Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - John McDonnell: How Bitcoin Will Win Online Payments

Episode Date: July 13, 2015

Solving the pain points of online payments was the applications that garnered the most attention in Bitcoin’s early days. In recent times, as consumer adoption of Bitcoin payments has been underwhelming much of that attention has shifted elsewhere. Nevertheless, companies keep working hard on making the vision of a universal, global payment system a reality. Among those companies, one stands out as the top contender to compete with existing payment systems: Bitnet. Funded with a heavy warchest and the company is ran by veterans of Visa and Cybersource, a company started in 1994 to help merchants accept credit cards online that was sold to Visa in 2007 for $2bn. They have been working behind the scenes to get Bitcoin to break through with merchants. CEO John McDonnell joined us for an important discussion of how online payments work today, why they are broken and how Bitcoin will revolutionize the industry. Topics covered in this episode: The story of Cybersource and payments in the early day of the internet The pain points with online payments for merchants and consumers today The role of the different actors such as payment processors, card networks, merchants and issuing banks The niches where Bitcoin payments could break through first Why coming from inside the payment industry provides Bitnet with a huge advantage Why they are focusing on Payment Service Providers instead of acquiring merchants directly His view on BitLicense and how it will affect Bitcoin payment processors Episode links: Bitnet Richard Gendal Brown: Why the payment card system works the way it does Richard Gendal Brown: Simple explanation of fees in the payment card industry Wikipedia e-commerce credit card payment systems This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/087

This episode of Epicenter Bitcoin is brought you by Ledger, makers of the Ledger Nano Hardware Wallet. Half piece of mind and knowing your private keys are protected by industry standard physical security. Go to ledgerWallet.com to learn more and use the offer code EB-09 at checkout to get 10% off your first order. And by CoinCap.io. With over 500 alt-coin exchange rates updated in real time, CoinCap is the authority for cryptocurrency market information. Hi, welcome to Epicenter Bitcoin. The show is talks about the technologies, projects, and startups driving decentralization

and the global cryptocurrency revolution. My name is Sebastian Kutu. And my name is Brian Farangkent Karin. We're here today with John McDonnell. He's the CEO of Bitnet, and he has a long history of working in the payments industry. He was at Nisa, and he was also the head of business development at CyberSource, which we'll talk about a bit later. So he's sort of deep from the payment space.

and they run a Bitcoin payment processor. So thanks so much for coming on today, John. Yeah, my pleasure, Brian. Thanks, Sebastian. So it's kind of funny that we've been doing this podcast for a long time, and payments is always one of the first things that come to mind when people talk about Bitcoin, but this is the first time we actually have a sort of a pure payments episode

and someone on who's really focusing on that. We have had, I guess, people talk on admittances, exchanges, all kinds of things. But so can you tell us a bit maybe about online payments in general? Because I think a lot of people in the Bitcoin space actually don't know that much about how payments really work. Okay, sure. Yeah.

And it's something that our founding team of Bitnet comes from the online payments industry. So we know a great deal about. how broken, frankly, online payments has become as the internet has enabled merchants to market and sell their goods and services globally, payments has not kept pace. The infrastructure for transmitting funds and accepting payments continues to be based on 1950s-era card swipe technology. So we see Bitcoin as a probably the biggest innovation in fintech since the introduction of electronic payments, okay, going back to the magnetic straight card and Visa.

So I guess probably a little bit of background about where we came from. My co-founder, Stephen McNamara, our CTO, and myself were at CyberSource, which is a company found in the mid-90s at the advent of the commercial internet, which was created to help merchants accept payments at the time, primarily credit cards online, and something that the cyber source founder, a fellow named Bill McKearinen, who is actually an investor in Bitnet, and he's a chairman of our board, founded CyberSource out of frustration, frankly, with his efforts to sell at the time software. So, you know, Bill looked at the internet and said, this is awesome. Okay, what can we sell over this, over this global network?

And software came to mind. Okay, it was a digital product that could be downloaded. So there was no need to, you know, ship a physical good. And so I created a company called software.net. But what they quickly ran into was collecting on that, on those, the license payments for software was a disaster. people quickly caught on to the ability to defraud merchants by filling out fake credit card numbers that would appear to be legitimate, but otherwise when they were processed would turn out to be false or stolen.

And so Bill looked at this and solved it by creating a payment gateway with some real-time fraud control systems. Something that's important to note that in the credit card world, okay, first off, it's a pull payment. You're presenting a credential to a merchant or more specifically to the merchant's processor. That merchant's processor then uses those credentials to pull payment from the card issuing bank. The card issuing bank maintains the account, the relationship with the consumer. So there are multiple steps, including a card network in the middle that connects the processing bank for the merchant with the issuing bank on behalf of the consumer.

The card network establishes the rules, including the collection of interchange, which is the fees paid from the merchant acquiring processor to the card issuing bank on behalf of the card issuer. And under the network rules, under the so-called operating regulations established by Visa and MasterCard, the merchant in a online transaction in a so-called card not present transaction is liable for the fraud. So it's the reverse of a physical retail brick-and-mortar transaction where you hand your card. In most places, it's now chip and pin. You insert your card. You put your pin in to authenticate yourself as the card holds. In some places like the U.S., it still remains a signature-based where you swipe the card and you sign.

But if under the card regulations, if that card is not physically captured, in other words, if the chip is not interrogated by a point of sale terminal or the magnetic stripe card is not swiped in the track two data interrogated to compare with the signature and the other authentication, then the merchant is held liable for fraud. So which applies to any use of a credit card through a mobile phone or through a PC over the internet. So there is a tremendous cost associated with accepting cards online above the interchange, which is for card not present higher 50 to 100 basis points, so a full 1% higher for card not present transactions as compared to physical retail location transactions. So merchants A are paying higher rates to accept credit cards online.

B, they're exposed to the fraud so that if the card transaction is later found to be fraudulent or even just disputed, the merchant is at risk of losing the entire value of that transaction. So it goes from the added sort of half a percent, one percent additional cost of accepting the card. Suddenly, it's 100 percent of the cost of the transaction. Okay. And those examples where a merchant is found to have accepted a bad card for transaction, they have lost. entire value of the goods or the services that they sold in exchange for that bad, that, that fraudulent card. Even if they're successful in defending a dispute, a so-called chargeback that's initiated

by the cardholder, it's still an expense. It still requires overhead. It requires resources. And we've done some math, okay, to try to come up with the total cost of acceptance, which starts with the interchange, and then other fees are layered on. network fees, the acquiring processor fees. Sometimes there's an ISO, a so-called independent service organization. There are PCI costs associated with accepting cards, the costs that are needed to pay outside consultants to audit retail systems for security, okay, to make sure that there

aren't any unintended backdoors for breaches where card numbers can be stolen, which unfortunately happens with increasing frequency. And that's the other thing. You know, The criminal rings are becoming very, very sophisticated. They're becoming incredibly organized and professional. And so it's an escalating problem. So when we add up the total cost of acceptance, it's not the sort of 200 to 400 basis points, 2% to 4%. It's really 8 to 10 to 12%, depending on the industry. So if you're a retailer and you're accepting cards, that's really what you're paying.

The fully loaded cost of accepting cars online is in the neighborhood of 10%, which is an incredibly corrosive cost, okay, to the margins, especially in some thin margin businesses. And in some industries, such as airlines, you're specifically, or I should say particularly and disproportionately hampered by the cost of acceptance because of the nature of the high value of the ticket and the delay in providing the service. So if you're a card acquiring bank, you're a bank that is basically accepting cards on behalf of airlines, you to mitigate your risk at any point in time or holding on to 10, 20, sometimes 30% of the airline's cash flow as a protection against this whole chargeback process that I just described and against the fraud. But people, unfortunately, airlines are particular targets for these crime rings to resell stolen credit cards that have been obtained through breaches of retailer and processor systems. And we're talking millions, millions and millions of cards in particular time, are for sale on the black market on the internet. And again, you know, these criminal rings are becoming incredibly professional and sophisticated at marketing these cards and gaming the fraud control. systems that issuers have put in place. They know that if they can sell cards by zip code in the U.S., then the buyers, the other criminals, the buyers of these cards can actually create

counterfeit cards and go shopping within a certain radius of that zip code and go undetected for a certain period of time. And again, as a way to circumvent some of the fraud control systems that issuers have put in place. As a result of this increasing amount of fraud, there's been a hair trigger put on these fraud control systems. And as a net result, otherwise legitimate card transactions are being declined. So in other words, if you're a card holder and you're presenting your card, it's your card, you've authenticated yourself, but because it's an online transaction and because, say, you're in Europe and you're buying an airline ticket on a carrier in Asia or you cross borders and you go outside your

particular buying zone, issuers increasingly are declining those transactions. And we call those false positives. So here again is another cost to merchants of accepting cards online. It's this deadweight loss of otherwise legitimate sales that get declined by the card networks, by the issuing banks, through no fault of the retailer. And there's a firm, called Experian that has done some data analysis on the magnitude of that cost, it is $40 billion annually, $4.0 billion. That's that's crazy. I mean, it is such a complex system and one that is like you say, it's extremely expensive. And on the merchant, I guess one exception to what you mentioned where the merchant is liable for fraud and online transactions is using 3D secure, but that's another

costs that the merchant has to interiorate through the subscription to through the subscription to three a secure so no but I mean so but why is it that when

these regulations that you mentioned imposed by Vizien Mastercard why are the why are online transactions different from physical transactions in the sense that merchants have to be held liable for fraud? I think you touched on it in the case of 3D secure.

It's the authentication. It's the ability to physically interrogate the piece of plastic that either has a chip embedded in it or that has a magnetic scrape on the back of it, which can be, you know, red and swiped. It's the added risk of just what we described, that there could be, you know, so-called pans, the primary account number, you know, and Visa MasterCard. It's just the 16 digit number, which can be sold and then used in a pull credential fashion, okay, to defraud a retailer.

It just introduces a higher degree of risk because of the lack of the ability to physically interrogate the payment credential in the form of a piece of plastic. And there have been a lot of efforts, okay, 3D Secure is a good example, although, again, it's an added cost. you need to be implemented. There's a certain amount of IT overhead. And again, you know, we're keenly, we had Bitnet or keenly familiar with this system. Okay. A lot of these costs that we were just describing are sources of revenue for cybersecurity. Okay. That was a, you know, a service layer on top of the credit card networks that was designed to help merchants handle these risks, you know,

manage these costs, improve the likelihood that they would collect on a card transatlors. action, but at the end of the day, their costs, right? They're just additional costs layered on top of the existing payment system to help merchants who are trying to sell their goods online from getting ripped off. So if we sort of sum up what that whole payment system currently looks like for consumers, sorry, for merchants, it's extremely frustrating because they have to bear bear the weight and the responsibility of potential chargebacks because of fraud. And for consumers, they're faced with the reality that they're not able to use their credit card in certain situations where it might be considered a fraudulent transaction.

That's certainly happened to me. I'm sure it's happened to you, Brian, as well. And who's benefiting from this, say, broken system, or a system that doesn't really serve merchants and consumers? as well, the banks are, because they're taking those fees for providing that service, but that doesn't really, I mean, it's not a very good situation when you look at it from a high level. No, no, it's, and it's broken.

And I think that was the point that, that was the conclusion that my co-founder and I came to while at CyberSource was, you know, as we, I'll give you another kind of background on that visa in 2010 acquired CyberSource for a couple billion dollars. Source was by then a publicly traded company and it had been for some time. And part of the strategy for Visa's acquisition was to extend the reach of cybersecurity globally. Okay. So at the time, we were active in Western Europe. We had a joint venture in Japan.

But Visa strategy was, you know, go to Asia, go to Singapore, go to Brazil, take this technology. And as e-commerce was proliferating globally, help merchants and other regions except cards more safely online. something that we found was that a lot of other regions were not as card-centric as Western Europe or as the United States in terms of they were using other payment types, so-called alternative payments, bank transfers, ideal in the Netherlands is a good example. Belletto Boncario in Brazil is another good example. Some places like South Korea were using mobile payments. And that was great. But the point being that for a retailer now to extend your reach, globally, which was the opportunity with the global internet, was to reach consumers anywhere on the planet with access to the internet, you had to, you were faced with the prospect of integrating not just to the card systems, but now to a proliferation of other regional alternative payment types that were tied to regional bank networks or regional mobile network operators.

Okay, so they worked great in a particular country or maybe even in a particular region, but they didn't travel. And so suddenly we're looking at this as a patchwork quilt of siloed payment systems that were stuck, okay, within regions and they were tied to proprietary bank networks, et cetera. And so what we saw with Bitcoin, and this is going back to sort of the 2012-2013 era, was an incredible leap forward, okay? Just an incredible development that with a single connection into a service provider like Bitnet, a merchant could now accept a global. a global payment type from anywhere on the planet, anyone connected to the global public internet could spend Bitcoin, and that Bitcoin could be accepted by any other merchant. Okay, independent of any bank network, any mobile network operator, no cross-border restrictions,

no cross-border fees, and that's another cost that I should have mentioned earlier with the card networks, a so-called ISA, an international service assessment, is charged by the card networks anytime that there's a transaction that crosses a border. Okay, again, where the merchant is in a different location than the issuing bank. So with Bitcoin, right, with, you know, the Bitcoin protocol, the global public internet became a secure payment network. And that caught our attention. And here we were at Visa trying to figure out, okay, how are we going to continue to serve

merchants globally to help them extend their reach to consumers anywhere the internet could be accessed, which with the proliferation of mobile phones was everywhere, right? And so we saw a couple of developments from the expansion of the internet, okay, through mobile broadband, the proliferation of smartphones, and then the fact that now there are billions, you know, five, six billion people, now with access to the internet, but no bank account, okay, and thus likely no, you know, no access to a credit card. So we saw the opportunity, you know, there were a couple of different important developments sort of converging, okay, and Bitcoin came out at a time when, you know, the global financial system was brought to its knees, frankly, okay, going back to the

metadata included in the Genesis block, right, about the central bank England bailing out RBS or whatever that was. And, you know, I think that we all started to question, right, you know, what, what are we doing here with the financial systems? Why are we relying on central banks? Why are we still relying on card networks and other proprietary bank systems to transfer money with all these added costs and risks and exposures? You know, the internet is freed up information.

We can now trade information. You know, providers like Skype and they enabled us to complete voice calls over the internet. We had voice over IP, which is a great technological innovation. Suddenly we were freed from, you know, the landlines and the mobile roaming charges. We can use the internet to speak. Well, now with Bitcoin, we have money over IP. We have the ability to send money securely.

As securely as we can send in, or as freely as we can send an email, we can now securely send money. And that was an incredible, in our estimation, innovation and probably the single most important development in financial technology ever. Okay. And so we felt that it justified our leaving cyber source, our leaving visa, to develop and launch a platform specifically tailored to enable merchants to accept Bitcoin, to obtain all the benefits of accepting Bitcoin, but without a lot of the risks and without a lot of the costs of having to handle the private keys, you know, convert the Bitcoin back into fiat, which merchants still need, okay, to pay rent, to make payroll, to pay vendors, and guarantee the payout right at the transaction, at the cost of the transaction to the

merchants. So we saw an opportunity in effect to create a services layer on top of the Bitcoin network to enable merchants to accept payments from anyone with a smartphone and access to the internet. Yeah, I think this is such a compelling, compelling thing. I think that's when one explains Bitcoin to someone. I think it's always those cases or remittances as another one that just kind of makes sense to everyone. And it's really easy for people to then see that it's such a compelling thing. I think when we look at the realities of it, and I'm curious about your opinion on that, because for a consumer that maybe insecurity of the credit card network can actually be almost a feature, right, because it allows one to sort of claim back the payment in case something

goes wrong, or if you're dissatisfied with the merchant, right, with this pull payment. And that's not the case with something like Bitcoin. So how do you think about the aspect of consumer protection and the aspect of how it appears to the consumer in this context? Well, so, and we're now using the case where a consumer has access to a credit card, right? So. Right. And, and, and, and I agree. That's, that's a, that's a, that's a frequent analysis that we perform is that, you know, if you have a credit card, despite a lot of the frustrations that we just mentioned, the fact that your card might not work. In fact, I ran into that twice just in the last week trying to buy airline tickets, okay, trying to get from Europe to the United States.

I won't name the airline, but in one particular case, I had to try three or four different ways to get to buy a ticket on that carrier. and I finally had to go through a travel agency that would recognize my credit card and authorize me. That's incredibly frustrating. You know those travel sites where you can buy with Bitcoin, right? Well, I tell you, unfortunately, that travels, I do know those travel sites well. And this particular airline was not hooked up to that travel site. But again, I mean, all kidding aside, that is the solution, right? I mean, if I were able to spend Bitcoin on that airline, I could have gotten 30 minutes on my life back.

But we'll put that aside for the time being because I know, Brian, what you're trying to get to is a consumer protection element of, you know, I'm now pushing cash to that airline. Okay, if that airline doesn't fly, you know, how do I get my cash back? And that, you know, the technology exists for that today. I know that's an increasing area of focus and inquiry for some regulators. I know in the U.S., the Federal Trade Commission has just begun providing some guidance, some kind of consumer risk warnings. I know central banks the world over have likewise issued, you know, even if they're not regulating Bitcoin, they're issuing guidance to say, you know, consumer, you know, caveat

mTOR, you know, consumer beware, guard your private keys, don't deal with unscrupulous merchants, you know, et cetera. But the fact is that the technology exists today to enable consumer protection on any Bitcoin transaction. And I think it was an important enough consideration that it was addressed in the initial white paper. And the whole notion of having an intermediary function accomplished through a smart contract, right, through multisignature transaction, where the Bitcoin is subject to some additional conditions, before it can be further transferred. And that's a service that we can provide today.

Yeah, I think that's a really interesting way of looking at it, right? Because one way of looking at consumer protection in the current card network, you could say, oh, the card networks are secure. So it's always possible the cart was stolen. So as a consumer, if you call them and say like, hey, this was a fraud. this was illegitimate payment stuff, you get your money back because they can be sure. Whereas with Bitcoin, it's like cash,

but then it does have all this programming capabilities and multi-sick and things like that. So you can sort of layer consumer protection on top of that in whatever way you want, right? Maybe sometimes you don't want it. Sometimes you want to have a third party. Sometimes maybe you want to pull data from APIs to determine whether the payments made

or how. And so I think that's interesting. Of course, it's a considerable engineering effort. It's going to be hard to coordinate and to standardize. And also, I think it will be hard for consumers to know what to expect, right? Because if you have different types of consumer protections in all kinds of areas, one of the advantages of a credit card is there's like one number of call and, you know, you can deal with it. If you have a credit card.

If you have a credit card, yeah. If you don't, yeah. Well, I'm just saying that's, you know, that's an important consideration, right? We're talking about the billions of people now. Right. You know, can get online. But that doesn't, that doesn't eliminate the fact that, okay, those billions of people can now shop with Bitcoin, but they're still subject to, right, you know, unscrupulous merchants who don't deliver on the services or the goods.

And we do think that, you know, there are near-term use cases. And we have best practices kind of, you know, turn. key solution that we can offer to retailers today to basically say, okay, this is how you handle, you know, refunds, disputes, and consumer protection to the extent that you want to offer the ability. And so a good example would be a marketplace, right, where, you know, it's one thing if it's a high street name brand retailer with whom, you know, the consumer may have a prior relationship or, you know, to whom the consumers want to place a business.

a great degree of trust and just the refund policy. If it's say, you know, you're buying, you're on Etsy, you know, or even eBay or some marketplace, and you're going to purchase a hypothetical use Rolex watch, right, from another seller. You have no connection to this seller. Probably will never deal with the seller again. Yet you're going to push that seller digital cash. Okay. What is your recourse? And in that particular scenario, we would say, well, you know, we could set up a multi-state transaction where in an automated fashion. And by the way, you know, these solutions exist today. You know, they're providers like GEM, you know, BitGo, right? I mean, this is not something that Nest needs to be built. It exists, right? We're all using this technology

for, you know, corporate treasury and financial controls purposes. But this could be a consumer-facing service where the consumer can say, okay, I'm going to spend my Bitcoin and buy this use Rolex. And I know that you know, if that doesn't show within five days, something happens, right? And there's a condition that's tied to a timeline that the condition expires. If the consumer, you know, receives the Rolex, inspects their Rolex, sees it's a valid Rolex, it works, et cetera. The condition expires, right? It's in some period of days.

And then the Bitcoin is capable of being transferred off the blockchain, sold on exchange, etc. that, you know, that, but that technology, that solution exists today, but I think, Brian, to your point, you know, that's our best practice that we've kind of put piece together. It's not a standard, okay? It's not like an operating regulation necessarily being dictated by, you know, a doopolistic card network, for instance. But at the same time, it's, it's something that for a consumer who's concerned about their exposure, you know, should be sufficient, okay, if that consumer has decided they want to pay with Bitcoin. And that could be because that consumer is in, you know, Malaysia, right, or South Korea, or someplace where they don't have a credit card or the card is not going to work. You know, for some reason that consumer has decided to pay with Bitcoin. And there are a lot of use cases where we can, you know, explain and describe where that,

that would be the case where they would want to use a Bitcoin transaction instead of a card. We can protect that transaction. We have the technology today to help protect that consumer. But it's a space we have to keep an eye on because I think that to your point, if each country regulator jumps up and requires a different standard or a different solution, that could get complicated. You know, it could cause consumer confusion. And any sort of kind of siloed regulatory approach we have found, you know, it carries with it the risk of disrupting the global. appeal of Bitcoin, right? I mean, if it's going to work differently in one country versus another because of these kinds of regulations, that's something that we need to nip in the bud. And I think,

you know, the only way really of doing that is coming up with some sort of, you know, self, you know, best practices, right, that, you know, the industry itself comes up with. Let's take a short break so I can take you to Paris. I dropped into La Maison du Bitcoin, the House of Bitcoin, in the heart of Silicon Sontier, home to many startups. including Ledger, and I spoke with Nicola Baca, Ledger's CTO, about their recent membership in the Fido Alliance. So the Fido Alliance is a group of industries dedicated to remove the use of password from the web. So we decide to join them because we think that Bitcoin is a very close protocol,

technically speaking to Fido and enhancing Bitcoin products with that kind of feature is very useful for everybody. So this will enable you to log on easily into websites in different ways. For example, with our NFC product, you will be able to log on into a service by tapping the device on your phone or by tapping the device on an NFC reader. You will have a way to authenticate without passwords in a standard way. And the standard way is really important because there have been a lot of initiatives trying to remove passwords from the web, but this will only work if they are interoperable. You don't want to lock users into single solutions. Given the traction that Fido has today, you have supporters like Google, like eBay.

paypal into it, we believe that it is the most, the best standard to do that. So definitely look forward to future Ledger products being Fido certified. In the meantime, you can always count on the Ledger Nano to keep your Bitcoin safe. So don't delay in getting a secure setup today. Go to ledgerwollot.com and use the offer code EB-09 to get 10% off your first order. And that offer code is valid until September 30th of 2015. We'd like to thank Ledger for their continued support of EPCON of Bitcoin. When we talk about adoption, you mentioned I was making the comparison to credit cards.

And you certainly right, that may not be the best comparison because for consumers, credit cards work reasonably well. At least they seem to work reasonably well because the costs are sort of hidden, right? They're just put on top of the price, but you don't notice it as a consumer. Does that mean that you guys at Bitnet will focus on maybe some of those niches and markets where that's not the case in payments don't work well, like maybe gambling, some online things that car networks don't work with or remittances, micropayments, maybe internet of things, although that's probably still quite far away until that's really going to become a big application?

No, exactly right. We're looking at all those use cases. And I think you're on to something that, you know, some of the areas of early adoption could well be tied to places where credit cards just are not working well today for whatever reason. The, you know, so I mean, our focus is that, look, if it's, if it's legal, okay, in the jurisdiction where the business is being conducted, okay, if it's regulated, is the merchant capable of complying with those regulations? You know, because we analyze this a lot and frankly, you know, with some of our banks, the notion of being a high-risk merchant in a credit card in a card acquiring scenario oftentimes has nothing to do with the appeal of that merchant as a Bitcoin acceptance solution. So in other words, again, going back to airlines and sorry to pick on airlines, but they're a high-risk merchant. They're high risk. Their so-called MCC, their merchant category code, is high risk because they're accepting high-value tickets, or they're selling high-value tickets well in advance of providing the service.

So that leads to a lot of disputes and a lot of headaches. And under the network rules, the card acquiring banks are the ones responsible for making whole the card issuing banks, okay, on these chargebacks and these disputes and these frauds. So, you know, that's a great merchant category. for Bitcoin, right? And, you know, the airlines get their cash up front. They don't have to wait for the billing cycle. They don't have holdback reserves. You know, the banks don't crimp their cash flow the whole thing. You know, gambling, sure, okay, potentially, I think gambling in Europe and other places where it's legal, the United States, it's still an issue. That should be a great market for

Bitcoin acceptance, right? It solves a lot of issues that card acquires deal with and chargebacks. But But an additional consideration for Bitcoin are the regulations and concerns pertaining to money laundering. Okay. And so online gaming, unfortunately, is prone to high volume, you know, kind of potentially anonymous transactions. Okay. So, you know, Bitcoin in to gambling chips, the gambling chips are bet traded. You win some, you lose some. But then they're cashed out.

And I think that some of the concerns about, you know, gambling specifically as a vertical pertain not to the credit risk, right, that typically is a hindrance for card acceptance, but to the money laundering considerations. But again, that's manageable, right? And our approach is, you know, we have built a platform from the ground up with a lot of these considerations in mind about collecting the data, both on the payer and on the merchant, so that we can comply with. a whole panoply of regulatory frameworks. Starting with the BSA, the Bank Secrecy Act, okay, you know, know your customer, anti-money laundering, you know, so-called SDN, specifically designated nationals in the U.S. is known as OFAC, the Office of Foreign Asset Control. And there are a lot of considerations that exist with the existing financial services,

existing financial systems, I should say. We're typically financial institutions are on the hook for screening out money laundering and monitoring transaction activity to try to spot indications for potential money laundering situations, activity that spikes or it's out of the ordinary unusual that requires further investigation. We're registered money services business in the U.S. Treasury under their FinCEN guidelines. We're obligated to file suspicious activity reports in all the jurisdictions where we do business. So these regulations don't change just because we have a global digital currency.

And we knew that. We know that coming from Visa and CyberSource. We understand that there are a whole host of regulations that we're going to have to be complied with. And so we've built, we hardwired in from the ground up in our platform, the ability to collect the necessary data and to comply with these regulations. And we feel that that's table stakes, right, for getting access to bank systems. And for the time being, while Bitcoin is still really a payment type as opposed to a currency, all right, in the sense that retailers really can't use Bitcoin to pay vendors and to make payroll, that they're going to want fiat currency.

So a big part of our service for the foreseeable future will be accepting the Bitcoin from a retailer, whether it's in, you know, high street retailer or, you know, gambling or, you know, travel or airlines or whatever, converting that Bitcoin back into fiat currency and paying that out through the existing bank systems. To have access to those existing bank systems, we have to comply with a lot of these regulations that were frankly created for financial institutions to screen out bad actors at the account level. Well, on the Bitcoin network, there are no financial institutions, right? So guess who has to do that? Bitnet. So, I mean, you touch that. Perhaps it's a good segue into my next question.

I mean, Bitcoin, as you mentioned, is, I mean, so it's an international payment system right now, but it's not used as a currency per se. And that is sort of the main role the payment processes are playing now is converting that back into fiat currency. And that has been one, I guess, thing that has held. back adoption is that you always have to hold this currency for one reason is a fiat currency. One of the reasons is volatility. Do you see in the future Bitcoin as a currency or simply as a payment rail? And I guess the second part to my question is can we assume that if we assume that Bitcoin may become a payment rail for only high value transactions as has been discussed, what would that mean for payments? Yeah, sure. I do think it will become a currency.

And if we look at the sort of the last six months, the volatility really has decreased dramatically, right? And the price has been trading within sort of a 200 to 300, 2705 band for several months. And I think that that's important, right, for establishing the confidence by consumers to hold Bitcoin for some period of time, right? And in some cases, it's, you know, they don't trust their own sovereign currency. So it's a store of value, right? The volatility of Bitcoin might be more attractive. than their central bank issued sovereign currency. But I do think that given time, and frankly, given, you know, the chicken and egg issue

of providing a place for consumers to spend Bitcoin, and that's something that BitNet is hyper-focused on, is the acceptance side of that equation, right? If, you know, one of the recurring questions is, well, gosh, how is Bitcoin ever going to act like a currency if consumers don't have a place to spend it? And that's where we come in. We're trying to make it as simple and as risk-free as possible for retailers to start accepting Bitcoin, which we think will be a big step forward in enabling consumers to treat Bitcoin as a currency as opposed to perhaps a store of value or a speculative trading opportunity.

And I do believe that given situations like we have in a couple of countries in South America, for instance, Venezuela or Argentina. Now we're pointing at Greece, you know, as always. You know, there could very well be a situation where a central bank, I don't know, you know, a particular example where this might happen, but a populist government takes over through some vote on the country and just basically bins the central bank, just says, you know what, we're on our third currency in 20 years. This is not working.

We can't trust ourselves or finance ministers anymore to issue a sovereign currency. By default, a lot of these countries use the dollar as a primary reserve currency. But I don't think it's out of the realm of possibilities that one of these countries is going to turn to Bitcoin. And I think that that would be a very interesting phenomenon in the sense that the rest of the world would then have to accept it as a sovereign currency. because it would be at that point. It would be the official currency of a country. Who knows what scenario might lead to that? And I'm not saying that that's going to be a necessary step.

I think that Bitcoin, just through dynamic market forces, can start to operate as a currency. And I do see that happening in the not too distant future. That's a really interesting scenario. I mean, I have my doubts about whether that would happen in the next 10, 20 years. But I mean, what I'm curious, though, is if transaction volumes increase and in a couple of years, we have, so next year, actually, we'll have the minor reward go to half. And then we can assume the transaction fees will start going up perhaps in four years after that, you know, as the minor rewards keep going down. If you have only these high value transactions with high minor fees that go into the Bitcoin blockchain,

and the blockchain is the Bitcoin blockchain is only used as a clearing mechanism, then where is the place for payments there? Where, I mean, how would you pay for, how would you assume that Bitcoin can be used to pay for your newspaper or coffee? Well, yeah, again, I think that there's, you know, a tremendous amount of, you know, activity, okay, around this, analyzing these potential future problems. and I like to make reference to, you know, Adam Smith's, you know, invisible hand analogy, right? Where if, you know, the technology exists, if there's a need for a solution, someone is someone very intelligent is working on it at this moment, right? Either, you know, at MIT or, you know, some private company. And we can see evidence of that today already.

You know, we can point to, for instance, a lightning network, okay, you know, a side chain, which is going to use under its current iteration, smart contracts, right? Where, you know, the nodes that operate on the lightning network, and it's basically, it's designed to try to process a high volume of microtransactions to take the strain off of the blockchain itself. But it's using the blockchain, okay, to enforce smart contracts for all the nodes operating on the lightning network. And there's teeth. You know, the nodes are going to have pledged, you know, Bitcoin will be used as a common denominator and, frankly, as a kind of capital to enforce good behavior on a lightning network. So, and it's more than just kind of a drawing board idea.

I mean, it's something that is developed enough and there's enough, you know, kind of activity behind it that, you know, there are solutions that you can see are coming out of the ground, which I think will will be effective in a different. addressing some of these longer term issues. But we are cognizant of, you know, the having of the reward. And as you say, you know, kind of reminders to start to rely on transaction fees at some point in the distant future. But if this all operates as designed, you know, the Bitcoin, the value is going to continue to go up, right? As people use it more, the utility will increase.

And as the only unit of value to be transacted on the Bitcoin network, the price of Bitcoin will go up. Yeah, we did an episode of the Lightning Network guys a few weeks ago, so I think our listeners are well familiar with that. And I think I agree, you know, there are a lot of different ways that one can use either Bitcoin directly or Bitcoin as a sort of a clearing settlement thing, and either one should work, and I guess we will see which direction it goes. I think it's not quite clear. But I want to bring a sort of critical point up here that,

Tim Swanson and some other people have analyzed, for example, some of the BitPay data and because they reuse addresses, so it's possible to estimate how much transaction volume they do. And also, CoinDest, for example, in their last state of Bitcoin report, they showed like the number of new merchants that have started accepting Bitcoin, and that has been decreasing dramatically. What's your point of view there? because it seems even though Bitcoin is becoming better known and more companies are building things that that sort of Bitcoin's usage as a payment system, people actually spending Bitcoin

and new merchants as a consequence starting to accept Bitcoin, that's not happening at the moment. Why is that? And what needs to happen for that to change? Well, I can just say from our perspective, I've seen some of the data you have and some of the blogs. You know, we're in early days, right? And I think that there's this saying, and I can't attribute it to the author, but that, you know, we human beings tend to, you know, overestimate the value of innovation in the short term, but underestimate it for the long term, right? And I think that there was a big flurry of activity in the early days, you know, bid pay has been in business now, what, since 2011, I think, something like that. that.

Coinbase created a merchant processing service in January of 2014, right, when they kind of signed up overstock. And they had exposed some APIs prior to that, right, to enable merchants to kind of create wallets and accept Bitcoin. But I think that with, you know, with introduction of a service like Bitnet, right, where we really have approached it in a different way, where we've built a platform from the ground up with a lot of considerations in place to address some of the regulatory complexities, but frankly, a lot of the technological hurdles that, you know, PSP will want to see specific kind of services

or a large enterprise-level, you know, international retailer are going to want to see the ability to integrate into existing commerce platforms, existing ERP systems that run their inventory and do reconciliation reporting. Before, I mean, not to blow our own horn, but before Bitnet, a lot of these solutions didn't exist. So, right, if we're seeing a reluctance by some of the bigger retailers to accept Bitcoin, it could very well be that the state of the art to date was not sufficient. And we have gotten that feedback directly from a number of retailers who have said, yes, they want to take Bitcoin, but prior to meeting with Bitnet and getting familiar with our system,

they weren't comfortable accepting Bitcoin, right? And so, you know, we'll see. It's, you know, I think that the idea is that we are continuing to focus on the acceptance side of the equation. We work very closely with a lot of the wallet companies and to try to keep, keep dialogues with the exchanges and try to figure out what solutions from, from wallet and other kind of consumer facing enhancements may be necessary, okay, to motivate consumer spend of Bitcoin as a payment type, whether it's, you know, something that

merchant can control, like a discount or reward, right, the issuance of loyalty points for spending with Bitcoin instead of using a card or some other kind of payment, perhaps that will help be helpful for motivating consumers to go out and get Bitcoin specifically, right, to make a payment. We are continuing to analyze the spending patterns to the extent that we can try to extrapolate, you know, where's the Bitcoin going. We think that remittances are a big part of that. The remittances corridors are, I think, leading indicators of who is holding Bitcoin as a potential consumer and who will then be in a position to spend Bitcoin as payment, right, as opposed to, again, speculative trading or store of value.

So a lot of those signs point towards emerging markets, okay, you know, South America, Asia, where expats, immigrants are sending Bitcoin back to their friends and family. We can see proliferation of ATMs. I think that's another good indicator of where the Bitcoin activity is starting to happen, where recipients in these countries are getting Bitcoin sent back from their family, and then they have the ability to go to an ATM and withdraw fiat currency to spend locally and then leave the balance on the blockchain, right, as their bank. And frankly, you know, as we continue to to launch retailers and see where the spending comes from and tracking, you know, incoming IP addresses or ship two addresses, that's, you know, trying to correlate those trends and form a pattern. It does look like probably a lot of the initial use case is enabling, excuse me, enabling consumers.

And a lot of these developing emerging markets to spend on existing established. retail sites. Okay. And so, but again, Brian, I mean, it's, let's face it, it's still early days, right, in the sense of if we look at the number of merchants that are accepting Bitcoin, you know, as a percentage of the number of retailers globally, it's a tiny, rounding air type of fraction, right? So we have a lot of work to do to solve the acceptance side to give people a place to spend

Bitcoin. And there's a lot of hand-wringing about, oh, people, you know, their consumers aren't spending. Well, where do they have to spend it? You know, look, I mean, we, we, we've, I spent a lot of time talking about airlines. There are very few airlines right now. I think probably count them on one hand where you can actually go to their site and, and buy a ticket with Bitcoin. We're solving that. You know, we're integrating with the UATP, a universal air travel program, which is owned by the airlines, okay? 260 airlines are now on, on the UATP network, which, you know, we will now be able to seamlessly enable airlines to accept Bitcoin and settle those transactions through

to existing systems. I think that's an important notion to kind of drive home. Bitcoin is a silver bullet. As a front-end payment type, it is a miracle, money over IP, anywhere in the world to anywhere else in the world. But it doesn't change the existing payment infrastructure. It doesn't change the back office systems, okay, that retailers have spent a lot of money putting in place. So I think that what Bitnet is now solving for is the ability to use the miracle of Bitcoin as money over IP, but at the same time, interface with all the existing payment infrastructure, the plumbing, as we like to call it, which is a labyrinth of complicated commerce platforms and checkout systems and modules. So the point being that that system is not going

change overnight just because they now have the ability to accept payments from anywhere in the world. And that's not something that a company is going to jump into this industry without having been at CyberSource, for instance, for the last 15 years and figured all this stuff out and provide the solutions that the big global retailers and airlines are going to want to see as a precursor to accepting Bitcoin. Yeah. I think if you think of the sort of, you know, you mentioned Adam Smith and if on things of where should it end up in terms of an efficient market, an efficient system, then it's pretty clear to me.

I completely agree that in the long run, something like Bitcoin just makes a lot of sense. One of my biggest worries and my biggest concerns is actually the security of the Bitcoin network with mining, mining centralization and incentives for miners. What are you thoughts on that? Is that something you worry about as well? Well, certainly. We've got some people on staff that one guy in particular likes to terrorize me with conspiracy theories, right, about, you know, big mining pools going offline periodically

and who the hell knows what they're up to. And I do think that it's a legitimate risk that we all need to remain, you know, watchful and cognizant about. at the same time, it seems like there's enough self-governance kind of in play. And when the mining power gets too concentrated, there seem to be some concessions to make everyone comfortable again. And I think ultimately that, you know, in the doomsday scenario, if someone's going to try to take over and corrupt the Bitcoin network, what are they going to gain?

You know, they're going to destroy the value, right, of what they're trying to obtain. Well, if you can short Bitcoin, which presumably in a world where Bitcoin's integrated, you will be able to. There's ETFs and all those things. Well, then there's potentially a lot to gain. Right, right. Yeah. Yeah.

I guess you're right. I mean, there's probably with derivatives and other kinds of financial instruments, there's always a way to benefit from destroying something. you know, the so-called bear raid, right, from the stock trading strategy where you short something and make up a bunch of bad rumors about it. And, you know, but, you know, I got to say that while the mining business is important, clearly, because that's, they maintain the nodes that comprise the Bitcoin network, and that's the vital importance to a company like Bitnet or anybody else using Bitcoin. The economics, I got to say, I mean, we talked to a lot of private equity

firms and other types of investors who always like to ask us questions about what we think about this mining company or that mining firm. And I got to say, I mean, that's just high stakes gambling, right? It's an arms race where, you know, it's tied to a lot of, you know, electricity and other costs where I'm sure somebody can figure that out. And if, you know, legitimate businesses are based on mining, and that's great. But I can't profess, frankly, to be an expert. I mean, that is the big Bitcoin ecosystem. I'll just admit, that is the one place where I've got a big blind spot. Like, I just, you know, there's nothing, we have not spent any time actually looking at mining as a business, except from just, you know, thirdhand what you can read in the papers. Okay.

I mean, I can, again, I can talk to some people at mining firms, and I know some mining firms that have pivoted, you know, and gotten out of mining altogether and just cut over to big data, right, because of some of the costs and because, you know, the reward did not keep pace, you know, with the initial business plan, right? Or you even look at a big kind of, you know, example like 21, right, that has continued to sort of pivot, right, from, you know, a mining strategy to now consumer-facing strategy so far as we can see from, again, reading in the papers. So, but anyway, going back to your initial question, you know, the, the, the, the, the, the, the, the, the,

the miners are some nefarious activity from the mining side, you know, corrupting and, and destroying the value of the network. It's something to be mindful of, certainly. And we've got some folks on staff that, again, are, you know, hyper, hyper-focused on tracking kind of concentration of mining power and periodically terrorizing me with some of the stats. But it's not something to keep me awake at night at this point. Today's magic word is Christine, P-R-I-S-T-I-N-E. Head over at Let's TalkBitcoin.com to sign in, enter the magic word, and claim your part of a listener award.

Let's talk about Bitnet. I'm curious, can you tell us about the infrastructure that you're building, some of the services that you provide, I believe you have an API as well. Talk to us about the products you're building. Yeah, sure. So, I mean, the idea was that we have a suite of services that are accessible through a single API connection, a restful hypermeda API that is easy to integrate. We've got an implementation guide available on our website that anyone can download. We've got a test center, which is important. And we basically accept the Bitcoin on behalf of the retailer.

So the retailer does not have to manage the handling of the Bitcoin. We maintain the trading accounts at exchanges so that we can aggregate and periodically sweep the Bitcoin over a period of, say, 10, 15 minutes into a trading account and liquidate it. We have some hedging strategies that at this point aren't too complicated. But, you know, we have the ability through some, as Brian just mentioned, there are some outfits in New York coming up with derivative products and Ford contracts and other kinds of hedging services. But at this point, it's really straightforward from our standpoint. We just try to trade as quickly as possible. We have Bitcoin on reserve, you know, ad exchanges so we can lock in the trade.

But the net result is that we guarantee the payout in fiat currency to the retailer at the transaction value. net of our processing fee. And the, you know, it's a pretty simple, it's a pretty straightforward value prop, especially as compared to the cost of other cards and other kind of payment types, as we discussed earlier. So from a retailer perspective, they integrate to our platform, either directly or through their PSP or commerce platform or other sort of intermediary. We take it from there, right?

We handle the Bitcoin, the conversion, and the payout to. to their account and their currency of choice at a guaranteed rate. I will say that there's one enhancement probably worthy of noting that we've started to discuss publicly just recently. And it's a, it's a risk, a proprietary risk mitigation tool. I believe we're calling it instant authorization, okay? Where despite the lag time, as we are all aware of the confirmation system, anywhere from, you know, five to ten plus minutes to confirm a transaction.

We're able to monitor the Bitcoin network and come up with in a few hundred milliseconds a risk score that is reliable enough to us that we can, you know, we're capable of making a determination, you know, in that few second time frame to underwrite a transaction. Okay. And so, and that's a big part of our guarantee to the merchant of the payout in the sense of if it's a digital good or an immediate download, you know, something that has to be approved instantaneously from the retailer perspective. We can do that. Okay. So that's, again, just kind of a proprietary, value-added component of the service, of the suite of services that retailers are able to access through our API integration to our platform.

And so the customers you're targeting, you mentioned you were targeting PSPs. Are you also providing services just for merchants, like the mom and pop store that has an e-commerce boutique? Or are you mostly targeting larger merchants with really integrated Bitcoin payments like on their website, etc? Yeah, well, we'll both. Okay, so I think that the larger merchants, we can integrate directly. for the smaller, as you say, mom and pop, you know, SMB, small, medium business-sized businesses, we typically will work through aggregators.

Okay, so that would be, say, a shopping cart provider or a payment service provider or a commerce platform. Okay, and examples of those would be sort of, well, the bigger ones, SAP, Oracle, IBM, but also, you know, high-risk, net sweep, magento. So a lot of these companies that provide software or SaaS-based, you know, commerce platforms to enable merchants. So in other words, retailers will outsource a lot of their payment infrastructure to a variety of these types of partners.

And depending on the vertical and, frankly, the size of the merchant, okay, and the complexity of what the merchant is selling, you know, inventory control, you know, tax collections, all this kind of stuff, they typically turn, you know, to a partner for that. I mean, retailers, you know, they're not, they don't want to be in the IT business. They want to outsource that. And so what we do and what we have done is to design and launch a platform that can integrate through a series of what we call microservices.

So we have discrete APIs from a platform to platform integration that can interconnect with these specific functional areas of these commerce platforms, of these PSPs, to pass through the data that the merchants are going to need to complete these transactions. Yeah, I mean, that makes sense. And I mean, I guess that's a way for you to, with one partnership with, you know, like a Magento Go or a PSP to potentially reach a really large number of merchants and customers rather than trying to target, like, individual merchants that are setting up Presta Shop or Magento on their own servers and then, you know, having mom.

modules and having to deal with customer service with them, having that higher level strategy where you're going after large payment processors and large e-commerce SaaS solutions does sort of broaden your reach. Yeah, no, exactly. That's the best. I mean, that's precisely the strategy is to be a trusted solution partner to provide Bitcoin acceptance through these existing, well, if we would call. you know, alliance partnerships, okay?

But frankly, they're distribution channels, right? For us to to leverage the installed base of merchants that have been aggregated by these payment solution providers. So before we wrap up, one last topic that we've also been coming back to again and again, which is a regulation side. So the license now finally came out. And I think the aspect that may be most interesting there is the sort of K-Y-C requirements, as I take them, where at least at some point it said that,

you know, if you're doing a big-hunt transaction, you have to know both parties. What does that mean for you? Are you guys going to get a bit license? Do you need to? And will you at some point need to do K-Y-C on each payment you receive or process? Well, yeah, I mean, our approach, frankly, to regulatory discussions. has been, you know, we, to the extent that we can technologically comply with the regulation, in general, we're in favor of regulation, right? We're in favor of the comfort level that banks get from dealing with regulated entities. Okay.

And that's a, you know, as we all know, that's the biggest, you know, hurdle, the biggest stumbling block to this industry is getting bank relationships. If you need it, if you need one, right? And there are certain types of businesses that aren't going to have to deal with banks so they can continue to, you know, ignore that consideration. But for us, that's a critical dependency, right, is the interconnection to banks to settle merchant funds through to their accounts. And so that being said, New York is, it's a key jurisdiction, right? It's an important market. A lot of retailers based in New York, a lot of consumers based in New York.

So I know that there's a lot of discussion about, you know, ring fencing New York, right? and using IP addresses to just block New York. And I know some companies have already come out and said they're going to do exactly that. You know, we filed a comment letter to Bit License. We asked for the same exemption, okay, as a merchant processor that applies for their money transmission statute in New York, where there's a so-called processor exemption that if you're an agent on behalf of a merchant, that you are exempt from having to obtain money transmission license in the state of New York because in effect, all you're doing is collecting on an invoice on behalf of a merchant.

So bit license, unfortunately, does not contain that same exemption as we had requested. So we are going to be required as a condition of doing business in New York to obtain a bit license. It's just, it's become final. We're analyzing it. We're trying to figure out exactly how to comply with it. So fortunately, we have the tools to do so. We have the ability to collect payer information through an API on our platform. So technologically, we can comply with Bit License, but we're only going to be able to do

it to the extent that the merchant, we don't have their relationship with the consumer. We are an agent on behalf of the merchant. So the merchant is going to have to collect the pair information or sufficient information that you know, can be passed through to us as their processor to comply to comply with the bit license. And that's our current understanding. But that's a super crucial point you're bringing up here, right? Because one of the appeals and then I've talked about this and talks about Bitcoin as well, you know, why is Bitcoin so much better than like credit card and stuff?

Well, if you pay online, you don't have to fill out, you know, your address and your name and et cetera, et cetera. I mean, of course, sometimes you need to do that anyway if you get a product shipped or something like that. But often, and especially if you think of like one-off, small payments and stuff, you just want to get rid of that. And with Bitcoin, because it's sort of like cash, you can. But what you're saying is that, well, if in any way, you're sort of touched by this bit of licensed thing. So, for example, you guys wouldn't be able to offer that service. Well, that's right. I mean, and again, we're, you know, we're analyzing it. It didn't come out

us any huge surprise, right? The previous iterations had been available for public comment. So we're pretty familiar with what was finally signed into law. But, you know, you raise a good point for, you know, something that where physical good has to be shipped. Clearly, a lot of information is being collected by the merchant anyway. So, and again, it's going to be up to the merchant from our point of view. If the merchant says, you know what, I'm just trying to sell, you know, an MP3 file. And part of the appeal of Bitcoin is that someone can scan a QR code and go on their way. I'm not going to collect pair information. Then our response to that merchant is going to be, well, then you can't accept Bitcoin from consumers in New York. And we're going to have to

figure out how to make sure that you don't. Right. And as a processor, right, we're going to be the ones responsible for enforcing the bit license. It's not optimal. I'm not going to sugarcoat it, right? I mean, I think that the sort of outcry from some of the other constituents in the Bitcoin ecosystem to let's ring fence New York and show. shut them off. You know, that's not going to change the law. Now, it may draw attention to the fact that in other jurisdictions that are contemplating, you know, similar licenses as California now is, as New Jersey now is, you know, the reaction from the Bitcoin ecosystem to Bit License may have some influence over, you know, their design, okay, their drafting a regulation, which

does not contain the same level of, you know, information or, you know, information or that does not introduce the same level of friction, right, for using Bitcoin. But it is what it is, right? And I think that at this point, our position is we're going to do our best to comply with it, right? Because, you know, we want our merchants to accept Bitcoin wherever our merchants want to accept Bitcoin. If that includes New York, we'll figure it out. Okay. But it could very well get to a place where technologically, and that's our fallback position.

Our mantra is if we can technologically comply with this regulation, we fully intend to. But if we can't, then we won't. And unfortunately, then we'll by default fall into the category of some of these other companies that are already out front saying we're not going to do business in New York and neither should you. Cool. Well, John, thanks so much for coming on. It was really interesting talking with you. It was really interesting diving a little bit deeper into one of the primary use cases of Bitcoin. Yeah, I appreciate that, Brian. Yeah, I really do. Look forward to seeing it next week in Berlin.

Yeah, absolutely. Yeah, so John is coming over because there's tech open air is coming up here, actually to anyone who is in Berlin. So tech open air is coming up. There will be a few events. It's just a panel that I'm moderating with John and Mike Hearn is going to come over. And we'll also be showing, screaming off the documentary, Bitcoin, the end of money as we know it. Some of you have probably seen the trailer, and I think it's going to be quite excellent. There's a good chance this probably airs after that event. Oh, that's right. Well, yeah, so thanks so much for joining us to our listeners. So we put out new episodes of Episandah Bitcoin every Monday.

You can subscribe to the show in iTunes, SoundCloud, favorite podcast app, and you can also get the video on YouTube at Epicenter YouTube.com slash Episendor BTC. And if you like to show, you've been listening to it for a while. you can do us a favor and leave us an iTunes review that will be appreciated and it helps other people find the show and of course you can send us a tip if you want to to our address so thanks so much and until next time