The Joe Rogan Experience - #581 - Andreas Antonopoulos

Episode Date: December 1, 2014

Andreas Antonopoulos is a bitcoin entrepreneur, he also serves on the advisory boards of several bitcoin startups and serves as the Chief Security Officer of Blockchain.

the jill hogan experience ah the english chick's back she's my favorite mr antonopoulos now you prefer to not go by bitcoin jesus is that correct i i do i don't like the ending of that story doesn't turn out so good for... But he comes back! Well, that's one version. That's the problem with the Jesus story, right? He comes back and then you don't hear from him again. Like, wait a minute, what the fuck happened there? The guy comes back from the dead after three days and then... nothing.

You know, even so, the torture to death part for poking a stick at the big bad bear of the Roman Empire is a bad enough story as it is. I don't want to emulate any part of that. Thank you. I agree with you.

Also, the misuse of magic. I mean, to have all that power and to just work on wine, turning water into wine and walking on water and stuff like that, seems like some other things could have been done. Perhaps combining those two. Walking on wine and stuff like that. Seems like some other things could have been done. Perhaps combining those two. Walking on wine. There you go. Like converting the entire Sea of Galilee into wine.

That would have been pretty awesome. That would have been rude as fuck to all those fish that live in there, though. Just marinate them. They can be thrown onto the grill right away. I guess. Delicious. They didn't have refrigeration back then, so we're getting

way off topic way early for those of you who don't know mr antinopoulos is an expert in bitcoin in digital currencies in what is most likely going to be in my opinion the future of economics i i really do believe that this is not just i think what we're seeing right now is not just a trend i think what we're seeing right now is the beginnings of what will eventually be a realization of what i think people don't people don't need this third party system they don't need banks they don't need what we need is a we need to figure out some sort of a way system they don't need banks they don't need what we need is a we need to figure out some sort of a way to exchange goods and services with each other and to keep track of like what things costs and right now we're doing it with money and right now we're doing it with money that's like somehow or

another being controlled by the world bank being controlled by the national or the federal reserve and most people agree that that sucks, that that system is not a fair or equitable system. And you're working very hard to try to alert people about Bitcoin and spread the word. And I think you're doing a pretty good job of it. I think that the word is getting out there. I don't think I really need to do much. That's the wonderful thing about marketing or trying to talk about something that's actually useful. Like if I was selling hydraulic fracturing, I'd have to really try hard to persuade people that it's not fucking up the environment.

But with Bitcoin, it's really useful money. It can solve a lot of problems. All I have to do is introduce the concept and young people, you know, the idea, hey, we're going to put money on the Internet. Well, of course, we're going to put money on the Internet. That makes perfect sense. And we're going to make it global and it's going to work without borders and it's going to be instantaneous. Well, of course, you know, how come we haven't done that yet? And so it's an easy idea to sell. easy idea to sell. Well, the system, for folks who haven't heard your earlier podcasts that we did,

and they're not familiar with what Bitcoin is, just give them a brief description of how the Bitcoin system works. So at a very basic level, Bitcoin is internet money. It's money that you can send like an email. It's like Skype for money. You can create an account if you like. It's kind of like an account, but it's basically an application that you download onto your phone or your desktop. And once you do that, you have a Bitcoin address and you can send and receive Bitcoin. And it's a currency. It works like a foreign currency. And you can convert dollars to Bitcoin and Bitcoin to dollars and back. But the really cool thing is that you can send Bitcoin to anybody else in the world in a matter of seconds for almost no fees at all. And if you do have to pay a fee, it's usually something like a third of a penny, and it has nothing to do with how much you're sending. And in a few seconds, cheaply, securely, all around

the world, instantaneous money. So it takes money from a technology of the 50s and it drags it into the 21st century kicking and screaming it would just so we can get past this just explain how it's created and explain like how it's how it's controlled like how the the number of bitcoins is generated and how this is not something that can be fucked with the same way money is fucked with today, where they can just print money and cause debt and create a lot of problems. Explain that.

So Bitcoin is a decentralized peer-to-peer network of money, and that's a lot of fancy words, but I'll relate it to things that people are familiar with, especially for a younger generation, things like BitTorrent or Napster or things like that, where you run a piece of software on your computer and that's simultaneously using resources, but also sharing resources for others. And the network is made up of everybody running a bit of software on the computer and coming together in a collaborative way. Bitcoin is money done that way so everybody runs some software and the collaboration of everybody on the network to run this software to secure and verify all of the transactions that is happening that also produces the currency and

the currency is produced at a predictable rate. So every 10 minutes, 25 Bitcoin are created. And they're created on the network, by the network. And they're created through this kind of like a competition that happens online with computing power. I won't go into too much of that detail. But the point is, every 10 minutes, 25 new Bitcoin are created. And then that happens for about four years. And then after four years, the rate of new Bitcoin is created. And then that happens for about four years. And then after four years, the rate of new Bitcoin is cut by half. So when it first started, it was 50 Bitcoin every 10 minutes. Now it's 25. In the year 2016, it's going to drop to 12 and a half, then it's going to go to six and a quarter, and it keeps reducing by half until eventually no more Bitcoin are created.

And if you do the math, and you add add up the years and you keep dividing by two, you end up with about 21 million Bitcoin. And most of them will be done in the first decade. But then that last small percentage takes a very long time. I think the last one is in the year 2141, if you just project out. By that point, of course, the world has changed. But if you just ran that equation. And so 21 million Bitcoin, that's all you can ever have. And the interesting thing about that is that it changes people's behavior. If you know how much money is going to exist in the system, you value it differently.

Like right now, if the Federal Reserve had a meeting on Friday, no one in the world, except for the people on the Federal Reserve Committee, know what's going to happen with money the Monday after. You have no visibility. They might say, we're now going to print another trillion dollars and all of the money you have in your pocket is now worth, you know, a tenth of a percentage less. Or they might say, we're not going to print anything next year and suddenly your value the value of your money is going to change but with Bitcoin I can tell you exactly how much Bitcoin is going to be around two decades from now now since you got involved with Bitcoin what if any change in perception have you seen in the public like the the the initial idea of Bitcoin for a lot of people was like,

wait a minute, what are you guys going to do? You have digital, people are like, hmm. But now you're seeing more and more people use it. Tiger Direct uses it. You could buy computers from them. Does Dell use it now as well? Dell, and more importantly, the most recent announcement about a month and a half or two months ago

was PayPal. PayPal is now going full Bitcoin. They're going to offer Bitcoin as a payment mechanism for PayPal. That's pretty intense. Which is pretty huge news. I did not expect that was going to happen. I was thinking maybe in a year or two, it happened a lot faster than I expected. That's pretty intense. So PayPal and Square, of course. What is Square? Square is the little thing you stick on top of an iPhone to swipe a card with. And they have Square Market. They've been doing Bitcoin now for six months. And that's expanding. So in terms of retail shopping, it's moving pretty well. But you know, as you probably remember from our previous discussions, retail shopping isn't where I think it's really powerful.

But it's great to see these advancements. A lot of interesting things are happening. But it's great to see these advancements. A lot of interesting things are happening. The perception is also shifting. At first, you know, Bitcoin was so obscure that the only people who talked about it were the complete lunatic fringe, like the geeks, the nerds, the people no one understands at the party. And in any case, they don't really talk to us. So that was the lunatic fringe. Now we've upgraded uh now people think that bitcoin is all about uh drug dealers terrorists and pornographers so we're

making some progress here how does that happen well you know i mean what do you think the media is going to focus on do you think they're going to focus on the fact that most bitcoin is charitable giving donations and tipping something you experienced experienced too with the donations to the address you showed at the last show. A lot of that's going on. But then also what's going on is things like Silk Road. And the media really loves that kind of story. You're not going to say, well, people are raising charitable donations on the internet.

No, they're going to say people are buying cocaine on the internet. And that's a much better headline. So we went from completely obscure to mostly negative press. And now you're beginning to see people say, yeah, you know, there's more to it than that. And I think the public perception is gradually changing because primarily they hear about it more and more in a better context. Yeah, we wound up sending thousands of dollars to Justin Wren who is he's got this charity that he does fighting for the forgotten and it's all about pygmies in the Congo he lives in the Congo most of

the year and all that came from Bitcoin I just took the money from from Bitcoin I doubled it you know I whatever the people sent in from the donations from the address that we posted on the web show. I took that and whatever they came up with, I added the exact same amount. And we sent it to Justin. So, I mean, that money from Bitcoin donations want to deal with water issues that they have, digging wells, all sorts of things. And he's going to be on the podcast next week, so he'll explain to us. But that's Bitcoin in action right there. Yeah, I've already done two or three fundraisers with Bitcoin.

There's a couple of favorite charities that I support in a number of ways. And I found that the fact that it makes it so easy for people to give and so instantaneous, and it's a way for them to demonstrate why they love this technology, a lot of people will do it. And a lot of people have been bugging me to get you to take Bitcoin on the stores and take Bitcoin on various activities, or maybe even put a tip jar up for your new comedy show I heard. I actually saw a trailer of that.

Yeah, it's all Comedy Central. I'd have to ask Comedy Central to do that because I did it through them this latest one uh but yeah I'd be interested in doing something like that I'm just right now I'm just super busy that's the one that stops me from getting uh fully involved with this but I'm always fascinated and I love watching other people adopt it as well like uh Shooter Jennings just had a big ad online where he was taking Bitcoin for all of his new CDs. And he was selling them, old ones as well, selling them all through Bitcoin. Yeah. I've been talking to Shooter about doing some other activities with Bitcoin too.

So we'll see where that goes. Yeah. Shooter loves it. He thinks Bitcoin is the future. And he even had a post the other day where he was talking about people saying that Bitcoin, you know, hold on to your, like people have this idea of hold on to your Bitcoin and one day you'll cash them in for a million dollars. And he's like, no, hold on to your Bitcoin and one day you'll have Bitcoin.

You won't need to cash them in. Yeah, you won't need the million dollars. Right. It won't be valid. Like, well, it'll be valid. I mean, I'm sure money is not going to go away, but it'll also be just as valid. Like, well, it'll be valid. I mean, I'm sure money's not going to go away, but it'll also be just as valid. And, you know, what you're saying about PayPal, we're starting to see that. Yeah, I think so. And, you know, you've got to think also about many countries in the world

where their own currency is really bad. And this represents a global currency that may end up being more stable, more valuable than their own currency. So is it going to be more valuable and more stable than the US dollar? Probably not for, you know, at the best case, decades, if then, if ever. But there's 193 currencies out there. Can it be more stable and more valuable than 30 of those? Probably is today. 50 of those within a few years.

So you're basically seeing this revolution in international currencies. We're not going to displace the most successful currency that the world has ever seen overnight with something that at five years old is a toddler technology. But we can offer opportunities around the world

where their own currencies are really, really poor and not very good for transnational and cross-border transactions at all. Now, what has been going on as far as like the shift? Because I know that there's been a lot of volatility issues where the price has gone up and down and things have moved around a lot. Like, has that in any way stabilized? It's stabilized. If by stabilized, we could say that it's gone down quite a bit and then it's kind of stuck to around the 350 to 400 dollar us dollar level for a while now um but you know it depends what you do with bitcoin really the volatility really affects you

if you're looking for an investment especially if if you're day trading Bitcoin, which is about the stupidest thing you can do because it behaves like a penny stock on steroids, right? So a lot of people get into Bitcoin because they hear about the price and they get this idea that this is a get-rich quick scheme, which it's not. And they try their hand at day trading with disastrous consequences, because you're talking about a very volatile market with exchanges that are not regulated and in various countries around the world, which have very little liquidity, and some pretty big professional traders who are like sharks in the water, who are like playing the market quite effectively and taking all the newbies for a ride. And so that's not, I don't think that's a valuable activity in Bitcoin. I think if you use it to,

as a payment network, accept Bitcoin, then convert it to your national currency to restrict your exposure. So for example, let's say I sell a t-shirt for $10. I'll price it at $10. I'll get $10 worth of Bitcoin and I'll convert it to $10 right away. Now, if next week the price changes, it doesn't matter. I've already sold a t-shirt. I've already got dollars in return. I'm good. I've opened up a completely new payment channel without any of the risk. So you can kind of get around that and find ways ways to use it i don't really you know for some people bitcoin can be a long-term investment but it's really dumb to day trade it and that's where you get exposed to most of that price volatility isn't that an issue though if you're

selling things because if you're selling things online like would you sell it like say if you're selling mugs like this mug you have in front of you, you were selling them for, you know, $10 American. What would you, $10 worth of Bitcoin? Is that how you would factor it in? Yeah. So let's say today Bitcoin is, I actually don't know what the price is right now, but I can look it up.

And so I can say, what is $10 worth in Bitcoin? And once I do that calculation, I can figure out what the price is and I can price the sale. So for example, I would say receive, I would pick an amount in dollars, say $10. So $10 at the moment is 0.026 Bitcoin or 26.18 millibitcoins, thousands of a Bitcoin. So the customer wouldn't see this and the website would do this automatically. So I put my mug up, you'd click and say, okay, $10, you put it in your cart, you say checkout, and it would just present you with a qr code like this now this is actually asking for 10 us dollars worth 26 millibits so if you try to click on this with your wallet it's going to tell you to pay the amount of 10 10 us dollars equivalent in bitcoin so the store does the calculation automatically and then then when the Bitcoin comes in, it gets bundled.

And at the end of the day, it gets converted to dollars or sooner if you have a lot of volume. And so you don't see any fluctuation. Price goes up, price goes down. It doesn't matter because you price it, you earn it, you convert it. Now, when you do that, though, like if you're a person that has Bitcoin and you're buying things, you would wait until it's worth more before you bought something, right? Yes. So you wait until your Bitcoin is more valuable. Like, I'm thinking about buying something, but I want to hold on until Bitcoin. That seems to be a bit of an issue, right?

Yeah, that's called a deflationary effect, which means that if you have a currency that is deflating, where the value of the currency is increasing over time, then people will tend to hoard that currency, hold on to it, and not spend it right away, because they hope that it's going to be worth more in the future. Now, in the case of Bitcoin, we've had periods where it's climbed in value, so the hoarding instant gets strong. We've had periods where it drops in value, so people want to get rid of it. All currencies have that. Bitcoin has it a bit more at the moment because it's volatile the hoarding is instinct you know it's funny because in the u.s we call it the hoarding instinct in asia that what they call this savings which is an inconceivable concept to most americas like the saving rates for example in asia exceeds uh 20 in some countries and in the u.s it's negative 0.2 or something like that so actually people increase their debt

every month instead of saving so it's also a cultural thing i think hoarding um is seen as a bad thing in a very very strong consumer society where you're supposed to take your paycheck and convert it directly into plastic crap from China as quickly as possible and not keep any of it for the future. That makes for a really good Black Friday, right? That's the attitude. So if you don't spend, that's seen as a bad thing. I'll tell you, once I started using Bitcoin, I ended up saving more money. I did become more frugal with my purchases. But honestly, when I saw something that was priced correctly and I wanted something to buy, I'd buy it. I wouldn't wait another week for the price to go up or down and start. Because then again, at that point, you're back to day trading, right? Well, since it's gone with PayPal,

you could pretty much buy, there's a lot of things you can buy. I trading, right? Well, since it's gone with PayPal, you could pretty much buy, there's a lot of things you can buy. I mean, I wouldn't say everything, but many things when you go to buy things online, give you that PayPal option at checkout. Yeah. And not all PayPal vendors will turn on the Bitcoin option yet, right? Not all. But they will have the option to turn it on over time as PayPal rolls this out. They just started it as a trial basis. turn it on over time as PayPal rolls this out. They just started it as a trial basis. It's probably going to take six months to a year before they roll this out fully. And then it's going to be in 19 countries

or however many PayPal serves, and the merchants will have to go and turn it on. But it gives them another sales channel. So the other nice thing about that is that if you have a web store, PayPal integration usually comes with it. So turning on in your PayPal merchant account the Bitcoin option

makes your existing web store Bitcoin capable without you having to change any of the code. And that's a pretty big deal. That is a very big deal. Now, are you surfing totally unrelated over there? No, I was trying to recover my Bitcoin wallet. Yeah, we were talking about that before the show. So he got a new phone,

and his Bitcoin wallet, for whatever reason, didn't transfer? Yeah, I mean, I backed up all, like, you know, you get your phone, you back up all your programs and stuff before I sold my old phone. And I didn't even think about it, redownloaded all my apps automatically,

opened it up, and it's like, oh, sign up or use an existing user. And I tried to put in – it's really hard to figure out. That's what I was just trying to do is going online and try to reset my password, but it won't let you reset your password ever because they don't keep passwords on the websites. So it looks like I might have just pretty much lost my wallet, right? It depends. I think if you use the application that we installed last time, which was blockchain info, that created a web account that went with it. And if you put your email address in there, you can reset it fairly effectively. So you can send them a support message and they can probably recover your wallet. Yeah, that's what it looks like. That's what I was doing just now where I found out the email address I used. But now I have to like fill out like this questionnaire

with my Skype name and stuff like that. And it looks like they might want to even interview me to see if it's actually going to take a few days. And the reason it's going to take a few days, and I used to advise that company from a security perspective, is because what we would do is we'd have hackers who compromised people's Gmail account. They found the fact that they signed up for a Bitcoin wallet, and they'd use the fact that they knew their email address. They'd troll and find their wallet's name and a bunch of other information,

and then they'd go to this website, try to do a reset, and try to steal their money. So we make it a bit harder. You have to get a confirmation through email so that people can't easily socially engineer and phish for your account. But it seems like it's possible, which is good to hear. Oh, it's absolutely possible. You should be able to recover your funds,

and then all you have to do is then connect the application back to the website. And that's the advantage of this hybrid model where your wallet is on your phone and you have complete control the website doesn't have access to it at all but it stores an encrypted backup online so that as you see if you lose your phone or or you drop your phone in the toilet right exactly if you have like a million dollars worth of bitcoin your phone it falls in the toilet that's yeah that would be bad you shouldn't keep that much money on your phone anyway. Just like, I mean, you have to treat your phone wallet the same way you treat your wallet, which is I don't carry my entire net worth in here.

I have a bit of petty cash in here and the rest of my Bitcoin, just like the rest of my US dollars, I keep offline. I keep it in another location. But what if you're like one of them Floyd Mayweather type ballers who likes to walk around with a big briefcase full of Bitcoin? Well, then you can do some pretty cool demonstrations. There's this investor in Argentina who gathered a bunch of his investment friends at a golf outing

and sat them down at a table. It was six people who had, you know, just some of them had just met with the other people and had never done Bitcoin before. And he said, hey, let me show you how Bitcoin works. Download this application to your phone. So they all did that. And he said, OK, what we're going to do is we're going to I'm going to send you some money and we play hot potato. So you you you receive it, you wait and you send it to the person next to you and then the person next to you and then the person next to you.

I'm like, oh, great. We're going to move some Bitcoin around, see how this works. So it sends the first batch and the first person looks at their phone and they just received a quarter of a million dollars. What? A quarter of a million dollars sent in a matter of seconds for a third of a penny. And then they're like, their hands shaking and they just swipe across, send it to the next person, quarter of a million dollars, quarter of a million dollars. Six times around the table. Now you've done one and a half million dollars worth of wire transfers for a total cost of less than 10 cents. And it's back at the original owner.

And the purpose of this demonstration was there is no payment system on the planet that could do what we just did. Yeah, but in the future, you're going to get screwed like the IRS. It's like, hey, it says here you've shared a half million dollars. We need half a million. You know? Yeah. Well, yeah, that depends. I mean...

What's the IRS's take on it now? There's some unique take on what Bitcoin actually is. They're not treating it as if it's regular money. They're treating it for taxation purposes the way they would treat a tradable commodity, which means that if you buy Bitcoin and the price goes up and you sell Bitcoin and you make a gain, you have to pay capital gains tax. And if you earn Bitcoin by selling products and services, then you have to pay income tax, which to me is a very reasonable and sensible way to treat it.

So, for example, if I do a gig in Europe and I charge my clients in euros, I'm going to pay income tax on those euros. But if I hold those euros for three months and then I sell them and the price has gone up in the meantime, I'm going to pay capital gains on the difference between the price I bought them or earned them at and the price I sold them. So it works in exactly the same way. The IRS doesn't go around really tracking everybody's bank account, doing the sums and checking against your tax return. That's not how it works. The way it works is the burden is on you to make an honest, truthful, and complete return. And when you make an honest, truthful, and complete return, quite honestly, they don't check it. If they have reason to suspect where they randomly sample or they do statistical analysis and they see that things don't add up,

then they're going to come and say, okay, you said X, prove it. And they flip the burden. And now you have to show that this is exactly what happened well they treat bitcoin the same way you know i make an honest truthful and complete tax return to the best of my ability and i calculate my income based on my invoices and things like that which i receive in bitcoin and i calculate my capital gains and i pay my taxes i mean it's it's really not complicated for me and it's not complicated for the irs and if they come out at me they're going to ask me you know

show us where this bitcoin came from and where it went and i can show them is there any way i don't know if this is even possible but is there any way to simplify what dollars to bitcoin actually stands for because when you say that one bitcoin is X amount of U.S. dollars or one dollar is digital points of Bitcoin, that conversion is confusing to people. Oh, yeah. It's really confusing. Yeah. And I think that's an issue. Yes.

Sorry. That's an issue with some folks. When you talk about getting involved in Bitcoin and they see the numbers and they see the differentiation, it's problematic. It gets in their head. They're like, what is it? How much? 0.1? order an espresso and pay 1,500 lira. And in your head, you're trying to figure out how much is 1,500 lira in dollars. That's already confusing enough for most people because it involves the higher order mathematics of division, which I can't do in my head. I use a calculator. And when it comes to Bitcoin, it's worse because when we use Bitcoin as the unit, because it's worth a lot more than $1, all of the denominations end up being fractions.

So 0.026, for example, is $10. Right. And that's even worse because most people can't do fractional mathematics to save their life. So one solution to that is to switch the unit to value. instead of talking about bitcoin you talk about millibits so it's easier to say it's 26 millibits right 26 okay 26 for a t-shirt i can understand that that makes a lot of sense right and when bitcoin was at about a thousand dollars then a millibit was a dollar so it was a lot easier because then it would have been 10 millibits for a 10 t-shirt and that lot easier because then it would have been 10 millibits for a $10 t-shirt. And that makes a lot of sense.

Other people have proposed bits, which takes you more to the Italian lira side, which is a hundred thousandth of a Bitcoin. And so at that point, you're looking at, you know, 5,000 or 10,000 for a t-shirt. So it feels more like lira where you have bigger numbers for smaller things like italian money but still better to do you know five thousand bits which is

a fraction of a bitcoin for a coffee than try to do 0.0013 yes no one can do that kind of math so really it's about what units do you use for everyday conversation? Yeah. No one can, and no one wants to, no one wants to, like we want like a dollar is a this, you know, I mean, that's what people want. And I have the following simple rule of thumb, which is that in any currency, if you want to make it easy for people and you can pick the currency unit you want, then a meal, a simple meal, a sandwich, a fast food meal, a cup of coffee and a pastry should cost between one and 100 of your unit of currency. Pick whatever unit makes it fall into the one to 100 range. People are comfortable with the idea of spending, you know, 10, 50, 60, 15 for a meal, a coffee, a pastry. They're not comfortable with fractions.

They're not comfortable with very high numbers either. Like spending 5,000 for a coffee doesn't make sense. But, you know, spending 25 of your unit for a coffee, that makes sense. So that's my rule of thumb. Between 1 and 100, pick the unit that makes it fall in that range yeah why when bitcoin was created was it established that way where one bitcoin would be such a large amount of dollars well it wasn't here's the thing when it was established first of all for the first year and a half bitcoin had no dollar price at all because no one was there was no market where it was being actively traded so you could establish a price point. The price at the moment, say $350, comes from the fact that recently someone was willing to give someone $350 for their Bitcoin. So it's a market-based system.

When Bitcoin was launched, you could buy a thousand Bitcoin or even 10,000 Bitcoin for a dollar. Damn. Right? Yes. Should have bought some. I know. Clean the fuck up. So we have one of the most famous things is the pizza event.

And this was when, in the first year and a half, when nobody really had a price for Bitcoin, a user called Laszlo online online suggested buying pizza for bitcoin and this was like crazy talk like i want to find a way to use my bitcoin to buy something i want and there were no markets there was no one who was taking it and i want to buy pizza so i'm going to give bitcoin to someone who's going to order a pizza with a credit card online and have it delivered to my to delivered to my house. I believe we talked about this on the podcast. And it's like a $10,000 pizza now or something like that?

It was a 10,000 Bitcoin pizza. Oh, Jesus. That's a $3.5 million pizza. He bought two of them. That's $7 million for two pizzas. So the point is the price has varied a lot. Bitcoin used to be fractions of a penny, and now it's 350 bucks. So we don't know where the price is going, and the creator couldn't know what. The creator

and those who were participating in the early days thought was, it's probably going to be worth very little now, but over time, if people adopt it, because there's a limited quantity, its value is going to go up. So we're going to need to have more units to break it down into so we can start talking about tens of bitcoins and hundreds of bitcoins then we'll talk about bitcoins then we'll talk about tenths thousands millions and it goes down to 100 millions the smallest unit is called a satoshi it's 100 millionths of a bitcoin eight decimal places that seems ridiculous i hate pennies i hate pen i hate pennies i don't even really like nickels yeah fucking nickel everything should be dimes or nothing quarters bust quarters yeah quarters and this is the difference between digital currency because this doesn't have value right now so you don't use it in conversation

if it did have value in the future so if it was worth a quarter right then you'd use that and just give me a satoshi and i'll give you a cup of coffee yes and if right at which point um a bitcoin will be worth a lot of money now you were just in austin new zealand i i did a tour of australia and new zealand a series of talks about Bitcoin. There's also a conference there called Bitcoin South in New Zealand, in Queenstown. Now, when you fly over there, are you paying for your airline tickets with Bitcoin? Indirectly, yes. Indirectly.

First of all, when I was flying to New Zealand, my cost was covered by the conference organizer. The conference organizer was paying both me and for all of the expenses in Bitcoin. All of the suppliers, the entire conference was paid for in Bitcoin. Where they can pay directly in Bitcoin, they pay in Bitcoin. Where they can't, they sell it, get New Zealand dollars, and they pay New Zealand dollars. I also got sponsored to do a couple of talks in australia i got paid in bitcoin for that when you were when you were over in new zealand did you look into the kim.com situation and are you uh you're smiling so you must be

well aware of what's going on with him over there i i think, I mean, Kim Dotcom is such a really great personality. I mean, he's larger than life. And he just has this tendency to poke a stick in the eye of governments. And he often gets away with it because governments tend to overreact and break their own laws going after him, which is hilarious, right? Because they ran through, just roughshod over their own judicial system to confiscate his servers, and then he fought them in court, and he won because they lost in court. They had to return his servers to him after three years because they had illegally confiscated them. And Kim Dotcom, who was allegedly accused of copyright infringement, they raided his house with about a hundred paramilitary-style police officers

in the peaceful island of New Zealand, for God's sake, and helicopters, and rappelling down from helicopters in the middle of the night to serve a warrant for copyright infringement. So, I mean, if that doesn't say overreach, it's ridiculous. Yeah, that's clear that they're trying to send some sort of a message and not just send a message, but to scare them. They're trying to bully them. They're trying to bully anybody else that would be brazen enough

to have similar resistance. And this wasn't a New Zealand operation alone. This was in conjunction with the FBI and other organizations from around the world. And it was a massive overreach and they broke their own laws to do it. And he turned around and rubbed their face in it because they'd broken the law. They ended up being the criminals first. So I don't know where the state prosecution is going on that. But as with many cases like this, there's a lot of upfront,

you know, big talk about how they're bringing down this great criminal. And then all of the charges fall apart when they tried to present them in court. Yeah. And they're confiscating all of his money too, right? Well, they're trying to. They have. I mean, he's actually said that he's broke now. He's in some precarious situation because he spent over $10 million in legal fees, and he actually generated some insane amount of money since they released him. He generated like $40 million worth of money.

I mean, he's a money-making machine. The dude knows how to make money. Right. But that whole mega upload website and all that stuff, that's all in some serious trouble right now. Yes, it is. So, yeah.

He obviously has nothing to do with Bitcoin, just to be clear. Well, I wanted to bring that up, that here's a guy who maybe could possibly benefit from moving his money, at least a big chunk of it, into Bitcoin. Well, I mean, if what he's doing is in fact legal, and if what the government is doing is in fact bullying him outside the parameters of law, then that might be a perfectly justified stance. I mean, I wouldn't recommend using Bitcoin for criminal activities. I don't think that's a good advice for anyone. How legal and noble of you. I wouldn't recommend. Well, I don't think it's right to sit here and encourage, you know,

illegal acts. But, you know, to talk about copyright infringements resulting in a helicopter raid and armed paramilitary raid on someone's house in the middle of the night, I think we have to really question where is the justice in that and what exactly is going on in that case. Well, copyright infringement for folks who are not completely informed on what the whole upload situation is with Kim Dotcom's website, what he was accused of essentially is that people would upload illegal downloads of movies, of songs, things along those lines. So he wasn't even doing copyright infringement himself. He was facilitating it allegedly for others, which is even one step removed from a crime that is a civil crime against property. And, I mean, really, talk about an overreaction. I mean, really, talk about an overreaction.

If that's the standard of justice, I have to ask, what kind of armed helicopter response should descend on AIG for fucking over a million homeowners and stealing billions of dollars during the mortgage crisis? How many helicopters should go down on that case where you have actual victims? This is the real issue here, which is that there are crimes that result in mega victims, millions of people put out of their homes, losing a generation's worth of savings, and no one goes to jail. Yeah, it's a huge point. It's a monster point. And there's sanctioned thievery in that sense. Did you guys see the thing that came out today in Iraq? That there's 50,000 ghost troops.

There's 50,000 troops that are receiving checks that are human beings that don't even exist. Really? Yeah. They don't even exist. And they're getting checks. War has always been the most profitable racket available. Yeah. But war has always been the most profitable racket available.

Yeah. I mean, there's plenty of instances of people where they're obviously doing something that's illegal and getting away with it. And somehow or another, it becomes okay because it's sanctioned or because it falls into some sort of an area where you're not allowed to look into it like this. But the mega upload situation is very fascinating to me because I've always been of the opinion when it comes to digital downloads and things like movies and songs that it is a completely new area. And all our laws, like our piracy laws and property laws, they're very vague when it comes to digital copies. Because digital copies, you can call it piracy all day. I had Paul Stanley from Kiss on, and he kept insisting that it's stealing, that it's stealing.

And my take on it is it's only stealing if the person who originally had it doesn't have it anymore right if i take your muffin you don't have any muffin to eat exactly if i take your song you still have that song and so does everybody else exactly so it becomes an issue of what is the song what what is it where does it go it's not stolen someone may have illegal illegally copied it and put it up so that other people can take it down and then it becomes sort of almost like a matter of ethics like if you appreciate the artist and you want to support the artist there should be some way you can do that and i also have always said that if someone can't afford to buy your songs like if they're a fan of your band but they have no money but they can they can download your your music and

then one day pay to see you in concert like you gained a fan right or you that fan stayed supporting you it's it with they didn't have money to buy your shit in the first place they would not have purchased it but now they have it and they get to enjoy it and they're it's one more person to tell other people and i think statistics have shown that you know like artists are making the majority of their money now like music artists through, through live performances because of this. Well, let's look at historically what happened with music piracy. Music piracy at a time when music was incredibly expensive and inconvenient to get was thriving. And what stopped the vast majority of music piracy was not crackdowns. It wasn't lawsuits, it was the availability of things like Apple iTunes

that made music easy and convenient and accessible to people. And then the range of music that people started consuming expanded massively. So from an artistic perspective, music is now thriving. From a money perspective, however, a lot of that profit is being concentrated in Apple. money perspective however a lot of that profit is being concentrated in apple here's the thing though and i i hate to drag us back and you know this is my my thing i'll i'll find a way to introduce bitcoin into everything and annoy everyone around me but one of the things i think that is magical about bitcoin is because it allows micro payments you can pay five pennies and you can pay five pennies in such a way that

the person receiving the five pennies still gets five pennies. It doesn't get chewed up in fees and transaction costs and things like that, and you can do that instantaneously. It offers on the internet a completely new business model for content and artistic creation. So this means that artists can now sell a listen of a song rather than the eternal perpetual rights of reproduction of a song, which is very expensive. A single listen for a penny, for a tenth of a penny,

and actually do that without most of that money going to Apple or Visa or some of the intermediaries, but go directly to the artists. We're already seeing that. Artists are beginning to use Bitcoin to make a direct connection between themselves and the consumer, get most of the money come to them instead of the intermediaries, and it creates a new funding model for content creators. And this also applies to news and media and bloggers and people who write and make music and make YouTube videos

for a living. So until now, it was really difficult to earn money on the internet. And the reason for that is because you were delivering a very small amount of value to each one of your consumers, but there was no payment mechanism by which they could pay you for a very small amount of money. They could only pay you for $5 or more. And it's very hard to bundle. So as a result, you end up doing two things. You either sell the consumer themselves by taking all their private information

and turning them into a profile and selling the crap out of that to marketing companies, or you cram advertising down their eyeballs until they hate what they're seeing. And now we have a third way, which is they actually pay for the content they consume. And that's revolutionary. I mean, it really is. You could do some amazing things with music and publishing. It's incredibly difficult to get people to pay for anything online, though.

I mean, that's always been the rub. The rub is that the internet is so Available there's so much yeah It's the it's essentially just this open ocean of content that anybody coming along saying I want you to pay To read my blog fuck off. You know I've seen that before I've seen people say you know They have to pay to read their blog I'm like you gotta be out of your fucking mind no one's gonna pay to read their blog. I'm like, you got to be out of your fucking mind. No one's going to pay to read your blog. People have actually sent me links to websites that have paid subscriptions,

like a link, like on Twitter. It's like really like kind of a scam. Like they're sending me a link hoping I retweet it, and I'll click the link, and then it'll say, to read more, you know, subscribe. I'm like, fuck you. Well, how much does it cost to subscribe though? Like five bucks or something like that

or something along those lines. What if it was a penny? And it was music you wanted to hear? Most, okay, if it's music you want to hear, yes. If it's a movie you want to watch, a documentary you want to watch. But for a lot of things, it's just people are going to find,

if you find something similar that's free, you're just going to go towards that. And if so, if there's something like, like reading something, like reading someone's blog, that's a perfect example. Most blogs are free. The vast majority of blogs are free. And that's how people read them in the first place. Cause it doesn't cost me any step that you take, even a one-click Amazon step where it's so simple. Amazon one-click is just the most simple thing of all time. I love it. I like it.

Bang. You hit that button. It's on its way to you. They already have your address in there. It's just super easy to get. Even that, like people are like, why do I have to pay for this when I can just go to his blog and read it for free or her blog and read it for free or her blog and read it for free. Why would I give you money

for something that is available for free? So when you get something like a blog or a newspaper online or a website, it's kind of already been clearly established that that's a free service. I think to a certain extent it has been. And the reason is that previously you were representing the cost of production. And then with the internet, the cost of production fell to zero. The value of what you're delivering is a bit more than zero, but it's not high enough to charge a credit card or to differentiate it from all the other free things that are out there. And there's no payment mechanism that fills that gap between $0 and $5, right? So your costs drop to $0, your minimum charge is $5, and there's nothing in between.

And that means that a lot of things that may be worth $1 or $0.25 or $0.75 that people would actually pay, because you can only charge $5 or $0, you end up going for $0 or $5. And you say that because of bank fees. That's because you can only charge five or zero, you end up going for zero. And you say that because of bank fees. That's why you can only charge $5. Because, yes, absolutely. Because credit card minimum transactions online cannot go below five. And the inconvenience and the information, the identity information you provide and all of that. So we haven't explored that range of zero to $5. explored that range of zero to five dollars and so if i could say for example right now the new york times wants me to pay um 10 bucks a month to read more than 10 articles but then if i want to read the washington post i have to pay another 10 bucks a month to read more than 10 of their

articles and the los angeles times is experimented with something the same. What if I could put down $2 a month and read 25 articles from all of the newspapers that I want to? And just put that into my browser and say, I want you to allocate $2 a month to newspaper articles. I'm going to give them a penny or half a penny each. I'm going to read 25, 50, 100 articles from all of the newspapers. Now they're generating an actual revenue stream and it may seem tiny when I'm paying just a, you know, a fraction of a penny per article. You multiply that by a million consumers and you've got some real money coming in, more than they're making with these paywalls. So you start exploring that range between zero and five or zero and ten dollars.

I would pay for quality news content without advertising. We know people will pay for things that are free. Evian proves that. Apple iTunes proves that when I can go out and torrent a song, but it's more convenient for me to pay $1.99 and just buy it at high quality. If you deliver high quality content and you lower the barrier for paying enough, people will pay for high quality content. And what we can do with Bitcoin is lower that barrier enough that a whole range of content

that you could never charge for before that was forced to free because there's no intermediate step can now make the artist and the creator income directly without intermediaries, without them taking a giant cut. I think that's pretty exciting. It is exciting.

Is there a way, I was thinking this, you remember the old days of DOS and the early versions of Windows with the command line prompt and the people who knew how to use and people didn't it was very Prohibitive yes for people who are uneducated in code and then came along the modern graphic user interface and

Essentially what you're doing is you're hiding all that secret shit behind it and you're creating something that's much more simplistic is there a way to do that with bitcoin to take away all these weird fucking numbers and zeros and ones and point this and point that and break it down to something or would it have to be stabilized first where the the actual the the the price of bitcoin or the value of Bitcoin would be stabilized to the point where something like that would be applicable. I think you nailed it. We are in the DOS days of digital money and a lot of things need to change. So what you have here, three things that are happening simultaneously. One is the evolution of the user interface and user experience. The other one is user adoption, how many people are using it and how many new people are using it every day.

And the third one is the price volatility. And those three are tied together. You can't really get one before the other. You can't really design beautiful user interfaces if you have no users and no value in the money. You can't get users if you have no beautiful interfaces and the money is too volatile and the money won't become more stable until you have more users using easier interfaces so all three of these move together and all you need to get to that is time so over time if you look at bitcoin today versus bitcoin five years ago we had enormous progress on the user interfaces

enormous progress on the adoption and enormous progress on the user interfaces, enormous progress on the adoption, and enormous progress on the stability. And if you then say, well, it's a five-year-old now, what will Bitcoin look like five years from now? I think you're going to see Bitcoin addresses are going to disappear, just like IP addresses. We don't see them on the internet anymore. Right. The user interfaces of QR codes and barcodes are going to disappear. We're already seeing protocols that allow you to do tap to pay and swipe to pay like Apple Pay with Bitcoin quite easily. That's already happened?

Yes, absolutely. You can do NFC, as it's called, near field communications. Like Apple Pay, you can do tap to pay with Bitcoin. But here's what you can't do with Apple. You can't with Bitcoin. I can do tap to pay with Bitcoin, but here's what you can't do with Apple. You can't with Bitcoin. I can do tap to pay between two phones. Like I could say to pay you with Bitcoin and with two phones. Now,

do I need, do you need out you being a merchant, right? You need a cell service to do that. Or can the phones communicate with each other? They can communicate with each other offline. Yeah. So you can be on the fucking North pole,

right? With no self service and you could swap Bitcoin. Right swap Bitcoin back and forth like you're playing ping pong. Yes, and all I'm doing is the same thing I'm doing by scanning a barcode, only I'm using the NFC protocol to do it. So you can see how this technology is going to get smoother and easier to use as we have more adoption and at the same time the price stabilizes. And all three of those metrics, if you like, will move in parallel. And they'll all gradually get easier. I remember a time of the internet with IP addresses. I remember a time with DOS and Unix command line.

I remember a time when sending an email, you needed to have those skills. And, you know, you just watch that progression of the technology. The most important thing is not only will these things happen, but the companies that build these things are building billion-dollar industries. So the company that figured out how to find things on the internet became Google. Some company is going to figure out how to make Bitcoin easier to use for addresses. Some company is going to find out how to make Bitcoin easier to use for retail, for music payments, for social media, for international remittances.

And each one of those companies is going to build a billion-dollar industry. Yeah, it seems like that is really the next step, figuring out a way to... Do you remember the IRC chat clients? You know, that's like uber geek shit, man. You know, I used to use those when I was in my Quake playing days. We'd all meet on IRC channels and we'd all be completely dorks. Yeah, that little thing that would do that. Train sound.

Yeah. I mean, there's things like that where only the Uber geeks adopt them and they just stay that way. Like IRC chat clients still to this day, you bring up IRC. There's people that are on irc right now the entire bitcoin development happens in collaboration over irc and there's a reason for that because it's global it's open it's transparent it's free and it's scalable and so no one has built a better chat widget yet yeah so my my yeah there really hasn't been, I mean, a Google Hangout, those things did, I mean, they were trying to come up with something along those lines, right? But it didn't really take, is that still around, that Google Plus? Eh. Sort of?

Kind of. I mean, it is, but I don't think, I don't know anyone that really uses it. It's hiding behind all the other Google products because it's now used as the main account and profile page i have a friend who's fucking she works at google she's an exec at google and you bring it up and she's millions of people use google hang out and millions of people are on google plus right now it's because they force you to sign up every time you like go to youtube and shit like that exactly in that way it's very similar to serious satellite radio subscription numbers because you know how when you buy a new car it comes with a car radio that has serious on it and you're subscribed for 90 days like we added 50 000 new subscribers right but how many of them are giving you any fucking money at all like how many of them are just

getting their subscription as a 90-day free trial from, you know, buying a Chevy or whatever? It's even worse than that because then they say we've got millions of subscribers on Google+. Well, you're a billion user company. So that means only one in a thousand is using it. I don't even think it's that many. I mean, I go on Google Plus every now and then. that many i mean i go on google plus every now and then and it's like a fucking it's like one of those buildings that they build in china where no one actually moves into them you ever see those uh yeah the empty mega cities the ghost towns that's what google plus is like i mean maybe i'm

wrong maybe i'm just tapping into the wrong google plus communities and i'm just missing a whole vein of interaction that's incredibly enriching and amazing and magical but i'm not seeing it now no but everyone's trying to come up with something like the irc like something that some or any other social media platform any any other place where people can communicate and and make it easy and make it less forbidding. And I think there's something about IRC that to some people it's like, oh, it's just too fucking crazy.

I think the new, where they take, at least with Apple and Mac, where they now have chat on your phone. Now, if you get a phone call, it will ring on your computer and it will ring on your computer and I will ring on your phone and you can always rings on your yeah you can set it up now with Yosemite or whatever the new operating system is that's annoying it is it isn't

like but it's great when your phone's dead and you just want to like answer a phone call real quick on you know you go hey what's up wait a minute wait a minute so if your phone is dead your computer will ring your computer will ring or your iPad will ring and you can will ring or your iPad will ring. What? And you can set it up for anything. But the thing I use the most is the chat now is on all of them. So I can chat on my computer like IRC and be sending you files and videos and stuff like that.

And I'll get it as a text message? Yeah, and you'll get it as a text message. And then I'll just go on my – Whoa. Yeah. The bad thing also with that is you go to work, and then you leave your iPad open, and your girlfriend can see every single thing you're... It's always your girlfriend.

What about anybody? Or your mom. Your mom. Senior dick pictures. Senior dick pics. Yeah, exactly. Now, if that's the case, can you use your computer to make phone calls if there's an internet connection, but there's no cellular connection?

Yeah, absolutely. And certain like T-Mobile does where you can be on your phone at your house on Wi-Fi and then leave your house and it will just jump to cellular service. So you're not using your minutes when you're at your house, but then it goes right to your cell service right when you leave your house. So it's handing off from Wi-Fi to LTE or whatever. Right, but that's amazing that they can do that because you remember how it used to drop off when you switched towers? Oh, yeah. It still does that on some networks. Really?

Yeah. So as you're driving down the highway, it still disconnects, and you have signals just switching from tower to tower. Yeah, the handoff technology is still pretty shitty in a lot of cities. That's crazy that they can use that technology to go from your cellular connection to your internet connection seamlessly. Yeah. But they can't figure that out yet. Right.

Google Voice does that for a number of customers, And it's a product they've never really advertised. I've been a Google Voice customer now for six years. It's a free service. I have a phone number that's Google, rings my cell phone, rings my desktop, rings every device I'm near. I can forward it and do all kinds of interesting things. Here's what happened there. You took a telephone call, which used to be a network, and you turned it into a content type that rides on top of the internet. So now it can ride on any network, right? So you separate the medium from

the message, you separate the content type from the thing that's running on top of it. And now you can take that same thing, a telephone call, and do it independent of telephone networks. It can be on the landline, cellular, Wi- internet connection anywhere you have tcpip and the argument i've been making about bitcoin recently has been this that what we're just doing that for money for the first time so up to now money has had networks and the type of money you use and how you use it and what it can do depends on the network. So if you want to do consumer to business you can use Visa, MasterCard or American Express. It's going to come with a certain specific fee, it's going to work only in some

countries, you can only move a certain amount of money. If you want to move money between banks you're going to use SWIFT, the Worldwide Interbank Fund Transfer. If you want to move money between checking accounts you can use ACH, the clearinghouse here in the US. So that's how you move money between checking accounts. If you want to move money between one of these things, then it gets complicated. So like if you want to move using a Visa card to a consumer, you can't really do it. You'll have to use a check, and things get really hairy hairy so you have these islands networks that can support small payments only or large payments only they can do fast money or slow

money that can do government money business money or consumer money and none of them mix so you can't switch between them well bitcoin does small and large, fast and slow, government and consumer, and it spans all of these networks, exactly like the internet took photography and moved it across all of the networks, took video, and now there's no difference between cinema, TV, all of these different formats, and took telephone calls and moved them outside of their own networks. Now we're doing that to money. It's a pretty weird thing because when you turn money into a form of communication,

it unshackles it from all of these restrictions. You can now do any amount in the country. You can send money to a person and not have any intermediary. You not have any third party. That third party's got to get pretty fucking nervous and what has been the reaction as far as like banks or propaganda or any negative a negative reaction from the powers that be about this possible technology um for the most part it kind of depends what kind of bank we're talking about because there are

different types of banks like there are banks that are primarily focused on consumer services checking savings payment systems then there are banks that are mostly about playing the market right some of the big six banks they they've actually pulled out of doing consumer checking city for example recently pulled out of 12 different countries, no longer do consumer banking at all. It's too complicated, has too many people involved who cause problems. With regulations? What is it? Well, no, I mean, it's not a very profitable business

because you have to deal with customers and they're fickle. But instead, if your only customer is the Federal Reserve and they give you free money, why on earth would you do consumer checking? It's not profitable. So some banks will look at Bitcoin and either think it's a threat, but most likely at this point still think it's a joke. Like they can't possibly imagine any way that this little experiment could ever threaten serious banking. Right. So now they're looking at like little kids that are trading marbles or something. Right. It's what I call the idea that a lemonade stand is going to threaten Walmart. That's what it appears to be to them. Then you've got banks that deal with consumer checking.

And I've talked to a lot of banks that look at this and say, for example, I talked to a bank in Brazil. And they have about 80 million people who have very little access to banking. And the reason they have very little access to banking is because the nearest bank branch to their location is 100 miles upriver on a canoe. Right? In the Amazon basin. It's the opposite of Bitcoin. It's one of the most, you know, sparsely populated countries in the world. So Brazil is an enormous country. It's a third of the continent of South America.

And some of the places are really, really very remote. But even though the bank branch is 100 miles downriver by canoe, there's a cell phone tower in the bush. There's a cell phone tower in the middle of nowhere. Why? Because you can airlift it in, you can plant it, you can put a microwave link that goes 20, 30, 100 miles, and you can power it with solar.

So they've actually planted cell phone towers. Now, if you could, so they look at Bitcoin and they think, you know what, the villages have a cell phone tower and they already have a Nokia 1000 that does text messaging. Can I use Bitcoin to turn that into a bank terminal? Now I can get 80 million new customers and give them banking that they've never had before. So some banks are thinking that way, right? Banks in South Africa, in Brazil, in India, in China, in Indonesia, in places where you have very sparse remote populations. And then there's other banks here in the US, the smaller ones. They can't compete on marketing. They can't compete on market size and economies of scale, and they can compete on buying politicians faster than the big banks. So they need a secret weapon.

They look at Bitcoin and they think, well, you know what? This is a settlement and clearinghouse network. There are these companies that do settlements that charge us 3%. Could we take them out of business? Could we disintermediate them? So there's all of these companies that are private but effectively have monopoly positions that do all of the clearing. The only banks know about them. The Depository Trust Corporation, Clearinghouse Corporation, which basically clears all equity settlement. So when you buy stocks on the stock market, you buy the stock and three days later, that goes through a batch process that clears that stock, exchanges the money and gives you ownership. That's run by a company called DTCC. That company charges a lot of money to do something very slowly and inefficiently. And the banks look at that and say, hey, could we use

Bitcoin to take DTCC out of business, to take Swift out of business, to build our own networks that don't have a middleman? Because to us, the bank is a third party, but to a bank, there's another third party, right? And they can take them out. That's fascinating. In a sense, what these banks can use, and even the people in Brazil that are setting up these towers can use Bitcoin for, is it's almost like an ability to send and exchange money without using the money itself. They do it through Bitcoin, and then that money can be transferred back and forth from Bitcoin to money, or to whatever their local currency is or not. Either that or use the underlying technology for Bitcoin to build their own parallel networks.

So just like, for example, in the first few years, the big phone companies were terrified of the internet and things like Skype because it threatened their long distance market. The smaller companies that didn't really have a lot of revenue from long distance saw this as an opportunity to link together calling cards and long distance offers and things like that and run backbones over TCP IP to cut their costs. So here they had a more efficient transportation network for transporting voice data. So now they could compete against AT&T. voice data. So now they could compete against AT&T. So even though the big companies may see it as a threat, the smaller companies see it as a weapon they can use in competition. It's fascinating that when you have companies that are worried about their businesses becoming obsolete, when technology renders almost anything that's not up to snuff obsolete. Do you remember when they used to have calling cards? They used to get a calling card.

You used to have to punch in the number when you would go somewhere and you would use the local pay phone. I mean, that's how you used to. Nobody has a fucking calling card anymore. Does anybody? Is it even one-tenth of one percent of the population that uses one of those fucking things? In the U.S., yes. But in the Philippines and Indonesia and Africa, there's a lot of calling cards. Really?

Because the main phone companies still maintain monopolies. But gradually, the internet has been breaking down those barriers and rendering even calling cards obsolete. Here's the interesting thing. The companies that are submerged in their existing technology paradigm, they're submerged in this technology that's becoming obsolete, they're blind to it. They cannot possibly imagine a time when this enormous edifice that they've built will come collapsing down. Kodak could not imagine the fact that film photography

would become obsolete. Because of phones. Because of phones. And the funny thing is, it wasn't a smart move by Fujifilm or Nikon or one of their existing competitors. One day, they were king of the hill. And a year later, a little company from Finland they'd never heard of became the largest camera manufacturer in the world, Nokia,

and started putting out more cameras than any camera manufacturer in the world in a year. That was the transition in 1995, and Kodak suddenly got competition from a completely unexpected thing. What did they do? They ridiculed it. They said, well, they're grainy, they're shaky, you'll never get a real quality camera photo out of that. People will still love their crisp, clear 24 exposures of film. There's artistic value to it, blah, blah, blah. And three years later,

they're facing bankruptcy. Now, after that happened. They went bankrupt? They went bankrupt. No, I mean, three years after the ascendancy of Nokia, they were facing bankruptcy, and eventually, despite all of their efforts to go digital and all of that, crashed

and burned. It's amazing. And this has happened throughout history. The companies that are best positioned, like, you would think that Kodak could do digital photography better than anybody else. I mean, they understood photography, they had the brand, they had the market recognition. Photographers loved them.

So why couldn't they make a play in this space? And history shows us that the companies can't. They can't turn around fast enough. They underestimate the risk. They overestimate the value of the old technology. And we see this again and again. Remember, you know, Tower Records, MP3s are never going to replace vinyl because vinyl has this depth and richness of sound, and people will always go for quality over this cheap, metallic, crappy digital music. Well, bye-bye, Tower Records.

Bye-bye. Blockbuster video. Bye-bye. And this happens. Blockbuster video. Blockbuster video. And if you go further back, you know, it's like people will not drive these internal combustion horseless carriages because they're dangerous. They're noisy. They're smelly.

There's no roads. There's no roads. There's no gasoline. Only crazy people would use them. Trust in the horse. It's always worked for you. It's worked for thousands of years. And the interesting thing is,

even though the companies that made horse buggies had all of the manufacturing to make buggies and could theoretically just pivot slightly, stick an internal combustion engine, they already had all of the relationships with the wheel makers, with the spring makers, with they understood how to build vehicle worthy road, road worthy vehicles. All of them went out to business except for one. Studebaker was the only after less than two decades. Studebaker was the only U.S. horse buggy manufacturer that survived the transition into the automobile i wonder if

it's possible at this point in time for bank manufacturers if if i mean you know people who are creating banks you know people city bank and bank of america to to look at all that it's is it possible to look at all that that history and see that you've got something coming up just like the nokia camera you've got something coming up like it might take a few years to to settle in but once people realize that you can do pretty much anything right now you can't but once you can start buying cars and what homes vac, paying for all these things with Bitcoin. How much money are people going to want to put in banks? How much are they going to want to deal with the idea of these third parties? And if that starts to happen, how about the fucking Federal Reserve?

That's where things get really squirrely. Because what is that weirdo fucking institution? That Jekyll Island fucking strange institution that we've been relying on for so long well um to your first point the people who are who are involved in the present day model of banking the three to five business days to clear your check the fees the banking hours the slow obsolete and inefficient they're never going to change that. And they're going to take that all the way to a bust. And the reason for that is because they can't possibly see a world

where the alternative really does win. And it won't happen gradually. It won't be like, oh, well, you know, Bitcoin's getting closer, or digital currencies are getting closer to taking our business. Maybe we should now start changing things it happens like with most technologies nothing happens for a while and the interest builds up and then one day something clicks something changes and the entire industry flips you know for kodak this happened in about a year and a half so the first camera phone came out and you cross the megapixel barrier

and boom, the entire industry flipped and nobody bought film anymore. And so, and especially with banking, the crazy thing is that there's 4 billion people out there who have never had banking. And that's great because they don't ever have to experience that mess. They can go directly to a digital currency. Just like they never had landlines, they went directly to cellular

telephony. And so you see this leapfrogging of technology. Now, as to the Federal Reserve, and most people don't even know what this is and how it works. The Federal Reserve Bank, the name is on the dollar bill. So it's a government organization, right? It's a government institution. No, it's not. It's a private company run by the banks that has the right to create money out of nothing and then sell that to the U.S. government in exchange for debt. And if that doesn't sound crazy to you, I mean, what does? That is insanity. And that

organization has the ability to create an infinite amount of money, set the interest rates between bank lending, and is completely independent of government control. And that was considered a good thing because government manipulated money. Now money manipulates government. That's incredible, isn't it? It's incredible they're allowed to use the word federal. I'm going to start calling my comedy federal comedy. It's a government approved comedy, but it's not. It's federal comedy.

Right. This is a federal podcast. What the fuck is federal is supposed to mean the federal government. That's what everybody automatically assumes. Right. The time in which the Federal Reserve was created is a very strange time in the history of this country. All of this is an experiment that's less than 100 years old. And I think in retrospect will appear to most people to be a failed experiment that made no sense from the very beginning. Well, it's a hustle. I mean, that's really what it is. It's a money grab on a large scale, an incredibly large scale, that includes the politicians that were involved in allowing it to form, the people that are allowing it to continue,

the amount of money that's being exchanged over between these banks the amount of influence these banks have the decisions that have been made directly because of the influence of these banks that have not benefited the american people in any way shape or form all those things when that's taken into consideration in history we're going to look back and go these were mad times these were crazy people and and the thing is, there's this illusion of stability. There's this illusion that because this system is so big, it can't possibly be fragile. But the truth is exactly the opposite.

It has become incredibly fragile. It is extremely overextended and extremely fragile. And you see the Federal Reserve at the moment has been pumping money into the economy like crazy for five years. And as they do that, you get diminishing returns. So every year, they put the same amount of money in, and they move the economy, they move the stock market a bit less. And then they put more money in, and it moves a bit less until they're putting money in just to keep it stable. Now, I've seen that pattern before. I mean, that looks like a cocaine habit. Right?

It does look like a coke habit. In the first year, right, the coke addict is snorting a lot of free Federal Reserve money and the stock market's getting really high indeed. By year five, it takes a big fat line of Federal Reserve money just to keep the stock market from crashing in the morning. And then one day, which happened in mid-October, the Federal Reserve turned off the tap a month ago. Federal Reserve stopped giving out free money to the banks. We haven't seen the effect that will have in the stock market.

But if you follow your cocaine addict analysis, right now that addict is jonesing for a hit and is really, really cranky. Yeah. So some bad things could happen. Yeah. They're about seven to eight months away from sucking trucker dicks. And that's really what's going on. I mean, they're about that far away.

But the amount of power that the bank has, that's the Federal Bank, the World Bank, the amount of power all of them have is really incredible. And it should have never taken place. I mean, the power is always supposed to have been something that was... You're supposed to have the people

who choose a representative. The representative looks after the will of the people. The people talk. They have discourse. There's debates and discussions. And we take into account social welfare and education and all these things that you would like your money to be distributed to. And instead, what you have is the money itself having this massive amount of power. And the people who print the money having this massive amount of power.

And generating, printing the money, but generating incredible sums of money because of the fact they print the money. Right. money which is when you see these fuckers these wall street fuckers that are living in these hampton these they have these houses in the hamptons that are i mean they're not they don't even look real have you ever seen some of those guys that i mean they have these a thousand fucking acres or hundreds of acres giant fucking palatial compounds and you find out what does this guy do oh he's just moving numbers around you got to realize joe they're not rich by world standards they're not rich the people who are really rich they own islands and countries and they don't even mingle with these little small time bankers here's here's the thing

sometime in the 20th century the this idea of governments being able to print unlimited money was considered the scientific approach to money. That if somehow we could control things a bit better in terms of tweaking interest rates and balancing unemployment and inflation, we could use the scientific method in terms of monetary policy. Because gold was too inefficient and you had to ship it across the waters in big barges and things like that. If we could use a scientific method for economics, we would see prosperity, and we would see growth and things like that. Instead, what happens, governments had the ability to print unlimited money. So now they could go to war without raising taxes. And what they did is they went to war again and again and again and again and again. And a lot of the money in the 20th century was pumped directly into war, war on scale that had never happened before and spending for

war on a scale that had never happened before. And now you end up with economies like the US, the US is addicted to war. We've been at war continuously since 1938, pretty much continuously in dozens and dozens of countries. And it is the machine that creates stimulus. So anytime the economy starts weakening a bit, we start another war and we get another enormous amount of stimulus money. another war and we get another enormous amount of stimulus money. In fact, we saw recently the third quarter and fourth quarter results for GDP are presumably a bit better in the US. And that happened to coincide with a massive influx of money to fight ISIS, you know, the latest bogeyman. By the way, ISIS is the same organization we funded against Hafez al-Assad just a year ago. So ally, enemy, very quick transition. And now all of this money going

into fighting a new enemy on a new battlefront. But none of that money is going to improve schools, roads, healthcare, or other things in this country. The government gets to print money, they use it for war every time throughout history. And so the fact that governments were freed from sound monetary policy and were given the ability to print infinite money has ended up being a scourge on humanity. It's ended up creating war just for profit, because you don't need to tax people to go to war,, because you don't need to tax people to go to war, and now you don't need to conscript people. You can make it just the only employment opportunity that exists in some states. And bingo, you've got remote-controlled, highly profitable

war that doesn't affect the vast majority of the population. And that has become the new form of economic activity. That's one of the reasons why I think that the same reason why states can't be trusted with religion and you need separation of church and state because when they take religion they use it as a form of power to beat down people for the very same reason you need separation of state and money. When state and money became one, only bad things have happened. And we need to go back to some of the earlier times. In fact, that's the weird thing about Bitcoin.

It's this tremendously futuristic technology, one that neither Star Trek nor Star Wars, nor the Jetsons predicted. Like all of these truly disruptive technologies, it wasn't even imagined in sci-fi. But its origins and its basis is actually pretty conservative and traditional. It's the idea of money by the people and for the people without it being nationalized state money. Ben Franklin, as one of the founding partners, founding fathers, was a printer, right? His main business outside of, you know, being a revolutionary, one of the founding fathers, was he ran a print shop. He printed stuff. He run a whole empire of print shops all across the United States.

And one of the things he printed was money. Because at the time, money was made by banks and by states. So it wasn't made by the federal government. The federal government didn't have one money, right? Every state had its own. Virginia money, there was New Hampshire money, there was Maine money, there was Rhode Island money, there was New York money. And there was also corporate money being printed by companies. New York money. And there was also corporate money being printed by companies.

And that was one of the main reasons that the British crown was pissed off. It was because all of these little free state money printing operations were sucking taxes out of her queen's money. A big part of why the war started, right? Ben Franklin was the original peer-to-peer money printer. That's funny. And now Bitcoin is doing that again, only in a digital form. And governments tell us that can't possibly work. What I would say the evidence is the opposite.

In fact, that worked pretty well for many, many centuries. And this current model is less than 100 years old and has resulted in perpetual war and terrible inflation, unemployment, and depression, that model can't work. Well, that model, not only can it not work, the people that are a part of that model actively campaign against it. I mean, everybody that runs for president talks about how they want to stop war. We're going to pull out of Afghanistan. We're going to close down Guantanamo Bay. We're going to do this and do that. We're going to pull out of afghanistan we're going to close down guantanamo bay we're going to do this and do that we're going to bring back peace but meanwhile the very machine that puts

them into place is a machine that that's that relies on war it needs war and it's one of those things where you have a path that is so deeply carved into the ground that it's almost impossible if you're traveling next to it not to slide into it right becomes just this this there's money it gets generated this is a way to get that money this is a way to figure out a way to put it all together and it's just it's a pattern it's a pattern that's repeated itself over and over and over again to the point where something disruptive has to be introduced into the system excuse me in order to stop that pattern and create something new. And we begin to see that because in the past,

even the very communications of political campaigns and elections were channeled through a few very narrow-and-dark channels like TV, right, and radio. And those gave the gatekeepers a hell of a lot of power because if they didn't like political candidates, they could just silence them. What the internet did, not successfully yet, but what it started doing is changing that equation and allowing candidates who otherwise wouldn't have a voice to have a voice. So, for example, the RNC broke their own rules at the convention in order to keep Ron Paul from speaking back in 2008, right? But they couldn't stop him from speaking and

raising a lot of advocates and followers on the internet. They could keep him off TV, they could keep him out of the debates, they could keep him out of the convention by breaking their own rules, but they couldn't keep him off the internet. And so the internet allowed candidates to communicate directly with their constituents. Well now, with internet money, you have the negligible, trivial, compared to TV spend. And then a couple of candidates started changing that. Howard Dean started running an internet-based campaign. Ron Paul ran an internet-based campaign. And even Obama himself eventually ended up using the internet to run his own campaign.

And suddenly the internet had influence in communications. You're going to start seeing some politicians taking Bitcoin and other digital currencies for their campaign finance. And at first, we're going to laugh at it, right? It's going to be ridiculous. It's going to be like a lemonade stand taken on Walmart. And then give it a decade. eliminates then taking on Walmart and then give it a decade. And you could see a significant shift in the source of money for campaign contributions. I think that's, you know, kind of interesting what could happen there if you shift both the power of communication and the power of fundraising

for elections to the people. Well, and whenever you have new variables that people start adopting, they get thrown into the system and become a part of the system and then become commonplace. It shakes things up. I mean, just like the cameras that Nokia created, just like the Internet itself, essentially 1990, what, four-ish, people started adopting it. I mean, when was like, what was that back then? It was CompuServe and AOL, just a few companies. And Netscape, followed by Yahoo and AltaVista, which started creating things that were more interesting. And that's 20 years.

It's a blink, a blink in time. And the world has changed so incredibly much, so much different than 1994 when it comes to access to information. It's impossible for someone who is growing up. You talk to a 20-year-old kid today and explain to them what it was like to be a 20-year-old kid in 1985, and they'll laugh at you. They can't imagine the world. How could they? Yeah.

How could they? Right. When I try to explain what it was like for me to be 20, I was like a monkey. I was like some dummy with books. That was where you got your information, from books and from things that you would see on television, that were on television. You couldn't stop them. You couldn't rewind them. You couldn't DVR them.

The idea of information has shifted so radically to Google on your phone. I mean, that is, that's so Jetsons. It's so beyond anything anybody comprehended. But Jetsons never imagined that. That's the interesting thing about it is that if you look at some of these disruptive technologies, things like the Jetsons and Star Trek and Star Wars and things like that, they anticipate the current technology and they just extrapolate it linearly. And if the person is really a visionary who comes up with it, sometimes they take a slight twist and amplify one side of it and create something exciting. And then they miss the simple things. They miss the really obvious things. Like they figured out mobile communicators, but they didn't figure out email or social media. I was

talking to someone who was saying they wrote a book on the Jetsons, Jeffrey Tucker from Liberty.me. He was saying that, you know, one of the fascinating thing about the Jetsons is that they would have flying cars and pneumatic tubes and robots and all of these things. But when the kid took a note from school back to his parents, it would be written on paper. Yeah, because they couldn't imagine email, whereas it seems obvious to us now. It wasn't simply a continuation of the past. It didn't have, it was completely new. And all of the really interesting technologies are ones that don't just take what you have now and extrapolate that they break that mold completely and and you see like look at star trek right they just gave up on money

they just gave up they just don't talk about it at all there is no money in star trek that's so true they just why are they fighting so much? What are the Klingons looking for? Like crystals, right? Well, I mean, there's energy. Everybody wants crystals. There's all kinds of things, but they kind of gloss over money entirely, and that's because money is a difficult technology to imagine where it's going.

And the same thing in a lot of sci-fi. You don't see social media. You don't see email, and you certainly don't see digital money as much or if people see digital money it's effectively apple pay right you have a thing and you go and it pays in galactic credits but that's not very imaginative that's just our current money on a phone right, they're just using placeholders. Right. But the truly interesting technologies start happening when you break that mold and you create forms of money

that didn't exist before and ways to use money that didn't exist before. So the ability, for example, one of the really revolutionary things about Bitcoin that I find fascinating is the ability for machines to own money. So up to now, only people can own money, or through legal fictions like corporations,

groups of people can own money. But machines cannot own, operate, and exchange money on their own. Software systems cannot own money on their own. They have to have a human paying for things, right? So think about this concept, which is being discussed a lot in the Bitcoin community, called the Distributed Autonomous Corporation or Decentralized Autonomous Corporation or organization, DAO, DAC. Imagine a software agent that is able to maintain a Bitcoin balance and uses that to pay for its own hosting on, say, a web service. So you... So it rents its own computer power. So you essentially empower the software company, servers... You write software so that it can manipulate a Bitcoin account and then use that Bitcoin account to buy hosting to copy copies of itself onto that hosting.

Isn't that like auto-pay similar? Hang on a second. Now imagine taking that a step further. Now imagine if that software system could create two varieties of itself, like by making a small change. And one variant of the software gets hosted here and one variant gets hosted there, and so it does an activity, like it creates content on blocks by aggregating news and sells advertising for Bitcoin. And if this one's successful, it buys more hosting for itself.

And if this one isn't successful, it shrinks the amount of hosting. So now you've got almost a fitness function evolutionary effect going on. So now the most successful versions of the software grow in size and fund more of themselves. Now I could go out on Craigslist and hire some software developers to make its software better. You've essentially got an autonomous agent that's acting with money to propagate its own existence. That's never happened before. And I don't know what you could do with that. Probably some very weird, some very bad, some very good things all mixed together.

But it opens a door to something that is completely crazy sci-fi level and when you take that and you connect it to uh i'm sure you've been paying attention to the elon musk statements that he's made recently about artificial technology that it's uh you're summoning the demon you know and he believes that within five years i mean this is ordinarily i would read things like that and go some crazy futurist guys really not doesn't have his finger on the pulse of the actual technology itself but when you got a guy like elon musk who obviously is a fucking super genius and he starts saying things like that you might take into consideration hey maybe this guy is thinking about some possibilities some variables that other people are just trying to ignore because we ignore a lot of variables automatically we ignore the variable that we're going to die. We like to ignore that one.

We sort of know it exists, but we try to put it away. We ignore the variable that the Earth itself doesn't have a very long life. I mean, in terms of cosmic viability, we've got another billion years and we can't support life anymore because the sun's going to be too hot. It'll fucking eventually supernova. There's only a certain amount of time for everything right now when you're creating intelligent life forms and you are in creating essentially some sort of autonomous physical thing that is going to be able to think for itself. You're going to have some sort of thing that can mimic thinking

or actually has the ability to think, propagate ideas, push forth its own agenda, and do that on its own. And it has Bitcoin. It has money. It can think, and it has a bank account. And it can think how to generate income. And it can think of what it could do with that income to ensure that

it keeps its existence well there are ways you can think about it and you know for the time being the amount of action such an entity could take in the physical world is very limited it needs people to act as its agent so so some of the applications you can put it to are really interesting for example you can create a distributed charity organization that has charitable members and builds an endowment fund, and then can use a vote among its members to execute charitable action. So you can essentially have a corporation that is programmable, where it doesn't depend on what a board of directors does, that is programmable, where it doesn't depend on what a board of directors does, but instead it has a code basis, and all of the shareholders get to vote directly on what that does. And all of the members say, oh, there was an earthquake in this place in the world. 75% of the members voted to

send part of the endowment for charitable contributions. And now you have a charitable organization that acts directly in the interest of its members and contributors without any influence by a board. That's kind of an interesting concept. You can use transparency and accountability and governance in interesting ways if you do that. There's a whole section of development here called Bitcoin 2.0. And the 2.0 version of Bitcoin, and I hate the term 2.0 because, you know.

It's so overused. It's so overused. You know, Web 2.0 with social media was kind of a deviation from the standard pattern of making publication-centric sites to making people-centric sites. publication-centric sites to making people-centric sites. So Bitcoin 2.0 is moving from currency-centric applications to contract-centric applications, where instead of running a currency on the network, what you're running is a contract. It's basically a piece of code that can execute contracts,

such as an agreement between two people to buy and sell a house. And you can now take that and run that as a contract on the network. And it can handle not just the payment, but also the registration of title, the escrow, things like that. You could have a contract. Here's one other application. There's a company called Airlock, which makes a digital lock for Airbnb locations. A brand new company based on the Bitcoin 2.0 technology. And the idea here is that you put a digital lock on the door, and when you sign the contract to rent an Airbnb location, or something that acts like Airbnb, you send a payment of Bitcoin,

and the payment itself authorizes the payer to unlock the door. So the same Bitcoin keys you use to make the payment now authorize you to open the door to that property so you can go and enjoy your stay for as long as you've paid. So you've combined a smart currency with a smart contract and a smart asset, which is the door lock. So now you can open anything. Another company has built a fluid dispenser. So it's a fluid dispenser where for a fixed price, you can buy a certain number of gallons of something and then dispense them simply by sending a bitcoin payment to that pump essentially you can imagine this for a gas pump a water pump a hydrogen pump you know whatever you

want anything that you can pump oil high fructose corn syrup coffee whatever and it's regulated by the amount of bitcoin that you've spent yes so there's a ratio of milliliters, liters, gallons, fluid ounces, or whatever you want the unit to be, and a price for that particular substance in that particular volume. And you pay for the volume, and you then put a cup or a car or bucket underneath and dispense.

Have any gas stations adopted Bitcoin yet? No. That would be fascinating. But you can see where the possibilities go oh yeah finally um there's there's this uh concept of smart property which i think we touched on before now uh in june of this year i sold my car for bitcoin and that in itself was a very instructive um transaction because if you want to sell a car, you have a couple of really big risk areas. If you're the buyer, you're going to a transaction with a whole bundle of cash with you, right?

And that means you can get robbed. And so it's pretty dangerous when you're buying a car. You don't just randomly pick up an ad and go to a remote parking lot with a bundle of cash. That's how people get killed, right? If you're a seller, if you receive cash, you've got to make sure it's not counterfeit. And most people can't tell the difference. So there's a big risk that you're going to receive a bunch of money, but that money isn't going to be real. give your car away you have fake money you're in trouble now or if instead of taking cash you want to take a check that check could bounce if it's a bank draft it could be forged if it's a money order it could be faked so what you now

need to do is arrange to meet the car buyer near a bank branch go in with the car buyer near a bank branch, go in with the car buyer, have them deposit the check or bank draft, have the bank validate it, have the bank confirm the amount. Now you can only do this between 9 and 4.30 in the afternoon, Monday to Friday. I sold my car at 11 p.m. on a Wednesday night, and I sold it to someone who wasn't in the same state as I was. Buying the car on behalf of his brother, who was a student in the state where I was, California. I meet the brother. They do a test ride. They call up their brother and say, yeah, I really want to buy this. Can you send the Bitcoin? I send them the Bitcoin address. We're in a parking lot in the middle of the night.

They're not worried I'm going to rob them because they don't have any cash on them. I'm not worried they're going to cheat me because I'm going to see a Bitcoin payment. So easy peasy, really late at night. The brother does the transfer of Bitcoin. I tell him, okay, wait here. I'm going to go grab a sandwich. I'm going to be back in about 45 minutes. Once the Bitcoin transaction is confirmed fully and settled, can be reversed, nothing. I'll be back 45 minutes later, sandwich done. I'm back. I give them title and key and they drive away. Transaction was safe. It happened outside of banking hours. Now here's the twist. Bitcoin 2.0, you know, a lot of cars today have digital ignition systems, electronic ignition systems.

So your key isn't just a metal key. It's also a radio transmitter that has a special chip inside it to identify itself to your car. So if you just, you know, break the lock with a screwdriver, you're not going to start the car because the electronic ignition system is not going to recognize your key and it's going to say, no, sorry, right? So the key itself is a digital key. Imagine if you could do the following. If I make a transaction that transfers money, Bitcoin, to the owner of the car, and the owner of the car in the same transaction transfers a digital token back to me.

And that digital token unlocks the car. So now I execute the transaction. The owner receives Bitcoin. I receive the digital token. I get into the car. I push the start button. And because it can recognize that I have that digital token, the car says, oh oh you're my new

owner welcome and i drive away from getting hacked well that's the beauty of it the security isn't in the phone right that's what the bitcoin network does it offers completely decentralized security so in order for the bitcoin to be received by the owner and the token to be transferred to me that transaction has to be verified by the owner and the token to be transferred to me, that transaction has to be verified by the Bitcoin network. And that Bitcoin network puts an enormous amount of computation behind it to make sure it's secure. Who's running that network? All of the participants.

So like right now, when you did this car thing. Yes. How long ago did you do this? This was in June. You said it takes about 45 minutes for everything to... It took 45 minutes to settle. I saw the transaction instantly. Seconds, right?

Seconds. And then I needed to make sure that it couldn't be reversed. For example, when you deposit a check, your balance updates immediately, but it takes three to five days to settle. In Bitcoin, it takes six confirmations, which is 60 minutes on average. In my case, it took about 45. The network was running a bit fast that day. So when that happens, you say everyone on the network, so you're talking about all the people that are mining Bitcoin?

All the people that are mining Bitcoin are participating in securing it, and everybody else in the network also independently verifies it. So after 60 minutes, everyone on the global bitcoin network knew that that bitcoin for the car was now mine and that is done how like what is the the actual process what is it that goes through so you you get the bitcoin it goes on to your phone then it gets verified what What's happening? How is it getting verified? So what the network verifies is it verifies that Bitcoin was transferred to an address that I control. And in that transaction,

there's a signature by the original owner. And that signature transfers an existing chain of Bitcoin. And the network verifies that the Bitcoin that they're transferring to me exists and has not been spent and has already been recognized by the network. So it's basically building a backwards chain.

My Bitcoin exists because it was properly signed from a piece of Bitcoin that the person who sent it to me existed, which was properly signed by the previous owner, which was properly signed by the previous owner, which was properly signed by the previous owner. You go back in time, back to the point where that Bitcoin was properly signed by the previous owner, which was properly signed by the previous owner, you go back in time, back to the point where that Bitcoin was mined for the first time. And because the network validates that entire chain,

once it's validated it, now I can spend it because I can sign it over to someone else and they can trust that that Bitcoin is good. And it's some complex math, but you know, here's the point. If I tried to explain to you how a webpage loads on your browser, I would have to spend 20 minutes describing the border gateway protocol routing algorithm that takes the TCP IP packet that your browser sends,

uses the IP address to recognize the global route, also known as an autonomous system, and based on the subnet of that autonomous system, sends that packet to the nearest routing system where a routing table routes it to the next router, et cetera, until it arrives at the web server. The point being, you don't see any of that. Not only that, I would still not get it, and I would just nod and pretend I understood what you're saying. Like a dog, you're showing card tricks, too. But it's the difference between using the technology

and understanding exactly how it works. The truth is most people don't even know how to grow a cucumber, let alone how a web server works. Well, even if they know how to grow a cucumber, they probably have no idea what is going on inside the cucumber that's turning a seed into a piece of vegetable. But you can still eat it and you can still use a web browser and you can still know the simple rule, which is this. After six confirmations of my Bitcoin transaction, I can

trust that I've got that money in my account done. So at that point, I can give the key over. Even better, if you take that to the Bitcoin 2.0 smart property, my car can recognize that it has a new owner after six confirmations. The car itself can independently calculate and say, this transaction that transferred my title as a car to a new owner has had six confirmations, therefore I have a new owner. And if that owner shows up with a key, I will drive them away. I will start my engine for them. And now the property itself, the asset, is smart enough to track its owners through a chain. And that means it's much, much harder to steal that car. Is this something that the car dealers or creators of the cars would have to implement their own operating system or would this be using the same bitcoin operating system inside the actual car for it

to recognize you would be using the handoff yeah you would be using the block you would replace the part where the car recognizes a specific key so hang on a second yeah i have a little key that when i get in my car so you've got this kind of, this key actually has an RFID chip or some other challenge response mechanism in it. So instead of the ignition system interrogating this key, the ignition system would interrogate an ownership record on the Bitcoin blockchain. When you see something like Apple Pay with the thumbprint security and stuff like that, do you see in the future Bitcoin adopting some of those kind of, you know? Bitcoin can do NFC already. So it can already do the same thing as Apple Pay. The big difference is you're not putting 300 million credit cards into the ownership of a single company that, you know.

Lost Jennifer Lawrence's butt pictures. Right. Yeah. Exactly. So, exactly. I mean, that represents a systemic risk. And that risk has nothing to do with whether Apple is good at what they do or not. It has to do with the fact that credit cards are broken by design. The fact that the number on a credit card that you give to every merchant allows them to go back into your account or anybody who grabs that can go back into your account.

That's a broken design. Essentially what you're doing is think of your credit card as a password, and you're telling the password to everyone when you buy something. You're giving people a key. Yeah, exactly. You're giving them a key to your house. Right, whereas Bitcoin is fundamentally different, because when you sign a transaction,

they can't change that transaction, and all they can do is take that amount for that payment. Well, that was why the issue of banking online or doing anything online was a huge deal just a decade ago. Anybody would talk about buying. I used to buy things online in the early 2000s, and people would look at me like I was crazy. I'd buy a T-shirt online.

Use your credit card online? Because it depends on a centralized model of trust, where you have to trust each intermediary in the chain. That's one of the magic things here, which is that on a credit card, if I transmit my credit card from here to there, that has to be encrypted. Then that system transmits it to a merchant processing system.

That connection has to be encrypted. Then the merchant processor transmits it to the originating bank, that has to be encrypted. Everybody keeps a copy of that credit card number on a database, that has to be encrypted, surrounded by firewalls and monitored 24-7, because otherwise Target, Home Depot, JPMorgan Chase, you know, again and again and again we see these hacks. When I transmit a a bitcoin transaction there's nothing secret in it i can transmit it over unencrypted wi-fi i can send it over bluetooth i can play it as a music tone i can send it as a series of skype smileys that's my latest example i can encode a bitcoin transaction as 15 emoticons in skype and send it it doesn't what anyone can it's just send it as a song like you could send someone a million dollars in Bitcoin through a song.

Yes. Like send them Pink Floyd's money and have Bitcoin, a million dollars in Bitcoin encoded in it. It's just a message. And the message itself can't be stolen. So that's the beauty of it. Now, there's a protocol for phones called Chirp, which converts data into a sound. And you can go into a store that supports

Chirp, and there are implementations of Bitcoin for Chirp, where you go up to the merchant and you press a button on your Bitcoin wallet and it goes... And that's your payment. It should always go... Instead of a cat sound. Well, yeah, it's a little modem.

It's like a modem, right? Do you remember the old modem screeching? Yeah, exactly. 14.4 baud. I had one of those bitches. Damn. Old school, son. Sending money where you don't need to encrypt the money

means that you can transmit it over anything. So you've opened up all of the communication media. When the merchant receives it, they don't need to protect it because if they have a bunch of Bitcoin transactions on their database, those are the same Bitcoin transactions that are on the public ledger. I don't need to go to the merchant. I can look them up on the public ledger. There's nothing secret about them. Everybody knows what they are. And so you don't have to hide them. They can I can look them up on the public ledger. There's nothing secret about them.

Everybody knows what they are. And so you don't have to hide them. They can't be forged. They can't be stolen. There's no information by the consumer transmitted. That actually becomes, I mean, correct me if I'm wrong. I might be thinking about this incorrectly. But if someone sends you, like say, like, you know, that U2 album that got stuffed into everybody's iPhone?

Mm-hmm. If somebody sends you an album, those songs themselves, you can have those songs have the actual value of the song embedded as Bitcoin. Like it could be a thing that you have. Yes. And instead of it being something you can copy money is content but you know i'm saying yes if it's completely embedded and and intertwined if they're symbiotic if it's something that cannot be copied like you can't take like say the big issue with digital downloads is that you make an album and someone rips your album, puts it online, and anybody can make infinite copies.

But if it's digital money incorporated into the actual song itself, then that cannot be done. Each individual one would be something that is unique and unto itself. Does that make any sense? Possibly, although you could probably just strip out the music and then copy just the music sound. That's like DRM, right? Yeah, exactly. Yeah, it's like DRM. So it's not really useful for DRM, but you can now embed money as a content type.

So people who say, you know, we're going to stop Bitcoin transactions from being transmitted. A Bitcoin transaction is 250 bytes of information. Skype has 128 smiley emoticons. That means I can convert a Bitcoin transaction to 16 smileys. And as long as you have the same code on the other end to convert them back to a Bitcoin transaction, and you have access to a Bitcoin network, I can send you the 15 smileys. You can take them, turn them into a transaction, put them on the network, and that transaction will go through. So it's a code.

I could be living, it's a code. I could be living in the most oppressive country in the world. And as long as I can transmit 15 smileys across my border, or 24 words in English, 24 words in English or some pixels in a picture or you know, a slight modification of the red coloration of the Mona Lisa in a JPEG. I can transmit money.

Whoa! Porn can be money. Any information can be any information. You can put a song in a picture, you can put a picture in a song, You can put a song in a picture. You can put a picture in a song. You can put a video in a... Do you see what I mean?

Right. So now money is one more type of information that can be transmitted across any communication medium that can support the transmission of information. Because that was an issue that we were having with uploading things to iTunes and including the image of the actual podcast image itself, image itself right weren't we having an issue with that yeah older mp3 players didn't understand extra information right they didn't understand the the digital and information

of the photograph of the you know the cover cover art right which is a matter of simply being able having the right encoding and decoding on the two ends of the transaction but um yeah here here's another really cool one you can now create a bitcoin wallet as represented by either 12 or 24 words from an english dictionary specific dictionary it has i don't remember how many words it has. I think it's like several thousand words. Specific dictionary of words where each word has a specific number. And with that dictionary, if you have that dictionary,

which you can download as a PDF and it exists online, 12 words create a Bitcoin wallet. So it's not just a matter of transmitting a single transaction. You can transfer the entire contents of your wallet or backups your wallet as 12 English words. So now, potato, asparagus, army, caravan, door, carpet, screwdriver, lemon, ficus is a wallet. And if I say those 12 words to someone who knows that it's a wallet, they can take that

to recreate not just one transaction, but all of the transaction, all of the addresses, all of the money that's in that wallet. I can transfer the entire account or millions of accounts under the same system in 12 words. That's fucking insane. Where can I put those 12 words words i could spray paint them on the wall i could put them on a poster i could transmit now obviously that's a secret you don't want to tell everybody but but i could just simply send you a book and then send you a series of coordinates you know page 35 second word first paragraph and now you have a bitcoin wallet in

the form of a book. I just think it's incredible. You could send me a photograph. Like you could be on vacation and send me a photograph and Bitcoin money could be embedded in the information of that photograph being sent to someone else's phone. In just a slight hue variation in the red coloration of a photo, yes. That's amazing. Or any of the colors. You could just modify a couple of the pixels. You could do that with anything, though, if you have the code.

It's just like Morse code. It's called steganography. It's secret writing within some other form. And it's been done, actually, for a very long time, for centuries. Well, that was an issue with, supposedly, with Osama bin Laden and how they were transferring information online, they were doing it through JPEGs, right? Wasn't that like one of the big ways that they were...

Among, yes, among others, I think they used, actually the first people to do this were Franciscan monks who would write, you know, copies of the Bible and then they'd write it so that the first letter of each sentence vertically spelled something else. So they put a hidden so that the first letter of each sentence vertically spelled something else. So they put a hidden message within the Bible. So it goes back a bit further than Osama bin Laden. Isn't that like some part of what the Da Vinci Code is based on?

Yeah, secret writing is an old art. Well, I mean, that's essentially how they got away with transferring information during the World War I, World War II era, right? When they were like, dee, dee, dee, dee, dee, dee, dee. They had to decode a lot of what their Morse code was, what they were actually saying. Mm-hmm. Yeah, all that I knew, but for whatever reason, this has blown me away. This idea of taking information, embedding it in either a song or a photograph, and that becoming a Bitcoin transaction.

Yeah. That's freaking me out. And you could put it anywhere. You could put a Bitcoin transaction into anything. So, for example, imagine if you have an oppressive government and they're trying to block all external internet communication. How about imagine if you don't? Is there a fucking government that isn't oppressive anymore? Okay.

You know, I mean, imagine an oppressive government. Imagine one that's completely banned all internet, right? And you've shut down the internet and you want to do Bitcoin transactions in that country. You're really motivated, right? You want to buy spray cans to spray your revolutionary message on the wall. Let's use a non-violent example. So now what you can do is, as long as you have a country next door that has a shortwave receiver with someone willing to put messages on the Bitcoin blockchain, you could transmit a Bitcoin transaction over shortwave, like Morse,

with a radio. And you could do it in a matter of seconds. So you could make your entire transmission in 25 seconds. So now you start going into, they did this in France. During the Nazi occupation, the Allies dropped tens of thousands of shortwave radios with parachutes to the partisan resistance, the French resistance. And the partisans would, you know, go out into the middle of the woods, hook up their radio antenna to a rail line,

a railroad line, a long piece of steel that acts as an antenna, burst the shortwave transmission, transmit for a few minutes, disconnect, disappear into the woods. There's no way you can find them or stop them or do that. They could do that with money. Wow.

That is fucking wild. That's a, boy, that's something I never even took into consideration. And that's something once money starts being adopted by more and more companies and more and more people start using it for more and more transactions, that's something that could be real paradigm shifting there's a i mean that's the this is the idea of the rabbit hole you know bitcoin is at first it strikes you as something very simplistic it's a series of digital information it's some numbers and you send them and you and you make a transaction and so it's money as email okay fine but then if you go deeper and you see the the way it's structured without

no intermediaries the way it works is a decentralized network the way it turns money into information the more you think about it the more you go down the rabbit hole the more you realize that structures and constraints that exist today are wiped away, are blown away by this thing. And it opens up these possibilities. And the really interesting ones are the ones we can't imagine. The ones that are not an extension of what we do today. Right. But are completely novel, have never happened before.

In a sense, it parallels the internet itself in that regard, right? And that's the main argument I'm trying to make. That this is not money for the internet. This is the internet of money. Whoa. It is a platform on top of which you can build applications. Currency is just the first app. There will be more apps. There'll be stock apps and bond apps and smart property apps. Okay. So to use the internet as an analogy, like what year are we in? Are we in the 1995 of the internet? My estimate has been consistent over the last year.

I've been talking about this being the 1992 to 1994 period. The interfaces are pretty rough. The major paradigm shifting companies and innovations haven't happened yet. The web hasn't happened. We're still on IP addresses instead of DNS names. That's why the Bitcoin address is not... The real dramatic user interface hasn't been developed yet. Right.

It's gnarly. It's weird. It's esoteric. It's geeky. Most people haven't heard about it. The big money hasn't come in. But all of the technology potential is already there. And the adoption has already reached technology critical mass, meaning that

as someone said recently at the conference, we're not the early adopters. We're the lunatic fringe. The early adopters come later. But we're beginning... I gotta turn higherprimate.com Bitcoin. I'm writing a note right now. You can. Just use PayPal. Yeah, you might be able to

just do it by turning on PayPal now. I don't know if their beta program is ready for that, but it's not that hard. They fucking better, sons of bitches. And I'm going to get on it as well. Get on it to start going. I can't do anything about Comedy Central, about my new special, but those things, I can do something. I don't know, man. those things, I can do something.

I don't know, man. You have, as a content creator, I think you'll find that publishers are open to new, exciting, and out there ideas. I think you have the opportunity to go chat with some of them and say, hey, you want to try something new? I definitely have the opportunity to chat to them and then they go, oh, there's that fucking pothead cage-fighting commentator idiot who's covered in tattoos. Let's just not listen to him and keep making millions. there's that fucking pothead cage fighting commentator idiot who's

covered in tattoos let's just not listen to him and keep making millions get out of here kid they're not gonna listen to me that's certainly a familiar sentiment for me because i felt that before you can now pump gas for bitcoin in the rocky mountains powerful rocky mountains where is this that's happening uh gas station in greeley colorado of course it's called the cosmic market well you know it's interesting greeley colorado is one of those towns that doesn't want marijuana they're those fucking dummies there's one of the towns that's trying to keep marijuana out because yeah well you know they're worried that it's going to be a bunch of hooligans and ne'er-do-wells meanwhile that has changed colorado in a goddamn dramatic way it was beautiful being

back there and seeing all the businesses that are spawning out of this this legalized marijuana movement and again it's another it's another example of what happens when you give people freedom. Can you buy pot with Bitcoin? God damn, that would be revolutionary. Really? Oh, absolutely. Does LA Speedweed use Bitcoin? No, I don't know.

Gino needs to get on that shit. You could buy gas cards also at coinfuel.com. You can buy any kind of gas card. Any kind of gas card with Bitcoin. Did you know about this? Yeah, so the real question now is can you buy x with bitcoin directly or can you buy x with bitcoin via an intermediary that's the only difference because you can pretty much buy anything with bitcoin now the question is how many conversions do you do do you need to convert bitcoin to a currency or

a gift card right or a reward point miles or something else system or some kind of customer loyalty program or does someone else buy the product for you and you give them bitcoin an intermediary or can you give bitcoin to the merchant directly so there's all of these shades right but in terms of can you buy x with bitcoin the answer is yes there's an escort for bitcoin time still not open yet escort for bitcoin theybitcoin.com. They're trying to figure it out. Meanwhile, those are some digital bitches. They're very shady. But you can trust them. You know those aren't

undercover cops because why would they go through the exter like, hey, we're going to make an early Bitcoin guy. Because they're trying to crash Gamergate. I don't know. They'll be the first digital STDs that you get. They'll get into your Bitcoin wallet and funk it all up. I think it's amazing.

I mean, since you started coming on here, which was over a year ago, so your very first appearance, we've seen quite a shift in the accessibility of Bitcoin, the ability to buy things with Bitcoin, the people accepting Bitcoin, the acceptability,

and the discussion of Bitcoin has escalated. It's elevated. I think the discussion is less about, I think there's less ignorance and less just blatant misrepresentation. So a year ago, I was having these discussions and people were asking questions like, well, why can Satoshi Nakamoto just come in and take all the Bitcoin? And, you know, won't this only be used by terrorists and pornographers? My people.

And, you know, that was the conversation. Now we've elevated a bit. So the funny thing is that people are beginning to recognize that they can't simply dismiss Bitcoin out of hand. So what they do is they try to split hairs. They're like, yeah, well, you know, the technology of the blockchain is really fascinating, but Bitcoin, the currency will obviously fail. So they're splitting hairs now. Give them another year, we're going to come around. Of course, those of us who have been in this for a while understand that the technology and the currency go like hand in hand. You can't have a successful technology without a valuable currency and vice versa.

But you're beginning to see the naysayers try to split hairs because they can no longer say there's nothing there. They can no longer say this is just a joke because many, many very smart, intelligent, well-educated, well-informed people are saying, hang on, this isn't a joke. There is something interesting about this technology.

There is something disruptive about this technology, and we're looking into it seriously. And after you see a bunch of, you know, we shouldn't do appeal by authority. This should stand on its own. It either is or it isn't. But the truth is that in our culture, we do appeal by authority. When PayPal comes along and says, there's something here and we're going to invest in it, Overstock, Dell, Tiger Direct, one after the other these companies turn around, you say well these are not dumb people. These are not people who don't understand money. These are not the lunatic fringe anymore.'re the early adopters and the conversation has changed do you remember when we did our first show apple

banned bitcoin applications yes oh they reverted that yes four months ago five months ago they had to change their stance and now there are dozens of bitcoin wallets and i predicted that they would switch you did predict that but i read that the reason why they did was because there was some fuckery involved in the actual coding of the software itself and that they weren't being entirely accurate about what the software was capable of doing. Oh, there was a, I mean, when they were being very difficult about Bitcoin applications, a lot of the Bitcoin applications were kind of trying to find loopholes here and there. One of the funniest I saw was that

Apple had a whole different set of rules if you have a co-op. So if you have a co-op, you can distribute software to your co-op members without putting it through the Apple iTunes store. So someone set up a Bitcoin wallet that you sign up by email to become a member of the co-op, and then they send you the app by email, right? So people were doing all kinds of shenanigans

like that. But really, the real reason for this, and we said that six months ago, was Apple was going to launch Apple Pay, and they didn't need a whole bunch of insurgent little weirdo applications ruining their announcement. So until the last moment they resisted, they wanted to keep control over payments, both in-store payments, where they make a very healthy 30% cut on every app and every in-store purchase. And they wanted to introduce their own payment

and wallet technology. And so they did that. So now Apple has created CompuServe and we still have the internet. Now we can play on a level playing field. Let's see who wins. I have my bets on the internet, not CompuServe of money.

That's what Apple Pay does, right? They have a number of 300 million credit card subscribers who have the sterile curated walled garden controlled experience and then there's bitcoin that works internationally that is wide open that doesn't do all of that what do you got there i have my credit cards on my my wallet i used it the other day for my first time just yes this is the apple pay apple pay thing yeah jamie can you get some whiskey and ice i'm

trying to like do something with my voice here. Put it in the microwave a little. No, I don't want it cold. That's why I had ice. Fuck. Put it in the microwave. Yeah, it's good for your throat. Warm.

It'll melt the ice. Who are you? When you used this, did it do anything? It was just, you just kind of swiped it over the thing. And only certain vendors it works on. You can't do it everywhere, right? It's any of the credit card machines where you usually swipe your own card. Most of the newer ones have a little symbol on it that means it has the...

Like a little Wi-Fi thing? Yeah, it has the remote control, NIS, or whatever it's called. Right, that's NFC. It's the payway system, or tap and pay. Now, here's the interesting thing. Apple launched Apple Pay. And Google, which has Google Wallet, had seen very few subscribers. And as soon as Apple Pay launched, Google subscriber numbers shot through the roof because you can do the same thing on Android.

And I'm really banking on that effect because Apple will make people familiar with mobile wallets, the idea of tap and pay with their thing. But they still have many of the same problems. Apple has all of these credit cards that are vulnerable. They track all of your purchases and everything you do. And they're going to impose restrictions on what things you can pay and what merchants you can pay. And you've still got all of the old players, Visa, MasterCard, American Express, all of the problematic payment networks

that are restrictive. They have $5 minimums. They're very expensive for merchants. You can have fraud, all of these things. But what they're doing is they're familiarizing people with pay and NFC. And we can do that with Bitcoin too, only we can give them the full experience

from micropayments to cross-border transactions to countries they've never heard of to, you know, the full Bitcoin experience. So that's why I say it's CompuServe versus the internet. Or AOL. CompuServe and AOL internet got people used to... You want some of this? No, thank you. You want some booze?

Got people used to the idea of email in a safe kind of curated environment like a sandbox. And once they did, what they really wanted was the full internet email. Because the open technology innovates faster, it has broader scale, is less fragile, and it has more participation. And so same thing applies to Bitcoin. Do you think iPhone is going to be the platform of choice for the four to six billion unbanked people in Indonesia, in the Philippines,

in Sub-Saharan Africa, in South Africa, in Latin America? Hell no. It's going to be Android with Bitcoin. It's not going to be Apple Pay. And that's fine because Apple pay has a role to play and will familiarize people with this technology it'll get people to start thinking of money as a purely digital thing and then we come along and we deploy bitcoin on 20 android phones and saturate the rest of the world um and give them that experience you say that with such passion. I say that with passion. Saturate the rest of the world.

Five billion people having international banking for the first time in history. I mean, that gives me shivers. That is the most revolutionary aspect of this technology. It's not making, like right now, instead of swiping my card, I can wave my phone. I've saved 150 calories in my consumer spending experience. That's bullshit. That doesn't do anything for anyone. But you allow someone who's never done banking before to send money internationally to get loans from anywhere in the world, to start a company and sell a product anywhere in the world. And to do that for 4 billion people, 5 billion people, 6 billion people, that stuff changes the world and to do that for four billion people five billion people six billion people that stuff changes the world it's not going to be about shopping no no it's going to be about getting rid of the existing system that many people find but they don't have an existing system impressive

but i mean in in this you know and well in the in the third world you're talking about in the in the second and third world. So according to the World Bank, there's two and a half billion people who are unbanked. That means they have no banking facilities whatsoever. They have no money. They can't deposit stones. No, not true. They live in cash and barter-based societies.

They do have money. They exchange labor products and services with each other all the time eggs chickens beans farming carrying water whatever it may be post-apocalyptic type money they have an enormous productive potential but barter makes it very difficult to trade right barter if you if the other person wants chickens and you have a goat yeah you gotta give a lot of fucking chickens you've got to find someone who wants a goat. Yeah. You got to give a lot of fucking chickens. You've got to find someone who wants a goat. And so what that does is you have a very high friction economy and it reduces everybody's productivity.

To do anything, you have to walk 10, 20 miles to transact. Now, these people have productive capacity and that's a two and a half billion. people have productive capacity and that's a two and a half billion then there's another three and a half billion people who have banking but it's very basic banking which means it's uh in their own currency only no international markets no credit or liquidity no credit history no ability to wire money and their their nearest bank branch is usually very far away. So they primarily use it for savings. They don't use it to do, you know, point of sale, visa swiping, debit cards, and things like that. And together, these two constituencies, these two populations, many of them have cell phones. They have text messaging cell phones. So you bring together those two technologies,

text messaging cell phones so you bring together those two technologies and you can create essentially a revolution in financial um economic inclusion in international trade in productivity where instead of now walking 15 miles the market you can do a transaction on your cell phone well especially since all that money is interchangeable internationally. Yes. It's all the same. This happened in Kenya. In Kenya in 2001, a local phone company, SafariCom, one of the telcos in that space, created a program where people could exchange cell phone minutes with each other. And so that system initially started being used informally as money. So people would be like, give me eggs, I'll give you two cell phone minutes, because it was equivalent to money. People couldn't afford to have a bank

account, but they could afford to have a cell phone contract. This is how messed up the banking system is around the world. And so they would exchange minutes for products and services. Eventually, the phone company, a couple of years later later recognized that they call this thing M-Pesa for mobile Pesa, which is the currency of Kenya. And they started broadening it. It now spans three or four countries in the region. Here's what happened. 11 years later, M-Pesa is 40% of the GDP of Kenya. 4-0%. 40. And this is not GDP that got converted from PESA to M-PESA. Most of this is completely new economic activity that previously existed as grain markets, barter markets, cash-only societies, and was inefficient and slow. So it actually generated growth and economic activity in this country. We've seen this happen in one country. You can't

transfer M-PESA outside the country. You can't use it for remittances. It's specific to one currency and it's still heavily taxed and manipulated. Now imagine what we could do with Bitcoin. Now, a few months back, there was some controversy online and you made a statement that you were resigning from some sort of organization. What was that all about? Well, there's an organization which is kind of like a membership association called the Bitcoin Foundation. And it sounds to a lot of people

that this organization has some kind of role or authority. They really don't. It's just a member association, right? They don't control Bitcoin. They don't have any role to play in the code. They do collect money from members and they use that money to pay some of the main developers so that they can focus full time on Bitcoin, like a foundation. For example, Mozilla that makes Firefox, they have a foundation, they pay a lot of developers. Linux, the operating system, has a foundation, pays a lot of developers.

Linux, the operating system, has a foundation, pays a lot of developers. So it's kind of like that, but they don't have any control over anything. They just collect member dues and they do some lobbying, they do some public relations, they pay some developers. I had some problems with the transparency and the way the organization was being run. I participated in the early days in the election process. I helped with that. I was one of the people moderating the debates between various candidates. I was hoping to see some reform. Some of the original members and some of the charter and the rules were such that it was highly, highly compromised from the beginning. For example, one of the founding members was Mark Karp mark carpellos the guy who owned and crashed mt gox he was one of the founders and the guy with the big fat face right so when you

have like two or three of the directors in that facing massive lawsuits or indictments or how's that guy still alive it seems like some i mean didn't like a lot of money vanished with that hundreds of billions of dollars and he's like running around buying noodles at a market right he can go anywhere he wants i'll put that down to the fact that japan has very very effective gun control oh is that the reason why he's so but you know i mean i'm a pacifist so i i would like to think that what should happen to him is we should have a full and proper accounting of what happened, and then he should pay the appropriate price through the judicial system. Well, that's impossible, though. I mean, the amount of money that you would have, I mean, he would have to generate some ungodly amount of money. No, people are never going to get paid back for the money they lost. But at least you could see, first, truth, then justice.

Some form of accountability. You need truth first. Let's at least find out what actually happened. People need to know the truth. Somehow or another, for folks who don't understand the situation or are not aware of it, Mt. Gox was about the online... So it was an exchange. It would buy and sell Bitcoins for US dollars, Japanese yen, and euros.

And it was the first exchange. So it was the first place where you could trade your bitcoins for US dollars, Japanese yen and euros. And it was the first exchange. So it was the first place where you could trade your bitcoins for something else. But it was originally established from a website that was about Magic the Gathering, right? Correct. It was for trading playing cards. Because they already had a market-based trading mechanism. Right. So they just converted it to bitcoin. Which was a very smart move, but it wasn't up to the job.

What is it a scenario? I'm sorry to interrupt you, but it was it was a scenario where the landscape had changed so quickly. Yes. So so radically that they couldn't keep up and they couldn't possibly have foreseen it when they started training trading Bitcoin. And then it just got out of hand, among other things. Yes. So how responsible would a person be in that sort of scenario well there's more than gross incompetence there and i for a long time thought it was just an incredible amount of incompetence and lack of due diligence oh so now there's there's there's evidence well there's the classic evidence where a mistake in certain problems cause money to be lost and then instead of coming clean about that,

we now know that Karpeles continued to run the operation where he would pay old customers out from the money coming in from new customers. That's the definition of a Ponzi scheme. Yeah. And most Ponzi schemes don't start because someone says, let me run a Ponzi scheme. They start because they start trading customers money. They too much, and they don't want to admit that they lost the money. So they start using the new customers' money to pay off the old customers. The lies get bigger. The numbers get bigger until one day the lies and the numbers get too big to hide. It all comes out in the open and collapses. That's exactly what happened. The lesson to learn from Mt. Gox is when you have a decentralized, secure solution like Bitcoin,

and you give all of the keys to one person, what happens is exactly what has happened for the last several thousand years of history. That person takes the money and runs. Yeah, you've said on the podcast previously that you think it's probably a good thing that this crashed, and it's a good lesson for the rest of the Bitcoin community. It's a very painful lesson. I of the bitcoin community it's a very painful lesson i wish people had been able to learn it i mean a lot of people were blowing the whistle long before it collapsed and saying including myself saying do not put your money

in this system and it in many ways highlights the positive attributes that bitcoin share peer-to-peer the way it's being done now has so you know the expression possession is nine-tenths of the law and law and bitcoin possession is ten tenths of the law if you have the keys it's your money if you don't have the keys it's not your money and and people did not control the keys at gox they gave them to carpelos anyway so people get just just to wrap this up okay i resigned from that uh association saying i i wanted to i tried to make it you know, I don't want to make a big deal out of it. I just said I disagree with the way this is being managed. I don't like the transparency. It hasn't been reformed enough.

I'm out. It was turned into a very big news story. I'm hoping that nothing bad happens within the foundation but I still have concerns that because of a lack of transparency because of a lack of reform there could be opportunities there for shenanigans what is the best resource besides listening to you on podcast which is excellent for people to research Bitcoin to find out where they could get more information where they can assimilate into maybe a community a message board where they can exchange ideas into maybe a community, a message board, where they can exchange ideas? So there's a couple of really good sites where you can go and learn things about Bitcoin. Bitcoin.org is one of those. It has

information about how to get into Bitcoin, what it is. That's run, again, by an association of users. It's a non-profit style thing. It's one of the things that Bitcoin Foundation does relatively well. And you can find information about Bitcoin there. There's various online communities, a massive community on Facebook. I'm really, really very excited about the Meetup community, meetup.com, local grassroots meetups all around the world.

So when I go speaking, like I went to Australia, I went to the Sydney meetup group, and I said, tell all your members, let's have a meetup. I'll come talk about Bitcoin. And they gathered, they sold out 250 seats in a room like instantly. So these things didn't exist a year ago. There weren't enough Bitcoiners in one place to get together. Now there are in hundreds of places around the world. So meetup.com.

Go and meet people who are into Bitcoin and learn about it. There are also meetups for Bitcoin developers to learn how to do software development. I started one of those in San Francisco, the second of that type, and one of the most successful. It now has more than 600 members i believe and i'm going to do a very brief but shameless plug how dare you um on december 27th o'reilly media which is a software um and development publisher technical publisher is publishing my book it's called mastering bitcoin and it's a book for software developers to learn

how to use bitcoin i spent a year and a half working on that and just finished. I got an email this morning that the final copy went to print. So is it actually going to be a book book or is it going to be a digital book as well? It's a digital book. It's a print book. Audio book? I should be

I'm trying to get Morgan Freeman to read the audio book. No! You need to read it. How dare you? I'll read it with my weird Greek-British accent. You're going to read it, right? I don't know. I don't know if there's going to be an audio book.

It's a technical book. It's got code segments in it. It's not exactly geared to be an audio book, but okay, we'll see. E-book, print. It's also on an open source license. I'm a huge believer in open source. I use the Creative Commons licensing system. So it's Creative Commons with attribution, share alike. It's available online. The entire book was developed online with contributions from hundreds of people who corrected things in the book. All of the editing process was public. You can download it for free. So it's for free or is there... No, it's published by a mainstream software and technical publisher

with a lot of clout who are taking it to a mainstream audience because we needed that in this case. And that's coming out in print, Amazon, Barnes & Noble, O'Reilly.com and every other book publisher and book distributor out there will have a copy of this book.

You can buy it. It's 30 to 3535 retail, approximately. $28, I think, on Amazon. You can buy an e-book for about $25. But it's also available for free online as a PDF or as a source code. That's kind of crazy. You're selling it and you're giving it away at the same time. Yes.

And I will tell you that as many have discovered in this space, open source content does not diminish retail sales. In fact, it grows them. Really? Yes. The people who can afford to buy the book will buy it to put it on their bookshelf and have a paper reference to put it on their Kindle in a nicely formatted, convenient way. It's easy. It's convenient. One click. If there is value, people will pay for convenience and packaging and just kind of the quality of printed colored paper. Honestly,

they will. That's why you're drinking a bottle of water when you can get free water from the tap. No, because the government. Fluoride and black helicopters. Okay. But people pay for quality and packaging and convenience. And so at the same time, people who couldn't afford to buy the book will download it and use it as a resource to learn these skills. And to me, that's the most important thing. Because if you want to invest in Bitcoin, you don't invest in the currency,

you invest in the skills. This is like learning how to make a website in 2000. It's like learning how to make an iOS app in 2005. This is a skill that will give you a job. And so that's... A skill that will give you a job? Yeah. Like what kind of job?

We're hiring thousands of people in this industry in order to do the software development. What kind of software development are we talking about? There are now some 800 startups being tracked by, I think it's called VentureScan, which is a company that tracks funded, venture capital funded startups. There are more than 800 companies in the space doing startups around Bitcoin, building applications, user interfaces, new wallets you name it someone's building something this is a new industry blossoming and creating thousands of jobs and and this industry is now hiring thousands of people in the u.s especially with skills around software development, accounting, finance, marketing, public relations, operations, management, the entire spectrum of things you need in a startup. Wow. And so this book that you wrote has a lot of coding and coding instruction in it.

The first two chapters are accessible to anyone. minute the first two chapters are accessible to anyone um they explain how bitcoin works at a level that someone who is not who is a bit technical but not a program i can understand the other eight chapters are how bitcoin works in detail for a programmer to get a complete soup to nuts overview of how the entire system, not just Bitcoin, but the blockchain technology and all of the other currencies that are based on that model, how it works, how to write software to it, how all the data structures work, how the protocols work, and to get a complete understanding of it. So it's really for programmers.

So you've immersed yourself in this over the period of X amount of years. How many years? Three years. Three years. And what knowledge base of coding did you have before you got into it? I started coding when I was 10 years old. So you've just been doing this for...

I'm not a professional programmer. I'm a passionate amateur, if you like. I've been paid a few times for writing code, but I'm not as productive and disciplined as a professional coder who only does coding. I code for fun. I code because I'm fascinated by it. And when I started this, I knew quite a lot about coding and a bit about Bitcoin. And I started writing a book. Honestly, the best way to teach yourself a technology is to try to teach it to someone else.

And I learned more about Bitcoin by writing the book. And, you know, when I started, I knew a bit. Now I know a lot more because I had to find ways to explain this technology in simple terms. You know, that's so fascinating that you say that because that's a truism that is often expressed in martial arts. You know, one of the ways that I got really good at martial arts is I taught from the time I was 15 years old.

I taught. I taught at Boston University. I taught at my own school. I used to teach all of the private lessons at my... And because of that, my technique got very clean and sharp. Right. And I think that that – I've often thought about doing that even with stand-up comedy. Although I don't think you really can teach stand-up comedy.

You can kind of exchange information and go over the facts of it or the building blocks of it. So I find that really amazing that you say that about coding as well it seems to be improv right um not really well you can teach people to never do it again okay fucking i need a genre well i would sign up um yeah it applies to coding it applies to book writing it applies to it applies to public speaking um i'm learning how to be a pilot now um so i love flying planes it's one of the things i'm really into and as soon as i'm complete with my training which should be in the next month or so i'm going to start the next stage to become an instructor because if i want to get really good at that i need to start teaching

other people how to do it wow it's a truism across if you want to get really good at that. I need to start teaching other people how to do it. Wow. It's a truism across. If you want to learn something, well, teach it. And maybe at first it's hard because in teaching it, you realize how much you need to learn in order to be more crisp and to be able to create explanations that are simple to understand. You first have to understand it in depth yourself. Yes. But it focuses you. And so that was part of how I wrote the book was I understood it,

but I understood it at a relatively superficial level just to use it. In trying to explain it, I had to learn it a lot deeper. That is so true and so interesting about knowledge, about information, is that a lot of people develop a cursory or a working knowledge of something. But in order to really explain it, you have to have a full foundation. You have to have the foundation, the blocks, the structure. You have to have the whole thing in order to explain what a house is. That's a really amazing thing about information it just it really fascinates me how the mind works and how

just absorbing information and the the depth of that absorption like there's some people that i could talk to i'm sure that know bitcoin but don't know bitcoin like you and i could have a conversation with them and come away with some misconceptions, perhaps. But then talking and talking to you, especially since you teach it so much. And I mean, essentially what you're doing when you do podcasts is you're teaching us what what the potential or the future applications for Bitcoin can be. And in doing so, you know, I get a much deeper sense of what it is because you're so used to teaching it yeah and i have to say you've got to realize there's a lot of people who know bitcoin a hell of a lot better than i do and know how to apply it who the fuck are these people

well they're they're all weirdos no they're all the technical geniuses who um spend most of the time making the bitcoin code better and building applications around it. I'm not a professional coder, and I don't spend most of my time doing that. It's important to realize what they do is orders of magnitude deeper than what I do and understand about Bitcoin. But you are an evangelist. Yes, I have one skill. I think that skill is necessary and valuable, and this is what I do. I took my skill, which is explaining and teaching and public speaking, and applied it to Bitcoin. And I'm not the most knowledgeable. I'm not even close to being the most knowledgeable person.

What are you missing? Huh? What are you missing? A lot of nuance. That they have. Well, first of all, the focus on code and developing. I mean, I don't write code 24 hours a day. I don't write code all the time.

They write code all the time. The algorithms, issues of scalability and optimization, understanding the really subtle technical nuances of the protocol and developing a consensus protocol. Those are really subtle. I mean, you can find tiny, tiny bugs in Bitcoin, which under certain conditions, if you write a transaction with certain script operators, it can cause this to happen and that to happen. And you've got people who are way out ahead who are finding these things, figuring out, oh, here's something

that could go wrong in a transaction. And here's some code that ensures that we check for that from now on. I mean, I don't have that depth. I can understand what they're talking about, but I wouldn't have figured that out by myself because I don't spend the time analyzing the code like they do.

Well, that's one of the weird things about being a human being. It's just it's so cool that there are so many different people and that the spectrum is so broad. Right. That there are some just very bizarre people that are just sitting in front of a computer just banging out numbers and staring at lines of code. And those are super important. If those people weren't here, we wouldn't be doing this. We wouldn't be doing this. just banging out numbers and staring at lines of code. Those are super important. If those people weren't here, we wouldn't be doing this. We wouldn't be doing this.

There's no question about it. We wouldn't be online because there'd be no online. Right. What I do by comparison is an afterthought. It's a layer that only happens because other people did this work at first. That's what really amazes me about working in this space. Over the last three years, I have met some of the sharpest, smartest, most intelligent, most incredibly complicated thinkers in terms of coding, technology, databases, protocols, finance, economics, monetary policy. Some of the best thinkers of our generation have fixated on this little project

and are doing things that are incredible. And I meet these people and I say, there's a reason why when smart people figure out what this is, they get fixated. They get really, really obsessed about this technology. So you go from skeptic. My first reaction when I came across Bitcoin was nerd money, like just completely ignored it. Six months later, I read the paper, light bulbs start going off in my head. I'm like, oh, distributed control system, security model. This is not just a currency. Wait, hang on a second. This is content. Now it has these implications. And you just go straight down the rabbit hole i i went down that rabbit hole so far four months later i had lost more than 20 pounds

because i was spending 18 hours a day reading everything i could about it writing code forgot to eat communicating i forgot to eat this has happened to me three or four times in my life that's a particular personality quirk. You can call it that. Yes. I call it the state of fugue. Fugue? My first fugue.

F-U-G-E? F-U-G-U-E. It's disassociation with reality. And you can go all the way pathological and just run into serious trouble. I did it on a relatively heavy basis for most people, but still survivable. My first computer, when I got my first computer, it just, it's completely transformed my life. It's opened up a space of imagination that I didn't know existed. And I started programming and I realized what you could do with programming. And my mind as a 10 year old just went.

And what, so what year was this? This was 1982. So you got in way early. It was one of the first, like before the Atari, like this was a ZX81 Sinclair microcomputer from Britain. You connected it to your TV, but you could program this thing and you could write basic software and you could even write assembly code on it. And within six months, by the time I was 11, I was writing assembly code on this thing. And I didn't even understand the

mathematics behind it. I learned those mathematics in high school, but I already was practicing that stuff. When I got my first modem and I connected to bulletin board systems in Los Angeles, in fact, from Greece over long distance phone calls, my family was not happy about that phone bill. And I communicated with geeks on another continent for the first time. It blew my mind.

I, I opened the door to an entire reality that was impossible for a Greek teen to, to experience. And when i got my first internet connection again bitcoin is like one of those events and when i first started i dismissed it but when i when i took a slightly deeper glimpse and i saw where what it was straight down the rabbit hole forgot to eat for four months, lost a ton of weight, just became completely obsessed, completely... I mean, you go out for dinner with your friends and you bring up Bitcoin in every single conversation before long. You're not invited to dinner anymore.

But after that, I managed to find a more healthy balance. I'm still absolutely fascinated about this technology. I don't forget to eat anymore. I'm still fascinated by this technology. And every day, I learn something that opens up even more the possibilities. And now I'm not longer thinking, what can we do in two years? Now I'm thinking, this is still going to be changing things two decades from now three decades from now wow listen dude guys like you are very important

really crazy fucks that will not eat for months at a time and lose 18 pounds because you find the viability and the potential and something like this. It's very important. The world didn't change because someone who was already an established researcher in an established space made a tiny incremental change. The world has changed numerous times because someone from the lunatic fringe refused to accept that their idea was stupid and crazy and would never work, and persevered regardless, and ended up changing an entire industry. When Einstein was a patent worker in the Austrian patent office, or Swiss patent office, I don't remember even, he wasn't part of the physics community. He was the lunatic fringe, and he came up with an idea that was ridiculed for a good decade before anybody

figured out that there was something there, right? And we see the same thing in history again and again. We rewrite and whitewash the history of innovation to say, and then Ford created the car, and everyone went, good job, Ford. We'll all buy Model Ts. No, they didn't. What they said was, you car enthusiasts, you're insane. This is crazy. It's dirty. It's noisy. It will destroy our roads. It will never work. When Edison discovered and created all of these wonderful things around electricity, people didn't say, That's amazing. Let's all electrify everything. The media said, anybody who puts electricity in their house will burn it down. And only the rich and crazy would dabble in this technology. And it will soon go away and pass as a fad.

And why don't you use traditional, good, working kerosene? Well, that's what they said about everything. That's what they said about everything. It takes the people who refuse to accept that the what they said about everything it takes the it takes the people who refuse to accept that the vision they're seeing is crazy now carl sagan said something very important he says yes they laughed at christopher columbus yes they laughed at edison but they also laughed at bozo the clown you have to be you have to be fairly confident that there's a there there because you might end up just being bozo the clown in which case they're right to be fairly confident that there's a there there, because you might end up just being Bozo the Clown, in which case they're right to be laughing at you.

It's a matter of subtlety. the same rabbit hole as me in exactly the same way and have come out of the other side transformed and have decided to dedicate their life or part of their career at least their focus their energy their passion their work to seeing how far we can take this little experiment because we all realize the simple equation underneath it well they can be no doubt wrong I lose some money and some of my time. If I'm right, we're going to change the world. It's as simple as that. And if I'm wrong, nobody gets hurt. The people who got into this, they understand the risks. This is fringy stuff. This is out there. You go invest all of your retirement savings in Bitcoin, You're an idiot. You're going to lose a lot of money. That's not how you do it. But the people investing their blood, sweat, tears, and knowledge, and passion, and enthusiasm into this, if they lose, they've

had a fun ride. I'm enjoying this. But if they're right, we're changing the world. Well, the question of whether or not there's a there there, I don't think that's a valid question. There's unquestionably a there there. It's already there. We can say that now, a year ago, it was really hard to even make that argument. Well, now you can say it. Now you can say it. Now you've got PayPal. Now you can buy a Dell computer. If you can use Bitcoin, you send off and then you get a laptop and then you're online with this laptop. You got this laptop from Bitcoin. There's a there there. That's a there.

It doesn't matter how many PhDs in economics write very long papers telling me it's not money. If I get a laptop in the mail, it's money. It's a there. Yeah. There's no question about it. If you use Bitcoin to get an escort, that escort, as soon as that website is up and available. Right now, it's not. I mean,

I've been hitting refresh all day. When that website comes online, Brian will be one of your biggest evangelists. Oh, yeah. You will come on. Right now, I'm sure you look at Brian like,

oh, this crazy fuck that Joe hangs out with. You will have a newfound respect for him and his ability to spread the knowledge and power of Bitcoin once these escort sites go up. Because then things will change, like Rubmaps. 40% of all Rubmaps customers go to Rubmaps because of Brian,

because they found out about Brian. I have a serious point to make about that, and I don't want to minimize what you're saying. Please do. I wouldn't. I would never imagine. saying please do and i wouldn't i would never imagine um the ability to control your money in a way that is entirely personal the fact that you can memorize a bitcoin address the fact that you can control that money the fact that no one can take it from you in that industry is an incredibly empowering process because it would actually allow the women who are in that industry to get

the value of what they're doing instead of being exploited mostly by men and mostly through violence so surprisingly enough you can make a very strong argument that the the self-determination and control aspect of bitcoin has a very significant empowering effect in that space. You can't get robbed at knife point for money that's sitting on your wallet with a PIN number or that's being transferred to a service that you don't have access to, and your pimp can't steal your money. It's a very good point. It's a very good point. your pimp can't steal your money. It's a very good point.

It's a very good point. And, you know, not getting deep down into the rabbit hole of social norms and why laws exist in the first place and what is and not empowering to any person takes on any job. And it's our societal constructs that make it illegal in the first place. I mean, a woman should be able to do whatever she wants, including giving massages or kicking men in the balls for money. I mean, there's women that do that. I mean, there's a valid fucking job to that. There's an occupation. Dominatrix, there's not just one of them. I mean, there's thousands of them all across the country, maybe even more than that. I mean, I don't know how many dominatrix there are, but I've met a bunch of them. Well, you'll like this story. The idea of money is not an idea that just exists in humans. In fact,

money exists in every culture and is created by every culture, even by children. Toddlers create money spontaneously as a cultural expression when they don't know what money is. They'll trade rubber bands and wooden blocks and things like that but in fact it's an idea that even goes beyond humans you can teach primates what money is you can teach them the idea that the abstract token can be exchanged for value so for example they've done studies where they teach it's in my act 2009 talking monkeys in space had a whole bit about chimps chimps they taught chimps money and orangutans and the first thing they did is the female trump chimps took the male chimps money. And orangutans. And the first thing they did is the female chimps took the male chimps money and fucked them. Right.

So the two most traded, well, I would say the three most traded commodities in the world are food, sex, and recreational narcotics. They have been the three most traded commodities in the world since the beginning of time. The accusation that Bitcoin is used to buy drugs or buy sex is a ridiculous accusation on its face. If it couldn't be used to buy those things, arguably it's not money. Yes, you're right. Because anything that cannot be used to buy

the three most traded commodities in the world is not money. The point is that money represents the buying habits of the population using it. If you want to see mainstream values in Bitcoin, wait until Bitcoin becomes mainstream, and then you will see mainstream values in Bitcoin. It's as simple as that, you know. Well, it's about personal freedom when it comes to any form of pleasure, what people enjoy, whether it's the pleasure of having someone cook your meal for you, the pleasure of having someone give you a back rub. I mean, all those things are

legal because it's a skill. These are services that people provide to people. We just have this weird idea of deciding what is and isn't acceptable as far as a service. And as far as I'm concerned, everything should be legal if it's not harming someone if if sex is legal free if it's legal for a woman and it should be for a woman to go into any bar and choose a man that she decides to have sex with ask the guy you want to fuck and the guy goes yeah and then she takes him home and has sex with him that's totally legal but if money is exchanged somehow that woman is a criminal that we live in a crazy world. We live in, we're insane.

And we're only insane because of these echoes of the puritanical values of the dipshits that were dressed up like pilgrims and got on fucking rafts and floated over here from Europe. It's an even crazier idea to say that you're going to control social interaction and behavior, not by controlling the act or by making the act illegal, but by making the transaction of money itself illegal. Controlling the money is a very dangerous road down which, if we go, people will use it to control all kinds of other behaviors that perhaps they shouldn't. There lies totalitarianism. Here's the point. The fact that Bitcoin can be used for these kinds of activities is not something special about Bitcoin. All money can be used for these kinds of activities. What is special about Bitcoin is that you can remove violence from the equation in many ways. The reason people buy drugs online is because you can't get stabbed over TCP IP. And that is a very callous and throwaway quip to make,

but it is true. Fundamentally, if you remove violence from the equation, that increases the value. And so that's why people use this money. That's what's special about Bitcoin, is that it allows individuals to retain control and it removes the possibility of violence. I think that's a good feature.

It's a huge feature. Listen, man, we're out of time. Thank you once again for illuminating us. And, you know, it's funny. You said the first time you came on that you'll be on in three months or four months and things have changed so much. And I keep saying, at what point in time is it going to not change? But it changed more in this one than the last one. So come back in a few months again, and we'll figure out what the fuck is happening then.

I don't know what you foresee taking place on the horizon, but I'm in. I'm in. March 2015. Okay. Joe Rogan Experience. Let's do it. Round four. I'm in.

I'm in. I'm in. I'm full in on Bitcoin. I believe in it. So does Shooter Jennings. So do it. Bitcoin round four. I'm in. I'm in. I'm in. I'm full in on Bitcoin. I believe in it. So does Shooter Jennings, so fuck it. So does Tiger Direct and Dell Computers and PayPal. Brian is still unconvinced, but once that fucking escort site is up, he's in. A-A-N-T-O-N-O-P on Twitter.

That's the at sign. A-A-N-T-O-N-O-P on Twitter. That's the at sign. A-A-N-T-O-N-O-P. That's very confusing. It's my first initial and my last name. Well, part of your last name. Yeah, that's all I could fit. That's true because you don't want to use that at sign. It eats up a lot of your 140 characters.

Thank you very much, sir. Thanks so much for having me. Always brilliant talking to you. Always enjoy it very much so. All right, we'll be back tomorrow, you fucks. So enjoy. Go get yourself some Bitcoin and be cool to each other. See you soon. Thank you.