let's talk bitcoin, episode 32, "sneak’s law and bitcoins next 2 billion"

8/13/2019 Let's Talk Bitcoin, episode 32, "Sneaks Law and Bitcoins Next 2 Billion"

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Let's Talk Bitcoin

Episode 32 Sneak's Law and Bitcoin's Next 2 Billion

ParticipantsAdam B. Levine (ABL) HostManu Sporny (MS) Founder and CEO of Di ita! Ba"aar #effrey $au! a%a Snea% (#$) Ha&%er'Entrepreneur Ste art uea!y (S ) Host of Media*istro event +nside Bit&oins

Questioners at Inside Bitcoins event#e" San (#S) An e! +nvestor and Entrepreneur $eter Seed ($S) Entrepreneur

Advertisement Voice ArtistDr. Step,anie Murp,y (SM)

ABL: Hi- fo!%s Adam B. Levine ,ere. /oday0s s,o isn0t afraid to 1ump in t,e mud. First- e sit in asManu Sporny of t,e 2or!d 2ide 2e* Consortium s,ares ,is perspe&tive from years of *att!e for&onsensus in t,e tren&,es of e* standards. He ants to *rin t,e ne3t 4 *i!!ion users into Bit&oin and,is met,ods are proven to or%. /,e se&ond ,a!f of today0s s,o &onsists of a !on intervie +&ondu&ted it, #effrey $au! a%a Snea%. #effrey is an Ameri&an ,a&%er and entrepreneur ,o sp!its ,istime *et een 5e 6or% and Ber!in. 2e &au ,t up it, ,im t,e day after t,e +nside Bit&oins event inMan,attan for an eye7openin dis&ussion of &rypto&urren&y- se&urity- priva&y- t,e onion router net or%

and mu&, more. + !earned a ,o!e !ot from t,is intervie and t,e ta!% *efore it and + t,in% you i!! too.+f you ,ave &omments- 8uestions or topi&s for t,e s,o p!ease visit !etsta!%*it&oin.&om'reddit to *edire&ted to our ne !istener intera&tion su*7reddit. 2e0ve ,ad a !ot of a&tivity ,ere so far and +0me3&ited to ,ear ,at you ,ave to say. +f you en1oyed t,e &ontent from t,e &onferen&e t,at e0!! *erea!i"in over t,e ne3t fe ee%s- p!ease donate *it&oins or !ite&oins at !etsta!%*it&oin.&om. /,is tripas out of po&%et and your support a!!o s us to &over future &onferen&es in t,e same fas,ion. 2e ,avet,ree or four more s&,edu!ed *efore t,e end of t,e year. A!so t,an%s to Media*istro for puttin on su&,a reat event it, +nside Bit&oins. On&e a ain + ,and it off to Media*istro0s Ste art. En1oy t,e s,o .

SQ: So- our ne3t spea%er +0m rea!!y e3&ited a*out... 2e run anot,er event &a!!ed Semanti& 2e* SEM/EC 7 it ta!%s a*out Bi Data- Lin%ed Data ,atever you ant to &a!! it. He is one of t,e mastersof t,e universe in t,at domain and + as fortunate enou , to meet ,im t,rou , our &onferen&e &,air,o runs our Semanti& 2e* event. Manu Sporny is t,e founder and CEO of Di ita! Ba"aar. He spendsmost of ,is time &reatin open standards and open te&,no!o y t,at i!! inte rate payments into t,e &oreof t,e e*. His vision is to demo&rati"e finan&e t,at0s a *i mission 7 you0re oin to ,e!p do it today-ri ,t9 He0s t,e &,airman a!so for t,e e* payments standardi"ation roup at t,e 2:C. Let0s ive ,im a

*i round of app!ause

(Sounds of &!appin )

MS: /,is is my first Bit&oin &onferen&e. + didn0t rea!!y %no ,at to e3pe&t. $art of me as %ind of


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e3pe&tin t,e !i ,ts to *e a !itt!e dimmer t,an t,ey are no - peop!e *e %ind of ,an in out in t,e &orner.My e3perien&e so far ,as *een &omp!ete opposite of t,at. +t0s *een rea!!y rea!!y &oo! to meet a num*erof t,e fa&es in t,e audien&e today and 1ust ta!% a*out t,e future of Bit&oin. /,ere0s !ot of e3&itementaround t,is te&,no!o y ,ere and so *e&ause of t,at + am rea!!y e3&ited to ta!% to you a*out ,opefu!!yon7*oardin t,e ne3t t o *i!!ion *it&oin o ners- ri ,t9 + t,in% a!! of us ant to see Bit&oin ro 7 to *emu&, !ar er t,an it is today 7 so part of ,at + do in or!d standards is to fi ure out ,o to ta%e nas&ent

te&,no!o ies and *ui!d t,em into !ar er &ompanies- produ&ts- peop!e !i%e Mi&rosoft- ;oo !e- Fa&e*oo%.2e ,ave a very su&&essfu! tra&% re&ord of doin t,at and so e ant to do t,e same t,in for Bit&oin-so !et0s o a,ead and et started ta!%in a*out ,o are e onna et t,e ne3t t o *i!!ion peop!e ontoBit&oin. +t ,e!ps to %ind of understand ,ere e0re &omin from as far as Bit&oin0s &on&erned and oneof t,e easiest metri&s to !oo% at ri ,t no is to see ,o *i t,e E&o7system is ri ,t no - so t,e *it&oinmar%et &ap ri ,t no is around - M>> times of a ro t, *et een *it&oin and t,e =S do!!ar 7 need it toet as *i as =S Do!!ar 7 a*out > times for addresses. 5o - + am pointin t,is out not to say t,at t,is isa *ad t,in t,is is a&tua!!y fantasti& ne s. +t0s rea!!y fantasti& ne s for t,e peop!e sittin in t,eaudien&e *e&ause you0re ettin it on t,e round f!oor. 2e a!! *e!ieve Bit&oin is oin to *e a*so!ute!y,u e and + t,in% a!! of us ant to fi ure out t,e ay to et it t,ere. 2e ant to fi ure out t,e ay toro it as 8ui&%!y as possi*!e in t,e most responsi*!e ay possi*!e- so *ottom7!ine Bit&oin ,as a !ot ofroom to ro so it0s rea!!y e3&itin to *e in t,is area at t,is time. 5o - ,en you ta!% a*out ro in ate&,no!o y- and t,e 2or!d 2ide 2e* Consortium ,as a !ot of e3perien&e doin t,in s at or!d s&a!e-!i%e t,e 2e* started off as t,is tiny !itt!e pro1e&t and no it0s t,is ,u e t,in - so t,e 8uestions t,at eant to as% ,o are e onna et 4 *i!!ion peop!e onto Bit&oin need to *e a !itt!e more pointed. Hodo e do t,is in t,e ne3t five years *e&ause *y puttin a time !imit on it e time7*o3 it and *y time7

*o3in it e start rea&,in for !o ,an in fruit. 2e start *ein a !itt!e more &reative it, t,e so!utionsfor ettin Bit&oin adopted in a mu&, !ar er ay. /,e ot,er 8uestion to as% is ,at e&o7system&urrent!y ,as 4 *i!!ion peop!e t,at are fair!y a&&essi*!e to t,e Bit&oin &ommunity9 +s it &e!!p,one

providers around t,e or!d9 /,ere are many *i!!ions of peop!e t,at ,ave &e!!p,ones around t,e or!d.+s it t,e *an%s9 +s it somet,in &omp!ete!y ne 7 a ne proto&o! for t,e +nternet9 + t,in%- rea!!y- t,eans ers are pretty o*vious. /,ere is on!y one net or% on t,e p!anet t,at is 4 *i!!ion stron . /,ere ison!y one net or% in t,e or!d t,at ,as a fair!y even p!ayin fie!d and t,at0s t,e 2e*. 4. *i!!ion peop!ea&&ess t,e 2e* on re u!ar *asis no and if e0re ta!%in a*out as%in t,e ri ,t 8uestions ,o do youet Bit&oin te&,no!o y in front of 4. *i!!ion peop!e9 2e!!- it turns out t,at @ of t,ose peop!e use oneof four e* *ro sers- one of four &ompanies. /,ose *ro sers are +nternet E3p!orer- App!e Safari-;oo !e C,rome- Mo"i!!a Firefo3. +f you &an &onvin&e t,ose &ompanies to inte rate Bit&oin into t,e

*ro ser t,ere i!! *e an e3p!osion in usa e and t,e ood ne s is t,at one of t,ose &ompanies isa&tua!!y very- very interested in inte ratin it in t,ere. 2e0!! et to t,at a *it more *ut t,e 8uestion isOG fine t,e 2e*0s out t,ere- t,ere are t,ese four e* *ro ser &ompanies out t,ere- ,o do e *ui!dBit&oin into t,e *ro ser9 2,at0s t,e pat, for ard9 /,at0s ,at + do. + am t,e &,air of somet,in &a!!edt,e 2e* $ayments ;roup at t,e 2or!d 2ide 2e* Consortium. My 1o* is to o out t,ere- findte&,no!o ies t,at e &an inte rate it, Mo"i!!a Firefo3- ;oo !e C,rome- +nternet E3p!orer and ta!%it, t,ose &ommunities to fi ure out ,o e &an et t,ose te&,no!o ies in t,ere in a safe and inter7opera*!e ay. + a!so do a !ot of stuff it, !in%ed data and identity and se&urity on t,e e* 7 t,ese are


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interest from t,e *an%in or!d to %ind of update t,eir ar&,ite&tures as e!!- *ut fundamenta!!y- eventoday- e3&,an in funds on t,e e* is ay more &omp!i&ated t,an it needs to *e. 2e a!! %no t,att,ere are pro*!ems ,ere. /,e speed of o!d money it &an ta%e days to et a payment from point A to

point B. Computers &an &ommuni&ate in mi!!ise&onds ,a!f ay around t,e or!d. /,ere0s no reason t,atmoney needs to *e t,at s!o anymore. Credit &ard num*ers are effe&tive!y pass ords into your *an%a&&ount and it seems %ind of &ra"y ,en you t,in% a*out it *ut you0re ivin t,at pass ord a ay to

every sin !e mer&,ant t,at you do *usiness it,. /,ey ,ave un!imited a&&ess to your funds. 5o -ranted t,ere are a !ot of !e a! prote&tions in7p!a&e to ta%e t,em to 1ai! if t,ey misuse it- *ut it sti!! doesnot stop t,ose &redit &ard num*ers from *ein a rea!!y reat tar et for peop!e t,at anna stea! yourmoney. One in every > internationa! transa&tions are fraudu!ent. One in every < > domesti& &redit &ardtransa&tions are fraudu!ent. /,at is a pro*!em. +t0s a ,u e pro*!em. +t0s su&, a *i pro*!em t,at t,ere0s a,u e &omp!ian&e industry t,at0s *ui!t up around prote&tin t,ose &redit &ard num*ers *ut e a!! %not,at- ,i!e it ,e!ps- it0s not a rea!!y ood so!ution to t,e pro*!em. /,ere are ay too many stepsre8uired to send and re&eive money. Bit&oin ,as rea!!y made fantasti& strides in t,is area *ut evenBit&oin ,as its pro*!ems. 2aitin for *!o&%&,ain verifi&ation- !osin your a!!et %eys. /,ere arenum*er of p!a&es t,at Bit&oin &ou!d advan&e and + %no a num*er of t,e spea%ers today are ta!%ina*out t,ose pro*!ems. /,e ot,er pro*!ems it, payments JareK doin di ita! re&eipts 7 t,ere is noma&,ine reada*!e re&eipt format ri ,t no . $eop!e emai! you re&eipts a!! t,e time *ut ,at you do it,t,em9 6ou pro*a*!y ,it de!ete or send it ri ,t to t,e tras, *e&ause it0s pretty use!ess to you. 2,at e0d!i%e to do is ma%e t,ose %inds of re&eipts usefu! over !ifetime idea!!y- and t,is is !oo%in years out-e ant peop!e to *e a*!e to fi!e t,eir ta3es *y 1ust pointin it at a transa&tion re&ord 7 a persona!transa&tion re&ord 7 it0s private *ut it0s ot ma&,ine reada*!e data t,at *asi&a!!y &an do your ta3es *asedon t,e ma&,ine reada*!e data in t,ose di ita! re&eipts t,at you ,ave. $at,s for ard ,at are t,e ayst,at e &an *ui!d Bit&oin into t,e *ro ser and et it a&&essi*!e to 4. *i!!ion peop!e9 /,ere are t o

pat,s ri ,t no t,at e0re &urrent!y or%in on. /,e first one is &a!!ed $ayS arm. +t0s a &urren&ya nosti& standard for e* payments. #ust !i%e sendin an emai! ,as a proto&o! on t,e e*- 1ust !i%eBit&oin ,as a proto&o! on t,e e*- e ant to *e a*!e to ,ave t,is standard for doin payments on t,ee* t,at0s &urren&y a nosti&. /,e e* &ommer&e A$+ is somet,in t,at Mo"i!!a is or%in on ande0re ,e!pin t,em *ui!d t,at into t,e *ro sers as e!! as a standard for doin one &!i&% payments on ae*site. 6ou s,ou!dn0t ,ave to o to a e*site and si n up for an a&&ount and verify your address and

put in your &redit &ard num*er. 6ou s,ou!d 1ust *e a*!e to o to t,e e*site and &!i&% *uy or donateor &ro dfund. /,at0s ,at e0re oin for ,ere. Somet,in rea!!y 8ui&% on $ayS arm- !i%e + said- it0st,e first universa! open standard for payments on t,e e*. + do rea!i"e t,at Bit&oin is open. Bit&oin isopen in a different ay 7 it !eads it, sour&e. +f you ant to et somet,in into t,e *ro sers you ,aveto !ead it, standards. /,at0s effe&tive!y t,e ay t,at0s typi&a!!y or%ed. +t0s payment providera nosti&. 6ou s,ou!d not &are ,o your mer&,ant0s *an% is ,en you o to pay for somet,in on t,ee* and t,ey s,ou!dn0t &are ,o your *an% is 7 t,e money s,ou!d 1ust f!o to ,ere it needs to o andt,at0s at t,e &ore of $ayS arm. +t0s a!so &urren&y a nosti&. +t doesn0t matter if you0re usin =S do!!ar-Euro- Bit&oin- Iipp!e- en- a!ternative &urren&ies- fiat &urren&ies- t,ey s,ou!d a!! 1ust or%. $ayS arma!so ,as a num*er of rea!!y &oo! features su&, as *ud ets you &an setup *ud ets it, sites !i%e t,e 5e6or% /imes- so t,at as you o in read stories from day to day you0re &,ar ed out of &ard automati&a!!yyou don0t even see a *uy *utton. ;ranted- you ,ave to set t,at up prior to usin t,e 5e 6or% /imes.Di ita! &ontra&ts and re&eipts- ma&,ine reada*!e di ita! &ontra&ts and re&eipts- t,at0s a!so a *i part oft,e standard. +t ,as to *e de&entra!i"ed- t,e e* is de&entra!i"ed- no &entra!i"ation 7 &entra!i"ation is

*ad. /,at is t,e ay te&,no!o ies are *ui!t at t,e 2:C *e&ause t,at is t,e t,in t,at ives t,e mar%et aneven p!ayin fie!d and a!!o s &ompanies su&, as t,ose sittin in t,e audien&e today t,e a*i!ity to &reaterea!!y round*rea%in ne te&,no!o ies. /,e ot,er t,in t,at e &are a*out a !ot in t,e 2e* $ayments;roup is &ommer&ia!i"ation. /,is is not 1ust a *un&, of a&ademi&s t,eori"in a*out ,at t,e idea!or!d ou!d !oo% !i%e. 2e0re invo!ved it, t,e messy detai!s of t,e or!d. 2e ant t,ese te&,no!o ies


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addresses t,at e3ist- t,ose are spe&ifi&a!!y a&&ounts t,at ,ave money in t,em.

SQ: Aesome. /ime for one more 8uestion9 6ea,9 $erfe&t. Here e o. 2ant to stret&, over9

PS: Hi- my name is $eter Seed and Ma3 Geiser and myse!f are doin a startup &a!!ed /radefor 7 /,e=!timate Bit&oin /radin ;ame. 2,at a*out Fa&e*oo%9 + mean- ,en you ere oin t,rou , t,e

num*ers- + t,ou ,t e!! if Fa&e*oo% adopted a virtua! &urren&y t,at ou!d *e ame over. 6ourt,ou ,ts on t,at9

MS: 6ea,- so Fa&e*oo% is a!so a 2:C mem*er in fa&t- + %no a !ot of peop!e... + %no a!! t,e peop!ein Fa&e*oo% t,at are invo!ved in standards. /,ey are very 8uiet on it. A!! t,e *i &ompanies are very8uiet on t,is and t,ey !i%e to stay very 8uiet on it unti! t,ere0s more movement on t,e standard. +t ou!d

*e ,u e if Fa&e*oo% ,ad supported virtua! &urren&ies. + am a!most positive- and t,is is &omp!ete!yunfounded- + am a! ays positive t,at t,ey are !oo%in into 1ust !i%e every ot,er !ar e te&,no!o y&ompany is !oo%in into it *ut t,ey are not onna *e pu*!i& a*out it. /,ey are not onna say anyt,in

pu*!i&!y unti! e et a 2e* $ayments 2or%in ;roup off t,e round and runnin . Offi&ia!!y- meanint,at e need offi&ia! approva! from Fa&e*oo% and ;oo !e to start a 2e* $ayments ;roup- e *e!ievet,at0s onna ,appen at t,e end of t,is year- in #anuary J4>< K. +f you et invo!ved in t,e 2e* $ayments;roup no - you i!! ,ave a seat at t,e ta*!e to ta!% to fo!%s !i%e Fa&e*oo% and ;oo !e a*out may*eettin an a!t7&urren&y into t,ere. +0!! *e ,appy to do any %ind of &onne&tions *et een &ompanies ,ereand Fa&e*oo% if you0re interested in doin a!! &urren&y stuff it, t,em.

SQ: OG- reat + am afraid e i!! ,ave to end it t,ere- !et0s ive Manu anot,er *i round of app!ause.

(Sounds of &!appin )

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ABL: Hi- every*ody. Adam B. Levine ,ere it, Let0s /a!% Bit&oin. /oday- + am 1oined *y #effrey $au!a%a Snea%. #effrey- e0ve *een tryin to et to et,er to do t,is ta!% for + uess &oup!e of mont,s no .6ou ,ave a rea!!y interestin *a&% round and a&tua!!y it as your ta!% in ;ermany...

JP: + started ivin t,e ta!% in 4>. + t,in% t,at one as from 4>


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ABL: 6ou ave a ta!% &a!!ed Finan&in A Ievo!ution and t,at as a&tua!!y t,e ta!% t,at turned me onto &rypto&urren&ies in enera! and a&tua!!y *eyond even t,e &rypto&urren&ies side of it- it e3p!ained in aay t,at made me understand ,y it as a&tua!!y ,e!pfu! to ,ave &urren&ies t,at eren0t ne&essari!ytied to identity and t,ey &ou!dn0t ne&essari!y *e pre&!uded for reasons t,at ere ar*itrary.

JP: 6ea,- one of t,e t,in s + rea!!y !i%e a*out t,e CCC- t,eir events t,ey produ&e 7 and t,ey0re very

te&,ni&a! 7 *ut t,ey a!so produ&e t,em spe&ifi&a!!y it, an eye to ard freedom and !i*erties and t,in s!i%e t,at. Bein ;erman t,ey are very fo&used on persona! priva&y and t,e interse&tion *et een priva&yand te&,no!o y and + !i%e t,at- so + didn0t ant to 1ust ive a pure!y te&,ni&a! ta!%- t,at of &ourse ,as

*een done sin&e t,en- *ut it as rea!!y important for me to s,o ,y it0s not 1ust some !i*ertarian o!d *u t,in t,at e need +nternet and e!e&troni& payments t,at &an0t *e &ensored *y overnment *ut a!soit0s 1ust fundamenta!!y important to everyone t,at *e!ieves in demo&ra&y or individua! !i*erty it,in aso&iety *e&ause it,out it t,en t,ere are a ,o!e *un&, of t,in s in t,e dependen&y tree t,at stem from

*ein a*!e to ma%e payment t,at may*e t,e overnment doesn0t ant you to- so t,at as one of t,e *ireasons + ant to ive t,at ta!%. + ive us sort of a provo&ative tit!e 7 Finan&in A Ievo!ution. At t,etime Bit&oin asn0t rea!!y t,at *i and its sort of no *e&omin t,is de fa&to +nternet &urren&y ande0re onna see more and more of t,em + t,in%. +t0s sti!! not to t,e point ,ere you &ou!d finan&erevo!ution it, it yet *ut + t,in% e0!! see t,at it,in t,e ne3t to years.

ABL: 6ou0re sayin to years out. +0m &urious are you ta!%in a*out Bit&oin spe&ifi&a!!y or are youta!%in a*out &rypto&urren&ies *road!y9

JP: Bit&oin raises an interestin 8uestion. A !ot of peop!e ,en t,ey first ,ear a*out Bit&oin t,ey saye!! t,is is stupid- it ,as no va!ue and no one s,ou!d use it- *ut t,e fa&t is it does ,ave va!ue *e&ause t,esu*1e&tive t,eory of va!ue is rea!!y on!y t,e pra&ti&a! one- and you &an ar ue a!! day !on ,et,er or notyour paper money ,as va!ue or o!d ,as any intrinsi& va!ue or anyt,in !i%e t,at- *ut t,e fa&t is t,at

peop!e a&&ept t,em as va!ue and t,e same oes for *it&oins. /,ere are ot,er &rypto&urren&ies t,at ,avesprun up- a!most a!! of ,i&, are dire&t!y des&ended from Bit&oin- + a&tua!!y t,in% a!! of t,em aredire&t!y des&ended from Bit&oin- t,e de&entra!i"ed ones any ay- *ut rea!!y it *oi!s do n to are t,eyusefu!9 + %no a !ot of peop!e ,ave otten into Lite&oin and Stron &oin and t,in s !i%e t,at *ut,onest!y + don0t rea!!y &are a*out t,ese *e&ause t,e uti!ity of t,e &urren&y is on!y ,o a&&epts it and,en you0re dea!in it, somet,in t,is sma!!- mar%ets t,is sma!! and adoption &urves t,at are !inear rea!!y- t,e on!y t,in t,at0s interestin to me are t,e ones you &an a&tua!!y use as money today and t,at0s

*are!y Bit&oin. Bit&oin is an order of ma nitude !ar er t,an any of t,e ot,er ones at !east.

ABL: Do you see t,at as a *it... so you t,in% t,at advanta e t,ere is po erfu! enou , t,at it i!! *eBit&oin for t,e foreseea*!e future *e&ause its a!ready a&,ieved t,at and so if one is oin to put effortinto somet,in - it ma%es more sense to put it into t,at re ard!ess of ,at e!se is out t,ere.

JP: A*so!ute!y +0ve never rea!!y !i%ed Lite&oin or Stron &oin. + t,in% t,ey0re interestin resear&, pro1e&ts *ut- rea!!y- t,is ,o!e idea of de&entra!i"ed stored va!ue- de&entra!i"ed payment me&,anism isforei n to most peop!e and it re8uires a &u!tura! s,ift for t,is to *e&ome a&&epted in t,e ider or!d.Ii ,t no - it0s of interest to se&urity peop!e- interest to ,a&%ers- it0s of interest to !i*ertarians- and ot,er&rypto7anar&,ists- t,in s !i%e t,at- *ut t,e !on 7term t,in ,ere is t,at peop!e need to understand t,atyes t,is is unintentiona!- no it is not run *y overnment and yes it ,as va!ue and t,at is a rassrootst,in . + am or%in on a ne Bit&oin *usiness ,i&, +0!! te!! you a*out in a fe ee%s or a mont, on&eit0s more so!id- *ut one of t,e &ore metri&s e0re tra&%in to i!!ustrate t,e adoption of Bit&oin in t,emar%et is not ,o many *it&oin transa&tions t,ere are- it0s not ,at t,e pri&e of *it&oin is on t,ee3&,an e- it0s ,o many nodes are on t,e peer to peer net or% advertisin t,eir address 7 ,o many


8/24

peop!e ,ave a&tua!!y do n!oaded and are runnin t,e soft are at t,is moment in time and if you !oo%at t,at &urve it0s not an e3ponentia! &urve- it0s not t,ese order of ma nitude ro t, and t,is is not a *adt,in - *e&ause it s,ou!dn0t *e- *ut it s,o s stron !inear ro t,. Every mont, P t,ousand peop!e ,eara*out Bit&oin- do n!oad it- run it- try it out- and t,at adds to t,e poo! and t,en t,ose peop!e te!! t,eirfriends and + am not sayin it on0t o e3ponentia! at some point *ut so far e0ve seen !inear ro t,and t,at0s a ood t,in . /,is mar%et is sti!! very- very sma!!. A !ot of peop!e et rea!!y e3&ited a*out

,o t,is is onna ta%e over t,e or!d and a!! t,at- and it0s true- *ut it ,asn0t yet and *e&ause t,e mar%etis so sma!! if a!! of a sudden you ,ad t,ousands of peop!e tryin to *uy a mi!!ion *u&%s it, *it&oin t,emar%et ou!d 1ust imp!ode t,at you &an0t even do t,at- and it0s very diffi&u!t today even if you *uy afe mi!!ion do!!ars it, *it&oin. /,e metri& t,at + am usin to monitor t,e ro t, and e3pansion of t,ist,rou ,out so&iety- is not pri&es- is not transa&tion vo!ume *ut t,e net or% node &ount ,i&, is as not a!ot of peop!e seem to *e &,artin or... /,ere0s a &oup!e peop!e t,ere t,at are !o in t,e state and isavai!a*!e to anyone if you0re on t,e net or%- you &an see a!! t,e addresses of a!! t,e parti&ipants *utt,is isn0t a rea!!y pu*!i&i"ed one. + t,in% it0s a very important metri&.

ABL: 2,y is it important9

JP: As + e3p!ained *efore- t,e va!ue of a &urren&y is its su*1e&tive va!ue- and t,e more peop!e t,atre&o ni"e Bit&oin as a t,in as say OG t,is is a soft are t,at + run and + use it and it ta!%s to ot,er peerto peer soft are. /,e more peop!e t,at understand- if not on a deep te&,ni&a! !eve!- to some &ursory!eve!- ,at Bit&oin is and ,o it or%s- if not,in more t,an ,o t,e soft are or%s- you do n!oad it-run it and it syn&,roni"es- you &an send and re&eive payments. /,ose peop!e are added to t,e poo! of

peop!e ,o may*e not immediate!y *ut may re&o ni"e Bit&oin as va!ua*!e- and t,at in&reases its uti!ity.

ABL: +n t,is &ase you0re e8uatin nodes to individua! users.

JP: 6es.

ABL: OG so ,en e ta!% a*out nodes t,en t,ere0s a differentiation- t,ere are fu!! nodes ,i&,a&tua!!y ,ave t,e entire *!o&%&,ain and t,en t,ere are t,e !i ,t nodes ,i&, referen&e anot,er servi&e.Do you differentiate *et een t,ose9

JP: 2e!!- you ,ave to differentiate *et een t,ose *e&ause !i ,t nodes- for e3amp!e- if you 1ust ,ave afront7end &!ient for an on!ine a!!et servi&e t,ose aren0t represented in t,e net or%- *ut t,ere is no ayfor us it,out oin dire&t!y to t,ose servi&es and as%in t,em. Some of t,em pu*!is,- for e3amp!e- t,e

*!o&%&,ain.info a!!et t,ey s,o ,o many peop!e are usin t,eir a!!et servi&e- *ut you %no - fore3amp!e- + ,ave no idea ,o many users Mt. ;o3 ,as t,ese days and + ,ave no idea ,o many usersCoin*ase ,as or ,at t,ere transa&tion vo!umes are. +t0s very important for t,e !on 7term ro t, and!on 7term va!ue of Bit&oin to understand ,o many individua!... it doesn0t ,ave to *e e3a&t- *ut a rou ,order of ma nitude estimate- ,o many individua! peop!e re&o ni"e Bit&oin as va!ua*!e today and ,ois t,at num*er &,an in over time- ,o many ne *it&oin users do e ,ave per mont,- and !i%e + saidit doesn0t ,ave to *e anyt,in even remote!y e3a&t 1ust e ,ave to ,ave some sort of fee! for t,esenum*ers.

ABL: Ii ,t- so one of t,e ot,er t,in s e0ve *een ta!%in a*out a !ot is t,is idea t,at even t,ou , you,ave Bit&oin as t,is de&entra!i"ed and &rypto&urren&ies as t,is de&entra!i"ed net or%s- it seems !i%et,ey are a&tua!!y approa&,in more &entra!i"ed infrastru&ture as minin *e&omes ,arder to a&,ieve andmore institutiona!.


9/24

JP: Certain!y- and + t,in% t,at e0re oin to see- in t,e s,ort term- a !ot of t,is sort of &entra!i"ation *ut t,e t,in t,at differs fundamenta!!y *et een a de&entra!i"ed mode! t,at tends to ard &entra!i"ationand a mode! t,at is &entra!i"ed *y its desi n- is t,at if- for e3amp!e- !et0s ta!% a*out t,e federa! reserveired net or% in t,is &ountry 7 if you ant to parti&ipate... t,at ,as a *un&, of different parti&ipants you &an send ires *et een t,em 7 *ut if you ant parti&ipate it, t,at- you ,ave to o to t,e &entra!aut,ority and say + ou!d !i%e to app!y.

ABL: $ermission.

JP: 6es- ,ereas it, de&entra!i"er- even if it tends for &entra!i"ation- even if e on!y ,ave ma1or p!ayers doin a!! t,e minin in Bit&oin- t,e fa&t is anyone &an o out and o to someone ,osemanufa&turin AS+Cs and *uy a ,o!e tru&% !oad of t,emet an internet &onne&tion and et a ra&%- fi!!it up and *e in parti&ipatin in t,is net or%- it0s not a &a*a!.

ABL: OG.

JP: Seems !i%e one- *e&ause it0s a!! ear!y adopters ri ,t no - it0s a!! peop!e it, entren&,ed interests- *ut t,at0s oin to &,an e. 2e rea!!y ,aven0t seen institutiona! money &ome to Bit&oin eit,er on t,einvestment side yet or on t,e ,ard are and te&, side yet.

ABL: A!t,ou , t,ere are some rumors s ir!in over t,e !ast &oup!e of days t,at institutiona! money is pourin into minin in a &oup!e of different &apa&ities.

JP: A*so!ute!y i!! *e. /,ere0s oin to *e a !ot of interest in a!! of t,e different ays you &an ma%emoney usin Bit&oin !evera in e3istin &apita!.

ABL: Same sort of !o i&- it seems !i%e- &an *e app!ied to... t,at it0s not &ertain!y *ad to ,ave a feAS+C manufa&turers *e&ause t,ey &an *e so!d- *e&ause t,eir se!!in t,eir produ&t and so you sti!! etdistri*ution it0s 1ust a*out t,e manufa&turin side.

JP: A perfe&t ana!o y ,ere is SM/$ 7 emai! on t,e internet.

ABL: OG.

JP: 2e ,ave massive &entra!i"ation it, emai! on t,e +nternet. ;mai!- 6a,oo- Hotmai!- Fa&e*oo% no -t,ere are a do"en providers t,at ,and!e over > of a!! t,e emai! on t,e +nternet. +t ma%es it very easyfor t,e 5SA to o to t,em.

ABL: Ii ,t- + as onna say...

JP: Ho ever- anyone &an set up t,eir o n emai! server and interoperate it, t,ese peop!e. /,at- int,eory- &ou!d &,an e in t,e future if t,ese peop!e de&ided to imp!ement ru!es. For e3amp!e- ;oo !eused to run #a**er servers t,at anyone &an &onne&t to. J6ouK &ou!d run your o n #a**er server and,ave +M &onversation of peop!e on ;oo !e /a!% and t,en t,ey s,ut it off. A !ot of peop!e ere upseta*out t,at *ut it0s t,e e3&eption not t,e norm to Juninte!!i i*!eK it it, t,in s !i%e t,at. 2it, emai!- you,ave to. 6ea,- everyone t,at ets emai! e3pe&ts to *e a*!e to send and re&eive to anyone it, an emai!address.

ABL: 5o a!!ed ardens.


10/24

JP: 6ea,- e3a&t!y- even if it0s not a ;mai!. + mean may*e users are ettin trained ot,er ise it, t,e pro!iferation of dire&t messa es on Fa&e*oo% and / itter and t,in s !i%e t,at- *ut + sti!! t,in% t,at peop!e t,at ,ave emai! addresses ou!d... if you ,ad a eird emai! domain and someone &ou!dn0t sendemai! to you or &ou!dn0t re&eive emai! from you + t,in% users ou!d ,ave an issue it, t,at.

ABL: Ii ,t- + tota!!y a ree. On t,e ot,er side of t,e issue- you %no t,ere0s t,e minor &entra!i"ation&on&ern on t,e AS+C side *ut t,en e start ta!%in a*out OG- so ,at if you &ou!d o *a&% to C$=s

as t,e primary t,in for minin and you ere a*!e to &reate somet,in t,at didn0t s&a!e 7 mininte&,no!o y t,at didn0t s&a!e.

JP: 2e!! it sti!! s&a!es- +t sti!! s&a!es it, C$=s. 6ou Juninte!!i i*!eK more C$=s.

ABL: Ii ,t- e3a&t!y.

JP: +t0s t,e same &ost &urve. +t0s 1ust you spend t,e money on somet,in different.

ABL: Hmm

JP: + mean you &an *uy it, t,at... &ertain!y it doesn0t s&a!e may*e t,e orders of ma nitude t,at itdoes...

ABL: /,at0s- t,at0s...

JP: 6ou &an sti!! o out and *uy...

ABL: 2e!!- for e3amp!e- yesterday at t,e &onferen&e e spo%e it, severa! AS+C manufa&turers andt,ey are in t,e transition point no . /,e 4 nanometer &,ips are 1ust a*out to &ome out and t,en t,eremovin to < - sorry it0s 4>- it0s a num*er not t,is < . < is &omin out of 4 of ne3t year.

JP: =, ,u,

ABL: /,e point is t,at ea&, one of t,ese is an e3ponentia! step up in terms of effi&ien&y...

JP: =, ,u,

ABL: ...and so for everyone ,o ,as pur&,ased t,e e8uipment *efore- t,ey0re essentia!!y inva!idated./,e e8uipment doesn0t enerate enou , return to even 1ustify operatin under most of t,ese&ir&umstan&es- so e ,ave *een ,avin t,is on oin &onversation a*out ,at t,e point of minin is and,at + anna et to it, you is ,at are t,e &ommon t,in s e et is t,at if you ere to revert to C$=minin iven t,e si"e t,e Bit&oin net or% at t,is point you ou!d ,ave *otnets- !ar e *otnets- t,atou!d dominate *ut it seems !i%e t,is &ompetition e!ement ma%es it so t,at t,e in&entives are t,ere to,ave mu!tip!e *otnets essentia!!y &ompetin it, ea&, ot,er- and it0!! *e very ,ard to a&,ievedominan&e it, anyone parti&u!ar net or%.

JP: Fast for ard to t,e end ame of AS+C minin . Assume t,at e ,ave t,e p,ysi&a! e!ement of AS+Ceffi&ien&y. /,e t,in you ,ave to remem*er a*out t,e time!ine e0re on it, Bit&oin is t,at Bit&oin issti!! very ne . 6ou &an *uy most of t,e pu*!i&!y avai!a*!e *it&oins ri ,t no for mi!!ion do!!ars. +t0sa very- very sma!! mar%et- and despite a!! of t,e media attention- it0s sti!! not a very *i mar%et. +t0s


11/24

ro in . +t0s ro in very 8ui&%!y- and in years it ou!d *e i anti&- and its a!ready i anti&&ompared to ,ere it as even a fe years a o- *ut e0re sti!! in t,e ear!y adopter p,ase despite a!!t,is.

ABL: Ii ,t- + tota!!y a ree it, you.

JP: Before t,e ear!y adopter p,ase is over- e i!! *e at t,e end ame of AS+C minin - and *e&ause t,ediffi&u!ty is varia*!e- it doesn0t rea!!y matter if e0re at t,e end ame of AS+C minin or at t,e end

ame of C$= minin . 2,at it *e&omes t,en is a fun&tion of ,o many do!!ars &an you spend on &,ips- *e&ause t,e AS+Cs and t,e C$= t,at i!! 1ust &ompensate for ,o ever many you0re runnin in t,e tota!re&ord.

ABL: Ii ,t.

JP: 2,at it *oi!s do ns to is t,at t,e peop!e t,at i!! &ontro! minin are t,e peop!e t,at &an dump t,emost money into &,ips ,et,er t,ose &,ips are enera! purpose C$=s or rat,er AS+CS or ;$=s or,atever a! orit,m is t,e *est avai!a*!e te&,no!o y in t,e mar%et for runnin t,at proof7of7 or%.

ABL: /a!%in a*out t,is end ame do you t,in% t,at0s a pro*!em9

JP: 2,et,er it0s a pro*!em or not doesn0t matter *e&ause Bit&oin0s de&entra!i"ation re8uires a proof7of7or%- and t,ere0s no proof7of7 or% t,at e &an desi n t,at is resistant to someone ,ose i!!in tospend Q > mi!!ion.

ABL: O%ay

JP: (!au ,s)

ABL: Money is effe&tive!y or% in t,is &onte3t.

JP: 6ea,- e3a&t!y *e&ause you 1ust *uy more &,ips and *uy more po er and t,ere0s not,in t,at &anstop t,at &entra!i"ation 7 more resour&es e8ua!s more proof7of7 or%. Doesn0t matter if it0s an AS+C t,atdoes >> *i!!ion more operations per se&ond t,an a enera! purpose C$=. +t0s 1ust a matter of ,omany do!!ars &an you dump into your minin ri .

ABL: Ii ,t.

JP: Eventua!!y AS+Cs i!!... e ent from C$= miners to ;$= miners. + ran one of t,e very first;$= miners. + as eneratin a fe ,undred *it&oin a day at t,at time. + *ou ,t a... t,is is a&tua!!y area!!y very funny story. 2,en + started minin - + *ou ,t a Q >> A/+ video &ard. + put !i%e ten of t,em inmy Ama"on &art and t,e ay + fi ure 7 + did t,e !itt!e minin &a!&u!ation and + as a*out to put t,em onmy Ameri&an E3press &ard and + ,ave !i%e :> days to pay for t,at- so it0s !i%e if + et t,ese and put t,emon &omputers t,en t,ey0!! pay for t,emse!ves in !i%e t o ee%s ri ,t and e!! + put of t,em- andt,en you %no ,at if t,is ,o!e *it&oin t,in is..

ABL: (!au ,s) 6ea,- ri ,t.

JP: (!au ,s) /,en + 1ust *!e >>> do!!ars on video &ards- !i%e ,at am + doin - and so + too% oft,em out and + 1ust *ou ,t


12/24

ridi&u!ous.

ABL: At t,e time- ,at ere t,ey ort, at t,e point you ere doin t,is9

JP: + mean it paid for a video &ard in may*e !i%e t o or t,ree ee%s.

ABL: So- >> do!!ar video &ard- 4 or : ee%s and a &oup!e of > &oins a day.

JP: 6ea,- and it as ,en t,e m>m&,i!! miner- t,e very first ;$= miner t,at as pu*!i&!y re!eased-and + ot it or%in and it as &oo! *ut t,en + so!d t,e *it&oins immediate!y as soon as t,ey ereenerated. + asn0t interested in spe&u!atin t,em a &urren&y.

ABL: Ii ,t.

JP: + t,in% ,at0s oin to ,appen- e o from C$= minin to ;$= minin - from ;$= to AS+Cs-different pro&ess si"es it, AS+Cs- eventua!!y e0re onna *ump up a ainst t,e !imits- and at t,at pointt,e diffi&u!ty i!! *e t,e same do!!ar7for7 do!!ar for ;$=s or rat,er AS+Cs runnin t,is proof7of7 or%or for enera! purpose &omputers runnin some different proof7of7 or%.

ABL: Ii ,t.

JP: Certain!y- it0s !i%e a *and aid and t,e ans er is as far as + see it s it&,in to a different proof ofor%- usin a different &rypto&urren&y t,at use a different proof of or%- it0s a ,u e dent in t,eadoption &urve. Say OG- don0t use Bit&oin- use Stron &oin or somet,in e!se !i%e t,at. 6ou0re not eteven dou*!e di it per&enta e to stop usin one and start usin t,e ot,er- and t,e *enefit is not a !onterm *enefit it0s a s,ort term *enefit *e&ause eventua!!y ,i&,ever one *e&omes dominant- and + t,in%it i!! *e&ome dominant *e&ause e don0t need more t,an one- + mean one is enou ,- and + t,in% t,at0!!

*e Bit&oin. $eop!e i!! 1ust dump a!! t,eir money into ,atever &,ip ma%es t,em t,e most money andit doesn0t matter ,at a! orit,m t,at0s runnin .

ABL: See- no + used to *e!ieve t,at too. + used to t,in% t,at t,ere &an on!y *e one t,in - *e&ausea ain you ,ave ot t,e net or% effe&t and t,at0s su&, a po erfu! advanta e in t,is parti&u!ar type offie!d- *e&ause !i%e a !an ua e money isn0t t,at usefu! if no*ody e!se uses it.

JP: =, ,u,.

ABL: +t seems !i%e ri ,t no e are in a!most a rea!ity *u**!e- ,ere peop!e !oo% at t,e ne situationt,at e ,ave it, &rypto&urren&ies and t,ey say- OG- e!!- + use one *e&ause t,at0s ,at you do- *utit seems !i%e t,ere is some destru&tive t,in s &omin in t,e future to t,e Bit&oin net or% and to t,eBit&oin proto&o! potentia!!y- e3&use me- t,at you %no ,ave t,e potentia! to pop t,at- and t,ere area!t&oins aitin at every- ,un ri!y aitin to &apita!i"e.

JP: A*so!ute!y- + am not sayin t,at t,ey0re oin to die. + am 1ust sayin t,at t,ere i!! on!y *e onet,at ,as fifty mi!!ion users.

ABL: OG. OG.

JP: + don0t see a!t&oins as providin enou , uti!ity versus t,e one t,at a!ready ,as t,e net or% effe&toin for it. /,ere i!! *e !ots of a!t&oins out t,ere t,at ,ave !ots of use *ut my t,eory is t,at Bit&oin- or


13/24

may *e it mi ,t *e an a!t&oin- *ut t,ere is on!y oin to *e one t,at0s oin to ,ave fifty or ,undred orfive ,undred mi!!ion users five- ten years from no .

ABL: + %no is t,at e ta!% a*out priva&y. 2e0!! et to t,at in t,e ne3t se ment. Have you read t,eBit&oin 4.> spe&ifi&ation t,at0s *een f!oatin around9

JP: + ,ave.

ABL: ery &urious for your t,ou ,ts on t,at. Can you summari"e some of t,e t,in s t,atJuninte!!i i*!eK9

JP: 2e0re ta!%in a*out t,e se&ond Bit&oin ,ite paper9

ABL: 6es.

JP: + !i%e t,e ideas and + !i%e t,e &on&ept of not ,avin to ma%e su*stantia! &,an es to t,e Bit&oinnet or% proto&o! or t,e *!o&%&,ain- *e&ause- for e3a&t!y t,e same reason + mentioned *efore t,enet or% effe&t. +f you ,ad to ma%e su*stantia! &,an es you ,ave some sort of OG you ,ave to pi&% A orB or if t,ere is a for% t,en you are not oin to et *uy in- *e&ause t,e reason t,at Bit&oin ,as *een sosu&&essfu! so far- and + t,in% t,e &ore devs understand t,is on a fundamenta! !eve!- is *e&ause it0s a setof ru!es e0ve a!! a reed on de fa&to. 2e start &,an in t,ose ru!es t,ere is oin to *e some per&enta et,at say- e!!- + didn0t si n up for t,is.

ABL: 2e!!- *ut t,at0s t,e t,in of &ourse is t,at t,e *it&oin t o paper t,at &ame out asn0t re!eased in ava&uum. +t as re!eased as a dire&t response it seemed to me to t,e &,an es t,at ,ave *een proposed for>. . Have you ta%en a !oo% at t,at9

JP: 5o- + ,aven0t !oo%ed t,ose yet.

ABL: My understandin is t,at >. in&!udes ne editions *asi&a!!y t,at add a &entra! issuin aut,orityso t,at invoi&es &an *e issued- and t,en t,ey &an *e verified a ain *y a t,ird party and so t,at sets offa!! sorts of arnin *e!!s.

JP: /,e t,in it, somet,in !i%e t,at is t,at as !on as it isn0t in t,e dire&t payment &,ain. /,ere ,ave *een a !ot of initiatives to fi ure out a ay of aut,enti&atin a re8uest for money.

ABL: Ii ,t.

JP: A!! of t,e ays e ,ave for &onveyin %eys from person A to person B are su*1e&t to t,e same %eymana ement pro*!ems e0ve *een ,avin it, &rypto end7users for !ast t enty years. A met,od forsomeone to verify t,at t,is %ey is re8uestin money from you is a&tua!!y t,e %ey t,at you ant to pay isnot a *ad t,in . 2,et,er or not it s,ou!d *e in t,e proto&o! is anot,er 8uestion. $erfe&t s,ou!d *esomet,in t,at runs a!on side it- *ut as !on as it0s not in t,e a&tua! &oin transfer pat,- + don0t rea!!y seeanyone ,avin a ,u e pro*!em it, it.

ABL: OG

JP: May*e not a &entra! issuin aut,ority- *ut a &entra! &ertifi&ation aut,ority ,i&, 1ust sounds !i%e,at you0re des&ri*in . A pu*!i& %ey t,at s,ips it, t,e &!ient t,at says t,is is a !e itimate re8uest.


14/24

Certain!y- it ives a !itt!e *it of &ontro! ,ere peop!e mi ,t ,ave an issue.

ABL: 2e!!- it0s t,at s!ippery s!ope t,in . /,at0s t,e pro*!em t,ere.

JP: Certain!y- *ut it doesn0t ne&essari!y as !on as t,ere is a a!! t,ere in *et een t,e a&tua! paymentsystem and t,e aut,enti&ation system for &ertifyin transa&tion. As !on as you &an a! ays send

transa&tion to a %ey t,at you verified *y yourse!f as opposed to verified *y some &entra! roup t,en yous,ou!d *e fine. + don0t see anyone rea!!y ,avin a ma1or pro*!em it, t,at.

ABL: Fair enou ,- fair enou ,- so t,at is my understandin is t,at it0s not ne&essari!y t,at t,ese are 1ustideas t,at t,ese peop!e- + *e!ieve t,e roup is out of J$anama9K t,at0s re!eased t,is spe&ifi&ation- t,att,ey 1ust &ame up it, ideas in va&uum t,at rat,er t,is as a response to t,in s t,at are &omin . 2it,t,at in mind- it seems !i%e t,e situation isn0t t,at e %eep oin as e0re ro in or e &,an e e dot,is ne t,in . +t seems more !i%e one ay or t,e ot,er e ,ave to &,an e.

JP: + rea!!y don0t t,in% t,at0s ne&essari!y true. One of t,e t,in s t,at some of my asso&iates ,aveni&%named RSnea%0s !a R is users &annot and i!! not se&ure!y mana e %ey materia!.

ABL: (!au ,s) OG.

JP: Most users &an0t and t,e ones t,at &an on0t- and so t,is means is t,at... t,is is ,y e don0t ,ave...t,is is ,y e sti!! use pass ords on t,e e*. /,is is ,y e sti!! ,ave most emai! *ein under7en&rypted. =sers &an0t se&ure!y mana e %ey materia!. /,ey &an0t *e e3pe&ted to- and t,en t,e ones t,at&an 1ust on0t *e&ause it0s a ,u e pain in t,e ass- and so t,e ni&e t,in a*out Bit&oin is t,at it sort offor&es peop!es0 ,and and t,at if you0re oin to use Bit&oin in a non7&entra!!y &ontro!!ed fas,ion- !i%eyou are oin to run your o n Bit&oin soft are- t,en you ,ave to mana e your %ey pair *e&ause your%ey pair are your *it&oins. +f you use somet,in !i%e an on!ine a!!et t,en you0re %ind of outsour&int,e ,o!e t,in to someone e!se *ut a !ot of peop!e t,e t,in t,ey !i%e a*out Bit&oin is it0s de&entra!i"ednature 7 ri ,t no any ay. May*e not years from no *ut most peop!e + t,in% !i%e Bit&oin ri ,t no

*e&ause de&entra!i"ed and so t,at for&es peop!e to mind t,eir %eys- *e&ause if t,ey don0t t,en t,ey &an0t parti&ipate or t,ey 1ust et t,eir *it&oins sto!en any ay.

ABL: Ii ,t.

JP: 2,at t,at &an tri er is t,at no e ,ave t,e *asis for e* of trust- *e&ause a *it&oin %ey &an *eused... it as added to t,e &!ient 7 + t,in% in t,e !ast year or may*e a year and a ,a!f 7 t,at you &an si nan ar*itrary strin it, a *it&oin %ey. /,ese are 1ust %ey pairs you &an use t,em to en&rypt. 6ou &an uset,em to si n. 6ou &an use t,em as...

ABL: 6ou &an verify it on&e you si n.

JP: 6ou &an use t,ese %eys for any sort of &rypto operation not 1ust for Bit&oin and + t,in% t,at is t,emet,od *y ,i&, you &an sort of *ootstrap t,is sort of t,in . +t doesn0t need to *e &entra!i"ed it &an *e

*ui!t a!on side *it&oin it,out a&tua!!y &,an in t,e &!ient.

ABL: + see.

JP: Somet,in t,at reads your a!!et and &an issue a si ned messa e sayin t,is ot,er *it&oin %ey isours or somet,in !i%e t,at.


15/24

ABL: Ii ,t.

JP: 6ou &ou!d re&reate somet,in !i%e $;$0s e* of trust ,i&,- to *e fair- ,as *een a ,u e usa*i!ityfai!ure. 2it, t,e &orre&t sort of user interfa&e and so&ia! proto&o! in top of it peop!e are a!ready used toBit&oin0s %eys sort of *ein a ,u e pain to dea! it,- so you are a!ready doin t,at you mi ,t as e!!

reap t,e *enefits from t,em as e!!.ABL: Ii ,t. 2e!!- t,at ma%es sense. 2e!! + rea!!y appre&iate you &!earin up some of t,ose t,in st,at... t,is is a... + try to &ome at t,is from as mu&, of a... e3p!ainin it is possi*!e and t,is is sti!! ,ard. +am &urious it, Snea%0s !a so it0s 1ust a ,u e pain in t,e ass9

JP: Most peop!e don0t %no ,o .

ABL: OG.

JP: /,e ones t,at %no ,o don0t Jdo itK *e&ause it0s in&onvenient.

ABL: Do you9

JP: + try.

ABL: (!au ,s)

JP: 6ou and + *ot, use O/I- for e3amp!e- for SMS. Ho many of t,e O/I &onta&ts did you spea% toon a re u!ar *asis ,ave you- not via SMS- not via some a!so possi*!y man7in7t,e7midd!e &,anne!- ,aveyou verified t,eir O/I fin erprints9

ABL: Ii ,t. +t0s a ,andfu!.

JP: + &!i&%ed t,e verify !ater *utton more t,an + do anyt,in e!se- and + %no ,o to mana e %eys. /,efa&t is- it0s se&ure &ommuni&ations ,i&, is one of t,e reason- one of t,e primary reason- e ant touse &rypto rap,y are rea!!y- rea!!y ,ard. A *uddy of mine pointed t,is out to me t,e ot,er day tryin torite a*out ,o t,ere is so mu&, sna%e oi! *ein re!eased in t,e a%e of a!! t,is 5SA spyin - andeveryone ants to ma%e some easy app you 1ust do n!oad- point and &!i&% and it0!! en&rypt everyt,inse&ure!y and t,e 5SA is foi!ed. =nfortunate!y- se&ure &ommuni&ations are !o i&a!!y a ,ard pro*!emeven in t,e most simp!e *!o&% dia ram mode. Even if you t,e most perfe&t user interfa&e- you ,ave todo %ey mana ement some,o - and if you 1ust ma i&a!!y ave your ,ands and say- o,- everyt,in isse&ret and en&rypted and you don0t address %ey mana ement you0ve not so!ved t,e pro*!em. =sersneed to understand t,at %ey mana ement is fundamenta! to se&ure &ommuni&ation or effe&tive use of&rypto rap,y.

ABL: Do you t,in% t,ere is a so!ution for t,is pro*!em9

JP: /,ere is. + t,in% t,at it i!! *e partia!!y ,ard are and partia!!y so&ia!. + t,in% t,at eventua!!y ,at0soin to ,ave to ,appen for us to use t,e too!s t,at e *e!ieve to *e overnment snoopin 7resistant 7

peop!e are oin to ,ave to !earn to mana e t,e %ey or t,ey 1ust on0t ,ave priva&y. /,at0s t,e ot,eroption- or e &an..


16/24


17/24

ABL: Ii ,t.

JP: 2,at e0re oin to see eventua!!y is t,at for payment systems... and it may 1ust *e 1ust nationa!a!!ed ardens. 2e may 1ust o *a&% to ,ere it0s mu&, more diffi&u!t to trade it, peop!e in ot,er&ountries t,an in your o n- *ut + t,in% t,at too many peop!e no e3pe&t t,e +nternet to ma%e !o*a!

&ommer&e easy.ABL: Ii ,t.

JP: 5o amount of !e is!ation- + t,in%- is onna put t,at &at *a&% in t,e *a - so t,e systems t,at su&&eedi!! *e t,e ones t,at ma%e t,at easier not ma%e t,at ,arder and no one0s onna use t,eir enemy0s&entra!i"ed a!!ed arden for payments.

ABL: Ii ,t.

JP: /,e ay e do it ri ,t no is t,at e ,ave sett!ement systems *et een t,ese &ountries- *ut...

ABL: But t,ey are *u!%y.

JP: /,ey are *u!%y and t,ey are s!o and t,ey are time &onsumin JandK t,ey are ,eavi!y re u!ated. +t,in%- eventua!!y- it0s oin to start... it ,as started it, t,e *!a&% mar%et- *ut eventua!!y it0s onna for&et,e a*ove round mar%ets to to et it, pro ram- *e&ause you &an0t &ompete it, somet,in t,at...or%in !i%e t,at- you &an0t &ompete it, somet,in t,at &an ma%e a payment in ten minutes of anysi"e to anyone on eart, it, an +nternet &onne&tion. /,ere0s 1ust... it0s not onna f!y.

ABL: 2it, &rypto&urren&y you &an.

JP: 6ou &an.

ABL: #effrey- you %no one of t,e first t,in s t,at you and + startin ta!%in a*out ,en you ot ,eret,is mornin as t,is idea t,at priva&y is not on!y important *ut t,e peop!e rea!!y are misattri*utin,at a&tua!!y is ,appenin ri ,t no in t,e or!d as far as priva&y is &on&erned. Can you te!!somet,in a*out t,at9

JP: 6ea,- + t,in% a !ot of peop!e &ame to Bit&oin- *e&ause it a!!o s t,em somet,in t,at0s &ensors,ipresistant. 6ou &an pay anyone you ant- any ,ere you ant- t,e overnment ,as no say in it- *utBit&oin itse!f- as e %no - is not anonymous. /,e f!o s &an *e easi!y *e monitored t,rou , t,e Bit&oin

*!o&%&,ain- *ut !et0s say t,at you0ve some,o mana ed to satisfy yourse!f t,at you ,ave *it&oinsasso&iated it, t,e %ey t,at is suffi&ient!y disasso&iated from yourse!f. 6ou use a mi3in servi&e or-you %no - *ou ,t t,em for &as, to a *rand ne %ey- or some ay t,at you &ame a&ross Bit&oin andt,ey0re su*stantia!!y disasso&iated from yourse!f. 5o - a !ot of peop!e say- e!!- t,en no t,at you,ave t,ese anonymous *it&oins you &an use /or- and you &an send t,em to ,oever you ant or you&an si n a transa&tion and use /or and pus, it t,rou , you %no same e* interfa&e t,at !ets you

pu*!is, transa&tions t,en you &an use *it&oin tota!!y anonymous!y. /,e pro*!em + t,in% it, t,at ist,at t,ere is so mu&, in t,e Bit&oin e&osystem t,at peop!e ,an t,eir ,opes upon /or ri ,t no - and

*e&ause not a !ot of peop!e understand ,o it or%s- t,ey assume t,at it0s t,is *!a&% *o3 and you use itand t,en you are anonymous from t,e +nternet. /,e pro*!em it, t,at not t,at e ,ave !earned t,at t,e

5SA monitors a!! +nternet traffi&- *ot, overseas and domesti&a!!y- t,ey0ve tapped a!! t,e su*marine


18/24

&a*!es and t,ey0ve tapped dire&t!y into e3&,an es for years no . +t ma%e *e&omes very easy to itdoesn0t matter ,at en&ryption /or uses- 1ust from traffi& ana!ysis at&,in t,e f!o s of traffi& t,rou ,t,e net or% it *e&omes very easy to a) ,ave a &omp!ete pi&ture of t,e /or net or% itse!f and *) at&,traffi& as it enters- *oun&es around and pops out. A !ot of peop!e said ,istori&a!!y e!! a!! you ,ave to doto su*vert /or is run a "i!!ion tor nodes and at&, t,e traffi& yourse!f. /,at0s e!! it,in t,e rea&, oft,e =S mi!itary- *ut t,ey don0t even need to do t,at no . /,ey &an 1ust at&, t,e traffi& *et een

peop!e0s e3istin /or nodes and statisti&a!!y t,is *e&omes very easy to &orre!ate t,ese f!o s- *e&ause/or provides re!ative!y !o !aten&y. +f you put a messa e into /or and it oes *et een t,ese nodes 77 soe vie t,is in our ,eads as 1ust a rap, of /or nodes *ut t,e rea!ity is t,at a!! t,ose node to node&onne&tions run over &a*!es t,at do not mirror t,at /or rap,. For e3amp!e- it oes *et een t,ree nodest,at may *oun&e *a&% and fort, a&ross t,e same &a*!e t,ree times...

ABL: Ii ,t.

JP: ...as t,ose nodes ta!% to ea&, ot,er- *e&ause you ,ave no idea ,ere t,ey are. +f t,e 5SA monitorsa!! t,at information- JitK *e&omes very easy for t,em to asso&iate t,at assumin t,at your &onne&tionoes on for more t,an you %no one or t o pa&%ets ,i&, it ,as to. From my perspe&tive- if you aretryin to prote&t yourse!f 7 prote&t your priva&y on t,e +nternet from t,e overnment in Ameri&a 7 t,en/or is insuffi&ient- ,i&, means t,at a!! t,e ot,er priva&y uarantees t,at you are e3pe&tin /or to

provide ,i ,7!eve! proto&o!s- for e3amp!e- Bit&oin are a!so insuffi&ient. +f you are doin somet,in - fore3amp!e- finan&in revo!ution it, Bit&oin- !et0s say *it&oin no ,as enou , va!ue to do t,at- and youuse /or to send t,ese payments or to re&eive t,e payments and use /or to send to someone e!se you areoin to run a ne pro*!em- *e&ause t,e /or *e&omes transparent if you &an monitor enou , for t,enet or%.

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ABL: Let0s /a!% Bit&oin is ,eard ea&, ee% *y t,ousands of peop!e ,o are parti&ipatin in t,e nedi ita! e&onomy. Our !istener *ase of *it&oin o ners- miners- investors- te&,no!o ists and mer&,ants isro in fast. 2e offer a !imited num*er for a s,ort advertisin s!ots in ea&, s,o to %eep our !istenersen a ed and to provide ma3imum impa&t for our sponsors. +f you0d !i%e to ta!% to us a*out Let0s /a!%Bit&oin- send us an emai! at sponsorsN!etsta!%*it&oin.&om.

SM: +f + s,o ed you a e*site ,ere you &ou!d easi!y pur&,ase e!e&troni&s from t,e or!d0s !ar estdistri*utor it, *it&oins at "ero per&ent mar%up- ou!d you t,in% it as too ood to *e true9 ;oodne s it0s rea! and it0s at *it&oinstore.&om. C,oose from ,a!f a mi!!ion items- save money over Ama"onand 5e e and &onvert your *it&oins to rea! or!d items. 6ou &an even *uy it, priva&y a!! t,ey needis a s,ippin address- *ut don0t ta%e my ord for it. See for yourse!f at *it&oinstore.&om .

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ABL: OG !ets *a&%up and simp!ify t,is sma!! amount so /or is t,e Onion routin net or% *asi&a!!yand...

JP: +t0s used for anonymity on t,e +nternet.

ABL: =sed for anonymity on t,e internet it, t,e idea *ein t,at every node &an on!y see t,e ones t,atit dire&t!y &onne&ts to and sin&e it routes from node to node to node to node you &an0t te!! ,i&, node isori inatin - *e&ause you &an on!y see on&e step eit,er in t,e dire&tion.


19/24

JP: /,en t,ey are en&rypted in various !ayers. /,at ay t,e !ayers pee! off t,en it &omes out t,e ot,er,and.

ABL: OG- so t,e pro*!em t,at you are !ayin out ,ere is in a &u!ture and in a system !i%e e ,ave ri ,tno of pervasive survei!!an&e. 6ou &an put a rin around it and at&, everyt,in t,at oes into it and

everyt,in t,at &omes out of it and *e&ause of t,e !o !aten&y nature of t,e system it0s easy to &orre!atet,ose so as !on as you ,ave t,at top7do n ten t,ousand..

JP: 6ou ,ave to *e a*!e to monitor t,e traffi& *et een every sin !e node.

ABL: +s t,at a!so- sure a ain- oin *a&% to Bit&oin for a se&ond.

JP: /,e ma1ority of t,e nodes.

ABL: Ii ,t- e3a&t!y t,e ma1ority of t,e nodes o*vious!y t,e more t,at you &an see t,e *etter of your pi&ture is- *ut it or%s even at a fifty per&ent9 + ,ave to ima ine at a !o !eve! it ou!d sti!! or% too.

JP: 6ea,- one of t,e *enefits of /or is t,at it is used or!d ide and so a !ot of nodes are outside of=nited States- *ut t,ere aren0t a ton of /or nodes in enera! *ut more important!y t,ere aren0t a ton of

peop!e usin /or.

ABL: Ii ,t.

JP: /,at0s rea!!y t,e *i est pro*!em- *e&ause...

ABL: +ts se!f se!e&tin to a &ertain e3tent9

JP: 5ot on!y is it0s se!f se!e&tin *ut a!so you0re not onna ,ave a ton of traffi& to ,ide it t,rou ,. Oneof t,e ays t,at t,is &ou!d *e miti ated is it, &,an es to t,e /or soft are and proto&o! t,at senddefined amounts of traffi& at re u!ar interva!s.

ABL: + see.

JP: $addin and 1ust send it ,et,er you a&tua!!y sendin somet,in or not and t,is ou!d ma%e it...

ABL: Some more noise.

JP: 6ea,- e3a&t!y *ut t,is ta%es a !ot more *and idt, and ma%es t,e &ost of runnin a /or node ,i ,erand in&reases !aten&y for everyone.

ABL: 6ou say you redu&e fun&tiona!ity in order to in&rease t,e anonymity and t,e se&urity..

JP: A!! t,at means is t,at on!y fe peop!e are oin to use it. (!au ,s)

ABL: Ii ,t- e3a&t!y so it &ompounds t,e pro*!em.

JP: 6ea,- e3a&t!y.


20/24

ABL: OG- so oin *a&% to t,e Bit&oin for a se&ond ,ere everyt,in t,at you 1ust to!d me seems !i%e itapp!ies even more so to *it&oin mi3in servi&es *e&ause *it&oin mi3in servi&es you don0t even need tostand on t,e rin around instead you ,ave t,e entire rap, t,ere in front of you.

JP: /,at0s true.

ABL: Our mi3in servi&es ort, ,i!e at t,is point9

JP: /,e t,in it, mi3in servi&es is t,at you &an it, /or- you0re &onne&tin from sour&e A to end point B- and it oes t,rou , /or- *ut it0s a sin !e point to point t,in ,ereas it, mi3in servi&es you&an &om*ine many inputs into a sin !e %ey and t,en fan t,ose out to different %eys- and as !on as you,ave suffi&ient inputs and suffi&ient outputs- &ertain!y t,e mi3in servi&e %no s it0s oin on- *utsomeone ,o 1ust ,as t,e *!o&%&,ain mi ,t not.

ABL: /,is is different..

JP: +f you on!y ,ave five inputs and five outputs t,en o*vious!y t,at0s oin to *e easy to tra&%- *ut if...+ fee! t,at *it&oin mi3in servi&es- if t,ey ,ave suffi&ient adoptions and a!so suffi&ient trust- *e&auset,ey are oin to *e trusted- *e&ause mi3in servi&es needs to %no ,o put &oins in to et &oins *a&%out.

ABL: Ii ,t.

JP: /,ey &an or% &orre&t!y *ut t,ey ,ave a !ot of users and t,ey ,ave to *e ritten in su&, a ay as tonot &ompromise t,e identities. 5o- t,ey need to a&tua!!y mi3.

ABL: /,e differen&e ,ere is t,at in t,e /or net or% ,en you send data t,rou ,- it is t,e same datat,at enters as t,at !eaves fun&tiona!!y.

JP: /,e si"e- yea,.

ABL: /,e si"e- yea,- OG. 2,ereas it, a mi3in servi&e you put five in and t,ose five o tosome*ody e!se.

JP: /,e ot,er t,in t,at differs is t,at t,is is traffi& ana!ysis. 2it, /or 7 ,en you send data t,rou ,/or- t,at data &omes out t,e ot,er end in !ess t,an a se&ond.

ABL: Ii ,t OG

JP: 2,en you send &oins into a mi3in servi&e t,at mi ,t- dependin on t,e &ontra&t you ,ave it, t,emi3in servi&e- you mi ,t not et t,ose *a&% for may*e a ee%. +t0s mu&, easier to ,ide net or%s froman enemy t,at is usin traffi& ana!ysis if you &an in&rease !aten&ies and in&rease &,aff paddin int,at messa e...

ABL: Ii ,t.

JP: ... ,ereas it, somet,in !i%e /or- ,i&, is desi ned to *e as !o 7!aten&y as possi*!e for usa*i!ity-it *e&omes mu&, mu&, ,arder.


21/24

ABL: A ain- if peop!e are see%in anonymity or see%in some sort of you %no meanin fu! priva&yt,rou , systems !i%e t,is are t,ere ot,er systems you ou!d re&ommend t,at t,ey use or is t,ere a ayto use /or t,at is safe9

JP: /,at0s t,e pro*!em 7 is t,at + don0t %no any ot,er system on t,e s&a!e t,at offers any of t,eseuarantees. One of t,e *i est issues t,at e ,ave ri ,t no is t,at t,ere is no ay t,at + %no of to

&ommuni&ate se&ure!y on t,e internet it,out ivin up your so&ia! rap,. Even assumin /or isn0t *ro%en- assumin you use stron &rypto rap,y and you do %ey mana ement perfe&t!y and a!! yourresour&es to %ey mana ement perfe&t!y- you are sti!! sendin data from point A to point B.

ABL: Ii ,t.

JP: 6ou &an sti!! ana!y"e t,at traffi& and unti! e ,ave !ar e net or%s it, many many users t,at aresendin re u!ar fi3ed7si"ed *!o&%s of data at re u!ar predi&ta*!e interva!s so as to mas% t,e a&tua!fre8uen&y of messa es t,at are rea! or t,e si"e of t,ose messa es t,at are rea! or t,e time 7 t,e time7stampin of t,ose 7 t,en e0re not oin to ,ave anonymous &ommuni&ation on +nternet. 2e &an ,ave

private &ommuni&ation ri ,t no usin stron &rypto rap,y assumin %ey mana ement ,as survived- *ut e0re not onna ,ave anonymous &ommuni&ations.

ABL: Does t,at matter9

JP: A*so!ute!y it matters. /raffi& ana!ysis a!one ,i&, is *ein referred to in t,e press today as metadata is everyt,in . Let0s say you are tryin to start a revo!ution and you ,ave a &e!! it, five peop!e init and your &over ets *!o n. /,ree or four of t,em et t,ro n in prison. /,ey are onna %no e3a&t!y,ere you are oin to o. /,ey don0t need to %no ,at t,at &on&ept of t,at traffi& is. /,ey 1ust needto %no ,o you are asso&iate net or% is and t,en t,ey &an tar et t,em dire&t!y. /,e &on&ept of traffi&ana!ysis is an ama"in - ama"in t,in . /,ere is &ryptana!ysis and t,ere0s traffi& ana!ysis and it, nounderstandin ,atsoever 7 it0s &omp!ete!y opa8ue messa es 7 and usua!!y t,ey are not &omp!ete!yopa8ue- *ut assumin for a moment t,e messa es are &omp!ete!y opa8ue 1ust %no in ,en t,ey aresent- ,o fre8uent!y t,ey are sent and from ,ere and to ,ere you &an et a !ot of information- andt,ere is no ay to ,ide t,at on t,e +nternet. /,at0s ,o t,e +nternet or%s and so t,e *est t,in you &ando is you &an o*fus&ate it. 6ou &an send fi3ed7si"e messa es at re u!ar interva!s and t,en em*ed yourirre u!ar &ommuni&ations into t,ose- *ut t,at re8uires *ein p!u ed in a!! t,e time.

ABL: Ii ,t.

JP: 6ou are sti!! sendin fi3ed si"e messa es *et een peop!e. 6ou0re onna need a very !ar e net or%.

ABL: $!ayin out t,is !o i&- ,at does t,e or!d !oo% !i%e in five years9 2,at does t,e or!d !oo% !i%ein ten years9

JP: O,- !ot more tota!itarian- + t,in%.

ABL: /,at doesn0t sound tremendous!y ood. +s t,ere a ood s&enario t,at &an &ome of t,is are t,eira&tions you t,in% t,at &ou!d !ead us t,ere9

JP: +0d !ove to say t,at o,- ,at if e made t,e ri ,t soft are e are oin to in t,e ar and ive


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everyone t,e anonymity and priva&y- *ut it doesn0t or% !i%e t,at unfortunate!y t,is is oin to *e a !otof !itt!e *att!es *et een a peop!e t,at ant tota! &ontro! of payment systems and peop!e t,at ant tota!&ontro! of +nternet monitorin and t,ose t,at re&o ni"e t,at t,at0s to3i& your free so&iety.

ABL: Does t,at !oo% !i%e t,e SO$A'$+$A of !ast year9 +s it somet,in different t,an t,at9 + am tryinto et an idea of ,at even t,ese moves are onna !oo% !i%e movin for ard9

JP: A !ot of it i!! *e soft are- *ut a !ot of it is 1ust oin to *e individua! &u!tura! &,an es t,at e,ave to ma%e in t,e ays t,at e &ommuni&ate.

ABL: + see.

JP: +t0s *een an open se&ret for years t,at + mean t,is is in a&tion spy movies years a o- *urn your&e!!p,ones t,at you send a te3t on- t,ro t,em in t,e ar*a e- *e&ause you %no t,e =S inte!!i en&e isonna "ero in on you. 2e %no t,at t,e ays t,at e ,ave of &ommuni&atin are monitored. 2e0ve%no n t,is for years and no e ,ave dire&t eviden&e of it- and it e3tends t,e +nternet as e!! t,ere is as!ide t,at &ame out today. +t i!!ustratin pro ram t,at *een oin on sin&e 4>> ,ere t,e 5SA- t,is isseparate from t,e $I+SM one- ,ere t,e 5SA monitors t,e &ontents of peop!e0s traffi& and puts it a!! ona *i data*ase and ma%es it sear&,7a*!e *y !o 7!eve! 5SA emp!oyees. Everyt,in you do on t,e+nternet and usin soft are..

ABL: Content- not metadata9

JP: 6ea,- and *e&ause ,ere is t,e t,in &o!!e&tin a!! > of t,e data &omparative!y is very easy andt,en &o!!e&tin spe&ifi& *its of &ontent t,at you find interestin for everyone is a!so very easy. 6ou don0tet a!! t,e &ontent. 6ou re&eive a!! t,e &ontent and t,en you fi!ter it and &,op it up and save a!! t,emessa es and a!! t,e information- a!! t,e p,otos and t,in s !i%e t,at. 6ou don0t need to save every timet,e Fa&e*oo% !o o oes over t,e ire.

ABL: Ii ,t.

JP: /,ey put a!! t,is information in a data*ase and t,en ma%e it avai!a*!e to t,eir ana!ysts.

ABL: 2e0re in 5e 6or% ri ,t no . 6ou enera!!y !ive in ;ermany and you0re Ameri&an &iti"en and,y do you do t,at9 (!au ,s) 2,y aren0t you ,ere9

JP: One of t,e *i reasons + !eft is *e&ause t,ey aren0t any ood !ar e Ameri&an &ities. + !i%e &ity !ifeand...

ABL: 6ou say t,at in 5e 6or%9

JP: 6ea,- + !ove 5e 6or% *ut +0!! never !ive ,ere a ain. + !ived ,ere for years *efore + moved and it0sa... Ameri&a suffers from t,is terri*!e sense of e ,ave to use a !ot of overnment or e on0t ,aveni&e t,in s- and a !ot of peop!e *uy into t,at. 5e 6or% is very mu&, !i%e t,at. San Fran&is&o is verymu&, !i%e t,at. + ant to !ive in a or!d7&!ass &ity- + don0t anna pay out t,e nose to do it- and +0d !i%esome sem*!an&e of freedom in my day to day !ife- and you don0t et a!! t,ose t,ree t,in s at on&e inany &ity in Ameri&a. +t0s a %ind of *ummer- *e&ause a!! t,e peop!e + &are a*out are ,ere- and + amaut,ori"ed to or% ,ere. + t,in% one of t,e *i issues t,at a !ot of peop!e don0t rea!i"e a*out t,is ,o!e

5SA t,in is t,at- espe&ia!!y iven t,at t,is &omp!ete!y indi&ates t,e usefu!ness of /or-..


23/24

ABL: Ii ,t.

JP: ...is t,at ,en you ,ave a!! t,is data- even 1ust metadata- *ut a!so t,ey ,ave a!! t,e rest of t,e dataas e!!. 6ou ,ave a!! t,is data and you put it into a data*ase- and !et0s see your on!y usin it for anti7terrorism a&tivities today ,i&, a!so e0ve !earned it doesn0t or% > e!! for. +t doesn0t or% a

,undred per&ent e!! for it. 2,at you are settin t,e sta e for is a pus,7*utton si!ent mi!itary &oup int,is &ountry- *e&ause ,en you ,ave a data*ase !i%e t,is may*e it0s not a*used today or tomorro orfive years from today- *ut five- ten years do n t,e road you ,ave a!! t,is information a*out every sin !e

person in t,e &ountry anyone t,at ,as a&&ess to t,at- t,at0s suffi&ient!y evi!- and e don0t %no ,at t,efuture is onna ,o!d e don0t %no ,o is oin to a&&ess t,at data*ase in t,e future- anyone t,at ,asa&&ess to t,at &an t,en *!a&%mai! anyone in t,e &ountry. 6ou &an *!a&%mai! every federa! 1ud e- every&on ress person- every state overnor.

ABL: +t0s a !ot po er.

JP: +t0s un!imited po er and t,e person t,at ie!ds t,at &an &ontro! t,e entire &ountry and- *ye3tension- most of t,e free or!d *e&ause Ameri&a0s t,e !ast !o*a! superpo er.

ABL: Let me as% + mean- iven ,ere e are today- &an t,is *e a!%ed *a&%9 C!ear!y ,at0s,appenin is e3tra7Constitutiona!. 2e are *ot, Ameri&ans &iti"ens and e ,ave supposed!y t,e ri ,t tovariety of t,in s to say ,at e ant. /,ere is supposed to *e a prote&tion from sear&,es and sei"ures,i&, &ertain!y t,is sort of metadata and &ontent &o!!e&tion seems to *rea&,. Do you t,in% t,at t,esystem &an even a!% t,is *a&%9 S,ou!d it ant to or..

JP: Let0s say t,at t,ey dismant!e t,e ,o!e t,in and te!!s t,ey0ve done so. 2,at0s to stop t,em from *ui!din anot,er and !yin a*out t,at and &opyin t,e data over. /,e dire&tor of 5ationa! +nte!!i en&e,as a!ready !ied dire&t!y to &on ress. /,ere is a... + don0t t,in% t,ere is mu&, ,ope for t,is &ountry. +t,in% t,e !on term so!ution is for peop!e to rea!i"e t,at t,e on!y ay to sustain t,is sort of t,in s is fort,em to &ontinue erodin freedoms- *e&ause t,e more !i*erty you ,ave- t,e !ess effe&t of t,e t,in is-and t,e more you &an resist it. 2e0ve seen &urren&y transa&tions of t,is &ountry o from ten t,ousand tot,ree t,ousand and !o er no and suspi&ious a&tivity reports are fi!ed for any do!!ar amount- no . 2eare !osin t,e a*i!ity- *it *y *it- to &ondu&t ourse!ves in ays t,at are not su*1e&t to survei!!an&e- and +t,in% eventua!!y t,at0s oin to !ead to a *rain drain. Eventua!!y- *e&ause as it sounds ri ,t no - noforei n &ompany t,at ,as ,i ,7va!ue &onfidentia! data is oin to trust it to any =S &ompany. Every =S&ompany is at a ,u e startin disadvanta e on t,e +nternet ri ,t no - *e&ause it0s pu*!i& %no !ed e t,att,ey &an *e for&ed si!ent!y to spy for t,e nationa! mi!itary- and so ,at t,is means is t,at peop!e t,atant to not start it, a disadvanta e are oin to start &ompanies in ot,er &ountries. /,at0s oin todire&t!y affe&t t,e ta3 *ase in t,e =S and t,e ;D$ and t,e 8ua!ity of !ife ,ere- eventua!!y. +t0s a !onroad- *ut t,e end of Ameri&a is no *e innin .

ABL: 2it, t,at- #effrey $au! a%a Snea%. /,an% you very mu&,.

JP: /,an% you.

ABL: /,an%s for !istenin to t,is portion of our spe&ia! Let0s /a!% Bit&oin &onferen&e &overa e. Bit,an%s to Media*istro for puttin on a onderfu! event at +nside Bit&oins. Stay tuned for more to &omeover t,e &ourse of Au ust. +f you ,ave any 8uestions or &omments for me dire&t!y- you &an emai!adamN!etsta!%*it&oin.&om.


24/24

/,is episode as trans&ri*ed *y Mansoor Mu"affar and revie ed *y A*dussamad. +t is re!eased under t,eCreative Commons :.> Attri*ution Li&ense

,ttp ''&reative&ommons.or '!i&enses'*y':.>'

let's talk bitcoin, episode 32, "sneak’s law and bitcoins next 2 billion"

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