The Bitcoin Group, the American original. For over the last 10 seconds, the sharpest, the most the hardest cryptocurrency talk. We'd like to welcome our panelists, Jimmy Song, Bitcoin developer. Hey everybody, good to be here. Jeffrey Jones from the Bitcoin News Show. Happy Friday guys. And I'm Thomas Hunt from the World Crypto Network. Moving on to issue one. Issue one. Bitcoin's coming split. What you need to know. The seg with 2x split is getting closer and closer. And even the mainstream media like Fortune Magazine has started paying attention to Bitcoin. They all want to know what will happen next. If they'll split the coin, if the developers will leave, what will happen next? Jimmy Song. Well, I'm actually working on an article right now to go over sort of the game theory scenarios. I've been in San Francisco or I mean at Stanford for scaling Bitcoin as well as that plus plus and my seminar programming blockchain for the past week. So I've been talking to a lot of people. There are some scenarios that will result in some strife. Most of them though, it looks like at least in my analysis, I think Bitcoin goes up. But I want to sort of retast this entire debate because I'm. Talk to people. The more it's clear that the block size is very important to. To a lot of businesses for the main reason that they're the ones utilizing it right. Most of the block blocks are filled with transactions that are generated by businesses that are either sending money to people or sending money to other businesses or whatever. And they utilize most of the block space. Whereas the users, the holders. They don't utilize the block space that much. And they're the ones that are sort of holding and they send maybe 5, 10 transactions a year if that. And most of the time they're just using Bitcoin as a store of value. And that's really the clash, the big conflict here is that businesses want the block size to get bigger because they're the ones that are utilizing it. Users don't what would rather have more security because they're using it as a store of value. And those things two things are sort of coming to a head here. It will be interesting to see what happens, but actually think a lot of these businesses end up going to 2X. Well, they're obviously going to utilize a lot of that block size, but for the most part for the users. I actually think the legacy coin or one X or whatever you want to call it or poor or whatever. It's actually not going to have that many transactions because if the businesses go to 2X, then that's actually, that'll free up a lot of block space on Bitcoin. So, in a way, I think everyone's going to kind of get what they want, which is, this is that want to go and do 2X, they get bigger blocks so they can do more transactions. And the store of value people, the ones that care more about security and things like that related to store of value, they get a chain that's more secure, that doesn't change, that's very difficult to change. And if my investment thesis is correct, that store of value is the main thing that gives Bitcoin value, then the Bitcoin core 1X, the backwards compatible one, that's the one that's going to have a higher price as a result. But I'm more coming to the view that people are trying to do different things with Bitcoin and a hard fork in this instance may actually get everybody what they want and allow everyone to go their separate ways. And I mean, we'll see if these businesses have as much demand if they're utilizing 2X as the main thing versus other people. But yeah, and who knows what the market cap goes to if you have a minimum of change in Bitcoin, which is what these businesses are utilizing for. But I believe in some money being the main driver of Bitcoin's growth. So if that's the case, then the 1X side should have a higher price. Do you think there'll be no transactions on the 1X side because of the incredibly slow block times? If it takes a day or three days, send by money, maybe I wouldn't use that network? Well, so I mean, for the most part, I think the minimum is maybe 10%. And I'm doing some math here as part of the article. We're going to be right in the middle of a block difficulty adjustment period. So there will be about 1,000 blocks before difficulty adjustments on both chains, actually. And if there's like 10% of the hash rate, a normal difficulty block period is adjustment period is two weeks. It's going to a difficulty adjustment period with them be 20 weeks, but we'd already be halfway through. So you don't have to wait like 10 weeks for it to adjust. So maybe for like two and a half months, so sometime in January or February, we would see an adjustment. And until then, you're going to have something like 100 minute blocks, hour 40 blocks. It's not the worst thing in the world, especially if you're using it as a store of value. And you're thinking, and I imagine most of the people that are holders, they're mostly going to transact the two X coins, right, to go sell it or put it into an exchange. I suppose some traders might want to get things out there faster, but it's not going to be a three day thing. It's going to be like, it's five hours, something like that to get enough confirmations for an exchange to credit you. And that's the absolute worst case scenario in my mind is five to 10% something like that. This blocks will be slow, but I think that's okay. I think that's almost a feature from a store of value perspective. Ten weeks for original Bitcoin to recover. Are the corporations, why should they be abandoning their development team? They want different things. A lot of these businesses, they want larger blocks because they want more throughput. They want, I mean, I've been told by various CEOs that they will often fill up, like their company alone will often fill up half of the block and are given block, right? That's how many transactions they're sending. So they're clearly the ones that are utilizing the block space on their own. They're the ones paying miners and that sort of the economy there. And if you sort of take a Keynesian point of view in terms of economics, you can sort of see their point. It's that the velocity of money going through the system is higher if you have a bigger block size. I tend to come from a more Austrian perspective and I don't think that's the driver of the price. But the great thing about this fork is that we'll get to see who's right. Is it more of a Keynesian perspective where the velocity of money actually matters or is it store value and saving and holders that actually give it value and that's what we get to see. Jimmy's being very reasonable. They want bigger blocks. They want more transactions. So we should just roll over and let them have the name. Isn't that right, Jeffrey? No, no, I didn't say that. I didn't say we should roll over and let them have the name. The name is not determined by businesses. The name is going to be determined by the social consensus or the social consensus. But again, they have the most use for the name in a Keynesian perspective. The matter what a keyman is. They should have the name. Let's go ahead and see what people call it. Jeffrey Jones all the time we spent on Bitcoin development, all these open source projects, just let them have it. Look guys, let's just let them have it. It's clear the two X team really wants it and they really, hey, Christmas is coming up. I just say we get the two of them. No. All right. A lot of great information has been already said. So thank you, Jimmy, so much for your response. Every time I hear Jimmy speak, I remember what a reasonable, logical person sounds like. But then you get back on Twitter of course and then it gets insane. But anyway, a few thoughts on this. The wallets, everybody wants to know what is going to happen. The two X is coming up. What's going to happen? Everybody wants to know. The wallets and exchanges are preparing. The entire ecosystem is preparing. Bitcoin released their blog recently about how they're building all sorts of infrastructure in order to support both SEG with two X and the legacy chain from core. So services will be going down during that time, during the period of the fork. People will not be able to use most exchanges, most things like that. So debit cards, all these services, most of these services will be going down for a period of 24 to 72 hours. So make sure if you have Bitcoin debit cards or something like that that you guys fill up before the fork and things like that. But the fees right now are extremely low. The men pool has been empty. Really most of the activity for Bitcoin happens off chain in this time and this point in period of Bitcoin's evolution. So all of the transactions mostly happen on things like Coinbase, with Bitcoin debit cards, Zappo, these type of things. They're really not a whole lot of activity on chain. So again, to bring in the two X, it doesn't make much sense when they're not actually utilizing SEG with yet. SEG with has grown back up to over 12%, but companies like Coinbase and blockchain.info are not haven't even started utilizing SEG with yet. And so this is something that's really important. We need to get the entire ecosystem to continue to go on board with this. And really I agree with Jimmy that longer block times are not going to affect most users. Because again, as most transactions occur off chain. So this really the vast majority of Bitcoin users at this time will not be affected by five hour block times, even 24 hour block times. It really doesn't matter when you're talking about moving millions of dollars and things like that. So everyone will get what they want. The two X will happen. People will get free money. The two X will get the chance to put their chain against Bitcoin in the market and let it play out. Now of course, there's a whole lot of socialized costs. As Jimmy has said and wrote about before, this is, you know, I wish there was a better way to do this, but they really, really want their big blocks. And B Cash apparently is not enough for them. So they're going to go ahead and do this. But look, if you look at the futures markets, we already know the prices. The futures markets are all telling everybody what the price is. And that's 0.1 to 0.15 of Bitcoin, 10 to 15%. We know the two X has no dev support, no community support. So I just don't see them really coming out on top of this. This will be probably the last time that we have to worry about threats via fork. I still think the big blocks are a smoke screen. They really want control. They want control of the development, control of the code and they're going to try to get it. What about this longest chain, most accumulated difficulty argument? If I have the longest chain and I'm mining Dogecoin, can I say that Dogecoin is now Bitcoin? Well, so first of all, longest chain and most accumulated difficulty are two separate things. So you can have very low difficulty and mine lots and lots of blocks and have a longer chain, but you might not have, you know, more accumulated difficulty. So for example, Bitcoin Cash has a longer chain, but they don't have as much accumulated difficulty because most of the blocks were found with much lower difficulty due to their emergency difficulty adjustment. But yeah, I mean, like companies are sort of arguing, I mean, I think any rational person can say, well, that's what you define it as. That's not what I define it as. I mean, this is kind of the freedom that you have when you have a decentralized system. Anyone can call anything, whatever. But as far as a common definition, you only come to consensus when you have sort of a community behind it. And you know, I mean, it's not a dictatorship. Like it's not Soviet Russia where they were saying, okay, this person is a loyal party member and then the next minute they say this person is not, it was a trader all along and then everyone has to believe it. That's not the way things work in Bitcoin, right? Like it's based on consensus, it's based on, you know, like, and you know, if a majority of people are like, hey, what the hell are you saying? You know, like you can call it by that definition if you want to, but you know, I'm not going to follow that definition and, and you know, I'm going to stop using your service because you're just confusing everybody. You know, I mean, they're going to have, there are consequences to this stuff. They don't have, there's no centralized party that gets to decide names and things like that. So I mean, I'm, you know, I don't care what these people are doing. They're going to be natural consequences to defining things a certain way. And if you're defining things in a way to suit whatever agenda you have, well, yeah, you're going to have consequences. And if you don't think you're going to have consequences, I have a bridge to sell you. So I mean, I'm okay. I'm okay with whatever people do. I'm not going to save them from themselves, let them suffer the consequences of their action and see what. So Jeffrey Jones, we're having a vote. Only the miners can vote. Brian Armstrong says this is letting the market decide. Is that all it is? Well, as Jim pointed out, the, you know, the longest chain doesn't apply. We already have future markets. We already know the price of this thing. You know, Bitcoin is not paper agreements. You know, because agreements don't work, they break down. The only thing that we can see that works with Bitcoin is consensus. And that doesn't have to be 95% per se, although the nodes for a core are all over 90% at this point, 90% of the nodes are for a core. But that is the best way that we have to come up with, you know, consents with Bitcoin. And when people say there's no consensus, that of course is incorrect because we have a new block every 10 minutes with tons and tons of transactions and, you know, what Mike Belch and these people seem to think that they seem to think that we're, they're idiot, that we are complete idiots as a community because they keep trying to spin up these fake nodes and thinking that, oh, that's community support. All of these, these new thousand nodes that just came up on Amazon Web Services, ah, that must be organic community support for BTC one. And it's like, what? Come on, Mike. And he's putting this in emails saying, hey, we just got to get over a couple thousand. I want to see 5,000 nodes, give me 5,000 nodes right now. And it's like, that sounds like an army general like saying, give me this many troops in this area. I mean, that's not how Bitcoin works. It's not paper agreements. It is consensus that is found by users, the entire ecosystem, you know, users of the entire ecosystem and not just corporations. Big question, the Segwit 2x4 will be successful. They will steal the name Bitcoin. They will pilot new users towards their Bitcoin. The old scientific and academic Bitcoin will die in a watery grave. Jimmy saw him, yes or no. Things going to die. No, I, what are you talking about, man? What are you talking about, man? I mean, okay, first of all, you can't steal something that doesn't have like a particular place, right? Like, I can go steal your laptop. I can go steal like, you know, someone's car. I can't steal a name. That's not something that's defable. I don't, like, and there's no central registry or copyright or trademark that you have to go, you can go and buy or whatever. It's just, you know, this is one of the things in a decentralized system. You don't have a central authority that grants you the name Bitcoin and, you know, you have it. No, it's driven by community consensus. No one's, you can't steal something that somewhere or is like physical that you can take. And that's, you know, it's a name, right? And no one's stealing anything. And I mean, not to get too stoic on you here, but that is inevitable, right? That's a certain. So at some point, everything will die. So in that sense, you know, there will be a watery grave for all of us and Bitcoin and 2X and whatever. It's really a question of when it happens. I think both change survive at once it happens. And, you know, I mean, say what you will about all coins, but they, one thing they've done is they've all pretty much survived, right? As long as someone's willing to mind it, they keep going. That's going to be the case for 2X. That's going to be the case for, you know, 1X, non-upgraded Bitcoin core, whatever it is that you want to call it. I have a hard time like naming that thing, by the way. But yeah, I mean, that's called the real Bitcoin. Yeah, oh, the real Bitcoin. Oh, that one. Yeah, the not fake one. Yeah, I mean, if someone wants to grab real Bitcoin on Twitter or something, I'm sure that would be, that would be awesome. Whatever, right? But let's put in the summary. Anti-singularity pessimism aside. Let's go to Jeffrey Jones. Well, Bitcoin died in a watery grave being replaced by a corporate Bitcoin, which for the record actually does own Bitcoin.com, in a centralized regulated naming system, will also allegedly own Coinbase.com, Sappho.com, and many others, bgc.com. Jeffrey Jones. All right. All right. All right. Look, guys, we got a long way to go here. You know, this is really, really early days. I mean, we haven't even hit the early adopter phase yet, which I expect to be next year. This is round 1. This is the first boss. Maybe you can call this round 2 and you could call G-HON and Bitmain round 1. But at the most, this is round 1 or 2. We have a lot more stuff. And I like to say, you know, all the time that Bitcoin is like, you know, pretty much going downhill blindfolded on fire 90 miles an hour with a brick wall at the bottom. Like there's just, there's always something, you know, some kind of drama, but yet Bitcoin survives. It continues to survive over and over again. And there is reasons for that. And mostly it's because it's demand, demand for a store of value, demand for a money that can be actually owned by the people and not be controlled by governments or kings. So, you know, both exchanges will likely survive, both exchange, both chains will likely survive because though they don't have replay protection natively, all the exchanges, wallet and services are building this in custom so that their customers don't get screwed over. As Jimmy says, this is the socialized cost part. So, you know, users will, you know, who have no idea about what's going on with the forks or anything like that, they'll be okay. You know, Bitcoin will survive this. We'll get our money and from the two X coins and move on. Moving on to issue two, changing screen. The price of Bitcoin. The price of Bitcoin jumped more than $400 in a single day, breaking all time highs of $7,4, $54 on Friday after opening at $70,30. The price of Bitcoin is currently $73, $44. Looks like it topped out at $75, dipped back down to $71,76 and now another green candle. Jeffrey Jones, the price of Bitcoin does it just keep going up or will we see the top soon? Well, you know, I have to agree with Tone's analysis. I don't know if you guys got that, but I highly recommend checking out Tone's market analysis where he kind of outlines his outlook for the upcoming fork. And what I have to agree with Tone about is that we'll probably top out, you know, it's hard to call the top, but we're getting close to it now between 7 or 8K. We're going to have to have a correction when the two X fork comes in a couple of weeks. So Tone and a lot of people are still expecting another week or so of upside could be longer than that before we finally start correcting for the two X fork because look, we've gone up insane amounts. The gaps have to get filled. There has to be a correction to this madness. People need to take their profits. And so we definitely are expecting some kind of correction around the two X fork and I'm really still expecting to go out the year between 5 and 6K. Jimmy, saw with a Bitcoin price go higher. Well, so I have a different perspective on this and I think the dynamic that's happening right now, it was pretty accurately summed up when Bitcoin gold froze their block. And I showed a tweet a while back how Bitcoin went down right after that block, which shows really that a lot of people are coming into Bitcoin to get their free Bitcoin gold and then they can leave. So a lot of this price action right now I think is people coming in to get their free two X coins, which is an interesting dynamic because we've seen a similar price dynamic happen with Ethereum because of all the ICOs. Like a lot of people are putting money into Ethereum because they wanted to get money into these ICOs and then the ICOs would dump them and then it would go back up because people wanted to get it on the next ICO and so on. I think we're about to see kind of a similar dynamic maybe happen except without the selling. Although people are going to, it's not going to hurt Bitcoin per se. But basically I think I see 2018 as the year of the hard fork and a lot of people are going to come back into Bitcoin to get their free coins and maybe get out soon as that fork is completed or something like that. But all this money that's been going to all coins starting in 2014 into Ethereum since the beginning of this year, I think all that money comes back to Bitcoin. It's good in terms of price, it's also bad because we're going to get back a lot of these scammers again. They've left for much more fruitful pastures in Ethereum and all coins and ICOs and all that stuff, which has been good for Bitcoin in many ways. But we're going to get a lot of those people back. But I can see this price action just accelerating. I do watch tones like technical analysis and stuff and we do seem like we're in a frothy territory. But we might have some correction but long term, I think we're in a, I guess shorter term than a stint or a year or two. I see us going much higher just because of all the people that are going to come back and all the people that are saying, okay, wow, we're going to get a dividend every two weeks. That's sort of the mentality I think people are going to have. One thing about Ethereum and ICOs that I want to make an analogy to, you can do ICOs on a lot of other platforms. You can certainly do it on Ethereum Classic. There's other platforms like EOS and others that offer the same thing. You can notice that you'll notice that a lot of people actually don't utilize a lot of those others. It's seen as safer to do an ICO on Ethereum. It's for that reason that I think most people will be forking Bitcoin and not Ethereum or Monero or Zcash or whatever. I mean, certainly there might be some but they're not going to have nearly the traction that working Bitcoin is going to have because exchanges already support Bitcoin. Yeah, I mean, we'll see but the price action definitely seems to be indicating that people are coming in to get their free coins. They saw what happened with Bitcoin Cash and Bitcoin Gold and it's certainly worth something on futures markets and they want their free money. Jeffrey Jones, the price of Bitcoin this time next week, higher or lower? Yeah, definitely higher. Just like the comment one quick second, what Jimmy said about people, the price rise maybe due to people coming in to get some free money. I really don't really think that's a big part of the case because the two X still kind of might not even happen. It's still, it's being pushed forward by it but with all the community people pushing back, it doesn't look like it to some people, it doesn't look like it might even happen. We have to look what's going on with the world, right? We have all of these negative interest rates. We have all of these huge markets that are just at their top, just ready for the big huge correction that are coming up. People are waking up, the floodgates are opening and Bitcoin is really becoming to be everywhere. It's on all, we used to get so excited about one article on Yahoo and now we're on CNBC all the time. I mean, people, I just think it's because it's time, Bitcoin has proven its security, it's proven its resilience, it's proven its utility. I just think that people are waking up and finally hopping on the bandwagon. Jimmy, it's on higher or lower? Well, I mean, I think you can, that's probably true on a year-to-year basis but short-term, you look at sort of the all-coin drop in the last month or two. You see that allotting a lot of those all-coins and coming into Bitcoin. It's pretty obvious just from the charts. Especially the negative correlation that all-coins have had in the last month or so. It definitely looks like people are coming in from all-coins to Bitcoin. Higher or lower, I've forced prediction. So I'm going to say higher but I haven't said, I don't think I've ever said lower. What information that gives you, like ever on the show. So that's more hope-talking and sort of me being just sort of an optimist in general. But yeah, I mean, who knows? I mean, I've learned to stop thinking that way. But that said, there are some good reasons to believe that it will go higher. I think more money will be flooding into Bitcoin as two-X approaches. And I've said this before. I think two-X is a good thing. I think we need to, and I hope they don't put in replay protection. So everybody immunizes against that now because we're going to have a lot more of that next year. And that's a good thing to immunize against all of these things, coins, security, and store of value properties in the midst of what looks like an attempt to subvert that. So yeah. There's no good thing about SegWit 2X. But if everyone says we're going higher, it might be time to take some profits. Let's move on to predictions or a story of the week. Jeffrey Jones, are you ready with a prediction or a story of the week? So I guess the story of the week would be the CME. If I had to pick something out of the office, the low-hanging fruit, the CME futures market. I mean, that is just huge, the institutional money that everybody always talked about, that everybody I was told is about that wall of money, that proverbial wall of money, they say. Seems to be about to enter. Like I said, I do predict next year that we'll be entering the early adopter phase. So that is 2% of the world will be happening to Bitcoin. And you know, we're already 1.5% of gold, so we're definitely getting there. And yeah, that's an amazing amount of news. And we'll actually be talking a lot about the CME group and their futures market this Sunday on my show on the Bitcoin News Show. Jimmy Song, excited about the CME. Well, I haven't been paying to be honest with you. I mean, it looks like a financial derivative of Bitcoin and not exactly Bitcoin. That to me is just sort of like that wall street. First place is all the derivatives that you can make out of it. I haven't studied enough to have a good opinion on how derivatives affect the underlying market. That's my story of the week is I've been teaching here at Stanford. I did my programming blockchain seminar, got out 18 more developers as a result of that. I taught yesterday at that plus plus and that is obviously still going on. I'm just really excited for the new developers that are coming into this space. And I've said this before, developers are in many ways heroes in this space, because they're taking on the negative externalities. They're paying the socialized costs of a lot of this stuff and they're adding value to the network. And I want to remind you guys, appreciate your developers, especially the open source ones that aren't even getting paid any money. The developers are what make, create the technical and fragility of Bitcoin. And I believe that to be a very important thing, important reason why Bitcoin is priced as high as it is. Obviously, there's an economic and social anti-fragility as well, which we all part as holders or as part of this community. And that's important too. But let's encourage developers. Let's appreciate them. Instead of fighting with them or whatever, they, you know, cryptocurrency and Bitcoin in particular is one place where development, a developer value is so clear and evident. And it's a great space to get into. And if any of you are watching and are thinking about it, you know, to start learning and contributing and getting into this, that's my story that we have. A beautiful shout out to developers from Jimmy Song. Just on the eve of the corporations stealing political power away from them forever. Well, let's see. I bought a new microphone today, but apparently it doesn't work. So that was a waste of time and money. We are accepting donations. That's true. If you'd like to donate to the World Crypto Network, donate to the code on your screen right now. Don't forget to give this episode a thumbs up and a share. We have more than 900 live viewers. If everyone gave us a thumbs up, that'd be more than 900 thumbs. Thanks so much for watching. We'll be back next time. We've got the vortex show, the Bitcoin new show coming up this weekend. And today in Bitcoin tomorrow morning. Until then, bye.