Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Bastian Brand, David Bailey, Eric Benz, Felix Weis, Gary Ubsdell, Joerg Platzer, Johnathan Brown, Matt Roszak, Max Gotzler, Onyx Ashanti & Tatiana Moroz: Inside Bitcoins Berlin 2014 – Live from Room 77

Episode Date: February 20, 2014

This episode is part of our coverage of the Inside Bitcoins conference which took place in Berlin February 12 and 13, 2014. The night before the conference, we were at Room 77, the world’s first brick and mortar establishment to accept bitcoin. We were joined by many members of Berlin’s bitcoin community and attendees of the conference. Thank to all the people who agreed to talk to us! Topics covered in this episode: Max Gotzler from Biotrakr – biotrakr.de Felix Weis from Bitalo – bitalo.com David Bailey from yBitcoin Magazine – ybitcoin.net Johnathan Brown – twitter.com/bluedroplet Oscar a developer from Vienna Bastian Brand from Pathfinder Capital – pathfinder.vc Matt Roszak from Silk Road Equity – silkroadequity.com Onyx Ashanti – onyx-ashanti.com Eric Benz from ZipZap – zipzap.com Gary Ubsdell from ICE3X – ice3x.co.za Joerg Platzer from Room 77 and CECG – cecg.biz Tatiania Moroz – tatianamoroz.com This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/eb-inside-bitcoins-berlin-01

Hi, I'm Brian Fabian Crane and I'm here with Sebastian Couture. On February 12 and 13, we attended the Inside Bitcoin's conference in Berlin. After two months of podcasting together, it was the first time we met in person. We had lots of fun, interviewing many people from the Bitcoin community, attending interesting talks and capturing Bitcoin at this unique moment in its history. This is one of a series of episodes about this conference. This episode features two inspiring talks on Bitcoin and its potential as a tool for change. We kick off with Oliver Flaskamper, managing director at Bitcoin.de,

who gives his keynote presentation on why Bitcoin cannot be banned. Then, Marshall Hoffman, an attorney involved in a broad range of technology law and policy issues, gives an amazing talk about privacy, free speech, and government policy as it applies to Bitcoin. Enjoy. Let's give him a big round of applause. Nice. All right, so we have a variety of formats. We're going to have some panels. We're going to have some standalone sessions.

I'll explain more later, but we're really lucky to have a class comber giving the keynote this morning. I'm going to tell you a little secret. It's the first time he's done a speech in English. I was talking to him earlier. His English is amazing. I can't believe it. So let's give him a big round of applause. Yep.

Thank you for the introduction. It's a great honor for me to be delivering the inaugural address at this event. I'm delighted that so many BitConners came from around the whole world to the Internet Capital Burner. I would also like to welcome the representatives of the NSA, CIA, GAT, spies and other secret service agents. We know that you are here today and we are already looking forward to relax informal discussions with you during the coffee breaks. you, then they laugh at you, then they fight you, and then you win. This vote, which is often attributed to Mahatna Gandhi, but more likely comes from the American

Union, the activist Nicholas Klein, is often broader in connection with Bitcoin. Almost every innovation probably went through these each four phases and had to fight a great deal of resistance before it became generally accepted. Right now, Bitcoin probably stands somewhere between Latin fight. That Bitcoin will win. The fight in the end is only question of time. Bitcoin is a plea for freedom. In Berlin, in particular, we know how strong the desire for freedom can be.

This desire has even been known to cause wars to form. As with every great idea, there are many naysayers in the beginning. The Lightbar, Petroleum manufacturers, derided as it asks the devil's work. The electric automobile too has not generally been accepted because the automobile and all lobbies

are very large and powerful. But each year it gains acceptance because the idea is not. In the case of cryptocurrencies, there's also a powerful lobby. In 2010, banks worldwide earth approximately 590 billion US dollars on payments

alone. And then, Bitcoin comes along and makes payment virtually free. Naturally, there's uncertainty in fear. But do we still use oil lamps to light our houses? I do not think so. If we take a closer look at recent headlines, overstock and Tiger Direct except Bitcoin, I can't put my tutician fees in Cyprus with Bitcoin.

eBay and Google are thinking very, very openly about Bitcoin, and probably the most powerful indicator, my 81-year-old neighbor has a Bitcoin client on his Android smartphone and you think it's cool. Karl Luffy Tielan, one of the six executive committee, members of the German Federal Bank, who is responsible for the Cajun Payment Division, noted in an interview with the leading German business newspaper, hundreds, that Bitcoin is just a niche phenomenon. Presently, about only 70,000 transactions with Bitcoin per day take place, worldwide. This is infinitesimally small, if we keep in mind that in Germany alone, her working day,

24 million transfers and 35 million debits are transacted. The German emperor, Willard the 2nd, supposedly stayed in 1992, the automobile is passing fat. I believe in the horse. Only a few years later, the emperor had an enormous automobile collection of his carlombie. own and had become a huge fan of automobiles. Bill Gates claimed in 1995 that the internet was only hype. Nine years later in 2004, he was completely off base again when he claimed that spam would be thing of past in two years. In the beginning, everything is a niche, but nothing is as strong as an idea whose time has come. As a French writer, Victor

Maria Hoobos said Bitcoin has come to stay when I first read about Bitcoin in 2011 I was electrified The feeling remind me

of the time around 1997 when I bought my first domains At that time everyone thought I was of my worker How can you invest so much money in nothing

In bits and bytes Nobody understood me at the time in their eyes I was a crazy alien. When I wanted to buy a domain for 10,000 Fiat Deutschmark, some members of my friends and family had serious concerns about my mental health. I bought the domain and wanted to buy even more of them, so I went to my bank and wanted to use the domains as a security for credit to buy more domains.

I tried to explain my account manager from the bank what domains are, why they have a value, and why domains were even more suitable and as a security interest than a car or a house. He looked at his computer for a long time. Then he looked at me and said, Mr. Flaskinber, who knows whether this internet will even exist in five years?

Ninety-seven. My first domain, which I bought for 10,000 Deutschmark in 1997, sold only two years later for 50,000 Deutschmarks, and it was not only my last good domain deal. What does it, what does all this have to do with Bitcoin? Because domains and Bitcoin have a lot in common. Both are virtual, both are unique,

and there is a functioning market for both. Admittedly, we are currently experiencing significant inflation in the domain market through the introduction of hundreds of new domain endings. But that is another commonality of Bitcoin and domains, because the many new domain endings are to dot-com domains, what al-cons for Bitcoin. The more new domain endings come to the market, the more valuable the dot-com domains become. And the more al-coins come to the market, the more valuable Bitcoin will become.

Just like my gut feeling told me in 1997 that domains would become the next big thing, my gut feeling also told me in 2011 that I absolutely had to be there when it comes to Bitcoin. I felt again a great opportunity lay waiting there. I called my team together and told them about Bitcoin.

My voice trembled. I was looking at many people rolling their eyes in disbelief. Finally, I was able to push my idea through and we began to develop our marketplace, Bitcoin.D.E. Just three months later, we were online in September 2011.

At this point, in time we had already left the first speculative bubble of April, April 2011 behind us, and the exchange rate was in free fall towards worthlessness. I admit that there were many times in which I doubted that I had made the right decision. Yet every entrepreneur here in this room knows that no, that not idea, works out and failures are simply a part of doing business. It was much the same when I began my first Internet project in 1998. As I had become single again, at that particular time, I thought it would make a virtue of necessity

and establish the single-in-fright-side connection. This was one of the first online matchmaking agencies in Germany. Although many nights, I developed a database using Microsoft Access for automated matchmaking for men and women. My advertising for the service was done in the classical manner by a classified ad in newspapers, but there was naturally also a telephone hotline. Then I met this evening,

when I was done with my regular job, it was hoping that new customers would call. After about three months, I had a pleasant chat on the telephone with a new client. At the end of the long conversation, he finally asked me, Flasker, be honest, how many women do you already have in your database then? I didn't need to think this over for very long. I did not have a single woman as

a slide. Because it was 1998 and the percentage of women on the internet in Germany was at quite noticeable 0.5%. As I have no desire to operate a matchmaking service exclusively for men, I wound up this project. frustrated and devoted myself to other projects. I had to learn that the time has simply not yet come for many ideas. I experienced something similar for a short time at the end of 2011. Had the time not yet come for Bitcoin as well? Little matter, I wanted to be a part of it.

Even if this project ultimately went down to defeat. Barefoot of patent leather was the motto. or, as well as much would, barfoot reduction. This is because Bitcoin was and is

experimental. Will Bitcoin nonetheless fail on one of these days? I don't know. Is Bitcoin

a payment means or store of value? Thus an option, that an object of speculation? In my view,

Bitcoin is digital gold with the payment option. It processes the main advantage of gold

namely that it is scarce and that it is furthermore ideal for making payments around the world, online as well as offline. Gold is in fact also an illegal means of payment, for example the crew around in South Africa. But anyone who has ever attempted to buy an automobile with gold will certainly have experienced the surprise response of the salesman. The problem of every vacation of contentious. alone exclude gold as a practical means of payment. With Bitcoins, on the other hand, I do not have this problem.

There are only two great dangers that could destroy or stop Bitcoin. Danger number one, the technical problem. I think we are all agreed that a major technical problem would mean the end of Bitcoin. Should it become possible to compromise the system permanently, then Bitcoin would immediately become worthless. And normally, in this moment I would say that each and every hacker and scientists and even spike agents in the world had now more than five years to find weaknesses in the open source code for Bitcoin, and with every new day it becomes even less likely that such a serious weakness will still be found.

But it cannot be excluded. Bitcoin is a technology, and as we all know, and thus failable like any other technology. And there's yeah. Gets out of God. Give them their own. They're already

problems. What has it to be banned the world at some point. In many countries, alcohol was

forbidden for so many years and later was allowed again. Why? Because laws against the

people's will cannot be enforced. And because you can't chance the Charlson

without alcohol. In America, you are not allowed. to smoke a Cuban cigar and in Jersey women over 200 pounds are prohibited from riding horses in shorts. I'm... it's really true. I'm digressing but what I'm saying is that bands are sometimes completely ineffective. I'm not especially knowledgeable about the horse women in Guernsey but I know that the former governor

of California appreciate a good Monte Cristo. The procession of gold was also forbidden at several times in the past, not only in the US. A law was passed basically overnight and the next morning our bank safe deposit boxes were sealed. These had to be opened in the presence of a finance official and any gold found had to be sold to the sale at a fixed price.

In France, there was also a ban of this thought from 1936 to 1997. During this period, the Hungarian speculator Andrew Kostolani, known in Germany as a trading

hoo-woo, made a law of money by trading gold from Switzerland with French customers. Laws only accomplish something if they are accepted by the majority of the population are understandable and can be enforced. Therefore, you

cannot ban Bitcoin. Bitcoin is not bad. Bitcoin is the first truly free market currency in human history. Who knows this man? Please write your hand. Okay, there's some. It is the Austrian Nobel Prize winning economist Friedrich August von Haig. On the left in his early years and on the right in its later years.

Friedrich August von Haig was an advocate of a free market currency. throughout his life. He is thus, not just in my view, the true father of the spirit of Bitcoin. Friedrich August von Hayek once said the following about money. The history of national dealings with currency is, with the exception of some sort, fortunate periods, the history of endless deception.

In this regard, governments have shown themselves to be far more immoral than any private cooperation could have been that brought its own currency to market and competition with other private corporations. And continued, money must be protected primarily against the state,

a Nobel Prize winner in the 70s. There is no justification for the eagerly preserved myth that there must be a uniform type of currency within a given territory. We will not get any sort of so-called upstander currency until others are free to offer us a better one than the ruling government in each respective case.

We received respectable money in 2009. Satoshi Nakamoto was the one who brought it to us. If it were up to me, then he would have won the Nobel Prize for Economics. Fulich August von Haig would have undoubtedly nominated him for it. As a prize winner, he would have had the right to make nominations in any case. If anyone wants to ban alcohol, gold or bitcoins, then you might as well ban breathing or gravity as well. It's clear that there can be legislation against bitcoins in virtual currencies,

but it's naive to believe that that can stunt Bitcoin. It's almost like when a little girl plays hide-and-seek and covers her eyes and believes that nobody can see her. We live in a global world that is becoming more and more networked. Wanting to ban Bitcoin in such a world is like the attempt of a lifeguard who wants to revive a swimming pool by using a line for kids who will pee or for kids who will not pee.

Anyone who wants to ban Bitcoin has either banned the internet or at least effectively ban a corruption in the internet and do it in each of the one of the one hundred ninety three countries of the world. However, such a ban would only harm the countries themselves. Clearly, one can close Bitcoin markets from one day to the next. But what would be the consequences? Bitcoin would immediately become 100% underground currency without any possible controls by the countries, which would then only be flying blind.

Currently, countries in which Bitcoin has not, yet the banned can make a correlation between otherwise completely anomalous transaction and real people. If Bitcoin is banned, and hence Bitcoin markets as well, then countries would lose the only possibility of getting the information. In my opinion, the possibility of getting data from the system is also the only reason why Bitcoin is not bent. There is no other reason. Most countries know that they would knock that small dull swirt out of their own hands.

So it's better to have a small dull swirt than not at all. This naturally does not exclude there being other attempts to ban Bitcoin. The only question is how long the ban will last. In Germany, we have a good general legal and taxation conditions for Bitcoin. In contrast to other countries, anyone who exclusively trades Bitcoin privately for himself doesn't need a permit from the authorities. Anyone who buys Bitcoins and only sell them. them after a year doesn't have to pay any tax on a possible speculated gain.

That's legal and journaling. Businesses that want to deal with Bitcoin commercially can submit an application to the federal supervisory authority. Only the topic of sales tax for companies requires further clarification. Allow me a small advertising block for Bitcoin. the end. More than 150,000 customers are now registered with us. As a peer-to-peer marketplace, our trading volume is still considerably less than markets such BSTAM or BTCE. Therefore, we also want to become a reed exchange and are

developing the appropriate, appropriate, difficult word, Weathers specifically for this. Furthermore, we also want to take a step towards the real exchange and are striving for a listing of our company on the stock exchange in the next few weeks. By the way, if you later measure, later Mase, your sell for our Bitcoin, dot the marketplace with your ID, and our booth in the full year, then you will receive a paper wallet and perhaps with a Bitcoin,

with a little luck. Okay? I'm coming to the end. We decide whether the idea of Bitcoin will be a success, not the governments. We must encourage more retailers to accept Bitcoin from day to day. We must issue Bitcoin. You must issue Bitcoins because otherwise the currency is not a currency. We must spread our idea with a great deal of self-confidence

so that people with feared money seems like the inhabitants of Papua and New Guinea when missionaries arrive in 1875 with a means of payment that was different from Sheld. And they recognized, yes, it's better, it's easier, we want it too. And because we are in Berlin, I say we are the people, we are in front. Tear down the field wall. And I will end with the toast of the Bitcoin

in the center in the room 77 in Berlin's Bitcoin Keech, which can be heard from more and more voices on the first Tuesday of the month to Bitcoin to blockchain eternity and beyond. Thank you very much. As Stuart Lichin, my name is March Alpin. I'm an attorney based in San Francisco and for a little bit of equity now, I've been litigating and cases in counseling, individuals, and companies on issues involving the law and in the technology, the Internet, most specifically. My specialties are in areas like privacy, data protection, free expression, security, encryption is something I'm particularly interested in.

And so I wanted to talk to you a little bit today about Bitcoin and how it touches. as these particular values and what that's all about. I apologize for the color. It looks a lot better on my screen than here. The colors are a little bit off, but hopefully you can read it and it won't be too garish. What we're going to talk about today? I think the point is really interesting and exciting

because the way that the protocol is designed, it has a couple of interesting little features that are very protective of civil liberties and individual rights, free expression and privacy. And as an attorney doing that type of law that I do, I think that that is something that you really

ought to think about and we ought to take advantage of. And so one of the big questions, I think, for the Bitcoin community is are these values that we care about protecting? And if so, how will we continue to make sure that those are safeguarded as the landscape changes? So,

I think a really good, way to frame the conversation. And as we continue through this presentation, I hope you'll think about this. There's this, so Lawrence Lessig, it's a law professor in the United States, and back in the mid-90s, he wrote this

book that was really a seminal work in my field. It's called Code. And the basic idea of Lessig's book is that anytime we regulate something, we tend to think of it as something that is law-based,

but really regulation comes from a bunch of different factors. And when I say a bunch, I mean four. There's law, certainly, but also architecture, the way that our system is created. There are market forces that impose regulation of one sort or another. And then also social norms, meaning the decisions we make as a community,

the rules we make as a community that aren't imposed by law, but really imposed by, people who get together and decide to do something. So voluntary codes and conduct, let's say. And so when I think of Bitcoin, and I think when we talk about Bitcoin, we realize that a lot of these factors actually are very strong.

The way that the system has built, the architecture of the system, is a huge force in the Bitcoin system. The market needs no introduction. I mean, obviously, because we're talking about a commodity or a currency, market forces are very big and important. And then there are social codes. Everybody who participates in the Bitcoin system is following a set rules that have been

determined by the community, right? And so one question is, how does law fit into this? And how do these things complement each other or work against each other? So something to think about as we continue. So the two features of the Bitcoin protocol, I think, are really interesting. from the perspective of the issues that I work on are these. First of all, the pseudonymous transactions. I choose the word pseudonymous rather than anonymous

because they mean two slightly different things and people have noted over time that Bitcoin transactions really aren't anonymous and that's true. Anonymity means that you really don't know at all who is connected to something. but pseudonymity means that there is an identifier it just doesn't personally identifiable for a person right and I think that that's really what we're talking about

when we talk about Bitcoin transactions we have public keys they are they are publicly recorded anybody can see the transactions and what public key is associated with the transaction but we're not able to link that public key to a specific person without additional information there may be ways that you can link a public key to a particular individual,

and it may be if somebody uses the same key pair for various transactions, you can connect various transactions together. But this takes some work and some additional information. And so the pseudonymous nature of the transactions is interesting, and it's important for protecting civil liberties, as we'll talk about in the moment. The other thing is the fact that the Bitcoin system is decentralized. It is meant to not rely on any trusted third parties. It's meant to be an entirely peer-to-peer currency payment system.

And that is something, as we'll talk about in a moment, that is very important as well. Okay, so, oh, that looks better than I thought it might. Okay, so first of all, my first basic premise is that pseudonymity is an important safeguard for civil liberties and the Bitcoin community should think about that when coming up with new businesses and working in the future.

So, financial transactions, I think, are form of expression. I'm not going to get too U.S. cent because I know that this is a very international crowd. I'm going to talk just a little bit about U.S. law because that's what my expertise is in and it's what I know best.

but of course the freedom to say what you want and associate with who you want is something that is considered I think at this point a general basic fundamental human right and it's in the UN's Declaration

of Universal Human Rights is Article 19 and in the United States the freedom of speech is the first amendment our constitution of course many other countries also have this basic constitutional right.

In the United States, it's been resolved now through case law for a couple of decades that online expression is protected by the First Amendment just as much as offline expression. And the publication of code is also a protected speech. And these are the cases in the United States that stand for these propositions. Now, interestingly, we've also had a series of cases

over the past 30 years or so that make it clear that political spending is considered a protected speech interest and this has come about in the context of a bunch of campaign finance regulation cases but the basic idea is that

one of the most highly valued forms of speech that there is is political speech and we care about this because people have great disagreements about it, but it's hugely important. And political speech is considered more high value than most of the types of speech, at least in the United States. And the Supreme Court has recognized that spending in support of your political speech is basically an essential part of that speech.

The fact of the matter is often if people are not able to spend money toward a certain message, they're not able to get the message out or they're not able to get it out in an ineffective way. And so expenditures are sort of they are so intertwined with political speech sometimes that they simply are part of that protected speech. So I think that's very interesting. I do think, you know, we certainly have not seen any cases

yet involving Bitcoin and freedom of speech and exactly what the speech interest is there. But my sense from looking at the cases is that in the United States at least, I think the purpose of the transaction is probably the key. It's probably the thing that will decide whether or not a court would say that a particular transaction, financial transaction, is considered protected speech, right? For example, in the United States, speech that is basically in and of itself illegal

is considered to have very low or no protection. and I think that an expenditure in the service of, say, money laundering is not going to be something that would be considered protected. But if we're talking about a situation where an individual is making a transaction because they want to put money toward a political cause that they care about or a social cause,

I think that a court would consider that to be a very high value form of action. And I think a court might very well decide, that something like that is protected by the first amendment. So let's think about pseudonyms and how they enhance that particular right. So this is an excerpt from Satoshi Docomoto's white paper, which laid out Bitcoin for the first time.

And there's a section in there that he characterizes his privacy. And he talks about how there is a privacy enhancing functionality to the way that the Bitcoin transactions are performed and reported. And he makes clear that it's not a perfect situation.

But pseudonymity, I think, is very interesting in this respect because it facilitates number one free expression, privacy, and third, free association. And the way that this works, I would say, is that there are many opinions that are unpopular.

and they are so unpopular that people would perhaps not express these opinions at all if they had to actually associate themselves with them. In the U.S., there's this great tradition of political speech that's done under a student,

and some of the founding fathers wrote what are known as the Federalist papers under one student in. It's impossible to know who wrote what, but these were criticisms of the government. And so, you know, student is something that can empower people to engage in expression they otherwise might not.

So that anonymity can also facilitate privacy and ensure that people have a spear in which to think through their ideas and decide what to express or not express. And free association, I think, is part of this too. And we have some case law that discusses this as well. There are some groups out there that are associated with unpopular, I know, ideas. And you may want to associate with the people who espouse those ideas or with these groups, but you may not want that to early know, and that may be something that you may not want your government to know, right? And so I think that this is important as well. If you're interested in Bitcoin as free speech, and you want to follow up, I would actually

recommend this article which was published just last week by a Boston at Harvard, and basically she really hashes through some of these three speech questions. and discusses freedom of association in the context of Bitcoin. Very good. All right. The second feature of Bitcoin that I think is really interesting

from the perspective of the type of law practices decentralization. And I think this is good for so many reasons. So the protocol as originally designed is supposed to be decentralized because very specifically such as she didn't want to have to rely on trust of third parties.

They're supposed to not be in the system. But as a practice, matter, I think that there is a great deal of centralization that is propped up within the system. And I think that this comes in many forms, exchanges, marketplaces, discussion forms. When you think about it, it really comes down to anybody who's providing a service to others, acts as something of a centralization point. And some of these points are bigger and some of these points are smaller. The amount of box, for example, is huge. But really, when we think about that, the users of Bitcoin, there isn't a whole lot of decentralization, I think, at this point.

I think that people who mind their bitcoins to begin with, you know, they're in a good spot. They don't really have to transact with some of these centralization points if they don't want to because they have managed to get their own points. And then there are some hand-to-hand transactions, but that's pretty rare. And so at this point, I think if you are a user of Bitcoin and you are an entrant into the market for the first time, the chances are good that you're going to have to interact with some of these centralization points. And so they've become a fundamental part of the system. Now, in Internet law, we talk about intermediaries,

and I don't know that this is a word that the Bitcoin community uses. When I say an intermediary, basically I'm talking about service providers. And service providers are always, in a way, female men, right? They probably are working with other service providers, and they're also working with users. But they are these choke points. And because they're choke points, they're prime targets for regulation. And I think that we've already started to see this.

In the U.S. we now have regulations from Finsen that are aimed at exchanges. And exchanges like Mount Gophe's. even though Mount Gox is really based elsewhere is is Mount Gox is basically assented to these regulations there have been some some indictments of some people involved in exchanges and their connection to money laundering and just last week I think we saw some states in the United States starting to actually go after exchanges too so it's very clear at this point

I think that exchanges are totally these two points. And I think those, as you look forward in your work, you should think about the fact that service providers are in this vulnerable position. And to the extent that there are laws, they're the easiest ones to target. And if you target an intermediary, you get greater regulating effects throughout the system.

It's easier to go after intermediaries than it is end users. Even if end users are the ones doing the process, behavior that you're trying to target, right? So another thing that is important to think about within the new years is the fact that they have a lot of discretion to decide what their

practices are. And what that means is that they can decide to empower others, make others' efforts possible, or they can cut them off. And here's another very recent example that I'm sure

you all heard about. Apple decided to pull a Bitcoin wallet from the App Store. It was the only Bitcoin wallet there was in the Apple App Store. I think Apple has been, it's very well known that Apple has not been receptive to Bitcoin. And, you know, on the one hand, it is a company. It gets to decide what it wants to promote and what it doesn't. And it has every right to do that, right? I mean, just like you and your companies, you can decide when you want to do business with. But this is unfortunate in certain respects as well, because when Apple makes a decision like this,

it means number one that users of Apple products, specifically I would say the iPhone and probably the iPad, are going to have more limited options for how to engage in the Bitcoin system. And, you know, it may be that certain iPhone users who would be interested in participating in the system will choose not to because it's just not easy enough to do it. The other problem with this is that I think that we have people who would like to develop products for iPhones and

for iPads, and they know that they can't get those products out there because they won't be distributed through the X-Star. And so, this has some effects that I think are very anti-innovation and anti-indusor that are unfortunate. And, you know, if other platforms decided to take similar steps, what would that mean? It would mean that the options would be

even more limited. I think it's worth thinking about the WikiLeaks. Back in 2010, K-Pal and Visa and MasterCard all made the decision that they weren't going to process financial transactions so that people could donate to WikiLeaks. And this was a big news story at the time. I think it was very interesting because WikiLeaks, there's a lot of speculation about what WikiLeaks does is legal. Now, there's never been an indictment brought against anybody associated with WikiLeaks for distributing classified information or anything.

No country has taken steps against WikiLeaks, even though we did know in the United States there was a grand jury convened to investigate WikiLeaks, right? And yet payment processors made a decision based on some, apparently some, informal pressure from the U.S. government, to not process transactions. And, you know, this could have had the practical effect of choking off WikiLeaks entirely and making it simply go out of business, to the extent that it's in business.

Now, that didn't happen in part because people have donated quite a bit through the Bitcoin system, which is something, by the way, that was very concerning to Satoshi back when WikiLeaks first wanted to suggest that people do this. And I think Satoshi, he or they, they were very concerned about this.

And they worried about the potential backlash that WikiLeaks could bring on the Bitcoin system. I understand that WikiLeaks at that time didn't push for donations of Bitcoin, but after Satushi kind of went off the radar, Julian Assange started encouraging people to use Bitcoin. And at this point, this is how they get most of their money. Most of their monies are Bitcoin donations.

And I think it's interesting. It brings us back to the speech angle. If you're a person who wants to donate to WikiLeaks, you might like to do that in a way where your identity is not necessarily known to others. That's a very good reason when you might want to support something in a way that is not immediately and obviously known

to government. So I think what this shows is that decentralization is a good thing. More decentralization, I think, makes the entire bit of points a system more robust because we move away from this choke point problem, our intermediaries being chock points for regulation. I'm not an economist, but I think it could have helped to stabilize the market because we would not be so dependent upon just a handful of big actors like Mount Crops.

And so every time one of the big big point exchanges has a disaster, it would mean some volatility in the market, I would think. more decentralization fosters new innovation by lowering barriers to the market so when we have little innovators who have a really cool new idea for something it's easier for them to get their idea out right I also think decentralization attracts new consumers because I think it will make the use of bitcoin as an actual currency that is something to buy something with more viable

and I think it will also encourage innovators to come up with more user-friendly innovations. And, of course, I have an ulterior move because I care about things like Pre-Sage and Privacy. I think more decentralization is good for those things as well. I think that more innovation, more engagement by consumers, and more players in the space is just better because when we have a few big players in the space, it's so easy to kind of crack down on those guys.

and the more decentralization we have, the harder that is. I would point out that there are some folks out there who are actively trying to develop things based on Bitcoin that are meant to preserve privacy and free expression. For example, there is Namecoin, which is going to be a DNS system based on the Bitcoin model. that they're hoping is going to be more censorship resistant

than our current DNS model. Dark wallet is a planned wallet that people can put in their browsers that are going to have privacy by default. And Zerocoin is something that some academics are developing.

It's going to be a system that actually is built off of Bitcoin that sort of operates beside Bitcoin in a way that can ensure truly anonymous transactions, which is interesting. So there is innovation in the space to try to build in civil liberties into the architecture. So there are my takeaways. Number one, I think spending can be considered an expression that you have a right to in the right circumstances, and that's worth

protecting. Financial transactions are closely intertwined with each association, privacy. We should keep thinking about that as the system develops. And Bitcoin's community supports these values, and so it's a good thing. And decentralization is spectacular. And I think that the Bitcoin community should do whatever it can to continue to foster that. And one reason why that is

is because the big intermediaries that we rely on so heavily now are going across ours. and the more innovation, the better purpose is going to be comfortable. So that's what I got. Any questions? You were just talking about the Fifth Estate, the Wikimedes movie last night, and a lot of the footage was actually shot right here. They showed clips of Tocales, clips of this building,

and the parking lot across the street. That's where Juliana is on. So questions, yeah? Just say where you're from and see it. So my So on. Wonderful. And my name is

Dion Stein. I'm from Bitcoin. A Bitcoin tank underdevelopment. And I have a question about the considerable

thoughts about a constituted on some of the laws concern at these short points

of this constitution maybe I guess I should ask about the first constitution. So

and Berkeley as an change to follow a lot of laws that are basically meant to protect net use, financial activities. So for example, I'll have to

as a money service, business in the US, send a suspicious activity requests to parts of the government and otherwise maybe I may summarize my own impression of the

eye to other parts of the government about the existence of the if I ever are in the unfortunate position to be so very much about that I'm just thinking how can this be a customer who somehow gets into

this process will never find out and will never be able to defend himself from the consequences and all be feeling that I'm co-opted to aspire to my customers and all there will just to do this wrong? Yeah.

Is it wrong? Can you use something in your knowledge with your chances of children or insufferation? So, I'm glad that you ask that question

and I am not, you know, I don't consider myself a specialist in the money laundering regulations. And so I think that you certainly want to talk to a lawyer who is more experienced

in those particular regulations than I am, as a general matter, I will say that in the internet space with the intermediaries, we've seen over the past several years a bunch of practices that the big players have adopted that are meant to be user-friendly. And the idea is that they want to show they are on the site of the users, right? And one of these practices, for example, is, you know, most of the Google, Twitter, a good number now of companies,

say in their privacy policies or their terms of use, if we get a government request for your information, we will let you know about that unless we're prohibited by law, meaning there could be some sort of a non-disclosure order that has served along with that. It could be that it would be illegal to let you know, but if it's not illegal, we'll let you know. And because so many new players now do that,

that's become, I think, pretty much industry standard. That's what most intermediaries do now. Similarly, a lot of the big internet intermediaries are publishing transparency reports. So annually or even quarterly, they will actually say, we got this many subpoenas, and this is how we handled that. And it's aggregate data, and actually a lot of these companies are in a big type with the U.S. government right now because they would like to be even more forthcoming about how they responded to data requests from, for example, the NSA.

and the government is pushing back against that, but it's a fight that they're willing to do. And so this is something that I think that all of you should think about. The FinCEN regulations, as I understand it, they apply to exchanges, but very clearly there are other service providers associated with the point that aren't exchanges that don't have to comply with those. And as a general matter, I think that you all can think about how you would like to be viewed by your customers,

how you can show that you are on their side, and how you would, you know, I think you can be transparent to at least a certain degree about how you deal with law enforcement and how you handle requests like that. So that's worth, that's worth exploring. Hello, my name is Stephen Keller. I'm here today for the government

Bitcoin exchange, is in the group where you can trade Bitcoin's based on cash or whatever you like. So we don't care about it to people. do it. So I'm really in favor for everything that you said about decentralization and empowering people

to transfer money wherever they want. But actually I think you're preaching to the choir someone here. We need to get this message to the bitcoiners to cover this kind of context

but we should get to the point where any NGO is accepting Bitcoin as a middle of dimension. That's my question. How do we get these NGOs these civil rights movement

to actually embrace Bitcoin? Because my experience it's more that they think, okay, this Bitcoin thing is just about money, people are willing to which we stay away from there, and they don't embrace it as they don't understand, the benefit of the economic health from the system.

I totally agree with you, and I used to work for the Electronic Frontier Foundation. As some of you may know, we got some early Bitcoin donations and then decided not to accept it anymore. And the reason was because our

the executives of the organization were really concerned about it. They were concerned about whether, you know, they felt like there are complex financial regulations out there. How do we know whether this is okay? Are we doing something wrong by accepting it? So, you know, there was a lot of uncertainty, even for a very tech-savvy organization. And ultimately they reverse that decision and now they accept Bitcoin. But I expect that a lot of NGOs probably go through that same analysis.

And I think, first of all, I think you have to be very technical to accept it. We don't know how to do this. Number two, is this even okay? And so I think that as more people, more normal average people, start to accept Bitcoin, I think NGOs will just normally be part of that. But I think also, you know, to the extent that they find the technology daunting, I think offering assistance to help them get set up and figure out how to accept it would probably be appreciated. And maybe get them all in the oil when they need one.

Yes. And the folks who know about this point, the protocol itself essentially doesn't relate to anything about the identity, right? So my question is that for law enforcement, who really has a genuine need to determine it, the protocol doesn't allow it to just plain kind of a service advocate. What's the solution to you have? I mean, as merchants, we really don't want to deal with that.

but at the same time, I get to ask this question a lot. If there's a general decision not believing on Dragonite type surveillance, the protocol really doesn't allow to do anything that request. You could be an end power browser, you could be known that can be physically. What's your answer to that? Well, you know, for one thing, I think that's how it's designed. And there's not much that anybody can do about that, right? to the extent that law and personal

I think, or let's say governments, are going to try to combat that problem. I think that they'll probably do it by encouraging intermediaries to collect more personal information about the people that they transact with. And as long as that's not legally required,

then there's no need to do that. But I do take your point that that makes it very to law enforcement to do their job. On the other hand, you know, we've had things like Torp for a long time, and, you know, cash has always presented this problem, too.

And so while I think that this is something that's important and that we need to think about, I don't think it's a novel or new problem. I think that criminals have always taken steps in one regard or another to cover their tracks,

and there have always been things that have taken advantage of to try to do that. technology, but also even well before we ever had the internet. Right? And so I think it's just an ongoing battle, and I don't think it's anything new. It just is what it is. I think law enforcement always feels like its job could be easier, and I'm sure it could be, but we've also made the decision in various governments to strike a balance between individual rights and law enforcement and their powers and what they need, what tools they need to do their job.

And, you know, I don't think it's clear to me, at least not at this point, that, you know, basically we need to make all of these intermediaries collect a bunch of personal information in order to make law enforcement more able to do their job. I think that we're just, I think we're on there yet. Yeah, thanks a lot. But in terms of cash, it's not across the water and maintenance. So, you know, that's true. So this is, that is definitely a new, yeah, that is a new aspect. Anybody else? Well, Marsha, thank you so much.

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