LETS TALK BITCOINEpisode 67 The Most Interesting Bitcoiner

Participants:

Adam B. Levine (AL) - HostStephanie Murphy (SM) Co-hostAndreas M. Antonopoulos (AA) Co-hostPaul Snow (PS) Founder of Passing Bitcoin Around the World ProjectTony Gallippi (TG) CEO and founder of BitPayPhinnaeus Gage (PG) aka The Most Interesting Bitcoiner in the WorldEmmy Velasquez (EV) Co-founder of CoindingDavid Menes (DM) The Bitcoin Monger

AL: Hi and welcome to Episode 67 of Lets Talk Bitcoin, a twice weekly show about the ideas, people and projects building the digital economy and the future of money. Visit us at www.letstalkbitcoin.com for our daily guest blog, all our past episodes and, of course, tipping addresses. My name is Adam B. Levine and its conference time. Andreas sat down with Tony Gallippi, CEO of BitPay to talk merchant services, fraud, expectations, perspective and more. This wide ranging interview is not to be missed. Then, Stephanie catches up with the most interesting Bitcoiner in the world, Phinnaeus Gage from the Bitcoin Talk Forum and the founder meta-charity Bitcoin 100. They talk charities, tutus and other tactics for raising awareness. Its certainly not normal. Have a good time!

And later, Coinding is a gamified app that turns cities into treasure hunts. Bitcoins and geo-caching? Andreas investigates from Buenos Aires.

Finally, the Bitcoin Monger is back. David Menes performs Bitcoin Man wherein our hero travels back in time and visits a bank.

But first, Paul Snow wants to keep Bitcoin weird. He caught up with Stephanie about his project, Passing Bitcoins and whats up with cryptocurrency in Austin? Enjoy the show! [1:38]

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Stephanie Murphy interview with Paul Snow

SM: Hello. Im talking with Paul Snow. Hi Paul. Welcome to Lets Talk Bitcoin. [1:48]

PS: Hello Stephanie. How are you? [1:50]

SM: Im doing great. You have a project called Passing Bitcoin Around the World but you are also from the Austin Bitcoin Association, is that right? [1:58]

PS: That is correct. [1:59]

SM: OK. [2:00]

PS: Now, Passing Bitcoin Around the World is something that we do through our meetup group and the Texas Bitcoin Association actually was an association that grew up out of the meetup group. They are both related in some ways, cousins maybe. [2:16]

SM: Yeah, thats cool. OK. I see the connection there. What is Passing Bitcoin Around the World? Tell me about that. [2:21]

PS: The thing that I got irritated about was constantly reading people on the internet and talking to people and them saying - Theres just no value to Bitcoin. Its not any different than dollars. We have credit cards, we have wiring systems, and we dont need another solution.

I just knew that I can pass a bitcoin to anyone in the world in ten minutes. Theres got to be a way I could demonstrate that its fundamentally more interesting than the fact that I can pay somebody with a credit card and that charge will clear in a day or two, or whenever the bank gets around to it. We set up an event where we recruited people around the world, Uruguay, India, New Zealand, a bunch of people in the US. We set up a financial relay. The idea was that I would send a bit of bitcoin the original one in May was a half a bitcoin I would send half a bitcoin to one person, they would send it to another person and they would send it to another person and each time you got a confirmation, you could send it to the next person in the relay. We were able to perform ten international transactions out of eleven transactions total, the distance between the participants, essentially stretched three times around the world, and we did it all in 1 hour and 51 minutes, 45 seconds. The last transaction went to the One Foundation, a disaster relief organization, founded by Jet Li in China that was currently responding to an earthquake that had occurred in April, in China. Theres a huge need there and they had the money in their account 1 hour, 51 minutes, 45 seconds from the first transaction. [4:27]

SM: After it did a couple of laps around the planet, huh? [4:29]

PS: (Laughter) Couple of laps around the planet, twice to New Zealand. I mean, it was just crazy and they could use those funds for good, right then, that day. You could never do that with a credit card. If you can do that with a credit card, then Bitcoin is nothing. You cant do it with a credit card then youve got to say, theres something here. [4:49]

SM: Yeah, absolutely. A question about that because I was thinking if you were to do something like this with a credit card, it would eat up 3% of the balance, at least every time, plus probably a $0.50 fee. How much were the transaction fees that got paid on that total? [5:04]

PS: It was about anywhere from $0.02 to $0.05 per transaction and those transaction fees were paid by the participants. In the end, at the end of the relay, 100% of the bitcoin we started with ended up at the One Foundation. There you go. [5:23]

SM: Yeah, thats really cool. [5:25]

PS: What a lot of people miss is with Bitcoin, with a pure Bitcoin ping system, your customer is paying the transaction fee to speed up the transaction. If they dont choose to pay it, they dont pay it. The merchant actually isnt ever paying any of it. From the merchants point of view, its a zero cost. If its from the charitys point of view, its a zero cost. They have the bitcoin in their pockets. [5:48]

SM: This is not only to promote Bitcoin charitable activities but also to promote Bitcoin itself among the global community, just to have them see what you can do with Bitcoin that you cant do with other payment systems. [6:01]

PS: Absolutely. Now, the second one we had all the participants put a full bitcoin deposit down and we actually passed a full bitcoin around. After each participants turn, we would either refund their deposit to them, if they so requested, or we distributed it to one of a number of charities that we had associated with the program. In the end, it was something like... I cant remember... I think it was 4 or 5 bitcoins that were donated to charity at the end of the event which was a fabulous return. It was more of a fundraiser on the second time around. [6:46]

SM: Yeah. You really believe in the value of Bitcoin charity. Do you have any thoughts you want to share about that? [6:52]

PS: I love Jason King. He is my guy. He came and spoke at one of the mini conferences we had in Austin, associated with our meetup group. He brought the T-shirt that Im wearing. Maybe youll put that picture we took... [7:08]

SM: Yeah. We took a picture. For people who are listening on audio, your T-shirt says Keep Bitcoin Weird which is like, I guess, a reference to Keep Austin Weird, which is where youre from.

PS: Yeah, absolutely. The whole idea, though its relevant to Bitcoin as it is to Austin, we say Keep Austin Weird because we celebrate the diversity; the many different perspectives that people bring to life and Bitcoin should also do that same thing have respect for a lot of different views and a lot of different positions. [7:43]

SM: I couldnt agree more. Do you any other plans to do more events where you Pass Bitcoin Around the World and then it ends up in a charity somewhere? [7:52]

PS: Oh, absolutely. In February, were planning to do this again but this time were going to be far more ambitious. Were going to be working with meetup groups to try to organize a regional participation around the world. Find people in Africa, find people in Asia, find people in South America and really extend the whole paradigm and produce something thats quite eye-popping. Thats the goal. [8:19]

SM: Great. If people want to participate in the next one, where do they go to find out more? [8:23]

PS: You can go to www.passingbitcoin.com. Right now, I dont have anything up there about the next event but I will have it in the next few days. [8:32]

SM: By the time this comes out, maybe youll have something posted, sure. [8:36]

PS: Id better. (Laughter) [8:37]

SM: (Laughter) Great. OK, Paul. Thank you so much for talking with me today. [8:40]

PS: Alright. Thank you very much Stephanie. [8:43]

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Andreas Antonopoulos interview with Tony Gallippi

AA: This is Andreas Antonopoulos for Lets Talk Bitcoin and Im here in the Latin America Bitcoin Conference in Argentina. Im very happy to have Tony Gallippi as my guest today. Tony, as you know, is CEO and founder of BitPay, one of the most impressive and well managed companies in the Bitcoin space. Its a great honor, Tony. By the way, great job on the Senate hearings. I think were all very impressed and we all benefited from the little price bounce that happened because of those, so thank you so much for representing Bitcoin so well. [9:42]

TG: No problem. It was an interesting experience. It was a bit intimidating and so we had practiced. We had certainly practiced for the worst and luckily the questions that we got were not as bad as the ones we had practiced for so it wasnt as difficult as we had thought it could be. [9:57]

AA: I particularly enjoyed the moment when you started talking about mortgages, and mortgage settlements, and jobs, and accelerating growth in the economy because you could just see the senators... their eyes light up and little votes popping up in their head. They could see the voter potential of this and that was a key moment in the hearing. [10:18]

TG: Yeah, you know, theres a lot of just waste in our financial system today and Bitcoin can automate a lot of these processes and eliminate a lot of waste, a lot of fraud in our system. Certainly, that money that is not spent on waste can actually be spent on more productive uses so companies can use that money to actually hire and employ more people. Absolutely, theres a tremendous opportunity for Bitcoin. [10:41]

AA: Theres a couple of competing narratives right now. One is kind of the narrative of Bitcoin simply as a currency and primarily used for the areas of the economy where there is the most friction which happens to have a lot of illegal activities etc. The other narrative is Bitcoin as an incredibly efficient protocol or payment network etc that can streamline economic activity. I think BitPay has been instrumental in highlighting that side of the business and bringing so many merchants and retailers. You had a pretty good Black Friday a couple of weeks ago. Can you tell us a bit about that? [11:16]

TG: We participated last year in Black Friday the first year it happened and Steve and I were all excited because we got 99 orders in one day last year which was a record for 2012 and this year, obviously, our company has grown. Weve taken some investor capital, we started hiring people. Were up to 19 people now. This Black Friday, we participated again. We got a lot more merchants to get involved and run sales and specials for Black Friday. We did some commercials ourselves and we did over 6,200 transactions - pretty exciting growth, year over year. All of our merchants were very excited and when you actually look at the number of transactions that we did, because every transaction at BitPay goes over the Bitcoin network, we were over 6% of the entire Bitcoin network transactions that day with people spending their bitcoins on a good or service at a BitPay merchant. Thats pretty exciting. [12:10]

AA: That tells the most important story about Bitcoin enabling the legitimate business and retail businesses. I know that a lot of the early businesses that signed up for Bitcoin got this incredible boost of free marketing just because of the novelty factor. Thats probably not going to persist forever, but certainly during Black Friday, that was a big push for many merchants, right? [12:36]

TG: It was. Right before Black Friday, we finally got the Shopify immigration completed and that became available to every Shopify store owner. If youre using Shopify to run your website, you can very easily add BitPay as a payment option and that got right before Black Friday. We onboarded hundreds of Shopify merchants that first day and we continued to do hundreds more per day. Thats very exciting. We had a few other big names join in like Virgin Galactic. I think that was the week before that they would take bitcoins for flights into space and they decided to run a sale on Black Friday. There was a bunch of interesting things that came out. A lot of unique gift ideas, as well as just your regular things that you would buy every day; you could actually save money by making that purchase on Black Friday. [13:22]

AA: BitPay itself does not engage with credit card companies on the front end. You are Bitcoin focused only but being in a platform like Shopify, or some of the other retail platforms, BitPay is often alongside the other credit card payment systems. I cant help but think that that juxtaposition creates such a powerful message because here is the 1950s technology credit cards, never developed for the internet and here is BitPay. The moment you experience the two, the difference is so obvious, right? Its such a huge selling point. [14:04]

TG: The first somebody pays with bitcoins, it is a very awakening experience. They realize, wait, I dont have to provide my entire identity, my address and my expiration date and the secret code in order to make a purchase. All I have to do is just push them money. Thats all I have to do. Wow! Thats very simple. Consumers are starting to realize that its a much safer way for them to pay online because they dont have to provide their identity. There is no risk of them becoming a victim of identity theft, whether they trust the merchant or maybe there is a man in the middle that gets that information. It reduces a lot of potential risk for shopping online; consumers risk of identity theft and merchants risk that the payment they are receiving is fraudulent. When you see it side by side, it is pretty interesting and more and more consumers are going to see that and say Oh, what is this? When they learn about it, they will realize that it is a much safer way to pay online. [14:58]

AA: Ive operated as a merchant on the BitPay network and use your services for a couple of little things I sell in retail. Certainly as a merchant, I decided obviously not to take credit cards but I think a lot of merchants have learned through bitter experience that credit cards represent a huge cash flow risk for traditional retail businesses because of the charge backs. Even though you receive the money, its not really yours until a sufficient period of time passes before it can be grabbed right back out of your bank account. That simply doesnt exist in Bitcoin. How does that promote the merchants? How does it help them reduce their risk? [15:39]

TG: With charge backs, as you mentioned, it is the retailers that sell online that are the most at risk of the charge backs because if a charge back comes in, that means a customer has disputed a purchase and its up to you now, as the merchant, to counter that dispute and either, if you dont counter it then the customer gets their money back and you really have no choice. What the credit card company wants from you is a signature, or other proof of purchase, that this cardholder actually made the purchase. In a retail environment, you do get a signature, so at least have some documentation that you can show Yes, this person was here, maybe you have a security camera but typically its the signature that will proof that it was the cardholder. Online, you cannot gather a signature. You cant get any information that really proves that the cardholder was in possession of that card and actually made that purchase. Its the online retailers that will lose more than 90% of the charge backs that come in and they just have to give that money back to the customer. The merchandise, of course, is long gone. Theyve already shipped it. Theyre out their merchandise, now theyre out the money and the business has become a victim of payment fraud. The business, now, has got a total loss on that transaction. Its the merchants that are selling online that are most at risk. Its also the merchants that are selling high priced and high ticket items that are at risk because if you have a criminal who gets a stolen credit card, what is the first thing hes going to buy on the internet? - Gold, jewellery, televisions, computers, cameras, right? Any type of high ticket item that he can try to acquire and then convert into cash before the cardholder realizes that his card was used for fraudulent purposes. It is a much bigger benefit for merchants. They see Bitcoin coming inbound as a much more counterfeit proof form of payment; a much safer form of payment and many merchants are offering discounts to consumers who pay with Bitcoin because not only does it lower their transaction cost, it also reduces their risk. [17:29]

AA: Behind the scenes, in my security experience in the past, I did a lot of work for PCI Compliance, the payment card industry compliance and this is a tiered risk management system that the credit card companies impose on merchants. The worst category you can be in is the sort of Card Not Present, as you said, the online merchant who doesnt have a signature. What most consumers dont see is that behind the scene, even before all of the risk of charge backs, the merchant has spent an enormous amount of money doing firewalls and audits and security measures and taken on all of this burden of security and at the end of the day, they still have the burden of the charge back. BitPay integration for me was enabling a module, of typing in an access ID and hitting Go. It took about five seconds and I didnt have to do any audits; I didnt have to do any PCI compliance and none of the risk was passed on to me as a merchant. Certainly, there is this whole other side of the merchant experience that most people dont even see. [18:39]

TG: The PCI compliance is definitely a hassle and a cost for any businesses that handle credit cards. Its even worse if you, as a business, want to store this credit card information so that you can bill somebody later because the way credit cards work, the secret credentials that a customer provides one time to make a purchase, those same secret credentials can be used 100 more times [??] make more purchases by that same company, or by anyone who has those credentials. Its important for companies that are storing that information, that they protect it from hackers and from their own employees. You have a company like Apple, for example, they store over 500 million credit card numbers on file, in their iTunes store. Can you imagine the absolute disaster that would be if that information got out? Can you imagine the cost that Apple has to go through to secure 500 million credit cards? Its mind boggling and its such a waste because were trying to put a bandaid on a system that was designed in the 1950s. It was never designed to be used this way. Were adding all this cost and complexity and bandaids on a system, when there is a much better system that exists now that doesnt require all those extra measures. [19:48]

AA: Yes, I remember when I was working in this industry as a security consultant. One of the biggest costs for post-breach compliance, which merchants dont really think about, is that almost 25 States now have passed database breach notification laws, which imposes a burden if the credit card database is compromised, or even if you suspect it has been compromised, you have to track down and notify by letter every single person who has been affected, whose identity is potentially at risk for identity theft. What most merchants dont realize is just the process of tracking down addresses and sending out letters can end up costing up to $8 per person. If you have 500 million credit cards like iTunes, just the sending out of the letters is going to bankrupt the company forget the actual cost. [20:40]

TG: Yeah, its mind boggling. These security breaches happen, right? It was Sony Playstation that got hacked 750,000 credit card numbers got out of the Sony customer database. It was about a year and a half ago that Global Payments in Atlanta got... they leaked out maybe a million and a half credit card numbers. I think its a result of some of those security breaches that these laws are now in effect. [21:04]

AA: Yes. [21:05]

TG: Thats only a part of the problem because any place where this customer has that card which got compromised on file, different merchants that are expecting to rebuild that customer again, those rebuilds are going to fail. Now, hundreds of other merchants are affected because their customers cant make the payments so they have to go out and contact this customer Your credit card doesnt work, please supply another one. It creates a ripple effect where there is a lot of waste. Not only just from the one point that was compromised, not just for that consumer but its every merchant where that consumer had that card stored on file, now has an impact, and now has to incur added costs to deal with these exceptions where the rebuild does not work. [21:46]

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AA: Somewhere under this mountain of bandaids is the original credit card risk problem which is still a seeping wound and none of these bandaids are really doing anything other than making a top heavy infrastructure. Bitcoin is obviously a much better solution. I think as a consumer, the most surprising thing to me, in the Bitcoin experience, when I used it with BitPay, was that I had mistakenly thought (and this is a common misconception) that I would have to wait until a certain number of confirmations occurred. When I sent my payment and the BitPay widget flipped in less than a second and showed it as credited, that was a surprise to me. Can you talk a bit about this misconception about what it means really to have confirmations of a transaction and what risk that imposes on the merchant? Do they have to wait ten minutes for a confirmation? [24:02]

TG: We give the merchants a choice. When we detect a payment coming in, we can detect that very rapidly because we have many, many connections and many nodes out there looking at the network. If the majority of the connections that we see think this is a valid transaction, we have a high degree of confidence that very soon its going to get confirmed into a block. Depending on what a merchant is selling, they may choose to take that right away or they may choose to wait. If youre selling a $100,000 car, youre not going to deliver that car in the next five seconds. You probably have the luxury of waiting ten minutes or more for a couple of confirmations to be sure. If you are selling online and youre shipping a piece of merchandise a physical piece of merchandise, you cannot box it and ship it in the next five seconds either. By the time you actually ship the merchandise, you can go back and check again just to make sure that this has confirmed. We give our merchants the choice. They can either get notified of the payment immediately, or they can wait for one confirmation or six confirmations. Every merchant can then assess that risk level for what theyre selling. [25:04]

AA: If you are a merchant who is selling say, online content, or other items that are delivered immediately but of lesser value perhaps less than $20, perhaps less than $10, then you make the same kind of risk calculation that Starbucks makes when they dont ask you for a signature. Its worth taking the risk because you can deliver that consumer experience much faster and I find that a really exciting option because if you want to take the risk, you can and you can do so in a way that delivers an additional benefit to the consumer. [25:40]

TG: Absolutely. The risk here is much less than Starbucks not asking for a signature because its such a low value transaction. When you look at the cost today of what it would actually take to successfully execute a double spend, its just not worth it for a low priced item. [25:57]

AA: Its purely an academic exercise for the most part. [25:59]

TG: They would do it just to prove a point that they could do it but they would lose money doing it so they probably wouldnt be able to do it many times. [26:05]

AA: Great. What are the future plans of BitPay? What do you see in the immediate future of your company and the types of services it can offer? [26:14]

TG: We continue to do what we do best and that is acquire more merchants, get more merchants on board accepting Bitcoin. We are continuing to focus on online merchants, you know, people selling electronics, gold or anything that you would want to buy over the internet. We are going to continue to focus, in the retail side, on the travel and tourism sector, so things that you would want to do when youre on vacation hotels, restaurants, bars, or any other type of travel, tours, things that you can buy. We are going to continue to improve our platform. We want to make it more scalable; more reliable. We need to be able to do more transactions per minute, per day. We want to add more features for our merchants; more real time visibility into what is going on in their account. We also want to offer more payment options different ways to take payments than we offer today. There is a lot that we can add. We have plans to continue to hire more engineers. Thats our number one focus right now is hiring more software engineers. [27:10]

AA: In the recent roadmap and product releases, or software releases coming from the Bitcoin core development team, one of the most important developments, I think, has been the introduction of a payment protocol through BIP70, BIP71 (if I remember correctly). This allows for much more interactive and rich experience than simply firing off some money at an address and to be able to set some of the other parameters of the transaction between consumer and merchant. Do you see that as an important step? Are you going to implement some of those features? [27:48]

TG: Yeah. We see it as very important and we fully intend to implement it as soon as possible. It does give us better interaction with the users wallet. It gives us better visibility into correcting potential mistakes before they happen. Right now, when users just fire off bitcoins to an address, there is the potential that they could do it incorrectly. They could pay the wrong amount, they could pay too little, they could pay too much, they could pay twice, they could pay late, they could pay an old address that they had bookmarked. There are all these types of things that the user could do wrong. Every one of those, when the money lands at BitPay, it creates an exception for us and so we have to manually go match it up and figure out what went wrong and then make an adjustment. As we scale up our volumes, these little manual adjustments start to take up more and more time in our day, so were building systems that can automate some of this and the payment protocol will be very helpful. The other thing it will help us do is to make sure that the user is attaching a proper fee to the transaction because what weve seen recently, on days like Black Friday when the network gets very busy with transactions, if there is not any fee at all attached to the transaction, it could take a very long time to get it confirmed into a block. The majority of nodes could think its valid and we know that at some point, it will get into a block, but some of them are taking 24 hours to get confirmed into their first block. That does create problems for us when were trying to deliver notifications to merchants and settle to merchants. We want better interaction with the wallets to make sure that they are paying the right amount, that they are attaching a proper fee and that also, that they know that they are actually paying BitPay because we can securely sign the payment request and they are not just firing off to an address that they dont really know who owns it. You cant tell by looking at an address who owns it, right? They all kind of look the same; they all like garble cryptographic addresses. For the average user, they would not be able to tell if a man in the middle has swapped out the address and replaced it with a different one and the payment protocol would be able to address that. [29:42]

AA: I often think of Bitcoin still similar to the internet in the pre-DNS days when wed go around carrying a list of IP addresses in our wallets, trying to figure out where the next FTB server with good stuff was. Bitcoin addresses are very much like that. They are just garbled numbers and they dont give you any information but with this addition of the protocol, one is that you have a name behind it, but the other one also is that you have an SSL certificate, an X.509 certificate that allows you to verify the authenticity of the merchant. I think thats going to be an exciting development and important milestone. [30:15]

TG: Its like bringing Bitcoin into the DNS age... [30:18]

AA: Exactly. [30:19]

TG: ... where you can actually pay a name and a secure signed certificate instead of just paying a random string of numbers and letters. [30:24]

AA: What about refunds? I think thats another aspect of the payment protocol. Certainly as a merchant, Ive sometimes had to process refunds and I certainly dont want to simply fire it back to the same address from which it came because that address may no longer be active or associated, or the keys may have been recycled, or destroyed. Thats not a good practice but certainly some people may have made that mistake, so you cant just blindly fire it back. The other problem I have is if someone asks for a refund, I have to verify that they are, in fact, the person who originally made the payment. Im not sending the refund off to some random address that came by email. All of this, kind of loosely coupled interaction makes it very difficult for me to do the honest refund I need when someone is disappointed, or something didnt work, or I made a mistake. [31:11]

TG: The payment protocol will help there. We think of doing refunds with Bitcoin as if it was a cash transaction, so if you paid for cash for something at your local hardware store and it doesnt work, you go back to the service desk. You also have to bring your receipt to prove that you made this purchase. With BitPay, every unique purchase that we make has a unique URL and we treat that as the receipt, so the buyer has to present this URL because thats only known to them. We can also ask for additional information what was the original email address on the order; how did you make this purchase so that we can verify that we are actually sending the refund to the right person. You do have to probably employ a best practice of asking the customer where they would like the refund sent because perhaps they paid from a pooled account, like an exchange, where everybodys keys and funds are co-mingled. Youre never going to get it back to the right person if they paid it from one of those. We dont recommend those to begin with. Its also important because the person may have paid from a phone at the original purchase but maybe they are no longer in possession of the phone, maybe they lost it. Maybe they do want the refund sent to a different address even if it was a key that was under their control at the time. Its probably a good practice to continue to ask the person where they would like the refund sent, again, just to make the mistakes, or to reduce the mistakes. Are the individual consumers going to be able to sign SSL certificates and be able to do that? Probably not. We may just have to fire off to the email address or the Bitcoin address that they provide. I do think that the Bitcoin protocol will help. [32:50]

AA: The payment protocol actually includes some characteristics for future expansion including the ability to provide a suitable refund address at the point of purchase, so that you essentially pre-positioned your refund address so the merchant knows where to send the money back. [33:08]

TG: You can do that but if sufficient time has passed... [33:11]

AA: Of course. [33:11]

TG: ... that user may no longer be in control of that wallet that made that original transaction. Its always still better to ask. If its something where the transaction would be refunded within a few minutes or hours, if something was unavailable that would probably be fine. If its a month later, its still probably good to ask. [33:28]

AA: BitPay has obviously been very successful in the countries that had the most adoption early on and certainly, North America, Western Europe etc have been hotspots, but it seems like in the last three months the center of gravity of Bitcoin has shifted quite dramatically. Weve got all of these hotspots in the developing world - here in Latin America, of course, Eastern Europe and the Middle East and Southeast Asia. Are you seeing equivalent growth in your merchant services outside the core areas as you had before? [34:03]

TG: Yeah. Were seeing our largest growth right now in Asia and in South America. Its a bit of a challenge for us because we cant offer all of the suite of services that we offer at BitPay in these emerging markets. We can offer all of our payment tools for e-building, or e-commerce, or retail point of sale. Anything that processes a Bitcoin transaction in an automated way, we can do. The other part of BitPay service is what we can do on the backend for the settlement. We can offer merchants the choice they dont have to handle or keep the bitcoins if they dont want to. We could put a direct deposit into their bank accounts. We can only do that in countries where we have established banking partners and relationships, so we can do that today in the US, Canada and the Eurozone but we cant do that in emerging markets. We can still use our service there but those merchants would have to keep the bitcoins, or we would send them to them and then if they wanted to sell them, they could sell them locally on an exchange in their country. [34:56]

AA: Thats a blessing in disguise. They probably dont realize that holding those bitcoins would be great. As a merchant in North America, my choice and my preference has always been to keep the bitcoins but Im sure Im not the norm and for many of the merchants who are using this as a way to simply facilitate payments, pricing would be in the local currency and theyd probably extract it right back to the local currency to minimize their exposure to foreign exchange rate risk and fluctuation risk. [35:23]

TG: The merchants would see this as a low risk, low cost way to accept dollars. Their accountants like it... this is more important when you get into the bigger and bigger companies. The smaller business that is typically owned by a single owner would be like Yes, Ill keep the bitcoins, thats fine. Ill just make my accountant deal with it. The bigger companies, they are run by the accountants and the lawyers and those guys are more risk averse and so, they want reporting in dollars, they want to be able to report their revenue properly. To them, the more invisible the bitcoins can be the better. Its great because it gives us another place to spend our bitcoins but it also reduces that merchants risk in liability of actually handling it. [36:03]

AA: Certainly, that seems to be one of the most powerful features of BitPay because you can take advantage of all of the aspects of Bitcoin without ever touching bitcoin as a merchant. One of the interesting things Ive been hearing, at least here in Argentina, is that the merchants are much more reluctant to convert back to the local currency because the local currency isnt doing so well and because when we think of volatility in Bitcoin, in a lot of the emerging economies and developing economies, they laugh because their volatility is not only worse, but their volatility is mostly down, whereas Bitcoin volatility is mostly up. Do you expect over time, when you go into more of the developing countries that people will just want to hold onto the bitcoin because its a better currency? [36:48]

TG: Yeah. Thats why I chose to come down here to Buenos Aires because here they have an immediate need for an alternative form of payment and an alternative store of value because the peso is just not meeting the needs of the businesses and the consumers. It could be helpful to us because perhaps we dont have to offer settlement in pesos to their bank account and maybe the merchants would be more than happy just to keep the bitcoins because probably the last thing they want is more pesos in their bank account. Thats why we are actually hiring one or two people here to be sales engineers, to help go out and sign because we think that there is an immediate need here and Bitcoin can solve a lot of problems. The more things that we can do to bring more bitcoins into Argentina, focusing on the travel and tourism sector; the places where people will be bringing money in from North America, or from Europe, or from Asia, those are the businesses that wed like to target first because youre bringing bitcoins into the country, then the businesses here can either choose to keep them or sell them to the local population and actually start to build a Bitcoin economy buyers and sellers here in Buenos Aires. [37:54]

AA: This is a fascinating time to be in Bitcoin and Id like to thank you for all of your contributions in making Bitcoin a mainstream acceptable and stable currency and BitPay has certainly done a lot towards that. Tony Gallippi, CEO and founder of BitPay, thank you so much for joining us today. [38:11]

TG: Andreas, thank you. [38:12]

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Stephanie Murphy interview with Bruno Kucinskas aka Phinnaeus Gage

SM: Im here today talking with Bruno. Bruno, how do you pronounce your last name? [38:35]

PG: Smith. Its Lithuanian for Smith. [38:37]

SM: OK. [38:37]

PG: In America, its pronounced Kucinskas. [38:39]

SM: You are known as Phinnaeus Gage on the Bitcoin forums. [38:43]

PG: That is correct. [38:43]

SM: I know the story of Phinnaeus Gage. He was a railroad worker and he got a train spike through his frontal lobe of his brain and it changed his personality. Is that right? [38:54]

PG: That is correct and that did not happen to me though. [38:57]

SM: OK. Where did you get the name from? [38:59]

PG: The Phinnaeus part was when Julia Roberts had her fraternal twins and named them Phinnaeus and Hazel. I took that spelling of Phinnaeus and after they were born, there were news outlets where the name came from and what famous people were Phinnaeus. One was the Phineas Gage, with the railroad spike which you just mentioned, but spelled differently. Then there is a Phineas P.T. Barnum. I used those monikers when I was playing poker back in the early 90s. [39:33]

SM: Oh I gotcha, so then it translated to the Bitcoin forums. [39:36]

PG: That is correct. I loved the moniker so much, I just moved forward with it. Now, I also go by The Most Interesting Bitcoiner in the World. [39:43]

SM: The Most Interesting Bitcoiner in the World. I think youre living up to this because although this is an audio interview, we do have some pictures of this. You are here at the conference wearing... well, lets see if I can describe it... a cowboy hat, a stripy polo, a dog leash and a pink tutu and some polka dotted socks, long johns... [40:05]

PG: Long underwear. [40:06]

SM: Long underwear, swim trunks and slippers. Tell me about why you are dressed like this. [40:12]

PG: The pink tutu started when someone posted about the Tutu Project which consists of a husband and a wife team that raises money for breast cancer. Unfortunately, she had breast cancer. Shes still with us. About a dozen years ago, him being a photographer wanted to do something to support his wife so he donned a pink tutu and probably just that. He photographed himself and the people enjoyed his images so much that later on, it was turned into a book. They had been raising money doing that and then the money they raise goes to the higher Breast Cancer Foundation. Someone on the Forum mentioned this, that they would be a good candidate for the Bitcoin 100, which is a charity fund that I have founded, that if they embedded a donation option onto their website, then Bitcoin 100 would endow them with $1000. If they did that, this particular poster said that he would donate a bitcoin himself. I figured I could amass a few more bitcoins. Basically, we were looking at $2000 that would go towards that cause that venerable cause. I have not spoken with them personally, but another person in the Bitcoin 100, Dmitry got an email reply that they would look into it. He kind of felt like the chances are it was going nowhere. I said Not so fast because Im going to Vegas and I will wear a pink tutu in the spirit of them. The rest of the getup had to do with another post that somebody mentioned and I turned around and I just wrote Wouldnt it be hilarious if I ... and then I posted it, then I read what I had written and hence the rest of the getup. [42:05]

SM: Wow, thats wonderful. You are raising money for breast cancer, is that right? [42:11]

PG: Im not here raising money for breast cancer. When I leave here I will contact their venerable cause and there will be enough photos on the internet to prove that I was here so that they would be more keen to get down and embrace Bitcoin. [42:29]

SM: OK. Youre raising awareness. [42:33]

PG: That is correct. [42:33]

SM: Thats right, OK. Great. This is a really cool project. How has it worked out so far? [42:39]

PG: I got to have my picture taken with you and again, weve raised enough awareness just by being here and interacting in the other photographs. Its just more leverage I will have when I contact the Tutu Project. [42:57]

SM: Great. How did you first find out about Bitcoin? When did you first hear about it? [43:02]

PG: About June of 2011, two years ago. There was something else I was just researching for my future... since Im 53 ... my future retirement and what have you and somehow Bitcoin came about. I thought it was so fascinating that I just couldnt read enough for two days before I turned around and joined the main forum that was out there. [43:28]

SM: Are you involved with Bitcoin100 at all? [43:31]

PG: Im the one who founded it. [43:32]

SM: You founded it? OK, I didnt know that. Thats wonderful. [43:35]

PG: Ed and Dmitry, who goes by Rassah on the Bitcoin Talk. Hes the one that handles the phones and Roger Ver has access to the wallet, in case Rassah gets hit by the proverbial bus. Ed handles the website which I started, which both of us can handle that. Since then, there have been two other people who have come into the Bitcoin100. One is Jason King of Seans Outpost in Pensacola, Florida and the other person, Frankie Delaney. That person has been so instrumental in corresponding with Rassah and has suggested so many NPOs that have now embedded Bitcoin donation options on their site. [44:23]

SM: How did you get the idea for Bitcoin100? [44:26]

PG: I was on Bitcoin Talk and because of my posting habits, since Im not familiar with forums at the time, I went a little bit crazy on my posting habits. I was banned for three days. During that ban, I was so upset that I started another account which was outside the rules, so they were kind enough to give me seven more days, so my ban was now ten days, but I could have been banned for life this time. Sitting around so [??] what could I do for the Bitcoin community? I envisioned the Bitcoin100 and then it grew from there. It was a good ending. [45:09]

SM: Great. Bitcoin100 gives an endowment of $1000 in bitcoin to charities who accept Bitcoin. [45:17]

PG: That is correct. Originally, it was 100 BTCs but when the price point went over $10, it would have been way too much money for what we were asking. $1000 is a nice magical number and theres no reason to go lower. At the moment, we have about $150,000 in our coffers. [45:38]

SM: Great. How has the response been? Have you had a lot of charities interested in learning how to accept Bitcoin? [45:44]

PG: At the onset, no, it was very difficult but most recently, its a lot easier because of the mind share and the awareness of Bitcoin thats out there. It is easier. [45:56]

SM: Do you provide support to... like, setting them up with a wallet, or setting them up with infrastructure to use and accept Bitcoin? [46:04]

PG: The learning curve to have it set up is relatively easy and yes, whatever support we can give, we do give. The payment provider we suggest is BitPay. They are not obligated to use BitPay but I believe to date, all of them have used BitPay which by doing such, BitPay will not charge their nominal fee of 0.95%, less than 1% of the transaction fee. They do it for free. If someone donates $1000, immediately that $1000 could go right into their bank account, the very next day within 24 hours, unless they set up their account with a different provider. [46:51]

SM: How many charities has Bitcoin100 funded so far? [46:54]

PG: I believe, without looking, I want to say its two dozen. It may even be more than that. Im going to say two to three dozen. It is on the website on one of the pages on the www.bitcoin100.org site. [47:09]

SM: Do you have any thoughts about why Bitcoin charities should accept Bitcoin? If there is somebody who is listening, or they have a charity, or a non-profit organization and they are on the fence about using Bitcoin, why should they do it? Whats your pitch? [47:24]

PG: The main pitch I would use is, is the fee structure. Its 100% free, whereas now depending on how PayPal has different pay structures for charities and other entities, they could be anywhere 2.5-3.9%, whereas with Bitcoin, we could do it 100% free. There are no fees. Not one iota. [47:49]

SM: Great. Where do people find you online? [47:53]

PG: www.bitcoin100.org [47:55]

SM: You are Phinnaeus Gage on the Bitcoin Forum. [47:59]

PG: That is correct. [48:00]

SM: Bruno, thank you so much for talking with me today. [48:02]

PG: Youre welcome. Thank you very much. [48:03]

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_______________________________________

Andreas Antonopoulos interview with Emmy Velasquez

AA: This is Andreas Antonopoulos from Lets Talk Bitcoin and Im reporting from the Latin America Bitcoin Conference. Im here today with Emmy Velasquez, co-founder of Coinding, a really interesting application that I recently found out about, here at the conference. Emmy, welcome to the show. [49:23]

EV: Thank you. Thank you for having me. [49:25]

AA: Can you tell us a bit about what Coinding is and what you do? [49:29]

EV: Yes, sure. Coinding is a new gamified app that we are releasing. Its a mobile game that turns cities into treasure hunts. What we do is we spread bitcoins around cities, around the world. People can collect them with just their cell phone; just walking on the street, running, they go for runs, they walk when they go to work, or whatever they can collect the bitcoins. After that, we also give recommendations of... lets say 0.001 bitcoin accumulated after the treasure hunt, we give you recommendations on where to go, or where you can use them like coffee shops or any place thats accepting bitcoins. The idea is basically connecting the entire [??] [50:16]

AA: Excellent. Very good. You say you distribute bitcoins around a city but youre not physically placing any token. This is done entirely by GPS location? [50:27]

EV: By GPS location. [50:28]

AA: Having this app, I would for example, be able to see locations around me that I could visit and as soon as I arrive on location and my GPS coordinates match that of the virtual hidden treasure? [50:43]

EV: Yes, yes. You would collect it. Yes, through the GPS, we know where the bitcoin is, so we know when youre in an area around it like 10 meters around it, then you collect it. [50:59]

AA: Very good. [51:00]

EV: The idea is also to... we could leave clues; we could leave messages to people to create their own treasure hunts. The idea is not to manage it entirely ourselves, like to do a part based on [inaudible ??] so people can create their own treasure hunts. [51:14]

AA: There is a similar game, if you like, called GeoCashing. I played with my GPS several years ago. Was that your original inspiration for this? [51:26]

EV: It was a combination, I think, we took ideas from Google Ingress, we took ideas from GeoCashing as well. It was basically, we were working with a lot of people that were involved in the map developing community and we were involved in the Bitcoin community and it just [??]

AA: Exploded. (Laughter) Is your application ready now? [51:56]

EV: We just launched the sign up page. A week ago, we launched the sign up page and were doing a competition to figure out which one is the city that is going to be where we start. Thats going to happen in the next couple of months. Really, sure were almost ready for the launch. We just want to create some movement so its more fun like its more people involved in the first day when we release it. [52:23]

AA: Very good. If a second person arrives at the same location a bit later, is the clue still there? Can they still collect something? [52:30]

EV: Yes. The idea is to have a lot of different... not only bitcoins, but also have bonuses and combining people and helping people create community. We can have certain rewards where if you go alone, you win a certain amount. If you go with a friend, you win a bit more and if you go with another friend, you win a bit more. The idea is going to be creating community and bringing the community together and maybe you arrive to a city where you dont know anyone who is part of Bitcoin so this can be a great way to connect with the people in that local community. Also, bitcoins are going to reappear its a multi-layered game. Obviously, we dont want someone to collect all the coins and suddenly drying out the city, so were implementing a lot of game mechanisms which makes it fun for everyone. [53:20]

AA: I can see this would be a fantastic game to play in the type of city like Buenos Aires, where there is a lot of outdoor cafe life and walking around the city is really, really a great pastime. Im sure the same thing could apply in New York and San Francisco and Paris, in London and many other cities. Whos winning the competition right now for first launch city? [53:43]

EV: Actually, its a fight between, obviously San Francisco just because when we launch, were launching where theres Hacker News and theres major communities in San Francisco. I just wrote a message on Facebook from someone from Singapore saying We need this now. Please bring it. There were people from Pakistan, from Japan, from everywhere in the world but I have to say, Germany and San Francisco. [54:12]

AA: This is the kind of game that could be launched anywhere in the world. Theres no real requirement the infrastructure is the same, regardless. [54:21]

EV: Exactly. [54:21]

AA: OK, great. I wish you a lot of success and if someone wants to participate, at least in the startup point now and recommend their own city, which website would they go to? [54:33]

EV: Everyone can go to www.coinding.com and if they have any suggestions, or want to give feedback, or want to be part of the project, or help in any way, you can send us an email contact@coinding.com. [54:45]

AA: OK, so Coinding, coinding.com. [54:50]

EV: Yeah. We tried a cheeky way to try to make it into ... Were gonna go Coinding! [54:56]

AA: Coinding. (Laughter) Very good. Emmy Velasquez, thank you so much for joining us today and giving us an insight into your new application. Very excited and I hope to be playing and going Coindinging sometime soon. Thank you. [55:08]

EV: Thank you so much. [55:10]

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Bitcoin Man written by the Bitcoin Monger at bitcoinmonger.tumblr.com and performed by David Menes.

If I call myself a Bitcoin man, youll agree. I run a family business my son, H.W. and I. (Laughter). Sorry, I simply love that movie to death. Bitcoin has had quite the Carls Jr sexy media lap dance since I last posted here. Dear internet friends, my faith in the coin remains utterly unchanged. Since there are plenty of places you can go for excellent technical type analysis on why Bitcoin will take over the planet like a benevolent fungus, I prefer to use this brief time with you to explain its utility in another way.Go to your local bank on Monday morning. Yes, your local branch - Wells, Chase, or perhaps Bumfuck Townships, We Have No More than $14,000 In The Vault Credit Union, whatever. Conduct some simple business.Deposit a check, or take out a withdrawal of several thousand dollars, or inquire about your balance and then deposit a check, or a check and some cash to make things really tricky.The process feels positively medieval. Friends, after playing with any Bitcoin client. It does. Bertha asks for your government issued ID (you need government issued plastic to gain entry to your own funds), she types an inconceivable amount of information into her ancient Dell, she prints out your receipt - hurry, hurry now there are customers behind you.Compare that odd little dance to sending a trivial amount of test money to a friends Bitcoin address.Its like comparing Oregon Trail to the latest Halo iteration. In other words, there is no comparison.The brick and mortar banks days are numbered. The smart ones will adopt Bitcoin early on, and perhaps survive. The rest will fade out - the exact date (a year? two? five?) matters not to us true believers. If you consider my rhetoric to be beyond reasonable, fine: go to your local record store (assuming youre in a massive million+ population city that still has a record store). Look around. Compare that process to the simple, undeniably utilitarian order flow of iTunes or the unbridled fun of BitTorrent.Weve already won. This is why I dont check the BTC price every day. Wake me up when theres something worth waking me up for.Oh, and thank you very much indeed for the tips Ive received on this blogs vanity public address. Whatever comes in, Ill push back out to commenters who have something insightful. Very glad to see that there are still other gentlemen out there.Once a coin man, always a coin man. Til next time, cheerio. [58:02]

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CREDITS:

AL: Thanks for listening to Episode 67 of Lets Talk Bitcoin.

Coinding and Merchant Talk was produced by Andreas Antonopoulos Paul Snow and Phinnaeus Gage was produced by Stephanie Murphy Bitcoin Man was written by the bitcoinmonger.tumblr.com and performed by David Menes Music was provided by Jared Rubens and Calvin Henderson

Questions or comments? Email adam@letstalkbitcoin.com (although Im on vacation)

Have a good one! [58:31]