The Bitcoin Group, the American original, for over the last 10 seconds, the sharpest Satoshi's, the best Bitcoin's, the hardest cryptocurrency talk. We'd like to welcome our panelists, Gabriel D. Vaughan from Future Rant. Good afternoon, Bitcoin! Well, Torpy from KyleTorpy.com. Hey, everyone else are going? Toned Vays from Liberty Life Trail. Just another slow news week, but the show must go on. And I'm Thomas Hunt from the World Crypto Network, reminding everyone to give us a thumbs up and share this episode. Moving on to issue one. Issac Boost. The Bitcoin world was rocked this week by Gregory Maxwell's assertion that a Bitcoin mining manufacturer has secretly been using ASIC Boost software that allows them to mine 30% faster. This may be the reason for the Bitcoin scaling debate as it's in the minor short term financial interest to run this clandestine software as long as possible. Kyle Torpy, your thoughts on this week's shocking news and its effect on Bitcoin scaling. Yeah, so basically there's two different angles to look at this. Why it's bad and then the evidence, there's circumstantial evidence that it may is probably maybe doing this. So a lot of people are maybe trying to say it's not as bad as some people are making it out to be, but the reason is bad is that Greg pointed out in his post to the mailing list, it's excused the incentives for the miners and the ecosystem in a way where it makes sense for them to block Segwit if they have this advantage because Segwit either makes this mining tool less efficient or blocks it completely. I think it just makes it less efficient. And the other thing is some people have said it's similar to how ASICs exist and just because ASICs exist we shouldn't try to outlaw ASICs or whatever. The difference here is that this is a tool that can be used that is patented that when it's used it centralizes mining further. So the difference is there's no fix for ASICs. There's ASIC resistant algos but they don't necessarily have been proven to work that well. As far as bitming specifically goes, the evidence that they're actually doing this is circumstantial. There's no direct evidence that they're using this tool to gain an advantage and that's why they're blocking Segwit. There's no definitive evidence that they're actually using this tool ASIC boost. But there was an interesting tweet a year or two ago where G-Hun from bitmain tweeted to Alex from Bitfury that they're going to keep mining empty blocks on the network because that's what the network allows them to do and there's no rule against that so they're going to do it. So it's possible that they have the same philosophy when it comes to ASIC boost. The last point is with Bitcoin it's supposed to be a trustless system and in their bitmeans blog post where they kind of tried to counter the claims made in Greg's post on the mailing list, he basically, the bitmean basically said, we're not doing this but we don't think that it should be fixed in the protocol. So which is suspicious I would say because what they're saying is that you can, they want to open source it and so everyone can use it. The thing is that means if they're using it right now that means they get more months until other people are able to roll out the hardware they get still more time of exploiting it right now. It's also been said that this bug in Bitcoin prevents a lot of the future projects that people are planning, things like the lightning network, snore signatures, confidential transactions. A lot of these new features that we want in Bitcoin we can't have if we keep this bug that allows ASIC boost. Well, one thing to add there as well, sorry, is extension blocks which is the recent proposal from the Bitcoin guys that Gihon quickly endorsed on Twitter. It is actually, if Segwit is implemented on an extension block then they would be able to keep using this exploiter optimization, whatever you want to call it. So extension blocks are like one of the few loopholes where they could still use it if Segwit was adopted. And there was an announcement by Joseph Poon. He said if they wanted to they could change the way that the extension blocks proposal works to not allow this exploit or bug or whatever it is to work. But that's all up in the air. We'll have to see. Let's go to Gabriel D. Vaughn or actually, Tony Vays, your thoughts on this issue. Oh, man. So I've already been speaking about this issue for two days. So those that have been watching my podcast pretty much know my thoughts. Yeah. So they took advantage. And that's fine. It's a competitive advantage. But now that the world knows about what happened, the playing field needs to be evened out. And this answers just so many questions. And again, this goes back to the moment I found out about this. I immediately saw this as huge positive news for the price of Bitcoin because some of the biggest question have now been answered. And in fact, I'm going to share a screen because it's from something new that I've just learned from Kyle in his article and I have it right there highlighted. I had no idea that this was a potential contributor to why they weren't mining full blocks. Like I had no idea that that relationship existed even after I found out about basic boost. It wasn't until about an hour ago when I read your article, I still don't really understand the mechanics behind it and how the two are connected. Why is basic boost not allowing them to put a full block together? But this does answer the question potentially as to why they were not mining full blocks. Of course, no one saying should believe anything Jihun Wu wrote in our blog post. I don't consider him to be a trustworthy person. Even if he was a trustworthy CEO, you still have to take everything he says with a great assault. But he's not a trusted CEO. So everything he says can pretty much be assumed to be complete bullshit. Now in my interaction with some of the people that remain in support of Bitcoin unlimited and they have now doubled down instead of just admitting that they were conned into believing that Bitmain actually cared about Bitcoin and they cared about transactions. Not just admitting that you're right, we should get segred, let's see how that scales, let's not give one chip maker this advantage. They were doubling down and now they're picking on every syllable of Greg Maxwell's basic letter and they're trying to find the one or two percent where he might not have had full disclosure. So everyone's now attacking Gregory Maxwell for like nobody's perfect. I'm sure Gregory Maxwell might have sent for himself of the knowledge or whatever. So let's say worst case scenario, Gregory Maxwell I'm very honest for 5% of everything he's been saying lately. But they're accusing him of being a liar. Meanwhile, Jihad who is probably lying 95% at the time, but he gets a pass. They're defending him and they're going after Greg Maxwell. That's what I've seen. That's how people are attacking me as well. So I just want to comment like I know I've been talking about this issue for today so I don't want to repeat myself a bunch of times. I have my own blog and it was on your channel, Thomas. I'm not sure what else I can add to this, but my view on it, people are going to now, people that were on the fence should no longer be on the fence. I said it on my show and I kind of felt bad about after saying it but I don't feel bad anymore. If you were on the fence before the sensitive and you're still on the fence, I'm sorry. Don't tweet at me. Don't bother. My reply to you is you're just an idiot. And at this point, I don't even care who I offend. I also think that this recent announcement helps us get to the core of this problem. And well before we thought we were having a technical debate, we were discussing block size versus larger block size, there was always this undercurrent where the goal posts seem to move and the project seemed to get political instead of technical. And I know this confused the technical people we were looking for the reason why. And maybe this is the reason why, the reason that it got political. And I want to go back to the core of this and I'll remind everyone that the problem here is mining centralization. The miners are centralized in China which could lead to two problems. And these aren't just metaphorical problems. These are actual real world could happen problems. Number one is government interference. And number two is a business is forming together to create a cartel. And we could have both of those here. We never know what the PBOC is doing. We could just have a cartel or we could just have some disagreements with misunderstandings attempt to make more money. But I really do think that this ASIC boost news is helping us understand the scaling debate in a way that we couldn't previously. Let's go to Gabriel Devon for your thoughts. Yeah, you know, actually before I go into some more sort of social comments, I wanted to address something that Sean Spence just asked in the chat. He's asking about, you know, what's the deal with the hard for? Why the hard for talking? What that comes down to as far as what I've seen mostly on Twitter, medium posts and such is that by requiring a hard for for segwit, that was basically a different organization of the Coinbase transaction so that they would still be able to use ASIC boost. And a soft fork would actually break ASIC boost. And that's why they were against it as far as understand. Tone, you jumping in? Yeah, BTC drag pointed this out and you are correct. If there is a hard for convolved in this, then they would be able to keep this advantage going. But I don't understand the tech. I haven't had a chance to look at the technical details yet. Nor do I care to look at the technical details yet. It would be a waste of my time. Again, I've outsourced the technical details to people that I trust with the technicals and it's not like one person. It's a group of 100 people. Jimmy, I forget. I still have this morning, but I saw like an asking diagram of trees and it was basically where you put the segwit. One of them puts it inside. One of them puts it outside. That affects how you determine the signatures and like tonus. I guess one of them allows you to continue to use ASIC boost and the other does. So basic understanding. Jimmy Song just jumped in on the chat. He is more technically worse than anybody on the panel today. He's saying that we're all correct. The hard fork means you can still grind. I saw that same ASIC diagram. And certainly if you want more information, check out our show that we did with Jimmy on the Mad Bitt Coins channel. We talked about it in much more technical detail there. Yeah. So that clears that up. That explains a lot of things. That kind of takes me to what I want to say, which is the social side of this whole situation is quite interesting this week. It was a real resolution because up until this issue was revealed by Greg Maxwell's reverse engineering, we were all guessing. And naturally I'm the conspiracy theorist. So I was just like positing you know, some sort of attack because it did not add up, right? With the you know, facts that we had available in that hand, it did not add up. And so we were just left grasping at straws for alternative explanations, which the fact that those alternative explanations were not the case. It's not some mysterious attack by a nation-state actor or some huge actor. You know, it's merely a $100 million business advantage that the Bitt main was trying to hold on to desperately and looking for an excuse and lying, manipulating, coming up with terrible software that was full of bugs, hiring giant troll armies because apparently Wu apparently said that at one point I've got $100 million to make this happen, which is exactly the advantage that basic boost was giving Bitt main or is still giving Bitt main at this time, $100 million a year. So and I think that's the explanation behind what Tony was talking about, which is, you know, there's a bunch of people quote unquote human beings out there saying, oh, I don't care what you say, Tony, you're still wrong. Those aren't actually human beings thinking that they're just people, they're just paid troll armies whose bills have already been paid. And they, you know, they might have been paid months out in advance and it doesn't matter what happens. And you'll notice that Roger Vier hasn't sent out a single tweet since the news broke, it's a touching thing for everyone's with such a false gets. Yeah, thank you guys for touching that. If you still have more than one thing so could you reach out and write a few comments about that? It's good to know that he still hasn't said anything. And that kind of tells me about this. That's the big question. The big question on everybody's mind is, did Roger Vier knew about Asick Boost? And since he's being so silent, if I had to lean one way or the other, I would lead 60%, he did not know, turned that he did, that that would be my best estimate. I don't know what you think. Let's go down the panel. Everybody give me two percentages. How much do you think Roger knew? I'm gonna go higher than tone. I'm gonna go 80, 20. He didn't know. Gabriel, what do you think? You know, it's so hard to say what somebody is airheaded as Roger seems to be over the years. I'm not really sure. I mean, he's made some, you really put me on the spot here because of course, prediction, no more stalling and Kyle will come for you next. I think that, God, is it possible that he could be that stupid? I have a hard time believing it. That's my answer. The transaction blocks, I mean, I spoke to him. I think he had that legitimate problem. We paid a lot of large fees. I, you know, he seemed like he was a, you know, truthful advocate in the things that he said he believed. Did he really believe them? That's what we're saying here. It's stunning if he's that stupid that he was roped into this. Kyle, will you give me a percentage? What do you think on Roger? It's a hard thing to say, but he has been saying a lot of things that are just completely not true lately, but I don't think you, I don't want to believe that he knew about this. I think that's all I'll say. That's a fair comment. And I'd also say to take this back a step to not even use their name, but if you're a mining company and you're going to make a very large bet on Bitcoin with the idea being that you're going to get an extra 30% back, you're going to make a very large bet. And I think that's really what this is about. We need to understand that they've made an investment or a bet or whatever you want to call it. And they invested knowing that they had this extra 30%. And they, I don't know when they thought they were going to break even if they're there yet, if they needed two more years of this to go. I don't know how much they invested at what level, but that's really what we're talking about is that they built a mining company based upon the numbers of this plus 30%. And then they had to like, that we're saying is potentially create this trolling operation, create this scaling opposition, create this debate, whatever is necessary to extend the time that you can keep mining that 30%. Gabriel, any more thoughts on this? We're still muted. Yes, I wanted to make a couple more comments. Just quickly, you know, tone mentioned it briefly, but the speculators, of course, it's a classic market reaction to clarity on an issue. Before we were wondering, we had no idea what the heck was up. As of yesterday, you know, for yesterday, boom, we have an explanation that makes perfect sense and totally explains why the lies, the deception, the manipulation, and then boom, of course, speculators are like, well, because of course, as we've all skirted said, you know, sort of as you guys hinted at, now the path is more open than ever for Segway. Segway's already gone up from 25 to 32% over the last couple of weeks, even went out. It's just because Bitcoin unlimited is so obviously not usable software. But now that we have a clear market, it's just obvious that Roo has been lying the whole time. Anybody that was taken in by that stuff, like, for example, BixWeer, just making a silly appeal to authority or appeal to friendship, saying, oh, well, you know, tone is abrasive and Rogers nice. So therefore, BixWeer become unlimited is great. You know, all these people that have no critical faculty who jumped on board with the easy solution and the propaganda have pie on their face. And the speculators, of course, bought their Bitcoin, they sold their all coins, the path forward for Bitcoin is clear now and wide open. The future looks so bright for Bitcoin, especially now that we all have clarity on this issue. It's just so, the solutions are there, they're ready at hand. We've got a bit being prepared to disallow, you know, AC boost and then solve these bugs. It's fantastic. My last point is just something that Done brought up. I read an article by a guy named Cole who used to work with mining manufacturer, they slept on mine right now, but he came out with a very slap dash medium post where he actually mentioned that mining empty blocks is a valid, you know, economic choice for miners in order to utilize their hash power directly right after a block is found because if they cycle them down too much, they're endangering the chips or something like the temperature differential, endangers the hardware and it increases the lifespan to keep them running at full blast and mine those empty blocks. So there may be some other explanations here that we're not privy to per se on the insider track for miners. All right, and I think this builds well into the exit question, but first I wanted to go down the panel and ask people about Gabriel's suspicion about the price. Do you think that the Bitcoin price has been buoyed by the potential scaling solution or is it something else like perhaps Japanese Bitcoin adoption that's driving the price up? There could be two hands in this game, but let's see what you guys think Kyle. It's always hard to speculate on price. I don't think it, the only thing I'd say I don't think it's adoption in Japan or anything like the news that we're gonna discuss where there's that retailer that's taking Bitcoin out. I don't think that really, certainly much of a use case. I don't think a lot of people are gonna be going to buy their cameras with Bitcoin, but yeah, I don't really have anything to say on what's causing the price movements. Well, and it might be more of a large international news story than an actual use case, a hype based tone vase, your thoughts. Well, yeah, it is hard to speculate on price, though. That's kind of what I decided to do for a living in the world of Bitcoin. So to me, and we're gonna talk about this in the next story. So I'll elaborate. So to me, this price rise is 110% contributed to the news that we now have the information we were missing about the scaling and way more optimism as to, you know, Seg would be enforced in there. I've been saying for a long time that I don't know how Seg would get forced in, but it's going to get forced in. Now we have a much clearer vision as to why it would be forced in. But to me, if the Japan situation has any effect on the price, it would be dropping the price not raising it and I'll elaborate on that in the next issue. All right, let's move on to the exit question. Most logical outcome, the miners rejoined Bitcoin and adopt Seg with. The miners fork and create their own coin. User activated, or user activated software, proof of work change, what happens next? Kyle Torby. Before I talk about that, I did forget that I saw a tweet from Wing Chun from F2 Pool earlier today where he tweeted that he's thinking about stuff signaling for SegWit on Litecoin. And immediately after he said that, tweet out the Litecoin price crashed 15%. So I don't like to give reasons for price movements, but that one's pretty clear. And then later on, it was made clear that they're not gonna stop signaling for SegWit and the price went back up. Also, we saw the Litecoin price triple based upon the potential for SegWit adoption. So maybe the Bitcoin price would triple if we adopt it. I'm just throwing that out there. What was the original, what will miners do? Or will happen? What will we do next? What's the most possible outcome? And we're just speculating. I think status quo is still the most likely scenario for the time being. I would assume that this situation helps out the probability of a user activated software for SegWit, but I'm not sure how much more support that will gain, though. And remember like Jimmy Song's article said, the status quo isn't that bad. We can keep going without SegWit, without larger blocks and we can see what happens. It's not the end of the world. But it does go against Roger's urgency argument that we need more transactions and that the blocks are full. But we just don't know on that argument. Tones. All right, so obviously it's gonna be status quo for at least three to six months. This was always gonna take a while. But I would give it the highest probability. Like if this was let's say Vegas and you have nothing is over 50%, but your best outcome is like 25% and then it lowers from there. So I would give the highest probability to the user activated software to force things in. But that's also kind of tricky because now you've got to really get users to upgrade. But thank God this is a software. My second highest probability would be the miners getting their shit together and signaling for SegWit and wanting to even out the playing field because it's gonna get messy. The hard fork is totally off the table. And I called the hard fork of the table a while ago. But now it's really off the table because if there is a hard fork, the only advantage the hard fork had was if BitMain was gonna go off to the opposite side of BitFury and they were gonna supply people with their chips and their miners, but no one should trust them. They can't fork and be the dominant miner. I mean, people weren't happy with them being as dominant as they are if they fork. They're gonna be even more dominant and now people know that they have an advantage that they may not give you because not everyone has the ability of a correct Maxwell to reverse engineer the miner that's handed to them and probably ruin it in the process. So fork, I believe is off the table because no one would mind that chain other than BitMain and that's not that is, that's R3. I don't know what that is at that point. When there's, it's completely centralized and private. So those are kind of my views. There's really not much else in the middle. It's pretty much a toss up between user activated software and pushing to segwood and honestly it should be a combination of the two. They should lower the threshold on mining make it like 85% compliance and in addition make it like 80 or 90% compliance on users. So pick whichever one is slightly more important give that one 85% and give the other one 80%. And once both of those metrics are reached that's what I hope they'll do. The hard forks off the table, incredible optimism from tone veys, Gabriel D. Vaughn. Well in the past I have stated that I thought hard fork, the hard fork option was nearly zero. In the past I was placing it at 0.1% or less and now I'm in agreement with tone that it's a zero percent chance. There will not be a hard fork in my opinion. However, I don't believe that the miners that are currently using BitMain hardware will be segured ever. Why would they? They don't have a market incentive to do so. They have no motivation to do so and they're just going to enjoy their 25%. No, no, hold on a second there. Hold on, hold on, Gabe. I got a button here, right? Not every chip will sell you is a sig boost ready, right? Like you don't know if they sold you a regular chip, a sig boost chip. So now I believe that anyone that has bought an ASIC from BitMain, they don't know has the advantage on them. So I will take the opposite of what you said are gonna be skeptical and they're probably, I think they're gonna either demand the ASIC boost chip but that puts those miners on bad standing with the community. So if anything, people are gonna wanna ask a bit fury for their chips, right? And I think a lot of the miners, they're in it not just to make money, they're in it also to secure Bitcoin as well because they know that if they screw up the price of Bitcoin crashes. So it's not, I don't agree with the statement that if you bought their hardware, you're now incentivized for status quo. I'm not sure if it was said if they were, it was mine are saying they were kind of maybe running these chips only in house or maybe they were changing the firmware of their own chips. We need more information on this. I just don't have the information. It only makes sense. I mean, think about it, right? I mean, if they were selling these chips, then anyone could have opened it up and checked and reverse engineered it, right? Or one of them would not know a lot sooner if you did a test and this one was mining 30% faster than you expected. A lot of the miners test these things. They all need ROI. It's important. So either an insider from BitMain decided to blow the whistle on them by sending this chip over to Blockstream or they accidentally made a bad shipment and someone looked into it by lock, right? I highly, it makes absolutely no sense for them to sell this advantage to strangers. That's just dumb. They're not that dumb. I could see them making a mistake if you ordered like 30 miners and they accidentally included one of these and that person sends it to Greg Maxwell. What's going on here? You know, that could work. No, because like if they accidentally sent one or two miners over to Greg, oh, oh, probably just saw the right one. If you go on the mind at 30% more, you'd probably just keep it. Name it lucky. Keep it. And also you may not even realize it. And even then, how would you figure it out, right? Well, like why would you do that? So why are there keeping track of how many blocks they're getting? I think they'd find out that way. I think what's going on here is it's in the chips. It's in all the chips. It's just not activated by default. So there are people on Reddit now saying that they're going through and they're trying to figure out how to get it activated so they can use the use-acboost. OK, so that would make sense. Outside of the company, you have the chips that they don't go faster. Inside the company, they have the chips, but they run code that makes them faster. You also have to have the chip pointed out a pool that has a certain software that makes a basic boost work. Because the pool has to structure what it impulsively does. But I'd have to demo from there. All right, so still a lot of technical questions on this. Yeah, and if only we had to help us expose this nonsense, right? I just wanted to finish up what I was saying. I think that minor activation is a poor method for consensus in Bitcoin. I don't think it's going to work over the long term. This is a really good test. And I think that the developers knew that. And they wanted to show, hey, this is a too political of a way to do activation. We should go back to the BIP-9 or whatever that was. We've already used user-activated software in order to put together a paid a script hash. So let's just use it again for segue. And I think that's an agree with the panel that that's going to be the way forward. And I think that's going to be the way forward in the future, too, with somewhat controversial changes, such as said. I agree with Gabriel. It was a good test. We learned a lot. And more importantly, or perhaps negatively, this is a pattern that we'll see repeated again. If a government or a cartel wants to attack Bitcoin, we're seeing now that you create a technical issue, then you have a political argument that's not about the technical issue. And that that's a formula that knocked us off our block for two years here. We've been arguing over this for two years, seemingly for no reason, perhaps for this reason. But let's move on to the next issue, running out of time. Issue two, photo, friendly. In the wake of last week's adoption of the Japanese Bitcoin license, electronics retailer, and camera, began adopting, began accepting Bitcoin this week, thanks to the help of BitFlyer. The company has more than 40 stores that will accept Bitcoin for purchases with a limit of $900. The store will immediately convert the funds to yen, paying a 1% fee for the convenience. Meanwhile, Japanese payment processor CoinCheck announced that it will place its POS system in more than 260,000 brick and mortar businesses in the land of the rising sun. Tones is Japan on the verge of adopting Bitcoin? No, absolutely not. So you see this right here? OK, that's the limit. Sorry. POS system, the flyer would allow the store to accept it. There it is. BitFlyer claims stores will receive their Fiat funds the next day. You see this right here? Fiat funds. OK, this is stupid for Bitcoiners. OK, I've been doing these debates since 2014. I've been arguing saying that if the more stores accept Bitcoin, that convert through a payment processor, the worse it is for the Bitcoin ecosystem. That's not what we want. You don't want accepting Bitcoin and selling it for Fiat on the open market. This sure wants and he's getting it. And we had this, you know, 2014, where all these merchants started to come online. By the way, in this argument, I took the position that if PayPal integrated Bitcoin, the price of Bitcoin would fall from about $600 down to under $100. That was my position in 2014. And that's still my position today. Good news from Gregory Maxwell to keep the price up. Because if this should happen all over the world, the price of Bitcoin would probably start to go down and go down somewhat quickly, right? It should be a store of value first. Bitcoin is for censorship resistant payments. It's not for your coffee. Maybe we'll get there one day. We also need to scale first, right? We don't want this right now. Roger wants it now, but that's because he was dealing with, you know, he didn't even realize what he was doing. OK, so to me, this is dumb. I want to see one of these headlines that says, you know, some big retailer has decided to pay their employees bonuses in Bitcoin. That's what I want to hear. You know, some big retailer has convinced a huge supplier to accept Bitcoin as payment, right? You want to see Bitcoin get pushed through the supply chain. Not be used as a payment to get a immediately processed by a processor. That's not what we want. So I don't care for this news. I don't even think it's good news. So I'll leave it there. I've been talking about this for years. I'll probably keep talking about it. Maybe after we have, you know, lightening channels and way more people believe in Bitcoin, this won't be a problem. But right now, PayPal doing that is a problem. It certainly puts a downward pressure on the Bitcoin with everyone selling. And we have to have increased demand every day to take back that pressure. So I can see what you're saying, Tom. Gabriel, Divaan. I love how you send my name. It makes me feel very important. So yeah, you know, I would like to just say, you know, in my opinion, I don't believe that it's so clearly a sell-side pressure only when a retailer accepts it. I do agree that it's not that important or that big of a deal anymore after the first big retailers sort of lent Bitcoin a bit of credibility in early 2014 with Expedia and overstocking a few others after at least in the US. And maybe in Japan, this is a big step. But, you know, I don't actually think it's all that important either. And, but I will say that in my opinion, the small sell-side pressure increase that comes from retailers cashing out Bitcoin that they get for products. I think it's probably offset by a small buy-side pressure, additional buy-side pressure due to the fact that you're buying, you know, people buying Bitcoin or buying an asset that is that much more liquid and spendable. So it's a little bit, it increases the value of the asset slightly and makes you think, well, you know, if I buy this Bitcoin, at least I can buy a couple of cameras, or you know what I mean, or buy it by an airline ticket. I mean, I know that plays into my Bitcoin buying habit. So literally, I'm like, okay, well, I don't necessarily have to pay high fees at exchanges. I can go to Expedia and get a plane ticket or I can do some other things I can go on-person and save money on Amazon, you know. So that type of, you know, buy-side pressure is, I think, is gonna come into play too. So I think it's kind of negligible, the effect on the price. And I very much would like to agree with tone at how extremely important for adoption closed loops of commerce are for Bitcoin. As soon as we start seeing these engines of business, or engines of economics coming into play where you've got employees getting paid in Bitcoin, employees paying for things in Bitcoin, you know, suppliers accepting Bitcoin for goods, you know, suppliers paying part-makers in Bitcoin for their parts. As soon as you have a closed loop like that, what happens is that you get the wealth effect. This is the simple 18th century economics, Adam Smith, wealth of nations. When you have these efficiencies of the market, you're creating wealth. And if you use a currency that is not constantly debasing by several percent every year, you're gonna get a greater wealth effect and even more of an incentive for all the players within a given economic closed loop to move to Bitcoin. We're seeing that happening now on the internet with affiliate advertising networks. And this is kind of the, in my opinion, the first kind of closed loops where the ad, you know, you pay for the ad with Bitcoin and then you get paid back in Bitcoin and it's kind of, it's starting to create these closed loops and it's amazing. We need more and I agree that that is what we should be paying attention to. Excellent points, Gabriel. And it's also worth noting what I found interesting about the article is the $900 or 10,000 yen limit. There are a lot of cameras that cost more than $900. There's nothing structural about Bitcoin saying that you can't do greater value than that. So I found that to just be a very odd footnote. What is that? Is that have to do with the bit license over there? Perhaps I don't have the regulation handy. It could be a bit license issue, which again is ridiculous limiting people to spending $900. What if you want a $1,000 TV? I mean, it's ridiculous. It's possible. It's also possible that there is a general law saying that if it's not, it's over $1,000 and there has to be some kind of an extra KYC process involved. So it could be a law that's regardless whether you use Bitcoin or gold or whatever. Could be part of the war on cash, right? Or even like foreign currency, right? I can see a country that US dollar is a global currency. I can see some even Latin American countries and say, well, yeah, if you have US tourists and they want to pay with dollars, I can go to Canada and I can pay in dollars. Most people take it. But I wouldn't be surprised if there is a law that's set as you can accept US dollars as currency as long as it's not on anything over 1,000 bucks. Yeah, 1,000 seems really low, though. 10,000 seems more reasonable. Let's move on to Kyle Torbitt, your thoughts on Japan's Bitcoin adoption. Yeah, so I think Gabe and Tony are right in that something like Alphabet probably has a better effect on Bitcoin than Japanese camera retailer. As far as the effect that it could have on the price, I guess generally I agree with Tony's premise where he's talking about it having a negative effect because people will be effectively selling their Bitcoin through that process. But I don't know how much how negative it would be because I don't think anyone really uses Bitcoin at retail stores right now. And the people that complain about slow transactions and high fees, they're right. It's really it's bad for these type of in-person payments. But like Kyle, no one uses it. I have a brick and mortar physical business. And I've had it for three years, a map for three years. Torbitt says we accept Bitcoin in three years. No one has ever. I do also appreciate the irony of Tony's position that if this were true, if they accepted it, the more we spent, the worse it would get for Bitcoin. Because every time we spend it, they're selling it and it's knocking down the price. So you want to help Bitcoin? Don't spend it. That sounds strange to say. But that's what it looks like. Kyle, go ahead. Yeah. Yeah, there's like one brewery here in Richmond that accepts Bitcoin. It's the only place in the whole city that accepts Bitcoin. And I've paid for beers there once. And they looked at me like I was the only one to ever do that there before. So I mean, there's some pockets where it gets used more generally, but in the entire world, basically, it's not being used at all. And people like Roger Vera write when they say it's very hard to use for payments. But the point there is that we're eventually going to get to the point where you have your Bitcoin savings account and your Bitcoin checking account. And your savings account is your cold storage. And your checking account will be something like a connection to the Lightning Network, Tumblebit, maybe a sidechain. There'll have to be some second layer protocol for these types of in-person payments where it's confirmed instantly for basically no fee. This isn't the kind of thing that works on the main base Bitcoin blockchain. But then you need your wallet. You have to separate accounts because you have to separate the Bitcoin into different layers of the network stack, basically. All right, Tony, did you have another comment on that? I was going to say one last comment. I thought Kyle was done. I was going to say, unless there is like a Bitcoin meetup that's taking place in your business or unless someone involved with their business has a circle of friends that are adopters. No one is going to use Bitcoin at your business. Unless the business itself is Bitcoin only for certain reasons. Well, that's also what I would suggest to Kyle is that they should have their meetup at that bar. No, it worked out. But let's move on to issue three. Issue three, BFX debt, no more. Bitfinex, the Hong Kong based exchange, did what many considered impossible this week, seemingly recovering from their August 2016 hack where 119,000 Bitcoin, approximately $65 million at the time was stolen. Rather than going out of business and causing a lengthy bankruptcy process that may never reimburse their customers, Bitfinex created their own debt token. The BFX coin and used it to compensate their customers for lost funds. The company announced that by week's end, they will have repurchased all outstanding BFX tokens, reimbursing their customers for their losses. Gabriel, Devine, your thoughts on this surprising turnaround. I don't agree that it's surprising. I actually thought that after about a week after they announced it and that tokens were trading and they were trading at a stable value or even up, I think, from where they started, which was, I believe, 33 cents on the dollar. I realized, oh yeah, why the incentives don't line up here for anybody to lose money, to lose more money, and to throw a tantrum. So while I agree that it's unfortunate that the people who cashed out early lost money and even the people that kept their Bitfinex tokens and got a hundred cents on the dollar still lost that capital during that time couldn't spend it. And I have to say, I don't think this is actually fair. I think they should actually be paying a premium to all these people. They should probably pay a hundred and eight cents on the dollar or something. But I'm not surprised at all that the free market was better than regulators at solving an issue of this type. And I think we're gonna see that because Bitcoin is decentralized, it encourages this type of market-based solution where the government's like, hey, you know, we didn't make that money or whatever, the guys that we owe money, the guys that have us by the short hairs didn't make that money. You guys made it, so it's your problem is fantastic. And that's just gonna encourage more market-based, much more effective solutions than using government-based, coercion-based solutions. So I'm not surprised at all. I think we're gonna see other things like this that hopefully don't do with axon thefts, but more just market-based solutions such as security and other things. I would agree with Gabe. The major issue there is that it's about time. And what this did is it gave the traders back their tokens. So presumably they could go back to trading and for trading time is money. So hopefully it gave them the ability to keep working. Surprisingly interesting procedure. Not sure if they were, I'm not sure which country it's legal to create a debt token in, but I'm sure that they went down the proper paths and buying it back is impressive. I was pleased to see that. Kyle Torpe, your thoughts on this issue. Yeah, I didn't really track this bitfenix token the past few months or however long it's been since I got hacked. So I don't really have anything to say on that. Because I just really don't know anything about it. But what I would like to see them do is since they did a Bitcoin unlimited futures token for trading on their site, I would like to see one for a SegWit user activated soft fork futures token. I think that would be interesting. Interesting suggestion. We'll hope they hear that. Tones. Oh, give me one second guys. Then a busy day. All right. So I'm gonna answer it slightly differently than Gabriel. I'm a little surprised. I'm a little surprised because very few companies in the space are responsible. No, I've been giving bifurnex a lot of shit over the years. And I used to, I always refer to them as amateur hour, but I'm soble here. And here's the funny part. So many people came here because of the evil bankers and the evil governments and the evil Wall Street. Well, yes, what? Never worked on Wall Street, but Phil Potter did, right? So there's your difference, right? You can hate on Goldman Sachs all you want, but 99 most people there are way more honest than your average Bitcoiner. So when you have an exchange that's actually run, by experienced people, they might need a little bit, they might need some more help in the Bitcoin security department. You know, they've been hacked twice now. But when you have the right people at the sea level management that will be responsible if things go bad and not steal the Bitcoin and run away to China, you could end up in the situation, right, where people did get paid back. Now, I'm not sure that they should get paid anything extra. I guess, you know, the free market rate maybe, but most of those people were going to lose that money anyway. They probably did them a favor by not letting them trade it. But but in all seriousness, or back to being serious. So that was, there's another surprising element here, right? After the hack, people investing in them paying people back might not have been in that wouldn't it be why is there to use that money to start a brand new exchange with no debt? The funding and exchange that had that like, well, why? If you can just use that money and start a new one. And I can tell you why they didn't just use that money and start a new one because they trusted the sea level management that they weren't scammers. Because if you go and start a new one, who are you gonna get to run that company? Another big burn, another marker palace, you know? I don't even know who runs BTC-E. I don't know who runs Poloniex. I have a hundred percent certainty that people running Poloniex never worked on Wall Street. So that's why I guess those people took the risk and funded a company to get them out of debt. So it's a little surprising. If these kinds of things don't normally happen in the Bitcoin space, usually it ends badly. This one ended good. So perhaps they will be fopped their security and this won't happen again, but we all know it probably will. I would like to add a quick disclosure onto the end of this bitfinex has hired our good friend and co-founder of this network, Chris Ellis. And we think this is just another sign that they are smart people. So congratulations to them and congratulations to Chris. Let's move on to the exit question. If Mt. Gox had done the same thing, would we still be trading with magic cards today? Gabriel, Devon. I missed the verb in the question. Would we still be using Mt. Gox today? If they'd done the same thing. If Mt. Gox had done the same thing that Bitfinex did. No, there was no way they could have pulled out. They wouldn't have been able to even pay 33 cents on the, they were so broke. No. And remember, not only did Bitfinex come up with this solution, they also ran a very efficient exchange, presumably generated a lot of fees that helped them pay back this funding. So impressive operation. Kyle Torpey. Yeah, I agree with Gabe. I think that hole was too big for them to climb out of Mt. Gox. And while officially we don't know what happened inside Mt. Gox, we can speculate that they did run a similar program just without the debt token and the admission of debt. There's been a lot of questionable, they got hacked at this point, they got hacked at that point. We just don't know what happened inside that black box. Tone vase. Okay. Yeah, absolutely not. In fact, Mt. Gox tried to do this, not with a token. This is before tokenization. Marker Palace was flying all over the world to some of the richest debt coiners trying to secure like a $5 million loan. And it was just too much because they were in such a big hole. And not only that, they obviously didn't trust the sea level map. They didn't trust the sea level management. By the way, I don't blame Marker Palace either. He inherited a fractional reserve exchange from IJav Mikhailov. So he was always behind the ball. And he didn't know what he was doing. He sure never purchased it. There was nothing there. There was no stable code base. There was no confidence in that exchange. So he tried doing it, but no one would lend them the money because no one was that dumb. And so he had no chance. And it's worth adding as a reminder, if you don't hold your bitcoins in a Bitcoin wallet that you control or in a paper wallet, if you hold them in someone's exchange, they might not even be holding onto your bitcoins. They might just be holding onto some database tokens. And your bitcoins might have gone somewhere else. So don't leave your bitcoins on the exchange. Don't leave your bitcoins on the shop website, wherever you are. If you have the time, send them back to yourself at the end of the day. And then when you want to buy something else or do some more stock trading or whatever, send them back out there. Oh, but the file comment. File comments, sorry guys. I forgot to mention. Also, please, I want everyone that's watching this to be aware that a bit of an accident issue and ICO on Ethereum, it was a centralized debt token. It wasn't decentralized. It wasn't built on top of Ethereum. Okay. So keep that in mind as well. I mean, they were responsible in many ways trying to get out of this hole. And good for them. No feature bloat doesn't need to be traded on other exchanges. Just keep it simple. Moving on to issue four, got rendering. Bitcoin has always been mentioned as a potential leader in machine-to-machine payments. Well, the example is usually about a washing machine that contacts the store to order its own soap. The new example given by the company, BitWRK, Bitwork, may be far more interesting. The company plans to offer customers the ability to outsource the rendering of their 3D products, projects, while paying in Bitcoin for the complicated time-consuming rendering. Kyle Torpy, will this model be adopted by other companies? Are Bitcoin machine-to-machine payments the future of outsourcing? Yeah, so the way this works basically is, if you're a 3D graphics artist and you use this software that they use called Blender to handle the rendering of your graphics, you can now with this plug-in, hit a little button while you're, when it's time to render, and instead of rendering the graphics on your local machine, which is a very computationally intensive process, the work gets outsourced to a peer-to-peer network of nodes that do the work for you, and you pay those nodes that do the work in Bitcoin. And it's a very, it's not like a completely decentralized system, like there's other projects, I think they're mostly built on Ethereum that are trying to do like a decentralized version of this. But these guys are just making it so it works, and they aren't really sure if you need the decentralization, they just need the Bitcoin for the payments. But it can also be applied to things outside of graphics rendering, any kind of, anything that requires a computational work, and there's a bunch of other projects that try to do this kind of thing, like storage and see a coin or say a coin, whatever the David Wart Varks project is, where it's like storage, and you have other people's story or files for you and they back it up, and it's like on a distributed network. So it'd be interesting to see this applied to more system resources on computers. I'm not sure if it's actually, if it's actually a good idea, it's kind of, it could lead to a situation where if you ever use a Chromebook, it's like a really weak piece of hardware. There's not a lot of hard drive space on it, it's not a very strong computing device, but it's kind of like, it's storing all your stuff in the cloud. So you don't have to have that much as expensive hardware locally. This is like a distributed version of that kind of. And also, while this is a centralized project, is it possible that it could have some degree of censorship resistance? Let's say that I wanted to render a video that was critical of the government, maybe a normal rendering farm wouldn't touch it. Do you think that this kind of Bitcoin to Bitcoin node-based render farm, which is render whatever I want, no matter what it is? Well, yeah, you can communicate with any other node on the network setup. I'm sure maybe some nodes would run behind tour or something, so no one would know where they are, and they could render the stuff for you and send it back. Although it's also like five or where, if you find a good renderer, maybe you could do a side deal or work something out with them for the future. Again, just opening people up to the ability of sharing resources, I think, could be a very positive thing in the future. All right, let's go on to tone vase, your thoughts on Bitcoin rendering. Well, I don't really know much about it. So I just have more questions than comments. So again, I'm just gonna, I don't even know if Kyle can answer these questions. I am, as always skeptical, I'm not gonna, where? So obviously, well, not obviously, right? So it's for multiple people to render your photos or videos at the same time, right? So you're basically outsourcing one other machine. I would love that, like my machine sucks. So I would love to outsource my rendering to somebody else, but now I run into the problem of why I don't like the cloud, even like Google cloud or whatever, because if I'm letting somebody else render my content, copy of my content, right? How does that work? Is there some kind of a medium that's encrypted that allows other hardware to render it without seeing what it is? And I would love for that to be technologically possible, but I don't know whether it can or can't be. So that's one question. Second question is, wouldn't this have to be a trusted network, right? Like how do you know, like when you said that I have a sensitive video that you wanna render in a decentralized way, well, how do you know you aren't sending that video directly to the FBI to render it for you? And then you get busted, right? So there has to be some kind of another layer to either create trusted parties or I don't know how that works. So I guess I just have a million questions. And if you do have a layer of trusted parties, what if one of those parties becomes corrupt? So go ahead, if anybody wants to comment on these. As far as trying to find a way to encrypt the file before it's rendered, I'm not sure if that even... I know about that. I know, that is possible. Go ahead and take a look. There's been a lot of advances in encrypted computation in the past 10 years. It's called homomorphic encryption. Now for any given application, there may be some more developments needed, but in general encrypted computation is a thing. Naturally it's less efficient than straight up computation. And you're gonna pay for that with more cycles. But yeah, there is a privacy option. And I would imagine that you would be able to select, I mean, ideally you would be able to select whether you wanna use homomorphic encryption or not. If you care about privacy or not, you would have to pay as premium because of course it takes more cycles. What I'm curious about is really, are they sharding? How decentralized are they just gatekeepers? Between nodes, are they sharding the projects so that you only getting a little piece at a time? And also nobody has mentioned the other side of the equation is which is I've got extra computational power on my rig. Can I go there and offer it up and get the market rate for, woo, we're renting out my hardware. Apologies to anyone wearing headphones, go ahead Kyle. Yeah, you can connect to the back end of Bitwork and put your device through the work and collect Bitcoin from all the people that need their stuff rendered. Well that sounds great. I'd like to go back to Kyle's point of the Chromecast earlier, a computer that's very light, basically has no processor. And I'd like to pause it and I know this is gonna freak tone out with the cloud and everything, but imagine if you hook that Chromecast up to one of these systems and it becomes the processor. So if anything's very difficult, it just throws it up to a processor cloud and the entire operating system would have this kind of code. We could see these kind of things in the future. Obviously it's gonna creep tone out and anyone else that wants privacy as we continue this strange path that we're on. Yeah, Bellagia 21. Let me just make this one quick point. Bellagia 21 actually used to talk about that a lot. That's one of the reasons you wanted to have Bitcoin on all the machines by default is because then Bitcoin basically comes like a system resource that pays for all of your other system resources. So in the background, like when you save a file, it automatically pays with Bitcoin to store it on someone else's computer. Yeah, this is kind of the concept behind MADE SAFE as well. Where MADE SAFE has their own token they wanna use, but it's essentially an encrypted, completely encrypted layer above a crust that distributes storage cycles and networking. Firstly, I find it totally creepy, but I love this idea technically. Sorry, Kyle, good. I just wanted to add that this project doesn't have their own messed on. This project doesn't have their own token, they have like a, they just use Bitcoin. They're not making like an all-coin or app coin or anything like that. And respect to them for that rare occurrence. Tone, did you have any more on this topic questions for Kyle? No. No. I know. I'm okay. All right. And I didn't write an exit question for this one either. So we're moving on to predictions or a story of the week. And I'm going back to the original order. Gabriel D. Vaughn, are you ready with a prediction or a story of the week? Yeah, my story of the week is how just, is just the drama of Bitcoin. Sometimes you just got to step back and see that this is all incredible history in the making. Bitcoin is the first decentralized money to actually function at a larger scale than among your five friends or whatever, or in an academic white paper. And we're seeing history unfold before our eyes. And it's really, my story of the week is that I'm so relieved that I was so wrong with my conspiracy theory that some large corporate or nation state actor was behind the seemingly nonsensical attacks on a social attacks on Bitcoin. And that it was just simple market forces. It's just so gratifying. So that's my story of the week. It gets so easy when you're just like, oh, they wanted to make more money. I get it. Kyle Torpy, your thoughts. Are you a story of the week? So earlier this week, I saw, I was on the show back in January to talk about a mid-Bardwatch. I think how you pronounce this name, who's running the Game Bitcoin Ponzi scheme in India. And I was working on another story related to that. And I went back to the first story I wrote. And I clicked on the YouTube videos that I used to source the connection between him and Game Bitcoin. And they had actually been taken down. So he took down all the videos of him talking about Game Bitcoin and how it's a great investment there when she get involved. But luckily, I backed up all the videos before I published that coin journal article. And we just uploaded them up to the Coin Journal YouTube channel the other day. So they're all back on mine now. But I was just wondering how he tried to whitewash his history in connection to Game Bitcoin. And we saw the same thing recently with Jehan. He started deleting tweets. And of course, the internet archive and the cache had a copy. But just in general, if you think something might be removed, you should save a backup copy. Because you might be the only one that thinks that. And then you might be the only one with a backup copy, which you could then share to everyone later. So everyone backup something if you think it's too sensational. Keep a copy of it. Help out some journalists. Good stuff. And if anyone finds, if anyone has a copy of the Aurora coin or a white paper, I can't seem to find it. I've been looking for it for like the last Aurora coin. All right, let's go to tone Vays for a prediction or a story of the week. Go ahead, tone. I'm going to make this quick because I do have to run out. I'm just going to go with the price. I've already talked about what I think on the whole segment angle. So I'm just going to stick with talking about my price views in this segment. So I expected us to get stuck at this red line right here at like the 1175 area. And I expected us to get stuck there to about mid April. I still think that will happen. We're in back in our channels. So everything is looking good. Everything is bullish. And on the hourly chart, my target was this 1175 area. And we're stuck between 1275. I think we will be here for a little while. And that we're going to break to the upside. I'm still bullish. It's possible we break to the upside earlier. Black Swan events can still happen. But from a technical perspective, I don't see anything bearish in the charts at the moment. But things can change in a minute. All right. I just like to tell a personal story this week. On about Tuesday, I had an interesting email that came in. It was a producer from Comedy Central. Looking for someone to be quote-unquote on a panel or interviewed for one of their new shows. So of course, I started researching the guy doing the show. And he wrote an article where he mentioned Bitcoin. And of course, he also mentioned the Silk Road and how great Bitcoin was for buying drugs. And it didn't seem like that great of a spot. But I was open to it. They kind of assumed that I lived in Los Angeles, which is not true. And I wrote them back with a few questions and never heard back. It wasn't really a direct interview. They didn't want to talk about mad bitcoins or any kind of second-level advanced Bitcoin stuff. I really think they wanted to get me on the panel and kind of meet with questions about how I use Silk Road for drugs, which I don't do. So not a great opportunity. I didn't exactly say no, but I was kind of interested. But that explains what that graphic was about. And the $300, I was going to raise for a flight. I raised about $40. If you want your funds back, send me an email, somehow prove that you sent me the Bitcoin. I'll send you the $40 back. It's not a big deal. But just because you guys are wondering, maybe what that image was. And I didn't exactly turn it down. I think this maybe I should have just said, oh, of course, I'm in Los Angeles. And I'll be at the comic book store on Friday. But then I would have spent $300 to kind of get embarrassed on TV about Silk Road and drugs. And I wasn't that into that. So interesting stuff. And while I hope we won't need it, I hope that the miners will come back to the table if they don't. Bitcoin is ready. So we'll do what's necessary for Bitcoin. And we're out of time. Until next time. Bye. Bye. Bye. You. Oh. Uh. You.