Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Esteban Ordano & Manuel Aráoz: Streamium – Pay-Per-Second Video Streaming for Indie Producers

Episode Date: October 5, 2015

One of the key innovations of Bitcoin is the ability to easily implement payment channels. A number of use cases have been discussed or demonstrated, among which is the idea of pay-per-use. This is particularly useful when charging for things like WiFi or streaming video by the second. With this in mind, one could imagine a line of communication between two peers, where data flows in one direction and payments flow in the other. This is the idea behind Streamium, a free and open-source service which allows content creators to stream live video directly to viewers, and get paid instantly. We’re joined by Manuel Aráoz and , the two brilliant software engineers from Argentina who created Streamium. They have worked together on numerous Bitcoin projects these past few years, including ProofOfExistence.com, Faradam, Decentraland, RelayStore, and actively contributed to the BitCore javascript library. Topics covered in this episode: The current state of Bitcoin in Argentina The general idea behind Streamium, how it works and its technical components How payment channels are implemented in Streamium and its various use cases The Faradam project The prospect of alternative content funding models made possible by Bitcoin micropayments Proof-of-existence and what innovations blockchain technologies brings to data notarization The Decentraland project and the vision for a blockchain-based virtual reality Episode links: Streamium Faradam Decentraland Proof of Existence The Mental Accounting Barrier to Micropayments by Nick Szabo Manuel Aráoz's About.me profile Esteban Ordano's personal website This episode is hosted by Meher Roy and Sébastien Couture. Show notes and listening options: epicenter.tv/099

This is Epicenter Bitcoin episode 99 with guests Manuel Araoz and Esteban Ordano. This episode of Epicenter Bitcoin is brought you by Hyde.me. Protect yourself against hackers and safeguard your identity online with a first class VPN. Go to hide.com and sign up for your free account today. And by Voltoro.com, the gold to Bitcoin exchange. Trade gold to Bitcoin instantly and securely, starting at just one milligram. Go to Voltoro.com to deposits to Bitcoin. and start trading today.

Hi, welcome to Episenter Bitcoin, the show which talks about the technologies, projects, and startups driving decentralization and the global cryptocurrency revolution. My name is Sibasankuu. And I'm Meher Roy. Today we are joined by two, a pair of talented developers from Argentina. They have worked on many projects. Some of them are quite well known in the Bitcoin industry. These projects are proof of existence, streamium, ferradam, and decentral land.

We are going to talk about their projects and the prospects of Bitcoin in Argentina. To introduce our guests, they are Manuel Artax and Esteban Ordano. We are very happy to have you on the show Manuel and Esteban. Hey, Mer, thanks for having us. We're glad to be here. Hi, hi. Thanks a lot for having us here. Okay, so perhaps we could start with Bitcoin in Argentina.

Because there's this impression in the Bitcoin media that Argentina is the one country which could adopt Bitcoin and jumpstart Bitcoin and leapfrog ahead of all the other nations in this technology. What's your opinion on that? Yeah, it's actually pretty funny to us to read all those articles claiming Argentina is like the center for Bitcoin and where Bitcoin is growing faster than. it's actually not quite true. As I always tell everyone, Argentina is kind of a good spot in many ways for Bitcoin because our local currency is really, really bad and there are big capital controls and it's hard to get foreign currencies. But actually adoption is pretty slow and I would say Bitcoin is growing much faster and adoption is much wider in other countries. So,

I wouldn't say Argentina is the best place for Bitcoin right now. And it's actually, I read many things in news articles that are totally not true about Argentina and Bitcoin. So be careful about that. But at the same time, the development scene in Argentina is quite good. There are many companies and cool projects that are springing from Argentina. So that kind of counterbalances the low usage. of Bitcoin in general. And how, I mean, I think one thing that has been pretty consistent is the Argentinian government's

attempts to sort of stop Bitcoin from proliferating in Argentina, regardless of whether or not it's being used. How are those startups coping with that? Yeah. Actually, the Argentinian government is not actively working against Bitcoin. wouldn't say that. There was a, the only official communication or action about Bitcoin was a posting by the central bank, warning the population about Bitcoin not being minted by the, by the government, like saying, okay, be careful with this because we don't regulate Bitcoin,

we don't regulate its emission, so be careful. And that's about it. As far as I know, I'm not a legal expert, but it's actually a more or less friendly environment for Bitcoin companies in Argentina. So we've been duped by all those Korn desk articles telling us that there's like so much stuff happening in Argentina that it was like the next place where Bitcoin was going to be developed, but in fact it's just like anywhere else. Well, yeah, as I was saying, I think there are some really good development. working on the technology side. And there are some interesting companies down there too.

But as far as what we read at least about adoption and how it's the perfect ecosystem and that we will get millions of users, I think that's not going to happen. I mean, it's not going to happen in Argentina first, at least. Okay. Well, let's talk about your guys' background a little bit. It seems like you've both been working together for so long and you've been together on many different projects.

Tell us a bit about how you both got into Bitcoin. So we've been working on Bitcoin since like two or three years ago. Manuel started on this. We actually have a chat conversation back in that time trying to manage, organize Bitcoin development. meetup. Then Manuel went out to create proof of existence. I was doing, I was working at Google at some point around that there and we, when Manuel joined BitPay, I joined a few months later and that's when we started working together in this space. We already met each other from college.

We're actually pretty good friends from many years ago from college. As I said, we were at first interested in Bitcoin, like from the side. We were not working with it, but we chat about it. Then I did proof existence as a small experiment. It turned out to be pretty well received in the community. So after that, I was unemployed, so I started doing freelance work for Bitcoin companies, mainly or trying to work with Bitcoin, given that I had a small experience. with that and it was really interesting in the technical side.

And after working for a year and a half with consulting in Bitcoin, I met Tony from BitPay and I joined there. And a few months later, I convinced Esteban and a couple of other friends to join. And we've been working there on all these projects. You mentioned Extremium, Faradam, Decentraland. We also collaborated on Building Bitcoin, which is the open source, JavaScript library for Bitcoin applications as part of the open source initiative by BitPay. So maybe with that we could go into discussing your new project Streamium.

So for our listeners that have never tried Streamium or heard of it, could you describe what it does and who it is meant for? Yeah, sure. So Streamium is a live streaming application that uses Bitcoin Payment channels as a monetization. option. So it started off as a hackathon project between seven friends. It's actually, the team is quite big. It was a group that we used to get together during the weekends for, we call them Bitcoin dinners. We got together and talked about latest news about Bitcoin, what we saw about the future. And after a while, we got bored about just talking.

because most of us are developers or work with technology. So we wanted to actually do something. One of the guys suggested doing a hackathon. So we got together on a weekend and started, it was actually Stefan's idea to build Streamium. We were talking a lot about payment channels and we wanted to build an application that was interesting in the sense that it showed the real value of payment channels

as a protocol. So we built it over a couple of weekends. We launched it several months later because it was a super slow development in our free time. But that's a story. So what it basically does is it allows a user to record something and stream it live and stream it live and in exchange receive payments through Bitcoin micropayment. channels. So maybe we could discuss part of the architecture

of Streamium. And there are two important sections to it. One is how does the money flow? And the second is, how does the data flow? And could you explain how both of these things happen when I create my own Streamium stream? Yes, of course. So Streamium uses WebRTC, which is a decentralized

peer-to-peer protocols. so browsers can talk to each other. We are currently relying on a rendezvous server so that browsers can create the connections between each other. And with that web RTC connection, you can send both data and the video. We're using the capability of sending data

so they can negotiate a Bitcoin payment channel. And this is actually, actually, I think it's the first implementation of a payment channel for some kind of like real world usage. Once that payment channel is established, the video streaming starts. And it's a broadcasting mechanism. So if I'm broadcasting my video, everybody that is receiving the video will have to be paying me through a pay. me through a payment channel. So from a technical standpoint, it's not fully, fully decentralized.

I will say the gotchas in a second, but both the video goes through a peer-to-peer protocol and the payments, because payments grow through Bitcoin payment channels, which we'll know is a decentralized payment system. And the video goes through WebRTC, which is a peer-to-peer protocol for the browser. And the two points of centralization are what Esteban mentioned, the rendezvous server where peers can get the other peers information for discovery. And of course, the static HTML server that serves

the files for the client to run the application. OK, so could you describe the payment channels and how they work in more detail? So a payment channel is kind of like a payment channel. opening a tap in a bar, you set a certain amount of money that it's the maximum that you want to spend in that payment channel, and you lock those funds in a two-of-two address. So this two-of-two is controlled by both parties in the payment channel. So any transaction that gets signed will have to have the approval of both parties.

And there's a time lock mechanism in case I funded this payment channel, but the other party that is going to be receiving the funds will not be willing to sign a transaction, giving back all the funds. So after a day, you can recover all your bitcoins. Is that clear enough? Yeah, but so if I understand that in this. case what you're doing is you're doing a two of two multisagnetual transaction. The person that's doing the streaming will have incentive to sign that.

So for the viewer, what forces him to sign? The viewer is the one that will fund the channel. We usually call them technically the consumer and the provider of the service. So the consumer funds the channel and asks the provider for a sign a transaction that becomes valid the next day so he can have the funds back if the protocol gets interrupted. Okay. So once the stream is initiated, the consumer has already signed his part of the transaction and is waiting for the provider to sign his part of the transaction.

Yes. He actually does this. He signs a transaction. And he waits for the provider to sign a transaction, a second transaction, spending that first two-of-two, paying to a two-of-two address transaction. It's kind of like complicated. I would need a blackboard to explain it. Well, that's okay because this is a podcast, so people don't necessarily see. If they're not watching the video, then I'm going to see it anyway. but and so the the payment channel is opened and then so there's a payment for every chunk of

let's say 30 seconds of video how does that work how do you how does the money keep flowing all right so as sending an update of the payment channel which means spending a little bit more money from those locket funds when when When I send one of these small micropayments to the provider of the service, he will send me back the video. Right now in Streamium, what we are using is we interrupt the video if the payment flow stops coming and if the video stops coming, we interrupt the payment flow. So it's a trustless solution for payments.

So basically, could we say it like this? Suppose it's me, me the creator of the video and Esteban is the consumer. I'm the producer and Esteban is the consumer. Then what is happening is when I start my stream, nothing happens. Now when you want to see my stream, then you will send your Bitcoins into a multi-signature address that is controlled by you and me jointly. right? Yes.

And so now, so basically when the service started, you agreed to watch the service for a maximum of one hour, and then let's say the price of that one hour is $50 an hour. So you locked $50 worth of Bitcoin into an address, which is jointly controlled by you and me. Now what starts to happen is there has to be data, that needs to go from my webcam because I'm the producer to your terminal. So with each item of data, let's say like there's a big packet that has 30 seconds of video.

So corresponding to the transfer of that item, that packet of data from my computer to yours, you need to send me a transaction which allows me to claim part of the funds that were locked into the multi-signature account, right? Yeah, that's correct. And it doesn't have to be 30 seconds. It can be one second. It could be one minute. And you may want to be sure that you have a certain margin of error,

so you don't stop the video because you didn't receive the payment. So it's actually more like a flow of video in one way and a flow of payments in the other way. Okay. So the question I start to have here is let's say I am creating a stream and I have already created this multi-signature account with Esteban because Esteban is watching my stream. Now Manuel joins, Manuel wants to see my stream so I create another account with Manuel and and then Sebastian wants to join. There's a third one created.

Is it the case that I'm broadcasting my video data to all three of you through WebRTC? Wouldn't that need a lot of bandwidth on my side? Yes. You are constrained by the amount of bandwidth that your upstream connection has. So if you want to have many users, let's say, I guess that more than 10

will start to really stress the connection. You may want to look into a different solution, some kind of like first cast to a server that will then broadcast the video to a lot of users, or maybe use a more decentralized solution like BitTorrent for the distribution of the video, right? Let's take a short break to talk about our brand new sponsors, hide.me. Personally, I've been using them for about a year, so I'm really excited to have them on. You know, we sometimes take our privacy and security online for granted. I know that I did.

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Now, you mentioned BitTorrent. That's interesting because we have thought about different ways that you could scale WebRTC. And I guess this would not only apply to what you're doing in sort of the Bitcoin micropayments space, but also could be potentially used for large-scale WebRTC broadcasts by just about anyone is by using BitTorrent or perhaps IPFS or some other distributed file sharing protocol to stream video. Does that not really exist?

Has that been done before? Or is this something that you're looking into for Streamium? Well, actually, one of the other Streamium developers, his name is Shemel. He did a small experiment about that. We had the same idea and he wanted to test it out. And it actually worked pretty well, but, well, not pretty well. It could work, but it was hard to make it perform well, talking about live video quality. So there are some complications where you're dealing with a live stream of video.

And we are having, because torrents are predetermined size files, because you need to check the file integrity and it has, it's not designed to stream files. So you have some problems when you are connecting several chunks of video and it's also As Esteban pointed out, in live streaming, you can drop some frames and it's fine. But the BitTorrent protocol doesn't support that kind of stuff. You need to download the whole file. So we had some pretty successful experiments with that.

But there's still a lot of work to be done to optimize the protocol and allow other ways to distribute the video without relying on the provider to share the same video to everyone. And is, I mean, is this something that has been addressed? Like, I mean, the problem of streaming live video to a large audience without having to rely on some centralized third party like U-stream or something like that. Is this something that has been addressed or perhaps we have actual solutions for outside of what you guys are doing? Not that I'm aware of.

But it will be interesting to see if there's a distributed peer-to-peer version of the real-time protocol, which is what WebRTC and Skype or all those solutions use. It's either RTP or XH263 or 363 or something. I don't remember. It could be a really cool experiment to build something on that. Well, I mean, if you guys successfully do this with BitTorrent, you'd essentially be the first to achieve that, right? Yeah, we actually don't know if there's another project doing something similar. We should look it out, but as I told you, it worked as a proof of concept,

but it still needs a lot of work to actually work correctly. We would need to polish the protocol in many ways. And I don't think the best solution is to use BitTorrent based on the things I mentioned earlier. But maybe building a specific protocol for this could work. Another question is, doesn't the fact that Bitcoin need confirmations, to confirm a Bitcoin transaction, one needs one hour, and zero confirmation transactions are not secure, So doesn't it impede stream in any way?

Like, for example, if me and Esteban want to launch this stream, then Estabahn's money needs to be locked in this two-of-two multi-signature account. And the process of that locking to be secure needs one hour. So how does it work out? What if I try to double spend you? So right now, streaming uses zero confirmations by BlockCyfer, and we are using the confidence in transaction parameter from them. Because the threat model is quite low on restrictions.

If like the worst thing that could happen for you is that I can watch a few seconds of video from you. Because the streaming right now when it detects a double spent, it will cut the channel off. So you could be stolen of a few seconds of content from me, but that's kind of like the worst that could happen. Streaming on your side will take care of that, and if the transaction gets confirmed, then it will stop checking for double spends or stuff like that.

Okay, so basically what you're saying is that when I'm trying to create this stream, there is a risk of double spends, but the value at risk is very low. So, for example, if I'm charging $10 an hour for a stream, and you do a double spend, maybe it's the case that you saw $2.5 worth of video

and I didn't get paid for it. Yeah, exactly. We managed to successfully double spend. And probably even less, because right now, block cipher at the moment it detects in any transaction anywhere it will report that and streaming on your side will say no hey this guy is trying to make a double spend so let's stop the video right now today's magic word is stream s t r e a m head over to let's stock bitcoin.com to sign in enter the magic word

and claim your part of the listener award So what is the monetization model for a service such as Streamium? Are you looking to monetize it in any way? Yeah, so Streamium is an open source and free project. Anyone can use it for free. There's no charge. I mean, the streamer charges their audience, but to use the product is completely free.

There's no fees. We're not planning to monetize. monetize it in any way. We had some ideas of doing a separate service that allows streamers to increase their potential audience based on the scalability problems we already discussed given that it's completely peer-to-peer and the limit is based on the streamers bandwidth. We were thinking about building a service that broadcasters could connect to for a fee distribute, it could distribute the video for them. So still using WordC, but with an intermediary for video distribution.

But we haven't completed that. I mean, we haven't moved forward with that. It's an idea. It's there in case we want to pursue monetization of Streamium. So then the content producers get 100% of the money that, that they charge for the video. Yeah, exactly. Oh, that's really cool.

So we had another question regarding piracy. What prevents someone from re-broadcasting a stream that they're paying for for free or for cheaper than what they're paying for it? Basically nothing. Nothing. Information wants to be free. The moment that you gave out information, the people that received it is free to rebroadcast it. I think that what waits in favor of the content producer is that probably the quality of the rebroadcast will be lesser because of the video streaming.

It's kind of like loses some quality. It's important to note that we're not trying to solve piracy with with streamium. It's just a way to monetize live content you create for free, but of course, once the viewer

gets the video on their machines, they can rebroadcast it in any way they want. They already have the day. Like any content essentially. Yeah, exactly. Yeah, okay. Well, then, I mean, my next question is on use cases. So,

So, you know, there's so many ways to do steering video these days. We're using Google Hangouts right now. Of course, that doesn't provide monetization, but, you know, some other solutions do. I believe YouTube is now starting to do monetization in their streams and those other services that allow that. What differentiates a Streamium user from YouTube paid live streams, I don't know what they call it, but from centralized services,

what types of people you see using Streamium as opposed to other types of streaming services? It's kind of funny, but we have like 50% of our users are basically porn. So it's come girls doing shows online for their clients, I guess. The other big use cases are education and live gaming. So it's people doing online classes or showing their screens while they play video games. But the biggest one by far is porn. We think that it's probably based on the advantages you have with Bitcoin where you don't have the so-called...

We learned about this after launching streamium. It's something we didn't know about about. But in live porn, like live camera porn, there's the problem of what they call the wife chargeback, where they have a really high rate of chargeback. And it's not based on the actual user, but when the wife sees, oh, what is this? And he says, no, I don't know. I didn't use that. Okay, let's do a chargeback.

And that's a big problem apparently. And this sort of solves that. But it also allows the user to sort of end the stream at any point in time so you don't have to prepay for something you want to watch. And it's sort of a win-win in both sides. That's our analysis of why this is interesting for the porn use case. So there's the privacy and anonymity part on the client's side. And I suppose on the provider's side is more money in the girls' pockets and not having to subject to the rules and restrictions of some campsite.

Yeah. Essentially, the people using it are completely independent. Yeah, and apparently the fees, those sites charge for the girls or the video producers is really, really high. Like, I don't remember exactly the numbers, but I heard something. something like 40 or 50% so it's math. So on the other types of people using it, you mentioned education and online gaming. Are you talking about sort of Twitch style of people streaming their online gaming? Exactly.

So in education we have several language classes like English or Spanish teachers. And a small amount of users doing consulting. and on the gaming side it's mainly just people playing video games and streaming their screens while they play. That's a feature we added some weeks after we launched Streamium, the possibility to broadcast your own screen because some users requested that, so we added. So, like, I mean, obviously with everything Bitcoin, all the technology, technologies are in this super early phase and somehow it also resembles the internet of old in which pornography was the first killer application.

So maybe it's fitting that even for Bitcoin this should be one of the first. I had this imagination that maybe one day drones could stream. I have this like $400 parrot Bhop drone that you can fly around and even though it's moving in the air. The video quality is extremely still. It seems like it's a tripod flying in the air. I had this imagination that perhaps in the future I'll go to a concert from Pantera or some band or Bono. And there'll be drones flying around and I can actually check out. And they'll be using something like Streamium to send out their video and I can actually take any of this stream and see what the drone is seeing basically. So, I mean, I had the feeling that it's an idea that has a lot of users in the future, and maybe it needs just Bitcoin to catch on in order to be really widespread.

It was interesting also to see, like, you mentioned that you have this service that just does micro payments. Could you tell us what that is? Yes. Yes. Based on what we talked with our early users, mainly on the education side, most were requesting some features we were not ready to develop. Like, okay, we need a digital white word where we can sort of write stuff and the student can watch that, or we need a dual video communication so that the viewer can also send their

webcam content. And we said, okay, do we want to really build a... an education product. Because what they, we, based on what we talk with them, what they really valued was the fact that they could charge by the second they were doing the class. Because sometimes they have problems charging after the class ends. So you do a two-hour class and then the student disappears

and they never pay. And so it's hard to get the money. The money is a problem in online teaching. So when do you charge? before the class after the class. So this solved this. And we thought that maybe extracting the payment system from Streamium and doing a super simple app

where you can use payment channels inside of any other application could be interesting. So we did that. We built Faradam. It's just a good way to describe it is Streamium without the video. So you create a session. it's like a timer where you create a timer, you set your hourly rate or your rate per minute,

and then you can connect a client and charge them by the second. And you can use it combined with any other application like Skype or whatever, it could actually be a chat session or whatever you want and charge for your time to your clients. So which gets the higher number of users? Is it Streamium or is it Faradam? So as I understand it, it's streamium is Faradam plus the software to do live video streaming. So which one is proving more popular?

Yeah, actually Faradam was a pretty unsuccessful experiment. We had really few users. It was basically the users that requested that functionality that you did a couple of times, but then we didn't see any actual growth, even though we tried to make it grow in some ways. So it's definitely, Streamium is way more popular, and we have more users there. I mean, it seems kind of obvious since, you know, Streamium is sort of more of a final product where Ferradam, I mean, you sort of have to make it, you have to, you have to come up with the means to provide the sort of,

service which you're charging for. And of course, you have all that porn on streaming, and we all know that brings in a bunch of people, right? I wanted to talk about alternative funding models. I mean, micropayments have sort of been touted by the Bitcoin community is one of the killer apps, and Bitcoin has often been described in some sense as a way to solve the content monetization problem. that we have. I mean, we've definitely, it's been something that we've thought a lot about.

How do we monetize our content? I think a lot of content producers also ask themselves that question. There's different ways to monetize your content. You can sell advertising as we do. You can have a paywall. You can charge by the article, which is mostly like pay-per-view. and for the most part, advertising has won pretty much for every types of content that you don't literally pay for with money. Now, with regards to Bitcoin and micro-transactions and how you would pay for content, I mean, it seems promising, it seems interesting as a thought experiment that you would go on some website and you would come up to an article and it would tell you, okay, you want to pay for

this and you just say yes or a YouTube video or perhaps a stream. But in reality, I'm not sure that people are ready to do that. For one, you need to have people using Bitcoin in this particular example. And two, people are so used to not paying for content directly that in order for that behavior to change, you would need a whole lot of... sort of pressure, I guess, from the content industry. I'd like to know what your thoughts on this. Where do you see micropayments going in the future?

I have some thoughts, but I think I'm talking too much. I want to know if Esteban has some comments there first. Well, one of the biggest issues that we've seen with user-facing micro payments is the mental cost of those transactions. You don't want to be browsing around and at the end of the day knowing that you lost $10, $20 in some random website. But at the same time, you don't want to be agreeing to be paying one cent per each article that you're reading.

So it's kind of like an unsolved problem from an usability point of view. But at the same time, it's probably going to be most used in machine-to-machine, this aspect of micro-payments. Although right now the best solution that we've seen for content monetization is this one of recording every website that you've been to and at the end of the day pay out accordingly to each one website that you've seen based on how much time you spend on it or how much you like it or how much which ones you liked it the most. As a donation essentially.

Yeah, something like that. Right now, I think it's the best kind of like solution. I don't know what Manuel. That's one of the things that we were. what is canceling with Manuel. Yeah, I agree. It's a really hard problem. There's many, many, many companies and many smart people working on this, because we all see,

we all have the intuition that there's some way of using Bitcoin micropayments to sort of change the way content is monetized on the web or in general online. But it's a really hard problem. We need to work on the really small details of the user experience. experience. There's a really great article by Nick Savo talking about the mental transaction costs of micropayments and how smart contracts can help with that. I recommend reading that if you're interested in the topic. But it's actually a, it will be a really long work of trying to figure out what the user interface is. In the case of human level micropayments

for content, I agree with Stevan that will probably see other applications where there are no humans involved, and their micropayments make much more sense. Because essentially, what micropayments and smart contracts solve is the problem of trust between the parties. They reduce the trust between the two parties for an economic interaction. And in the case of computers, I mean, in the case of humans, the trust is usually there. So it's really in the details where you can improve the experience with micropayments.

But when you have two machines interacting, it's really machines cannot trust other machines because they can break or they have, I don't know, the concept of trust is really human. And it makes a lot of sense to try and build some applications of micropayments with machine-to-machine interaction. There's one interesting example of an attempt to try to solve this content monetization problem or to at least reduce the number of ads that we see is perhaps you've seen a Google contributor. So basically what Google has done is said to their users, I mean to everyone who uses the internet and sees Google advertising. So whenever you go on a website, for instance, and you see an ad, there's a pretty good chance

that that ad was sold through Google and the content producer is making money when you see that ad and when you click it. And what Google has done is they said, okay, we're going to put up this platform called Google Contributor. And as a user of the internet, you can pay upfront, say, $2, $5, $10, $20 per month to not see ads. And rather than paying the content producers through the display of ads, you're going to pay the content producer directly through Google contributor, and we will give them the money, basically, as though you were seeing an ad. Instead, you'll just see a white box, or you can put custom

HTML in there or whatever. So I thought that was really an interesting experiment, but Google is in a particularly good position to do that because they own the advertising space. That's part of the problem with these kinds of solutions, too. It's hard to solve the distribution of a micro-payment solution for content monetization, because when you don't have any sites that support this, you have no reason for users to have the client side of the application. And if you have no users that can pay for these micro-interactions, the sites don't have any reason to implement the system too.

So it's also a business or sort of growth hacking problem where someone needs to figure out a way to make this grow in some way to solve the chicken and egg problem, so to speak. It's time for a word from our sponsors, Voltaural.com, the gold to Bitcoin exchange. Look, if you've ever traded gold with fiat, you know how much of a hassle that can be. Of course, trading gold with Bitcoin makes it super easy and super fast to send money into the exchange. And with Voltoro, you can start trading gold as little as one milligram, and their trading fees start at 0.2%. And with the world leading security and transparency that Voltauro are providing, you can rest assured that your bitcoins are safe. And by the way, because you're trading commodities, you don't need to provide any KYC documentations for deposits less than $5,000 worth of Bitcoins per day, which means that there's barely any, there are no barriers to entry. You can get started today.

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and you can now deposit your bitcoins and start trading straight away. So keep improving your service. So go to walteroro.com and start trading gold today. We would like to thank Voltora for their supportive website of Bitcoin. So you've mentioned that the mental cost of transactions is a barrier to micropayments. And on this front, I think Streamium has, you know, we did quite a bit. Like all the user sees is how much somebody charges per hour. And then the system works and you just decide whether you want to give something 50.

dollars an hour and then you watch the stream and you close out and everything else is handled on its own. The user doesn't really see the meter running for example. What kind of user feedback have you received regarding this aspect? Are users happy with this kind of system or do you think something else is needed, something even better is needed? Well, right now the highest barrier for using payment channels is the knowledge of that you are sending this transaction for the maximum amount of time that you will be watching. And that kind of like confuses the users. Because, well, I've already tried to explain the payment channel, but it's a complicated thing to do. With the streaming, we're having that maximum amount of money to be locked in thing,

which is the current biggest problem for payment channels for users. Because the fact that the users need to lock funds and there are currently no wallets supporting payment channels natively, we need to ask them to make a sort of deposit, it, then we create the payment channel. And even though it's trustless, we require the user to send the actual total amount. So it feels like, OK, am I prepaying this or not? So a big barrier to that is actual wallet adoption

of the payment channels protocol that would decrease the mental costs a lot, I think. But with regards to the metered payment, we actually asked this question, because we were afraid of the same thing. about users being, I don't know, nervous about the costs, not knowing how much they're actually paying. But from what we interviewed,

all of them said that it was, okay, like they understood it and they were not nervous. They were not checking the time to see if they were wasting a lot of money or not. I think we did a pretty good job, but we're still really far from an optimal solution, I think. Yeah, I used your service, and in the beginning, I saw this multi-signature address and the first thing I thought was

it's a centralized service that I'm sending money to you and you will partition the money between me and the stream creator but then that turned out to be wrong. It's actually a wallet in a browser that we have to code so we can have the payment channel. So basically when I put in money I'm actually creating a new

set of private keys and with those new private keys I'm putting money into this multi-signature signature address. So it's my own browser that is my own wallet in the background without me even realizing it. Yeah, that's right. So maybe we could talk about one of your other projects that is quite interesting. It's called DeCentraland and it's a project. And it's a project that I saw that merges virtual reality and blockchain technology. Now I've been surfing around the virtual reality world for the past half a year. And you see many people talk about the intersection of the blockchain and the virtual reality. There are statements like Bitcoin will be the currency of the metaverse.

The metaverse is the virtual reality universe. Or you see statements like that the virtual reality. needs to be decentralized. So could you explain what is the connection between these two technologies and why you chose to devote some of your time to it? It's actually a super experimental project we did for fun. So don't expect a lot of sense to come out of this.

But we were also really excited personally about virtual reality and, of course, blockchain technology because we work there in the industry. And we wanted to do a small experiment where we could combine those. to cool ideas. I don't know how much sense that makes, but we wanted to build a blockchain-based virtual reality world. The idea is to use the blockchain as the support for the structure of the world. So in Bitcoin, you have the blockchain as a data structure that allows you to

synchronize the state of the decentralized network so that all the notes can agree and reach a consensus on what the... To simplify it, the balance of every Bitcoin addresses. So the same idea could be applied to a network where the nodes synchronize the state of a virtual world. So transactions in this blockchain would be state modifications of the world. And in the case of the central land,

we did a really simple technical prototype, where you have the model of the virtual world is just a pixel grid. So a two-dimensional color grid where each pixel can have different colors. And transactions represent a color change in the two-dimensional grid. So one transaction in the central land

is a message that changes the color of one pixel at an x-y coordinate. And mining is used as in Bitcoin to validate and provide security to the transactions. And when you generate a new block, the Coinbase transaction in the central line allows you to add a new pixel to the grid. So initially, you have a one by one grid, so only one pixel.

And when you mine the next block, you can add a new pixel to the grid in an adjacent position. So the idea is that the grid of pixels will grow over time when users are mining new blocks. and then the owners of each pixel can change the color. So it's actually a really simple model of a virtual world. It's sort of a proof of concept that has no actual use, but it was a fun experiment to do.

So it was like, I could see that it's a prototype, but to my eye it also, it was sort of the answer to one of the problems that virtual reality has. Well, not an exact answer, but a really interesting one. So with virtual reality, I think the problem is if I actually start to live my life in virtual reality, then I want to have my own house or my own property in virtual reality, and I want to own something in virtual reality like the way people used to own stuff in second life.

But the problem is if all of the information to create this virtual space is with a company like Google. and I call something my house in virtual reality, but actually all the information to build it is owned by Google that can go down any day, that can prevent me from accessing my own house in virtual reality. So a centralized model is like, I want to own something, but I really can't own anything in a centralized model of data processing.

So it seemed to be that with these standards, I could have my ownership over something and the data structure that is giving me ownership is not a centralized entity and that makes it really interesting. Would you agree with that? Yeah, it's exactly what we try to do with the central land. This first version, you could see those pixels as parcels of the world and you own those parcels and you get to decide which color you can paint those pixels but in a further version that would be your land your house instead of a pixel and the color also the motivation for that like why why would you want it to be decentralized and actually own it we even

even today where we have virtual worlds that are super centralized say I don't know games like World of Warcraft players spend a lot of time and invest a lot of money and time into those virtual worlds. We think that when you actually own the staff and you don't have the risk of a company changing the rules of the world or taking ownership of what you built, the time and the things we will see created in those virtual worlds will increase a lot. Like the investment of users into virtual worlds will grow a lot because they will actually know that there is no reason. to lose that to the whims of a company. Before we wrap up here, I'd like to briefly talk about proof of existence.

So Manuel, you sort of pioneered this, the idea of proof of existence. And it's funny because I was reading just randomly reading this white paper this week, and it mentioned you in the abstract as the person had pioneered the idea of proof of existence in the blockchain. So proof of existence essentially is time stamping a piece of data with a hash that you then put into a transaction in the op return. And that hash is sort of notarized into the blockchain forever so that you can prove that time X this piece of data existed. So it could be a document. It could be an MP3 file. It could be a contract, whatever.

and that allows you to notarize a piece of information at a certain point in time. I personally find that this is one of the most interesting use cases for Bitcoin and blockchain technology outside of payments, and I wanted to get your ideas about what you think about that, and where do you think this is going? Yeah. First of all, I have to say that I was not the first to think about this. After building proof of existence, I found that there are several projects doing the same thing, the same idea. Although proof of existence was certainly the first user-friendly experience, most were tools for developers where you had to download some command line utility to do this and running a full node. So it was actually the first user-accessible way of doing it.

But yeah, it is considered by many, like the first real-world, application of the blockchain that is non-financial. And I think it's a really interesting way to think about the blockchain. Like there are a lot of things we can, there are a lot of properties of Bitcoin that can be used for other systems rather than payment. And mainly what Proof-Ex system does is using the fact that it's a public ledger where you have decentralized consensus on data that is published.

And that the blockchain structure allows to timestamp that data. So this project was launched three years ago or so. And since then there have been many, many similar projects coming out. Some trying to improve on the technical side. Some trying to sort of build a nicer product, more targeted to a specific use case. Recently, there have been a couple of really

interesting developments. The Ethereum project sort of improved both in the technical and the business side. They are building a system where it's based on an open source project called

Chainpoint, where what you do is instead of inserting each documents hash in a single Bitcoin transaction, They use a Merkel tree to insert several documents. So you only insert one hash per each Bitcoin block, which is a better way to do it because with Bitcoin, you only have one timestamp for each block.

So it makes no sense to add many documents into the same Bitcoin block. But they solved it in a really interesting way where they can provide you a proof. like a proof where you don't need any of the other documents in the same block to know that your document actually is in that Bitcoin block. So the basic idea is you have a set of documents each 10 minutes and you build a Merkel tree from that and you insert the root of the tree into a Bitcoin block. And then you give each user a Merkel proof or the path in the Merkel tree that proves that your document is part of that Merkel tree.

So the user can then use his document and the Merkel proof, or how they call it, I think it's a blockchain receipt or something like that. With those two pieces of information, you can prove that your document had a certain timestamp using the Bitcoin blockchain. That's an interesting project.

Yeah, I'm I'm very interesting to see, interested to see where this goes. Are you aware of any, any instances where a notification in the blockchain was, my question is basically, is there legal precedence for this to stand up in court or in some sort of a dispute resolution, for instance, copyright? Right. There's other companies, like we've talked to Trent McConaughey of a scribe. They're doing sort of an realization of digital art on the blockchain. And like you mentioned, there are so many other projects that are doing similar things.

I feel like this might be something that sort of gains somewhat interesting quantities of adoption. How do you think that it would be legally, will it become legally binding soon, you think, do you think that it would be adopted as something that people would sort of trust as a viable way to notarize documents rather than going through like a notary or whatever, copyright registration, things like that? Yeah, so there's no legal precedent. yet. The only similar case we have is the Canada Senate that when they did a cryptocurrency research, they actually used a similar, well actually the same protocol from proof of existence to certify their own cryptocurrency report in the blockchain. That's the only like government

acknowledgement of this technology working, but we still haven't seen any legal precedent of someone using it in court. I think that the way this could develop is someone that used proof of existence or a similar blockchain-based time stamping system going to court about something, and they will need to have an expert witness.

I don't know how these are called in English, the people that go to court and try to explain to the judge. Yeah, an expert witness. Okay, expert witness. And in that case, we'll see what precedent is set and if he can actually hold in court or not. But I think that as it works technically, it only needs time so that people sort of understand it

and see the value and sort of everything. These kind of things need time. So it's a matter of. And as you said, with all these companies emerging and doing work in this area, I think it's better even. But we still need to see what happens in court. The technology is solid, though. And when we ask some lawyers in Argentina,

they said that this could pretty easily hold an investigation. and it could be hold correctly against the shots, which actually surprised me, because I thought that there would be no chance that that judge would take something like this into his trials. Yeah, maybe we need a big case where it's like $100 million on stake and the proof is on the Bitcoin blockchain.

and then the judges agree on it and then that really drives this kind of thing mainstream. It's pretty similar to what happened in biology. Like people were shouting that can you patent life for 20 years and then there's one guy who actually did patent it and then there was a huge case for $50 million. And after that, suddenly this idea of patenting genes went into the mainstream.

Maybe Bitcoin will be similar. It needs this big lawsuit moment where some big parties are suing each other and the only proof is the Bitcoin blockchain. What I find really interesting about the sort of service like proof of existence or some other services out there is that I find that it opens up the business model. The business model is not necessarily reliant on Bitcoin payments.

So a service like proof of existence or others that you mentioned, Tyrion and services like this, can charge per notarization with a credit card or whatever. So it allows people from outside of the Bitcoin and blockchain space to use the blockchain for something actually pretty useful, which is notarizing documents. Yeah, that's true. And I think that that's a really big strength for a Bitcoin business right now

or a blockchain-based business. because user adoption is growing pretty slow. So if you are basing your product on the assumption that your users will have Bitcoin, you need a really, really compelling use case so that you get users to actually buy Bitcoin to use your application. In other case, you need to have an application where Bitcoin is invisible. And as you said, you can have credit card or PayPal payments and still use the blockchain in some other way where it's invisible to the user. So before we wrap up, we just wanted to mention briefly, so you guys have a new company.

Can you just tell us briefly about the company and which is trying to achieve? Yeah, we just started a new company. It's called Smart Contract Solutions. We're doing work with Smart Contracts. We're currently in Stealth mode so we can not talk about the details, but hopefully we'll have something we can talk publicly about soon. Okay, great. I want to thank you both for coming on today.

It was a really interesting discussion. I think that this problem, I mean, problem, the issue of content monetization is one that there's definitely, Bitcoin definitely tries to solve it in some way. Now, whether or not it will catch, it'll catch on because of user adoption of Bitcoin or, as we mentioned, the user experience problem that needs to be solved. This still remains to be seen. but in any case, I think that it does provide a really interesting way for content providers to monetize their content. Yeah, definitely. We are also very eager to see solutions in that space.

Content monetization, streaming, Faradam, proof of existence, there is something from that into all this. Okay, well, thanks for coming on. Thanks for joining us. And to our listeners, thank you for joining us today. another episode of Epicenter Bitcoin. We release new episodes every Monday. You can subscribe to the show on iTunes, SoundCloud, or wherever you get your favorite podcast. It could be also on iOS or Android. And you can also watch the video version of the show on YouTube at YouTube.com slash Epicenter Bitcoin. Of course, you can always send us a tip and the tipping address will be in the show notes. Now, just as a quick note, regarding the T-shirt bribing operation that we had going on for these last few weeks, we've actually run out of t-shirts. So you can still leave us a review on

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