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7/27/2019 Let's Talk Bitcoin - Ep 62
1/19
LETS TALK BITCOIN
Episode 62The First $900 Bitcoin Episode
Participants:
Adam B. Levine (AL)Host
Andreas M. Antonopoulos (AA)Co-host
StefanosMember of Hackerspace GR
Esben Friiz Jensen (EFJ)Founder of Crowdcurity
Jacob Hansen (JH)Founder of Crowdcurity
Anthony Di Iorio (ADI)Executive Director of Bitcoin Alliance of Canada
AL: Hi and welcome to Episode 62 of Lets Talk Bitcoin, a twice weekly show about theideas, people and projects building the digital economy and the future of money. Visit us at
www.letstalkbitcoin.comfor our daily guest blog, all our past episodes and, of course,
tipping addresses. My name is Adam B. Levine and today wereall over the place. Andreas
is back on native soil again, educating about Bitcoin and visiting family. He checks in with an
interview from Athens based Hackerspace GR. They talk culture and how easy those early
bitcoins came and went in the days before their value was understood. Then, the battle for
your bitcoins online is often a battle against bugs and those who exploit them to your
detriment. The guys at Crowdcurity have taken the bug hunt to an institutional level - we
talk websites and wallet security, bitcoins and bounties. Later, Anthony Di Iorio is a familiar
face on Lets Talk Bitcoin because hes always doing so many things. We catch up about themajor Canadian conference theyre planning for spring, the mysteriously named and very
cool open source KryptoKit project and more. Finally, where do you stand on the Coin
Validate Whitelist? Ive been talking to a lot of folks and thinking way too much about the
topic. We wrap todays show with myexplanation of the problem, the project, the players
and the current battle lines surrounding this pivotal upcoming issue. First, lets join Andreas
now, live from Greece. [1:36]
AA: Hi everyone. Andreas Antonopoulos here reporting live from Hackerspace GR, the
Greek hackerspace here in the centre of Athens, where we have a fantastic community. I
just completed an introduction to Bitcoin to a great audience and got quite a bit of agathering. I have with me here today, Stefanos, who is one of the local Bitcoin users and
has agreed to talk to us a bit about Bitcoin. Hi Stefanos, how are you? [2:09]
Stefanos: Hello, very well thank you. [2:10]
AA: Stefanos, tell me a bit about your experience with Bitcoin. I know youve been involved
for quite a while and you understand the technology quite well. When did you first get in?
[2:20]
Stefanos: I think it was around 2010 when a friend introduced me to the project. He hadjust started mining himself and he wanted to find some more sources for mining. He got me
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really interested into the idea, so I started to (??) the protocol, mostly by studying the
source code and see how everything worked. [2:41]
AA: Right. Right. Right into the source code. Thats the best way to study it. Excellent. So
you got in in 2010, early days. That must have been a pretty good price for the Bitcoin
right? [2:51]
Stefanos: It was really easy back then. Actually, a lot of people just gave their coins away
on the Bitcoin forums. It was, I think, around $0.10 or something close to that. [3:03]
AA: Wow. Early opportunities. Let me askDid you manage to keep any of those original
bitcoins? How did that go for you? [3:10]
Stefanos: Actually, I didnt. I mined some bitcoins later on, I bought some graphic and
some GPU cards for that but after the first large crash of the market where I think it went to
$17 or so and then some account got hacked and the price really went back to zero. I didntbother resetting up my mining hardware; I lost some of my coins in some formats and didnt
really pay any attention to them. [3:38]
AA: OK. You kept some of them though? [3:41]
Stefanos: Yes, just a few of them. [3:42]
AA: Just a few. Thats great. At least you got in somewhat early. So youve been involved
in Bitcoin for almost three years now. Have you been following it consistently since then or
did you fall off? [3:53]
Stefanos: I fall off but I regularly, every couple of months check up, or watch news, see
some research papers that they get published every now and then and follow up the price.
[4:03]
AA: Lately, the price has been rather interesting to say the least. [4:08]
Stefanos: It has been extremely impressive actually. [4:10]
AA: Yes, yes. Whats your involvement at the moment? Are you mining at all? *4:15+
Stefanos: Right now, Im not mining. I used my early bitcoins to buy an ASIC miner. *4:21+
AA: Oh, very good. [4:21]
Stefanos: With some expecting to arrive this week. Hopefully, I will be back in the mining
game much more. [4:28]
AA: Do you think there are other miners in Greece or in Athens that you know of? Do you
know other people with ASICs, for example? [4:35]
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Stefanos: I know that we have an ASICs in Hackerspace. We brought it as a donation so
that everybody can play .. [4:41]
AA: Oh excellent. You have one right here. [4:42]
Stefanos: Yeah but its right now not in the space. One of our members is taking care of itbecause we didnt really have the dedication to properly set it up and we didnt use it yet.
[4:53]
AA: I see. Theres at least one more. What do you know about the community here? Do
you see much activity with Bitcoin? [5:00]
Stefanos: I dont know many users but the few people that I know, they have mined quite
extensively. [5:08]
AA: Committed an early start. [5:10]
Stefanos: I have met mostly early people that got in the game early on, usually from
universities and places like that. [5:18]
AA: Excellent. Do you see the community growing? Has the new price level made more
people (??). [5:28]
Stefanos: Its definitely exploding, in a sense. Most people are very impressed by the price
of the bitcoin and not really in the network, or the functionality, or what it represents
anyway. [5:43]
AA: I know that from your perspective, weve discussed this before, you see Bitcoin much
more as a technology and a network than as a currency. Do you want to tell me a bit about
that? [5:55]
Stefanos: Yeah, of course. When I first discovered the Bitcoin as an idea, it was really a
brilliant idea of a distributed currency. I was really amazed that it can actually work and that
three or four years down, it is still working and still popular. I believe it really has the
potential to change the way that economics work on a global level. If not as a user level
currency, perhaps as some backbone for some different banking system or something likethat and perhaps if not the exact same technology, some other technologies derived from
this idea. [6:38]
AA: Excellent. So I think were very much on the same page there. Im beginning to notice
that you can tell the difference when people talk about bitcoins, they mean the currency
and when they talk about Bitcoin, they usually mean the network. Thats a clear distinction
because the technology is so much more interesting than the currency. Although, you
know, at $600/$700, its not too shabby. *7:02+
Stefanos: Well, of course, the Bitcoin network really needs both kinds of people because alot of the technology and the development, in particularly the ASIC production, which is
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extremely expensive, wouldnt have been possible without the economic side of the thing.
[7:20]
AA: Definitely, they coexist. What about altcoins? Do you see any interest in altcoins here
in Greece? [7:25]
Stefanos: Well, I know that there has been a lot of interest in Litecoin lately. Mostly
because it hasnt still caught up and you cant really mine it as effectively because of the
hashing algorithm. I know a few people that are working actively on that. I know that the
Greek Pirate Party can accept donations in litecoins and they also provide the Litecoin client
that you can use to fund them by donating your CPU time or GPU time. Litecoin is quite
popular. I have seen a couple more coins but none of them has..... I have also another
interesting (??) peer to peer coin, PPC I think, which has some extra centralized
management kind of structures, but I havent studied extensively. *8:13+
AA: Does this Hackerspace take bitcoin donations? [8:18]
Stefanos: I dont think we do yet, but its in our plans, yeah. [8:23]
AA: Excellent. Thats really good. What do you see as the potential of Bitcoin for Greece?
Do you see any kind of special application or possibilities here in Greece given the economic
crisis and things that are going on? [8:38]
Stefanos: Well, its an easy way to avoid some problems. Mostly because there are services
that accept any currency or bitcoins, like Bitpay which are really easy to integrate in an
online sort of experience and kind of transparently use the Bitcoin network for you. I guessthese services could really come in handy as the banks are more reluctant to interact with
other merchants. Apart from that, I dont think it will play a great role into transforming the
economy. [9:14]
AA: Do you see the possibility of a currency crisis here, potentially kicking up interest?
[9:18]
Stefanos: Well in that case, of course, there will be a lot of interest but the general public in
Greece isnt that technically informed. So probably they are not really able to fully utilize
such a tool. [9:31]
AA: So its going to be a niche technology? *9:34+
Stefanos: Yeah, yeah. I believe so. [9:36]
AA: What about merchant activity here in Greece? You mentioned Bitpay. Have you seen
any merchants here start to consider integrating Bitcoin capable cards and ecommerce
solutions to sell things? Is there any market for buying stuff with bitcoin here? [9:52]
Stefanos: I havent used any but some of my friends work in companies that acceptbitcoins. I havent seen it reach the general public yet as in big subs or, thats hard. *10:05+
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AA: Well, thats fine. I mean we dont have that pretty much anywhere, with just a few
cities exception, like Berlin and Bratislava where they have a couple of streets. [10:13]
Stefanos: A few online subs do use bitcoins and there is a lot of interest in bitcoins but that
hasnt materialized yet into actions. [10:24]
AA: What are your future plans in this space? Are you going to get involved in mining, you
said, with your new ASIC? [10:35]
Stefanos: Yeah, I will get back into mining and see how... get myself updated on the latest
news because I havent been following the past two or three months. I also hope to set up a
nice way to donate and handle bitcoins in the Hackerspace because its a space run by many
people, so there are some trust issues and we need to see who manages the bitcoins and
how public (??) our processes. I guess thats my current project. Later on, I was thinking of
some web-based projects for bitcoins and perhaps integration with any subs but thats justideas for right now. [11:17]
AA: Do you see a possibility of being able to work in the space and work for bitcoins, for
example? I know you are a programmer by trade and you have language and coding skills.
Have you found any opportunities to work for bitcoin? [11:33]
Stefanos: No, but I havent exactly searched for anything like that. *11:37+
AA: Ok great. Well I certainly hope thats goingto happen more and more in this future
space. By the way, I have to say, since you are a member of this Hackerspace, it is awonderful community in the space you have here. I would certainly encourage other
Greeks who hear this program to check out the Hackerspace. Where can they find more
information about Hackerspace? [11:57]
Stefanos: Hackerspace GR on the site. It has pages about our vision and current projects.
We also have a Facebook page, which is regularly updated but not as live as the Wiki itself.
There is also a public mailing list, which you can find on the site which is how everyday
conversations are actually get organised and you can join in. [12:21]
AA: I can say from having visited this space, its ... to me, it would have been adream cometrue if, as a young geek I had access to the kind of tools, electronics, manufactured
fabrication capability (??) machines, UAV drones and all the other wonderful things you
have here. More importantly, access to a community of same minded people, who I can
learn from and really this is a really great community youve built. *12:51+
Stefanos: Thanks a lot. [12:52]
AA: Congratulations. [12:54]
Stefanos: Its not just my achievementthough. There are other people that some of themhave left by now. This was one of our original goals was to create a place where we can get
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people together and particularly help young people that .... its hard to find technology
related material in Greece, so we really wanted to create this kind of space. [13:18]
AA: Stefanos, thank you so much. Its been a great pleasure to be here today and discuss
Bitcoin with so many people who are very enthusiastic about the topic and to see this lovely
space youve builtand I hope to visit you again. [13:31]
Stefanos: Thank you. Thanks a lot. It was nice speaking to you, as well. [13:34]
AA: That was Stefanos and this is Andreas reporting from Hackerspace GR,where I am on
the first leg of a world tour, visiting Bitcoiners in a number of different cities around the
world. Obviously, coming back to my original home country where I grew up has been a
great pleasure and seeing the local Bitcoin community, which is young but flourishing and
growing. It has been a great experience. Reporting from Athens, this is Andreas. I hope to
see you all soon. [14:03]
______________________________
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______________________________
AL: With the price of bitcoin skyrocketing and web wallet hacks in the recent news, security
is clearly an important issue in Bitcoin. Joining me today to talk about white hat solutions to
black hat problems, Esben Friiz Jensen and Jacob Hansen are the founders of Crowdcurity.
Gentlemen, thanks for speaking with us. [15:42]
Crowdcurity: Thank you. [15:44]
AL: Your Company, Crowdcurity, consults on security issues but in a rather unconventional
way. Can you explain your process? [15:51]
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Crowdcurity: What were basicallydoing is using the concept of bug bounty programs. As
some of you might be familiar with the bug bounty program that Coinbase is running, where
they are openly inviting skilled security testers to kind of report vulnerabilities on Coinbase
app and then, in return, they can get rewards. Basically, what Crowdcurity does is we take
this kind of concept and then we provide the structure for the company to kind of do it.
Instead of creating their own bug bounty program, they go to our site and create it with us.The benefits of kind of doing it with us, instead of doing it on your own site, because you
still get the benefit of vulnerability submissions by doing it on your own site, so if you dont
decide to do it with us, we, of course, recommend to do it anyhow. By doing it with us, you
get a structure, you get a best practice rule set, you get payment management, and we
handle the payments. We also handle all the tax rules, which come with the payments. We
are talking about testers from all over the world, so there are different tax rules related to
that. We take care of that and we only send one invoice to the customer. Thats some of
the things. We are also handling just the questions. Sometimes there are some questions
that say they might have a bug to test and we are kind of the first level support and handling
that. We are taking away a lot of the admin from the businesses. [17:18]
AL: Basically, what youre doing here is youre putting out bounties; youre putting out
rewards for people who can figure out ways to break the site. OK, so your company is
providing like an infrastructure level for this, so that companies, when they want to do this,
dont have to reinvent the wheel and so they just come to you. Youve already got a system
in place that works. Youve already got a community that is making money from you, I
imagine. I imagine that you probably have some of the same testers working on one project
as another, just because its connected through you. *17:44+
Crowdcurity: Thats correct. I mean, at the moment, we have around 400 testers signed upvia our platform. One can think of it a bit as crowdsourcing IT security, in the way that if you
start a reward program, we will go and market that toward the testers and within a fairly
short while, you will have a lot of testers, security testers inspecting your site and providing
a crowdsource security test of your site. Of course, the benefit from the testers in this case
is that if they find something that might be vulnerable or harmful to a business site, then
they will earn rewards for those vulnerabilities. [18:20]
AL: One of the concerns with this type of approach is that, essentially, you are inviting
attacks. I assume its legal to do this type of testing for your testers because again, its kind
of a game here thats being played. Do you ever have a problem where the value of thecompromised thing that is discovered, outweighs the bounty thats being offered? [18:38]
Crowdcurity: Thats a very good question. Its a valid concern for many businesses. I think,
in this case, what we normally offer is that business can do what we call a private reward
program, where in this case, we only invite a limited number of testers that we know and
have a track record with. I think that the much bigger question that is important to ask is
that - a level of these sites are already under attack and are constantly being examined by
malicious users who are looking for ways to kind of exploit vulnerabilities. Youre already
attracting these users and I think thats what were seeing with the various exchanges and
wallets being hacked. Secondly, if a hacker were interested in doing malicious activity, it willsimply not be a very good strategy for them to sign up with our service. They could just go
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straight ahead and start poking around with the site and try to exploit some of these
vulnerabilities. [19:28]
AL: Youre saying that the penetration testing is happening really one way or the other. Its
just that one way it only is happening for evil purposes and in this way.. it might, you know,
some of it is going towards helpful purposes? [19:39]
Crowdcurity: Thats simply correct. All the sites are already on the attack. Basically, what a
bug bounty program or reward program really does, is that it provides an alternative for a
lot of these testers to not do malicious activity with potential vulnerabilities but giving them
a kind of a lawful way of earning rewards and reporting these vulnerabilities to the business.
[20:02]
AL: On Bitcoin, specifically. Bitcoin and online wallets. Theres a saying: secure web wallet.
You get two of those words but not three, which implies that if you want a secure wallet, it
cant be online enabled. Ive referred to online wallet sites kind of like piatas, where themore people who use the service, the higher the price of bitcoin, the greater the prize for
whoever breaks it open. Do you think that its possible, given the type of reward, that these
wallet services have, to actually have safe and secure, really like trustworthy and secure
online web wallets? [20:31]
Crowdcurity: In general, I dont think that anywhere you are able to get 100% security on
your wallet. Neither in the physical world or on the digital world and we still see banks
getting robbed, even today. Its an illusion that you will ever get 100% security. What we
should see is that businesses, as they grow and have a large user base, that the reward size
increases and because they will be more serious about their security. If you look at, forexample, Google and Microsoft these days, they are paying between $20,000 and $100,000
for very serious vulnerabilities, which gives huge incentives for testers and the whole
security community to improve their security and report these vulnerabilities. I think we
will be expecting as kind of the Bitcoin market and the Bitcoin space is maturing, that more
and more exchanges will start running these reward programs and that the rewards will
increase. I think from a user perspective, if Im a user, I would use a wallet service or an
exchange that actively have a reward program and you can kind of measure how good their
security is in terms of how high the rewards they are paying out because the higher the
rewards are, the more confident they are about their own security and the more they are
kind of asking for the security community to help them improve their security. [21:56]
AL: If somebody is interested in learning more about your service or contacting you guys,
what is the way to do that? [22:01]
Crowdcurity: We are always reachable by email. You can find our emails on this site, which
iswww.crowdcurity.comand anybody can reach out to us with questions. We are more
than happy to answer. [22:12]
AL: OK. Last question. We dont have security experts too often on the show and I am
curioushow do you store your cryptocurrencies? What do you think is the right balancebetween security and convenience? [22:26]
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Crowdcurity: I think that is a very good question and I think really what youre pointing out
is that there is a trade off between convenience and security. I weighed it out. I only store
all my bitcoins in online wallets, but I never have more than 25 bitcoins in any wallet and
those are spread across, at the moment, four different wallet providers spread out across
the world. Thats, of course,a trade off between having your bitcoins in an online wallet
compared to offline wallets. The reason why I chose for going with online wallets is that,basically for the last two and a half years, Ive been travelling around the world and Im
losing stuff and Im only having my bag with me. Its not very convenient for me to ... I dont
have a physical place simply where I can stuff in my online wallet or my hardware where my
online wallet would be, so I need something that is convenient and out there in the internet
somewhere. [23:19]
AL: Have you ever lost any like that? [23:21]
Crowdcurity: So far that has not happened. Of course, I mean I look very carefully at the
providers that I store my bitcoins with and let me put it this wayif they cannot providetwo factor authentications, I would not use it from a user perspective. [23:35]
AL: Right. I understand. [23:36]
Crowdcurity: OK. That was basically how I treat bitcoins in my personal life and my
personal bitcoins, where I weigh in on the side of having greater flexibility and convenience,
in terms of online wallets. How we treat bitcoins in Crowdcurity is - its very different. First
of all, we dont hold a lot of bitcoins. The bitcoins we do hold are in the amount of 5 to 10
bitcoins and we use those mainly to pay out rewards for testers and we buy them, kind of
every time that we need to pay our rewards in bitcoins and then basically use them straightaway, so we never hold any large balances of bitcoins. Once we are in the range of 5 to 10
bitcoins, we do hold those in online wallets. I mean, we go for the most secure online
wallets that we can find out there. [24:24]
AL: You pay the bounties in bitcoin. Whats the average size of a bounty that youre paying
these days? [24:30]
Crowdcurity: All the bounties are listed in dollars but we do have clients where the
bounties are listed in bitcoins. Of course, in these bitcoin bounties, we pay those out in
bitcoins as well, some kind of pure Bitcoin programs. Bit bounties are kind of categorizedinto high, medium and low, where kind of the standard package for high, medium, low is
$1000 for a high reward and $300 for medium and $50 for low. That would amount into
whatever the exchange rate is for bitcoins at the moment that we pay out the reward
thats the bitcoin part of it. I think, at the moment, if its around half of all our rewards that
are paid out in bitcoins and the other half are paid out in dollars via PayPal or via transfer.
[25:17]
AL: Do you prefer bitcoin relative to the other options? [25:20]
Crowdcurity: Of course, for our point of view, its a lot easier to pay out in bitcoins becausewe can do a lot faster and there are lower fees, so we are trying to kind of get all our testers
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to accept bitcoins but, of course, in order to attract testers, some testers would simply
prefer having them in dollars. We try to push for them accepting bitcoins and that also
lowers the fee and we can pay out the rewards faster. I must say that the reason why weve
been able to pay out around half of our rewards at this point to testers in bitcoins, is its
kind of our target group, all the security testers are kind of very tech oriented and, of
course, are early adopters of bitcoins. I mean, over time I expect this number to increase.[26:04]
AL: OK great. Guys, thank you very much for your time. This was very educational and I
look forward to seeing more of these programs develop. Thank you. [26:11]
Crowdcurity: Thank you, Adam. Have a good day. [26:14]
______________________________
AL: Anthony Di Iorio is the Executive Director of the Bitcoin Alliance of Canada and a
familiar face on Lets Talk Bitcoin. Anthony, how are things?
ADI: Things are excellent, Adam. Thanks for having me back again. [27:00]
AL: Listeners know that I love a good conference. Weve been hooked at Lets Talk Bitcoin
here since the San Jose event. Anthony, I know youre putting on a kind of big event coming
up in Canada this spring and were hoping to be heavily involved. This is a bit of a ways out,
can you kind of share your vision and why youre starting to talk about it so early? *27:16+
ADI: Our initial plan was to have it in October of this year and when we were starting to
plan it, we only had about two/three months to get it going. We wanted to do it before the
snow came and before it got too cold, so we figured it had to be done in a time that wasnt
the winter because we think well have a lot of driving traffic here. After we figured we
couldnt do it in October just because oftime restraints, we decided to do it in Spring and
set it up early, get the date booked, get the venue booked, start getting some key speakers
here and the rest will come in time, but it gives us so much time to plan everything and
bring it all together. [27:48]
AL: You have dates set. What are the dates right now? [27:50]
ADI: The dates are April 11th
, 12th
and 13th
. Were planning on a Friday evening, all day
Saturday and Sunday. [27:57]
AL: Its going to be interesting. This is literally within days or weeks; Im not exactly sure
what the date is of the start of Lets Talk Bitcoin. This will almost be exactly to our one year
anniversary of doing this show, so thatll be interesting too. What is it that youre trying to
accomplish with this because, I mean, different conferences go after different target
audiences, different niches, different angles. I know that youre planning kind of a larger
event. Weve seen a lot of one day events. Yours is a two day, right? [28:22]
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ADI: It will be two plus well do like a gala dinner, I think, on the night before on the Friday,
as an opening thing with the keynote. Well do the Friday evening, then the two days on
leadership and growing Bitcoin communities. Were hoping to gather together a whole core
of international Bitcoin leaders from around the world. Thats the major theme. The theme
is facilitating the growth of Bitcoin communities worldwide and doing that on local and
national and international. Working together, sharing resources, getting best practices andpassing those along. Working together and were seeing all these groups that are forming
right now. Weve got Google groups for leadership, theres a Skype group thats forming
right now. There are all these different ones and its going to try to bring everything
together here. Lets come up with a resource or a place that we can all just contribute to
and let the ideas flow and take ideas and adapt them from country to country. Just,
basically, like thats always been my goal is to have a blueprint with the Alliance, have
something we can pass along because weve gone through a lot so far. We started this
process in April. Its been a long process but weve learned a lot fromit and people seem to
be receptive to the way that were approaching it. Theyre taking it, theyre running with it
and theyre adopting it. We want to be here just to help facilitate the speed of theseorganizations. Thats what the main focus of thisExpo isis to get international leaders
together and formulate plans to develop these communities. The second one is to see and
focus on how Bitcoin is going to benefit the world charities. How its going to be affecting
Africa. Thats a secondary focus. Those are the two things that were going to be stressing,
so each conference does have a theme. Those are the two that well be focusing on.
[29:54]
AL: What types of speakers? What types of talks? What types of events? I mean, is this
mostly going to be a panel event, where theres lots of people sitting up there and
answering questions or is it going to be more prepared talks, a mix? [30:04]
ADI: The actual talks and how were going to do it hasnt been decided yet. The first thing
was to get a good core of say 20 speakers that will be the base of the conference. Weve
already got a good core from Toronto and from the US. Were now focusing internationally.
Now weve just got a few more leaders from some of the countries in Europe thatare
coming over. The actual talks and forumswere going to decide that in the upcoming
months. What weve done right now is: weve launched the website, weve got a great core
of speakers, then, I believe, the sponsorship and everything will follow and were going to
start selling tickets and getting the talks and everything straightened out in the New Year, so
starting in January. [30:38]
AL: How many people are you expecting to attend this event? [30:40]
ADI: I think were maxing out at about700-800 right now. There can be up to four theatre
rooms. There are two large rooms: one holds 500 and one holds about 350 and those can
be split in half, as well, to give us floor if we want. Then theres a large Expo Centre, which
has enough space for, I think, between 20 and 40 exhibitors and that will be the space that
we use the night before for the dinner. That will be the main gathering space. Yes, similar
to what was going on in San Jose at the beginning of the year. Were hoping to getmore of
an international flavor though. That is the focus: to get people from all over. Were alsooffering some scholarships, so there will be applications where we will be providing flight
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and tickets and things like that to people in either underdeveloped countries or theyve got
a story to tell and wed like to get them over here. There will be a contest for that. Call for
abstracts will be going out early next year. Weve got the committees that are forming right
now and the program and everything else will be coming in the next couple of months.
[31:33]
AL: Well then, well look forward to hearing more about that as it kind of matures and
develops a bit more. Thanks for letting us know thats coming. Before this interview, you
mentioned that one of the things that you want to talk about is called KryptoKit. I have no
idea what KryptoKit is. Can you give me an overview of what that is? [31:52]
ADI: Certainly. The concept stems back a few months. We had a site that had a really
secure secret URL system and it was true and it was tried and tested. We had 4,000 users
on our site over the months that we had it. Secret URL systems are a frictionless way to get
into your account. Basically, you go to a site, you get your secret URL, so its an individual
secret URL and thats your account. Thats how you get back to either a wallet system or ifyoure on a gambling site, thats how you get back to your account. *32:20+
AL: Whats an example of a service that somebody might have used if theyreusing online
web wallets to do things this way? [32:25]
ADI: Instawallet would have been a perfect example. [32:27]
AL: OK. [32:28]
ADI: Now, the problem that they had and Im not sure if your listeners know, Instawalletwas an instant wallet service that enabled you to go to their site and be instantly given,
basically, a new wallet. You go there, youre given a secret URL and youre given a deposit
address, they had a couple of issues though. Firstly, that their URLs were getting spidered
by Google. Thats a big problem when youre having passwords, basically, being given out
on the internet. The second is that, they were holding onto customer funds and that was a
big problem because when they eventually got hacked, which they did, they lost a lot of
accounts. I think they had upwards of over a million accounts on there. They shut down
and theres really been a void on an instant wallet service. I used them frequently, back
then. We had always wanted to get the .... I had always had it in my head I wanted to
develop a new instant wallet service and since we have developed a secret URL system, webegan working on a project called Rushwallet. Rushwallet was very similar to Instawallet. It
had a secret URL system. We knew what to do so it wouldnt get spidered with Google and
the key thing is that we werent holding onto any customers funds. Everything was going
through blockchain.infos API, there were no stored funds on our end, everything was client-
side, so nothing got sent to any servers. We had no access to passwords, we were never
given the passwords and we dont want to hold onto peoples passwords or funds. We took
Rushwallet to a beta, a few months ago and it was well received and then something
happened with the blockchain API and we kind of shelled the project for a bit. Then, about
last week, my business partner came in and said hed been working on something. What he
showed me was an extension for Chrome that was incorporating blockchain.info credentialsand allowing you to put in your username and password and you now had a browser-based
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wallet just from an extension. You click on the extension in Chrome, it pops open your
wallet and it pulls out any Bitcoin address thats on the site and puts it in a bulleted list right
in the wallet, which makes it easiest, frictionless system to make Bitcoin payments. What
you do is you can go to any Bitcoin site with an address, it pops up every single one on the
site, you pull up the one you want to make a payment to, you put the amount you want, you
press enter, and youvenow sent a payment to that address. It no longer requires youhaving to go back and forth from websites or going to blockchain.info and logging in and
then putting the address in, copying, pasting, going back to another window. It keeps the
wallet on the side of your screen and it shows the main website that you want to make a
payment to, you pop it open, make a payment, you close it and youre done. Its really
simple. We then incorporated our back end of Rushwallet that we still had, put it into this
extension, so we dont even need to rely onblockchainsinformation. Its not your
blockchain account youre setting up. Pretty much, you install the extension, you open it up,
you move your mouse around and it randomly generates a private/public keypair. From
there, youve got a wallet in about five seconds. Its the easiest system to actually go get a
brand new wallet. [35:15]
AL: Now that youve described it, I actually did use this. It just wasnt called this at the
time. I think it was just called Rushwallet plug-in, at the time or something like that when
you showed this to me a day or two ago. [35:24]
ADI: Yeah thats right. (??) *35:25+
AL: This is a really easy way to use Bitcoin wallets and, I mean, Im someone who does not
ever use web wallets because every time I hear about somebody losing money or getting
hacked or something like that, its always from these web services and so Ive starteddescribing them as like, piatas because the more value thats in them, the bigger the prize
is for breaking them open, so they get broken open. Does this actually fix that? You said
that it stores the keys locally, so why is this something that isnt being done by someone like
blockchain or why didnt MyWallet do this or InstaWallet? *35:54+
ADI: Ive shown the guys at blockchain and they really, really think that were onto
something. Ive shown it to Roger, Ive shown it to Nick they loved it. When I was in New
York City, I went to the conference there, the Inside Bitcoins and they had the guy from the
Web Standards, was it W3 Web Standards was there? [36:10]
AL: Manu Sporney. [36:11]
ADI: Thats right. His main point was that you need to get this into the browsers. Once
you can get this into the browsers, it can get the mass adoption and acceptance because
then it makes it extremely simple for people to make payments. Thats always been in the
back of my head. Just coincidentally, my partner started working on that and brought it to
me just a few days ago. Were ready tolaunch this in beta mode. Its, in my opinion, the
easiest, simplest way to get a web address and web wallet. Its most secure, in that we
dont store any passwords and never get sent to any server, were not holding onto
anybodys funds, you instantly make deposits, you pop up a QR code in your little wallet,you can first off fund it from any other wallet and now youve got bitcoins in your extension.
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It stores your credentials; you can put a password on it, if you like. Im all about frictionless
services and making things easy for customers to use. Thats the whole step. I think logins
and passwords are a pain in the butt and if you can avoid them, then do that. This can store
right into your extension and youre making payments in two seconds and then it actually
drives and pulls up any Bitcoin address thats on that page and puts it into a very simple
easy list for you to select a payment ofhas huge implications. We can now tie in anydigital media and descriptions of that media thats on that page and pull it up right into your
wallet in a list of products that you might want to purchase and start buying. This could not
just change Bitcoin purchases but could actually change the way that shopping gets done
online. [37:30]
AL: OK. I think that youre definitely onto something. I totally buy all of these arguments.
The natural counter to this is, of course, what happens if your browser is compromised?
[37:41]
ADI: If your browser is compromised, it would (??) be a keylogger, that would be the waythat it could be compromised. Any other web service that you go to or web wallet, it would
be dealing with the same issues. OK? [37:52]
AL: OK [37:53]
ADI: This extension, again that it sits on your client-side and that no information does get
sent anywhere, is pretty secure. [38:00]
AL: When you send a payment through this, do you have to enter a password or is it
literally anyone sitting at your computer can pop this up. I mean, I understand thatsomeone would have to hack in with a keylogger. Im askingcan you encrypt these wallets?
Because you werent able to when I was testing it out and it seems like that would be an
important layer. [38:19]
ADI: There is a password. When you actually set up your first account, the password is not
set. One of the settings is to enable a password, so for me, I know on my computer its in
my house, I dont want to have a password on it. Again, frictionless thing. I like just being
able to open it, go make a payment. If I want the option to, I can set a password and now
every payment that goes out would require a password to do it. As well as also if anyone
tried to reset the account, it would require that password thats there or you wouldnt beable to reset the account. Now, the other interesting thing is that, we also implemented a
brain wallet system there. When you go into the extension and you set up a new account, it
gives you the option to put in a brain wallet, so you could use a phrase there. That can be
your account. You can then take that phrase anywhere else, install the extension and put
your brain wallet in, now you have access to your funds too. [39:06]
AL: Very interesting. It seems like any vulnerability that impacts this, would also impact any
other wallet thats installed on your computer because a keylogger would grab anything
because its just essentially sharing your password and then being able to compromise that.
Are there any weaknesses to this besides that? That like, it has more in common with a webwallet? [39:25]
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ADI: Well actually, you can get rid of that keylogger issue because we also are
implementing a keyboard popup, where you can then use your mouse to click on the keys.
That would actually negate the keylogger aspect of that. Thats what blockchain does, for
example, for their secondary password on your account. Theyll pull up a keyboard and you
have the choice to use your mouse to select and put your password in through a visualkeyboard on the screen. That even gets through the keyboard aspects of things. What
weve done is weve created theeasiest, simple of use wallet to set up, easiest, simple
wallet to make payments, all client-side so no information gets sent, we dont store
anybodys passwords, all put into this package we call KryptoKit. The reason we call it a kit
is because not just are we a wallet, weve now implemented the simplest, easiest to use
GPG encryption messaging and communication system built right into the wallet. Once
weve got the payment system and the wallet, now weve got communications and getting
that GPG encryption key, it now opens the door for so many other things. We can now use
encrypted conversations, chats, and video. We can incorporate Gribble. We can
incorporate any open source software like, theres one called Mailvelope, that allows you todo GPG encrypted using your Gmail, Outlook. We actually have a system that is securely
NSA proof, in terms of messaging right now. We will then be incorporating something
similar to Cryptopak right built into the wallet, as well and into the kit. We will then be a
source of identity. You could actually have proven identity on our system, youll have a
payment system and youll have communications all built into one. When you have those
three things together, you get a very powerful tool kit, which can then implement into a
social network. Weve got friends list now, where you send me your GPG key, it goes into
my friends list inside the kit and I select your name, I send you an encrypted message, you
get a little notification in your extension, where you get a sound and you get a little one that
pops up and says You got a new message. You open that up, its encrypted all the way tillit gets to you and then on your client-side youve got your keys to unlock it and view it. It
really is a powerful kit. Werereally excited about it and we think it really could be a
revolutionary thing for Bitcoin. [41:40]
AL: It sounds like a very impressive package that youre putting together. Again, like the
last time when you showed me the prototype, it was a prototype. Where are you actually in
the development cycle of something like this? [41:50]
ADI: OK. The messaging system, the GPG key system, which will be the key for all the other
encrypted services is in place. We can now send secure communications to anybody elseusing GPG, in two ways. You can copy and paste the GPG message and put it into an email
or wed send it right through our system. If you to provide me with a GPG public key, I
import that key into my kit. Youve just imported Adams key, it puts you in a list.
Whenever I want to send you a message, I would click your name, type it in, hit send, you
get a notification on your end on your browser extension with a little one that pops up and a
sound, you can then view that message on your end. Thats where we are. Were starting
to implement the chat; were starting to implement the mail system. You know, encryption.
Were planning to get this out in beta very soon. Its actually ready to go to beta. Were
going to be looking for a closed beta and try to get some people to auto decode for us. We
want to get some good backing of people in the community to say and give their seal ofapproval on what weve done. Were very confident in it. My partner is, Ill say it, he is a
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genius. He works in ways and a speed that Ive never seen anybody do. Weve also been
told weve been able to do two thirds of what Dark Wallet is trying to do right now and
weve done it in a few days. Im not sure if youre aware theres meetings in Milan going on
now to decide how Dark Wallet is going to proceed. Weve actually done a big chunk of
what theyre trying to do already. Ive reached out to them and Im hoping to get some
communication lines open with them and see where theyre thinking with this. The onlything we havent done right now is the mixing service. We havent even looked at it yet but
I dont see it as really being something that we cant implement down the road. *43:26+
AL: Thats fascinating, Anthony. Every time we talk, youve got so many projects going on
and you seem to be implementing on them pretty well. That sounds fantastic and again, the
project that youre working on is there going to be a company backing it? Is it just going to
be an open source project that you work on and then release into the wild for projects like
Dark Wallet to continue? Whats the game plan? *43:45+
ADI: The game plan is thiswith extensions, they are open source. Anybody can view thewhole quote of an extension. Our goal is to ... were goingto push a video out explaining
the features on it and how it works and then a call for a closed beta. Thats our first step.
The second step is to get our product branded and supported by people in the community
that can stand behind the system and believe in it. Im putting my name behind this. Ive
spoken to a few other people that really like it. I may approach them to get their name
behind it to say that.... listen, this is a secure system, we really believe in this. Thats whats
lacking with a lot of businesses in Bitcoin. Its the professionalism. We want to get a
professional marketing company and branding company working on this right away. We
want to come out and do things properly and really all about user experience really all about
customer support. I think its crucial to have companies that are doing this in this spacebecause every time we see someone get hacked or a situation where customer support is
lacking, it really is a negative aspect on the community. Im all for community building and
seeing what we can do and how Bitcoin is going to help things. Its important for me to do
this properly, professionally and with backing of people that believe in our product that are
respected in the community. We think that we can then give and offer an amazing system
to Bitcoin users thats going to help speed up the adoption rate of Bitcoin because whats
easier than just having it right in your browser and making your payments, without flipping
back and forth from any other wallet system? [45:11]
AL: Right. I mean, these usability issues certainly are coming to the forefront as the pricegoes up. I mean, it all becomes just so much more pressing. Anthony, weve gone over our
allocated time. I do want to ask you one quick question because weve reached out to the
Bitcoin Foundation for a comment on Coin Validate proposal, which is essentially a Whitelist
proposal of approved addresses - identity verified transactions. Does the Bitcoin Alliance of
Canada have any sort of comment youre able to make on that issue at this time? *45:39+
ADI: Were having a board meeting tomorrow night. On the table is our policies. Thats
what were going to be discussing because we think its very important to come up with
clear policies from the start. The Alliance is launching to the public on November 30th, so
our membership structure and our nation builder, community building platform will belaunched on 30th
. We think its really important to come up with our policies right at the
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beginning where theyre very clear cut and theyll be everything that we reference back to.
Thats going to be some heated discussion on that tomorrow. We will be talking about the
Coin Validation and the liststhe Blacklist and Whitelisting. I cant give you any comments
of what the group will decide at but I think what we will be able to provide is our policies
and make them clear for our membership and clear for people that, this is where we stand
and this is how we will be moving our organisation forward. [46:26]
AL: Great. Well, thank you very much for your time, Anthony. I look forward to your
continued work. Again, at the pace that youre going, I imagine well be talking again sooner
than I can think. [46:34]
ADI: Great chatting with you, Adam. Thank you. [46:36]
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AL: I dont know where you stand on the Coin Validate issue but its a pivotal fight that has
the potential to destroy Bitcoins network effect or give it the mainstream legitimacy it
needs to propel cryptocurrency into global use. I have friends in both camps and they allspeak with equal and opposite passion. Its entrepreneurs versus idealists, all over again,
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except, theres a splinter group within the idealists camp, who find the ir short term goals
lining up with entrepreneurs but with the aim of achieving a very different long term effect.
To quickly go over the issue, as Andreas likes to remind us as often as possible, the most
important part of Bitcoin is that its a neutral protocol. It doesnt matter who you are, it
doesnt matter what youre doing it treats you the same and every bitcoin is
interchangeable for any bitcoin or combination of fractions of many bitcoins, it makes nodifference. Enter Coin Validatethe, obviously what is needed, effort of Matthew Melon, a
Psion of the famed banking dynasty. After spending the last few weeks making the rounds
in San Francisco and New York, talking to the names and players in the Bitcoin space, he
joined with Alex Waters, the now apparently defunct BitInstant CTO, the polarizing leader of
the Avalon ASIC project, Yifu Guo completes the announced executive team. Yifu has been
developing a tool for miners to run that, basically, lets them only accept transactions from
addresses on an approved list. This is a crucial piece of infrastructure to make a program,
like Coin Validate, work. To make the system work, they would need to convince miners
and large pools to use this mining filter and simply not process transactions that are not on
the approved list. This approved list would be controlled centrally by Coin Validate, actingas a trusted keeper. Their role is to associate Bitcoin addresses and legal identities. When
two Whitelisted addresses do business, their presence on the Whitelist means Coin
Validate, essentially, vouches that they have an identity. It remains to be seen if disclosing
your identity in all business will be required or if that information is kept private, but in
practice theyre the same. A central list of Bitcoin addresses and identities exist, accessible
to government and hackers and the seas of a mostly mapped Bitcoin network, where the
promise of a transparent transaction ledger means your privacy is only as good as the
keeper of the list is willing or able to deliver. The thinking goesBitcoin is a marvellous
innovation, it makes the transmission of money cheap and easy compared to any system we
have, but it has a flaw that could be fatal. In Western monetary systems, there are controlsin place to make sure that certain types of individuals, terrorists and criminals, dont benefit
from modern, financial infrastructure, which in practical terms means there are transaction
limits, suspicious activity reports for every banking customer who deviates from their
normal and acceptable use pattern. This infrastructure relies on it being impractical to deal
with legacy currencies, like dollars, in a peer to peer fashion. After all, how many people
would shop on the internet if the process for paying for it was to put your cash in a stamped
envelope and mail it directly to the merchant? In the days of Searsscatalogs, this may have
been normal but now its not safe. That and we lack the patience. Bitcoin, with its online
P2P nature has no reason to do any of these things. Christianitys Ten Commandments
chiselled on many stone monuments around the world, has as much power over itsadherents as Bitcoins blockchain. They cant force you to follow the rules but only those
who do follow the rules can call themselves participants of the system. With that as
background, the sights line up like thisidealists look at the Coin Validate proposal and say,
this is terrible. Even if you only get less than 10% participation once the foundation is in
place, it will be easy for national governments to simply declare it illegal to make
transactions with addresses not on the Whitelist, which means that anything not on the
Whitelist is de facto on the Blacklist. Entrepreneurs say, are you crazy? There will just be
two systemsa Whitelisted part, where all identities are proved and transactions logged for
tax purposes and a non-Whitelisted part, thats like the current state of affairs. A bit of a
Wild West, lots of fraud, people happy to not pay their taxes and no consumer confidenceto be found because of those things. The slippery slope argument is tempting. In reality, I
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dont know who here is right and even if its worth talking about. These divisions in the
community enamoured with Bitcoin are not surprising and, in fact, its a little odd relations
have been so cordial to this point. Bitcoin is neutral. Its different things to different people
and yet Bitcoin never changes, so this value is found in each individual who learns. I did
want to mention the third group Ive noticed in this conflict. Theres astrain of idealists
who view Coin Validate as a good thing and desired thing because they think it will makeBitcoin fail. Not fail, as in crash in value, mass wiping of wallets, GPUs and ASICs lying dead
in the street, dedicated water cooling systems spasming viscous liquids into darkened storm
drains but the understanding, by users of cryptocurrency, that Bitcoin has been
compromised and its time to abandon ship. In any free market, but cryptocurrency
specifically, events in one part of the ecosystem inform the development of others. People
going the way of Blacklists would catalyse the equal and opposite reaction. We are already
starting to see it in the announcement of the, much lighter white, Zerocoin chainnot
waiting for Bitcoin implementation at all, just going for it as an altcoin that will allow for on
blockchain coin mixing, which makes this sort of tracking impossible. Luke Dashjr has led
the charge from a different angle, releasing a piece of software to counter that release byYifu, where Coin Validates contribution would only process transactions from addresses on
the approved list, Lukes release does the opposite. It forbids miners from processing
transactions to addresses that have already received a transaction. Simply put, Lukes
change would mandate that every transaction made through the Bitcoin network use a new
receiving address, which makes tracking funds exponentially more difficult and anything
resembling a Whitelist, which relies on repeating use of the same approved addresses, flatly
impossible. I dont know where you sit on Coin Validate and Im not really sure where I sit
either. I take comfort though in knowing that controversial proposals like this, even when
done by private companies, have a tangible and immediate reaction from the passionate
community building the future of money and I look forward to what comes next. [53:37]
______________________________
Thanks for listening to Episode 62 of Lets Talk Bitcoin. Hackerspace GR was produced by
Andreas M Antonopoulos, edited by Adam B Levine and featured Stefanos and Andreas M
Antonopoulos. The segments on Crowdcurity and KryptoKit were produced and edited by
Adam B Levine. Crowdcurity featured Esben Friiz Jensen, Jacob Hansen and Adam B Levine.
KryptoKit featured Anthony Di Iorio and Adam B Levine. The Coin Validate (??) was written,
produced, edited and performed by Adam B Levine. Music for this episode was provided byJared Rubens. Questions or [email protected]. Have a good
one. [54:24]
mailto:[email protected]:[email protected]:[email protected]:[email protected]