This episode of the Bitcoin Group is dedicated to Hangouts Toolbox. Hangouts Toolbox was an incredibly useful piece of software killed by Google for no reason. As you can see in the pictures here, Hangouts Toolbox allows you to have the name on the bottom of your video when you're talking. This is incredibly useful. As you can see on this page, all the Hangouts use Hangouts Toolbox. Everyone wonders why this is happening. Google says they're killing the API on April 25th. It's not April 25th. Why is this happening anyway? Anyway, moving on. The Bitcoin Group, the American original. For over the last 10 seconds, the sharpest Satoshi's, the best Bitcoin, the hardest cryptocurrency talk. We'd like to welcome our panelists, Blake Anderson, cryptographic economist. Hi, everybody. Thanks for having me back on the show. It's been a while. Gabriel D. Vine from Future Rant. Hey guys, thanks for having me. Hey, Pasta Dairity. Hope you enjoy this historical look at Bitcoin on January 13th, 2017. Kyle Torpy from Coin Journal. Hello, everyone. My name is John Vays from Liberty Life Trail. Hi, everyone. Joining you from the Miami Hackathon. I got one guest to come join me here for it. So it should be fun. And I'm Thomas Hunt from the World Crypto Network. Still fired up about Hangouts Toolbox. Moving on to issue one. Issue one. It's not a raid. Come on, mouse. Chinese exchanges rock the Bitcoin price this week with early announcements that they were rated by the government, which turned out to only be a meeting. And now only a day and a half later, we know the results of that meeting. BTCC, OK, coin and who buy have completely halted loan based or margin trading. The Bitcoin price would drop from a recent high of 1130 all the way to 760 has recovered to around 830. Blake Anderson, what does this mean for the future of Bitcoin and China? Well, I meant that I bought the dip and was very, very happy about that. But what it means for people at large is that not having a lot of margin trading, going absolutely nuts in like 33 to 1 like in 2008, like happened to America is probably actually not the worst idea. I mean, I'm a pretty libertarian free market Austrian kind of a guy. But it seems like the Chinese population or whoever in the government that is trying to make sure that they don't get into a giant, an inescapably damaging situation with exchanges not being as you know, buy the book as they could be. I think it's good. I think it has the potential to cause lots of turmoil whenever you get anything that I get super leveraged. And then at the end of your money making processes, it creates a lot of instability and a lot of pain for the people that were still in it. So the exchanges are a place where things can happen with Bitcoin that really can't happen other places in terms of you know, promising you Bitcoin stuff that's really just a number that's in an account on their website and not necessarily populated coins in a wallet. So I'm kind of cutting back on leveraging on exchanges in China for the Chinese is probably pretty good. I'm not against all kinds of leveraging, but it needs to be done extremely responsibly. And if they don't think that that's what was going on, I can actually kind of appreciate why they thought that that was a good move to make. Other than that calling it a raid and you know, getting the price to go away way down, I think that people had seen the recent surge and they wanted to sell and then have an opportunity to rebuy. And so I think that there was maybe a lot of motivation for people to blow that out of proportion and that a lot of people did do that and then tried to capitalize on what they knew to be true versus what they were saying and signaling to the market. So that's a little bit sleazy, but you know, we've seen China kind of threatened or whatever before. And so if you've seen the story play out before, I think a lot of people were able to make some good money off of those swings. Anything to make the Chinese exchanges less like gambling casinos with their no fees and now less leverage Gabriel D. Vaughn. Yeah, I agree with Blake on that one. And I also agree with Matt Bitcoins who sent out a video today with the guy on the cat or Moran, which I really resonated with me. You know, like Blake said, and like you like you mentioned, it is a lot like gambling. And when you have high levered situations on these exchanges, sometimes, well, one of the things that really surprised me, and I don't have a trading background in musician, some of you guys know and I've done some coding over the years, but I don't have a markets trading background. And I was shocked to find out that margin trading on most Fiat mainstream exchanges actually will allow you to have a loss on the books. And they'll say, oh, well, your trade didn't, you know, there wasn't any liquidity during this air gap. And you lost your, you lost your trade and you lost on this on this position. Nobody picked it up until $500 before your ask price. And now you owe us $1,200 because your trade executed at a different place. And so it allows you to have a negative balance, which is really strange. And I think crypto exchanges don't allow that, which is I think really smart. So in other words, if it gets to that point, it'll automatically liquidate all of your money and it's like, okay, now you have zero, which makes a lot more sense. And I think the Chinese exchanges are maybe operating on something closer. I'm kind of guessing now I'd love to hear tone and Blake's opinions about this. And we're operating more on something like traditional markets where they kind of allow you to float a loss. And that's a really good way to have exchanges go out of business. If tons of people get crushed on margin trades and lose millions and then that's more than the company has and then they have to either pull a token scam or go out of business like BitFinex. So in that sense, in the long term, of course, I'm for free markets, totally free markets, total lack of regulation. But of course, there's pain points during that process and you pay for that where people take too many risks and then they eventually learn through collapses that those risks are not tenable over the long term and then gradually the industry's zero in on sustainable practices. And so what happens in the situation of authoritarian governments like we have in the across the world today, except for China, Switzerland, and maybe Singapore, or excuse me, Hong Kong. What we have is where governments attempt to help industries, like the good view would be that governments attempt to help industries leapfrog that difficult phase of collapses and go right into sustainable business practices. In practice, of course, that hardly ever happens and they usually just become all rent-seeking bastards. But in this case, I have to go with Blake and say, the Chinese approach to this situation is very interesting and seems very unexpectedly and extremely balanced, which I think is absolutely so bullish for Bitcoin. Bitcoin, Naysayers, for years now have, reasonably in my opinion, been claiming that as soon as governments get wind of how much power crypto and decentralized currencies are going to take out of their Bayleywick, they're going to crush it as much as they can and just try to fight it. And I think China has been showing the world for 20 plus years that they know that 20th century authoritarian, 20th century communists type organizations aren't really practical in the digital age and they need to kind of whip themselves into shape and gradually bring their populists and their government into something that works a little bit better. And I have the sneaking suspicion that China sees Bitcoin as a way to hasten the collapse of Western banking cabals while also greatly massively increasing the wealth of their populists, which they maybe want to try to ride the dragon on. They want to try to ride that Chinese dragon and maybe just kind of like pull off a little bit of that taxation and not really try to run things like a Middle Eastern dictator or a mid-20th century communist tyrant and instead just kind of chill a little bit and help things along, which is incredibly optimistic for Bitcoin. So good point Gabe, the Chinese certainly could have shut down the exchange and they didn't do that Kyle Torpy. Yeah like Gabe I'm not a trader so I'll probably defer to tune and blink on this too a little bit but one thing I have been wondering is whether or not there's any insider trading going on with all these announcements that China seems to make every now and then. I'm not sure how many have really been telling that attention to the announcements this week just because I was working on other things but I remember back in 2013 it was like basically each announcement was we're banning it we're not banning it and then the price would go up and down. So if you're someone who has that information I don't see it. There's definitely an incentive to trade on that information. I mean I don't know I'm not saying like the PBOC is doing this but the information is there and the incentive to trade on it is there so it's a very perfect storm. Yeah it's definitely it makes sense to me but I mean I'm not an expert in any of that stuff so maybe there's a reason where that's a stupid idea but in terms of PBOC cracking down on the exchanges one thing I would like to see out of that is more transparent volume numbers with especially with like okay coin I know that some of their I mean I'm not a trader but I know a lot of the traders are suspicious of their volume numbers and I know Bobby Lee has even said I don't think he named names but he he mentioned Chinese exchanges in the past as not having the most transparent systems and maybe a offshore trading or something like that and I did see Brian Armstrong tweeted out a series of tweets maybe a week or two ago because people are pointing out that GDAX doesn't have very much volume compared to the Chinese exchanges and he was pointing out that the way the incentives work you have free trading with no fees on the Chinese exchanges and then the withdrawal system have fees in the tiered system so the more you trade the lower your fees are so there's an incentive to keep trading until you get to that next tier where you pay lower fees on your withdrawal yeah and like GAB said there it could there's definitely a benefit for China I would think uh globally for weakening maybe the the dollars hold on the world as the world's reserve currency uh remember reading currency wars that Jim Rickard's book a few years back and there's the opening part is talking about a scheme between China and Russia to destroy the US dollar the US economy basically and the way they do that is by creating a new goldbacked currency and I always thought it would be that's like my one of my favorite theories for where Bitcoin came from was China and Russia basically doing that and creating Bitcoin uh and like that that playing out as an attack on the US or the dollar uh in terms in terms of uh with PBOC thinks uh I did see one of the okay coin executives said that they don't like it but they don't know how to handle it so that seems to be like the PBOC's stance at this point Kyle would you agree that things that can be damaged by immutable Austrian policy probably should be damaged uh like if like if the truth can damage something then that is probably something that can be damaged I mean it would just be kind of an extenuation of those kind of assumptions yeah I mean the truth definitely damaged gained Bitcoin today I would say in their scheme and GB miners if the Chinese government was inside or trading that would be a very capitalist move from a so-called communist government but uh well that's the only reason with them too with China they've had a trend of trying to be more and more capitalist to try to fix some of the problems that they've had so it's interesting to see how they go about that and then what ways they try to regulate or become free market and they seem like they've been really kind of pointed in going in a direction that makes sense which doesn't like you know historically with China you wouldn't think that because we think of them as you know hyper communist and very very regimented so that's interesting all right let's go to tone veys all right a lot of things to comment on here from what you guys said okay so let me start with um I don't think China cares enough about Bitcoin like they definitely are not tailoring their economic policy to Bitcoin um I also disagree with Jim Records that China is buying off all this gold to launch a gold back currency I don't believe that is going to happen um aren't to Blake's point I think it was Blake about uh the traditional exchanges allowing people to take a loss through margin trading because it didn't liquidate in time that is extremely rare extremely rare that's oh that was gay okay um that's extremely rare that doesn't normally happen and it doesn't happen to the tune of like a thousand dollars if it happens it happens to the tune of millions of dollars and that's because the trader is a whale with a relationship with the broker you also see this um talked about in the show billions which I strongly recommend um if you have not seen the um I think it's show time I know as I mean I'd say it's one of the premium channels um if you haven't seen that show or Netflix um if you haven't seen the show billions um definitely check that out and they talk about this specific case um so all right so so where do we start with China let me um I will make this quick let me just share my screen real quick only because it was interesting so so here's the tweet that Thomas pointed out and I just saw this tweet for the first time um and this I can see why uh BTC China got so pissed because the tweet said central bank is rating Bitcoin operations and then the article title is rating Bitcoin operations in a title but when I read this article uh literally a few hours after it came out uh the headline of the article is Chinese central bank is inspecting Bitcoin operations and I'm reading this entire article and I'm like wow this is actually more professional uh then what I usually read from coin telegraph these days uh it's very well written and then the word raid comes up like right here somewhere at the very end I don't even know I can't even find it right now it's here it is um I guess they forgot to edit this word out uh and I'm reading this article like oh that's the word that's bothering them so I have no idea that it was in the headline that prompted all these tweets uh from BTC China uh so that that was kind of interesting isn't the first time that coin telegraphs done that where they have an incredibly sensational title on twitter and then they change it in the article I don't know if they're doing this on purpose but it does seem to be a pattern they would never do that no okay so so I've actually worked sort of why I don't want to say worth but I've written for coin telegraph in the early days and I have to say that I want to say this is not on purpose uh this is more like um it's a very decentralized organization as far as writers go and they they do pay based on there there is a pay component to the article based on clicks and based on views I don't know if this is still going on but that's how do you see it paid so it's to the advantage of the author it to create these more sensational articles and the editing policy there is also very very loose in the fact that it's very decentralized and people are fact checking from the editors is no that great there or fact checking period like it's literally a decentralized blog site closer to that it's not uncommon for editors to add the headline and the the person who writes the article has no control over it that's a pretty common thing no no no but in the case of coin telegraph it's complete opposite like your editor it does like the like I have to like argue with the editors to actually change it in my articles because of my bad English and I'm like look if you're if you're proofreading my article and you see bad English can you please change it like their editorial policy was like the opposite um and and other publications I ran into the other way around and I'm like no no I don't want you to change the contents of my sentence I want you to just edit the grammar and English I don't want you to like remove this because you don't you disagree with my position so the coin telegraph at least I'm sure it's changed now than when I was there but the editing at coin telegraph was very very minimal so it's the opposite of what you just said there okay so now I'm just gonna I'll keep sharing my screen it's fine so now back to what actually happened so it's interesting so this was the the headline that came out the morning up when the price was crashing and I pointed this out that when a PBOC I don't know if they were actually in their offices or they were just meeting I'm not even sure but it doesn't matter right because it's not the reality it's the perception and if the perception that is that you know PBOC is inside their office that can panic the market and it did panic the market and this is the quote that I always struggle with when it comes to Bitcoin it literally just says implement implementation or runtime money laundering system so I'm like okay so how when is like I'm sorry I have to be blunt here like this is why I would never run a regulated exchange because there's a huge conflict I mean you can't KYC Bitcoin really unless you coin base so what is going on there so you have to convince if the focus of these regulators is to prevent money laundering I'm not sure how they're unless they're a coin base that KYC's every little thing how else can you implement that now here's the interesting part 24 hours before the incident that crashed the price down to 760 this was my quote as given to coin idle where I literally stated that if the Chinese government really wanted to go after Bitcoin they would literally shut down decentralized exchanges they would raise electricity or they would confiscate mining equipment but if you read the next line I say in fact I wish pvoc would get a little more involved and perhaps regulate some of that unrealistic volume out of the ecosystem so with today's headline coin desk I kind of think this is a good thing like this leverage in the Bitcoin space is ridiculous it's it's just dumb and this tells me that a lot of these people don't know all that much about trading in the traditional markets there is a reason why let me just share I'll do your stuff share this screen we can have comments right now okay there we go okay good nope now we're looking at Blake Google went and removed all the rules on town here yeah so I mean the reason why things like oil things like gold indices the reason why they have such crazy leverage is because these markets are so deep and so liquid and it was regulation that allowed that keeps an eye on these things like if the market gets even more liquid and gold and oil they will let you do more leverage but if these markets don't aren't that liquid they will not let you do all this leverage because it needs to literally be liquid and be and be in control Bitcoin doesn't have this and I remember having these discussions with BitMax and Arthur Hayes when when he was launching it initially that he's like no no no 20x leverage is insane we're never gonna go we're not gonna go to that route we're gonna do like two maybe up to five times leverage like six months later they're doing 50 times leverage okay because they realize that's where the gambling is but it's not really safe for for the Bitcoin network so I'm kind of happy I was gonna pull up another chart but I'm already speaking forever I saw the volume drop on ptc china I also saw the volume go up on ptc china but you know what no sorry guys I will go on for another minute and where is my or here we go so here is the brave new coin liquid index and I help put the syntax together now look at the volume right the volume is like nonexistent and then boom here's the volume this is all btc china doing so all of a sudden the volume gets ramped up on btc china as of october now bobby lee has been a big proponent of how everybody else is doing fake volume but not well maybe and they not quote him like that but I've heard him be critical of chinese volumes and I really thought that he had like some of the more legit volumes out of china which is why his exchange is in the index and then look at this volume go through the roof and then look what happened on the on that drop day right so this is the drop day of a hundred points and look for the volume is it's right here now look at this drop day of only about 20 or $30 not a hundred and fifty dollars right look at the volume it's like three times more volume so you tell me how does the price drop three times more yet your volume is three times less so something is definitely going on now that I just learned that they took away leverage that might have a lot to do with it but I hate the fact that there is your future eating and I hate the fact that there is 20 30 x leverage in a market that is not liquid that is just stupid I hope like a yeah go ahead I'm saying if you compound that with you know trading at scale and then also you know robot trading and automatic trading and stuff like that is definitely not a healthy thing for the bitcoin environment at at at scale right now here's my view on regulation oh come on is it gonna here's my view on regulation right like I used to be anti regulation across the board but now after being in the bitcoin space I realized that you know regulation is really necessary but we need a full separation between technology and the people so I want the like a btc China to be regulated but I don't I don't want the users to be regulated like I want the users to be able to remain anonymous but I want btc China to be regulated to make sure they don't pull them out of dogs so I want stricter regulation on for consumer protection without compromising the identity of the consumer so that's what I'm hoping to get out of this and if China is smart enough they will do it but like any government there against money laundering which I don't think should be a crime but they do so I don't see a good way out of it it's it's a chicken and egg problem see what regulation that's aligned with the letter of the law without allowing for a lot of capture would that be fair to say just capture being the biggest problem with regulation if we can avoid that you think it's healthy to have some yeah yeah because I want to remove the idea of money laundering being a crime and I know it's difficult because the governments are going in the opposite direction and I do think China is becoming more capitalistic I have high hopes but I don't see it I mean we'll need another whole other generation that believes in financial privacy but the way things are headed even with the with the election it's yeah and no one wants to hear the truth right look what happened with the DNC email hat no one cares the truth in those emails all the hair is like who hacked it and it was Russia's fault not the fact that the Democrats were doing something illegal it's the fact they were hacked is the problem right I wanted to ask that question I apologize for talking over your time all right that's fine oh sorry the Russians hacked both sides and didn't release rnc emails but we'll move on to Theo Goodman it's the end of leverage as we know it in China Theo is this a good thing is it a good thing first of all I'm not I don't know I don't think it's the end of leverage in China but it's a nice title I like it I also like the mad bitcoins check it out mad bitcoins bitcoin and end of leverage just do YouTube search mad bitcoins and check out the latest episode it is a historical document in the history of bitcoin among the other episodes that will always be with us on the internet and if you want to go back to other boom bus cycles in bitcoin we'll just check out the mad bitcoins videos and you can see the panic and the euphoria in his videos in a short form all right about leverage all right all um I'm vocal fry and my vocal fry now am I better sorry ladies and gentlemen I had to make it through the snow to come to the bitcoin group to be on time and it was really rough there's a snow storm coming in the weather weapon is active in any case leverage is not bad okay leverage is a tool in order to open a bottle of beer you use leverage you're able to use you know multiply your force so you could use that for good or you could use that for bad I could also use a can opener to rip your face open that would be bad but it's just a tool as is leverage in trading now you're responsible for how you use it now to define what gambling is and what trading in is all that let's who cares you can decide that for yourself there's no one no one is going to be able to decide that for someone else that's very subjective it's there's all kinds of things that could be going on there could be hedging there could be who knows what all right so now first thing what's good about leverage that not many people are thinking about and it relates to bitcoin and the yeah gray area regulated or lack of regulation or self-regulation or whatever you want to call it is simply this you don't have to put as much capital at an exchange to trade because you can use leverage so let's say I have 10 bitcoins and I'm really worried about the price dumping on me could put one bit coin at an exchange and go 10x short and then I would have hedged my spot position that is it see how I did that now without leverage it would not be possible oh shit the exchange is hacked I lost one bit coin not 10 bit coins so you should put all 10 in there you got you got to get some balls out of your person go yeah of course yeah of course one 10x I mean shit you got to go you know and 100x of course go a bit max go 100x on 10 bitcoins not 10x not one bit coin 10x but anyway whatever you want to go 10x 100x I'd do a kind of like it's not really like options like a straddle exactly but you know theoretically you could do it you go long on one future and short on another future you go long weekly short biweekly you can do all kinds of thing like that so you can play with the valve you can trade volatility and so on you cannot do that with the packers too yeah but you can't do any of that without leverage okay so let's all right so let's everyone is talking about trading and gamblers and this awful and every in China and all that stuff so let's think about it on a payment processor and I have to hold I don't know a thousand two thousand three thousand four thousand five bitcoins overnight and the price dumps 20% that was pretty dumb right but if I would have be able to use some kind of tool at the moment all we've got is you know leverage trading in the form of futures or swaps or they're called swaps I don't want to get into all the we've got what we've got we don't really have traditional options to do that so one way would be to you know have some kind of leverage in order to protect yourself from that it's very sensitive okay now now now that I'm going into my um podcast you're just one last thing to wrap it all together why does all this matter as well as far as the so-called wash trading so-called fake volume and the infamous which might be the end of the infamous China vol-volumizer which was the Loch Ness monster of the Bitcoin market on the charts if you could spot the volumizer what I want to the first thing I want to get it back to before someone distracts me in the chat again is that if you want to have people use Bitcoin to buy stuff if you want to have people to use Bitcoin to do micro payments to pay people on YouTube if you want to have Bitcoin to be able to do stuff like aren't sports betting if you want to have people to use Bitcoin for anything it's going to have to go to an exchange at some point if that exchange has very little trading going on and is basically illiquid and has a lot of slippage that's going to make that whole situation difficult whereas if there's an exchange with a lot of trading going back and forth it has some volume where the volume comes from in that situation I just need to get my thing going and I don't need to have a lot of slippage right so it comes into use then it's very useful to have an exchange with something go with some action there not with a huge spread okay you got a parent process you know they got to think oh shit I got to go to the exchange oh there no one trades there anymore it's a ghost town the spread is enormous now I've got it now I'm going to have to you know calculate that in so all this stuff that you like about Bitcoin if there was not a lot of trading on the so-called evil China exchange is bad and they have automated trading and leveraging it so evil then you don't get all the good stuff too so there's a you have to think about the good and the bad and guess what do you really think that the Bitcoin price would have hit a thousand again without all this do you really think the Bitcoin price could go up without the volumizer hype and leverage I really doubted so think about that this is how it is this is the reality Bitcoin so you're saying China good so you say China Bitcoin down China bad you're saying that leverage is the son of Willey Bart no I'm saying that not exactly you know I mean I think that you know wash trading could be a distant cousin of him but you know that does not it's not exactly it's not exactly the same as we need to take every willy-bott comparison as into an individual comparison and not make blanket statements about willy-bott here in order to facilitate fake news about Bitcoin in any case I would really go away from saying leverage is bad we need to everyone that says leverage is bad learn about leverage what is it could it be used in a bad way could you get wrecked yeah sure you could but all the there's a lot of good stuff that comes with leverage too it's just a matter of how you use it and don't forget unfortunately there's no pipic cash leverage trading just yet but never know that's gonna come soon I really jump at you willey-bott had the unique position of owning the exchange so he had a little more insider data but go ahead so we are starting to move on to the next issue soon yeah no I'm just gonna comment and I got both things at the offset so look I'm a I'm a leverage trader in the traditional finance base I trade I trade futures I'm taking a little break from that I still trade options and always trade options are no options in Bitcoin because options are a very tricky leverage instrument now I don't have a problem with leverage but what happens in the Bitcoin space there's several problems one in the traditional space there's like one exchange there's one exchange for oil futures there's a couple but there's just a few and all you have are brokers so there's a lot of liquidity there right but there's science that has gone on to determine a proper amount of leverage that's not gonna blow up the system and it's also high enough it it like to do with some science that's going on in order to figure out a good amount of roll leverage it happens in the option space as well there's a reason why option strikes are like five dollars apart for stocks under seventy five dollars one stocks are over a hundred dollars these strikes are ten dollars apart and for a stock like Twitter and Yelp which I'm actually like those options are one dollar apart so to keep people more choices and I'm actually not a big fan of that personally but there is science is going on and there is testing going on will this give you more liquidity right none of this is happening right now in the Bitcoin space these exchanges are thrown out these numbers it's just for people to do it now I understand I have the same argument that you have that you're able to put the less of your capital at risk than an exchange being half and I agree with that but at the same time I don't agree with giving people a hundred x leverage I think it's ridiculous this market isn't liquid enough for that and you shouldn't be able to take both sides of a futures contract that's not supposed to be profitable but it is in the Bitcoin space and you can like alter the market with it by being able to go a hundred x on both sides well can have the capacity of moving the underlying and profiting from the socialization of a stupid contract on one end like and this kind of manipulation is common in the Bitcoin space and also the common from earlier about insider trading there are no insider trading laws in the Bitcoin world so you can really do whatever you want there's actually no insider laws for currency trading or future trading they don't exist you cannot insider trade those no matter what you do no one is going to yell at you for insider trading it's only unlike stocks so in the Bitcoin space those laws don't exist so of course you do it my speculation on day one of the monero was that it was insider traded and by the dark net markets before they added it which is how they made their money what a bunch of monero pre-announcement that you can go back to whatever episode we did on that day and that's what I said before any evidence of that came out and evidence of that came out I mean that's what you use Bitcoin for and if you can't trust the dark net markets who can you trust moving on to issue two issue two Bitcoin Ponzi India based Bitcoin mining pool GB miners who made headlines recently for supporting Bitcoin unlimited with their 3% hash rate has been accused of being a Ponzi scheme the pool seemed interlinked with gain Bitcoin a site that promises 10% monthly returns no matter what and add up the story was broken by Kyle Torpy from coin journal who joins us on today's program mr. Torpy what does this mean for the future of cloud mining can it be trusted what's really going on yes I remember a few years ago Gavin and Jason actually said most of the cloud mining schemes will turn out to be Ponzi's and it seems that he's been correct on that I'm not aware of too many legitimate cloud mining companies maybe someone else could on the panel could share but I know there's Genesis mining it's been around for a long time and someone told me there's a one connected the bit main in China that appears to be the legitimate but outside of you know a handful at the most all of them seem to be running some kind of scam so GB miners contacted me a few months ago because they were launching their pool and they were trying to do PR and marketing which is you know fine so they reached out to me and wanted me to cover their pool and everything and they had 3% hash rate so it was like okay they actually they actually have some hash rate that can't fake that really and they would they would say things to me that were just blatantly not true and I guess I don't know if they were I don't know if they just assumed that I wouldn't look into it or something but there were just things that I knew just because I'm at all I cover his bitcoins so I knew what they were telling me wasn't true they were saying things like they're the biggest mining pool outside of China which obviously bitfurious I don't remember what the other ones were off the top of that but there was just like little things I was like all right well that they're still doing marketing I guess and they're probably just fudging the facts a little bit and then someone gave me a tip about a thread on the Bitcoin talk forums where the founder of gb miners is being connected to gain bitcoin which is a cloud mining scheme gb miners is the mining pool so I looked into that and I didn't really see anything at first and then I saw that they're guaranteeing 10% returns for per month so it's like you know this is a Ponzi scheme obviously and the returns are actually even greater than greater than that compounded because they pay out twice a month and it's 5% on each payout so I calculated that annual compounded return and it's something like 200% or over 200% that they're saying that you can get out of it so in terms of why it's a Ponzi scheme obviously the 10% thing is a good giveaway but there's also other stuff like they have their own Bitcoin mining calculator on their website and it says if you have one Bitcoin worth of mining power purchase through them which is 1.5 terahash it should give you 0.1 bitcoin per month in earnings which is not true at all if you go to any other calculator it's something like 0.04 per month and that's ignoring like all the costs going to mining electricity and everything and the way game Bitcoin works it's a multi-level marketing system so they have all these referral payouts that they have to do on top of that so there's there's no way they could be making any of those payments at all but another thing is they sell cash power for four times the amount of Genesis mining they do a thing that another cloud mining scheme did back in 2015 that are covered for Bitcoin magazine where they're offering a discount on the offer a discount on like this contract that's a 100 Bitcoin and they're offering it for 86 Bitcoin so there's like there's the prices that they offer just don't have no direct connection to what they're if they're mining at all in the background and they kept the the dynamic their contracts and Bitcoin they didn't change the prices at all for the having after that happened they didn't change the price at all for the entire year even though the price doubled and I asked the guy who runs a GB miners and is connected to game Bitcoin about that and he basically said that Bitcoin the price of Bitcoin doesn't affect his business which is an absurd claim because like if the price went to zero then you wouldn't have a business at all yeah that's a that's a really dangerous statement to make unless they can qualify it by saying we have X source of funds which allow our horizons to be almost infinite so yeah I agree with you that that's really sketchy well I did I didn't put this in an article but someone this is just a random person so I don't know if it's true at all did say uh at a meet-up somewhere amid a barred watch said that he has the way they're making the payments is that he has a stack of Bitcoin that will keep the system running for 25 years or something like that which is obviously another absurd claim so it's just absurd claims of course if you're not a stack of Bitcoin like that why would you even bother running in exchange yeah there's there's a bunch of different flaws that you can poke at in this uh yeah there they were also going to be they were about to launch or I don't know if they even already launched Satoshi Studios which was going to be an incubator in uh southeast Asia for blockchain startups and stuff uh a met was a investor in that along in Roger Ver was uh about to be an investor in it and I talked to him about it in he seemed to think everything was on up and up with Satoshi Studios I haven't talked to him since I published the piece I don't know what he's thinking of doing now but maybe I'll talk to him later and add it to a follow-up piece or something the good name of Satoshi drag through the mud again Tony what do you think of uh this Ponzi scheme a legend oh man it's bad look there's just more scams and ponties in a Bitcoin space like Prokapeta than probably anything in the world it's it's really rough I also don't believe in cloud mining we lead the world in Ponzi's we're number one yeah no I I don't believe in cloud mining I know I know Marco from Genesis and I know um what's his name uh Joe B. Weeks from BitClub they're nice guys I don't believe they're scamming people I think they're trying to run legitimate companies but I believe their business models are just unsustainable and sooner or later they're gonna run into a problem and when they run into a problem problem immediately it'll be like a 1% problem I mean if they're really doing it right then like Genesis mining like people's payouts which gets smaller and smaller and smaller right if they're doing it honestly but if there is a miner screw up there's a miner screw up you're gonna wake up one day and you're gonna realize you are 1% short at this point you are 1% short and at this point as a company you have to start making decisions now the best decision you can make at that point is to come out publicly admit that you've come up 1% short and you give everybody 99% of their money back but nobody does this right they don't want to admit like no one's gonna sue them for that extra 1% I mean people will be happy they got 99% of their money back what happens most of the time is they try to come up with other incentives to double down and they cut the 1% and now they're down 2% and then they have to make a decision do we keep going for a full blown Ponzi or do we take the money and run some take the money and run some end up you know losing 50% and the whole thing blows up and then they have no money and then they go to jail right kind of like or gars up but gars is not in jail yeah anyway so I don't believe that these cloud mining are going cloud mining schemes are going to work this one is very clearly a Ponzi it's it's frustrating that like I can't do even like convince people about it we're gonna have to go through it and now here's the thing that I that I learned that I didn't learn but I read the great article by the way Kyle great job really really top notch work here's the thing like you read these things and like these schemes are getting more and more kind of alluded they're getting more and more complicated and that tells you that the level of the scammers coming into the Bitcoin space are more are smarter and they're more you know they're making the scams more and more difficult and then when you try to expose them they put up this fight then lyrma is probably the expert at this right like they're making steam it so freaking complicated and convoluted with their economics so it's the same thing it's like like obscurity and complexity is not a feature also doing the same thing right so it's like all of this complexity is adding to it which also means that the level of the scammers is kind of high so we have to deal with it as a community if only they'd been cloud mining pay coin or one coin this never would have happened Blake Anderson I think Telen has a really really good point I mean the people that are coming into Bitcoin to try to scam the people that are smart enough to know about Bitcoin and why it has a value proposition they're going to be a lot more able to fool people like I'm a Nigerian prince and I need your security numbers so I can get money out of the country most people know about that or most people know if the IRS contacts you and they're like hey we need some money from you can you get your friends to loan you the money that you need for us people know that the IRS takes tax they don't have to go around collecting it though you know basically garnish your accounts and stuff but the Bitcoin scheme is with the crowdfunding and all that kind of stuff the people that basically it's an emperor is wearing clothes strategy like look at the emperor's amazing ropes they're so great they're so elegant they're so or neatly decorated and then if you say you know what I don't see the clothes or I don't see the value proposition in this extremely complex you know self reinforcing rationalization happy plan people like oh we you don't understand it what are you dumb and then believe it or not people don't want to admit that they don't understand it and they don't see it and they invest in something that they figure is a really good investment because somebody that they saw as smart said it was a good idea so I would say that you know I guess the lesson to come from this is if you don't personally yourself understand the value proposition of an investment absolutely if you don't have an absolute grasp of it for the love of God do not do not put any money into it that you can't lose um you know I mean I guess if you think it has an infinite upside and that you don't need to understand it because you're extremely lucky I mean I guess that's up to you but um really uh you know know thyself be skeptical and uh don't try to say that the emperor's clothes are beautiful when you can't see them that's a great that's a great point great great point and I would agree with what tones that as well that so many of these scams are so well designed that uh as an average normal person you have no way of seeing through it sometimes it might not even be possible so you don't even have the inkling that you're doing something shady you just you don't even have that yeah okay to add something on that I think this article probably won't even do much good because like to like to tone said everyone in the Bitcoin community it's obvious that this is a Ponzi skin but they're not targeting the Bitcoin community they're targeting the normal everyday guy in India it doesn't know any better and Bitcoin's a very very complex topic and very hard to understand so uh i mean i hope that it does some good but i know that some Indian news organization is supposedly also working on something so we'll see if that comes out as well well hopefully people in India are watching this i mean i don't think that's uh i mean if you build a thing will come and if you put the information out there i mean i think it'll do more than zero good i really do that's a good point though collette they are targeting non Bitcoin people things like one coin has had so many seminars and meetings and i don't even hear anything about it because i've just not in that circle but the people who are in the circles are in danger because they just don't have the knowledge of cryptocurrency to know if they're making a good decision right no no one one one coin on account no and you're right they are so this is why we really hope to get get help from those Indian exchanges like one coin uh that can kind of speak out against a lot of the stuff and help the people in their local community um that these things are scams because they're focusing on non Bitcoin people just like one coin the reason why i picked a fight with something like steemit and i've ignored one coin you you never really hear me talk about one coin because my my target audience is Bitcoiners and it's obvious for them like if you go to like the steemit website they all talk about how obvious it was for them within a minute to figure out that one coin is a scam steemit which is why i picked a fight with a steemit community because i'm like but it's the same thing as one coin how come you can recognize that one coin is a scam within 60 seconds but you can't recognize that steemit is a scam after three months of writing on steemit um so we have our own problems within the Bitcoin space they're the same it's just the target audience is different and those scams are way more complicated and way more convoluted but now the scams for the non-bidcoiners are getting complicated and convoluted to the point that bitcoiners are struggling to identify the scam and we're saying well it's obvious to us i'm so it's obvious just look at it it's obvious we're screaming at these people and they're like well how is it obvious and we're like crap i mean like this guy has convoluted this to a point to non-bidcoiners that bitcoiners are having a problem scam even though we know it's a scam at least we're leading the world in some on the point with the exchanges zedpay did put out a they did like a live chat on facebook or something and they did like the first thing they did was say this warning about they didn't name gain bitcoin specifically but they said they were aware of these cloud mining ponzi schemes and they're very clear that their scams and the profits they offer are not possible but another thing with more people talking about this is it's kind of an issue because of the level of corruption in India a lot of the people that i some of the people that i talked to didn't want to go on the record or anything because they were scared of some type of retribution i don't know if that's maybe why the exchanges don't talk about it directly and like specifically point them out but uh yeah it's also got to be hard from their perspective they're just running a business they don't necessarily want to call out other businesses that's not good for business uh but yeah if you're giving away 10% returns and saying it never goes down the price doesn't affect you it's pretty bad feel good man your thoughts um my thoughts are i have a message to all cloud mining operators and all that kind of stuff guys just call yourself a ponzi it would be better you don't have to like okay let's think about it uh last year we had mmm right it was a huge success a lot of people made money now but they said we're a ponzi now i'm totally okay with that you see what i mean they're just up front and they're like hey this is a ponzi you know this is how it works we've got like this mega payout mm thing going on and you know it's it's a kind of pyramid scheme form or whatever you want to call it you know we've got to hooked up the social media and we're going to do this thing in bitcoin makes it all possible because you know we don't have to use banks basically so that's what fuels it and if they were just would just come out like that look at the success mmm had in the i mean success as far as a ponzi it was probably the biggest bitcoin ponzi success that i know of so you know at least just come out with it and say hey we're you know cloud ponzi or i don't know what you or whatever you want to call rebrand yourself whatever you know just be like hey look bitcoin mining it's just not working it's not really profitable there okay and for everyone there are no lifetime contracts that's my favorite one all these places they say lifetime contract it's so great yeah lifetime contract yeah lifetime yeah you gave me your bitcoin i hold it for a lifetime more like it it's really just you know that's the i think it's probably the one of the best um sales lines marketing lines that have lifetime contract earn wealth for a lifetime you know your mining contract never expires a strict as soon as it doesn't pay the txv then you don't get anything which doesn't take long depending on how the difficulty is and everything it's just so it's pretty simple i think these things and if you're interested in cloud mining schemes which i would just openly call them as that fine it's kind of like a form of gambling or something i mean you know it's maybe it's possible to make money if you have well actually the way you make money on it is affiliate earnings that's the only way to really make money on it but you know just look at it if you were to market it as um betting on these cloud mining ones how long it's gonna last and i think that's okay way to do it just come up you like hey we're betting on these scams which one's gonna last the longest that's a good way to do it so i think that's the best way to approach it and uh that's what the people promoting them the affiliates affiliates of these stop being trying to be all serious look at me my oh wait here we go i got my big mining gear here and we're mining we're mining Bitcoin check it out cloud mining you click my link below um we've got this thing go yeah check it out just just say look look it's not even hooked to anything see you just anyone can get one of these they don't cost anything i could put secure cloud that's secure i could get i could put you know like five of these behind me probably cost i don't know hundred bucks or something to get you know five s ones it looks really cool i got a nice picture if i'm really clever with face but uh face if i'm really clever with photoshop maybe i can just take Jeff Garza can zap him out of the picture i put myself in front of a wall of miners you know look all serious just quit all you people everyone promoting cloud mining stop being serious like you're really promoting mining just say look this is a cloud mining scheme get in why you can and maybe you'll make money and that's how you should promote it just be honest that's the only honest way to promote these things just be honest and do what the Russians used to do just put mirrors around the missile and suddenly now you have more missiles Gabriel divine yeah i like that this is a definitely like a hall of mirrors that we go down when we discuss all the scams in the crypto space and uh you know this whole thing that i gotta say you know Kyle it does do good the awareness that you bring at least it spreads to the crypto and the bitcoin community and it spreads a little bit outside that into the tech community and you know gradually increases awareness and in this case the connection to uh to bitcoin unlimited specifically is totally fascinating to me it's so ridiculous and and over the top to have this new mining pool running bitcoin unlimited uh and then to have the CEO just so transparently involved in a scam is so um over the top that it just makes me think it might almost be an intentional project you know by some bitcoin whales are like hey how much is it how much is it going to cost us to um you know do this scheme and make bitcoin unlimited look really bad oh yeah i only need like three four grand i got i got you know um seven hundred thousand bitcoin laying around so you know from from 2009 so you know here's six go out there and uh you know make a mining company don't even buy any actual hashing power just rent some from in it and from my friends and and then you know make bitcoin unlimited look really bad because we want you know bitcoin to live a long time and then he's unlimited guys are making too much noise i mean it's just totally ridiculous i i i would think that the bitcoin i mean bitcoin unlimited is way less of a scam than a straight up Ponzi scheme so i'm assuming that big quantum limited fans have got to be anguished about being associated now with this straight up pyramid scheme Ponzi uh you know they must be really upset about this and i think it's i think it's hilarious um and basically what i think really happened i don't think this whole thing is a scam to undermine bitcoin limit i think really what happened is uh the uh gb miners scammer cio guy saw that the bitcoin unlimited uh fanboys are the more um uh what's the word i'm looking for credulous sector in the space and therefore decided to focus on marketing to them to get the stupidest of the stupid to actually throw down some of their hard earned or hard one uh you know crypto sound assets bitcoin into their extreme scams so that they can pull an exit and just rip everybody off um so that that's what i think is kind of going on on on the larger scale with this project and um you know an even larger scale unlike tone unlike uh some of the thoughts and opinions that i'm hearing today i think this is wonderful i think the more scams the better bitcoin is anti-fragile so scams like this are just nothing it's like a fly on the horses back so this the the tail of uh you know of crypto hard assets the tail of intelligent investors intelligent people in the space will easily whip uh you know scams like this off it's off the back of the ecosystem and what it is is like a this tiny viral infection but you've got this tiny slice of the pie of crypto aware people who are taken in by Ponzi schemes one coin you know people get brought into the ecosystem for that type of stuff or they're already existing there people like a friend of mine who got taken in by big club who big club might not be a Ponzi i don't know maybe they can keep up their 30% returns or whatever they've got right now it's not 200% but um it doesn't seem like it's very very high risk and i advised him against it but um you know they're gonna take in these people the people will get fleeced they'll lose all their money and power in the ecosystem and uh you know the intelligent people will go on to make another scam just like uh net uh did with um you know going from uh bit no excuse me pay coin to steam it and you know these the successful scammers will get more sophisticated but at a certain point the people are just you know everybody in the space gets really jaded and does a lot of diligence and then you what happens is the people that everybody turns tone cold right exactly and not only do they turn tone cold they also look to tone and uh Kyle other thinkers in the space and Drayson to not below you know um Peter Todd block stream guys people ask these those type of people they're opinion about things and if they have time to look into they give their honest opinion and the more they're correct in their judgment about these scams the more clout they gain and then it's like hey i've never been wrong about a scam before and i've exposed these 16 scams that have all collapsed since because they were scams the whole time and you were too blinded by your greed to see it for the 17th one maybe you should just not give them your hard earned sound crypto so good point and just remember how early we are in this this is new money you can use it to buy drugs prostitution or the dreams of getting rich and people never get tired of buying the dreams of getting rich this is a great product to sell i bet you can say good just come to think let me just comment something real quick um so i i haven't been happy with untrace and tenopolis uh lately in the space and by lately i mean over a year um he was looking at ripple way too positively he was looking at a theory i'm way too positively he was looking at the more the thought leader and be way more critical of some of these projects and i like andres i just think that he's way optimistic and he's not he's not questioning some of these projects like i believe that he should also uh gave i think you meant that lairmer going from the chairs to steam it um you just just to correct that um one last point in these pannies right and i realized this during the thousand eight crisis because of burning made off um we have to be really careful and i kind of wanted Kyle to talk more about the ddo s attack that happened after he published the article um maybe he can do a very quick comment and over a dragon on this topic for a while but there is danger there is an element of danger and this is where i disagree with Gabe that oh let these pannies go and stuff no no no no they need to be squashed because here's the problem as this pannie becomes powerful that people behind the pannies get incredibly rich as they get rich they become powerful um one statement like as as i you know go go against place things like steam it like a theorem like in the back of my mind i do worry a little bit and the reason why i worry is because after burning made off went to prison there were interviews with one of the guys that was trying to expose burning made off for like five years before the two thousand eight crisis he was keeping track of everything burning was doing he was like following burning's funds he was trying to report it to the sec and he was doing all of it anonymously because he didn't know if burning made up had people at the sec so the sec wasn't taking him seriously but then there were interviews with him after burning had gone to jail and he said i had to do it anonymously because burning had so much money i was not going to put myself or my family in danger trying to expose burning made off as a pannies schema and this is what i worry about for us and for people like Kyle because if this pannies is gets to the point where the owners of this pannies are so powerful and they know Bitcoin it is possible for them to do something malicious to you and your family because they have the money and the means because they're a scammer and they're illegal to do something you know very bad and you can let your imagination run wild so you do have to be careful and saying that you know these pannies let them go and they'll eventually collapse is very difficult on guys like us that are putting our faces out there trying to expose them as they get more and more money i think everyone gets the drift well i think you cut a little bit miss and and thank you for correcting me yes Dan Lairmer is exactly who i meant um i think you little bit misunderstood what i was indicating there i'm definitely not uh saying that we shouldn't fight with everything we've got all these scams uh they're absolutely terrible they they need to be they need to be fought for sure my point was simply that we will fight them we will win the immune system of the bitcoin ecosystem will become therefore stronger and it's nothing to worry about it is something to spend time on to warn people about to actively fight that's kind of more what i meant and i also appreciate what you said about andreus um who i called out as my big corner of the year because of his incredibly great uh analogies about bitcoin and things like that but i completely agree with you 100% that he isn't skeptical enough on some new projects for sure i agree with that just a comment on some of the things tone was saying those kind of thoughts did go through my head before i published this i even thought about publishing it anonymously and like i said uh a lot of the people i talked to didn't want to go on the record at all just because they were uh worried about that type of thing uh in terms of the the the dos attack i'm not too sure in the details of that uh the guy who runs coindry and all did say there was some kind of attack going on this morning but uh when we were talking last night he said that he was gonna i don't know how cloud flare works but he uped whatever he like made cloud flare work better paid more i don't know he prepared exactly these these dos attacks can be very costly to journalists it's enough to try to keep a website online but if you have thousands of people trying to attack it to bring you down you have to pay more uh you don't necessarily make more money for that article if people can't read it it is a major issue yeah it's it's a problem it's a problem there's very little money in you know journalism and keeping that alive and if these scams are making money they have the capital to like ruin your company for one article do you want to add something oh i just wanted to say that uh this is a very regular occurrence for all uh crypto rags all bitcoin um new sites or whatever you want to call uh any of them that have any kind of traffic get ddo s on regular basis a small or middle or big or whatever uh it's a constant thing now i don't know if it has to do with um it could it could be related to articles it could just be related to uh maybe even who knows what but it's a it's a pretty regular occurrence but uh guys it's not gonna do anything so just give it up i believe i believe that the attacks come from people that are running botnets we have a lot of computer scientists and computer nerds in here if you have a botnet and you want to use it for something and you can't think of anything and then you think maybe you can affect the price by trading in a certain way and then preventing an article from coming out before you can make your trades i think that that's where a majority of this stuff comes from is people wanting to use a botnet for something that they've either scripted together or put together themselves hey guys i was i was just fact checked let me let me just correct myself so people in the chat are saying they don't recall andreus ever speaking positively about ripple um i could be wrong on that i just heard other people be critical of andreus uh speaking positively about ripple i so if he never did uh that is misinformation on my part i do apologize to andreus in case he hears this uh but i i'm not gonna go back and look for one andreus set up on ripple three years ago i just don't have that kind of time nor is it important to me but i heard other people be critical of andreus about ripple in the past that he wasn't critical of ripple so that's where i'm getting my information from um so if if he wasn't then um sorry andreus i think that uh blake but it brings up a good point with the uh crypto locker and with the information about that because basically it's all the old tricks it's having a botnet it's encrypting your hard drive but now you can combine it with bitcoin we can have a botnet maybe we can affect the bitcoin price we have take over your hard drive maybe you can send us some bitcoins so we're seeing mod you know advanced modifications of that uh go ahead and kind of like it's too late now it's too late now it's it's gonna be on the next a new say right now to turn it's too late tone vase tells the world that andreus on tenopolis uh is positive on ripple it's you know it's gonna be on coin desk and uh bitcoin magazine and but coinist and bitcoin news is and everything else tomorrow just be aware get ready for that and vdo s is incoming Kyle's already typing away uh anything else on this issue Kyle before we move on to the next issue just give you last word uh oh yeah with the game was talking about this uh support from bitcoin or support for bitcoin unlimited from uh gb miners and i did notice i've been trying to read it a lot less lately but i did see the thread on rbtc about the uh gain bitcoin or based on article and they didn't seem uh that convinced it was a Ponzi scheme they they kind of viewed it as an attack uh on gb miners because they ran bitcoin unlimited but i also talked to to write yeah i talked to uh about uh why he was supporting bitcoin unlimited and that was part of the reason that became more convinced it was uh Ponzi well i always knew as a Ponzi scheme the the thing i was trying to figure out is the connection between gain bitcoin and admit uh but yeah a lot of his answers on that uh interviewed seem i mean he said that he'd be all right with a hard fork with only 60 percent of the miners supporting it which is something that even i don't think many bitcoin unlimited people would even say you can always uh make money during chaotic periods so now let's move on to issue three issue three bitcoin prices down except in India economic conditions and the war on cash combined with a roboost bitcoin infrastructure have led to a current market price around $972 on the indian exchanges a full 17 percent higher than average the circulation of national currency in india has been cut by 50 percent is this the perfect storm is bitcoin going viral in india tone veys oh did they realize i was going to be first for the story um yes and no i mean bitcoin maybe going viral in india only because they have like a giant population but because the average person in that population is very very poor then uh it i don't think it has all that much of an effect right like just because like bitcoin is over a thousand dollars in india i don't think it registers um across the world because the amount of buying that they're space in europe and china in the u.s like dwarfs the amount of buying that they're space in india also it's a supply and demand i mean if you have a lot of demand and not a lot of supply prices will go up it will eventually normalize a bitcoin is starting to go up again it'll probably be a thousand dollars pretty much everywhere and the most likely the appreciate like it's not going to go like infinitely higher right like right now if india is over a thousand dollars and if we go back to a thousand dollars india will just stay where it is where it will go up at a much slower percentage rate than the price of bitcoin everywhere else until they eventually normalize um and again opportunistic people will take advantage of the situation like if i was in india why on earth what i sell bitcoin at price at at market cost especially when it was over a thousand dollars like earlier and those that follow me on twitter you know that i every month i publish the bitcoin maximalist uh bitcoin month and price where i take the global market cap of all crypto and i divided by a number of bitcoins outstanding and if someone comes to me wanting to buy bitcoin that is the price i'm quoting them right i'm going to the premium and the bitcoin that i sell to people that want to buy it from me is that and almost nobody buys it because that's always like a 15 percent to 20 percent premium but i tell them exactly how i get this number uh there you go that's the number for my bitcoins and uh so i'm not surprised by this like i said before i don't believe india is going to lead the wave of adoption i think what's happening in india is um is the headlines right it's the headlines that reach out nationally that is what um what will draw what is helping to drive the bitcoin price so not necessarily what is happening in india but the idea that this could be happening anywhere else is what uh might actually be be helping to drive that um the price in india as far as uh bitcoins technological ability uh to go to this um digital world of crypto um actually had a nice uh picture that i pulled out from a hardwood study uh let me look for it i'll let other people talk and then maybe get back to me at the end but that's basically my views on on india and we've talked about indian many times in prior episodes so listener should definitely go back to those it's a good thing the tone's not running the exchange i think we get a better price from that bear lake anderson well it's interesting i mean definitely i think that in india there's very very many reasons to like and to use bitcoin some people in america and stuff are like well the dollar works fine i mean it might be inflationary over a long enough period but there's not a whole bunch of really you know visceral reasons to use it right away that's not really the case in india india it's got a lot of uh turmoil in terms of economics and their power grid and all kinds of different stuff we have lots of people hungry and starving and living in poverty and they build gigantic just completely disgustingly huge airports and stuff like that so in terms of what their country is using their money for and stuff like that i think that that sent a large signal to all the people to look at you know how and where their money is coming from where it's being spent and they're like i want to go ahead and want to withdraw my consent from those operations a lot more than maybe somebody in the united states would be motivated to do so is bitcoin going viral in india i don't know if it's like a viral trend that'll continue to increase in like you know the permanent viralness but i think that there's definitely very very strong reasons why bitcoin would do well in some places even more so than others china and india obviously being two of those but i think that china is kind of moving away from being similar to india and trying moving towards more free markets i don't know quite yet that india is you know doing things to really do anything to prevent their continual overheating cycles and maybe not spending money as well as they could in regards to how they treat their populace and stuff like that not that i'm a huge fan of government programs etc but i mean you know there there's limits to everything Theo Goodman the question is bitcoin going viral in india and what's up with the premium why is it so much direct sir okay excellent thank you very much host um well i don't know if it's going viral or not it could dump could totally dump the premium could go away tomorrow maybe somebody realizes there's a premium figures out an efficient way to arbitrage that and it dumps and then we don't have an india premium anymore i think part of the reason the premium is there is it's not quite as easy to move funds in and out of the exchanges as it is some of the other exchanges that are in the west it's not that easy to do as it would be and that is one factor in the premium i think um i don't know i'm not in india so i can't say if it's going viral there or not i definitely agree that it looks pretty good the the future if the government keeps on clamping down on um you know gold silver and things like that that are very traditionally you know used as a store of value in india then of course bitcoin does make some some logic there as an alternative especially for moving it you know overseas of course that's a logical choice there um and it seems like the regulations on banks on people moving stuff around is just increasing so it has the potential to go viral but i wouldn't say it's going viral just yet just because as bitcoiners see that there's a few exchanges out there and it's over a thousand and we think it's going viral i don't think it's just yet it's just probably but maybe on the good side it's probably just started it's probably just now getting started and um yeah let's see where this goes hold on to your horses india it's not pepe cash yet gabriel divan yeah you know um i am of the opinion that 2017 is going to be the year that bitcoin begins to be utilized as a money and as a store of value by some larger populations in the world almost certainly all of which are outside what we call the west and uh so but not including south america and that so i'm thinking south america i'm thinking asia and i'm thinking africa primarily for the uh start of mass adoption i made that prediction back in 2013 and from everything i can see we are now setting up for it and i have a feeling that lightning and other payment channel tech will come just barely in time to handle some of the transaction volume demand coming down the pike um and i want to point out in regards to viral uptake viral infections grow at an exponential rate and exponential charts are barely more than linear for the first half of their existence until they hit the knee of the curve and then they go astronomical so yes big coin is going viral in argentina and venice wala and russia and turkey and india and china it's just that those numbers are still so incredibly small it's only the nerds it's still we still have some security and user experience major hurdles to come over but nevertheless yes it is absolutely viral it's been it's been viral for seven years it's just that even after seven years it's still quote unquote only single digit or double digit millions now you would have shocked and exploded brains of the very few nerds that knew anything at all about bitcoin in 2010 by saying that we would have 20 million or 15 million or 8 million users in seven years there would be shocked too by the price of $50 $1080 in india at this time so i don't think that the premium is any surprise we're going to see continued premium around the world in these type of markets where there's extremely high demand and very little liquidity which is the case with a sound asset like bitcoin there's huge premium for golden silver all over your all over Asia it's a very similar effect with you know and this is not for paper and there's even a little bit of a premium for paper at golden silver in china for example but for you know spot prices for metal in a store you're looking at 15 20 25 30 40 50 percent because it you have to card it on on a donkey to your village you have to get it on a ship to where you're going and bitcoin even though it can be moved easily the the fiat moves slow so liquidity is low demand is high we're going to see continued viral adoption just wait for that knee of that curve my in my opinion and my prediction it's going to happen this year next well even if it's only the Chinese and Indian bitcoin nerds i say welcome aboard Kyle Torby yeah so with the adoption of bitcoin as money this year with with Gabe was just talking about it's possible i think venezuela is probably the best case very possible place where that would happen right now but the problem with the place like venezuela is the government can just shut down the internet too so and they've done that in the past so it's going to be a difficult situation where a lot of the places where bitcoin might take off the government also has a lot of control over the infrastructure that bitcoin runs on in terms of adoption in india i think we already talked about a bitcoin's killer app in india which is game bitcoin that if you want to run a ponzi's game bitcoin is a great tool to do that outside of like normal use cases like gambling ransomware and stuff like that i did talk to sonny ray from you know going a month or two ago and he was talking about different users and the one that he pointed out that kind of made sense was freelancers in india when they get paid from abroad like to use bitcoin because they'll get much more than they would otherwise get if they're using something like paypal but first of all the fees are lower and there's because of the premium they're basically getting a bonus when they receive bitcoin and then sell it on uracolin right away so it's like not only are the fees cheaper but they're actually getting paid more because they're accepting payments in bitcoin and i asked him about the premium but this is probably i think it was a month maybe two i think it was like a month ago he said the premium had gone away so i hadn't read the article that you posted but as far as i know the premium has mostly gone at this point because they even unocoin i think was looking in to try and do some type of arbitrage but the problem was the capital controls in the country made it difficult for them to get money on uh us exchanges or exchanges outside the country hey let me i think for the uh the veniceuela issue veniceuela would be coming from a position of extreme weakness in the bitcoin and while the indian economy is faltering they are a little more strong so it would be interesting to see them try to adopt bitcoin rather than veniceuela with extreme weakness uh sorry town good oh it's like i was gonna jump right back in here so for those watching it live i surely recommend reading this article from a hardware business review and it's called the countries that would profit most from a cashless world i found this article very very fascinating and some of the links that this article references from other academic studies on the removal of cash i mean i really enjoyed it and some of these graphics actually took me some time i'm like wait what does this mean this cost of getting cash around the world index and this was really really interesting i'm actually going to be presenting at the hakatan in about an hour my presentation and i'm going to talk about this hopefully i'll have time for it in my presentation and they identified very well the reasons for the elimination of cash which has to do with the ability to make negative interest rates and removal of bank runs because if there's no cash there's no bank run and you know collecting all the possible tax revenues so it was a very very um i thought it was like a great article now what this shows this picture here can it is they have a color coding this is the cost of cash in the in the country right so if it's blue that means it's very very cheap uh like the government doesn't spend much money moving cash around the country so like stocking ATM machines or processing of cash payments for businesses like to the government like the cost of the government over having a cash system in that country is very very low like now us is moderate because us is pretty cash-based society and also us dollars move around the world so i'm sure a big contribution of the us you know making sure that their cash is legit also payments let's say government has to put all these efforts to make sure their cash is of counterfeit so they have to you know come out with new and advanced bills things like that and then you look at Europe and it's red but you're like well German he's a pretty advanced country Italy's a pretty advanced country why is it such a high cost uh for that government to have cash there in this in this article it explains these things and indian china are also red and then they have this index here and this is also again you have to like really i was looking at this for a while i'm like what the hell does this mean and why is India such an outlier and uh what this is like the higher you are like over here so the higher you are that means the more technologically you are ready actually society so the lower you are that means the crappier your digital technology is and the more you are to the right side is means the more you get out of removing all the cash so like germany belgium and france um their government will save a lot of money by removing cash and they're digitally capable of removing the cash because people are pretty advanced now india is here which means that india had the most to gain out of all these countries by the removal of cash which makes sense because 80% of that country runs on cash and that it's way more tax revenue that the government isn't getting because of a cash society and this article points to it directly and they have the numbers which is again this is an amazing article from harbor business review on the elimination of cash but india is so low on a technological level and they specifically talk about india and how india is not ready for the elimination of cash because of a large population and um here anyway so just uh here here's the headline i'm sure you can google it i strongly recommend um this article for people so it's very very like fascinating to the world that india is trying to literally jump from here all the way to here and i have no idea how this experiment is going to work but i i just wanted to uh point to this also a one quick comment on san ure here runs an amazing meetup um in toronto i'm going to go ahead and help you re um okay i will be speaking at san u uh one of the meetup that san ure helps organize in toronto on February 6th so you're in toronto i definitely come down um and support excellent and let's move on to issue four issue four back page backs out due to intense pressure from the u.s. government the website which hosts advertisements for goods and services has shut down their adult sections the outcome is similar to craigslist with shut down similar sections in 2010 back page famously blocked by visa had turned a bit coin to allow users to purchase adult ads is this the end of online adult advertising forever and bit coin black anderson what's tough i mean it's going to be the end of it forever obviously not but at the same time i mean people that are the law or the government or whatever they have an obligation to preserve the negative rights of people especially people that you know are minors or that for whatever reason are you know mentally retarded or people that are more vulnerable on society so they want to say you know uh people are being you know sold or um basically sexual acts for minors and stuff are going on over this network i can see why they would definitely be wanting to stop that but i think what happens is so many people that work for the government and government positions want to make their cause or something really really known and they want to not just protect uh the children they want to virtue signal in terms of we're going to constantly be assaulting this medium no matter what they're doing to try to get the entire thing shut down and uh it sounds like that's what back page felt was happening it wasn't just when there was um malfeasance possibly going on but they were being hassled but they were being just continually investigated and hounded and haranged by the government until they were just no longer willing to uh run the the thing so i mean i can understand the the motivation to want to protect the negative rights of minors but at the same time it seems like uh the government really i mean this is a microcosm of how the government tends to become over zales and maybe harass people more than they uh become a level headed arbiter of justice so yeah it kind of goes both ways i can see why the government was wanting to trying to protect people but then people just perseverate over you know oh we know that this one medium has the risk for that we'll just go and constantly use all of our time uh to harass them and then it'll look like we're really getting stuff done when really we're just going after one actor that maybe had the potential do something bad maybe their death society was not exist or paid but we continually went to uh go harass them until they were unable to even survive so it's but maybe not handled the best way at the end of the day uh to say the least it kind of seems like a golden shower of morality that just trickles down from the top Theo Goodman over it's done now it's okay on to the next on to the next no big deal people are going to do what they want to do on to the next no big deal people will figure out a way no big deal there'll be a new platform it'll find whatever other loophole that exists you know the authorities will then you know close that loophole there'll be another loophole it's just the same thing same cat and mouse uh game that's going on and of course um Bitcoin is a great tool for it and now people uh learned uh probably a lot of people learned how to use it and are really used to using it and it'll be even easier to make some other new platform refine some other way to do it and they'll just probably keep using Bitcoin and uh you know just go on because they learn their lesson about using Visa and other methods so it makes it even easier for people just to adapt in my opinion if anything the major loss would be the whole cottage industry of people teaching escorts how to use Bitcoin so they could post ads Gabriel D Vaughan I have one word with two hyphens in it whack a mole there are so many Kyle Torpy yeah I agree uh I don't think uh what back page is doing is going to go away just because they're not doing it anymore just creates incentive for someone else to start that business maybe in another country maybe uh overture it's going to be built either way but the one thing I mean this uh basic use case for Bitcoin like when the government tells you you can't do something you use Bitcoin to get around what they're telling you to do uh so it's uh besides like uh ransomware and stuff like that it's like I like these kind of use cases where people are actually uh like it's they're not just using Bitcoin because they feel like it or because they like it they're using it because they have to those are always the most one interesting use cases to me and it makes me think about uh like the Horace Stofy's in the world I wouldn't wish ransomware on anyone but I wonder what his response would be if his computer got ransomware and the only way to get his files back was to buy some Bitcoin and uh send the payment I wonder if it just it'd just be really funny to me if Horace had much force to use Bitcoin even though again I wouldn't wish that on on anyone it's a time to pay and as we all know these centralized points are really centralized points of failure tone days hey guys so I decided to literally do research on this topic right now as you guys were talking so think if we're getting to me last oh yeah research that's what they're calling it now I perhaps it should not be appropriate for me to share the screen right now but I don't know well I guess it's up to you Thomas but I've already found where everything has moved uh so uh the sections are canceled but if you go to and this is the whack-a-mole uh this is the whack-a-mole that uh Gabriel had a perfect answer I also understand why he had a very short answer he's enjoying his snuggie are you in California or in Moscow where it just hit minus 40 um it was an interesting discussion earlier today somebody was talking about the temperature of the Moscow minus 40 and they they were talking to me in Celsius and the person is like hey so are you able to like convert Celsius to Fahrenheit because you're American and I'm like it's really easy at negative 40 at negative 40 it's actually the same whether you're in Fahrenheit or in Celsius uh which tells you how cold uh Russia actually got but wait so that section for those that are interested has now moved to women seeking men so those that have been resourceful um with their ads those that know how to use Bitcoin uh have moved all of their ads to the women seeking men's section on back page so go ahead and you can still get whatever you need and if that gets shut down and I understand why it sort of got shut down this is why you don't run a company like this publicly and the CEO of your company should not be flying through America where he got arrested and the investors of back page got arrested it's kind of bad so they do need to you know hell they can raise prices right you have to take it anonymously you have to disappear and you can still run it you have the reputation for running this and if you can't run it somebody else will and I hope it doesn't become you know brief for all like what after naps they're one down I hope someone reputable will do it we were just talking to uh uh one of the guys from exotic us here were like hey you guys should you know uh try to build a competitor to this and I tweeted at Paxful who are running a business in educating these escorts in learning how to use Bitcoin which is an industry and they're fairly profitable I believe and they're basically in the education business of sell in the Bitcoin uh to these escorts and maybe they have a reputation to build something as a competitor and you do it out of the country and you stay out of like US and maybe even Europe and um you can run one of these things because the cat is out of the bag and if the industry is demanding it if there is demand someone is going to provide the supply uh I believe that prostitution should be legal and that would help them bubble of underage prostitution and force prostitution because if you legalize prostitution you can have the I guess the pimps or the nerds these days uh that are running these operations um help you because um illegal prostitution cuts into their legal business so you can use them as allies to cut down on the child uh prostitution and on uh forced prostitution because you have legal prostitution businesses that will help you against those elicit versions of prostitution but they don't want to do that they don't want to acknowledge this uh for consenting adults so they have no friends in that industry and it makes them possible for them to fight the really bad parts of that industry versus the okay parts of that industry not everything is uh like it's black and white everything is a sliding scale and if you don't have allies in that uh allies in that industry there's no way you can fight it and you're just wasting taxpayers money you know hardworking people that are wasting money on these you know on on all this regulation so you're saying that like John Pedesta definitely doesn't want legalized prostitution because that would get in the get in the way of his pizza parties right I don't know much detail on that so I can't comment all right fair enough I'm surprised the category switch was so basic I expect there's something more exotic like you had to search for instant pudding no it's no sorry it's all about perception it's not about the reality right like enough SJW's complain about why is it called escort so now it's just a little more obscure it's obscure enough not to be in the face of all these SJW's um it's it's obscure to a point where you know what now it's consenting adults fine now we're just not going to call it belated prostitution so now it's consenting adults so maybe that section is okay you know it's like it's the same exact act that's how you call it right and remember if you film it it's pornography not prostitution George Orwell and proud well let's move on to prediction or story of the week Blake Anderson are you ready with a prediction or a story of the week prediction or story of the week I guess my story of the week is just I've been away from the Bitcoin group for a long time I missed it very very much I had a lot of family issues going on as far as my son who has special needs starting a new therapy regimen and things like that he's been doing really really well and my wife has been very supportive so now I look forward to being able to be back on the show a lot more often now you can see my house is kind of torn up right now under construction but yeah we'll get that stuff done and I'll be much more regular on the show on Fridays and I really just can't articulate how great it is to be back I love you guys a lot and obviously there is not a whole bunch of people that any of us can talk to outside of this group on the kind of a level about these kinds of issues and I'm just so thankful to be here and to have you guys with my friends that I can't believe how fortunate I am so I'm really really really excited to be back really excited to be interacting with the chat which is also so hilarious that they continually derailed my thought processes and this is my happy spot so I guess that's kind of my you know touchy feeling a story of the week there good stuff Theo Goodman story of the week I don't have a story of the week I have predictions because we're moving into the divisional round of the NFL playoffs and we're going to hit it off first of all I'm going to go with Kansas City minus one and a half if you can get it minus one take that I'm going to go with Atlanta versus Seahawks over 51 points it's going over the total also I'm going to take Atlanta minus five going to go with the Patriots against the Texans the Texans have the fourth largest point spread of history in the playoffs with a whopping plus 15 points but I'm going to go with Patriots first half minus 10 and I'm also going to go out on a limb and I'm going to go with Green Bay plus four and a half over the Dallas Cowboys those are my predictions of the week 15 is a lot of points whoa two times and an extra point it opened it opened at 16 I don't know if it won higher than 16 but I saw it opened at 16 I wonder if that was like the third highest or second highest I don't know if you know it's 16 16 is the fourth highest that anyone had any of the people that keep track having their database ever since the playoffs existed that's the 16 is the fourth highest ever point spread in the playoffs so let's see what I saw it opened at 16 yes what happened to me let's go to Gabriel D Vaughn to have a prediction or a story of the week yes something that I decided to skip on the China exchange regulation topic that I'd like to revisit for my story of the week you guys know that I talk a lot about Cliff Hies fascinating Alta reports which he sends out a bunch of spiders and you know bots on the web web bots that collect information and he sees what kind of trends have been doing it for about 20 years and absolutely fascinating not always accurate although the Bitcoin predictions tend to be very accurate even with prices and some timing and the one very very interesting part of this last web bot report from around December 30 was a section describing something coming up in the data called a Eurasian Bitcoin nation growing with unprecedented speed something that he's thinking about actually devoting a whole new section of the report on as a new entity as he calls it data entity and what this thing is described as is the Chinese government laying fiber at an unprecedented speed through Asia not just China all the way through west through to the to through Russia and bringing almost a billion new users onto the internet in 2017 and early 18 and setting them all up with Bitcoin wallets the Eurasian Bitcoin nation watch for it never heard of it but it sounds great Kyle Torpey you ready with this prediction or a story of the week yeah one thing I forgot to mention when I was talking about India before I guess since I'm it is not going to be very happy with Zepay since they made that video about how all those cloud mining schemes are scams and so one of the things he said is Zepay wouldn't be much of anything if it wasn't for a game Bitcoin because all the people that go through that Ponzi scheme use Zepay so I don't know how large this game is but I imagine a lot of the volumes at the exchanges is actually for the game Bitcoin Ponzi scheme but as far as a story I did I did have an interview with Barry Silver posted this week about what digital currency group thinks about Ethereum and Ethereum classic and RIP stock so you should definitely check that out on Bitcoin magazine they did they invested in EtherScan which is basically just an Ethereum block explorer but Barry pretty much doesn't think any of the decentralized applications being built right now are useful at all and they've looked at pretty much every Ethereum project available and decided to pass on all of them except for this block explorer which I guess it could be pivoted away from Ethereum to root stock or something pretty easily and block explorers are historically incredibly profitable magnificent enterprises to invest in so but we'll see how to see how it goes that's excellent so you can check that interview out at Bitcoin magazine good stuff tone veys prediction or a story of the week all right you know what I'm gonna go with prediction and I don't normally do this for what the hell right since we've been talking Bitcoin price all day so I'm gonna go with the Bitcoin price and I'm not gonna talk about this you can go to my blog or you can go to earlier this blog I actually called the bounce right here off of this line at 760 and I called it pretty in advance and that was kind of cool even though I didn't personally profit from it so what I'm gonna do is I'm gonna draw I'm gonna make a yellow and I'm gonna draw this line right here which I find very very important and it should be like a solid line a little thicker and let me do that right so this is this is a line and as you can see right here I'm also gonna grab nope not that one sorry I'm gonna grab this one this this starts to become too time consuming it's not gonna end very well give me one second here one and where are my arcs here we go sorry about that guys this is going to be my prediction and this needs to be as you can see I'm a little OCD when it comes to my graphs so what you have right here reminds me of back in the day playing with kid picks I know right so you have this shape and this is known as a and then I need to draw one more so that's your cup cup and handle right here yes this is known as a cup and handle pattern this and then this arcs to semi-circles why isn't this adjusting anyway I might have screwed that one up but right so you kind of get the idea so because of this I am looking for a breakout let me get an arrow here and this arrow should be green and I am looking for a breakout here and to take us all the way back up to 900 this is an hourly chart by the way and then once we go here or we have to do it break this line and then we go even higher so I do think that the bottom is in I think that the worst is over of course I am not factoring in the PBOC does decide to come in and you know shut down these Chinese exchanges and then all hell will break loose I don't think that's going to happen for now and I am liking this cup and handle and I am looking for a breakout it'll take us back to 900 and then above I do see us going back to all time highs and higher no time highs in the near future so that's what I'm seeing in the market that's pretty much that will be my prediction for the week that we are going to break off of that line yeah I personally made a purchase of some great news 40 as I said but me personally without any kind of graphs I made a large purchase at the mid 700 so that's that's where I thought that the balance was and so I'm pretty much in agreement with tones analysis it's looking good then we've had about 140 viewers thanks to everyone for watching it live thanks for chatting make sure to give us a thumbs up share this video on Twitter things like that and we're going to move on to my story of the week which is pretty simple we've been talking about it on Twitter for a little while we're going to have a little contest soon called Bitcoin Idol so if you have a favorite Bitcoin song that you'd like to nominate just go ahead and go to Twitter mad bitcoins and you can nominate the song we're looking for open nominations so you still have time if you want to record your own song about Bitcoin or maybe make a new music video for your old song it should be an exciting show we're probably going to keep the nominations open for another week and then we'll start having the show as just a nice way to celebrate all the great artists that we have making music and Bitcoin some of our parity some of our original songs some have great videos some are just soundcloud but we want to recognize them all and just get the word out there about all the great people making things to support Bitcoin and we'll be joined by Gabriel Devon on that but and maybe Derek Jay Freeman but we're about out of time so until next time bye bye