Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Roger Ver: Bitcoin, Liberty and the Scalability Roadblock

Episode Date: December 28, 2016

Roger Ver is one of the earliest Bitcoin investors and through his tireless evangelizing of the cryptocurrency became known as ‘Bitcoin Jesus’. Roger joined us to discuss Bitcoin’s incredible potential to foster liberty. We also discussed how the current stalemate about how to scale Bitcoin is threatening that potential. And, finally, the mining pool operated by his site Bitcoin.com that is supporting the Bitcoin Unlimited client. Topics covered in this episode: How Roger Ver became the first investor in Bitcoin startups What the Bitcoin community was like in 2011 The appeal of Bitcoin for voluntaryists Why the scalability stalemate is crippling Bitcoin Bitcoin.com’s new mining pool and support for Bitcoin Unlimited His vision for the future of Bitcoin Episode links: Bitcoin.com Roger Ver Uncut Video Bitcoin Unlimited BLOCKTRAIL | Bitcoin API and Block Explorer Hashrate Distribution Mining Pools & Clients BLOCKTRAIL | Bitcoin API and Block Explorer Roger Ver: TIme to End the Block-Size Blockade Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/163

This is Epicenter Episode 164 with guest Roger Revere. This episode of Epicenter is brought you by Jax. Jax is the user-friendly wallet that works across all your devices and handles both Bitcoin and Ether. Go to J-A-A-WallX.io and embrace the future of cryptocurrency wallets. And by the Ledger NanoS, the hardware wallet which sets the new standard in security and usability. Get it today at ledgerWallet.com and use the offer code Epicenter to get 10% off your order. Hi, welcome to Epicenter, the show which talks about the technologies, projects, and startups driving decentralization and the global blockchain revolution.

My name is Sebast Inquadu. And my name is Rob, Brian Fabian Crane. We're here today with Roger Rare. I think Roger Rare probably needs no introduction for most of you. He has managed to acquire this wonderful nickname called the Bitcoin Jesus. And he's one of the earliest investors in Bitcoin, I think around 2011. He got very heavily into Bitcoin and we're going to talk. about that as well today. He managed to acquire one of the largest holdings of

Bitcoins of anybody, you know, after Satoshi. And he's also an investor in a lot of Bitcoin projects and companies and has just had a huge impact on the space. So thanks so much for coming on, Roger. Thanks for having me on guys. So yeah, you were very early on, got involved in Bitcoin. I mean, I guess there were people more sort of from a developer side involved at the time, but you were coming more from the business side. Can you talk a little bit about how you originally heard about Bitcoin and how you got involved in the community back then? You actually made an interesting point that I don't think had occurred to me until now,

but I guess I was the very first businessman to get involved in Bitcoin for the most part, and everybody else up to that point were just the developer types. And I first heard about it on a podcast that I like to listen to called Free Talk Live. and they mentioned it in reference to the Silk Road. And I wasn't interested in the drugs or that part of it, but it caught my attention a little bit because if there's a money you can use to buy drugs, that's very different than Visa or PayPal or these other online payment methods.

So I googled it a little bit. And unfortunately, like everybody, the first time they look into it, they don't fully gripe it. And the price at that time was somewhere between five and ten cents each. And I kind of thought, oh, this is kind of interesting, but if nobody's using it, it's not worth anything. And then I heard about it again, about a month later, and Googled it again. And that's when all the light bulbs went off, and I thought, oh, my God, this is going to change

absolutely everything. And, you know, I had read Neil Stevenson's Cryptonacron and, you know, heard about the ideas of, you know, online digital cash more than a decade before the invention of Bitcoin. But I'd been kind of waiting for it to come along. And then when I saw Bitcoin and put all the pieces together in my mind, I realized, oh, it's here. The online digital cash finally is here. And it was off to the races from there.

And I bought a bunch of Bitcoin and became the first person in the world to start investing in Bitcoin startups. And here we are. It's hard to believe it's almost six years since my initial involvement in Bitcoin. And time goes fast, but the ecosystem has developed amazingly quickly. Do you remember what that first startup was that you invested in or those first startups? So the very, very first startup that I invested in was a bit instant, which I think was a way a lot of people got their first bitcoins ever. and that was with Charlie Shrem in New York. And I was reading the Bitcoin Talk forums,

and Charlie had posted something about, hey, you know, I have this business that's helping people get bitcoins, but we don't have enough capital. And nobody, I talked to these VC guys in New York, and none of them have any idea what Bitcoin is and have no idea what it is. So I emailed them and said, like,

I understand what Bitcoin is, and I have some capital. And I think we worked out a deal within like a couple hours. And I sent them the Bitcoins for my investment in, bit instant as well, from Tokyo to New York, just like that within a couple of hours. I think it only took us to strike a deal there.

Nice. And what was it about Bitcoin that you found so captivating? Was it just the economic potential you saw, or was there something else? So my hobby, since I was a, you know, my early teens had been studying economics, and I obsessed, I guess hobby isn't a strong enough of a word. I obsessed over learning about economics in a similar way. I've obsessed over promoting Bitcoin for the last six years. And the more economics I studied, the more I realized that, you know,

violent intervention into the free flow of goods and money is retarding the entire world's rate of economic growth and preventing the entire world from becoming as well off as it otherwise would have been. And the way that that's done is by governments controlling money and controlling the flow of money. And then when Bitcoin came along, I saw it as, oh, my God, this is a tool that, allows every single human being on the planet to interact financially with every single other human being on the planet. There's nothing anybody can do to stop it. That's going to increase the rate of economic growth for everybody in the entire planet, make the entire

planet better off and make the entire planet have more money, which means we're going to solve cancer sooner, we're going to solve AIDS sooner, we're going to have international or interplanetary space flights faster. We're going to have the human lifespan extension faster. Like the entire world is going to be a better place. If you want to heal the sick and help the poor and help all of humankind, you're going to the way to do it is through economic growth. And Bitcoin helps that for the entire world

by stripping away government's ability to control the economy and control the flow of money. So what nerd isn't excited about, you know, interplanetary spaceflight and life extension and curing every disease and artificial intelligence coming sooner? Like, how can these not be exciting things? And Bitcoin helps bring all of that to, you know, makes all those things happen sooner rather than later.

So it was just like, of course, I have to do everything I possibly can to help the whole world realize what an amazing tool we have for the advancement of humankind in the form of Bitcoin. Now, that was a wonderful, wonderful explanation. Now, you mentioned that you are a way libertarian and have spent a lot of time thinking about these issues. What was the reception of Bitcoin by libertarians initially, and how has that changed? What does that look like today? So I like to use the word voluntarist, which basically means that I think all human interactions should be on a voluntary and consensual basis or not at all.

And originally the Libertarian Party kind of stood for that, but recently they're not, the Libertarian Party isn't very libertarian anymore, and the libertarian word has lost a lot of its meaning. But my initial outreach was to libertarian types or voluntarist types because they should love this. Bitcoin has the ability to strip away government's ability to control the economy and fund wars and fund all these horrible things that governments do, of course libertarians or volunteers should be interested in that. So my initial outreach was by buying, I paid for national radio ads for the first, I don't know, five years on more than 150 radio stations across the United States promoting Bitcoin. And it was on a libertarian-themed radio show, which was called Free Talk Live, where I first

heard about Bitcoin. So I did that. I gave away Bitcoins to all of their listeners. I gave away Bitcoins to basically anybody get to listen to me. And the people that I had the most success and that I focused on getting to listen to me were the libertarian types. So specifically people in the state of New Hampshire

that were part of a thing called the Free State Project, which is a they're trying to get a whole bunch of libertarian, free market, volunteerist types to move to New Hampshire and have a big effect on local politics there. And before Bitcoin, I thought that was one of the best strategies around to improve the amount of freedom in certainly the United States, if not the world.

And of course, Bitcoin is far, far better than that. But all these people that used to be so interested in the Free State Project and libertarian there, most of them now are way more interested in Bitcoin because they see Bitcoin has a much, much bigger potential than any political activism does to bring the world in a better and freer and direction that has more respect to individual rights and individual property. I don't want to make this, you know, the whole show about, volunteerism or libertarianism, but I wanted to ask you, as a self-proclaimed libertarianism, libertarian and someone who travels all around the world and lives in Japan,

like to Brian and I, who live in, we both live in Europe, we're not Americans. Nor am I. Well, I mean, you were born in the U.S. So libertarianism is very much, I think, an American concept that, if you talk to most people in the U.S., even people sort of on the, sorry, in Europe, it's a little early here. I haven't really had my coffee yet. If you talk to people in Europe, even people on the right, they sort of dismiss it as this, oh, this isn't an American-type idea that really doesn't work for other types of societies.

What are your thoughts on that? I think people always are skeptical of ideas that are new or things that are new. I mean, look at everybody when they hear about Bitcoin for the first time, think, oh, that can't work. And a lot of people say that libertarianism or voluntarism is, you know, kooky and extreme. But if you think about it, what we have now is kooky and extreme. We have one little tiny small group of people bossing everybody else around and telling them what they can or can't do, whereas I'm just advocating that everybody deals with each other on a voluntary basis, like most people do most of the time. And I'm just saying that we shouldn't make exceptions for people that put on fancy

uniforms and work in buildings with flags out in front. I think murder is murder whether or not you're wearing a uniform or not or working in a building with a flag in front of it. Like don't hurt innocent people. It doesn't matter if you're doing it under the name of a flag and wearing a uniform while you're doing it. Don't kill innocent people. Don't hurt innocent people. Don't aggress against peaceful people. Just treat everybody else like you want to be treated yourself. And I don't think that that's such a wild and crazy and extreme idea. I think it's how most people deal with with people in their daily to day lives, but they have this one giant glaring exception

that they don't view as an exception, and that's when it comes to government. And they think that when government commits violence against peaceful people, for some reason, it doesn't count as being violence, when if you stop to think about it, the military draft we talked about briefly before the show, that's indisputably the moral equivalent

of kidnapping and slavery. And if kidnapping and slavery are wrong, then anybody that claims the moral right to kidnap and enslave others are bad guys, and we shouldn't support them. And the fact that all these government people around the world claim the right to draft people at any time for any reason means they're bad people.

We shouldn't support them. So I guess that's the end of my libertarian rant for this morning. So what about this idea then, and we can stop it here afterwards, what about this idea then that is kind of blatantly obvious that the left of their own devices corporations will, in fact, and maybe this is the same behavior. I mean, we see this all around the world. with large companies gaining more and more and more power and enslaving people in effect,

one way or another, whether economically, whether, you know, enslaving them in terms of, you know, slave labor or, you know, unequal rights, that kind of thing. What are your thoughts on where basically corporate greed will go, if not controlled by some sort of in government instance or some sort of centralized power. So I'm talking to you on an Apple laptop, and I've never once heard about the Apple Corporation forcing people to go off to other countries and kill people, whereas governments do that all the time. They draft people into the military and then tell them to go kill people in far off lines or drop bombs on people that they've never met.

So to me, it's not even an issue. If Apple started doing that, people would be absolutely furious with Apple. and there'd be protests in the street, and they'd tell people don't ever buy another Apple product again, but when the U.S. government drops bombs on more countries than I can count on my 10 fingers, nobody says much of anything at all. So to me, it seems really clear.

The real threat to humankind and world peace are governments, not corporations. And it should be noted that corporations are a creation of the state, though, too. If you want to create a new corporation, you go to your local government office and fill out some of their magical paperwork. Yeah. I mean, I think when you hear the term a little bit, in, right, where people sometimes take a sort of contrary position to is, you know, let's say in Europe, right, you have generally universal health care in some way and other,

right? Like people get sick, they get treated in some way, which is something that doesn't really exist in the U.S. And then so when one hears the idea, okay, we need to privatize that. And when we see where this is going in many cases, it's not going very, developing very well. although of course it's still very regulated so maybe it's not a quill into an actual free market system. But then at the same time, you know,

when you look at something like Bitcoin and then when you look at how money works today and how Fiat money works today, then I think, you know, explaining that to people and just the kind of frankly insanity of that system, you know, it doesn't really matter where people, what political-leaning people are, they will always look at that and say, this is, you know, there's something slightly odd with that,

you know, to say the least. And, and I think from that perspective as well, you know, Bitcoin is just has a very strong appeal. Of course, most people don't really understand how if your money work, it is very complex, perhaps intentionally so. But I think especially on the monetary side, there is such a strong potential appeal for that. The fun part about it too is Bitcoin kind of turns everybody into a libertarian to some extent. I have an interesting story about somebody I know here in Tokyo who is not a libertarian at all. He loves governments. He loves the war on drugs.

He loves everything that they're up to. But he saw Bitcoin as a potential investment where he can make some money. And he asked me how to buy some Bitcoin and I pointed him in the right direction. And then I didn't hear from him for, I don't know, six months or a year or something like that. And the Bitcoin price went up substantially. And then he contacts me in a panic, right? And he goes, Roger, Roger, I need your help. And I'm so what can I help you with?

What do you need? He goes, I need you to show me how I can hide my Bitcoins. Because with his own Bitcoin, he was, he loves taxes and loves governments. But when he came to his own Bitcoins and his own capital gains there, he didn't want to pay any of that to the government. So I wish you would come along on the philosophical side as well, but I'm happy to have him along on just the pure personal greed side and defund the beast that I think, you know, I think he'll spend his money on a lot of things that'll make the world a much better place than if he pays it to some government.

But I thought it was interesting how Bitcoin can even turn non-libertarians into libertarians when it comes to their actual actions. Yeah. Let's take a short break to talk about Jacks. Jacks is a multi-coin wallet created by the people at the Central. Now, in the past, if he had a whole bunch of cryptocurrencies, it was a pain to have. handle them. You either had to leave them on an exchange, which was insecure, or you had to have all these different wallets, which was a hassle. Fortunately, now with Jacks, those medieval days of

darkness, misery, and suffering are over. Jack supports multiple cryptocurrencies and new ones are being added. But it's not just storing cryptocurrencies you can do with Jacks, but you can also exchange them directly from within side the wallet, thanks to their shape shift integration. And since there's only one seed, Jax makes it super easy to back up and sync to your other devices. Jaxx works with Windows, MacOS, Linux, Android, iOS, and has browser extensions for Firefox and Chrome. So go to jacks.io, that's J-A-A-DoubleX.I-O, to download the wallet and get started today. We'd like to thank Jax for the supportive Epicenter. We talked briefly about how you go into Bitcoin and you were kind of the first business person to do that or among the first business

people. What was the community like back then and how has it changed to, you know, how would you describe it today and the kind of biggest changes you have seen? It's amazing how far it's comes. So my business that I started before Bitcoin was a company called memory dealers.com that was based in Selcom Valley selling optical transceivers and networking equipment and that sort of thing. And when I added the memory dealers to the list of companies that we're now accepting Bitcoin for payment, I think that we became the biggest, company that was accepting Bitcoin for payments. I think the biggest up to that point was the Alpaca Sox guy. So we were definitely a big, big, big step up in legitimacy as far as businesses

accepting Bitcoin. And I remember I paid to have a billboard put up on one of the most expensive, I'm sorry, one of the busiest expressways in all of Silicon Valley. And the billboard wasn't cheap either. But it just, and we've been advertising my company there previously, but I changed the billboard to say, we now accept Bitcoin, right, on the billboard. And we got so many people contacting us that were so excited, like, you accept Bitcoin? And like most people didn't, they'd only heard about it because this was the first run-up in Bitcoin, or one of the earliest run-ups where in the course of a couple weeks, the price of Bitcoin went from $2 or $3 to $30. And so it got a real big wave of media attention.

And our little billboard in Silicon Valley even made like the newspaper in Germany, like on the other side of the planet and made all sorts of newspapers and news reporting across the U.S. as well. but at the time there wasn't, there were zero mobile apps for your smartphones. There were no desktop wallets other than Bitcoin QT at the time. There were no merchant processors. There wasn't really much of anything other than this idea. But people that understood Bitcoin and understood the idea behind it realized that all these, you know, processes and merchant services and wallets and all of these things, they knew that they were going to be built, but it would take time.

Now, today, there's more wallets from my iPhone that I can keep track of. There's more desktop wallets. There's more merchant service providers. There's more exchanges around the world. There's way more than any one human being could ever keep up with. Whereas when I first got involved, it took me about a week nonstop with hardly sleeping at all, but I read every single post on the Bitcoin Talk.org forum. You could do that back then.

You could read every single new post that was being posted every day easily because there weren't that many posts. Whereas now, today, you can't even. even keep up with, you know, 1% of all the stuff that's being talked about online with Bitcoin. So now we have companies like Overstock.com accepting Bitcoin. There's another wallet ipayu.com is integrated directly into Amazon where you can fund directly into your Amazon store credit account from your Bitcoin wallet directly. That's a pretty darn big step. So like we're seeing all these things and all these businesses and Fortune 100 companies around the world are busy integrating Bitcoin. Banks here in Japan are looking into Bitcoin. Like it went from, I remember

people that have been around Bitcoin a long, long time will remember in I think August of 2011, the price of Bitcoin had crashed down from $30 and it was down to about $10. And the media was saying, this is the end of Bitcoin, Bitcoin, stupid Bitcoin, this is the death of Bitcoin. And I knew that wasn't the case. The Bitcoin fundamentals were better than ever before. More people were paying attention. So I made a video saying that I don't think, Bitcoin is a fad. I don't think Bitcoin's stupid. I think Bitcoin's going to change the world. And I said I was willing to bet $10,000, which at the time was about $1,000. Bitcoin's that was going to be the case. And I made this video public.

And if you look at what people said to me at that time, they said, Roger, you're an idiot. How can you think this? And they made fun of me and mocked me. And like, from the time I made the video when Bitcoin was $10, it dropped all the way down to about $2 from there as well. And the hate just piled on and people called me an idiot. idiot and all sorts of far worse names than that. But if you look at what Bitcoin is and understand it, it's amazing. This changes the entire world and changes the entire world for the better. So, of course, more people are going to use it. But maybe that's an interesting tie-in to some of our next topics for this. Like, Bitcoin isn't guaranteed to be the winning cryptocurrency

in the end. Bitcoin has to compete against all these other cryptocurrencies as well. And network effect is important, but it's not nearly as important when it comes to cryptocurrencies as it is with traditional currencies, and that opens a whole other can of worms for us to talk about. But that's one of the things that I'm the most concerned and most active with in regards to Bitcoin at the moment. Yeah, so talking about Bitcoin not being, sort of not having won this game yet, one of the biggest issues of contention at this point and problems in Bitcoin is the scalability or the lack of scalability. and the inability of the community to come to consensus and, you know, sort of agree on a path forward. So what is your view on this issue?

Are you concerned about it? And why do you think we got into this situation? So we've just opened a whole wide range forms there. But I guess one thing I'd like to start out by pointing out is that consensus through censorship isn't consensus at all. And I think we've seen a lot of that unfortunately happening within the Bitcoin community. One guy that unfortunately controls a lot of these social media sites, like name Thamos, has basically said you're not allowed to have a dissenting opinion and post it on. And if he wants to do that with his own private property, like I agree, but like on our Bitcoin,

that's not his property. It goes against the actual rules of Reddit itself. And I think that's doing their whole community a really, really, really big disservice since more people from the general periphery area of Bitcoin, people that are just mildly interested in Bitcoin, more people get their news from our Bitcoin than probably every single other Bitcoin website combined. And for the fact that you're not allowed to have a dissenting opinion on there, does the entire Bitcoin ecosystem a really big disservice? And I think we've seen a bit of an example of just how big of a disservice that is in regards to segregated witness. If you had only looked

at our Bitcoin and the famous controlled Bitcoin-related properties, you would think that segregated witness had 99.9% support and everybody's so excited about it and everybody's going to adopt it from day one once it's released and turns out that wasn't the case it wasn't even close to being the case at all and it turns out a lot of people are really unhappy with it and i think we lost months and months and months of what could have been open and productive discussion about that sort of thing due to the censorship and that's a really big problem because we need to move really really quickly with bitcoin there was a uh a video that came out in india today by the indian equivalent of the BBC, basically bashing Bitcoin, saying Bitcoin's only for money launderers and terrorists and

bad people, and nobody should use Bitcoin. And that's a really, really big problem. And people that are knowledgeable about Bitcoin know that that's a pack of lies, and that's just a bunch of government propaganda. But people who don't know much about Bitcoin or have never used it in their lives, they don't know. And maybe they're going to believe that sort of thing. So I think it's really, really important for people that are supporters of Bitcoin and want to see the improvements that Bitcoin has to bring to the world. If we want to see those improvements come about sooner, than later, we need to get as many people around the world using Bitcoin as quickly as we possibly can so that when those people hear the government propaganda and there's going to be a lot more anti-Bitcoin

propaganda that's coming down the line, we want it so that when people hear that propaganda, they realize, well, wait a minute, I use Bitcoin. I use Bitcoin to buy my Starbucks coffee. This isn't for money launderers and terrorists. This is for everybody. I use Bitcoin. My sister uses Bitcoin. My mom uses Bitcoin. And if we can get everybody using Bitcoin, then the government propaganda won't be effective. But if Bitcoin's limits is only having, you know, a few million people around the world using it, when the vast majority of the world hears this anti-Bitcoin propaganda coming from governments and who knows who else, they're a lot more inclined to believe it. So that's why I think it's so important to spread Bitcoin as we can to as many people around the world so that

this anti-Bitcoin propaganda can't be effective. Yeah, absolutely. I mean, we've talked about this a bunch of times before, and I also used to read the Bitcoin Reddit and then I It's just sort of some point it was like, this is, this is so wrong, you know, whatever your point of view is, that I also sort of just, okay, never use this thing again. And yeah, I think that's a true pity what happened there with our Bitcoin. But to come back to the scalability issue itself, where do you think we are at right now? Is it an emergency situation? Is there still time? it's hard to know.

It really is hard to know, but I think it's better. This isn't a problem that caught us by surprise. We knew for years in advance that the blocks were going to become full and that we should do something about that. And the current Bitcoin core team didn't do anything about that. And in just about any other job, if you're supposed to do something and accomplish a task or solve a goal and you fail to do it, you get fired.

And somebody else comes in to do your job. job. And I think there's a number of competing teams that are looking to take over Corps' position and provide alternatives to the core scaling roadmap. And another thing that really concerns me, though, too, is that a lot of the core supporters have resorted to suppressing dissenting opinion, or even, dare I use the word censorship in some occasions, or slandering their opponents with lies and things that just plain aren't true. If Bitcoin is supposed to be an open financial system that allows everybody in the world to participate on even footing, we shouldn't trust people that resort to suppressing dissenting opinions or censorship to maintain Bitcoin as this free

and open network. We should support people that support free speech and trust people that support free speech and free and open discussion of Bitcoin to be the ones to maintain Bitcoin as a free and open financial network. And that's one of the biggest reasons why I don't support the current core team and because they've deviated entirely from the original Bitcoin white paper and the original plans of Satoshi, which is what I signed up for and all these other early adopters signed up for. And in Satoshi's own words, the ultimate solution is to allow the blocks to get as big as they

need to be. And maybe he's right. Maybe he's wrong about that. Satoshi isn't infallible, but certainly they can get a heck of a lot bigger than the one megabyte we're at today. And I feel sad. When I used to give my Bitcoin introductory pitch to people, I used to tell them, you can send and receive any amount of money with anyone, anyone in the world, basically for free.

That's what I used to be able to say. I used to be able to say that for the first five years of my involvement with Bitcoin. Now I say, oh, for around 20, 30 cents, 50 cents, or if you're doing a complicated transaction, it costs tens of dollars, which is still, for the most part, better than banks for international transfers. For domestic transfers, it's not really better anymore. So, like, Bitcoin really has lost a lot of its competitive advantage. And if you look at it, we know what the formula was that allowed Bitcoin to grow from just a few thousand people using it when I first got involved to now millions of people using it.

And that was very fast, very cheap Bitcoin transactions. And by allowing the blocks to go from five megabytes to 10 kilobytes to 50 kilobytes to 100 kilobytes to half a megabyte to one megabyte, I think it seems pretty clear that the right method in the short term to allow Bitcoin to continue to scale for the same way that's worked for the last eight years amazingly well is to let the blocks go from one megabyte to 1.1 megabyte to 1.2 and on and on and on. until we have some layer two solution or some solution that we're confident does work. But things like side chains and lightning networks, they're not here yet. I'm looking forward to them. I'm excited about them. But I'm excited about flying cars, too. But those aren't here yet either.

So I'm not going to get rid of my regular car today because flying cars are coming tomorrow. I'm going to wait until the flying cars are here to get rid of my regular car. Today's magic word is voluntary. That's V-O-L-U-N-T-A-R-Y. Head over to let's start off Bitcoin.com to sign in, enter the magic word, and claim you're part of the listener reward. So you mentioned this that originally it had been intended, and this sort of was the consensus amongst the community in the early days that scaling would happen on-chain, that that that That would be sort of the preferred method of scaling.

And at some point, that seemed to have changed, especially last year we saw the Lightning Network emerge and this idea of side chains. And the attention sort of shifted from on-chain solutions to these off-chain solutions, which, as you pointed out, are not here yet. They're very promising. And I think a lot of people are looking forward to them, but they're not here yet. Why do you think that changed? Like, where was the shift from these on-chain scaling solutions, like growing blocks, to the sort of rejection of those solutions?

I think we've seen a similar change within the Bitcoin community from when I first got involved in Bitcoin, pretty much everybody was a hardcore libertarian, voluntarist, anarchist, anarchist, whatever words you want to use. I'm 99% of the people involved were of that mindset. And today there's still some of us around, but we're a much, much, much smaller minority because now Bitcoin is millions or tens of millions of people around the world. So now we're just a very small subset of the user base of Bitcoin.

And I think a similar thing has happened with the influx of these new users to Bitcoin. And we saw, you know, Blockstream raised, I think it was $76 million from a bunch of traditional banks and those types of things. And they've been the leading proponents of changing the roadmap. for scaling of Bitcoin, $76 million can pay for a lot of employees and a lot of manpower

and a lot of things to happen. And they've been very effective at lobbying for their position. And a lot of the early adopters that have been involved in Bitcoin from the early days, a lot of them maybe aren't as vocal. And then the censorship was a really, really, really big problem, though, too, I think. Like that's, I think, you know, almost makes me want to bring tears to my eyes when like this whole ecosystem that I knew and loved and thought was wonderful was filled with a bunch of people that supported free speech and free and open financial network now are resorting to censorship and suppression of dissenting opinions. Like what happened to this community that I love so much? How could it change so much into something that I'm opposed to?

Like, people should be allowed to talk about the ideas they want and people should be allowed to. to pay the people they want. Like those two to me seem like, you know, almost two sides of the same coin. And I guess it's just part of this big tent that's happened with Bitcoin. Now there's so many people involved in Bitcoin that there's a lot more people with different ideas. What do you think changed in terms of support for these solutions? Like, is it because these on-chain solutions are seen as perhaps technologically inferior

or economically damaging or, Where do you think basically this, what is the polarizing, you know, factor which splits the community into? Or in three or whatever. Yeah. I think the business community very, very clearly, the vast majority of the business community wants to stick with the original game plan for Bitcoin, which was on-chain scaling. And certainly they don't want to, we don't want to damage the existing Bitcoin in the hopes of creating layer two technologies that might work, but they're not. here yet. So don't break the thing that's working now in the hopes of creating something tomorrow that might work. And that's what's happening now, whereas I feel like a lot of the off-chain

scaling people or layer two proponents or whatever word I'm not trying to use, you know, I'm not trying to phrase it negatively, but whatever, whatever word we want to use to describe those people, those mindset, I think that those are many, many more of the much more technically oriented people that don't have any consideration for the economics that underlie Bitcoin or the businesses that are trying to use Bitcoin. Previously, I said that just holding Bitcoin helps develop the ecosystem. Bitcoin didn't have any price at all until people decided that they wanted to hold it. And that's what gave Bitcoin its very first price.

It wasn't people who wanted to buy and sell things with Bitcoin. It was people that wanted to hoard Bitcoin is what gave Bitcoin its price. So just the simple act of holding Bitcoin helps promote the entire Bitcoin, The fact that people are holding Bitcoin is the reason that it has a market cap of $14.5 billion today. And because it has a market cap of $14.5 billion today, lots of banks and lots of big businesses are interested in it. And if it didn't have a market cap that big, nobody would be interested in it. And when I mentioned this previously, a lot of the core roadmap and Blockstream supporters mocked me and laughed at me and said, you're an idiot. You think that just holding Bitcoins promotes the development of Bitcoin?

What an idiot. And those people are wrong. Absolutely without any doubt, the simple act of Bitcoin, holding Bitcoin, helps promote the entire Bitcoin ecosystem. And that's the reason Bitcoin has any price at all is because people are willing to hold it. And the fact that so many of these people mock somebody for pointing out the obvious shows a real lack of understanding on their part. Or another thing I mentioned recently,

it's one of the most basic tenets of economics. When something costs more, people will use less of it. Bitcoin transactions now cost more than they did previously, which means people will use less of it. If Bitcoin transactions are free, people are going to make a lot of them. If Bitcoin transactions cost 50 cents, they'll make less of them. If Bitcoin transactions cost $50 each, they'll make a lot less of them. That's one of the most basic rules of economics. When something costs more, people use less of it.

And a bunch of these Bitcoin Core Blockstream Roadmap supporters, and I'm not using that as a disfimism. I'm just, that's the best term I have to describe them. But they mocked me for saying that and said that you're an idiot. And Roger, how can you think such a stupid thing? But of course it's true. And anybody that studies economics will realize that. So I think that there's a real divide between the people that are coming from the business and economic side and a bunch of the people who are coming from the technical side.

And that's not all the people that are coming from the technical side. Satoshi left the project and then he turned over basically the entire project to Gavin and Dresen, who's very clearly, and he mentioned one of his favorite books that got him interested in Bitcoin. was economics in one lesson by Henry Haslett, which, interestingly enough, was one of the books I read when I was a young man that had a big influence on my worldview as well. And Gavin basically got excommunicated from the Bitcoin ecosystem and treated horribly by these, you know, people that came to Bitcoin much more recently with a different roadmap than Satoshi had.

So I think it's absolutely horrible the way Gavin was treated and absolutely horrible the way Mike Herniz was treated. And they're even, for the most part, being a bit disrespectful to the role that Satoshi played in this whole thing as well. And I think it's really sad to see that. And, you know, where do you want to go next on that topic? I covered a lot. But it's really frustrating and a really important part of my life. Yeah. No, and I think there's been, it's had a big impact on the community as well. I mean, I started a meetup in Berlin in 2013, sort of the fall, just when the price started going up. And there was so much.

enthusiasm around it and was all focused on Bitcoin. And, you know, today that enthusiasm is still there, but it's in a different way. And it's not so, it's much more about the technology and it's much more dispersed around a different project, which is also great. But it's no longer that idea of this common cost, this common disruptive cost, that's like going to really revolutionize the world. I think that has gone away a little bit.

And that's a bit sad. That's certainly the case. I mean, I would agree with you, Brian, that, like, for instance, between the first time we met in Berlin and in February of 2014 and then whenever that was, we went to the next inside Bitcoin's conference, you could, in between that, like the, the Amsterdam conference, that was a big difference in, you know, the enthusiasm of, you know, everybody that was involved. But however, to address your point, Roger, I mean, I haven't looked at the numbers. but I mean, I think Bitcoin is being used more than ever. Am I wrong on that? I mean, people are using Bitcoin and people, you know, the number of transactions has gone up, I believe.

I mean, I think we could check to see that that is the case, that transaction volumes have, you know, been growing. Skyrocketed, yeah. No, this is all great, and I agree. And sorry if I'm interrupting, but I guess it's good to take a step back and look the problems and the things we're arguing about, they're like the absolute best problems we could possibly hope to have. Like, so many people are wanting to use Bitcoin that we're having to argue about how to accommodate

all the new people that are using Bitcoin. So that's a far, far, far, you know, cry away from what we were, you know, in 2011 when I first got involved, it was just a pipe frame that we would have so many people using Bitcoin already. And I'm sorry to interrupt, please go on. No, but I was just addressing your comment that, you know, if fees are going to go up and less people are going to use it, well, I mean, fees have gone up and more and more I mean, there's more and more in transactions. I don't know if that means that more and more people are using it.

Again, I haven't looked at any of these numbers. But it seems to me like Bitcoin use and Bitcoin adoption is growing, perhaps not at a scale that, you know, we would have anticipated, say, in 2013, when people were saying, like, in two years from now, the price of Bitcoin would be $10,000 or more. But I would argue that Bitcoin use is growing and that, and that there's no, you know, we haven't seen like a reduction of the amount of people using Bitcoin because the fees have gone up.

So we have. That's where maybe we disagree. So when something costs more, people will use less of it. So let's say today with the current fee structure, 10 million people want to use Bitcoin per month. If the fees were even lower, then maybe it would be 11 million people that would want to use it. So some greater number of people would want to make Bitcoin transactions each month if the price

per Bitcoin transaction was less. So I'm not saying that less people are using Bitcoin today than in 2011. Of course not. More people are using Bitcoin today than ever before. But it could be an even bigger number if Bitcoin is allowed to scale fast enough to keep up with the demand and keep the fees per transaction low. Do you really think that that has to do with scaling in fees or perhaps that has to do with some external factors? Like, you know, rightfully so like you mentioned earlier, this piece in India. like so negative media coverage, or simply the fact that in most Western countries, I mean, it's

much easier to, most developed countries, much easier to use just regular banking infrastructure than to use Bitcoin. So I don't think it's only the fees. I think the big, big problem is from the network being run at 100% capacity. So I have, I don't know, about 17 or 18 years of experience in scaling enterprise networks before Bitcoin. And there's two ways you can scale enterprise networks. You can scale it through better software, which is what the Bitcoin core team seems to love

and be really excited about, which is fine. But you can also scale it through better hardware. And we have much, much, much better hardware today than we do back in 2011 when I got involved in even better than when Bitcoin was originally invented. But if you look at all the stuff that's happening here, when any network is run at 100% capacity, the user experience is horrible. or not nearly as good as it would be otherwise. And the Bitcoin user experience

from just the actual perspective of making a Bitcoin transaction out is much worse than it was a couple of years ago. Initially, you could broadcast your Bitcoin transaction. Most of them were free and it would be included in the very next block 99% of the time. And the only time it wouldn't be included

in the very next block is if you tried to broadcast your transaction a second or two before the next block was found. And the only reason your transaction wouldn't be included in the very next block because it hadn't reached the mining node yet and propagated across the network. Today, Bitcoin transactions can take hours or even days to confirm.

The fees are high. The double-spinned windows is hours and hours long. Like, this is a big, big problem compared to where Bitcoin was before. It makes people a lot less likely to want to use Bitcoin for payments and for business. We want Bitcoin transactions to be as fast and safe and cheap and reliable as we possibly can. And those things have been degraded over the last year as the network became full and began running at 100%. capacity. Right. So one of the obvious ways to scale Bitcoin is to increase the block size and

Bitcoin Core has so far been unwilling to do that. One of the proposals or sort of clients at the moment that has gotten some traction is Bitcoin Unlimited, which also your mining pool supports Bitcoin.com's mining pool, which we can maybe talk about it a little bit in a second. Can you want through what Bitcoin unlimited is and what unlimited in that context actually means? So that's probably a good topic for a whole other episode with the Bitcoin Unlimited developers. But the short version is Bitcoin Unlimited does not mean unlimited block size. Basically, it means that the people running a node and the people that are mining the blocks get to decide what the maximum size block they're willing to produce is and what the maximum

size block they're willing to accept into their blockchain is and basically takes the control over the block size away from the Bitcoin Protocol Development team and puts it in the of the people and businesses that are actually using Bitcoin. And I wrote an article explaining why I think that Bitcoin block space is the commodity that the miners are producing and that the miners need to be the ones to decide how much block space they're willing to produce at what price. And I put my thoughts down on that. Unfortunately, it was censored by Thamos from our Bitcoin and wasn't allowed to be discussed

on all the platforms he controls, which for his private platforms, he can do that. But I don't think that's appropriate for our Bitcoin. and I think it's sad that someone like myself who's been so passionate and so heavily involved in Bitcoin for so long. I'm genuine in my enthusiasm for Bitcoin. I want to do everything I possibly can to help Bitcoin. I think it's sad that my ideas and thoughts wouldn't be allowed on a place like our Bitcoin in regards to that. But anyhow, you can Google Roger Veer on Bitcoin block size or something like that, and it'll come up. And basically, Bitcoin Unlimited implements those ideas.

If the miners are getting paid to produce block space and include transactions within that block space, they should be able to choose how much block space they're going to produce. And Bitcoin Unlimited allows that. And that's why Bitcoin Unlimited is really gaining traction just earlier today. Another mining pool in China made the switch to Bitcoin Unlimited. And if you look at the number of mining pools and blocks that are signaling for on-chain scaling, it's actually right about the same or maybe even a little bit more than the number of blocks that are signaling for segregated witness, which is very interesting.

And I think we're going to see more and more of a turning point here as days go by. And I think people are going to realize that if you don't listen to the people who are actually using Bitcoin and all the businesses like the Coinbase has probably helped more people get their first Bitcoin than any other business in the world. And it's really frustrating and sad to see how they literally get mocked by some of the current blockstream and Bitcoin core supporters. And same with blockchain. The wallet that's responsible for more Bitcoin transactions than every single other wallet combined.

The people that are in the Bitcoin core blockstream Slack group, and that's not to say that that that represents everybody who's in that camp. But I went and told them, I said, doesn't this worry you guys that these people are busy trying to integrate altcoins because Bitcoin hasn't been allowed to scale? And they mocked these companies, and they said they should leave Bitcoin. I hope blockchain leaves. They suck. I hope Coinbase leaves.

They suck. This is crazy talk. Like, this is absolutely insane that people with that sort of view or are involved in this sort of thing. And I understand that doesn't speak for everybody. But then, you know, there's all name names like Greg Maxwell, one of the Bitcoin core blockstream developers. Recently, he keeps accusing me of shilling for altcoins and wanting to hurt Bitcoin. I didn't buy any altcoins until very, very recently because I was so scared that Bitcoin wasn't going to be allowed to scale to keep up with demand. And the other concern I have about Bitcoin is the privacy is.

nearly as strong as we thought it was initially. So I bought a couple of privacy-centric altcoins that maybe will have as good or better scaling than Bitcoin and at the very least have more room to scale today. But 99% of my cryptocoin wealth is in Bitcoin. I own Bitcoin.com. That's not a cheap domain name. I want to do everything I possibly can

to see Bitcoin be the winner in the end. And as we talked about really briefly before the show actually started, cryptocurrencies are different than dollars and euros and yen. And it is incredibly easy to switch from one cryptocurrency to another. And we have wallets like the Jack's wallet with Shapeshift built right in. If you're sick of Bitcoin and its high fees, boom, you can instantly convert your Bitcoin to whatever other coin you want for a very low fee. That makes it really, really easy for the whole ecosystem to switch to whatever cryptocurrency has the best properties as money.

And if we want Bitcoin to be the winner in the end and have the lion's share of that, Bitcoin has to be the fastest, cheapest, most secure, safest, most private currency out there. And we need to work on all of those things. And if we don't, Bitcoin's not going to be the winner in the end. And that's why I'm so concerned about this whole scaling issue. A lot of people I don't think feel any urgency. This is really important. We need to do this fast because of that.

And then we need to do it to counteract the government propaganda that's coming against Bitcoin and cryptocurrencies. Like the more people that are using them tomorrow, the better because then the propaganda is not effective. Because people say, oh, I don't believe that I'm using Bitcoin myself. Yeah. And I mean, I think also what's the concerning thing is that, you know, know, maybe Bitcoin right now is still maybe almost good enough sort of for what people want to use and the number of people want to use it, although you're certainly right that the user experience has gotten a bit worse. But if we imagine, let's say another financial crisis or

something big happening and really a lot of people want to start using Bitcoin, like they wouldn't be able to do that, right? Like it is really at capacity. So it would be even if some unfortunate circumstance came external circumstances that could really drive up Bitcoin growth dramatically, you know, Bitcoin's not, wouldn't be able to handle that. If I can add one other thing, though, too, I think a lot of people that are just using Bitcoin privately as individuals don't realize just how bad the network congestion is. Anybody that's running a business using Bitcoin is already routinely paying tens of U.S. dollars for single Bitcoin transactions.

If you have, let's say, a T-shirt store selling T-shirts, if you sell 100 T-shirts for $20 each, right, that's, what, $2,000? And if you want to go and move your $2,000, right, to a Bitcoin exchange or something like that, it's going to cost you probably $50 in Bitcoin fees to do that for that one single transaction. The reason why? Because you have 100 inputs from the different customers that send you $20 each, and you have two outputs, the money you're sending and then the change, you're probably going to pay 30, 40, 50, maybe even $60, $70 in Bitcoin fees for that transaction.

So that's already way more than a bank wire transfer. That's where the network is right now today. I'm almost every single day I'm doing a transaction where I'll pay in the tens of dollars for a single Bitcoin transaction moving money. That's a big problem. If we want people to use Bitcoin instead of banks and dollars, it shouldn't cost tens of dollars for a single Bitcoin transaction. Yeah, no, absolutely.

Let's take a break to talk about the Ledger NanoS, the new flagship hardware wallet by Ledger. I'll let Ledger's CEO, Eric Larchavec, tell you all about how simple the NanoS makes it to securely store all your private keys. The Ledger NanoS is our latest generation hardware wallet. This is a multi-currency hardware wallet. It has a screen and buttons to manage everything on screen. You can generate a new seed, restore a seed, or set up your PIN, on the device. Your seed will never be exposed to the host computer. On the nanoS, you have different apps. You have the Bitcoin app, you have the Ethereum app, and you have the Fido U2F app for

strong authentication, for instance with Google, Dropbox or GitHub. You can manage your cryptocurrencies with the ledger wallet Bitcoin Chrome app or the ledger wallet Ethereum Chrome app. With the nanoS, all your Bitcoin and Ethereum addresses are derived from one unique seed. With one seed, you can have in the same time Bitcoin, Ethereum, ECEM Classic Balances. And also, if you restore your seed, you will also recover all the keys associated

to other apps such as FidoUF, SSAG. So it's very simple, just one seed and multiple applications. The NanoS sets the new standard in hardware wallet security and usability. You can get yours to, today at ledgerwallat.com. And when you do, be sure to use the offer code Epicenter to get 10% off your first order. We'd like to thank Ledger for their support of Epicenter. Now, I think what's concerning here, though, is that, so with segregated witness, right,

we talked about it that have maybe 25% of the hashing rate, signal support for segregated witness. Then Bitcoin Unlimited, maybe 10 or something, 11. Then there's some other proposals for bigger blocks, 8 megabytes that also has. you know, significant support. But all of those have a threshold until they activate. Right. So I think segregated witness is 95% with Bitcoin unlimited. We weren't quite sure, but let's say it's 70% or something at that, 65%. It seems that there may be a big chance that none of these proposals will ever reach the activation threshold. What then? That's a big problem for Bitcoin. And I, I, I, share your concern and I guess what then is look at alt coins that already have the right

characteristics in place to scale and be private is maybe my answer but that's really sad and frustrating as somebody who's put so much of my time and effort and love into bitcoin for six years now. Do you see a hard fork as an option to say like you know let's say bitcoin splits and you're going to have one camp that supports segregated witness and some other things in one camp that's going to go with Bayer Blocks and well, we'll have two Bitcoins. Just we had, you know, ETC and Ethereum and the regular Ethereum. Do you think that's a potential path? So I don't think it's really fair to compare the Ethereum and Ethereum Classic split

because that was basically done as a bailout for a bunch of people who made a bad investment. Whereas if Bitcoin were to split or have a hard fork, it would be because there's two conflicting visions as to what the proper characteristics of Bitcoin should be for Bitcoin to be used as money, and then eventually the market will choose which version of Bitcoin is the one that's most useful as money. And to me, there's absolutely no doubt in my mind. Bitcoin that's fast and cheap and secure with low risk of double spins is much, much, much more useful than a Bitcoin that's slow with a high risk of double spins and high fees. Like, it's not even a, it's not even a close debate in my mind. And I think anybody that's using Bitcoin for business

will see it the same way. And they'll sell their Bitcoin core. block stream coins and buy the useful bitcoins. And I know that's what I'll do. And there's a really interesting website over at vote.bibcoin.com, previously known as Bitcoinocracy, where people that actually hold Bitcoins vote on these exact topics. And if you look at it, close to $100 million worth of Bitcoins have voted on that exact topic. And 90 plus percent of them don't support the current block stream and core vision for the future of Bitcoin. And they can't argue that. that $100 million worth of Bitcoin are a bunch of trolls or sock puppets on the Internet. And the majority of that money in Bitcoins aren't me.

They're from a whole bunch of people all over the world. These aren't sock puppets, right? Sockpuppets don't have $100 million worth of Bitcoin. These are real people and real holders of Bitcoin. And the Blockstream and CoreCamp and Greg Maxwell and those guys, they used to reference that website all the time saying, look, the economic community supports what we're up to and told a whole bunch of people with a bunch of Bitcoins,

came in there and voted the opposite way, and now you never hear them mentioned that website before. And there's a whole bunch of topics. It's not just about scaling. It's a really, really interesting tool and fun thing for people to play with. So if I can plug my own website a little bit, that's it, vote.buccom. And I think it's a really fun thing for people to play with and see the power of Bitcoin.

I think we should have probably a proper episode on Bitcoin Limited, but to talk about sort of the technical implications and economic implications of having an unlimited block size. It's not unlimited block size is important to clarify as well. Having a block size where the community essentially gets to choose what the block size is is probably the best way to put it. So one question that we had and we thought of is, what makes you think that this is the adequate solution?

Have you done any, has there any risk analysis been done on this? like what makes you think that this will work and can't fail? Because there seems to be some issues that can arise from having, so this, you know, free market approach to the block size, one of which, and this is something that we probably have to discuss with a, you know, on a more technical level, but one issue that we thought of was that this idea of centralization, if, for instance, you have minors that are centralized,

centralized in, I don't know, somewhere like China, and they have really fast networks between them, they may be able to sustain very large blocks and to, you know, propagate those blocks amongst them, leaving out, for instance, other miners outside of China. So this is one, one thing that we thought of, and there may be other, but have you done any proper sort of thinking around what could be potential issues around Bitcoin Unlimited? Sure. I've done a lot of thinking about this, but it's also worth noting that Bitcoin isn't guaranteed to be safe. In fact, Bitcoin's very, very risky. But one of the points that I think is very important that Jeff Garzik, one of the earliest people involved in Bitcoin, who I think was involved quite a bit before I was even pointed out that if we want to keep Bitcoin the same, we have to allow the blocks to become bigger because that's been the path of Bitcoin the entire time. But in regards to mining becoming centralized or this and that, like remember all the the people that are mining Bitcoin, the reason they're mining Bitcoin is because Bitcoin is worth money. Bitcoin is money, right? They want the most money they possibly can have for mining

Bitcoin. So they're incentivized not to do things that would undermine the value of the thing that it is that they're mining. So if the people in China or people mining Bitcoin thought, and the rest of the world thinks that if all the mining winds up being in China and the blocks are so big that they can't propagate outside of the Great Firewall of China, and that means that Bitcoin's more susceptible to being controlled or undermined, they're going to trust Bitcoin. less, they're going to keep less of their wealth in Bitcoin. The price of Bitcoin will go down. The miners, by doing that, would undermine and destroy the value of the very thing that it is they're trying to mine. Therefore, they're incentivized not to do that. And then there's all sorts

of really cool technologies that allow blocks to propagate much faster, blocks to be validated much faster. Both the hardware and the software for Bitcoin are much, much, much better than it was just a few years ago. And that's, in large part, thanks to the core team. So credit where credit is do. They've done a lot there. But changing the underlying economic code of Bitcoin is really, really dangerous. And that's exactly what they're proposing right now. And that's exactly what has me so incredibly concerned as someone who's holding such a large percentage of my net worth in Bitcoin. So I would like to just come back for one second to what we talked about before. It seems like you were actually quite in favor of the potential of having a fork and then having,

you know, people able to choose, you know, which they want to go with. I mean, you know, if you look at them, you didn't like the comparison with Ethereum and Ethereum Classic, but still, right, after that fork happened, you know, I had coins in both chains. And of course, immediately, you know, very quickly, I sold Ethereum Classic because I felt it was overvalued. And, you know, so you have that potential, right, to make those choices. As Bitcoin holders even, right, who today really don't have any say in, you know, how big will the blocks be and what kind of protocol is going to be. a path is going to be followed. So do you think this is actually a feasible path? Would this, for example, have similar issues

like we saw on Ethereum with replay attacks? Have you actually, you know, have you spent time looking at how such a thing could really be accomplished on a practical level? So my first choice would be that Bitcoin doesn't split and that it continues on, you know, one version of Bitcoin for everybody. But I don't think it's the end of that. the world if Bitcoin does fork. And we do have the advantage of seeing exactly what happened with the fork with Ethereum and Ethereum Classic. And we can learn from that and try and solve the

problems in advance so that we don't have replay attacks and don't have to deal with the same problems that we had with Ethereum and Ethereum Classic. So I guess thank you with Ethereum for being a testing ground there in that regards. So again, I'd prefer that Bitcoin doesn't split, but I don't think it's the end of the world if it does. So you mentioned earlier that you run Bitcoin.com. And so Bitcoin.com is sort of this website where, I would say the landing page of Bitcoin where you can get all kinds of information about Bitcoin,

about Bitcoin clients, where you can buy Bitcoin, this sort of thing. And there's also a podcast on there, which is actually really well produced. I listened to it a few times. And Bitcoin.com, recently,

you started a mining pool there that supports Bitcoin Unlimited. Can you tell us, story behind this? Yeah, thank you for such a good plug. I need to hire you to do PR for at Bitcoin.com now. So the mining pool got started maybe six months ago now, and I've learned a lot in that time that building a mining pool is much harder than I thought initially, and that dealing with the great firewall of China is a really big problem for everybody, and especially

for mining pool operators. But I was looking around the ecosystem, the vast majority of businesses that were using Bitcoin supported the original vision of Satoshi and on-chain scaling and allowing Bitcoin to scale in time to keep up with customer demand. But a lot of the mining pool operators seem to be indifferent and not willing to change anything at all. And so I thought, okay, the best way to have a bigger voice and effect in this debate is to have my own mining pool.

So I've been working on that. And at the moment, we have a little over between 2% and 3% of the global hash rate and we're in a private beta at the moment. And hopefully we're going to come out of that soon, but we've been having a lot of trouble basically dealing with, the Great Firewall of China and replicating the database on both sides of the Great Firewall of China so that miners inside and outside of China can mine on the same pool. But hopefully we have that solved maybe soon, I hope. I've been hoping for a while now.

But eventually we're going to have something solved there, and I think that's going to be a real big debate changer because we'll have a much bigger voice there. And I think another thing I've learned because of this is all the mining pool operators. for the most part, they're just keeping all the Bitcoin network transaction fees and not paying that to any of the miners that are mining. And it used to be almost nothing. It used to not count as, you know, five bucks a block or something. And nobody cared about that when the blocks were worth $5,000. But now the transaction fees in each block are, you know, more than 5%.

And we're talking about a lot of money. We're talking about, you know, sometimes $1,000 worth of value per block that's mine. And the mining pool operators are keeping almost all that now. And if suddenly Bitcoin is allowed to scale on chain, a lot of that fee pressure will go away in the short term, and the mining pool operators will lose that income. And it's big money. We're talking about the earnings hundreds of thousands of dollars a month worth of Bitcoin's thanks to all this fee pressure. And so I'm going to pay out most of the network transaction fees to the people that are mining on the Bitcoin.com pool. So people wind up getting paid maybe 5% more than any of these other pools.

And so it's going to bring more competition to the market, which makes markets more efficient. and it's going to force all the other pool operators to treat the miners on their pools even better and pay them a bigger percentage of the money that they're mining. So that'll be exciting. I think it'll be a bit of a shakeup in the mining pool industry as soon as I'm able to launch publicly. So this is something that we heard of quite a bit on other podcasts you were on or read about, that Bitcoin.com is not taking any fees for the mining, which obviously is allowing Bitcoin.com to pay more to the miners.

There's also this something I heard of, and I wasn't quite sure what it related to, the share acceptance rate was higher. Can you explain what that is? Yeah, so when a miner receives a share to work on, it submits it back to the pool when it's done. And if only 90% of your shares are accepted by the pool, you're only going to get paid for 90% of the work that your mining equipment is done. Whereas our pool, for whatever reason, and you'd have to have the CTO on your show sometime to explain the exact details of why. but apparently our share acceptance rate is a lot better than a lot of the other pools which means you get paid for more of your work so if you have a 90% share acceptance rate versus 100% share acceptance rate you're getting paid a heck of a lot more

on the 100% share acceptance rate pool than the 90% share acceptance pool so a lot of the people that are mining on our pool have reported you know some as high as 8 or 9 or even 10% more gross revenue for mining on our pool than the pool that they are mining on previously and that's a combination of the higher share acceptance rate and our zero fee policy. Okay. So then one can assume that the zero fee policy means that Bitcoin.com is covering all of the, all of the, you know, the costs associated to running the pool, running whatever

servers you need. So I assume then that you're not trying to make any money with this. You're just the idea is to promote Bitcoin unlimited. So while we've been testing, we've been having a zero. percent fee on all the coin base and then we've tried various configurations with the coin transaction part of the reward for each block and we've been charging via thing that's called pay per share which is where the miners get paid no matter how many blocks we find so if our pool is unlucky in the number of blocks we find that

comes right out of my pocket and that's money we lose but for whatever reason you know maybe Satoshi's been smiling down on us from above but we've been really lucky and been finding a lot more blocks than we should for the amount of hash rate we have. So, for example, in November, we actually wound up with a profit of like 80 bitcoins, mainly because we found more blocks than we should have for the amount of hash rate that we had. So that's a nice problem to have. But the luck might go the other way in the future as well. So then is this something that is, do you think it's sustainable?

Once you do go public, because it should be said that the mining pool is not public yet, I think it's still under invitation only. Is this something that you think will keep doing in the future, or will you instate some sort of a fee at some point? If I get to 51 or close to, anywhere near 50% of the network, I'll start charging some fees pretty quickly because I don't want to have more than 50% of the network on my pool. And we're still trying to decide what our final fee policy will be. And we don't really have to worry about that until we actually do launch. and we need to have the rock solid back into the pool before we do that. But one example potential scenario would be, let's say the transaction fees on average

or 5% of the reward, maybe we'll pay out an additional 4% and we'll keep 1% for us or something like that. Whereas right now, pretty much all the pools are keeping all of the transaction fees and charging a fee for the Coinbase reward as well. So a lot of the pools are charging 7, 8% fee, even though they claim it's a 1% or 2% fees because those transaction fees have become so high now. But for somebody like you who has, you know, a lot of capital and is very heavily invested in Bitcoin and is also very concerned about where Bitcoin is going, but it makes sense to

maybe say, I'm going to pay out, you know, I'm going to pay out negative fees. I'm actually going to give miners, you know, the entire coin base, the transaction fees, and another 3% on top so that they mine, you know, you. know, once you launch, so that in mind if Bitcoin.com pool, and so that, you know, the hash rate that supporting Bitcoin Unlimited, you know, correspondingly increases a lot. Is that something you'd consider? I could if I needed to, although I don't think I'll need to, because I can all, without paying any money out of my own pocket, I can probably already pay out about 10% more than most of the other pools. And that's 10% more of the gross, right? That's 10% more of the

gross, right? So the miners, if their profit margin is just, you know, 10% percent. percent or something like that, which, to be honest, a lot of the miners, the profit margins a lot more than that. But if you pay out 10 percent more of the gross, you're talking about maybe, you know, 30, 40, 50 percent more profit for a lot of these miners. So, like, I don't think I'll have to pay any money out of my own pocket to convince them to come on board. And even if I did, a lot of people might scream and howl about that as being an attack

vector or an attack on Bitcoin. But the fact that anybody can do that means that that's already an attack vector on Bitcoin and that's not something that I haven't caused that attack vector to be created. Maybe people are just noticing that potential attack vector, and that is an attack vector that we should worry about in the future. Maybe somebody who really hates Bitcoin could come in and start a mining pool where he pays everybody, you know, double the block reward for however long,

funded by the central banks around the world to make the blocks only 10 kilobytes so that there's no room for anybody's transactions ever. That's already a potential attack vector for Bitcoin. Yeah, absolutely. then. Well, Roger, thanks so much for coming on. It's been a pleasure to talk with you, and it will be very exciting for us to see where Bitcoin.com goes, what's going to happen with the mining pool once it launches and how this whole controversy about the future of Bitcoin, how that's going to play out. So thanks so much. Thank you guys so much for having me on and for making

more than 100 fantastic episodes as well that I've watched many of myself. So thank you guys. Cool. And that's, of course, the best compliment we could have. and Bitcoin Jesus himself is the regular watcher of the show. Yeah, I did. My entire day, all day, every day revolves around Bitcoin. So, of course, I've watched lots of your episodes. Thanks so much. So we are a part of the Let's Talk Bitcoin Network.

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