin first because that's what we're just talking about. Okay, that's one way to describe it a forced ICO that's okay, but actually it's not as bad as you think because basically the idea is what would happen if everybody sued Bitfinex that lost money? Then it would take many years of litigation. They say what they tried to do would be to simulate that and this would be the result. Now I don't know. I haven't really seen how they came up with 36% yet and all that kind of stuff and how they did it, but that's the idea. The idea is, okay, do you want to litigate and get everything later? So we see what's going on with Mt. Gox. People say, oh, maybe we're going to get my coins. You've got the Bitcoin Builder situation and all that. Or do you want something now? So cut my hair now or litigate and wait later. That's the, I mean, that's that was basically the idea. So okay, that's that's that one thing, but I guess to make it short, I'm going to have to just go through a few headlines just to give a little bit of history and so that we can learn from different signs of when there might be a problem. Okay, so first of all is the first meme is, I don't trade on my exchange. I just buy and sell at certain levels. So that's the first thing. If the someone works at the exchange and says that, then there should be like a little alarm going off and say, okay, maybe there's something up there. So that was early 2015 already. So then you have the failed Alpha Point integrations, Alpha Point coming soon. That's the other thing. It didn't quite work out. You could go into what all that was and everything, but basically that they tried to upgrade. It didn't work. Then almost at the exact same date as this recent hack, you had the so called don't press, close your position twice situation. That was the so called XT dump. So what happened then was people were panicking trying to close their position at Bitfinex and they were pressing close and it wasn't reacting in the user interface and they were actually opening longs and shorts over and over again and they were getting margin called in all different kind of directions. That was exactly almost exactly a year ago as a year to the date of the recent hack. Not to mention between that, like I don't know, mini hacks which they made people good. And then recently the DDO S attack where they were just like guys, sorry, something's wrong. We're have to go offline a little and the price totally dumps and nobody can do anything with their coins are basically trapped in Bitfinex. That was only like a month before the hack. So there's so many different things that happened before this and we should all take a look at that and decide if it's worth it. I think the other thing, the other reason that a lot of people have money, have money at Bitfinex is because of the learning which is called not, it's not a swap. It's margin funding. It's called margin lending because it's, they've had to change the name. And yeah, that's the reason because it's, you're getting really good rates for learning out your USD or your coins and a lot of people had funds on there for that purpose. So I don't know, that's my opinion. I think that it could be worse as far as the, I don't BFX coin. I don't know how they, I haven't seen anything really clearly how they came up with the 36%. And from what I can tell from what people have investigated, but I don't know exactly, it seems like they have enough to cover the costs if they wanted to, which is really weird. It's probably easier to just print an alt coin. Gabriel, divine. I think it's very difficult to understand how in this day and age with so much thought around security in the crypto space and so much money being available to these businesses to create solutions that are reasonably secure so that you can head off at least large, strange as, you know, I am never surprised when I hear, oh, one of our hot wallets got drained and we lost 11,000 or 2,600 bucks or even 30,000 or 40,000. That's terrible, but it's understandable that you have to keep a certain amount online and at risk in order to run your business as an exchange. But this auto signing thing with Bitcoin, with Bitcoin that you're talking about, I read about that too and it's just absolutely shocking. And I think that the price is really reflecting how the ecosystem is especially traders who aren't necessarily the most knowledgeable in the ecosystem, but it's reflecting the amount of insecurity that traders feel when there's a hack of this size at the biggest Bitcoin exchange. It really is a sign that the ecosystem has not matured to the level of being able to be trusted with tens of millions, hundreds of millions in crypto value problem. So that it's not like a given that third party can hold crypto assets relatively securely yet. It doesn't have to be with 100% accuracy. Another thing is that really now exchanges are approaching the size of small mainstream banks and small mainstream banks also have security issues and wire fraud in terms of huge giant banks have massive fraud, it's money laundering that they get slaps on the risk for because they're well connected. So I think what we're seeing here is really a confluence of two processes. One, the security infrastructure around crypto assets, maturing and the security infrastructure in general rapidly degrading in the force of just the prevalence of the internet and hacking. So we've got two competing sort of trajectories here that are meeting in this hack. I agree, Gabe. It was shocking to hear about the auto signing of the BitGo signatures and it's surprising that some of the best information and explainers of this hack come from Bruce Wanker on BitFinex, a great video where he talks about a theoretical way that the hacker could have dreamed the accounts obviously a humorous video and the Hitler gets a haircut video where Hitler gets very angry as always and what he's angry about is so simple. Why didn't they have withdrawal limits? Why doesn't an alarm go off when someone withdraws $2 million plus from your exchange? Everyone just sits there and lets it happen. I'm sure they had some kind of controls but from the outside looking at this and with no information because they all lowered up, no one's talking, those videos explained this hack very well. Yeah, and as the resident conspiracy activist on the show, it's incumbent upon me to note that this hack and the ease and quickness of it is so fishy and suspicious that it's a natural assumption to think that there might be some skull dugger behind the scenes, disgruntled ex-employee at least if not inside job. I mean, it's a very lucrative process to fake a heist and then issue a debt so that you're going to make that money. So you make money twice, basically. I'm not accusing them but the possibility is very, very real. It is possible that this debt plan could have been sitting in a drawer just waiting for the right time or maybe they had a car pellets like Mt. Gox situation where they lost the private keys under the cat or something like that. We don't know. Tone Vaze. All right. I've commented on this issue a few times so I'm going to make this real quick. This is why I've never traded on Bitfinex. I never trusted Bitfinex. I always tell people anytime they ask me about Bitfinex. I met a couple of Bitfinex top people two years ago at some event. I spoke to them and then I remember saying to myself, oh my God, these guys have no idea what they're doing. And I've been trying to warn people never to trade on Bitfinex and of course nobody listens because they were almost a gamble. There's just so many warning signs constantly being hacked. The exchange always goes down. Look, but then again, they're not that much worse than any other exchange in Bitcoin. There's just no professionalism. There is nobody that has ever has any real experience of running an exchange attempting to run an exchange. Maybe at like, not even a bit and I think like noble markets might have had but no one's going to trade there. I mean, these things are out of New York, over regulated, AMLKYC, you know, over your head. Look, it's very dangerous to trade Bitcoin. You trade Bitcoin. This is what's going to happen. Now I think them socializing the losses is terrible but they had no good options. But they been an anonymous exchange like BTCE and this wasn't an inside job. They could probably just take the rest of the money and run but they don't have that as an option. Again, they're damned if they do and they damned if they don't. I can speculate on this token which I think is very, very silly. Obviously, we all agree that socializing the losses is bad but I don't know what other solution they had. My view on the token, I don't know what they're thinking but there's a couple of possibilities especially if these tokens are being traded. I know they're being traded within Bitfinex itself. I don't think they're live traded in the open market but people can get around that AMLK by C-LOA, I'm sure and just get these things traded. So they're either hoping that to buy them back on the cheap. So basically if the price and these tokens drops then maybe they will be able to just buy them back and avoid some legal action. Also if they have some deals with some big whales, if you buy up all these tokens and don't sue us we'll try and make them good on this big debt. Someone with a lot of money that can wait 10 years though I don't think Bitfinex will last 10 years. Either Bitcoin will last that long or Bitcoin does then a professional exchange will actually give us something we're trading on. I mean it's just amateur hour. Go back to these videos like a year ago I referred to Bitfinex as amateur hour especially back a year ago last August when they had that terrible malfunction. So that's it. They'll be in court. They'll be trying to prove a negative that they didn't steal the coins. It was very stupid of how Bitcoin was just there as like the token third party they weren't doing anything. I'll briefly mention my solution to this. You can't have simple cold storage because my own gods had cold storage and an insider can just leak it or steal it. You can't have all hot wallets either. You need multisig and you need cold storage. It's the best of all worlds. A user needs to have a key. The exchange needs to have a key. A third party like Bitcoin needs to have a key. These do need to settle. I personally would recommend a monthly settle. I think the CFTC recommended something like that. A monthly settle would be good. So every month the coins come out of cold storage. Users trader sign off. If a trader doesn't sign off then Bitcoin gets involved and they sign off. Once a month all these coins move so that on that one day a user has control of all of his coins with their private key and then as long as he doesn't make another trade he can withdraw that Bitcoin out of cold storage. The moment he makes a trade he has to wait till the end of the month for another settle. Everyone is trading the internal token, Bitcoin, whatever that it's irrelevant. It can't be stolen because it's simply internal. That's my solution to exchanges. One of these days somebody will do it and you'll have a nice safe, audible exchange at any point in time. I agree it's known it is most likely gambling and gamblers using the exchange all for speculation. As I hate to quote Adolf Hitler but as he said in his recent video and Dres always says if you don't hold the keys you don't hold the Bitcoin but I had to margin trade. I'll make one last comment real quick. As in what Bitfinec should have done and I don't know if this would have helped them but in their terms of service they should have said you know they should have been very transparent about how they protect the Bitcoins, not the details of course but the interior. They have a disclaimer. You're trading them at your own risk and segregated accounts. If you're the unlucky account that gets hacked for the Bitcoin you give up the right to sue us unless unless and this is a nice little quote unless you bring evidence to court that you have proof that it was an insider that took the coins. A current Bitfinec employee. So they needed a disclaimer. I don't know if this disclaimer would have protected them but I don't understand how this doesn't open up to a lawsuit from someone that was holding USD. It just makes no sense. But we'll see how it goes. It does seem like a missing part of the contract not to pre-announce what you'll do if you have a loss. A lot of the information I've seen said that the accounts were segregated and individual so people expected to take a loss if they were stolen from or to take no loss but then they switched it to this socialized losses model. Whichever way they're going to go they should have pre-announced and stuck with it. By changing it willy nilly it seems like a violation of the original contract. So it's really lost. I can go on a limb and suspect why they did that. They probably did it because they don't know whose money got stolen because they might have been segregated but I don't know if they were segregated by user or if they were segregated into some kind of pools. I mean the moment they... I don't know. I'm just guessing. If they really were segregated I don't see why they wouldn't notify the users who actually got hacked and how much they got hacked for. I'm assuming 100% for user and present the list of users not necessarily to the public but notify the user himself. You know, publish a list of x number of users. This is how many bitcoins each user had. And but I don't think they're capable of doing that because I don't think they... I'm not sure that they really were segregated. Branches guessing. I have no idea. It is funny to think about how the losses were handed out. If the hacker ran an A to Z script you would lose money if your names at the beginning of the alphabet would be fine at the end. If he ran it by account number chronologically older accounts would be robbed first. We have no... It's just a script that's running emptying all these accounts. We have no idea how it was run. Maybe it's more fair to socialize the losses but either way I think it should be announced beforehand. That's a real potential issue for them. Moving on to the exit question. Exit question. BitFinex's plan is solid and they will rebound after the hack. Yes or no. Alex Sturk. Got to unmute yourself. Sorry about that. I think if they had any chance of succeeding they probably should have created a token for every asset they took. It should have been a BFX USD, a BFX E3, you know IO use for everything. Will they rebound? Well I guess it kind of depends on Poloniax listing them which they formerly denied it so it's probably apparent so yeah they'll rebound. The problem is you didn't create enough shit coins. I totally agree. If they would have made more shit coins they would recover faster. But yeah I think that actually I think that they are going to rebound at least in the short term because I think it also hinges on if they can ever get their lending going. If people are able to lend out and make money by lending on the margin positions then I think they'll rebound for sure. Lending Bitcoin is always a dangerous game. Gabriel Devon. I have no idea. I've been so surprised lately. I've really been so surprised. I've been surprised about things dying like this you know happening and I've been so surprised about things succeeding as well. And I think what it is is temporary craziness. So I'm going to say Bitfinex is going to slowly die. Tone Vaze. I honestly think they're done but I always underestimate the gamblers in the space. I think they're done. I think they're going to lose volume to BitStamp to VGCE. I really think they're done. I don't know how many lives they have. They're like a cat. They have to be running out soon. I would usually say once you're hacked you can ever go back but this clever plan with the altcoins I think they're going to survive. Bitfinex lives. The altcoin might live longer than their exchange. It's a clever idea. I think we'll see it happen again. Issue 2. US government selling $1.6 million in Bitcoin. The government never seems to consider Bitcoin as money except when they're selling it. The US Marshall Service announced recently that they would be selling the Bitcoin seized from a Silk Road drug dealer, dirty FBI agent Karl Marx force the third and a man who created a site to sell stolen, debit and credit card numbers. Theo Goodman. Will this establish yet another government auction help establish Bitcoin as a legitimate currency? Or will it establish it once more as the currency of drug dealers corrupt cops and thieves? Both. That's why it's going to establish it more. Both things you said are true and both things are what's going to make it more established. Can you repeat the name of this officer again? Is it something like force? It's Karl Marx. You got it wrong actually. You were wrongly accusing his father of crimes when the gentleman at stake is Karl Marx force the fourth. I think the main I didn't believe that was a real name when I read it when the news came out because force and Karl Marx and the whole thing that's just and he's a cop is just too weird. I don't believe that's his real name. It has to be a CIA code name or something. Yeah. I agree with that. It always reminds me of the Simpson's episode where Homer changes his name and the judge says I will change your name to the only one of these that you spelled correctly. Max power. Gabriel D. Vaughan. I forgot the question. Why are we doing Bitcoin and the government selling it. Does it make it more legitimate or more criminal? Yes. Very interesting. You know, crime syndicates hold auctions all the time. And maybe we finally have a decent exchange. Is it a tone vase or do you buy some Bitcoin from the government? I would not. I don't think it makes it more or less legitimate. I mean, look, we just talked about a $70 million bit for next hack and the government is selling 1.6 million. I mean, I'm glad that this is the only Bitcoin the government has. I don't want the government to be holding Bitcoin. The less the government knows about Bitcoin, probably the better off everybody is. What bothers me is that Carl Force, the only compensated 65 Bitcoin from him, that sounds fishy to me. I think he extorted way, way more. So government selling them, that's fine. Hope somebody buys them that it's going to hold on to them. Yeah, I kind of try to ignore government in this case. It's still unfortunate that so crude wasn't allowed to exist. I think it was doing a lot of good in my opinion. But we'll see. Hopefully we will get to see Ubrug again in the maybe 10, 15 years when there are when trucks are legalized and maybe they'll go lenient on something like that. I think it's going to take a presidential pardon to get him out of jail. But if the climate keeps changing, I could remember when gay marriage seemed impossible and marijuana legalization seemed impossible and money was not free speech. But all of these things have changed. Gay, you understand? Yeah, I was going to say that if you think that Silk Road was doing good and you should rejoice because online drug sales on the dark night have tripled since it closed. I know, that's why the price of Bitcoin has been pretty high. I'm very happy about that. Alex Dirk. Good. Yeah, I think most governments already considered Bitcoin as a legitimate currency or some form of asset. The only way it could be more cemented is that they were auctioned out something other than Bitcoin. They were allowing people to pay for it in Bitcoin. So-and-so is Manchin being auctioned off. And this guy is offering X amount of Bitcoin for it. That would probably put it more on the legitimate books. So the government could accept stolen Bitcoin as proceeds for stolen property. This is a complex issue. We're going to need some whitelists as a blacklist. Exactly. Well, you can get the whole network voting against it. I'm sure it would be a very interesting. But as for, you know, does this have an effect on the entire marketplace or the industry of all? Like, it's only 2800 coins, which the network produces 1800 every day after the hard port. That's like next to nothing. You're talking about a day and a half of mining production. Yeah, it's a very mining issue. But I think I agree with the rest of the panel here with-there definitely was probably more Bitcoin involved and stolen during the self-road investigations. So we'll see. Maybe there'll be more of these smaller auctions. Exit question. After the sale, the price of Bitcoin will go up, go down, or be unaffected. Theocodon. Unaffected. Gabriel D. Vaughn. Unaffected, too small of an auction. Toe and vegs. I'll go with the consensus on this one. Unaffected. Alex Sturk. I'm from the last quarter of the year. Previous auctions were around 40,000 Bitcoin. They had a significant effect. I think this will be a slight uptick for the day, but overall unaffected. The price of Bitcoin will go up because the price of Bitcoin always goes up. Moving on to the plug. Shop at purse.io where we've got everything you need to go back to school from Red Bull to Soilin, from beer bongs to ping pongs. And it's all on sale. Shop with Bitcoin and save money at purse.io. Issue 3. Bitcoin and Terrorism. The Australian government plans to take strong action this week to classify Bitcoin as an e-currency, such as prepaid debit cards, and regulated under their very strict anti-terrorism laws. The article once again falsely claims that Bitcoin allows for anonymous money transfers when it is actually the world's most traceable form of currency and incredibly difficult to use anonymously. Gabriel D. Vaan, your thoughts on this decision should countries be worried about Bitcoin back terrorism? It's a complex issue, I think. Bitcoin does enable more trade to happen online. And some people trade in terror. So in that sense, there is a legitimate case to be made to categorize Bitcoin along with other things that might be used for terrorism. What I don't understand is the US dollar. Yeah, exactly. Well, I don't understand why there should be a different, well, I do understand, but it's very corrupt, and there's a logical disconnect there that they consider mainstream government currencies not to be in that group. Now, you can do transfers of government currency with shell companies and things like that to fund terrorists, but of course, cash delivery is the main way to do it. So I think this is mostly show. It's mostly sort of lap dog type behavior to the American hegemony. And really, it fits very well into Australia's slide into authoritarianism. Tone phase. Oh, man, did you say slide into authoritarianism? If there is one country, I would pick that's more authoritarian than the United States. It would be Australia. They literally have the most ruthless tax authority, who as far as I'm concerned, every one of them is armed and all they do is just bust down houses. I really don't like Australian tax authority. This is all about taxes. This has nothing to do with terrorist financing. I mean, some of the lower level people, their brainwash, believing that it's all about terrorist financing, but it's not. It's all about taxes. They just want the money. I mean, everyone's a money launcher. They just want their cut. They have no idea what they're doing. All they want to do is regulate. They regulated Bitcoin way too early and every single company involved in the Bitcoin space left Australia two years ago. Then they decided to add a goods and services tax of like 20% to every Bitcoin transaction. Now they want to reclassify it as money again way ahead of the game and everybody else. Australia is all about regulation. There are big countries. I can't understand that you have some place like Singapore that has a lot of control over the population, but that's more of a city state. But Australia's authorities, I think they're terrible. I think that is one of the most impressive countries in the world. I wouldn't want to live there. Maybe I'll go there on vacation one day, but I wouldn't want to live there. That's just my opinion of it. I think everything that comes out of the mouth of that government is always wrong. So I'll leave it at that. Tone's right. The real terrorists are the people who don't pay their taxes. We call them corporations. Alex Sturk. You didn't. There we go. Sorry, Pesky. That was fun. So this story, I guess, maybe hits a little bit closer to home. As earlier in the week, there was actually a terrorist killed about an hour from where I lived now. The small town of Stratth Roy. And he was taken out due to, I guess, a hint or something given in the police, but he died before he reached the denser urban areas. So after reading, like, there's a story from a German news outlet that they found that the terror expirons, the reuse and attack there were coming from the darknet market. This is a pretty easy response from a country that historically had very strict standing on digital currencies. I think Australia's tone mentioned. But it's, in my opinion, that individual terrorism events, these stem from mental health issues, which I think Bitcoin probably helps in a way, because it allows a lot more liquidity and say something like the marijuana market, so people can just chill the hell out. Yeah, as per tax on everything else, they definitely have a harder stance on the entire currency space. And I don't think they should be setting an example for any other country. Mental health issues like religion feel good. You heard it here first. Bitcoin helps with mental health. It doesn't cause bad mental health. Okay. So I'm just wondering, I guess maybe there's an election coming up or some politician there is low in the polls. Those are just kind of reactions. It's not only with Bitcoin. It can be with anything. And politicians have to posture to make people think that they're actually doing something. And Bitcoin sounds interesting. Hey, there's this weird currency. We heard of it Bitcoin and the terrorists are using it. You know what? We're going to regulate. We're going to do something against it and look, we're doing something. See where we're talking about. I mean, they probably can't really do that much if I really want to use it. It doesn't matter. It's just about the perception that the government is doing something and it even sounds cooler. Next year, the government is going to be talking about regulating blockchain. Moving on to the exit question, what other useful tools should we ban for fear of use by terrorists? Top top smartphones or keyboards? Gabriel D. Vaughan. I'm going to go with the classic shoes. Terrorists always seem to be wearing shoes as far as I can tell. Shoes are instrumental to helping terrorists walk long distances such as Chairman Mao during the long march. They never could have made it without shoes. Tone Vaze. Yeah, no, I'm kind of surprised. Like some country hasn't banned cell phones yet. I mean, that should be the number one tool, right? They are very dangerous. They can be used to trigger bombs. They can also be used for communication. Very dangerous tool. Alex Sturk. I think we should be banning forks. Hard forks, stop forks, forks. Because these represent a serious danger, not just to the average citizen, but to all big pointers and Ethereum, token holders, and really the entire cryptocurrency space, the whole should be very concerned about forks just being passed around willy-nilly. So many times. Why not use a spoon? It'll hurt more. Theo Goodman. When humans fell out of the trees, they reached down to the earth and picked up a stick. That was the first tool. That's why we should ban sticks. When they ban sticks, the only weapons left will be rocks. I think we should ban keyboards, musical keyboards, like the one used by Gabriel D. Vine. As we all know, music is the true weapon of terrorism. Is he showing us a keyboard? There it is. Moving on to issue four. Issue four. Mega upload two. Kim.com, Australian millionaire and founder of the popular file sharing website, Mega Upload, is back in the news this week claiming that his new product, Mega Upload 2, will feature Bitcoin micro payments for file transfers and a new feature called BitCash, which he claims will solve Bitcoin scaling problems and increase the popularity of the fledgling digital currency, sending the price to the moon. Tony Vaze, your thoughts on Mr. comms, exciting announcement. All right. I think I already have a reputation for being the perpetually skeptical commenter on the show. I have no reason to change that stance now. I like him.com. I thought it was a complete sham when they arrested him. The US arrested him. He's never even had a US visa. Never stopped putting on a US soil. I had no business doing that. I'm using this to be a pretty progressive country. I'm all about Kim.com. He was doing a great service. It was unfortunate when Mega Upload went down. Video sharing became a complete and utter mess. I read that article. It sounds like a bunch of gibberish. I'm sorry. Unless he built a better version of the lightning network, what is this micro payment system? I have to see it to believe it. Are people going to put in a bunch of Bitcoin and then there will be micro payments internally within it? That's fine. What does that have to do with Bitcoin scaling? Again, I had the last I heard. He wasn't really, I haven't heard of him cooperating with any of the Bitcoin developers. I haven't seen him at the scaling event. I don't know what he's doing. I don't know how it's going to work. But again, we don't know any of the details. At the moment, I'm very, very skeptical. He's also going to have a lot of problems. You can't put Humpty Dumpty back together. When Mega Uploads went down, it became a free for wall for video sharing. If he thinks he's going to launch a website and everyone is just going to come back, it doesn't really work that way. People are already comfortable. They got to remove all of their files. Yes, if they can get paid for them in Bitcoin, that's great. This gets back to how has he solved the scaling problem that the 20 smartest developers possibly in the world haven't yet solved. I'm very, very skeptical on what it's actually going to look like. The best case scenario is he's going to have a bounty system. He'll have a wallet where users donate some Bitcoin into a path. The first person to put up a movie or a video and stream it for X amount of time so that enough people can download it and recede it. That person takes the path of the Bitcoin. I think that would be a great system if he can pull it off. That might actually bring all the videos back to his site. I got to see it to believe it, guys. I really, really do. I'm very, very skeptical on what he's saying. Excellent points, Stone. Also, if we falsely labeled Mr. Dot Combra as an Australian, he might be from New Zealand apologies if we made that mistake. Alex. I don't think he's a New Zealand citizen. I think he's like finished and dropped the hell. He's German. German. You guys live in New Zealand. Yeah, I'm not even sure I'll be a citizen. I know. I'm a mysterious Mr. Dot Combra. Alex Sturk. There sounds a lot like Megadaser. Something that's going to create a lot of spam for the network. Unless he has created some sort of new technology that none of us have heard about or it's going to be better than what's already coming. He mentioned micro transactions, which he's going to require the lightning network for that. I imagine he's planning on using that or he's planning on doing a sidechain. The other thing that was mentioned while he's planning on launching in 2017, which is already like a decade in crypto terms, but I find it really cute. Like the network could be out by then. To give him some credit, he might be planning for it. I don't know. Yeah, I imagine he is probably waiting for it, but I find it very curious that he's talking with Bank to the future about doing an equity crowd sale of some sort. So he's planning on taking in money, which I guess it's supposed to be a billionaire, right? Maybe his drafts are getting a little hungry. It doesn't have money for food. But we'll see if he's making a sidechain of some sort or maybe it's even an altcoin all together. If he's doing a proof of work of some sort, I don't really like the idea of doing a crowd sale. It kind of earns a lot of the economic interest with people just buying into it rather than actually putting it in for heavier hash rates. You want to see the hash rate go up with these sort of systems. And what if he's starting out small, is there any kind of made a number of enemies? I think he could probably have some issues with network attacks. If he's not directly tied to Bitcoin's hash rate, there are a number of competitors in the space, like not just from what I'm, you know, tone was saying in the traditional marketplace. There are already a couple of companies that are nearing final release such as like storage coin and made safe. So I doubt he has the ability to capture the market from those two companies and many others. But I'll probably still throw a little money at the crowd sale from my data portion of my blockchain portfolio. I can't just jump back in real quick because I actually have to run. So unless Theo or Gabe want to severely disagree with what I said, I got to get going and I'll catch your comments later on in the video. All right, bye, Tom. Bye guys. Let me tell you just one word about your future. Mega Bitcoin. Theo, good one. Oh, Theo? Hello, hello, testing. Okay. I think that it's probably going to be a centralized thing. I don't think it's going to be all this technical stuff side chains and all that stuff, which is fine, whatever. And you know, maybe he figures out a way to get it so people use it. I don't know. But probably just hasn't heard of Ethereum and I'm sure that Vitalik just make this thing in one line of code. Gabriel, divine. Yeah, you know, I talked about this on the Bitcoin new show with War Tex on Monday and with Ton as well. One of the things that is interesting is he was talking about last year was this concept of meganet. But of course, made safe is already doing what he's talking about, which is creating an encrypted layer of communications that lives on top of TCP IP and the internet. So I don't really see that him having better, more deeply thought out ideas than this 10-year-old project that just entered alpha today. And then the other issue is, you know, Kim.com is awesome at PR. He's really good. He's so good at, you know, mudding, ruffling up the waters, getting attention. He's really great. And I just really enjoy the whole show. I think he's a master sort of manipulator of sort of public opinion. I agree with Ton that he was wrongly persecuted and basically the US broke a bunch of international law in order to do the bidding of the Motion Picture Association of America, which considering how small the industry it has, it certainly has a lot of power. And I'm very convinced that that has to do with the powers of propaganda in societies around the world that aren't living in the jungle and don't have access to media platforms. So I think it's pretty great that he has gloned on to Bitcoin. I think that's even though he's a crazy showman type of person, the fact that he's bringing attention to Bitcoin is really linking cryptography and technology together with this sort of freedom idea of the ridiculousness of intellectual property and how it's not defensible from the philosophical and economic standpoint. So I think that's really great. I think it's wonderful that he has come into the Bitcoin ecosystem with his declarations. So directly, but I agree with Theo that it's very unlikely that he's got a decentralized system in mind. It's very unlikely that he's going to be able to align incentives in a way. I'm sure his mind doesn't work like that. Like these open source platforms that I think have a bright future of the next few decades. Pretty sure he's just going to have another version of mega upload with Bitcoin functionality so that they can directly make money instead of through ads. They can make money through Bitcoin, micro transactions through some sort of incentivization for uploading and sort of getting paid to upload and paying to download type of things. I'm pretty sure it's going to be a centralized thing. I don't think it's going to increase the scaling ability of Bitcoin at all. I really genuinely doubt that. Although he might just be using a variant of lightning or thunder now or something. It's an excellent point Gabe. Even if the project is not a technological tour de force, we're still very lucky to have Mr. dot com on our side. Exit question, which will have a bigger effect on Bitcoin scaling, mega upload to or the lightning network. Alex Sturk. I think it ends on how much spam he's planning on creating and by putting in transactions that there. Who knows? Maybe he's the one who's been putting his spam attacks out there and really developing the fee market. Yeah, I think it will probably even drive a little bit of price movement. I really so claim to. But it will probably be more coinciding with the US elections rather than anything to do with tip dot com. Yeah, being the love PR guy is. I'm sure he'll bring some interest whether it's to development or price. It is true that the price of Bitcoin has done nothing but go up since we started the Bitcoin group. Theo Goodman. I think lightning network will have a bigger impact than as a bigger technical impact on scaling than Kim dot com's new venture. Gabriel D Vaughan. Can you repeat the question you dropped out when you were saying it? Which will have a bigger impact on Bitcoin scaling, mega upload to or the lightning network. Lightning network. We're in agreement. It's the lightning network but we're still big fans of Kim dot com. Let's move on to predictions or a story of the week. Alex Sturk, are you ready with a prediction or a story of the week? I think I said earlier Poloniacs will less be effects coin. They've officially denied it but that problem is just accumulating quietly so they can list it. Story of the week. Tonight I'm interviewing decent. Another media project. You can check it out. Follow a block talk right over there. That's really all I could say. Very cool. Thanks for being on the show. Theo Goodman. Bitfinex will add margin trading to Bitfinex coin. Gabriel D Vaughan. My announcement story of the week is a plug for my new show. I'm going to be doing an interview show gradually over the next few weeks and keep an eye out for the little intro that I recorded last week. Should be a nice little fun. Intro into what I'm going to be doing on the show. It's called Future Rant and it will be here on the World Crypto Network. Very cool. Looking forward to that. My story of the week is just thanks to the San Francisco Bitcoin meetup. Had a great time last night at our drink cup event at the El Rio. About 40 or 50 people came. We all had some drinks. We talked about Bitcoin. A lot of people working on interesting projects. I got to meet somebody from China who's been watching the show for three years and even wanted to take a picture with me. That does happen very often. I always think it's neat when it does. Thanks to everyone for coming to the Bitcoin meetup. Thanks to everyone else who has Bitcoin meetups out there. We should be having them every week, at least every month. As a great way to meet up with your fellow Bitcoiners who, as it turns out, you have a lot in common with. We're about out of time. Until next week. Bye. Bye. See you later.