Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Joel Hampton: Spendr, Neo & Bee, Sidechains, Square

Episode Date: April 14, 2014

This week, we have Joel Hampton on as a guest host, a rather nomadic entrepreneur, currently based in Sydney. His startup Spendr.io is building a site to help people find high-quality, bitcoin-accepting businesses. Episode links: Cyprus police issues arrest warrant for bitcoin entrepreneur (Cyprus Mail) Danny Brewster Bitcoin Talk post Spendr Understanding Sidechains Square Market Accepts Bitcoin This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/015

Hello and welcome to App Center Bitcoin episode 15. Today is April 13th, 2014. My name is Sebastian Kutur. I'm a user experience designer and developer based in LidFrance. And I'm also the founder of Bitcoin Talks, Lille. And I'm Brian Fabian Crayne. I'm a Bitcoin-based, Bitcoin entrepreneur, and also the founder of the Bitcoin Sars Spilling Group. And we're joined by a very special guest today. Joel Hampton. This is Joel Hampton. I'm a entrepreneur. It's also involved in Bitcoin. Thanks for having me on, guys. Yeah, no, it's great having you.

We met before, last, kind of towards the end of last year at the Berlin meetup group. And you were about to move to Australia at the time and work on Bitcoin there. So it's like, let's have you on. And hear what's been going on, how you've been enjoying Australia. And what's up with your project? Yeah, thanks. Yeah. So since then, I have actually.

We're rebranded a couple times, and we're known as Spender now. What Spender is is, I guess you would say, just another directory, but we don't like to think of it that way. We're heavily focused on user reviews and actually knowing who are the good merchants and who aren't the good merchants. Oh, yeah. Yeah, so hopefully we should be launching in just a couple weeks here, about two weeks. And right now people can't sign up if they'd like to at Spender.io. And that's a, without the E, right? So spender dropping the last E, so S-P-E-N-D-R.I-O.

That is correct. We're running on that Silicon Valley Tumblr train. Yeah, yes. Yeah, absolutely. Like, yeah, yeah. Makes for cheaper domain names. Yeah, yeah, absolutely. Well, it makes you hip, right?

And that way you don't have to fight over whoever has the dot-com either. Yeah. I find it very interesting that you kind of focus on that abuse aspect with Spender. I mean, I guess kind of being in the Bitcoin world is quite obvious that there is a lot of abuse. But maybe can you talk a bit more about that and how you came to focus on that? Well, I think a lot of it came from using coin maps, which I know we've all used coinmaps. And, you know, they are the pioneer site and they were definitely the first one out there. And we got a lot of love for them because they're doing things okay, but things weren't great.

You know, there's a lot of entries in there that just weren't valid. And it didn't seem like there was a really easy way to tag those as invalid and get them off of there. Not to mention just you don't know if someone is good or not. You know, there was nowhere to really tell. Even if it was just online websites, if people were having a lot of things, success with them or if they were having issues. So it just seemed like a need that needed to be filled and we felt like we'd step up. And I guess what's interesting, though, is because when we talk about Bitcoin, there are no

chargebacks, right? So if you use PayPal somewhere else, in a sense, you feel like, okay, the payment processor takes care of me because if the sites are fraud, I can go through them and get my money back. But with Bitcoin, obviously that's not the case. So I think I can see that there's like really much more of a need for something like this in this area than in some other area. Yeah, absolutely. And a lot of times it's also faceless too. So it's kind of nice to be able to see the success rates without necessarily having to attach names to everything.

Yeah. And how is this going to work? So is it like user reviews or? Yeah, a lot of it's going to be user reviews. We plan to also procure other content from other venues, be it other people, blogging sites, Reddit, things like that. Podcasts. Constantly be updating everything we can. Cool.

So you say it's launching in a few weeks. Yeah, should launch in a few weeks. We're in beta right now. And if you guys would like, there is an email sign up on our website. if anybody wants to sign up and help us beta test, that'd be great too. I'm signed up. Yeah, absolutely. And you will see your email tomorrow.

Absolutely, right? Cool. And so you're based in Australia. What's the reasoning behind that? Well, currently, Australia, I guess, right now I'm living off Bitcoin and kind of seeing the world while I venture into my first web startup. I have an IT background and I did get a fairly early start in Bitcoin, not as early as I would have liked for sure. I think everybody would say that.

But it's been nice to kind of see the world. I was living in Munich, Germany before this, for about six months, kind of seeing Europe. But my background is, I'm American, you know, and I lived in San Francisco for seven years before that. So. But yeah, no real reason for Sydney other than it seemed like a good place to be. And there's a lot of a great Bitcoin community here right now. And they probably not quite as good as Berlin from what I saw. I'm just kidding.

For anybody from Sydney that's listening, I love you guys. But no, it's great out here. They have a good Bitcoin presence. And are there, yeah, before I was going to ask, are you by yourself on this or you have associates? No, I have a co-founder, actually. My co-founder is actually my girlfriend. She is a designer from Frog Design.

And she's kind of handling the whole user flow and trying to make it really painless for people to sign up and update and do all the user experience. Is she working on this full time too? Yeah, yeah, yeah. We're both working on this full time. Okay, cool. Awesome.

It's very exciting, yeah. So what's your business model with this? Like, where do you think this is going to go on? You know, I mean, that's always the first thing everybody asks is how do you monetize? Yeah. And I don't think we're as concerned with monetization at the moment. I mean, there's, of course, other people similar like Yelp are people that are, you know, advertisements from businesses, things like that.

But that's not where our concern is immediately. I think right now we're more trying to get back. to the community and put something out there that's needed. So I think if you can get the users to come, the monetization will follow it afterwards. Yeah, that's actually the motivation for a lot of Bitcoin startups from people that we've talked to is, you know, this is something we need.

Yes. This is something that we want to make money on. But ultimately, you have to make money if you want to live off of it, I think. Absolutely. But I think that's a good approach, you know, to have this kind of like, let's build it. And if it's needed, people will come. Yep, absolutely.

That's kind of the angle we're taking. Awesome. And what's the, so what's the Bitcoin community like in Australia and where you're at in Sydney? It's great, you know. There's been quite a few ATMs launching, with a few launch events happening with those. We just held a Bitcoin bar camp that was really neat with a lot of people doing various talks on everything technical. I should say from beginner to expert. Oh, cool. Was that like a one-day event?

It was one-day event. Yep. How many people? How many people? Did you guys have? I believe the attendance was about 160 people that showed. That's pretty cool. I think, yeah, we need to do something like that here in Berlin, too. Yeah, it was a neat event, you know, and it was, I don't know if you're completely familiar with the bar camp format, but none of the talks are. I know it, yeah.

Yeah, it was neat to have none of the talks planned, and for people to just show up and say, hey, here's what I'm talking about. giving my time slot and then seeing who wanted to attend and see what i actually got uh i ended up losing uh so last october fest when i was in munich uh i had a little too much fun at october fest and i broke my nexus four phone um it had about a bitcoin and a half on it at the time and while that was going on it wasn't worth too much uh funny enough that broken phone became worth a whole lot more as time went on. I think at the highlight of the phone, what it was worth about almost $2,000, I think,

something like that. The neat thing about the Bear Camp is someone was talking about wallet security and just how, I guess, non-secure the standard Android wallet was. And just from hearing... Are you talking about the Andreas Schipach's wallet?

Yes, yeah. The Android, Bitcoin for Android wallet. Yeah, just the Bitcoin wallet, yeah. Yeah, yeah. Yep, yep, for Android. And the wallet itself is fairly insecure. It's unencrypted on the phone.

So the neat thing about that, and I didn't realize that. From getting the tips from the speaker, Andrew, I was able to recover those bitcoins about two days after the conference. Cool. Yeah, yeah, yeah. And I got about a Bitcoin and a halfback. So I actually got paid to go to the conference. I like to look at it.

So that was really, really nice. That's interesting that you mentioned that, I had a similar experience this week that we'll talk about in a few minutes. Well, let's talk about it now. No, you lost your phone. I didn't know that I got stolen. Yeah. Oh, no.

Yeah. So Friday night, I was out with some friends and just standing on the sidewalk in front of a bar. And I had a Nexus 5, which was pretty new. I got it in November sitting in my back pocket. And I guess it was kind of sticking out. And somebody just came up and took it. And I didn't notice until about maybe 10 seconds later.

It didn't take long. Like, I had just arrived there and was standing there and somebody took it. So my initial reaction was to kind of not panic. But then I did something that, I don't know if I, like now in retrospect, I don't know if I sure have done it, but which was wipe the phone. So I was able to wipe the phone using somebody else's, phone and logging into my Google account and everything and and wiping it from a distance. So after I'd done that, I was quite, I mean, I guess I was a little relieved that my data

wouldn't be used or my passwords or anything like that. I mean, I had a password to unlock the device. So I suppose I would have felt safe and not wiping it and being in. able to just kind of like maybe see where the phone was going. Yeah. But in any case, so the next day, the next day I started changing my passwords and forgot, I kind of forgot that I had cryptocurrency on there. So I had maybe like, I don't know, 70 milibits.

and then I had some doge coin and like five or six light coin. Like in total, maybe like 150 euros, so like $200 perhaps. And I had backups for all of them in my Google Drive. And it was just last night, like I was coming home. We were out all day. And I said, shit, I got to get my, I got to, you know, get all my, my, my, my, my cryptocurrency back. So luckily, my girlfriend's got a Nexus tablet.

I was able to just kind of install all the wallets on there, sweep the wallets. And so none of the coins were gone, I guess probably because the device had been wiped. But when I was doing it, I guess the thing is, like, we don't have a plan for these kind of things, right? We don't have a plan for the day my phone gets stolen. So this goes for like cryptocurrencies being on the phone, but also just like for passwords and stuff. Like I have last pass. Everything's in last pass. So that's easy to recover.

But I guess when I was doing it, my question was like, where am I going to put these? I have got like five or six different cryptocurrencies on there. I don't have all the QT clients installed on my computer. I didn't really know where to put them. I didn't want to put them on paper wallets because those are kind of a pain to, to, to use later, like if I wanted to get the money off, especially for like those coin. Like I didn't really know how it would go about that.

So, so the whole thing, like I was just, the coins were still on there and I was thinking to myself, like, where do I put them? Yeah, no, I think it's a, it's, you know, I can weigh in as well here. It's not a story that sounds a lot like that because my computer broke just two weeks ago.

And because I spilled some, liquid on it it's highly annoying and I also had you know my well actually I have no mostly I have I have it I bought this really cheap separate webbook what do you call them netbook yeah so I have armory on there and I had like a watch only army on my computer but I also had some some other coins in multi-bitch for example here and then I have I have that backed up to the cloud but you know now I'm so so there is the recovery plan but I think it's I guess the main message here is if you own Bitcoin and you need to have a recovery plan because these things are going to happen absolutely you're going to

lose your computer your phone's going to be stolen someone who's going to hack into it etc so super important to have a backups preferably multiple backups preferably some kind of paper backup. So if you have RMA, of course, it's easy to have the seat as a backup. Also, I know, for example, I mean, I didn't realize that the Android Bitcoin wallet wasn't encrypted on the phone. You can do backups of that, though. So the backups are encrypted. So the backups are encrypted, but not on the disk, I guess. Not on the disc. But I don't think that you can actually access the data just by plugging it in. I think it's on a separate kind of partition.

No. And my phone was already rooted, which was good. So I was able to ADB into the actual phone itself. Right. What had happened in my phone is the screen had cracked. So I could still actually even see the screen, but I couldn't touch anything. My digitizer was broken. I mean, I had always known I was going to get the Bitcoin's back.

It's not like I had the phone stolen or that it had actually crashed, like the memory crashed. You know, I just basically lost the screen. And I knew that at some point I would just fix the screen. and get the bitcoins back. It was kind of nice not to have to fix the screen. Since I actually changed my wallet, though, I no longer. Now I've gone with mycelium. Yeah.

Yeah, and I'm really happy with that wallet. It's been really good, and it does provide me with a seed. So just in case, something does happen again, I do have a paper backup now, and I don't really need to worry about what you on it. I mean, I know for the Android wallet, he's also working on HD wallets. So I think they will come. but I guess it will be some time until that's implemented. Yeah, I guess so the question is, what's your recovery plan?

Because we all have, you know, we all have this backup plan. So, you know, you back up your wallet, you've got your seed, you've got your paper wallet, et cetera. But no really, no one really has a recovery plan. And when I was doing this, I was thinking to myself, it would be awesome if you could just take your wallet backup files, put them in this service or whatever. it sweeps them and puts them on paper wallets for you or puts them on this online. So I just put them on Cripsy because that was the easiest thing to do for now, like until I take care of it in the next few days.

So I just want to get them off there. I know it's not a good practice to keep coins on an exchange, but it's just for a few days and I don't have very much. But it would be nice to be able to, and maybe this is something that somebody is going to develop in the future, import all your backups, and that just sweeps them and puts them on paper wallets. for you so you can just get it done quickly and not have to trust that service. Obviously, yeah.

I mean, it could be a service or software or whatever, but maybe like an open source solution. Yeah, and right now with Mycelam, I do have a piece of paper, or it's actually a PDF, that if I do lose my wallet again, I can load Mycelium, scan the QR and then put in the passcode that I've created. It's a, what is it? I believe five sets of five characters, I believe, off the top of my head. I might be saying that wrong. So I should really test that though

That's what it comes down to I mean even having what I think You're disaster recovery plan Without having tested it Probably just a disaster waiting to happen I did that once because I had multi-bit So I before I did the whole army thing Which took me a while to set up

So before that I had multi-bit I had it you know encrypted on my computer But of course it could still be a key logger I could use the computer etc And I had a backplay So the cloud backup And I did actually test that in terms of that I, you know, deleted the wallet file. I went there, downloaded the wallet of that file, and imported again.

It worked. So, but it was a, yeah, I think it's definitely something one should do. Just run through those scenarios, test it out, and make sure that you are backed up and you are. Well, with my bitcoins, I treat them, or I should say, I treat, myself kind of like an exchange. I mean, you know, when I talk about my cellium, that's only a very small amount of bitcoins that I keep on me for spending when I'm when I'm out at anywhere that accepts Bitcoin.

You know, that's not where the bulk of my coins are kept. I always prefer to keep those more in a cold storage type offline. Actually used a Raspberry Pi with a... Okay. To create a cold storage wallet. Yeah. And then keep them there. That seems the safest, but definitely not the most convenient.

So it's this tradeoff that I know my mom wouldn't do that. I mean, I know that this is something that's a little more advanced that if we want to go mainstream, that's something that's going to have to be shined up and polished. Yeah, I'm actually going to give a talk very soon about an offline storage system that I think is really, really simple to use the next meetup here. And we're going to talk about it on the show as well. So I think I finally found something that does work for, you know, quote-unquote, relatively, you know, people who don't have any technical background for offline storage.

Yeah, one other thing I learned about this experience is that when you have good security, so you have peace of mind, but getting yourself outside of, like, unnotting that security to have, like, re-implementing it, I guess, is very complex. So I had last pass. I also had two-factor authentication, a lot of stuff. And luckily, I had kept all of the two-factor off, like backups and even like the URL that's in the QR code when you initiate two-factor off. I've kept those kind of stored so that I could easily kind of reinitiate the two-factor off.

But now, like, having to change all the passwords because obviously like all my passwords are different and long 20 character passwords and having to like reinitiate two factor off and all these services like so it's very secure. I feel very confident that none of my data on the phone is going to be compromised

or that my passwords are safe and stuff but I still want to like redo all of that and that's that's really a pain. Like the night when I was when I was standing on the sidewalk the first thing I did was sign into my Google account to to to wipe the phone. phone, well, just there, it took me like 10 minutes because I had to sign into my last pass,

then sign into Google, use a backup two-factor off key. Right there, I lost like 10, 15 minutes a time just trying to log into my account, right? So when you have good security, it can also be, it can also make it difficult for even yourself to react quickly in situations like this. Yeah, it's a double-edged sword for sure. Exactly. I guess it's better to have a little, let's say it's a little better to have some drama when you get in the second time than it is losing all of your coins. Yeah.

Yeah. Yeah. But there's definitely some room for improvement. And that's a job for someone somewhere, I guess. Probably not me. Yeah. Sebastian, you had your meetup this week as well, no? You texted me about it.

It sounded like it was a very exciting event. Yeah. So, yeah, it was kind of an up and down week. I had a really high point on Thursday and had a really low point on Friday when I got my phone stolen. But anyway, so we had our third meetup on Wednesday, or Thursday, rather. And it was a really exciting event because so the meetup had been announced as sort of an introduction, a general introduction to Bitcoin. We wanted to really kind of target newcomers. I had even told all the members of the meetup, people that regularly come to bring someone who doesn't know anything about Bitcoin.

And I also had gotten in touch with some local media here. So there's a newspaper that gets published every day and is distributed in subway stations and stuff. It's called 20 Minutes. Europeans will know it. And I had an article on the second page of Wednesday's 20 minutes. So that really created a lot of interest, I think, and brought a lot of people into the meetup. So I did a general presentation about Bitcoin and kind of outlying my views about where it's going. Not really to explain the technical side of it, but really the vision of Bitcoin and where it can take society.

And we were really fortunate to have Philippe Rodriguez, who you may have heard on our Berlin conference episodes. He's the president of the French Bitcoin Association. He came from Paris and did a talk to just kind of explain the French Bitcoin Association, what they do, what their missions are, et cetera. So that was really great. And he was on, like he had a train to go back to Paris at 920. And here he is at 10 after 9, still answering questions. And I'm there.

I'm like, behind him, I'm like, oh, Phil, you're going to miss your train. He's like, it's okay. It's okay. One more question. Like he was so into it. And then he actually ended up missing his strain and having to stay a night at a hotel. So props to him for coming down and being such a, yeah, for really giving it until the end. And then we had another talk.

We're just two members of the meetup explained wallets, you know, the different types of wallets that you can have. So online wallet or a wallet on your cell phone. Talked about my celium, talking about the Andrea Shilpaq wallet. So, yeah, it was a great event. And I think this is going to take kind of, we got a lot of, we were noticed, obviously, because of the article in the paper. And then like the following days, I started getting tweets from kind of the tech clusters here. We've got a few startup clusters and incubators.

And they want to do a conference. And so, yeah, lots of things happening in Lille. Cool. Yeah, we also had a meetup, which was the 10th this week. actually I just realized. So it's exciting. Same day. I think our meetups always line out.

No, ours wasn't Tuesday. Oh, sorry, yeah. Tuesday. That wasn't the 10th. That was the 8th. No, but it was the 10th or 10th meetup. Oh, sorry. So, yeah, it's like, it's cool.

And funnily, we also had to talk about the German Bitcoin Foundation. There was actually the yearly meetup yesterday. I was planning to go with Frankfurt and it was just like, didn't have time. Yeah, we need to get all. these foundations linked up together so philippe's going to london soon to meet with uh the the british digital currency yeah i know those guys yeah so um the french and and british foundations are meeting uh we need to get the german the germans in there too i i mean i know they're all the german guys so i can connect i can connect philipp and the english guys with them yeah um and we had

really cool app and this really cool Doshkone app I will talk about it when it's out because it's it's not on the Android Play Store yet but it's it's super cool I think I think it actually has a chance to have like a really you know resonate a lot with the Doshcoin community cool so we'll talk about that when it comes up all right well let's launch on our first topic and I think it kind of touches on a bit of what you're doing with Spender, Joel, which is the kind of Neo and B story. We've talked about this before a while ago. I remember hearing about their plans on the Let's Talk Bitcoin podcast maybe last August or something.

And then I was at the conference in Amsterdam and Danny Brewster, the CEO of the company or ex-CEO, he was going to talk to it. I wanted to see it all, though I ended up missing it. And so just a very brief background. And NienB is this company in Cyprus that tried to put on this kind of Bitcoin bank. That was the idea. So they would actually have physical branches. You could have accounts with them.

They would have a point of sales system. So you'd get like a NioNB debit card. And you could go to the grocery store and pay with that card. And you know, your bitcoins would get. get deducted automatically. And they also wanted to have like Eurolinked accounts and things like that. And they had this big advertisement campaign where they got, you know, made these fancy, expensive commercials for the superotic TV.

There was a lot of buzz around it. They were also trading their stock on this share exchange called Havelock. So it's kind of a, I would say, great. maybe not quite legal, but functional exchange where you can trade stock of cryptocurrency companies. So they're trading there. I think they raised a lot of money there too. Yeah, I almost, I was going to say, almost caught into that hype. You know, with Havlock, I was looking into NeoB and thought about jumping onto that quote, unquote, free IPO.

I don't know if anything is truly IPO on Havlock. Yeah. Yeah, there's a lot of hype behind them. There was a lot of hype. And basically now what's happened is apparently the guy has left the country. He has dumped all his stock. People, some people in Cyprus, they tried to buy or they gave NRAB money to receive Bitcoins in return and they never saw their money again, nor did they see the Bitcoins.

And so it looks a lot like this. some kind of fraud involved here and maybe the guy just took their money and ran away. I think the employees of NeoMB supposedly, they don't even know what's going on, and I think they stopped coming to the office, and it sounds like total chaos. So, yeah. Well, anytime you hear this, I always get a little concerned. You know, this goes back to regulation. And obviously, when you're talking about regulation with me, my mind always wanders to the U.S.

even though this is so much larger. I mean, by all means, this is Cyprus, and it would almost have to be some sort of regulation in Cyprus. And I'm not necessarily for or against regulation. But, you know, this is, whenever you hear something like Mount Gox or NeoMB or any of the large ones that take a large sum of money and just run off,

you've got to be a little careful. Like I say, I almost got caught. I almost jumped on to that Havelock investment and trying to throw up. you know, a Bitcoin or so over there, nothing major, you know, not that it was going to be the death of me. But it's too bad there's not something out there. And this is kind of why with Spender, I want to have a site that everybody can, you know, come together and say, hey, this has been good. Hey, this hasn't been bad. Hey, this person that's behind this is amazing. And they have this track record. I think

Ethereum guys, you know, do Ethereum. I actually have a little more faith in right now than some of the other things just because of the team behind it. and they do have somewhat of a track record already, and it's not just some random name that pops up in the media and the really story. So, yeah, no, I hope to centralize kind of people talking about other people to a degree, you know, and reputation management almost, you know, in some sort of way. I like that. Reputation management is exactly what we need.

And this sort of, like, I don't know if this guy was very well known, this Danny Brewster. I mean, the neon B thing was quite... Oh, yeah, yeah. And that had been sort of been worked on for a while, at least seven, eight months, I think. No, but I mean, this guy, like, it was he reputable, or could he be trusted?

Like, if you take, for example, like, I want to take the other example, which is Mount Gox. Not that I want to talk about Mount Cox for an hour, but... It's a great example. If you take the Mount Gox example, I think that with... Mark Carpalis, we had every indication to believe that he was an irresponsible, negligent character,

whether or not he did this deliberately or not. I mean, that's besides the point. But, I mean, just reading his blog and the kind of the work that the DailyTech.com did, going through all the posts that he did over the last few years and painting the portrait of his character. So for something like Mount Gawks, I think there, that we had sufficient, the alarms had went off earlier. Now, for something like this, where it seemed to me, it seemed to me like it was legitimate, I mean, how could we have known that he would take off with the money?

Maybe he is an honest guy. Maybe he just left because of threats or, you know, some people are saying that, so he said in a Bitcoin talk forum post that he was threatened. Maybe there's just circumstances, like who knows? I don't buy that. No. But let's, so to be quite honest, you know, I was reading about NEOMB and I was a bit like Joel. I was like, oh, this is actually exciting.

I think we talked about it very positively on the show. Yeah, yeah. We were super excited about it. I think going back, I do think there are some really clear alarm signs. And one is their business model. And so their business model was, you know, they were going to do their payment system for free. they were going to give these point of sale terminals for the merchants for free for the first year and after it's charged some rent. And they plan to do make money by basically.

So let's say I put in a thousand euros into NeonB and I would have a euro-linked Bitcoin account. So what does that mean? That means they would always keep a thousand euros worth of Bitcoin in my account. Now, if the Bitcoin price goes up, they can decrease the amount of Bitcoin. If the Bitcoin price goes down, they have to put in more Bitcoin. So the way they plan to make money was actually purely by speculating on a price increase. So they were going to take that currency risk. And of course, if the Bitcoin price doubled, well, they made a ton of money.

If the Bitcoin price went down, they could lose a huge amounts of money. So that was part of their business model, which is just extremely irresponsible business model, if you think about it. But I guess sometimes you, I don't see it clearly enough. I certainly, you know, when afterwards someone pointed out, it's like it's just obviously not a good idea to operate a business like this. Yeah, because it's purely speculative.

It's just purely a leveraged speculation on the Bitcoin price. I mean, of course, they never even went that for, because I guess the guy took off its money before or something happened and maybe was stolen, I don't know. But yeah, it's also perhaps important to notice that they were pretty sparse on details about their service, like on the website. They didn't say very much. For example, the TV commercials were devoid of any information. But, yeah.

Yeah, there was very little information on the website. That's one of the things that slowed down is that vaporware has been around for years. It's not just a Bitcoin thing. You know, and being in the technology industry as long as I have, Lord does I've seen my share of vaporware. And I think that's kind of what stopped me from actually going and pulling the trigger at half-block investments, you know. There was something too good to be true.

Have you guys seen the new Cryptex card that have you guys read about this? There was an article recently that's talking about it's an ATM card, mainly I think, for use in the U.S. I heard of it. Can you talk some more about it, though? Well, one of the neat things or not neat, I guess it kind of depends, is it allows you to take Bitcoin and deposit them into account that's immediately converted to U.S. dollars, which makes it a little more sense. I mean, these guys are kind of an exchange that you immediately send some funding to the card. You say, hey, I tend to have a, the majority of my money is in Bitcoin or not U.S. dollars, just because I have so much. faith in the U.S. economy right now. And so it's kind of nice to say, hey, I'm going to need

X amount of dollars for spending money this month, rather than using gift, you know, and buying a bunch of gift certificates or going to BitStamp or going over to whichever exchange and selling the coins and then doing a wire transfer over to my bank account, you know, so I can actually go to an ATM machine and pull out cash. This will be an ATM card that I can just wire some Bitcoins directly to my card, which is kind of like, it's almost as if like a bit stamp or your favorite exchange of choice had an ATM card and you were able to just say sell and then immediately go to an ATM machine because it's on the same financial network and pull your money out which is kind of nice and it does sound a little more believable which is the

one thing that Neo and B wasn't doing I mean there is a point that they're not handling the volatility you're already saying hey sell these bitcoins or whatever the market rate is and then just, you know, just go ahead and have the money available. Yeah, no, that I think makes a lot more sense than the NUMPB business model. Maybe one more thing to mention there was also that they had this really grand plans. You know, they wanted to do all those things like a point of sale system, bank accounts, Eurolink bank accounts, debit card, kind of all at once or, you know, maybe in some sequences, but really grand plans without having done anything.

So perhaps starting somewhere, you know, building up, maybe starting with one service like this, and then going from there is a more sensible approach. Yeah, well, that's always a surefire giveaway, too. I mean, if, I mean, I look at a company like Cricken is a good example for me, where not only is Cricken, or Cracken, I should say, they've done a good job because it's a U.S. company, I think they're based out of San Francisco.

but you can't even use them. At least I wasn't last I checked, able to use them in California because they're very specific. They're actually following the laws, and that's one thing Bitcoin's got to be really careful of right now is not to break laws. And so anytime someone says, hey, we can do everything in every country

that kind of throws a flag up for me. You know, you're like, you know, just knowing the laws is one thing. You know, it's a challenge. Yeah. So do we think that it, because it always, this always amazes me is that, you know, The media, media, I'm using air quotes, but the Bitcoin media will kind of portray this as fraud, which, you know, it may be.

But do we think that this is something deliberate, like they started this company with the intention of leaving with the money? Or like, that seems so crazy to me that somebody would say, like, okay, let's start this company, build these stores and everything. But it's all like, it's all a scam. It does sound like a easy plan. It sounds like a crazy plan Or is this like There's something that we're missing here, right? I don't think that it's so black and white

Like, you know, there are these crooks that are wearing ski masks And yeah No, I am more likely scenario to me It would sound that this guy maybe was just a bit delusional Had this like really grand plans We actually believed they were going to work out And then maybe something started failing a bit And you know, they just moved on anyway, made bigger claims.

try to raise more money and somehow like get out of the mess and then I guess perhaps when he saw it wasn't working just dumped his stock and left and so I'm going to leave this thinking shape first of course is speculation but that sounds like a more likely scenario to me I agree that I knew that he had this grand master plan from the start sounds not that likely especially because the guy is known right people know his face know his name where he's from. So that seems like a very dangerous place because obviously he doesn't have a lot of friends now and I think he can certainly forget doing anything ever again with a Bitcoin related. Yeah, I agree. No, I mean, for just half a moment there, I wasn't sure if we were talking about

NeoMB or Mount Gox because it sounded so similar. But I think a lot of times, you know, that's when people get a little over, over their head. And, uh, They don't plan on stainless money, but once they see that there's an exit solution that involves them getting rich, greed is a powerful thing. Let's just be clear. For the time being, we don't know if he has any of the funds or not. Yeah, we don't know. Who are we talking about right now? Which person?

Me and me. Oh, everybody. Also, Mark Carpella is. That's still unclear. Yeah. Yeah. So, yeah, I don't know. I'm sure I would doubt that he went into it completely malicious.

I mean, that's one heck of a con job. With regards to NEOB. It's one heck of a con job if he went in completely malicious. I would think that it's the later, you know, who knows really what happened. But if it doesn't completely crash and it's not completely public about the crash, there's a lot of wonder and a lot of secrecy around it, I don't think it's too much to assume, not necessarily the worst, but just the most likely scenario. Yeah, go ahead.

Yeah, so let's throw in this question here. Do we have a problem here? Why is this keep happening with Bitcoin companies? And we have Mount Cox, these guys. There's so many other examples of that. What's going on here? Is this just because there is money involved? because people tend to have access to people's funds,

which is not the case of the startups that it corrupts people? Do they just take it because they can? Or do we have particularly irresponsible people entering the Bitcoin space? Like a lot of – I don't know. Can someone help me here? What's going on? I think it's a mix. I think it's a mix of inexperience and money.

You know, it's – you know, the money causes a little bit of greed, but also the inexperience for getting in over your head. I think seeing that like what's happening in the Silicon Valley right now and seeing large amounts of money being thrown from VC capital people into say Coinbase or BitPay or any of that, not only comes with a lot of money comes a lot of responsibility to to investors and shareholders. So I think that's a good thing. I think if you see more funds coming in, you see more legit companies. You get more experience besides the dollars that come in. you get actual advisors that guide the company in the right way. So I think it's a great thing.

So we may have a place where there's just a disproportionate number of inexperienced people, you know, entering the Bitcoin space and just starting this grand thing, which maybe we have less in other areas or if it happens in other areas, there's less damage because the company just collapses, whereas here hundreds of thousands. millions of people's money. Yeah, absolutely. Yeah. No, I couldn't agree more.

I think there's a lot of new money in Bitcoin, too. I think there's a lot of people in the community that have a little more to invest than they've had before. And probably they're a little more careless than some of the old money that's out there in the world. You know, there's a lot of people aren't watching their money as much, I think, from an investor's side. but then also on an entrepreneurial side. I think the barrier to entry is low on a lot of web businesses. And it's just a little easy to get cut up, you know, with your hand in the cookie jar a little bit. Yeah, also let's just keep in mind that this sort of thing also happens in non-Bitcoin startups, right?

I mean, startups go up and go down, you know, come up and disappear all the time. This is just the first time where it's been so easy to, I guess, start a company that's involved, and so entangled with people's money. Yeah. And so I think this is why it's, you know, we're giving such attention and it's gaining such attention. Yeah, but it is a serious problem I think we have here, and it's something that's just very important that it gets solved.

It also, I think one thing I notice is when you read, news coverage. So in mainstream media about Bitcoin, the tone has changed now, I think, since the Mount Gog's disaster. It's much, you know, you read, often it starts like the controversial cryptocurrency or it often is prefaced at the moment of that. Whereas just before the Mount Gogh disaster

and, you know, during that all price in November, the spike, etc., it was much more positive. I mean, it's still, you know, it's mixed. now, some is very positive and some is mix and some is, it's certainly more intelligent than six months ago, but there's quite a lot of tones now that pick up on those cases of fraud and disaster. So I think it's a problem for Bitcoin. Of course, it's a problem for those people lose their money. Yeah. And I think also there's a problem of representation and communication, So the media has a hard time understanding of what is actually going on and have very little knowledge about Bitcoin.

And there's nobody really there to represent the Bitcoin communities. And this is what associations like the French Bitcoin Association or the German Association or the Australian Association can do. This is the work that these players in the community need to do is be. be the source of relevant information when it comes to these kind of things. Absolutely. So let's hope that Spender is going to fix this mess and the bright future is ahead of us, no? Yeah, that is a large statement. I wouldn't expect Spender to keep in exchanges audited or anything of that sort.

I know there's a level of transparency to be good for, some of the bigger things. But no, absolutely. I mean, if I can at least help one day to not get ripped off, I'm going to feel good about it. Yeah, exactly. I mean, I think it's actually an interesting question, like how this probably be solved.

Because spender, of course, can help, but it's really what you need is to have, not to have to trust those companies so much. So, you know, even if, like, for example, but Spender would help that you know who is more trust worthy. The problem is with trust in the first place, especially if it's new startups and it's about your money. So I don't know if maybe multi-sig or things like that would help

in diminishing the amount of trust that's required for that. Yep, absolutely. And we've even toyed with the idea of possibly going into more of an escrow kind of thing as well. But I think multi-sigs could do a better job with that. And I think that's something that would be even better to be automated and decentralized as well, something a little more built onto the blockchain maybe. But yeah. And I think if nothing else, at least knowing that the four people in front of you had a really bad experience before you go somewhere would not be a bad thing.

And also knowing if someone had some great food at a restaurant before you got there is a good thing too. So yeah, that's our vision, I guess you would say. As Bitcoin gains more traction and becomes more mainstream, I guess, what do you think, what do you think players like Yelp and others will play and giving this kind of service also? I mean, don't you think that at some point they could also become competition for you? I just saw on Reddit about two days ago. I just saw that Yelp had a little thing that said accepts Bitcoin, something that effect. And I didn't actually go and research it out myself or even go to Yelp and look if that was true.

You know, I didn't actually take a peek. And sure, no, I mean, that's good, though. I mean, if they do that, it just kind of validates my idea. And as long as it's getting done, I tell you, that's great. You know, I'm not a, I think the main reason is happening was not for me to get rich, more than it just needed to be done. And like I say, I've used some of the other sites, and there's definitely some other folks out there kind of doing it. Just nobody seemed to be doing it perfect. You know, everything's either seemed like a lacking user experience or missing a couple features that I would like to see there.

Or, you know, just not quite what I have visioned, I guess. But if, yeah, yelp may do it. And that kind of validates my idea a little bit, I guess. Spoken with like a true passionate visionary. Yeah, absolutely. No, but I think it's really important the work that you're doing, but that you're doing it for the right reasons. Thanks. Yeah, I appreciate that.

You're a noble man, Joel. You're a gentleman and a scholar. Yes, that's all for the love of the coin. That's all I can say. For the love of the coin. Okay, well, I think we've covered this one, no? Yeah, we might come back to it next week. Yeah, maybe we'll find out, perhaps we'll get some Instagram feed of him sitting in a doche-coran rented villa somewhere in the Caribbean,

surrounded by three bikini models and a huge pinocalada in his hand. Then we know where the money went. I think that, you know, if we relate back to Mount Cox, like when we first started talking about Mount Cox, This was on February, early February when we're at the conference. And then how that story evolved. Like if you look at what we knew at the beginning and what we thought was actually happening at the beginning, which was like transaction malleability. And then at the end, which was just like this guy's a total, like, whatever. It's just incompetent.

Let's keep our minds open, I guess, to other possibilities because this might not be what it seems. seems to be. I don't think we should make conclusions right now. I also think we should start a new podcast this week in Bitcoin fraud and it'll just keep the Mount Cox, Newmb, kind of stories for that one and we'll just keep the good news for, and if people won't listen to that, they can download it. But we'll keep up to Bitcoin for interesting and relevant Bitcoin news. Like the side change proposal. Yes, like the side change proposal. So I met Adam back last fall in Amsterdam kind of randomly

and I had dinner with him twice so I talked with him quite extensively or mostly listened to him to be honest and like ask some questions and it was very fascinating because he just goes off on these topics and it was like extremely mind-blowing even if I could only understand

maybe 40% of what he said, but actually quite a lot, given that there were very deep topics. So you're talking, of course, about Adam Back. I'm talking about Adam Back is the creative hash-cash. Now, hash-cash is the proof of work that Bitcoin is based on. So if you check out the original Bitcoin paper, you know, there's like eight papers cited or something. So he's just one of them. So it's one of the fundamental things that Bitcoin relies on. And he's a crypto, a cryptographer.

Yeah, he's a cryptographer. for a mathematician, computer scientist, kind of. And he's come up. There was an episode on Let's Talk Bitcoin about a proposal. It's kind of called Side Chains. I think they're going to have a better name, an official name soon. And it's super interesting. I mentioned it in my newsletter on Friday,

although I didn't understand it at the time. I've read some more about it. I think I sort of understand it. So I would love to cover this and kind of talk. Talk about the potential there. Please explain to us. Okay. I haven't listened to the last topic in the episode yet, so I've just been reading about it a little bit.

Yeah, so I'm going to try to explain that the way I understand it. So there are all those ideas to extend Bitcoin, to make it more, to make, you know, Bitcoin 2.0 have contract languages like Ethereum or some kind of colored coin asset properties, all those things. And those are not so possible with Bitcoin. Or to an extent, you know, the scripting features are partially turned off. And so that's why we see all those other projects like Mastercoin, Ethereum, proto shares, Next, counterparty, and all those others that they are. And now the proposal that Adam back, and the guy he's doing this with, a guy named Austin Hill, who apparently I didn't know about him,

He has quite a history in cryptography and entrepreneurship. So what they're proposing is that you could basically allow the creation of new coins with these features, but using the same monetary basis Bitcoin. So just maybe briefly why this is interesting and why this is important. We talked with, on the episode when we had John Lovina on, we talked about the whole idea that old coins can undermine this idea of a scarcity, of digital scarcity. Because if you have 21 million Bitcoins, but then you also have, I don't know, how many billion doge coins,

that you can use for the same thing? Can you really say that Bitcoin is still so scarce? Or that wouldn't you have to look at it as a cryptocurrency thing? So that seems to be a primary concern by Adam back. And the whole idea is that now you have your 21 million Bitcoins. Now someone can start a side chain and implement something like Ethereum, for example. And then if I want to use that, I can basically move my Bitcoin into that side chain, use the features of that side chain, and whenever I feel like I can move them back to Bitcoin.

So the point of that would be that the same 21 million Bitcoin, would be kind of the tokens used, the foundational tokens, for all of those coins and all of those old coins with different features, et cetera. So it's very interesting. So this implies a fundamental change to the protocol. I think only a minor one.

I don't, so technically, the way this would work is the following. So I would spend, I would put my Bitcoin using some kind of script, like a complicated script, and it would be suspended. So I couldn't use it, but it would be in some kind of, you know, we can, for example, send bitcoins to an invalid address. So now here it would be spending it to a script where it's suspended for some time. And now my proof that I suspended my Bitcoin then creates an issuance in that side chain.

So now I have one Bitcoin equivalent in the side chain. So now I can use that there. And then my suspended Bitcoin would be released if I send the currency in the side chain to an unspendable address. Does it make sense? I'm sure it makes sense. So right, you can send. So you send your bitcoins to this. unspentable address and that that serves as the proof for you to get a currency in the

side chain and then you can send money in the side chain of course you can destroy bitcoins right you can destroy cryptocurrency by sending it to an address for which no private key exists and you can prove that too so the idea is that you basically kind of suspend your bitcoin then the side chain checks that the Bitcoin is suspended. It gives you one money in that side chain. And when you prove that you've destroyed the money in the side chain, you get your Bitcoin back. That's the basic idea.

Yeah, my curiosity comes on the pricing of, you know, of course, Bitcoin and light coin tend to follow each other. I should say light coin tends to follow the price of Bitcoin quite a bit. If this was done, like let's say let's use Doge as the side coin that you're attaching it to. If you took your Bitcoin, and I assume this needs to be, the coins you're attaching it to needs to be fairly linear, you wouldn't attach one Bitcoin to one Dogecoin, right? I assume it's going to be something a little more linear. Does that then, like if the price of Dogecoin goes up a bit, while the price of Bitcoin goes down a little bit, would you have to destroy it? And then,

no, it's always, it's always going to be pegged because, so, I mean, the units don't matter, right? So, I mean, Dogecoin is different. It's not going to happen with Doshcoin, right? But let's say we do we start, I don't know, beta coin or something. I think that's actually an example in some of the conversation. So let's say we started beta coin. And now I suspend my Bitcoin. I get 100 beta coin, for example, or one beta coin.

It doesn't matter. But some fixed amount. Now, that exchange rate is always going to be the same. Because at any time, I can go back and I can get my Bitcoin back for 100 beta coin. but not more. And at any point, anyone else could get a hundred beta coin using one Bitcoin. So this is a fixed exchange rate. Okay.

So it would basically allow you to take features from another coin right now and then augment the features on Bitcoin. But this coin would be created basically to marry two Bitcoin. Is that correct? I mean, to marry as a side coin, it wouldn't be really used for too many other things. I think you could do any, so you could do anything. like let's say anything that master coin does or all those features you could implement on a side chain but the main the main point here is that you don't create a new old coin you don't create a new there's no mining yeah there's uh there's no like new issuance to a bunch of like etherium

it's not like a bunch of founders you're going to get their money etc but you basically are able to take your bitcoin take it onto that side chain and just use all those features there then take it back when you want to, without having any approval, right? No, they don't have to agree with you to take it back. They don't have to agree that you take it over. It's completely trustless. And anybody can create these side chains,

much like today, anybody can create an alt coin. That's right, yeah. Okay. Okay. So essentially, you would use then the scripting language to create specific feature side chains, much like today we're creating feature-specific alt-coins. Only we're using the Bitcoin blockchain and network and mining power to run that. I think you would have some kind of merged mining for the transaction verification.

I honestly don't understand how they could do different transaction, different confirmation times or block times, but apparently it's possible. Okay. So what's the interest about it? So the interest is scalability? It's, uh, what, why is it being proposed? So I think the interest, there's a few things, right? So one point is that Bitcoin is developing slowly, right?

The core protocol. And that's because we have to be very conservative. If there's something that messes up Bitcoin, well, that would be disaster. So, uh, you know, the core developers, like new features. they're not being like added quickly to test things, etc. So those go to old coins. So the idea is to kind of bring those, to use the same monetary base to do all those things.

So essentially the idea is to take all that innovation that's happening in old coins and kind of bring it back to Bitcoin. And if we think of the Bitcoin price, this is very dramatic implications. So if Ethereum, for example, becomes prevalent for all kinds of financial derivatives, etc., then that will have a huge effect on the currency ether because that's used for that.

So you would take all that transaction volume. You'd look at how much ethers needed to do that, and then it would imply a certain price for ether. But if that was implemented on a side chain, then you would need to use the same 21 million to do all that stuff too. so it has huge implications for the value of Bitcoin. Okay, so it has huge implications. I understand that it could have huge implications for the value of Bitcoin.

But what about the amount of Bitcoin's? Because you said a while ago that you would essentially be destroying Bitcoins every time you move them into a side chain. They're suspending them, not destroying them. You can get them back when you move your money back. Okay. I guess the risk would be, let's say you move your money to a side chain and then on the side chain, you get hacked. Or maybe your money gets stolen. Someone else can take back your Bitcoin in the real Bitcoin chain.

Or if maybe something goes horribly wrong in the side chain, it could be that you can't destroy your Bitcoin anymore to deliver the proof to unsuspend your Bitcoin. So that's the risk, but it's very limited. I think it's only the small security risk is only to those bitcoins that are suspended. Okay. What are your thoughts on this, Joel? Well, you know, I'm not fully clear on it yet. I've done a little bit of reading on it,

although I'm curious to see how it will be implemented. I've seen some people discussing if there could be possible attacks if someone wanted to like if you had a large mining pool could they try and attack another currency by not doing not using that portion of the protocol and I haven't seen a really clear answer yet

and these are all questions that are still up in the air it's nothing that I would expect either you guys to answer by any means but I'm curious to see how it'll be implemented I mean it's definitely on one hand it's a good thing you know being able to use all there's definitely advantages to some alt coins

So having other alt coins features is definitely a plus. Although if it causes even more confusion and it makes it even harder for some people to use Bitcoin, maybe there could be some negatives in it as well. So I guess I got mixed feelings on side chains right now. Yeah. Well, like you said, I'm not very well versed on it also. I just read about it very briefly. And I'm going to listen to that LTV episode right after this. but to me,

I think that in terms of Bitcoin as a platform, it helps because it allows other things to be created on the protocol and it keeps everything. I had mixed views about this, but now that I think about it, I think that keeping everything on one single protocol is a good idea and not having multiple blockchains. It gives more legitimacy to Bitcoin itself.

now also on the long term like it helps the platform be uh it helps the platform develop itself as to something more than just currency right which is kind of the problem now yeah so i mean i personally i like this proposal so i like i think what i also like is how easy it would be to go to move from one to the other currency you know now realistically you have to go to an exchange So if you want Bitcoin, you say, but I have some Bitcoins, but now I need to use this feature for which I use MasterCoin. Okay, this doesn't happen today, right? There's no like real practical features any of those Bitcoin 2Bund0 coins have. But in the future, hopefully, that will be the case.

So let's say you have Bitcoins, but now you want to buy some kind of derivative or God knows what. And now you'd have to go to an exchange. to trade that and it's it's kind of a it's not as neat as this this is literally trustless one transaction and and it's done it's it's i think it's really nice how you have this this kind of direct link between the different between the different system so i i like that and maybe over yeah well i was going to say overall i don't think it's a bad thing i think having options is a good thing. I think that seeing how it gets implemented

will determine how useful it is. You know, if this causes a bunch of people trying to start and use different wallets and all of a sudden if I go to a local grocery store and I got to figure out exactly what currency they're taking, you know, that's not necessarily a good thing. But having options

is definitely a good thing. And when we're talking about autonomous corporations and you're talking about Ethereum coming out and a lot of things they want to build in, yeah, I could definitely see some good stuff there. Definitely. Maybe one thing I want to mention as well, which is quite tricky here. So if you think of the financial motivation in starting Ethereum or all those things, it tends to be that the people starting that have a huge interest in the success of that

because they, you know, like let's say the example of Ethereum, because they're going to give themselves part of the monetary supply. So if it's successful, they'll become rich. and they become rich because the tokens used on the platform become valuable. Now, if you look at the side chain thing, that's not going to be case so much. So essentially, if a side chain is going to become hugely valuable, the main value is going to be kind of realized in an increase of the Bitcoin price. So I think what's interesting too is if we think about the financial incentives,

of the developers. So I think those will actually be less, there will be less an incentive, there will be less the possibility to kind of get rich quick, developing side chain things than alt coins. Well, and that kind of goes back to mining. You know,

assuming the side chains are directly mining off the Bitcoin network, then I understand how they'll function. But if, if we're talking about another coin, you know, I guess with the example of Ethereum, for Ethereum's network to work. I mean, you do need to have a whole network of computers

that are running those contracts and are running the blockchain that is Ethereum. And so now if the ethers become worth nothing because of the side chain or whichever, that could be detrimental, I would think, to the Ethereum network. And I don't really know what I'm talking about here, obviously. I only know a little bit about Ethereum. But I do know that a large portion of what makes Bitcoin valuable

is, you know, the computing power and the electricity that's put in to keep that network, you know, keep the network running, or to keep the blockchain, you know, the ledger having entries added to it. So I'm curious to see how they'll coexist, I guess. Yeah, no, that's a great problem. I think that's another reason why they want to do that is because they say it's wasteful, you know, it's wasteful to start all those other coins when there's been hundreds of millions of dollars invested in the Bitcoin mining infrastructure that help secure that network, you know, why not use the same infrastructure? Sure.

So, but, but of course, Joel, I mean, that's a, you know, a very important point. This, we haven't seen anything yet. We don't know how it will look like. I mean, it's a bit like Ethereum or MasterCron or all those things. You know, we haven't really seen real applications yet that, you know, all that promise that those things have hasn't been realized yet. So who knows, you know, maybe, maybe. maybe when they try to implement this,

it won't go so well. Maybe there will be problems we don't know about. Who knows? But interesting. Maybe one more thing. I think this will require a protocol change. I guess I suspect it will require a protocol change because of this suspension scripts.

Maybe that's not possible right now. But I think this is actually a protocol change that would go through because it's definitely in the vested interest of Bitcoin minus, et cetera, and Bitcoin holders to move all this innovation to side chains versus altcoins. So I think this is something that will, if it's feasible, will almost certainly, you know, and if it doesn't cause other problems, will almost certainly be accepted. Yeah, I think we should probably get Adam back on the show to discuss it.

Yeah, no, I want to. I'm going to reach out to him. no it's interesting when I was reading about this this morning I was kind of hesitant about it because to me everything needs to stay on the I really didn't understand it that well but now that we've discussed it

it seems to me like it's a good thing to keep everything on the Bitcoin network and protocol and of course helps build more it helps it can potentially build more features right onto the Bitcoin protocol. So let's talk about the Square Bitcoin integration. We talked about this a little bit last week.

So Square, the payment processor is working on integrating Bitcoin into their payment platform. So they've already done it for online merchants. and I think they were testing with one merchant. Brian, do you know if they've expanded that beta test to other merchants? Or is it still just in beta? That's a good question. So, no. Well, according to their blog post and according to what I read on their website,

so, you know, the square primarily is this point of sale system. So it's like, you know, you have an iPad, tablet apps, or if you have a little store you sell something, you can get that. And it's like a cashier type. to accept car payments and stuff. Yeah, it's also an online, like, it's also an online payment system. Yeah. Well, no, no, that's, but that's, so, I don't know, to what extent.

Square space, for instance, uses square in the back, in their back end. Okay. Yeah. Maybe, but this is used. So, you know, there's a square that kind of thing directed at, like, small merchants. I understand. Yeah. And then they have like an e-commerce platform that's maybe a bit like some mix between Shopify and Etsy or something like that.

And I think that's also directed at like small local merchants that then can say, okay, I can make this really easy e-commerce system. So from what I understand, and Square handles all the payments for that. Yeah. So from what I understand, Bitcoin is simply going to be a payment. option on that which is called Square Market, so in that e-commerce site of Square. And it's going to be turned on by default. So everyone will have it unless they go somewhere in the settings and say like no. But by default, they will be turned on.

And when you pay with Bitcoin, they just get dollars. They don't even know if who paid with Bitcoin and who not. Okay. So then Bitcoin is really just being used as a payment system. This is really interesting because we talked about this with with Jeryn last week where, you His vision of Bitcoin is that, you know, for the average user, you're just paying with dollars and, like, the transaction that's going through is Bitcoin. So this kind of takes care of one end of it where the user pays with Bitcoin, the merchant gets, gets dollars for the merchant. It's completely transparent and never actually touches Bitcoin, I guess, maybe unless he wants to and turns that on.

But he can't even. I mean, that's also one of the criticisms here is that as a merchant, you don't even have the option of getting business. Bitcoins. Okay. And they're also going to charge their normal transaction fee, which 2.75%, which, of course, is very, very high if you compare it to other Bitcoin payment processes like you pay or Coinbase, et cetera. But maybe they'll change in the future.

Well, and they partnered with Coinbase, if I, if I, memory serves me correct? Yeah, I think that's right. But the interesting thing, and I'm not sure this works yet, I do know in San Francisco, there's a lot of mom-and-pop shops. There's a lot of non-corporate businesses that you would see using Square. And any time they're using Square, anytime they have that little plug-in dongle that goes into the iPad or whatever they're using, I think you can use it on iPhones as well. If they have that dongle, they obviously have an iPad attached to it that should be able to accept Bitcoins. And there is a Square app that's running on it.

So I would think it wouldn't be too difficult for Square to not only change their web cart that, that you were just talking about, but also to enable that app to have mom and pop shops everywhere, accepting Bitcoin, and then converting them to US dollars immediately using Coinbase, because I'm pretty sure that's who they earned up with. And it should be a good thing for Bitcoin acceptance, at least in the US. I don't know how widely used they are in Europe. I think not at all. Not at all. No, I don't think they have any, I don't think they even exist in Europe.

up. So, yeah, I'm just looking at this. So effectively, Square Market is a platform for local businesses to create websites to sell their products, so essentially e-commerce websites. So Square takes care of the, I guess, the platform and you just kind of put your products up. More like a Google checkout, I would assume. Sort of something like that. I think it's sort of. It's more like, it's like a web e-commerce platform. It's more like, I don't know, maybe Shopify or something. A lot simpler.

So, for instance, I'm on a page here. It's just like kind of like a profile page. So you have like the name of the business, their logo, they've got a banner there, the address, and then like just a page with a few products. So it's very simple. It's very basic. Yeah, maybe Etsy is a good comparison. Yeah, something like that. Something like Etsy, I guess.

So this enables Bitcoin payment only through that platform. But I guess so it's interesting. I don't think that it's going to enable large amounts of Bitcoin payments for local merchants. I think that it does, however, indicate that Square is favorable to Bitcoin and that their payment solutions that they have on the ground in local businesses may soon or in the near future accept Bitcoin. I think that's where the real potential is, is that when all these mom and pop shops that use the square checkout system or that use the square dongle on their iPhones or iPads to accept payments at the local business, when they can now accept Bitcoin right in the square app and that they, with a simple click or even by default,

have Bitcoin payments enabled in their business, that's when we start seeing, you know, people flocking to Bitcoin as a payment system. Yeah, absolutely. I completely agree. I think this square market thing is, if it wasn't square behind that website, it wouldn't be interesting or wouldn't be that interesting. But because it's square and because they have this huge, huge customer base in real-world shops, that's where the problem is.

I completely agree with you. And we shouldn't forget, it's not just mom and pop shops. Square is also used by Starbucks in the U.S. and by Whole Foods. So two major, major merchants. So I'm pretty hopeful. I don't think we will see it in the next months. But maybe in 10 months or a year or something, it could be that they turn it on on these point-of-sale systems,

and that would just be fantastic. Well, as a man that's putting together a directory website, I'm going to keep my fingers crossed. That would be great. It would give you a lot of work to add all these places to the directory. Yeah. Yeah, I hope you won't have to do that manually. But if we have to, it'll be done. That's what it comes down to.

Now, I guess what's kind of too bad about this is that, for us Europeans, people living in Europe, is that it's not Square is not available in Europe and I think that there's a real need for that kind of like easy to set up payment solution here like getting it if you want to accept card payments

here you have to get a terminal from your bank and that's not very easy at least in France that's how it is like for instance the place where I work the tech cluster where I work there's often like food

trucks that come in and they all have their little terminals for taking debit and bank cards. And I'm sure they have to go through so many like loops to get that from their bank and they're probably paying like really high fees. Of course, Squares fees are pretty high. Like, yeah, they're pretty high compared to accepting a credit card for your bank, but it's a lot easier to set up. And just having options, I think is important. So I really like them to branch out in a.

Europe. But I think for now the problem is that in contrast to the U.S., where you have, you still use swipe cards, Europe, you have to use chip cards. And I think that's a lot harder to implement on a dongle that you connect to your iPhone. Yeah, absolutely. And that's one of the big, I guess, maybe complaints. That's the right word for it out here in Australia that I've seen too, is out here they do very heavily use NFC. I mean, every seems everywhere has the tap your card instead of swiping, not even using the chip, but actually using the NFC tap and go, which is kind of nice. And out here, there was a big complaint with Google Wallet.

A lot of people want to be able to use the NFC and the Google Wallet, but for whatever reason, I guess Google's not playing nice or the Australian side isn't playing nice. I'm not sure who's the culprit is. Well, in order for that to happen, Google has to have deals with the banks, right? Because the banks have to agree to have your card integrated into Google Wallet. I'm not sure exactly how that all works. But I'm sure the banks are putting up a front. I mean, at least here in Europe, I know that they have been quite –

upfront about not wanting to bring in. I mean, not up front, but they've been putting up front to solutions like Google Wallet coming into Europe. Everybody wants their dollar. That's for sure. Yeah. But,

no, this is good news, I think, for visibility and perhaps adoption. Like I said, I think that one square starts accepting it in, in physical location. then they might get a bit more traction.

Then again, if Square is charging 2.75% plus 30 cents or whatever it is per transaction, that's really not a good solution. And in that case, merchants have access to much cheaper solutions. And I'm not even talking about just having a wallet, but going through companies like BitPay or Bips or whatever other payment solutions are out there. Yeah. I guess we'll see. I mean, the advantage, of course, of Square is that it's one app.

So you can use the same app to accept credit cards or Bitcoin payments. Assuming they implemented it with a point of sales system, whereas otherwise, you know, people will have Square for credit cards maybe and then BitPay for Bitcoin payments. And that's a bit of a mess. And hopefully in the future, I think that's, seems likely to me that they would decrease their transaction fee on the Bitcoin side. I would hope so.

I would hope so, yeah. Because right now it's 2.75% per swipe. So, yeah, that's extremely high. Well, but they're coming from the credit card space where this is marginally better than, I think, other solutions. So, of course, they just supply. the same rate.

I think it makes some sense to me, at least for the time being, but I don't think it's sustainable in the long run when people do a significant amount of revenues through Bitcoin, then, you know, I think they're going to say no. Yeah. I guess we'll see. But definitely interesting. So, well, that's all the time we have for today's show. It's been lots of news this week, and it was really interesting discussing all these stories with you guys.

And Joel, thank you so much for coming on and taking part in our 15th episode. Thank you for having me, guys. It's been a pleasure. And so you'll be back in the U.S. in a few weeks. Yep, absolutely. I'm back in the U.S. towards the end of April. we have a beta kind of going on right now. People would like to sign up. Go to spender.io. That's s p-en-d-r.io.

And just give us your email address. And we'll make sure to notify you as soon as we're fully live and be picking a couple few people to help us beta test as well. So if you get in there fast enough, you can get an early peek at what's going on. And yeah, going from there. Awesome. And, well, you know, when you're back in the U.S., and after your launch let us know

and maybe you can come back on and tell us how things are going. That would be great. I'd love to. Yeah. Okay. Yeah. Thank you very much for listening. And if, so we talked about this last week,

if you could go ahead and go to iTunes and review the show, we'd really appreciate it. If you could give us honest feedback about how you like Epicenter Bitcoin. And that would really help us for discoverability reasons, of course. and also follow us on Twitter. We're at Epicenter BTC. You're also on Facebook. You can search for Epicenter Bitcoin.

And subscribe to your newsletter. It's at Epiccentb Bitcoin.com slash newsletter. It goes out every Friday. Joel, you read it. Absolutely. I love it. I read it and love it. If you guys haven't signed up,

signed up for the newsletter, it's well worth the digits. Or the digital bandwidth. Well, thanks so much. And we look forward to being back next week. Have a good week. Bye-bye. Thanks, guys.