Fractionallyreserved BTC? Venture Capital in crypto? BCH Dilemma Hello everyone this is Adam Meister welcome to this week in Bitcoin today is August the 10th 2018 strong hand longterm thinking offended by selling all right weve got some really awesome guests theyve all been on the show before but its been a while for some some you havent seen for a while theyre in three different times were all in different time zones a United States I got Josh Nussbaum coming from the east side I got Blake Anderson coming from the central time zone and I got Michael Krueger coming from the mountain time zone Im in Los Angeles for the week Ill be speaking tomorrow come out to the event at 7 p.m.
its linked to below its in downtown LA itll be really laidback were gonna start off Josh nice mom hes uh hes in the venture capital land okay and so he enter and he sees cryptocurrency from that perspective its a unique perspective tell us what is going on Josh with you yeah yeah I think since last time I was on the last year obviously people probably seen the markets gotten pretty crazy and I think that theres sort of reasons for that theres a lot of newer cryptocurrency hedge funds and venture funds and theyre currently large and this sort of takeaway seems to be lets look for the small contract protocol that is the next internet and you know it seems like every other day or every week youre about some other protocol raising some insane round that are really really high valuation um anything partially its a little bit of circular logic where a lot of those funds a raise capital look at the parks and public side and see that things are mostly correlated in to bear market as sure I dont need to point out and so what ends up happening then is they decide ok if we dont throw their money so lets figure out how to do venture capital style investing negotiate deals it prices low enough that you know the public will see sort of that brand name and buy it at higher price versus whats sort of longterm value and its not everybody but it seems like its more often than not these days and I think the other thing is theres sort of now a bit of a comfortability with LPS in just fine Bitcoin directly and so most investors there cant bite out of fun and so trying to find new ways to capture some value even the upside Society its possibly shortlived and the bottom critical out anyone very interesting would you say you know I get I see some venture capital people tweeting mostly out of California stuff um is it but whats what is it is it blockchain or Bitcoin for these guys in general yeah you know I think thats a decipher between sort of west coast and especially in the valley and over the rest of the country the world and I think for a lot of Silicon Valley it is watching and looking at it as you know some kind of Internet Protocol or even platform Im despite not being that and so thinking about sort of the applications that can be built and the protocols and capturing value that way versus them the monetary space and is a store value okay so another thing that people have told have said and I want your opinion on that I CEOs are gonna make venture capital a thing of the past what do you think about that yeah I heard this before not just specifically this but you know with the JOBS Act and crowdfunding I think its very very different for one ICO is just about all at least in the last six months are no total garbage Johnny can raise capital that way its really you know figure out ways to get advisors that make it look like its quality or come up with big ideas you know sell to a greater fool its kind of like if you ever seen that wolf of Wall Street that idea and sort of the boiler rooms in the 90s lets figure out ways to signal quality because we have you know the Internet as a way to last you a lot people at once versus having a cold call by penny stock and answer the bottom pulls out right afterwards and you realize that that sort of was not exactly what both you signed up for and which is usually nothing to do with a product itself but for the most part with the hopes that itll become more valuable if you get it early and one final question and I think the other guys I have questions for you too and I forgot to tell you guys feel free they answer to other questions and people in the chat you can do super chance to Ill read your questions in the venture capital space I mean obviously its about making a lot of money Im curious about their technical when they get into crypto the guys that are gonna gain crypto how many do you think know what the bitcoin having is do they mean then its a really important thing to me if you watch this show everybody knows Im a big promoter of the 2020 Bitcoin having any do they know that basic type of thing I would say a lot more than if you ask me especially a year ago I think that theres sort of so much interest since last summer and people are spending all of their time on Reddit and Twitter learning about these things so I would say theres probably more were knowledge about it now than URI oh its still probably over the entire venture capital landscape you know a smaller percentage but in terms of people who are actively investing in the space probably a decent percentage okay I want one last question real quick lightening network is a huge a second level of tech solution being built on top of Bitcoin there going to be other second layer solutions companies specializing in building applications with the second layer solutions in the next you know two to five years are the bench for example people are they going to flow into the second layer solution in the Bitcoin people or into the speculative altcoin other stuff yeah I think its more likely that the former happens well see how long it takes and I think itll take people losing money and investing in these things and Im starting to look like a venture capital court folio which is you know things dont launch it goes to zero and there is no product market but vs. theres some value even if it hasnt launched and nobodys these things but yeah Im actively looking to invest around lightly whitening so if anybody watching this turning company please feel free to reach out weve one company we invested in I cant talk about specifically but is working on some stuff like oh well people be in motion pound that like button all of these guys links are below now Im talki s the lot on Joshua dome where the other guys are gonna get a chance to speak its because you know this week you know it started with there have been a lot of big big money talk oh the SEC didnt approve the the ETF so the big money is delayed and you know big money is becoming a big issue here for me I know that the big money is gonna come in eventually but I want to give you the venture capital big this guy is in the venture capital and hes giving you a unique perspective here or whats really going on over there my two other guests give any questions for Josh any things you guys wanted to say about this uh before we move on here into uh into some other subject matters I would just add that um one of the things that I found frustrating and I and Im guessing that the VCS there have been focused on this although Joshua can can sort of confirm is that what I would suspect theyre doing is trying to just like wiggle into the presales as much as possible and get as much as they can there and then just dump them you know when the thing starts trading if they start trading up now I havent been following and this would be curious maybe Joshua is following this um you know a year ago you know any IC o would would list and it would list like multiples above what the pre sale or right the original sale was and you could just flip it real quick is are they still are they still pricing a lot higher than the pre sales now like when they start trading are these new I cos Im trading up a lot or flat or down that would that would be an interesting thing Im not Im not following at all yeah I would say most are definitely trending flatter down I think the exception to that is agent specifically there are no icos that do trade above what certain investors can get in at and I think that you know specifically is where these things are the more of that than here where the line between a hedge fund and a VC firm has become pretty blurred in this space but most funds that I know at least anything that theyve invested into you they sold they havent sold at all but the tech shows its completely different but thats becoming harder and harder and I think pounders are also getting smarter really trying to go through the long term and putting in all sorts of you know lockouts investing and things that youd expect them to have got okay jump in for just a second and I was gonna say that yeah I mean any type of emerging market you want to look for it to emerge and then reach equilibrium and if you can get in really early theres you know that that early time where you can make some money but were almost looking at how how over heated can that get what are the actual diminishing returns in terms of how many I cos can be listed and how many people can ride that wave versus now the trend seems to be can we fork a UT Exocet can we do a chain split and then like for example BTCC or Bitcoin core which is an actual protocol change because people kept calling Bitcoin core a protocol when its an implementation so they actually made a Bitcoin protocol split called Bitcoin core and thats been trending viscerally up recently so its interesting to see that trend if people wanted to get in early to be able to make those killer returns the diminishing returns making it so that not all of the ICS are getting listed and then going off into this new area of how can we continue to do this and try to tamp down some of those diminishing returns so its a very very interesting fastmoving complex space to be able to try to watch and glean information its its it never sits a nonstop action comedy basically BTCC thats a its more than just a trolling niggle twitter for all you people who know I think theres quite a few people who do if latest is talking about there all right weve got a question from the audience and this is one is Blake Blake can you see that question that mentioned McDowell just asked out there I think you can handle this one but Ill read it out Ill read it out loud how soon till we have an app like TaskRabbit where we can buy and sell low labor locally and anonymously where people can hire electricians plumbers and mechanics outside of a legacy Mart thats a good question thats like getting down to the human action element of economics to a super individual and decentralized level I mean I think that that would be great I think that one of the things that people talk about a lot as we get to this libertarian utopia type of future with lots of decentralization and selfimposed regulation one of the things its going to be required to be able to do that as reputation has to come back a lot of these central planning institutions are kind of anti solidarity anti reputation people get about a little bit lazy in terms of vetting things and reputation coming back and giving these decentralized systems where somebody can be a plumber or a gardener or something like that and people will feel safe with using an alternative method from these type of mainstream sources I think thats valuable I think that were a little bit far away from that there needs to be a little bit of a social shift in terms of people need to understand implicitly why reputation is important instead of just saying the work making the noise with their mouth and saying reputation so again I think that as an end goal thats really valuable and thats really cool but I dont know I think that social change is a little bit slow to I take hold so that might be a little bit farther off than some of these onramps that were talking about right now that are going to have a more visceral and ephemeral effect on the market in the short term well beautiful answer there and yeah again invention asks question before I mean were so early on in all this stuff its a little bit down the road of course thank you veteran account for the 10 Supercat ulcer Colonel Swan jr.
sent two bucks in the superjet thank you very much he said no need for gold bitcoin is pegged to is pegged to Bitcoin oh yeah dude one Bitcoin equals one Bitcoin value your wealth in Bitcoin pound that like button get your treasure and your tshirts link to below theres all sorts of awesome affiliate links okay now were going to move on to the subject matter that was discussed on well Caitlyn long when she was on trace me me or show and something she wrote in Forbes that is linked to below and that is the well its its the the correct what by the financially a fractionally reserve bitcoin all right so were talking about big players were talking about venture cash people now were talking about the entities that you know were touch that God brought up gold a second ago in the chat you know how gold was made into paper gold you know you can buy paper you know basically fake gold from these gigantic institutions and in the Catelyn long thing she is worried about Bitcoin becoming a similar thing when your body is theres gonna be factually preserved Bitcoin out there I think this is probably going to heaven I dont think its going to make that big of a difference because of the holders out there but a Krieger I wanted to get your opinion on this first on that article and do you think this is uh coming down the road yeah so I think um she brings up a good point but if you read you know if you read her her series and what shes actually saying she she doesnt seem that concerned about it she seems like shes saying hey this is something to pay attention to and I agree it is you know knowing how fraudulent the financial system is and when you read that article and you see what shes talking about shes basically saying she mentioned this one really crazy example of like dole fruit where they had um where they were like multiples of supposed shareholders with lawsuits then actual shares existed and all these holders could point to their brokerage statements that saying that they owned the shares and it was more shares and existed I mean thats just thats just a great example of the traditional financial system which is essentially based on fraud now the reason I dont really worry about this ah lets just lets just talk through an example so what shes talking about is a tail wags the dog kind of a situation where the financial players start creating derivatives or phantom bitcoins and the big players decide they want to trade those derivatives right and then that market becomes so huge its actually multiples of the actual underlying Bitcoin thats trading and therefore that market then is the tail wagging the dog right its influencing the price of the the actual bitcoins with phantom pickles now yes this could certainly happen but I dont think it would it would be something that could be sustained over any long period of time for one main reason first of all bitcoiners and the bitcoin community from what Ive seen watching it for the last six years or so are some of the best people Ive ever seen at being at sniffing out BIA right so theres something thats off or something thats wrong the equators are really really really good at that the best Ive ever seen of a group of a community on the Internet so therefore what would happen what would happen fairly quickly if there was suspicion that there was a tail wagging the dog and I am these derivatives were making the price go down where it shouldnt you would have very quickly in my view um people running into the actual markets to buy real Bitcoin and buying a Bitcoin at a low price and then very quickly youd have a disconnect you have actual bitcoins trading at a different price than the derivative pickle and so therefore I dont see a situation where the derivative Bitcoin can ever really control the price of the underlying I dont see thats possible now heres the big difference between gold and Bitcoin and some have made the case over and over again yes you can buy physical gold and take delivery but youre not gonna do that for billions of dollars of gold its extremely costly its extremely difficult by the way there have been many articles written on this when institutions have tried to actually institutions have tried to take lets say a few hundred million dollars of delivery of gold you get you get pushback you know they dont really want to do it so so with Bitcoin you dont have that issue you can you can buy it and you can move it to your trenzalore or your ledger or whatever you want very quickly and very easily and that ease of taking delivery and moving your coins off exchanges is what its sort of like um this immune system in Bitcoin thats built in that in my view will prevent this this nightmare scenario that she talks about I think it can it can happen in the short term but it wont be something that can like it cant suppress the price for months or years and because of that long term thinking people krieger that was an amazing freaking point about you cant you cant get your billion dollars worth of gold I mean but you really you can and you should be able to get your billion dollars worth of Bitcoin like that and that is a tremendous difference there very good point man I love this show all right boy what do you what do you have to think about that all good stuff its a very good point about gold theres actually been specific examples where people want to take ownership of their gold and theyll go to uh you know holding our storage facility and be like heres the money that we want for this gold come and put it in our locker and theyll be like no were not going to do that so people actually have to go to a forge or mines are actually giving gold to the forge then they take delivery from there and then theyll put it in their own secure locker they actually have to physically subvert the authority of the holding institutions to be able to collect physical gold and I think that there are risks though in terms of paper gold defusing the paper bitcoin defeating the value of Bitcoin there is some type of information overhead that a lot of us in the Bitcoin community early that are prophetic enough to be able to understand the information overhead we run full nodes we hold our keys but there are a lot of investors that I think are going to come and want to get their hand on bitcoins theyre going to want somebody else to be the custodian of those bitcoins theres going to be bitcoins that are alone so theyll be hypothecation on the basically the hypothesis that if somebody doesnt pay that you can then collect this then theres rehypothecation in terms of somebody saying all right Im gonna daisy chain lend that out and then like five layers of hypothec asian are now registered as 5 bitcoins when theres only one I think there is a concern of that Im an agreement that it wont be a long term problem because its actually this inverted pyramid well I cant even make the shape of a pyramid but itll be an inverted pyramid where the where the bottom with the actual amount of Bitcoin that there is versus the amount of Bitcoin thats being traded its a doubleedged sword because youre making something that is scarce less scarce so theres not only a scarce amount of it but theres all this weight thats happening on top and that means that if people come and they start start taking physical ownership of their Bitcoin which is a liquid enough asset like you pointed out that you can take it and you can take delivery of it unlike gold that that will make a very very weak position under which you would be able to try to create all of this paper bitcoins so its a very very very precarious house of cards if they try to really aggressively go out and defuse the value of Bitcoin without the paper Bitcoin because the risk that somebodys going to take the rug out from underneath them and the ability to look at different wallet addresses and look at holding accounts from an outside position where youre not an auditor that can be you know controlled and bought is a centralized regulatory body there are things that make it so that these situations are harder to capture regulate totally and then make sure that you actually control the underlying instrument people control gold that are in these positions you cant really control Bitcoin least of all because of things like the UA SF and people that are very very prone to calling out scams in the space that it was looked at so I think its a very important balance to look at the very very real possibility of another bubble happening here and then also look at why it wont be a longterm problem and how we are going to be already you know in possession of the tools that well need to dismantle this type of a nonsense that will defuse the value of something that should be rare yeah I think theres gonna be a lot of people getting into the space that dont understand control controlling your private key is and think that hey letting out my Bitcoin is great and there would be actual institutions that are going to be like that maybe also that are gonna lend out to these guys and allow such a fractional reserve situation to occur so guys dont dont lend out your Bitcoin control control your own private keys or youre gonna make the fractionally reserved institutions that you dislike so much even wealthier control your own private key alright its like the diametric opposite of holding to try to make it more scarce and have the gold or have the value go up if you lend it out its not only not holding its inflating the amount of 21 million bitcoins in a soft type of derivative sense so I would say its good to think about it in that way to some extent yeah I just wanted to jump in real quick and just say that also one of the things to be to be aware of look at 6, 000 and the current ownership profile of Bitcoin its not something to be worried I mean this is something you get worried about maybe in the next boom and lets say the price goes to a hundred thousand and you got Wellington management and all these hedge funds owning it and those guys dont care about private keys then they lend it out thats when youre gonna lets put this way in the current structure of the market the price the ownership distribution its not a risk what shes talking about is if you get in the next bull run you know the big the run is dominated by institutional buying and by institutional holding then you then you have to start think about it but the price would be so much multiples of where it is now before we have to even think about something but but the but I want to ask the panel this the bull run I think the next will be dominated by institutions and so I think everybody out there should be prepared for some a scenario like this to happen where the Fiat price of Bitcoin will drop from an unimaginable amount at one point when this is all discovered all this plays out so just have a strong hand people all right weve got Reva Josh whats whats your opinion on this a fractionally reserved big coin a situation perfect a possible situation yeah its funny when I read that article I was thinking um something that Charlie Munger said several months ago he was asked about Bitcoin and he was pretty bearish and said something along the lines of the reason that hes bearish is every time something has value and his scarce people will rate more of it some way or another and most people myself included laugh that off and thought that he thought it was a company and that the Bitcoin company it would just bring more bitcoins but I actually think that this is probably what he was talking better at least in my mind and things like this all coins its just sort of the tip of the iceberg because something has value because it scares people will come up with ways to at least pull other people into thinking that theyre more than there are Im reminded of when coinbase sort of spoke to their users and realized that people were buying litecoin because they thought it was cheaper from they couldnt afford a Bitcoin and so yeah I think I think its just arent necessary and throwing pain those people or any get educated what it is that were actually buying with the value in it do you think the next the next bull market will be dominated by institutions that will trigger it yeah absolutely um you know its really funny people work it or touch for institutions that it seems like its gonna come fairly soon I think you know custody is still an issue a lot of large funds over a certain size cant just be their own keys and so they need some sort of solution and there are some out there but its still limited and yeah I think thats absolutely true well again look these custodial solutions this is just its gonna become its gonna become a honeypot I and Id love to hear what everybody thinks about this I think theyre gonna be a lot of custodial solutions that are going to make these institutions comfortable but I also think one of thems going to get hacked and its good thatll be bad for the Fiat price when that happens uh Blake or Krieger d4c stuff like that happen or any any other thoughts on this matter I mean from my end I did see I think I saw an article talking about Goldman even talking about a custodian solution I dont like that I didnt like that at all I mean what I would want to see in this space is those that are coming up with custodian solutions are not the people that are essentially pros at creating fraudulent financial assets and you know rehypothecation everything into oblivion so you know I would rather see you know like tech geeks and bitcoiners from old school come up with you know custodian solutions independent of these financial institutions thats thats thats the thing that scares me a little bit cuz because if you get all the institutions than wanting these traditional Wall Street entities to hold their Bitcoin then then that would make me a little bit uncomfortable yeah the price would be through the moon from here but that would make me really nervous because that would be the big holders right the big institutions holding and then holding it with the same people that wrecked the economy ten years ago I wouldnt I wouldnt be so comfortable that do you think the institutions will dominate the next big board on oh yeah that for sure I mean I think you know as youve always said with the happening if you look back the last two bull runs you know it was right right around when that happening happens right before it in both cases so you know Ive said for a long time that the next I think probably up till mid next year is when were in the danger zone still like of you know this bear market but once we get to like middle of next year youll probably start seeing people start to say okay were a year out from the happening lets get long and by then you probably will as Joshua alluded to have better custodian solutions because I think its hundred and fifty million I believe is the number that above that you need you need to have someone as a custodian essentially you can have your own keys so those two things I think are going to come together at almost the exact same time the next happening plus a custodial solution so that thats gonna be and that thats when youre gonna get the funds coming so yeah I think I think thats whats gonna drive your next big run yes big money all right well theres also a regulatory male incentive here in terms of that window that you were talking about where you get over 150 million youre actually to give up your Bitcoin keys to a custodian and that needs to be switched around in terms of this digital Bearer asset because thats the opposite of what you want to do I think youre totally right if we can have tech people creating these custodial solutions where there are multisig accounts that are no bigger than you know excise each where you have transparency or transparency into a key that youve been provided even if its going to be in an omnibus account there are ways to program the money to make sure that its chunked up in a way that its not this giant bowl of value honey pot worth then all of a sudden its worth it to point all these computers towards it and to you know go through rainbow tables and try to unlock the funds what you want to do is you want to chunk out the Bitcoin that youre holding in a way that makes it more secure and theres a vested interest in the legacy custodians not to do this because they want to have it all lumps together so that they can loan it out you know 33 to one and then you get back into the 2008 crisis which was the reason that we did all this in the first place so I think that very good points were made on on Michaels point there all right and do you see the next the next bull run basically these institutions are fueling it yeah definitely I think that right now we are seeing people making statements about Bitcoin to try to suppress the price the bull market a whole bunch of people are saying you know its terrible its worse than rat poison its like well cui bono who benefits from that people wanting to collect in a crude cheap Bitcoin before the next happening comes up and then when you look at things from the question of you know who benefits it helps to really clean understanding of why would they be doing this stuff because the longterm consequences is its going to go up and theyre going to have to spend their credibility to do this so what is the actual value if theres actually a calculable cost and I think that the value would be to try to push it down and a crew chief Bitcoin ignore the crypto noise people its noise to get you to get out your Bitcoin if you sell your Bitcoin youre probably not gonna like the dudes at okay theyre gonna end up with it its the same people then youre like oh they control the world I think its its its the institutions its the banks they they can talk they can talk it down but theyre smart dudes theyre theyre slowly acquiring most likely okay well I this has been an awesome topic do any of you guys have anything to add to this uh this hypothec asian and all this madness that we might eventually see here and all right well Ill get it getting your value out of a fork when you have paper bitcoin is an impossible problem to solve if theres a perfect coin that doesnt exist and theres a fork and then you owe that back to youre like thats thats gonna be a spicy meataball and I guess thats all I wanted to uh does Josh have any thoughts about this I feel like I jumped in on him about to talk a couple times so Im starting to feel guilty about that no no I was just gonna add the forward and now its all a but I was just to say theres sort of thirdparty custody for these institutions but theres also a lot of family offices in your worth individuals that dont really know how in a secure way to put a lot of money into Bitcoin and secure with themselves and secure their private keys its a we invested in a company called Casa just three if Im only saved where you control your own keys and its a lot of their early customers yeah Casa you like you know Casa right that you heard of that I know I mean house and that but you made a great point about the forks and I tres also brought up that when he interviewed Caitlyn long and I mean were already seeing that on a small level how coinbase so many people will keep their Bitcoin at coinbase they havent been able to get their Forks they still need their be gold and everything I mean this is this is the price people pay if you if you dont control your private key youre gonna get into this madness where these Institute who ever is opening it for you is gonna make up some excuse er theres gonna be some little small a print somewhere saying hey we get to keep your uh Forks its too complex to give you the crypto dividend and there you go pound that like button people are all right speaking of Forks were gonna bring up B cash here because because shes an altcoin at a forked off of Bitcoin over a year ago and recently there was there was a story and I talked about this on my show I think I talked about this yesterday how a big Bitcoin guy notice the big problem with be cash and reported to the be cash people and saved trouble for beat cash Blake can you explain this situation and would you have done the same thing Blake well this is very very interesting from a risk management information science perspective because risk management professionals take risk management extremely seriously and I think this is an extremely good example of that case what happened was there was a critical vulnerability discovered in Bitcoin ABC which is the most popular wallet implementation for Bitcoin cash so bitcoin has Bitcoin core is their most popular wallet implementation Bitcoin cash has Bitcoin ABC and one of the Bitcoin core developers Corey was looking through the changes that had been made to Bitcoin ABC to look for any type of fixes or vulnerabilities that they had noticed that then would be backwards appliable to Bitcoin core just to make sure that not only are we working towards their own solutions but taking advantage of everybody elses work to avoid some type of overlap or scope creep or bloat situation where people are working towards the same thing when they dont need to be well what he discovered was there was a pretty big change there was theres a large refactor in the kind of core element of how Bitcoin ABC works and when he was looking at the change logs and about how many people had signed off on this it was only about two people and they had done it in a period of a week so he looked through the code and it took him about ten minutes to find the sig hash bug which would have basically split the Bitcoin cash chain into two there was a wallet software version for Bitcoin ABC that about 50 of people still had and there was an update that about 50 of people still had and there was a vulnerability in the update where if somebody had specifically formatted a transaction it would have made all of the chaining compatible for one set of the wallet software in perpetuity which would have made a 5050 chain split which would have been absolutely devastating now a lot of people that think that this is a competition and we want to you know go for blood would say you know dont call it out you know go and capitalize on that vulnerability and kill off Bitcoin cash but I dont think thats a good thing to do because when you look at this as an individualistic experience people dont want to see individuals lose a lot of money and be hurt no matter if theyve backed the wrong horse you dont go hurt individual people thats not a good thing to do especially not if youre a libertarian or staunch existentialist liberal you dont do that you dont want to see any vigils be hurt so actually as I was reading through the risk that Cory took upon himself to disclose this when somebody could have you know figured out who he was figured out that he knew this and then also figured out that he was one of the people that knew this if somebody else had hacked the system somebody might have wanted to arguably kill him over this and he took all of that risk upon himself to handle the situation exactly way that he would have wanted it handled if somebody had found a problem with Bitcoin core and again like I was I was like tearing up as I read the way that he handled this because its an issue thats so close to my heart and he handled it so well so nobly that it really really really is something to be respected and I have a tremendous level of respect for what was done and how he handled it its easy to go and make changes to software with the Silicon Valley attitude of move fast and break things lets iterate lets get things done but when youre in a large live material value transfer system in production you really dont want to do that in large reef actors of code right at the core of whats going on I mean thats really really dangerous so I think that a it was really great the way that he handled it and be it should give people pause in terms of putting lots of money into some of these alternative chains and implementations and things like that they are pretty neat and pretty nice to have in terms of competition but when you dont have enough eyes on something and a fatal mistake begins to happen its something that you really really really dont want to have all your money in beautiful beautiful explanation there I agree with you I I want to just what do you think if he had not found it and this would have played out what would have happened to the cryptocurrency market any fossil well I think it would have been really bad for B cash I think that people would have lost money I think that they would have definitely been some articles where people conflated B cash with Bitcoin and instead of just saying in exchange got hacked with the easy example of saying well if somebody loses cash in the back of a taxicab and theres a theft you cant say that the serialized index of dollars was compromised and somebody can print infinite dollars so that was a good way of saying okay somebody had their exchange robbed or hacked so they lost Bitcoin but that doesnt mean the protocol is compromised any more than it would mean if dollars got stolen that the printing press of money is compromised that people can print infinite dollars this would be a harder situation to describe in terms of why its not Bitcoin that was at fault yes its an implementation for a competitor but trying to explain that to a layperson and having them pay attention enough it would have definitely created a lot of a PR overhead not to mention the amount of people that it would hurt on an individual basis so I think that the way that it was handled was very very very prophetic in terms of risk management ability awesome Josh have any thoughts on this story do you how do you think it all would have played out if it would went down yeah I think its a challenge right these people by you know Bitcoin cash because they dont know much about cryptocurrencies and see it as a cheap version of Bitcoin and it was their money and theyre sort of turned off towards preferences forever and they never you know decide to actually buy Bitcoin and so its not hurting sort of the developers and people but to the fork possibly by handling it the way that it was handled and so yeah a respect for him and the way that he did that and disclosing it after the back to which I think you know he could have easily just sort of gone about this but the entire story and sort of laid out the risks and a fourth because at the protocol level the bugs when theres value associated with something its its much more fertile than people think and so if people were chained and you take it from one snapshot in time and youre not continuously updating actually things and have you know really strong cortical developers working on that its very likely that you end up in a situation like this if weve seen it with several other folks as well we I think not being anonymous you know saying it was him hes sending an example for everyone out there you know hes saying I did this you could you should do this hes putting his a face putting itself out there and I think it was its a hes trying to set a good example for the entire cryptocurrency community setting a good vibe Krieger any thoughts about all this yeah so absolutely and I agree with what everyones saying wholeheartedly and I want to just kind of put it in my own terms you know for me coming from the finance system you know and I quit Wall Street when I you know when I realized how horrible how fraudulent it was and the bailouts and all that you know when I first came across Bitcoin and learned about what it was I was struck one of these are struck by not just the opportunities for obviously for freedom but by its design how ethical Bitcoin is compared to the traditional financial system just by existing in the way that Bitcoin exists it makes the financial system look bad and I think thats great and you know one of the things what he what he did by by essentially you know almost a competitive chain and saving them is a great example and one that I think he should be absolutely applauded and celebrated for because look if you start finding vulnerabilities in Chains or protocols you dont like and you keep it to yourself for you and you hope that they go down in flames thats the worst possible thing you can do youre essentially becoming the system itself by doing that thats what the NSA does thats what the CIA does they look around for vulnerabilities and Apple and other you know tech giant software and then they exploit it they dont tell the companies about they use it for their own nefarious purposes so I mean if you go down that path youre as bad as they are so yeah like thats the whole point you know Im interested in this community Im interested in what were trying to do here because were trying to make this world a better place so youre gonna act like those the intelligence agencies and you know I have no interest in being part of that very good Blake do youve anything to add no I mean I just I was just explaining to chat like I literally got choked up like as as my left brain understanding of this had to traverse my corpus callosum to my right brain to conceptualize in the way that my wife could understand I kept getting choked up by trying to articulate to her the personal risk that Corey absorbed to make sure that individual people didnt get hurt regardless of peoples you know competition streak in terms of these protocols so I think that thats you know really something to be respected he could he was at risk for serious physical harm can you go over the scenario where that would have you yeah yeah definitely so he was at serious risk of tremendous physical harm this was a huge bug that would have forked basically 50 of the node implementations for a protocol which is live and in production during value so if he went about this with his name and said heres my full name heres the vulnerability that I discovered and heres how it needs to be fixed if somebody had used that vulnerability to attack and split the chain before anybody could fix it people would know a that he knew about it and B he would not be able to prove the negative that he didnt do it and somebody might have been motivated to literally kill him over this so the amount of risk that he absorbed on himself to make sure that other individuals were not hurt again like thats so brave that Im getting choked up even now trying to talk about it it is it is something to be admired to say the absolute least Wow okay and again Blake is knows about this stuff dudes that the I mean whats your tiny risk whats risk management information scientists but I actually kind of work as a cryptographic economist all right there you go thats a thats a mouthful but its hard or pound that like button people I cant check out all these links the guys links below there theyre very interactive dudes and theyve got all sorts of great information that they put out there and josh is interested in lighting Network people I know some dudes actually that Im gonna try to get in touch with Josh after the show actually because theyre emot the emotion people be in motion theres no youre not risking anything by just giving your idea out to someone and say hey man this is my idea do you think its good or whatever thats thats in motion there youre not doing like with that but Blake is describing that guy was putting is everything online whoa all right so were getting it were getting close to the end of the show here I want everybody I know these guys have lot lots to say if theres anything that it was left off anything theyd like to add about their their specialty or anything like that but well start with Josh anything you want to add that was left out any comments on things that were brought up and just story of the week anything you want to share yeah nothing I didnt think of other than just to add to me conversation about the vulnerability I think if the situation was inversed and it was a you know be cash developer that found a link oh it wouldve been handled very very differently than probably used to packaging really worried it was so I think setting that example mmhmm interesting very interesting theory there well Josh thank you very much for being on the show they break and break it down the venture capital knowledge and everything for us here Im glad to get people that are in the belly of the beast in New York on the show to do this to see whats going on krier what was uh anything you had to add or yeah definitely um so I dont know if you guys really know but you know I I dont spend as much of my time on on this stuff is all you guys do so youre way more knowledgeable than me so I write about other things but I did want to actually pose a question to everybody based on what I think is the most important story of 2018 Im not talking but its related to Bitcoin and everything but its bigger than that and that has to do with this recent flexing of muscles lets say by the tech giants and deep platforming Alex Jones and info irrespective of what you think of his content this is a big deal right because it all happened at the same time Google Apple and Facebook all acted within 12 hours of each other 2d platform him and so Twitter has had some of its issues as well in the last few days I dont know if youre familiar this guy we meant well hes an Iraq war whistleblower he worked for the State Department during the Iraq war and he came out and basically talked about how journalists lied about everything etc hes been banned from Twitter permanently and then to libertarian guys this guy Scott Courtney whose brights about war a lot and Empire and Daniel McAdams who is the executive I think director of the wrong Institute also was suspended so those who are suspended so so from me I feel like this is the biggest story of 2018 so far and I think were gonna see a lot more of this because once this is open the once this door has been opened and its been established this is something you can do and that will be done it will be done to other people and it will expand it will be wont just be Alex Jones next it could be Artie and then next it could be anyone thats against the war and so Ive started looking into and I dont have the tech chops I think as any of you do but I have started looking to Mastodon as a Twitter alternative just as something to explore cuz I know it is a more decentralized social media alternative so I was wondering if anybody on the panel has looked into Mastodon has any opinions on it I know bitcoiners have started opening accounts on there I think whats that and BK that guy opened all faux okay yeah I think started like an instance there its become popular so I just I wanted to see what you guys had thought of this if anything because Im really Im really not up the learning curve much all right this is a huge I should this should have been one of the topics today because on yesterdays show that I did late last night I talked about masks on I talked about Rodolfo and Ive been this whole week actually Ive been bringing up Alex Jones stefan molyneux all these people that are the you know get sorta block or blocked and this is an opportunity for crypt for these people to get into crypto okay this is an opportunity for someone in crypto world to make a crypto alternative to all of this now Mastodon is great too because its it doesnt have advertisements its not gonna get blocked but I want to when the rest of the crew here starts talking about it I mean especially Joshua what you you uh you fund uh companies I mean this is a I mean if there was a company that a social media company is somehow incorporates crypto and not uh not not the silencing people would you be interested in something like that yeah absolutely and we invested in the past in a chemical block stack which people might be familiar with and you know theres a team right now thats building something similar as well to that yeah check out Mastodon pretty interesting probably a couple of things that are out there today the best of them you still have sort of the you know the network effects problem but if enough people migrate from its just some social media platforms this is I see this is an opportunity and Ive agreed with Krieger that this is uh this is a huge huge huge story again they are Im gonna say theyre private corporations thats why other people got to create their own private corporations that are better than these ones that involve crypto that everyone will flock to and then who cares what YouTube does who cares what these things do Blake whats your whats your thoughts on all of this unfortunately I havent had any time to a play down play around with Mastodon yet but I think that there is a huge problem with this amount of centralization that weve allowed to just kind of infiltrate our lives I mean the problem with mountain cocks when they had 80 of volume for a long time and everybodys using their ticker symbol and then eventually the mountain cocks was just ubiquitous in the clip throw community with everybody trading on there and then it went you know bellyup that was a huge lesson for a lot of us early on now having all of these huge technology conglomerates theres a I would like the band Muse Matt Bellamy is a great musician and one of the lyrics in one of his songs is all of history deleted in one keystroke I think thats a really really good kind of like a shallow allegory for what is at stake if we dont decentralize some of these things a lot of the ways that I decentralized as we have a private service we have the Bitcoin mumble server where theres audio chat thats hosted on an AWS that we can move the hosting I talked to a lot of bitcoiners there its I think called the Dragons Den Bitcoin mumble thats a really great place to talk I do some stuff on Twitter and I think that Mastodon is another great layer that we can add to that I love that were on YouTube but at the same time YouTube and Google have been making me pretty upset lately with banning alex jones which i see basically is a stephen colbert type character before he was hosting the Late Show back on Comedy Central I thought that Stephen Colbert was really really funny I thought that a lot of the stuff that he was doing with jokes I kind of think that Alex Jones is in the same category I dont know that deep platforming people instead of arguing with them to show the superior nosov your ideas is a good way to go when you have a vacuum of dissent theres no a sounding board upon which to illustrate the superiority of your ideas and your traditions to argument and debate and discourse and dialogue so I dont think its a great version of the future thats by deep platforming and banning people that are either antiwar or too edgy because theyre comedians I mean there are certain things that are beyond the pale and private companies are private its private property they can have the rules the way that they want them to be but also I mean it becomes this huge thing is whats their fiduciary responsibility to their shareholders and investors in terms of making money how much money is lost by the platforming these people how much PR does it does it come into this with how much do they need to manage PR or do they lose money theres a whole lot of questions that I think that could really be talked about in depth about this issue but I think that one of the main takeaways is the more that we centralize the more that we risk this type of all of history being deleted in one keystroke and Bitcoin is great its antithetical to that idea which is a huge reason that the UA SF held so much weight in terms of people wanting to increase the block size which would have naturally decreased the node count and people said no were not going to do that were going to increase you know block density and were gonna make the block weight is four megabytes I think that you know as was said earlier by Michael this community is really really good at going and sniffing out nonsense and making arguments to counter it I think that the cost of refuting bullshit is high but its a cost that should be paid if somebody is debating in you know in good faith seeing them banned like some of the representatives of the Ron Paul institution is really a terrifying precedent and I would have to tend to agree that its one of the most important stories of the year I do want to say all these people being banned they gotta take first responsibility put up a Bitcoin address all you people being banned and and you will get is funny because when when you are banned for I mean Alex Jones is losing a lot of money by getting kicked off all these things I mean he made money from this stuff he should be getting putting up crypto addresses saying hey if you support me send it over here theres theres no shame in that Stephan mom theres one step up ahead everyone hes had crypto up there for years and hes done great because of this I see this as an opportunity for cryptocurrency because it just someones gotta have an innovative model to incorporate cryptocurrency with these alternative views and again we have D live is a new platform also its from Stevens that Im trying to put stuck on to I guess I should give them a shoutout also Alex Jones and all those people should be trying to get on the deal any anything different they should hes got a lot of guys working for him try to diversify trying to that because if you you are personally centralized when you are depending on YouTube so much people should not be depending on if youre controversial like or if youre anyone you should be depending on three platforms so much just the case of something like this happens back to you Michael Craig or anything else you have to say about them as they want to just add a few points so first of all like and this is very disturbing in the case of lets say Peter Van Buren whos been apparently banned permanently from Twitter you know thats seven years worth of commentary and and and and information thats gone down the memory I mean you cant find this thats crazy I mean thats a lot of lightwork thats also something that history should have like posterity like whereas human beings will lose it by having someones a whistleblowers work of seven years just being disappeared I mean thats very very disturbing um but second I didnt want to just have a little debate here about the private company argue first of all I dont really consider these companies private first of all Google is making a sensible web search for the Chinese government and basically listening to China and doing whatever they want any terms disappearing it from their search its extremely evil and if Google is willing to do that in China why wouldnt they do it here in some in some nefarious ways we dont know what their code is we dont have no idea secondly with Snowdens revelations we know that these arent really private companies they had backdoors for the for the NSA and the CIA and prism all these things so how can you can you really call these companies hes essentially platform monopolies private theyre kind of pseudo private really yeah theyre private in the sense that you know they make a lot of money private for their shareholders but are they really like independent of government I would say no and then lastly uh what about phone companies right I mean is a neonazi allowed to have a landline phone I mean I can connect and ATampampT say you cant have a phone because youre a Nazi I mean no they cant do that and so the point is are we really talking about when we talk about communications are we really talking about this is a private company issue are we saying that somebody out there is afraid of the efficiency that the internet is allowing ideas to spread because theres no you know you have access to mail and the Postal Service even if you are have horrible views right I mean they are engaging hate speech so its its not quite as simple as people make it seem by just saying are there private companies you know this is the new communication field that were living in now so and these are sort of government entities as well in my opinion I say I think that youre totally right and I think that youre youre making an equation to like digital bookburning what I think that it is all this communication history theres an African proverb that says that when an old person in the village dies its like a library burning down because youve then lost the ability to get all that information out of them and this is really a similar thing its digital book burning its not something that I think that we should let go quietly into the night without you commenting on its definitely not something that people shouldnt be at least marginally upset by it is something that I think that we need to not just be upset by but take and vote with our dollars elsewhere because thats the most power that we have in the current situation yeah I agree with that I boycott them all then I mean I think thats the answer Josh but you have to say yeah I agree with everything thats been said I just wanted to point out that the George Gilder has published a new book called the end of Google I believe its whats called the sort sort of gets to the heart of this idea the big web platforms and looking more and more like extremely large countries and having too much control in many different ways you know this being one of the most important over our lives and its all our data and yeah I would just highly recommend it to anybody whos interested in this topic whats called the end of Google the end of Google the end of Google some people dream of that all right do you have any any I I want to use you brought this up I want you to have the last word on this topic no no I know I do agree at the end of the day Im not Im not like crying to got you know government to solve the situation and entrench Facebook as a utility thats not what Im saying Im just trying to get people thinking you know my suggestion has been to people to delete facebook permanently um you know I have an old I had an old Facebook account Id never really used it I deleted it permanently forever this week and I do know for a fact that eggs Facebook executive particularly now their stock collapsed a couple weeks ago 20 dont forget theyre vulnerable now you know and so you know like you said vote with your actions you know delete freaking Facebook and theyll pay attention and if enough people do it Facebook will go away and well find something else yeah I mean we dont need Facebook I dont want to entrench Facebook I dont want the government to come out and say Facebook you are the monopoly you have this monopoly and were gonna entrench you and regulate thats not the solution although I do think Facebook shows Facebooks rules should follow the First Amendment of the Constitution I think as a platform monopoly they should follow the First Amendment as a guidepost and theyre not doing okay theyre very very good here I wanted to quickly you know where were running up on the end here but like in in the chat and you still havent had your conclusionary remarks yet actually so you this is a twoprong question anything you want to add anything thats been left out any final comments but here in the chat you see theres a guy Javier Suarez asked by guys privacy is what is needed well Bitcoin incorporate ZK snarks member Wimble may not be enough to conceal identities so thats thats a blank question right there thats a very good question its hard to know what types of processing overhead versus privacy solutions are going to be implemented into Bitcoin to a large extent the amount of privacy that youre able to glean from cryptocurrencies its how you manage your keys if you docks yourself with your key address then trying to go through and wash your coins becomes very difficult so trying to find a good balance of usability and then also a privacy is difficult but I wanted to go back and talk about Facebook yeah I mean I deleted my facebook a while ago I was on the world crypto Network a lot very very early on and I had my a public figure page links to my Facebook had thousands and thousands of followers lots of good stuff and eventually I took a snapshot of all that so I have the information and I deleted it because I dont I dont agree with the way that Facebook runs their platform I had been suspended or banned from Facebook almost more than anybody that I have ever heard of and I Im not a controversial person I wasnt like going in there beyond the pale and saying stuff it was that people would agree with my ideas and then they had certain you know flagging thresholds where people would disagree with something and then they would flag it now I get suspended and it would take down my public figure page my joke friendly community page and then also my private page and that had happened enough that I got sick of Facebook a while ago and then now looking at whats happening theres this thing in music theory where the notes that come later changed the notes that came earlier and now the notes that are coming currently in the Facebook song makes me really really glad that uh that I deleted Facebook a while ago so I think that theyre 20 stock hit is just you know absolute poetic justice and that more people should delete their Facebook other than that I think that the Ross Ulbricht trial is a really dangerous precedent where he had a a kangaroo trial that he deserves at least a retrial and that I think that a lot of people should throw some weight behind at the very least even if you think that Ross did something wrong and deserves some form of punishment he needs a retrial the the the amount of problems with that trial with the murderforhire rumors that he wasnt charged with tainting the way that he was charged and then with a lot of the agents that collected the evidence being corrupt and now theyre in prison I mean that needs to be a retrial hopefully if it was you or your family member or your child in prison and all of those circumstances that unfolded that youd want to at least have a retrial and have a fair shot at justice for your family member so I want to kind of donate my closing statements to please support free Ross and in any way that you have time to do all right that is that is very good there thank you thanks everyone at Javier Suarez thank you for that 5 super chat question okay before we leave I want to just remind everyone Ill be in Los Angeles I am in Los as I speak in tomorrow so check out that link below Ill be speaking to Philadelphia big event whats his face will also be there with the yeah Ken Bozak will be with me next Saturday in Philadelphia Im tired still Ive ran this morning its hot out there in LA so check that that link out below this we get bitcoins on every Friday so keep coming back here every Friday tomorrows the beyond Bitcoin show I post a new show here every day the one Bitcoin show hey gang do any of you guys have anything else to add in the 3d I really you guys rocked it today all right good good good then were were all settled I hope everybody enjoyed this as much as I did so pan that like button im adam meister the bitcoinmeister the disrupt meister remember to subscribe this channel like this article share this article check out the links below to learn all about these guys have oh theres one link below burning down the house bye bye the talking heads if youre watching yesterdays show youll know why Im posting it today I want everybody to have it as a great song mr. Byrne actually grew up in Baltimore County just like I did so hey theres a half on everybody see you later byebyep