TFTC: A Bitcoin Podcast - Tales from the Crypt #51: Max Keidun & Roman Snitko

Episode Date: November 27, 2018

Join Marty as he sits down with Max Keidun & Roman Snitko, co-founders of Hodl Hodl, to discuss how they became interested in Bitcoin, why they decided to start Hodl Hodl, the nature of P2P exchanges, Bitcoin prediction markets, their decision to block US citizens from using their service, and much more. Follow Max on Twitter: https://twitter.com/keidunm Follow Roman on Twitter: https://twitter.com/romansnitko Follow Hodl Hodl on Twitter: https://twitter.com/hodlhodl Follow Marty on Twitter: https://twitter.com/MartyBent Check out https://hodlhodl.com/ Thanks to our sponsor cash.app!

Hey there, freaks. Welcome back to Tales from the Crypt. It's your boy, Marty Bent, here to introduce this week's sponsor, our favorite sponsor here at Tales from the Crypt. This episode of Tales from the Crypt is brought to you by the Cash App. You already know what's going on with the Cash App. We've talked about it many times on this podcast before. It's my favorite app right now to use to buy Bitcoin, to send friends money, to get discounts off at retailers around my neighborhood uh so check out the cash app if you haven't already for you freaks that don't know the cash app comes with the boost program and the boost program what that does is you download or excuse me you get a cash card sent to you in the mail and the cash card in

particular is very customizable you can put your own signature you can put a little bitcoin sign whatever you want uh to customize your cash card it gets sent to you once you have the cash card you can start taking advantage of the boost program so you get a whole foods 10 10 off coffee shops a dollar off they just added taco bell 10 off chick-fil-a is involved uh and they're only adding more retailers every every month it seems to me at least um so definitely check out the cash app they have this feature with ach specifically where you can pull money from your bank account to the cash app pretty seamlessly and send it back to your bank account seamlessly as well uh so the direct ACH deposit with Cash App. It's a huge feature, especially if you're looking to buy

Bitcoin on the quick. You can send money from your bank account to the Cash App and quickly buy Bitcoin and then send that Bitcoin from the Cash App to a personal wallet, potentially a wasabi wallet. Make sure that you're cleaning your Bitcoin after you're sending them from an exchange. So definitely check out the Cash App. Go to the App Store or Google Marketplace today. download the cash app now we're not using the other apps anymore don't even remember their names it feels like my life has been completely changed since the cash app entered it for you freaks they're here for the interview with the huddle huddle guys max kidun and roman snitko had an incredible conversation with them please bear with the audio we recorded this via youtube

live so i was using my uh airpods to record this so that's the the quality of the audio that we're getting for this episode but the content of the episode is uh is very high quality highly recommend you guys stick through it even though the audio may not be up to par uh to what it usually is i hope you freaks enjoy what is up freaks welcome back to tales from the crypt it's your boy marty bank here on a sunday afternoon after thanksgiving uh back in brooklyn after after heading home with the family for a little bit uh but very excited to be back in brooklyn uh recording first youtube live recording we've done in a while uh and i'm only do this on rare occasions i usually like to get people live

in the studio because i think the interaction uh is a bit pure but i'm happy to have uh the two guests that i do today from the company hoda hodl uh in lafia uh i want to introduce you freaks to Max Caden and Roman Sniko. Yeah, Sniko. I'm sorry. I just know your first names. So, guys, welcome to the podcast. Thanks for coming on.

Thanks for having us. It's great to be here. Yeah, thanks for having us. Just Max and Roman. I know that our surnames are quite heavy to pronounce. I'm sorry. That's one thing. No worries about it.

I'm terrible at words so hopefully that will be only one of the few mistakes that we have here so yeah guys how this podcast usually goes I'm really interested to figure out how you guys found Bitcoin

what drew you to it and sort of what your tale is so I guess Roman if you want to go first how did you get into Bitcoin? Sure, I first learned about Bitcoin in I think it was 2010 or 2011 and i didn't do anything about it back then i just went to the hacker news front page and like

half of the front page was about bitcoin and one of the articles was about how gavin andreessen went to the cia to talk about bitcoin and i thought oh that must be interesting and then i completely forgot about that for a couple of years and then in 2012 a friend of mine reminded me that there's such a thing as bitcoin and by that time i already uh read a couple of books of economics and Austrian economics specifically so Bitcoin was very interesting in that respect for me so I looked into it and didn't have any money back then so I couldn't really buy a lot of bitcoins and so I started like you know suggesting other people take a look at it but nobody listened and eventually I had to buy it myself and learn about it more and started developing projects so this

This is the short version of how I got into Bitcoin, and I've been working on Bitcoin-related projects since then. Oh, yeah. What were you doing before Bitcoin? Just software engineering and web development. I think Max can take this story from there, because this is how we actually met, because we started working in the same company together. Oh, really?

Yeah. Yeah. I got into Bitcoin in 2013. I think I have a twist in my story. So I'm like 10 years I was working as a private banker. So I'm from the dark side, you know. and uh um i was working for 10 years as a private banker and uh in 2013 one of my clients introduced me to this point he was like we were sitting in the meeting he was like saying there will be no need for your bankers like in in 10 years because because you see there's a bitcoin and i was looking at this guy was thinking like what what the heck he's like crazy one why why we should use that why we should use bitcoin some kind of weird money and then in 2015 i think but i started researching this this topic because i was quite fascinated always about the i.t and the finance and the

fintech basically so in 2015 i left the bank and i met roman actually the same client that introduced me to bitcoin he invited me to join his project uh roma was working there as cto and that's how we met and in 2016 we started working on huddle huddle so basically that since 2013 i i met bitcoin and are you guys so ideologically how did you come to bitcoin are you believers in austrian economics and uh more uh privacy freaks or yeah to be honest i was like when you're working in for 10 years in banks you see how the system works from the inside and at some point i really understood that there's no need for a middleman why there should be a person who is like telling you what to do with your money

why all the transferring process wealth transferring process or just payment process should be so difficult why you need to pay why there's the working hours why why why why why and there's a lot of why so so uh literally at some point i remember that day i was i was sitting in my office and i was thinking why i am here because you know um i i'm not the smartest guy but and when i went to bitcoin when i'm uh entering the room people who are software engineers or economists or people who are doing something within the community usually i'm one of the dumbest person out there because these people are smart literally smart i want to say yeah i heard your speech at the honey better conference i think you know

yeah what you're talking about yeah but you know uh when you are and when you are speaking with the people who are more into conventional finance like bankers investment bankers etc usually you are one of the smartest guys out there because of of well at least i felt like that so and i don't know about roma but yeah i just understood that there's no need of banking industry like in 10 years and to be honest in our region for for example in my country there's a lot of things happening with the banking industry at the moment that those people who are worked with there's no need of them at the moment so they're left the banks and they're they're trying to to find a niche where they can apply their knowledge where where they can work so things are happening quite

fast what kind of changes are happening are people losing confidence in the banks or people becoming more open and newer technologies people are becoming more open to technology like you know like my little brother who is like 12 years younger than me he never been to the bank he doesn't know what you don't know how to go to the bank you need to fill papers you need to handle your personal data to some kind of guy who's sitting like on the other side of the desk he don't know this process but uh he literally has a bitcoin wallet so because it's easy he can go to app store or to play store download the bitcoin app and receive bitcoins like from me like i don't know in in 10 minutes that's it he's only 12 years old he's already experimenting

no no he's 20 years old i'm 20 i think so 12 years different i would love him to be 12 years old to be honest i want to be back in my 24 like but yeah i'm 32 so um no so i guess so you guys met uh while working at this company together so did hoda hodl start out as a side project for you Were you guys building this while you're working at the company? Or did you guys have like a, hey, we need to go build this now. We've got to leave. No, we actually left the company. I don't want to go into details.

We worked for Mycelium. And at a certain point, we decided that it's no longer possible for us to stay with the company. And we just went on and started working at HODL the same day we left the company. um so there was no interference but at the same time we were so excited about huddle huddle and just going forward and it wasn't an easy process like it took us you know essentially two years before we were able to launch the production version um what were you guys what were you guys doing in that two years what were you finding out just build building this surf i mean it was just me and max we didn't have any money to hire the team yeah it was just me and max building and

testing and you know doing all sorts of jobs that now our employees do like we just build it from the ground up and then you know the bitcoin we were very lucky because the bitcoin price you know went up um like a year and a half later um and uh we were able to hire our first employee and then the second one and then we grew the team uh so in that's in that respect we're very lucky but um we also build it from the ground up so that's that's the short version story and what was your sort of like original view going into building a huddle did you have like a first product that you guys wanted to bang out and build on top of that i guess and then on top of that like is there a company mission statement um like what you're what you're doing we're just local

bitcoins um we both used local bitcoins and we saw how actually complicated it is and we also predicted correctly now that at some point they are going to institute KYC ML policies. And the other problem, significant problem was that LocalBitcoins actually held Bitcoins for the customers just like every other centralized exchange. And at that point, we figured out a way because I was familiar with the multi-sig technology and how to implement it correctly the browser um i realized that we can build a better exchange that that is non-custodial right and max fully supported uh this idea so it actually wasn't mine it's just you know me talking to max back and forth exchanging ideas and we came up with this concept so we thought okay we'll try

that and we'll go from there and uh you know a lot of things change in the process uh it's It's, you know, I don't like this word, but it is agile, essentially. This is how a startup should be. So, and here we are today. Yeah, no, it's cool. So I guess let's touch on and dive into the problems with local Bitcoins that you saw. So on top of like, they have custody, now they're implementing KYC AMLs or anything with like the user experience that you guys are also building on as well. Cause I was going through your tutorial videos earlier this morning,

which are incredible by the way. Will is very, very good at making these tutorial videos. If you guys are not ready. Yeah. All right. The wheel. Yeah.

Great guy. You freaks got to go to the huddle huddle tutorial page and go through all those videos, especially if like you want to learn how to make like a multi-sig wallet with a, with a business partner or something. That was, it was a 10 minute video.

And I, Oh yeah, that's, that's part of the um part of a mission sort of we realized early on that education is very important so if people would use our exchange they would need to understand what exactly they were using right and some of the videos that are on our website they're some of the tutorials and screencasts they're actually not related to huddle huddle at all they just explain how to use a wallet how to use a multi-sig wallet specifically electrum so and there are some others as well so

even if you own user exchange go ahead and check the screencast because they you're going to learn something new yeah no and it's actually very happy you brought that up it's like i mean that's the mission that i like to see myself on too is i saw that pain point of education people sort of misunderstanding this technology and how it relates and while not be educating people from a technical perspective like you guys are i like to think that uh trying to get people attuned to the philosophy and the under underlying ethos of why bitcoin exists uh so you can you can educate from different angles and yeah so i i think what you guys are doing with the tutorial videos is awesome but like and the other thing i wanted to mention that there's also a testnet version which

is also for educational purposes so a lot of people are and you know me and max we we we Used local bitcoins and when I use local bitcoins for the first time I almost lost my money there because it was stupid I really what happened. Well, I released bitcoins from escrow before receiving Fiat currency right and I didn't even I didn't even know what I was doing, right? and this is why we thought it was important to have a To have a really working test net where people can just sign up up, try it out for themselves for like be try being both sides

of the equation seller and the buyer and see it works and then they can start and trade for real. So it's important. Yeah, and again, I spent like an hour and a half two hours this morning going through the tutorials and I feel like I would be comfortable with using a huddle huddle exchange. Unfortunately, I'm not able to since I'm in Brooklyn right now. but uh we'll get we'll get to that later okay we'll talk about it later we'll get it to later i want to talk about specifically uh the the user experience that you guys have on your exchange

because it is a process uh and but i think you guys are are creating a great ux around around the product so um from from a buyer's perspective what you can do um i guess that that would be a place to start how you would sort of uh uh incite and uh begin engaging with with this sort of uh otc um exchange or ptp exchange excuse me yeah well actually uh yeah um you mentioned already like couple of things like security and uh no no no kyc ml and uh roma already mentioned about testnet which is again i i believe it's quite important because i i was trying to research are there any other exchanges having a testnet so basically you can go to the testament version of exchange you can you can

try and trade with bitcoins with testnet bitcoins and then you can reproduce same same steps uh on the magnet version and there's actually i don't think there's much of uh testnet versions of other exchanges educational videos yes of course and yeah ui and ue um it's quite important because we we do understand that peer-to-peer exchanges are usual like uh way more difficult to understand than centralized exchanges and uh because it's peer-to-peer it's complicated a bit more complicated although it's way more secure and and more confidential but we don't understand the hassle with with the user experience and in user interface so yeah that's that's one of the differences and and people you know people are always saying well yeah everyone is saying

that their user experience user interface is better than than the competitors but actually you can go and compare you will understand that uh we're putting a lot of effort to to providing proper experience and providing a proper understandable um interface that people can actually easily buy their first like fraction of that point or uh with current with current current prices even hold it very soon maybe one bitcoin who knows who knows maybe in like maybe in two weeks like two bitcoins even so whatever but but yeah i think it's the for for a platform that is offering something to buy or to sell is quite important to provide a proper proper tools and understanding how we can do that easily yeah so i think let's jump into like the marketplace

so like to to engage in this p2p exchange basically you have to find somebody who's willing to trade at the same time that you are uh at this like uh exchange the same amount of bitcoin uh at the same time and then use the same type of money transfer uh to to facilitate the exchange so they have the option of doing it there's actually two options so we have a public coffee list which is more and more and we have also the private ones yeah so the public public offer list is uh the same i think technique that you use in any other exchange so you go you you sign up which is like one minute and you go you find the proper buyer or the seller or if you don't don't find we usually say that create an offer by yourself it's easy like you can do an

offer if you want to buy then create a buy offer if you want to sell you can you can create a sell offer especially as we're like twice and a half cheaper than our competitors now the price up until the end of exchange fee rate now up until the end of this year is 0.4 percent if you compare to our competitors usual rate for peer-to-peer exchanges is one percent per trade and so you create an offer or you take an offer and then you trade directly from your wallet or to your wallet because each time for each trade we create a unique escrow account so the buyer so the seller deposits coins into this escrow account the buyer sees that coins are deposited he sends the wire transfer or sends the cash or do the payment via any other payment system that he used

and up upon the receivable of fiat the seller just signs the release transaction and then you go the the coins are in your wallet directly in your wallet so you don't need to deposit anything within huddle huddle we don't hold any money also the the interesting part is that you can use how you want to trade with we have two types of multi-stick contracts two out of two which is the signatures one huddle huddle and one for the seller and release transaction is signed by the seller and by huddle huddle and there's also a new type of multi-stick that we introduce multi-sig system that we introduced like month ago which is two out of three so it's similar to this yeah each each each part of the trade has their own key so

in case of the dispute we can move money either to seller or either to the buyer and the another option is private offer which we we have created this specifically for large OTC traders because they requested the extra layer of confidentiality and so you can create an offer but you can you can like think that it's a private offer so the offer will be accessible only via directly it won't be you won't see it in the public offer with so you can if you have a counterparty already buyer or the seller you can just send the link to him and you will trade privately within the hodl hodl using hodl hodl as an escrow.

And with the private thing, it could be something like, hey, I'm going to send you this offer just so you can transact over Venmo or cash or anything and people basically won't know what's going on. Yeah. People are using this. We actually already saw some significant volume on OTC trades because a lot of OTC traders, They also understand the security risks when they hold coins within any centralized entity like large OTC that they don't want to deposit like 500 coins into any other like wallet that they cannot control or that is controlled centralized in a centralized manner. Because it's basically the similar that you will hold like 500 coins in any other centralized exchange.

eventually there's a risk that it could be like compromised in fact yes and uh in will's one of will's awesome tutorials he's explaining that you guys implemented the two or three multi-sig because of uh uh customer demand for it right so you guys are are obviously listening to customer feedback and just interested to see how that process is they're just having people complain on twitter no no no no actually the same otc traders that request that uh private offer offers uh they also told us that well we trade a large volume and the buyer he wants to have obviously he wants to have some kind of control over the the flow of coin so could you please implement two out of three uh we spoke with them and we actually created that because

they insisted so yeah we usually speak with our customers and we have a telegram group people are writing in in the twitters uh like they're they're saying they're like suggesting some improvements so yeah we listen to them because it's quite important you know we we don't have um such big volumes like local bitcoins have but uh we do have uh i think quite good support team and people are like embracing this and saying that well it's it's a good that you have proper support so at least we can like uh create a loyalty uh create a loyal uh customer base using our proper support uh and then another approach so yeah we are listening to our support now this is actually something i was talking uh with jeremy welch from casa last week about is like the the power

of telegram to for companies building products to to get quick user feedback uh ux data is uh is actually pretty pretty astonishing like uh we've all known that like slack and telegram groups have been big for like trading and uh coin uh altcoin uh enthusiasts but uh specifically with products like hodl hodl and casa being able to get that user feedback right away must be incredible for you guys i mean it's kind of an off topic but i i still don't understand why telegram isn't widely used uh in let's say america or europe um because it was actually uh the founder of contacti which is a like a russian social network a facebook clone he invented this telegram and it's uh you know it's it's very well known in russia very well known in south america and asia

but for some reason not in america but i think it's it is literally the best uh messenger out there um you know i've read um a lot about the design of um and uh i mean the infrastructure that telegram has and uh the cryptography and everything i mean there are a couple of uh questions here and there but really the interface and and the approach it's the best so guys use telegram it's uh not associated in any way with it but it's the best no and it's It's been an incredible line of communication for a lot of Bitcoiners. And like I said, my company is looking for feedback. And you just send somebody a link like Casa.

I have the Casa node and I'm in their telegram working with that team directly to help with my Casa node. And it's something that I haven't seen before. And I think it's like we talk a lot about how Bitcoin is going to drive innovations in a lot of places like energy efficiency and stuff like that. seeing it drive like innovation at a product like ux level is cool too um yeah yeah um yeah so i guess let's get on uh to the new products you guys are are rolling out um very excited to talk about those what should we talk about first uh yeah let's talk about the products and then we'll talk about the us later um so you guys have uh the otc desk which we briefly touched on before than bitcoin futures in a prediction market it's launching next year um which is very exciting

about yeah about prediction markets uh roman and uh s4 otc yeah we have otc that we have uh we have our brokerage arm so we're already working on that and and already like helping some some trades happen because again we have like i think the only one non-custodial otc that's out there at the moment so um yeah and but i i'm also quite excited about the prediction markets that rome is building with the team so so i think you should touch upon this as well right um so um initially it was called uh bitcoin futures um but we realized it's not exactly the correct term in that case so we settled on bitcoin uh peer-to-peer prediction contracts and uh you can call it a prediction market if you want and the point is that you can uh bet bitcoin on pretty much

any anything that's legal to bet on right so for example um you think that the price of bitcoin is going to be above five thousand dollars um by the end of the year and so you create an offer and say i i'm willing to bet one bitcoin um that the price is going to be about five thousand hey somebody else goes to the website sees sees this offer um and uh creates a contract based on this offer and both parties in the in the simplest case possible it's uh it's a one-to-one um bets right so they both lock one bitcoin in escrow and uh the winner gets two bitcoins and the loser loses his bitcoin um that's kind of the point um and of course it doesn't have to be the price of bitcoin but anything that can be um easily verified right and what we're going

to do we're going to moderate offers so if there's some kind of ambiguity or this something illegal we're not going to allow that but anything else if you want to bet on who's going to win the election um you're not going to move on assassination markets uh yeah but that's the difference of course that's that's what i was uh getting into like if you if you want to bet whether trump's going to be the next president uh once again you can do that but nothing illegal for sure but i don't think like to be honest i don't think people um i don't like um i don't like to call this um bets because really it's just a financial instrument that allows people to manage the risks and uh it's the first instrument that's actually non-custodial and that allows people to um have

those predictions settled in bitcoin not in fiat but in bitcoin um you can still and and you you have kind of uh the same thing on bitmex because they trade futures contracts right but it's it's it's not the same in the sense that first of all they actually hold the bitcoins and second you can bet on um on price of bitcoin or price of litecoin or ether or whatnot but it's like the choice is limited what we're offering is you know it's freedom to um to manage your risks and bet on things that are important to you. Yeah, and I was being a bit provocative earlier bringing up assassination markets

because I imagine that you guys are building on perceived faults that you view in Augur or similar prediction markets. I mean, I guess you guys are trying to build a separate product, a differentiated product. A differentiated product, excuse me. and uh so i just i i'm just curious to get your thoughts on if you see any flaws in a system similar to auger and what they're doing and what may they be the the difference with auger i think

first of all they're based on uh ethereum right as far as i understand so that's that's one thing we don't want to touch we work exclusively with bitcoin maybe like coin because it's very similar um in terms of technology and code base but um the other thing that augur um does differently they they sort of try to solve the oracle problem in a decentralized manner um what we're trying to do so the the workflow is going to be pretty simple and straightforward um let's say you make this bet that the bitcoin price is going to be above 5 000 by the end of the year so january 1st comes and you you look at the price both parties look at the price and either they both agree that there's a winner and there's a loser and they sign the release

transaction right or one party disagrees for some reason maybe they just don't want to give that bitcoin but it's already locked in escrow so it's not coming back to to the loser so in that case huddle hollow steps in and checks the condition and that we can sign the transaction to the winning party that's in in case of a two out of three contract in case of two out of two contract which i predict is going to be less popular with these kinds of contracts prediction contracts but if we have a two out of two contract then the winner still gets his one bitcoin and the loser he he loses his one bitcoin but it's going to to be locked in astro forever um so he is actually he has a lot more to lose by not releasing uh this bitcoin in favor of um the winner uh so that's

the basic workflow yeah do you so let's talk about decentralized oracles do you think it's a problem that can be solved um it's a big topic in this space especially with prediction markets i i really don't know it's just i i sort of like have this workflow in mind that we're working on i think decentralized um exchanges decentralized oracles are actually uh they do have a place in the community and you know i i see a lot of people on twitter they constantly sort of attack us and they say oh you're not truly decentralized right you you're not a decentralized we never said that we are peer-to-peer exchange we are non-custodial so in a sense we're kind of decentralized in that we don't actually hold the bitcoins but we're still centralized because we

have a central server and we will look at the disputes that that are um that spring up on our exchange so um i just i just want people to understand that there's a place in the market for different kinds of exchanges and you know bisque is is a is a very interesting project it. We are excited that it's becoming popular. It's just that what we're trying to do is to be somewhere in the middle between LocalBitcoins and Bisk in the sense that we're not decentralized, but we're also non-custodial and we are providing an easy to use interface by just being a website and not a software that you have to download. yeah and then the game theory of the reputations that's another thing that comes with uh the p2p

exchange the reputation so you get rated as a user and obviously as a company if you are turned out to be a bad oracle your reputation will suffer um so you have an incentive to to be a good oracle correct i think reputation in general is like a big problem uh and a very interesting problem so um currently it's also centralized for all peer-to-peer exchanges but um in the future i mean uh there's a very high probability that uh reputation is going to be kind of like uh you know a separate field of computer science or something i don't know uh at least i see it that way well let's hope it doesn't go to the dystopian uh future that china's uh yeah yeah yeah that's the difference i know we're all looking um at it and it's just uh it's it's horrible it's just

fighting yeah so how do you how do you guys handle it for buyers and sellers on on huddle pretty sure it's pretty straightforward but um how is the experience for the user uh rating rating their experience how does that how does that work out does it happen immediately after the transaction um just pops up yeah it's usually it happens after the trade is completed so basically you complete this trade and each one is like writing the commands and and uh rating the another part is quite quite similar to local bitcoins to be honest there's no reason to invent a bike in that case because you know uh maybe we will touch upon the reputation and making it like a bit more sophisticated in future because i know that roma has a dream to create a proper reputational

system that that can be like used by multiple exchanges and can be decentralized uh maybe at some point yeah why not let's talk about this dream roman expand on it what is your dream well the dream is a sort of decentralized reputation and uh i've been i i had this dream i've been having this dream for a very long time and like maybe since 2013 and i've been talking about this idea to very smart friends of mine and they all trashed it so i guess i'm wrong um but the point is i i do think reputation is a very important part of the economy like you know a lot of problems might be solved um if if we had a better reputational system that is not centralized that cannot be cheated and like to just to describe it um concisely i i mean i think you

like imagine a graph right and you might not know the person that's you need to know like let's say you want to have business with a person you don't know him but a friend of a friend of a friend knows him and he says this person's good right so here comes the graph database through which you make this connection and you can calculate the reputation relative to you um the reputation of that person relative to you and then figure out whether you want to have business with that person or not and like even if even if it's some scammer that creates multiple accounts that's uh sort of uh that bump up his reputation on the system it still wouldn't matter because all the all those uh bots they wouldn't be connected to you so it wouldn't affect this

person is rating relative to you so that's like a shirt the shirt version of the idea but you know there's there's never time currently focusing on hollow hollow and hopefully someone someone much smarter than I am eventually develops some create something like that well I do too but how do you envision that change in the world and change the economy that you just think it will create certain efficiencies that that we have not untapped uh up to this point yeah yeah for sure i mean just uh you know you you go to to a foreign country and you don't even know uh like you you let's say you rent a car and then something happens to your tire that you get a flat tire

need to to find a uh good uh mechanic or something it's just like these sorts of problems or whether you want to eat at that place you know whether you want to go to see that doctor um i mean these problems are solved to an extent but there's definitely a lot of room for improvement and like if even if you look at amazon there's there are lots of fake reviews this problem that amazon cannot solve like if you want to buy a book and you know i've seen books that they get like five star reviews and there's like 50 people reviewing this book five stars but it's actually trash And they cannot solve it, and I think a graph system that is decentralized can actually tackle that problem, so yeah, that's the point. Yeah, but actually I wanted to touch upon the reputation on HuddleHuddle.

At some point we understood that we're quite young, and we have a new platform, and a lot of other peer-to-peer exchanges that have well-established profiles or reputations for traders that are willing to use HuddleHuddle as well. So we have created this thing that is called peer-to-peer profile. You can basically transfer your reputation from other platforms to HuddleHuddle, and people will be able to, even if you don't have any trades on HuddleHuddle, HODL. They will see your profiles on other exchanges and they will understand that you are decent and a proper trader. So you can do that on HODL as well. So it was one thing that we have improved in terms of sharing the rating

of reputation system on HODL. That's a great point that Max just talked about i think um currently people are unable to export their reputation from one website to another and specifically if we're talking about peer-to-peer exchanges they're incentivized to try and keep it local right they don't want like they don't want sites like hotel hole to um to transfer that data but we still are able to do that and you know paxful did it to local bitcoins we did it to both poxful and local bitcoins and we actually talked to them about that like there's nothing you can do but it's still like it's still not straightforward and i think for for any pure peer exchange or any website that requires some sort of reputation

let's say a freelancer's website it would be so beneficial to have the system in place that would not have to build it um themselves like we did um but they would just need to implement it and and yeah and let their users let their users have it so well could you guys make like an open API that other sites could call on or fortunately no not at this point it's still we're planning on doing this because we have a lot of requests and actually talk about this problem but yeah it's it's got we have a lot of requests on doing the API most probably first half of 2019 we will and be able to throw out an API.

Yeah, so we're working on that. Hopefully in 2019, we will have a proper API. And I think that actually brings up a good, interesting point. Cause I'm like, I don't know if you guys know, but I'm like a UX nerd and a product nerd in particular. So I actually liked that you guys are like, Hey, we'll get to this eventually.

So like what, you guys have a lot of stuff on your product roadmap. So how do you prioritize and decide what to work on and at what pace you should start building this out? Well, we have like quite small team to be honest. So sometimes we even don't have any options to choose. We just understand that we need to build something. Like for API, we received a lot of requests

from companies that trade Bitcoins not appear to their platforms they have their own platforms or they have their own software they want to connect with us and to like optimize like make it automatic to some to some extent the training makes an ultimate but usually um well we we have uh like i don't know special channel in in slack uh and our team members they change the ideas and if we like any idea like from our team member or from from our customers then we just make it and that's it um we don't have any like strict priority what we need to do uh but we are trying to what we are trying at the moment is to make uh huddle huddle as profitable as impossible at the moment yeah yeah i think

that's a very good point the the profitability so we're always one criteria that we're thinking about is this going to make us money unfortunately we have to think about it because it's not about like you know getting filthy rich or something we need to be sustainable like we're raised around now uh from the from private investors because we realized we needed to move faster and so on and so forth but eventually you know we we're going to need to to be making money and that's priority i think it's a big mistake for many projects right now in bitcoin they sort of relied on bitcoin price to be high you know and they thought oh we can go on forever but they can't they need to have a sustainable business model that does not depend on the price

and that's what we're trying to do that's how we prioritize features yeah certainly prove that Yeah, but also we're always looking at the ethical side of the making money, as you say, because we've had like a lot of offers to make an ICO with HODLHODL or to promote ICO during our conference, during Honey Major. so we refused on them because you know it's and we see now actually that in Bitcoin and crypto community two main things that usually pays

out is long term strategy and reputation if you don't have that in place most probably you will fail so that's the core values yeah I completely agree so what are

what are you guys thinking that which areas of your business do you think are going to be most likely to drive profits for you guys as you expand the offerings so

I think that we have like four main areas or even five areas that we're working on one is not connected with the exchange so first of all it's the retail part which is peer-to-peer trade which is uh like public offer list another one is otc uh the market out there is booming actually not depending on the

price the sales are still still going the trades are going and the volume out there is like three four times bigger than the volume on all central exchange because you can have like one trade with one thousand coins per trade and that so basically some some exchanges even don't have uh such turnover in a week so um the third thing is future and or prediction markets as roma said because uh we already been like approached by some people who are working working in that field they're quite interested because of again it's peer-to-peer we cannot manipulate that uh basically we cannot shut down the whole hotel and say like we will liquidate your shorts or or lungs or whatever or we can or or we will trade against you that's some some of the exchanges actually

something the bitmix is quite famous for by the way again i'm not i'm not naming anyone so just i'm just like i'm looking at twitter every time every time there's a uh big price movement in bitcoin big mix goes down and they're like oops we're liquidating you right and a lot of people are pissed off because of that and and there would be no way for us to do that if it's peer-to-peer. So, hey guys, if you're disillusioned with BitMEX, come to a lot. I mean,

you guys bring up a good point. Build a product where you make that impossible and it might be impossible for users not to use it in the long run. Why would they use anything else? Well, they would, like if they're data traders. Yeah, still, centralized

exchanges are suitable for data traders. you know you have a fast order execution automated so you won't be able to reach that speed on the future exchange at least at the moment you won't be able you need or you need to sustain a proper liquidity list like you know

you need sometimes you will have to then you will have to fill the orders by yourself and at some point that can be like you won't have the balance of selling and buying or something like that so finishing up the fourth project is house huddle which is buying and selling real estate with smart contracts that we have

basically with bitcoin the same the same thing that is go going with uh huddle huddle except the fiat you are selling or buying the house with with the bitcoin with the two out of three multistakes yeah we have that as well we actually our state funding part of that will go to developing HouseHotels as well. So let's talk about HouseHotels. Yeah. Can we talk about HouseHotels before we go? Yeah. So basically it's a platform for buying or selling real estate with Bitcoin. You will be able to list your property on that platform. You will be able to remotely sign the papers on this platform and you will be able to use our escrow

for buying and selling real estate so basically we are just removing the banks from the equation so the same escrow that you use in the bank but it will be the crypto escrow but we are we're going to launch it in 2019 because we do understand that with the current beer market conditions nobody is actually willing to spend money or bitcoins on buying the house it was actually quite interesting that we've been approached with some people during the bull market last year when the price was like above 10 000 people were saying like hey with your like functionality we can buy something like valuable uh but now you know in this bear market condition i think prediction markets are way more profitable and uh there's a huge potential for that because

people were always bad on the price movement or on certain certain um like things that events that are happening so yeah that's that's quickly about house model and the fifth part of course is a baltic climate measure company so it's also the part of auto auto brand but it's it's not connected with with uh with the exchange uh well the one connection is that we we do that but uh yeah the honey badger is something that we're going to continue to organize each each year please do i had the uh the pleasure of attending this year it was uh like it was it's one of the best organized conferences i've been to in space and the uh the town and the uh the concentration of uh people dedicated to bitcoin in particular not coins or icos uh was was something i haven't

seen at a conference in the industry uh ever up to this point and then being able to travel to Riga Riga is a beautiful city um it was a very fun experience thank you and that and that's also a returning to having a long-term plan and the reputation you know first year we barely made it like uh break even so we didn't earn anything on on doing this conference although there was like a lot of offers from ICO shills that, hey, we can pay you, you can shill our ICO on your conference.

We refused everything. And this year actually we even made some profits with the conference. Nice. So yeah. What's that experience like, putting together the conference? I can imagine it's hectic. It's like

it's crazy. I'm like two months before and one month after that i'm like just in it's this i don't know how to it's it's something like i don't know how to describe this condition that i am in into that because most of the field of work i do roma is helping me as well but he's like he's like too far away from from riga i'm here and um it's i i i think like two weeks ago i i feel like really i just i just understood that everything has finished and the conference was good and all it's like two weeks ago and the conference ended like in the in the end of december so you can imagine

that you still have like stress for one and a half month after the conference but it's always a funny it's always a funny and uh people are saying that it's actually good conference uh we're doing good things and i still don't believe them but you know you better believe them that was it was no there was like a palpable i don't know how to describe the feeling but like the vibes were very high people were very engaged and a lot of my favorite parts of the conference over the weekend or during the coffee breaks outside meeting people you've only ever conversed with online for the first time there was a lot of people talking seriously about like Bitcoin attack vectors and security concerns every

conversation was in depth and enthralling to me you know I had a friend of mine visiting the conference and he said to me that the so we both attended san jose 2013 bitcoin conference and it was we there was a great vibe there and he said there's it's the same vibe because we see he actually for the first time at a bitcoin conference he saw the same people who attended um the conference in 2013 and then for me specifically you know the after party really reminded me of of the san jose 2013 conference because it was so packed like you know you turn and you meet another person and it was so awesome that that's what i loved about it because uh there was no um i mean it was easy to meet people great food great beer

and uh outside it's just beautiful so yeah i remember i remember sitting in a circle and eric bosco was holding court like talking for four hours about his views he's really intense he's He's one of the most interesting dudes in the space to me. I love his views. That's true. I agree with that completely. His GitHub pages are related to Bitcoin economics.

It's just one of the best readings out there. You should check that out. The LitBitcoin wiki, right? Yeah. Definitely check this out. Eric Vosko, LitBitcoin. Just go read. It's an amazing read for sure.

You'll learn a lot. Thank you guys for throwing the conference. It was an incredible experience. I was jet-lagged for like four days. I never got adjusted to the time zone, but needless to say, the vibes at the conference kept me up. Yeah. Well, next year is going to be better.

Okay. Yeah. We already have a list of potential speakers, So most probably in somewhere in the beginning of March, we'll announce a new finding. Hell yeah. I guess let's jump into another topic, which many people here in the States might not actually know, because I was fact checking this before we hopped on. I asked my co-host for Rabbit Hole Recap, Matt O'Dell, who's usually very on top of all the latest happenings in the space. I thought I had seen a tweet from you guys saying that you had to block U.S. customers.

So I asked Matt, and he said, no, no way. And it turns out, pre-interview, you guys said, yeah, that happened this week. So you guys have had to shut off access to HODL to HODL from U.S. users. Sorry for me. That's unfortunate for me. Anybody else here in the States? But I guess you guys could jump into the reasons for doing that and why you had to do that. Yes, I think Romo can explain that because he was the mastermind behind it.

That is true. So actually, all the trades that happened in the U.S. on our exchange, they were from licensed traders, right? So they were licensed in the states that we're trading in. So it was all completely legal. but we and we didn't allow any unlicensed trades at all in the US but even then we decided to pull the plug and restrict US citizens and residents from trading our exchange and the reason is quite simple the regulatory burden

it's just it's too much the truth is we we need to protect our exchange we need protect our employees and uh you know our business and uh the the truth is that if any of the agencies in the us decides they don't like huddle hollow because we work with um american customers um that's going to be a huge problem for us so i mean you know at least or we're going to have a lot of expenses um in terms of like lawyers and you know litigation and all that which we don't want to have at all like we we definitely do not do anything illegal but it's just the burden you know we know how is it in the United States they they try to prosecute people all over the world regardless of their

nationality and their location anything and it's just something that you have to deal with you and that that was our decision a lot of exchanges in the space they actually do that you know it max to name the biggest one and then you also have bitfinex and their local exchanges like the one in Thailand I think they're come they're called Bitcoin in th or something or BX in th anyway they all block us customers regardless of their location and I think that that says a lot about the situation I mean unfortunately I mean I think the US market is sort of saturated with exchanges that are licensed already so

US customers have a lot of choice in terms of purchasing Bitcoin and trading Bitcoin and if we talk about like market share there even if there was no regulatory burden at all we would still not be interested in the u.s market you know it's it's it's not a big peer-to-peer market the the most activity um in peer-to-peer markets happen in eastern europe in asia in latin america this is where we want to be yeah that's what i was going to say the burden is so much to to uh to put up with the u.s regulations and it's it's not even worth it for you guys because most of your volumes come from russia and latin america you said correct yeah we we the most of the peer-to-peer volumes actually at the moment are from eastern europe

russia ukraine and latin america like if you if you will check it out the the thoughts on local bitcoins i think the most liquid market for them and the biggest one for them is russia at the moment although they're officially blocked in russia so um also asia also africa so there's a lot of uh like peer-to-peer markets are emerging markets so it's suitable for immersion as for us well um yeah it's it's like legal and security risk for us so no offense guys it's just a business so no we really we really have a lot of we because we had we we we saw some like most of the people actually even from us they supported us in our decision if you check the twitter thread some of them i support you yeah some of the people started like saying like hey hey you're like both

lickers or whatever you know what i'll usually make any sense yeah because it's like you know you're choosing the less evil thing we believe that blocking u.s market and not implying kycml at any point is less evil things than having the the u.s market and implying the kycm what's the difference then between auto huddle and coinbase and or any other exchange with kycm what's the reason for us to be there there's no reason to be there so i think this and And I was going to say, I think this brings up an interesting point, though. It's funny, like America is supposed to be the bastion of freedom, the home of freedom and all that. And yet a lot of companies don't even want to work here because it's too burdenful and it's not as free as people would think.

So as an outsider looking at the U.S., like as a country that likes to tout ourselves as the home of the free, like what is your perspective on these types of regulatory hurdles? Are we as free as we may think we are? May I just comment on the land of freedom and all of that? I think there's, to me, the way I look at it… Roma, Roma, just don't forget you are planning to… You have some plans, just say it. To live with the United States. Yeah, yeah, yeah, just like don't say it out loud, you know.

Of course. No, I was just going to say that I think people in the U.S., they have this mindset of freedom right um most of them i would say they they have this mindset because of the legacy of you know how people immigrated to the united states in search of um you know freedom and uh you know less taxes less restrictions all of that in search of a better life and they endured a lot of um things on their way and i think that's uh that still persists but at the same time in practical terms you would actually find a lot more freedom in in china or russia or in asia from latin america because the the united states is so heavily

regulated in in many areas that it just makes it impossible for the small guy to start a business and uh you know may actually make it i mean it's easy to start a business but it's not easy to comply with all sorts of regulations if you want to get big so um i mean i hope that's going to change because i think um again in practical terms it's there's more freedom in other countries but in terms of the mindset i think american people really value freedom they really understand what it's all about uh i mean that's that's how it's it and it's a paradox right it's so weird but that's how it is it's it's ironic it's like it blows my mind i would say like i and many americans like me have like an inverse an aversion to authority like i i know i do in

general and i i like freedom of individual thought obviously that's why we have this podcast that's why we're in the bitcoin um but uh the system under which that we live uh is not as freedom enabling as some people would like to think i would say that was my comment on american uh regulation for the day um yeah so i guess uh we hit on a lot of what i wanted to hit on but i guess uh let's talk about bitcoin in particular um what do you guys obviously the price has been tanking the last five days pretty pretty heavily we're we're getting into the depths of the bear market but uh uh before we talk about price or anything i don't really we can focus on price later but uh from a from a development perspective bitcoin uh from a scaling perspective uh from a

from a security perspective like what do you guys think of the state of bitcoin right now in 2018 as we approach the 10-year anniversary what do i want why me i was just You're the technical guy, you know, there's like killability and all this weird words that they don't understand. Okay, I do understand that was gorgeous, but yeah. I think that there's like this saying that beer markets are good for developers. And to be honest, I really believe that. You don't have the pressure of the price to build something fast to earn some money.

So, and I think that overall this beer market is good because a lot of people that wasn't actually understanding the proper economics and all of the tech and all of the stuff that was just speculating, they get to wipe out of the market. ICO are like, it's so 2017 now and I'm so happy that it's 2017. and a lot of shitcoins are falling down. It's good. It's a great cleansing.

Of course, everyone wants Bitcoin that will cost at least $20,000. But we will eventually be there at some point. And I think it's not so far future away from now.

But in terms of tech developments, I think that Lightning and other things that are happening at the moment. It's fascinating. And then I read an article, I think a few days ago, that the actual processing power of Bitcoin is now $8 billion, which is almost the same as the MasterCard with $11 billion.

So I think the market is growing. Although some people are saying that, hey, the volumes of the trades are falling and all that stuff. But in general, I think the adoption is there, and we see that a lot of, even in this bear market condition, a lot of startups, proper startups are opening, and they get developed and good for infrastructure. I will say this. I think a bear market is definitely good for developers, although it's very uncomfortable. I will tell you from my own experience and from the experience that we had at HODL HODL when the price hit 20, you know, and our company was self-funded, we were like, hey, you know, we're going to do this and that, you know, all those things. We don't care.

And then when the price went back to six and now it's three, you actually have to start thinking. You actually have to start thinking what is something the market wants? What is it prepared to pay for? And how do you survive? I think it's very important because you know when you have a lot of money it makes you weak it makes you lazy complacent and I think yes that's very very dangerous and I still consider us very lucky you know we have wonderful investors who really understand our business and our project and what we're

trying to achieve and that really helps us um and the price i mean nobody knows what's gonna happen maybe it's gonna go for like a thousand or a hundred dollars who knows that that might happen i'm not predicting that but you have to just understand that you need to actually if you want to make money you need to build something that's really useful and something that the market wants I mean, look at the richest companies, Bitcoin companies out there. Who are they? They're Bitcoin exchanges, right? Or they're miners because they actually build what people want.

People want to trade. People want to bet. And people want to transact. This is what miners do. That's their business, right? Or, you know, some other companies, they build hardware wallets. This is also something that people want. They have continuous business, right?

so uh if you're just holding that's fine but uh i mean if you're thinking that you can be become rich by just trading bitcoin i don't think that's going to happen and you know i had a rant about this on on youtube i'm not going to repeat that but just don't trade bitcoin go ahead and build something right um no i'm very appreciative of what you guys are building at huddle huddle again uh even though i can't use it i think it is a very important uh product to be made and like you guys said earlier it is uh you're just creating optionality for users where you can go hardcore bisque or you can go local bitcoins but you guys are in the middle um and experimenting with that use case and to me it seems like uh an incredible user experience that a lot of people

would prefer as compared to both extremes where you get no KYMC or excuse me KYC AML but you have the luxury of having a third party to intermediate when when you'd be yep I mean I'm not into that you're absolutely correct yeah so yeah I guess that's all I have to ask you guys today I guess the last question for each of you do you have a parting note for freaks out there uh anything that that you think people should be focusing on or or thinking in the spare market uh well i don't know focus on something that is not related at this point you know if you cannot bear with bear with the price you know you know you know just just just relax spend some time with your family or with your friends or just travel around do something

read a proper book you know yeah it was just uh it was just thanksgiving here in the states and i spent four days not thinking about bitcoin it was great yeah so just uh and if if you are into for a long run then just huddle and don't worry about that because you know you need you need people are constantly saying you need to look at some dimensions blah blah blah but it's really It's true. You need to look at fundamentals, whether you believe that this technology and the community behind this technology, which is awesome, will change the world or whether you don't believe. If you don't believe, then just sell your coins to someone who believes and that's it. Go out. I mean, don't look for another opportunity. If you do believe, then hold on. Yeah, that's true. I'm just going to say that you're in it for the technology, right? But you are. You actually are. And you're also in it for the people you meet and the

friends you make along the way. I mean, it's so pathetic. It sounds pathetic, but it's actually true um i've you know i'm a lot more um proud of the fact that i met so many amazing people and the fact that uh i managed to stay through uh like three bear markets by now um and i lost a lot of money but who cares like it's you you you actually learn that it's not about the money the money um it's just that it's just the means right and uh you just need to to to find something that actually drives you through all this and bitcoin just provides a lot of different opportunities meeting people writing code learning something do that i mean that's that's how you that's how you win and to touch on that like i think the really

important thing in the this like sort of crux of what you're getting at there is that bitcoin provides this common mission that anybody and people from various different backgrounds can can work towards and that's something that's important for humans is having a mission having a common mission having a bond like hey we're building something and and bitcoin provides that which is incredible yeah i think it's very true like you you meet a bitcoiner that you know it doesn't matter which country he's from but you pretty much know that he's

going to share the same values the values that are important to you it's amazing like you know you speak different languages but he actually understands what you're about and you understand what he's about it's kind of cool like you don't have to explain a lot of things you don't have to they just know

and that's why we set up the conference so hopefully I mean that's the lesson that we'll learn from from the bear markets yeah well glad to be the front lines of this bear market with you too yeah appreciate what you guys are building appreciate you guys coming on and having this conversation with me and then the conference the Baltic honey badger conference thank you for throwing that again it was one of the best I've been to up to this point

in my life and it was a lot of fun highly recommend you freaks go if you can attend next year um yeah yep thanks a lot for having us thanks a lot thanks a lot appreciate it that's all we got today freaks peace and love cheers cheers bye-bye cheers