This week in Bitcoin- 7-13-2018- Lightning Network, BTC tech trends, Litecoin bank

Friday the 13th 2018 strong and
long-term thinking unconfident we've got an exciting panel here international of
course that's what we bring you on this show
Aaron bond weird um you know him from Bitcoin magazine is legendary and it's
great to have him back on the show after about a year I think Gabriel Devine is
actually has never been on my show before I don't know why we've been on
the same show together but you all know him he's freaking awesome and then we
got Nolan Vander clay and the liniment I'm just calling and all over the whole
time that's nailed it perfect all right band with clay baby he is a dude here in
Alberta and as you know I am in Alberta and I attended like four days of events
in a row this is the fifth day so we're gonna talk about on the ground stuff but
something that Nolan and I have both noticed on the ground speaking to real
people is their interest in what the heck is going on with the Lightning
Network some people are trying to build things on it they've got questions for
me I'm no technical guru here so I decide you to get some guys on they can
elaborate on the Lightning Network now something that came out I mentioned I
think of my show yesterday was a quote from it a Nick Bhatia article and I was
wondering if this quote about the Lightning Network it's a huge quote and
if it's an exaggeration is it an inspiration and I will go over this and
we'll let this stop there you know start off the discussion here Bitcoin state to
lightning is the most unique income-producing asset in all of
monetary history income with zero counterparty risk the historical
implications of this on capital markets are tremendous when I fear is zero
County zero counterparty risk I mean that sounds too good to be true
ah Aaron what's what's your take what's going on in a lightning Network with you
uh uh yeah Adam thanks for having me first of all
regarding this tweet specifically all comments on this tweet first it is so
first of all it's a little bit of an action you know or at least it sounds
like it but it's an interesting it's something an interesting future
lightning there I know do you know a eautiful plot sir he is
the owner of room 77 he gave a presentation on this like two years ago
I think an iron him and he gay he also gave him product he gave it a couple of
times he's a great guy he's the room 77 is the bar in Berlin where they accept
Bitcoin it was probably the first place in the world the first brick and mortar
place in the world where I accept Bitcoin back in like 2010 or 11 or years
ago and this guy is a this guy's totally into Bitcoin and he gave this
presentation this was in the heat and in the middle of the block size debate on
on the negative block size so we you know while the debate was going on or
whether it should be one of me or to me or a to me or whatever
he made this argument that it should be about that is that we should go towards
a negative clocks I saw that that's what he meant by that is that if you the way
to measure your block size is by the cost of running a note all right it
costs money to run no it cost hardware resources its cost data are the source
stuff and if you if you use a node to stake money in a lightning Network cell
then actually you can make money by staking money you can yeah you can make
money by running a note so instead of having you know that cost money you can
make money and that's a very interesting feature of light network so that's also
what is tweet touches on where you're you're putting money up in the network
to help other people route their payments and you charge a small fee and
it must be small fee because it's like a perfect free market right anyone can
open these channels so it can be a big fee but it can be a small fee you can
make some money over time by simply routing payments for other people
without actually taking any sort of monetary risk you're not making an
investment that that you know you can lose your money on a bad investment because it's not an investment so you're
in charge of your money the whole time you're just helping other people rather
payments so it it's almost like free money now it's not completely free money
it's flying them work is designed to not have any counterparty risk so that that
part of tweets true but you didn't need a hot wallet like your money is sort of
you know on your computer connected to the internet people can hack into your
computer maybe so there's a risk there there could be some theoretical risks if
something really goes wrong with lightning Network it is still better
software or alpha in some cases you know it's still reckless to put up at least
big amounts so it's not completely without risk that part of the tweeters
seems like a little bit of an exaggeration but it's it's a very
interesting way of making money that wasn't really available before as far as
I can tell so that part of the quiz is very true all right all right I know I'm
not expert in financial markets necessarily so maybe I might be missing
something maybe another maybe someone who has an expertise in that field would
correct me there but I think it seems true to me it's it's a relatively
riskless way to making money which is interesting yeah which is very a
riskless it's just it's hard it's just hard to have bet that that's a strong
word it's very inspirational and it gets me very excited about this development
that we're about to see some things that we've we've never seen before remember
it is linked to below found that like button no one before because I know
Gabriel's got the next thing to say Nolan obviously this quote is
inspirational you you have been travelling around with me and you've
seen all these people talking about Lightning Network can you sense the
excitement out there and what are your thoughts on this quote and just
enlightening network in general yeah I love for not lightning for sure like
that's what I'm feeling now especially going to Calgary there and it's a big
Bitcoin strong community and then heading all the way up to Emmett and
there's a lot of really strong Bitcoin people there and I think for me I'm
more forming myself into more bitcoins learning about how much lightning is
gonna impact everything and how its gonna make everything more frictionless
and I think there's some really good things that are gonna come with
Lightning Network but and you would bring it back to what's it what was that
quote that safe teen said at the at the event I mean this is something that's
basic this there's a lot of people watching this they're not technical
dudes and I think it was a good summary just in case but some people don't even
know what we're talking about right now but What did he say again yeah so that
well that thing that really hit me at the Bitcoin rodeo when he talked about
it was what lightning Network is and how it's going to affect it so like gold was
the standard before and we were using paper as the protocol on top of that so
that the people would transact with paper and then once a week the banks
would settle and gold so lightning Network Bitcoin is gonna be the gold of
the currency essentially and lightning is just gonna be that protocol layer on
top of it that people are transacting with and then when you want to settle
you go back onto chain so that really hit me with how it relates to what we
have right now but just a way way way better system and I like how he did put
that into terms that related it to you know something everyone can grasp
because there's so there's so much particularly when we're talking about
these awesome tactical aspects of it that just it scares people away and
that's another thing that we noticed during her travels definitely sir
everybody can that like button now Gabriel is gonna take it over with his
thoughts on what we've been saying well I've been you know in touch with Nick
personally and we've been talking about his articles he comes from a financial
kind of background so that's his real approach and that's his his analytical
view point and like Aaron I I do not share that background so my knowledge
basis for that is relatively shallow but I would like to kind of dive in a little
bit too on Aaron's comments and kind of hopefully provide a little more
resolution there the you may call it semantics but what we're talking about
here is the distinction between counter specifically counterparty risk which is
a specific situation where somebody else controls your money completely and you
have to trust them or or partially might be multiple parties that have
control over your money which you know it's very common in the current or what
I like to call old finance right there's continual counterparty risk oh like
everywhere you know really really extreme counterparty risk you know just
from everyone knows that from their own bank account the money that you
quote-unquote have in your bank account is actually a claim on some money that
the bank may or may not be able to get when you get it and that's why there are
bank runs you know this is the this is one of the many dangers of the of the
current scaling solutions of you know creating fiat on top of savings and you
know it's a real mess with a lot of counterparty risk so this is something
this is a risk that current financial markets are very much pricing in and
aware of and you know as we saw in 2008 and many panics for decades and decades
ever since the Federal Reserve was founded and ones before that as well
having to do with fractional reserve banking specifically as opposed to debt
based central banking that we've had since then which is even more panics you
know this is a familiar concept of people who are these panics create
contagion because it's a huge chain of counterparty risk lightning has the
complete opposite philosophy and approach it's you're chaining
irreversible promises so instead of chaining promises and and giving people
your money and then lending it out and lending it out and letting it out again
instead you are placing your money in an indelible contract and then creating
chains off of that of more and more indelible contracts it's quite the
opposite from the current system so just on the semantic basis it's important to
to recognize a Nicks statement that he was very very clear in his article to
distinguish between counterparty risk and security risks which is what Aaron
was bringing up so yes staking money in a lightening channel is
not risk-free by any stretch it just has no counterpart
however the security risks are quite low as well compared to old finance so they
you know they're much higher than you know holding Bitcoin in cold storage and
their past problem they're definitely a little higher than holding it in then
holding Bitcoin in hot wallet online so you know you're adding a little bit of
security risk without still without any counterparty risk that is the Bitcoin
way so I'm you know in the centralized exchange is that's kind of building
these private you know scaling solutions and you know like something like coin
base where you can send it back and forth to users on there
this is a way to scale that's using a centralized server which you totally can
do but it has complete you know it has complete counterparty risk you're adding
category risk and so that's what was the amazing development the amazing
innovation of lightning network is to build scaling so the first really you
know robust scaling solution without any counterparty risk and so Nick is
pointing out that this is a development where that hasn't existed in financial
markets before a an asset a way to make steady if low profits and interest on an
investment with without introducing any counterparty risk into the equation
that's it that is a new thing it's a new niche right so it's like it's one little
level less more risky than having gold in your vault at your compound or
Bitcoin in your cold storage with your private keys it's one it's this sliver
above that where instead of making 0 on your investment and just keeping the
same you actually make a little bit of interest that that's kind of what he's
talking about as far as the first half of the statement the second half is he's
predicting that this will cause an incredible infrastructure of financial
instruments to be built on top of lightning contracts so this is an idea
of basically you can take the promised or the expectation that that
Bitcoin in a lightning channel will earn a profit and then I'm assuming he's
talking about building financial derivatives off of that I really don't
know and I asked him to explore the topic in his next article so I'm looking
forward to that wow that was a really good explanation and that gets us the
excitement that we're about to entering this new niche I mean we can't even
predict where this is going to end up and it just kind of is a complete
contrast to what you sometimes read about on social media with the people
just saying if the government controls they be the fun that gets spread about
the Lightning Network unfortunately it's so loud sometimes you
can't even focus on this amazing world-changing type of technology that
we might be on the cusp over here Aaron do you have any thoughts about what a
Gabriel just said and if you don't tell us some maybe some other cool
developments on Lightning Network that you've heard about that maybe we haven't
heard about because of all the crypto noise out there yeah so Gabriel is
absolutely right that the important distinction which I generally make is
that there is a difference between counterparty risk and any other risk I
mentioned the other types of risk because I kind of feel that may balance
out the fact they're counterparty risk so while there is no counterparty risk
and that's a great benefit I'm not sure if that benefit really holds up if you
have other types of risk and Indian there should be some kind of a cool
equilibrium with the money you're making in the risk you're taking right so if
there is where as small that probably means that over time that money you're
making this although very small because everyone will be doing it and hey I
expect that not going into the whole derivatives story like just staking for
I think that will probably not make you a lot of money the whole derivative
story very interesting touch is working on stuff I forgot what it's called
anyways that's definitely interesting there's a lot of interesting lightning
stuff coming up I read this article a little
a little while ago I opened it here it was called the future of Bitcoin what
Lightning could look like with all sorts of improvements they're coming up if you
look at lighting now it's such a young technology it's you know it's working
but it's it's not even really really practical to use unless from gimmicks
and it's gonna be such such an improvement over time at least if it
plays out like like I would expect and the biggest improvement I think is that
right now you have you can't yeah Bitcoin and chain and if lightning
Network and they're really sort of two separate things right like if you want
to pay merchants in this in this point then or in light being then he must also
be on lightning or on chain you know so you have the network effect of Bitcoin
which isn't really taken over by lightning it has to create a whole new
network effect with merchants or supporters and people are gonna have to
needed in their wallets and I think the biggest improvements we're gonna see is
where this difference is gonna disappear over time where you can pay an Unchained
you can make an Amish a payment and it will be converted into a lightning
payments halfway either through a counterparty which again you don't
really have to trust or through other sort of tricks there's a couple of
tricks like these like submarine swaps splicing where you can open a channel
closed channel while funding it or while withdrawing money and then once this
difference between what once this sort of disappears once you can make unshaped
payments that will be converted into lightning and lightning payments or
prepared into this point I think that's when you really will see it take off in
a more I don't want to miss a mainstream quite yet but where everyone who's using
Bitcoin might as well just use lightning because even if you want to pay someone
who doesn't use like it still make a light and paint it might even be cheaper
stuff so that's I think that's the most interesting thing we're gonna see from
lightning in the short term where the difference between on chain and
lightning is just kind of disappeared you're gonna be seamless
that's important yes before we move on from lightening that was we've covered
it very nicely here Gabriel or Nolan do you have anything
else to add to the lightning Network conversation before we move on to
something a little different all righty then
Aaron you or we'll stick with you here and we're gonna stick with the tech side
of things you had an article at the beginning of the year talking about the
tech trends for Bitcoin in 2018 and recently you had a tweet which discussed
that the trends that have actually your predictions that have come true and one
thing that was in the original article was increased privacy through tumble bit
and zero link and then you have actually just recently spoken about privacy
what's up with those two things and what's up with privacy yeah I I hosted
the panel in a little there was a building on Bitcoin conference and I was
a panel on privacy and then sort of team there was there's a lot of some loud
noise anyways guys playing music on their bikes or whatever anyways in the
Netherlands everyone whose bikes right you know that
yeah it's healthy man I like that I wished more okay continue sorry nice
weather as well so yeah anyways yeah um pretty panel yeah but there's a lot of
you're talking about the your presentation in in Portugal yeah there's
a great there's a great lot of innovation Carnivale for privacy tech
like lots of innovative thoughts you improve privacy in all sorts of ways but
I kind of feel like this has been it's always felt felt like that ever since I
got into Bitcoin for the past five years it's always felt like privacy is around
the corner now like all this great stuff coming out whether it's Co enjoying or
confidential transaction is a bit more theoretical or tumble bit like you
mentioned or Onion Routing of lightning remember when all this great stuff
meanwhile no one is actually using any of it and that was sort of that the
topic of mine so why isn't this stuff actually being in the wallets why is it
why is it alter ethical and how are we gonna make it practical like how are we
gonna make sure this actually happened so I guess it's better if you did you
watch the talk if you wanna Ori she was what's the panel for takeaways but we
covered stuff like the political problems actually of implementing
privacy in your wallet like will it get you in trouble with authorities and
whatnot and so one conclusion is it's actually better to have something like a
lightning Network which offers more privacy but it doesn't appear to be
designed for at like right it's it's a it's designed or at least it's sort of
presented and marketed as this way for cheaper and faster payments what's also
more anonymous and that's this convenience but it's not marketed that's
some sort of money laundering thing but anyways I do think it's actually looking
hopeful right now there's gonna be the wasabi wallets which is Adam Fiskars
were working on these dishes this has zero link embedded which is a co
annoying type of system lightning itself is gonna offer more privacy like I
mentioned there's a tenday liam which should make broadcasting of transactions
more random in a way my harder harder to distinguish where is which IP address
launched a certain transaction onto the network
and there's on a Fisker no para 73 on twitter also he tweeted out a threat
lately and it's helpful there's a lot of stuff around the corner and i hope this
time it will actually materialize I'm hopeful it's looking relatively good
okay yeah because people I mean I know I'm Twitter there they there was a guy
who basically said it's right around the corner the the privacy developments I
could like feel it so III have not watched your your talk it is on regular
I can find that on YouTube you think uh it was a the tweet you mentioned I
actually linked through there oh yeah yeah yeah everybody saying so if I think
if people click on that tweet then they'll be able to see all right Gabriel
thoughts privacy anything that Aaron just said yeah just to give a wider
perspective on it you know it was always the case that Bitcoin was susceptible to
sudden floods of of traffic and spam attacks I mean originally there was no
block size limit in the codebase and I believe it was actually Gavin Andresen
who pointed out that the protocol was was susceptible to a spam attack on the
content you know on the transactions and that we should introduce some sort of
limit in order to make the fee market respond to you know high volume attacks
and that actually is it's just really interesting how that became such a bone
of contention and I I think possibly that it was actually a fake bone of
contention that nobody really wanted to raise in order to help Bitcoin it was
only attackers but you know it was always the the intention to introduce a
few important scaling improvements to the base protocol before then moving on
to privacy was always scaling number one in privacy number two and segregated
witness achieved so many things at once for scaling and other things for Bitcoin
including their versioning and and some other things you know it really
increased the transaction capacity by a lot you know snort signatures are also
going to increase capacity by really decreasing transactions
sighs so it's not you know the scaling thing basically everyone worked really
hard on it there was the biggest outstanding bug in Bitcoin which was
called transaction malleability which is essentially a pointer to transactions
whereas breakable you couldn't point to your transactions properly so you
couldn't build things on top of Bitcoin as well because your pointers to the
transactions could be broken and so it was not that you could you know steal
money back and forth it was just that you couldn't point to things properly
and this is a very challenging bug to fix and that was one of the main reasons
why they moved the signatures out of the transactions entirely and now they're
stored in your computer instead of when you have run a full node so the this you
know I've really started we're gonna witness passing through immediately like
most of the greatest minds in Bitcoin began working much harder on their
privacy ideas one of the reasons why privacy is so important in fact probably
the main reason and this and it has nothing to do with you know can
controlling your user information your personal information
you know anonymity dark-dark markets being able to control your own data all
that stuff is actually less important then the main reason why we need privacy
at on the base layer of Bitcoin and that is fungibility fungibility is a fancy
word for every Bitcoin is the same as every other Bitcoin so an ounce of gold
is an ounce of gold as an ounce of gold the atoms are exactly the same it's no
you know you might have issues with purity but with enough you know
technology you can you can detect purity and then you can you know create an
exchange rate between coins for example with Bitcoin in my opinion I think there
will always be a premium for virgin coin that is coin that was included in the
coin base of a trends that have a mining transaction block that's the coin the
block reward so virgin coin I think might always have a premium
because it's never been sent to anybody else provably so but every other Bitcoin
that's that has been spent should be worth exactly the same as every other
Bitcoin currently that is not the case there's so much transparency in the
blockchain that some institutions that are highly connected to governments
maybe you know picky about which bitcoins they're gonna they're gonna
accept and there's companies that have been started by you know in my opinion
unethical immoral individuals like Jeff garsik these companies like they're
doing block analysis and they're trying to trace things and of course it's
probabilistic meaning you can't prove that it's this person's or that person's
or that it was on the dark net market or or wherever but you can say with some
likelihood that it probably was and this is preventing Bitcoin from being the
best money that it can be fungibility is an extremely key property of all
money um you really can't have a money that has poor fungibility at that point
it's more of a collectible rather or you know maybe a commodity where you have a
you know quality of like iron ore or something like that or quality like we
have with oil right it's a commodity you got Brent crude you got Brent light who
you got Texas you got all these different gradations that it's not
fungible that's why oil even though it's a really valuable commodity in the world
it will never be money because it's it will never be fungible in that way so
this is something that came up in a very important landmark legal case I believe
it was in Scotland in the 18th early 18th century or late 17th century
something like that where somebody you know they came in they're like hey these
bills or these coins right that had this mark on him or these coins I know that
they were you know spent they were stolen and then now I've received them
in my store and now I want to like you know sue this guy or not excited
shouldn't have to accept it for my debts and things like that
and the judge they realize when they thought
about it when it got appealed I think a couple times and the judge specifically
said if we were to to gently nudge the money not good in this situation because
of where it was before we would completely undermine the value of the
money and create uncertainty in our entire economy and make every
transaction subject to legal proceedings and basically undermine our entire
economy D because fungibility is one of the key aspects of money and I believe
it was Aristotle who like even came up with that idea like hey one of the
things that you know makes money money is that it's the same as every other
piece and they're interchangeable units of account so bitcoins fungibility right
now is moderate to its moderate it's not poor
so like oil but it's not good either so this is a really really important thing
in order to make Bitcoin invest money it can be everybody found that like button
for that also lesson in fungibility I think everyone should understand what it
is right now you mentioned virgin coin and I understand what that is now if we
got to a hundred percent fungibility though what and Aaron what do you think
about this if no longer gets you a second uh will there still be people
will still be able to tell what a virgin coin is one that's just been mined I
mean I was a hundred percent fungibility um and we'll version coins always be
more in demand than the regular coins even if we have a hundred percent
fungibility yeah that was actually company copiers
NGO that sold 13 coins block street no locks real luxe real they got bought by
bid main later and they rebranded so BTC calm but they used to sell for your
coins for a little while I don't think the business really took off in a big
way and there were some complications maybe with you know it's his money
laundering or not but yeah it's definitely true that you can also Oh
pinpoint the frigging coins that's in my I don't think you can remove that from
purple will be worth more yeah maybe I could be possibly yeah well I mean basis
for their for their and that's what I started sewing them well we see why
there's a big I see why there's a basis for their value currently because
currently you can end up with the coin that can be traced back to some drug
dealer and then someone might not accept it in fear with the birds point now
that's it's no one's ever used its so problem but I'm saying if we get to
where you're not gonna be able to tell where you're not gonna be able to tell
the history of your coin I I don't see how the Virgin point would be more
valuable at that point the case they made at the time is that it's also sort
of like a collectible you know you can imagine you'd be TC for a while selling
these physical coins for example and I think these were also virgin coins and
you know so that has this sort of nice touch to it where you've got this
physical being an actual coin and it's also never been used it's like a you
know in the same way that people collect actual coins so that never be used and
these these are also worth more typically you can collect these and so
in the same way that that could be I think that's possible alright now I
Gabriel did bring up about two things that you had you had brought up in your
tech trends article and early twenty eight he brought up Norris signatures he
brought up segregated witness these were things that you said were to have an
impact in in 2018 and they have it would you like to just comment on that real
quick or mention so second layer solutions that you think are going to be
huge for this year but besides lightning yeah so slight change is also still your
ask you ask me the question right yes so change is also still an interesting
topic there's a lot of debate on what the best way to implement aside changes
but I think well so you've got black stream doing
the father federated model which means you've just got a bunch of semi trusted
empties and only if they all collude can they steal money you've got the drive
change model which which which is secured by miners and it's there's some
controversy about about that because especially when it's way within this
sort of centralized mining ecosystem we have today you know it's not completely
unlikely that a majority of miners could actually clean now they can already
collude to do all sorts of stuff most notably censoring transactions and
double spending but with a side chain model they can also go as far as just
downright stealing funds so it's it's a bit of a weaker model now should you
just do it anyways are these left people do it you know I tend to think so if
people want to take that risk with no money I'm sort of okay with that butters
don't really see it that way so there's these discount side chains will need a
soft work and this soft fork right now doesn't look like it's gonna be deployed
anytime soon by the owners so we do have federated side chains these are starting
to take off you've got a blushing shake and also our ski RSK the rootstock
cerium like side chain which started out now as a federated model as I understand
it they do have plans in the future to switch to a more grudging model but you
know whether it'll be able to do that that's an open question so yes I case
was two or three years ago people were very excited about this but this far I
think at least sort of the core developers the design they've they're a
little less excited about this type of thing all you right now all right guys
pound that like button if you like how this show is one of the most tech
oriented this wicked bitcoins in the history of the show before we slip away
from the tech do you at the other members of the panel of
anything else to add to own the technology side of things that we've
been talking about here I just wanted to say on that topic that's really good
Gabriel how you explain that really big and they were actually brought that up
at the Bitcoin rodeo because ATP that Bank was there and that was one of their
things they're a very forward-thinking bank where they were getting willing to
give you loans and that sort of stuff but they were really focused on that
fungibility side of it where we want to make sure these aren't traded in illicit
assets before we want to make sure they come so that's why they set up with
minors and I know I think the new people coming in and this is with a demure 8020
rule I think a lot of the people in Bick when they don't really they don't really
understand the importance of that side of it yet they don't see how that can be
traced back to them yet and I think that that's a really big layer that needs to
be built on so I really appreciate that that's good thank you
I also have just a couple small things to to note as well first of all you said
a hundred percent fungibility but yet coin based you know minor reward
bitcoins still being distinguishable so well by definition if there's any
difference between virgin coin and any other coin you don't have 100 percent of
legibility so that's just on a definitional basis but um I would be
really interested in anybody out there listening right now of course Aaron's
included because he's probably the most knowledgeable person currently involved
with this broadcast listeners and speakers alike but if anyone has any
knowledge about any Bitcoin improvement proposals or anybody talking at all
about coinbase obfuscation in other words somehow preventing anybody from
knowing that Bitcoin had just been mined or whether it's been spent or not it so
as to no bridge that last gap of fungibility between virgin coin and
spent coin that would be really interesting if anyone knows about that
I'd love just hit me up on Twitter direct message yeah I want to quickly
note Sarah I wanted to move on to the drive trains if I may
were you pleased you know these federated side-chains i I
think JW weatherman really hit home with that with a video and a few weeks ago
they're really there's a lot of counterparty risk with those there's a
lot of trust involved and the fact that there's you know 11 parties instead of
you know whatever five thousand or something is a big difference so
federated side-chains be careful with them and I wanted to mention with drive
chains that actually for Paul sources proposal for drive chains he requires an
improvement to the base protocol that I don't believe has been coded up yet I
think that he wrote his BIP his uh his proposal document for it but I don't
believe anyone's coded it and it sounds like a relatively complex bit and it
sounds possibly even controversial to he's Paul has been quite upset that the
core developers don't seem to be jumping on his proposal to do it I think they're
not excited about drive chains a lot of them because of the the minor risk none
of the developers trust the miners to to maintain their objectivity in that
situation and they see a lot of risk and it sounds like his bit even which really
I mean on a surface level just looks like it's adding and nuts-and-bolts
improvement to I think the script or something they don't nobody's jumping in
on it so unless he you know it codes it up and can convince the core developers
to merge it into the protocol I don't know if we'll be seeing drivetrains
anytime soon all right uh you know Gabe wrote I get you you've brought a really
excellent point I had not heard a virgin coin mentioned in the entire fungibility
debate until today so I if anyone could answer Gabriel's question do contact him
or contact me if you have insight into that you also brought up JW he was on
here talking about his white hat hacker attack on these things that he's planned
I mean he really cares about Bitcoin he doesn't he doesn't want any of these new
developments to be able to hurt it in any way so that was he has given a
different side of the story that I'm never thought about but when I hear
about these develops I always think of them oh they're so positive they're so
great but he had a little take on it that was a little different
all right before we now we're gonna talk about the light cool I want to talk
about the light point Bank but Aaron did you have anything to say to Gabriel
about what he just said just just in case I don't want to leave anything out
there no no really and the only things that I personally
don't think it's necessarily a big problem if it's urgent coins are
distinguishable you know it's just there'll be less and less of them over
time and you literally can't use them because then it's not a freudian coin so
you know then we'll have one class of bitcoins that are sort of collector
items and as long as the right as long as the rest is perfectly fungible yeah I
told wait totally agree okay yeah that's a good point he's a
really good all right so uh let's know when we were talking about light coin in
the car yesterday and people have asked people know about like coin and stuff
but uh here's something that came out in this week from Charlie Lee I'm excited
to announce that the light coin Foundation and token pay have entered
into a strategic partnership to buy a stake in a German bank weg Bank AG we
plan to work on many exciting consumer driven crypto solutions so this this
brings up a lot of thoughts in my head actually are we going to aren't about to
enter the realm of where cryptocurrency related entities are going to be buying
banks that's very exciting because people you know I we're moving fast that
means and what does that really mean but also why is likely doing this what are
the likely foundation what what is this all about and again I think you know as
a press release I know it pumps the price it gets people's imagination going
but is this necessary so what Nolan what's going on in your head about all
this all right so my thoughts on this well so I'm coming back full circle
coming back more to Bitcoin maximalist how I think bitcoins gonna be the one
but the one reason I do really like litecoin is because my Cohen tries
everything for Bitcoin it did Segway before it it's
working it tries it's like almost bitcoins
little experiment sort of think so they try everything so with them buying this
Bank that's the the first ones ever do that remember it's the like but I just
want to clear up to everyone like coin foundation because there's your coin
can't actually buy the you know but you know that ya know for sure fair enough
so we all know they're being real progressive here and it's it's a the big
thing I don't know we're gonna see what happens I guess I don't know if Bitcoin
I guess Bitcoin doesn't have a foundation they can't buy a bank but I
don't know we'll see what happens I think this is kind of where a bit like
coin how they lost out on their litecoin card their pay this is one way that now
they have a stock and a stake in a bank they can implement that and we can have
more payments sort of thing and that's just the thought it almost sounds
gimmicky to me but at the same time as there could be some this could lead to
Bitcoin related entities wealthy powerful ones experimenting and trying
to buy banks but is is there a real reason to do all this I or it or is this
a trend I mean this this is your unique story I'll say that I think I think
we're one of the hardest parts right now from people I talk to is that bridge
between fiat currency and cryptocurrency right now and maybe this is one method
they can use to make it easier I'm not sure but yeah yeah that's a good that's
a good point Aaron what's your thought on this
development uh yeah whoa okay so first of all it's definitely something we
would need or it would be great if they pull it off no I'm not I don't know
about all the details of this story I just read about it for first time like
an hour ago oh and I but from what I understand it's
they they bought like nine point nine percent of the back yes it wasn't more
than that which they do one they need permission so personally I would be you
know hold your horses until they actually get his permission this is not
gonna be easy or at least I don't think it's gonna be easy I had a there's a
little story I had a friend he was also Bitcoin his name is Paul balding he was
involved with setting up a Dutch bank so he wants to set up a bank in the
Netherlands and they had a very interesting idea they wanted to start a
bank that would actually holds people's money right that was the idea for their
rank because usually we put your money in a bank the bank is actually holds
your money they invested in all sorts of stuff and there's all sort of risks you
know I don't have to explain this party so they had this idea we're gonna start
a bank and we're gonna actually hold people's money and when they want their
money you know they come to the bank and we'll get the money back and we'll
charge a small fee so they went it's a process of actually
starting a bank to do this and they found out the hard way how incredibly
difficult it is to start a bank or to to get into the financial sector at least
in the Netherlands is really the last guilt or a cartel or it's really nasty
to you it's really hard to get in there you know to give you one example if you
want to start a bank even if you have enough money if you have all the skills
you need if you have a great plan if you if you got everything you still need a
director on your board of directors who's been a director in another bank
right so you already need friends within the financial sector if you don't have
friends within the financial sector you can forget about it all right so that's
that's right there you can see that's not a free market that's not our free
market to work right so that's one example now I believe they even they got
past this stage and then they got to the point where so right now banks to avoid
banks from collapsing banks are obligated to ensure each other right so
one bank collapses 10 all the other banks must by law chip in to save to the
bank right so the financial sector sort of rescues itself so the taxpayers don't
have to do it this sounds somewhat logical paper or maybe not
maybe thanks to just fail anyways for them this made no sense at all because
they're not gonna clumps because they're not lending out their money right
they're just keeping it there's no way that can go wrong so they don't need
this insurance meanwhile they didn't get an exception on the law so they still
had to insure Gela banks so now they couldn't actually guarantee to their own
customers that it would hold money because now if another bank fails all of
a sudden I have to chip in for his other Bank and now they're on fractional
reserve so they went to the finance minister and they explained this to them
and you know very clearly this makes no sense for us to have to be part of this
of this structure and this was some day but I didn't get the exception now did
the suspicion is that they may not like maybe their finance ministers didn't
understand or me but it's also very possible that they just didn't want a
bank like this because if you have a bank like this it could actually to a
bank run where everyone wants to have their money in this Bank and a bank run
that all the other banks who are on the fractional reserve so they'll all
collapse now this is just an example of you know they had everything they needed
they passed all of them all of that challenges they had to pass to create it
back and then they run into this sort of nonsense so I don't know what the status
is of the life inclination or how well first they are within the financial
sector of Germany or but I think it's they're gonna find out probably that
it's actually very difficult to get a foothold in this world you know and
ironically that's the best evidence that we actually need something like Bitcoin
yep you hit it right there pal that like button people if you create a better
bank they're not gonna let you create a better bank so you've got to get into
something where they have no control over letting you do anything which is
Bitcoin but Gabriel what's your thoughts on this our crypto company's going to
get involved in buying banks and or should we just forget about that even
getting into that realm that's a good question
you know that the story about power bag tink it's that's that's really
really funny you know cuz I he he had a really terrific podcast and show on
YouTube that I followed avidly and it was called what what what did he call
his show Bitcoin do you remember Aaron hello been on that
show a bunch of times as well um but I don't yeah sorry what was he this is
we're talking about three years ago three and four years ago really good and
then suddenly he disappeared and then he came out he came back with some like
general economic and financial thing that was just really boring and I was
like what happened to Paul he lost it is like mojo and he went he went you know
he went mainstream or he like he like sold out you know and I think he was
just trying to suck up what during that process and he's still got slapped in
the face so that's what happens to people you know you go to this
permission system and I you know you suck there mm-hmm he suck up to them and
lick their lollipops and then do everything at the you know the bank they
give out the free lollipops and you do you know that you get your toaster and
then they they buy you lunch you know with with expensive wine they try to get
you drunk and and they say oh that's that's great okay we're gonna look over
your paperwork and now let you know if we can allow you to do business in the
world and that's what you get you know you gotta throw them back in your face
you know Powell thought he could change things from the inside and he's just you
know yeah the time to do that and you know with any thought that you might
succeed he was before the existence of Bitcoin now that we have Bitcoin doing
things like that is kind of a waste of time I think but you know with the
litecoin foundation and stuff they're trying to buy a stake in another bank
and stuff I mean it could be a profitable venture for all I know I
don't really know what they got going on I mean personally you know coin
Foundation's are you know a problem in the first place
if your coin is a foundation that has any real power you're screwed and your
coin is centralised it's just bullshit it'll never read money so you know as
far as just in general banking I just want to throw out there once again big
picture thanks can still exist in a Bitcoin world you know in a world where
we're all using sound digital money banks perform to can perform to
traditional functions that they used to be really good at before they became a
hundred percent fraud and that is real hard money lending and storage so if
they were really smart which they're not they would be going into those realms
instead they're just sticking to the old finance because they're stuck in their
paradigm literally you know legally they can't do certain things like this so now
you see Jameson lop with the first real enterprise level zero counterparty risk
you know storage and security consulting solution these are the companies like
it's called Casa hotel I think these these are the companies that are
actually gonna take over those old banking you know features there's also
lending platforms there's decentralized lending as well so I have a feeling that
almost no banks will survive the transformation ahead into the Bitcoin
world almost none very few I think what's gonna happen is several of them
will buy up companies like Casa hotels and other yeah lending or like lending
platforms and then they'll survive because they'll suddenly have a business
that's viable but the most of them won't and they'll just implode yeah I'm real
interesting to see the skyline without the hill without any Bank logos today
just a few years well I I agree that they I think a lot of them are gonna buy
companies like Casa and I think there's always going to be a demand by the 80
percenters out there I can't I can't control my own private key you do it for
me and the banks will learn like hey simple they will just hold their Bitcoin
for them it shouldn't be this way but I think I think the banks are going to
survive and just kind of alter their model because people are going to be
begging them to hold their Bitcoin because they're not responsible enough
to control their own private keys it could be wrong about that
I know Nolan you're gonna have two thoughts on this you're you're a big guy
into the central banking and banks and everything on what Gabriel is talking
about yeah cm because Goldman Sachs who own circle who bought pallone EXO
they're coming in it at that way so maybe this is I guess I know the
foundation side but them coming in it at the other way and see what's gonna
happen but somebody's gonna have to do that serious bridge between the old
system and the new system and I agree with you Adam with the whole custodian
thing people don't people don't want the responsibility we've been bubble wrapped
so much by our society that that 80 percenter don't the 20% that actually
know what's going on do but that 80% they've been bubble wrapped by society
and they're gonna want people to look after their private keys and their
things so we'll see how it looks I don't know I'm not a supporter of that but
they're they sent out there I think I think you guys are wrong in the
transformation part of the transformation is societal and cultural
and that attitude is going to change when that when you know when the the
truth hits the mainstream about this amazing fraud that's gone on behind the
scenes the collusion between banking and government and how what how much the
will has been pulled over the society's eyes it's gonna take you know a number
of years to happen but I think that's really the only way that that I think I
think people are gonna want to control their money and it's gonna be way easier
than it is now the hardware well it's all that stuff the user experience is
going to improve so much that it won't be all that difficult
it'll just like people doubted that grandmas would be able to use email in
the 80s and 90s just like people doubted that anyone would be able to use
e-commerce as late as 96 all those things turned out wrong just because of
improvements in UX so say anything here in my opinion I really use your
experience is going to get that there is no it is going to become easier
but I I think you give the regular person too much credit in society today
they are so obsessed with bread and circuses it's not gonna be a choice that
they will be making it'll be forced on them you know the you know X will be so
much better and everybody that they know that does business and Bitcoin will be
far richer you're here's another side of it there that you're not have if there's
a Fed coin I mean then that's what they'll be in and then and then the
bank's nobody will say if in this inflationary coin it'll never compete
with Bitcoin it will never be able to it it'll be purely self-preservation
oriented not a philosophical again I don't think it will compete with big I
think people will just blindly go into it because it'll be easy the dollar will
easily transition into this fed coin that the cunt the country will make it
easy for that for the mindless follower is just a plenty of people are going to
get in the Bitcoin it is going to be awesome it is the right direction to go
in I think that there's just a lot of people out there they're gonna do as
they are told and that and fed coin will be for them and the banks will hold the
Fed coin and look around you Adam look at look at look around you at the rise
of nationalist parties even in Europe arguably the most brainwashed place on
the planet this is so this is not gonna stop we have the Internet this is this
is news this is real news right now what we're doing this is real media and this
is that's changing the world so fast hardly anybody is watching these old me
things in the brainwashing is falling apart all over the place now it's gonna
take years of course but this is a process you can't judge you know what's
gonna happen in five years based on most people now there's so much shit
happening so fast in people's attitudes are changing very fast yeah okay kids in
you yes I just want to say I I agree with that but I think we need to be
aware that so many people are just sheep a lot of people are waking up but I
think that they're gonna still try to bring their centralized coin out here
their last-ditch effort and I think our job really is to teach be
the most important thing between decentralization and what centralization
is because those those banks are gonna if a collapse happens they're gonna come
out and say oh we got blockchain technology now we got this and just
bring all of your money from your old system into our new system and and
unless we don't do our do our job teaching people that decentralization is
the only way it'll work a lot of people might get duped oh yeah found that like
because people do that that's the bottom line people do not understand the
decentralization aspect of Bitcoin and cryptocurrency and that that's what
they're buying all these Neos and all this yeah they won't need to that the
collapses will be so epic it'll be just like like in the depression where this
is you know we're in a situation where you know even our grandparents weren't
around for sound money but our great-grandparents were and you know I'm
an American in the 30s you were raised by your parents and
grandparents both of there were the last two generations in the sound money
paradigm and they had the diametrically opposed approach to savings economics
and fraud that we do now these grifters and everything in the thirties they had
to overcome so much more cultural baggage than scammers do now they could
just do decentralized not even these essentials but they do they could do
scams with you know internet marketing now and just scamming all look at these
look at the ether thief bots on Twitter it's so easy to fool these people
because they're all spenders they're all idiots they're all fraud is it fraud is
the norm right we have politics central banking is completely a fraud so that's
the norm so anything that nobody has any idea but in 30s and 20s you know back
then man it was hard to get somebody to part with their gold I mean after all is
gonna be worth 2 or 3 percent more next year
so already you gotta beat that bar I mean jeez you know you really had to do
a number on somebody took it to court grift them back then but now super easy
that's gonna change again they're gonna be so many frauds and so much and I
agree with no that the central banking the Fed coin
will be the last and biggest gasp of the fraud and when that collapses then the
late adopters will straddle in with Bitcoin and do well alright Aaron are
your thoughts on any of this we've gotten to a social talk here but this is
an important aspect of cryptocurrency yeah
even if governments lunch pet coin or not and they keep using the fields or
whatever it is they want to push on people this money will have to compete
with Bitcoin are they will away now I do think it could have some advantages over
Bitcoin maybe it could be a bit more stable for example but it can they can
inflate it too much right it can be inflated so much because people have
Bitcoin has an alternative so in that sense Bitcoin could keep even these
alternatives honest just bided by the merit of competition and if that happens
in my mind Bitcoin will succeed even if most people don't actually use it
themselves if it keeps other currencies honest
that's already a big success and then over time maybe people will
just come to prefer Bitcoin or or or maybe the Fiat or techo and we'll have
some benefits and it'll both exist but Bitcoin isn't going anywhere
so I do either way it's gonna be better world monetarily I think I suspect yeah
I lean toward that scenario III just still don't think the mass that all the
masses are gonna get into Bitcoin they'll be stuck in something else for a
while okay let's quickly get to the conclusion
here everybody get ready for your final thoughts anything that was left out of
your stories of the week I will start with nulling uh I I want you to talk
about you know what we saw here in Alberta this week and just how it shows
that you could be anywhere on this planet and you can be a huge you know
make your mark in the cryptocurrency world just because you're in a province
that not everybody knows too well yet doesn't mean that you can't become the
main jurisdiction for crypto Curtin who know there's just a lot of positive
vibes coming out of Alberta this week the Bitcoin rodeo was a great event on
Monday and Tuesday what were your
thoughts Nolan are you excited about being a citizen of this crypto province
and tell that that dogecoin story – no okay I know it's been a really really a
big week here in Alberta it's been big we had the Bitcoin rodeo Monday Tuesday
we had a big meet up in Red Deer Wednesday where we had we brought all
the different Bitcoin clubs from around the city together so we filled that room
we had yeah our Bitcoin and beers that's our meetup we had a blockchain FinTech
and then we had another shopping club group that's building a shopping club
and integrating Kryptos into it so there's a lot of work going on a red you
and then Emma to do with the guys at Bitcoin solutions got a meet-up there
Thursday and then coming down here onto here Friday so this has been a big
Bitcoin big crypto week in Alberta but yeah that funny the funny thing at the
conference guy that was selling the ecards or whatever he has about eight
different cryptos that he accepts and he was getting a lot of flack from people
why aren't you accepting Bitcoin cash when will you be accepting Bitcoin cash
and then so just a slap roger bear in the face he started accepting dogecoin
it was it's been a good week man I can't complain us has been the probably
Alberta's biggest week and there's a lot of big players that have a lot of big
big things going on we've got big mining operations going on and it's been
awesome and great ride yeah I really appreciate you for coming up out and
really spurred a lot of things so it's been really good yeah well you guys have
been very inspirational you know I urge everyone out there not to just you know
you can predict participate in the Twitter arguments and the social media
organs but get out to some events and try to go to some places you've never
been busy you get insight into the cryptocurrency community with the real
people in other parts of the world are talking about and I've learned something
every time when I'm traveling around going to these conferences and I thank
the guys at but the meetups and Red Deer the meetup up here in Edmonton and the
guys have put on the Bitcoin rodeo in Calgary for making this just just being
wonderful and being so welcoming to me it's been a great time
let's see Gabriel what are your conclusion airy thoughts or anything
that you wanted to add anything that got left out yeah I just ran across some
breaking news right before the I thought might be funny and interesting
possibly the Mueller investigations into basically Russian involvement in the
Trump Clinton election in the u.s.

So sort of
marketing eBay because it's obvious bull bull and you know I don't really hold
much water by this but the latest twist is Mueller finally indicted a couple of
dozen or so I'm not sure I'm that exactly a many Russian private
corporation workers of some type and in the indictment they accuse them of using
Bitcoin to move funds around and to to evade whatever capital controls are or
you know to evade tracking and stuff so in numerous ways including some mining
concern or something so that was pretty interesting little footnote on the
politics side yeah you know I noticed that right before we went on also and I
thought to myself you know the whole the whole thing now is it's totally
political and I urge people don't waste your time worrying about politics and
stuff but then when I heard about the Bitcoin aspect I've been like it's been
this bullish for Bitcoin that you they used it for something there was a use
case there yeah that's awesome so I know I like that all the 80 percenters out
there that are following this like it's their life it's their soap opera though
they're here but they're here about Bitcoin maybe that'll get some out of
their trance will wake some of the people up alright Aaron we're we're
ending it with you Annie you could talk your latest article was
really cool about the history of Bitcoin how it was almost started beforehand or
something like that anything you want to add to that or anything you want to say
yeah so I've been I've been writing this article series for bidco magazine on a
sort of the prehistory with Bitcoin so that's the projects that
came before Bitcoin like Bitcoin Bitcoin wasn't invented out of nothing right and
sometimes people think they serve but but it was a it was
really inspired by technologies that came before it
sorry word for four of these articles now the first one is on my tummy and II
catch which it was a privately or it was a cash for the the first cash for the I
was mostly intended to be private but it wasn't decentralized or anything like
that then you had doctor Ida max hashcash then viola is B money I
probably didn't pronounce his name right Wade a well anyways be money and now I
wrote an article on a nick szabo Smith gold so yeah if people want to want to
check that out you can find a bit for magazine also next week I'm gonna be in
San Francisco at the distributors conference I'll be hosting a fireside
chat with some some out of blood stream we're gonna discuss the future of
Bitcoin if any more awesome awesome that's it for me alright it's pronounced
wait wait I thanks yeah prehistory I love it okay we're at cook somehow we're
actually not allowed that means the show is over everybody thanks a lot my guest
this has been an awesome show thanks for everyone who was watching remember we do
this show every single Friday I do a show on this channel every single day at
least one check out the archives below disrupt meister comm get a treasure
letter nano t-shirts all linked to below of course I had to mention I'll be in
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a discount to it and again pound that like button everybody Saturday tomorrow
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Friday 30 hit a great weekend Mike relations disrupt meister sometimes
channel like the video the video see you later people bye bye

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