Let's Talk Bitcoin - Ep 95

8/12/2019 Let's Talk Bitcoin - Ep 95

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LETS TALK BITCOIN

Episode 95The Captain and the Keep

Participants:

Adam B. Levine (AL) - Host

Stephanie Murphy (SM)Co-host

Andreas M. Antonopoulos (AA)Co-host

Anthony Di Iorio (ADI)Founder of Ethereum, Executive Director of Bitcoin Alliance of

Canada

AL: Today is March 25th

2014 and this is Episode 95. This program is intended forinformational and educational purposes only. Cryptocurrency is a new field of study.

Consult your local futurist, lawyer, cartoonist, investment advisor, international

accountability coordinator and ethnobotonist before making any investment decisions for

yourself.

Welcome to Lets Talk Bitcoin, a twice weekly show about the ideas, people and projects

building the digital economy and the future of money. This is a long one so were going to

get right into it.

We talk EthereumIve never seen something like this blow up the way it has insuch a short time.

The Toronto ConferenceThis is (??) the work of the (??) and art show thats goingon during the event, where actual artwork will be created during the talks when

theyre going on and then well be having an auction on the last day.

The Bitcoin Foundation, past and futureIts bound to happen because these thingsdont happen because of technical failures, they dont happen because of bad actors,

they happen because of failures of leadership and the Foundation is the very

definition of a failure of leadership and, therefore, these things will happen to them

eventually.

AL: I like how Andreas waited to say that until after we start recording. (Laughter) [1:17]

SM: What he does in the privacy of his own home is his business. (Laughter) [1:22]

AL: Today Im joined on Lets Talk Bitcoin by Stephanie Murphy. *1:26+

SM: Hello. [1:26]

AL: Andreas M. Antonopoulos. [1:28]

AA: Hey there. [1:28]


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AL: ...and special guest host, Anthony Di Iorio, who is the Executive Director of the Bitcoin

Alliance of Canada, Co-founder of KryptoKit, a founder on the Ethereum project, and many,

many others; full disclosure. Anthony is also an individual sponsor of the Lets Talk Bitcoin

show. Anthony thanks for joining us today on Lets Talk Bitcoin. *1:43+

AD: Its an honor to be on with you guys. Thanks a lot. *1:45+

AL: You have a million projects, so weve been trying to getyou on to talk about the

conference up in Toronto but again, its just like were starting to do these guest-host things

and Im into this idea that we can just make this one long conversation because those really

seem to be the episodes that people like the most. Pick a project. What do you want to talk

about first because Ive got questions about all of them? [2:05]

ADI: The most recent thing that we launched was the Bitcoin Decentral Accelerate, which is

an accelerator program thats run at a Bitcoin Decentral, which is a 5,500 sq ft building, (??)building in downtown Toronto. It gets, I think, about 100,000 cars passing every day looking

at a big orange Bitcoin sign right at the front. We house an ATM in there. Its a co-working

facility. Itsa space for the Bitcoin Alliance of Canada, which is a non-profit organization in

Canada that Im involved with. We do a meetup every week that gets between 50 and 100

people, every Wednesday, in the space. Weve got some offices for Ethereum out of there.

We have HR, legal counsel (??) Etherum working out of there. Metallics place of business is

out of there. It is offices for KryptoKit; weve got a studio for CoinTalk and a bunch of

activity going on there and its getting busier every day. Its really a lively building and its

really amazing to have these people altogether in a space where ideas are just flowing.

Thats the newest thing that weve started in January. Weve got the Expo thats coming up.Thats going to be at the Metro Toronto Convention Center. All of you guys are coming and

Im really excited to have you up there. Its going to be great. Its going to be a real

community event. [3:17]

SM: I am so looking forward to that Anthony. Its going to be awesome! *3:21+

ADI: Yeah. Ive done maybe 15 conferences in the last year and a half with Bitcoin and Ive

really learned a lot from them. I think it needs that balance. It needs that community

balance with the business balance. Thats something that I hope we can perfect. [3:35]

AL: Bitcoin Decentral right?Anthony, when was the first time we talked? On Episode 5 or

6, I think, of Lets Talk Bitcoin? *3:44+

ADI: You mean last year? [3:46]

AL: Yeah, last year, last year. It was a really early episode and, at that point, your project

was the Alliance of Canada. That was the thing that we were talking about, at that point.

You were working on... I can count 7 or 8 different projects here. What happened over the

course of that year that could put you in a position where now youre starting an incubator?

Just for all this activity everywhere I look. [4:10]


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ADI: What happened was with the Alliance, I had sold a Bitcoin business before that but I

became Executive Director of the Alliance and I had nothing, I had no business interests at

all. I was a full time volunteer doing this Executive Director position and working with the

other directors. Weve got, right now, over a thousand members of the Alliance up here in

Canada. Then, things just started coming at me; with different business ventures and

different ideas. The first one was KryptoKit. My partner Steve, who I had worked withbefore, just out of the blue one day saidHey, Ive beenworking on a Chrome extensional

Bitcoin wallet. Im like - Thats exactly whats needed. I knew that thats whats needed. Id

been dreaming about that for a while. I remember at the conference in New York at Inside

Bitcoins, last year, the Web 3.0 guy sayingThats whats needed. You need to bring it into

the browser. Nobody had done it yet and we were the first to do it and from there, we

started working on that project. Weve now got the instant messaging; weve got a Bitcoin

directory built into there. Then things just kind of snowballed. [5:07]

AL: Anthony, the question that I wanted to ask you was when you got started, did you have

a bunch of resources or was this something where, over time from being involved in thecommunity and acting opportunistically, you kind of levered up? [5:20]

ADI: When I got involved, I was just coming out of selling some properties. Thats what I

had done previously. I was a landlord; I had student properties and in Toronto, I thought it

was going to be hit hard very soon. I thought that the prices were way overheated. I

decided I to get out fully and just enjoy the six years before that of the housing prices going

up and thats where I came across Bitcoin. It was a perfect time and Id look and was

thinking where am I going to start investing some of this money. This was about the time

when it was about $11. Thats when I made my first purchase and I did it as easy as going to

the bank and just making a bill payment. That was my first foray in and about a month later,I started the meetup group, and it kind of snowballed from there. With the sale of my first

business, that was a full Bitcoin sale, I did pretty well with that. Thats the thing would be to

continue on doing these type of things and funding them. It has always been the goal for

my first company and my partner to sayHey, lets get involved in something and then

well take that money and do something more meaningful for the community and for

different projects to really spread this out. Thats how it came about. *6:32+

AL: Last year, the first article that I wrote, at the time that you got in actually, at $11, thats

just about the time that I wrote this... was this article based on a bunch of interviews I did

with people who had between a couple of hundred and a couple of thousand Bitcoin. Thequestion at that point wasWell, Bitcoin is this big ponzi scheme because all the who

people got it early and cheap are just going to sell it later and then the price will go down

because no one will want it. There was all this sort of talk. I went and I talked to people

who actually were in the situation where if Bitcoin succeeded, they would find themselves

there. All of them were talking about starting incubators, or launching start-ups. That was

the one commonality in all of the divergent opinions and things that they wanted to do. Ive

been watching your progress for a long time and it really just feels like... I dont know... Im

probably putting some of my own bias on to you here but that is what Ive kind of looked at

you like, is someone who is taking the opportunities given and levering up and then using

that. Instead of being likeAlright, well now Im going to take my cash and do something


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else, you sayOK, now Im going to reinvest it in because it makes more sense to me and

its better just generally speaking. *7:36+

ADI: Yeah, thats exactly it. Its building up relationships. I mean, Etherum is a good

example of this. Ive known Vitalik for a long time. He was actually at the very first meetup

in Toronto that we did. Boy, hes come a long way in the last year and a half. It wasapproaching him when we started doing KryptoKit, saying to himHey, we want you to be

involved in our project here. Wed like to offer you part of our company to just continue

doing what youre doing and help developmentas a partner and weve got a lot of respect

for you. Its the same thing we did with Roger Ver and Erik Vorhees to bring them on board.

It was likeI really love you guys. I look up to you guys a lot and Id love for you to be part

of this team with us to get, what we think is, a really amazing wallet system out there and to

improve it. It was building up those type of relationships that always seem to come back

afterwards. Thats how, I think, Vitalik brought me on board with Ethereum. I was one of

the (??) people with him and then I brought, I think, it was my connections through Charles

Hoskinson and Joseph Lubin, two of the other founders that are involved with us, right now.Its about building up those connections and people just doing what youre doing and giving

back to the community. It all comes together in the non-profit side of what I do and in the

for profit side of what I do. Im just so passionate about this. Ive told you this before

Adam. I was like a three months guy before getting involved in Bitcoin. I have to do things

for three months then Im out. This has been a year and a half to two years for me and Im

just more excited every day to be working on this stuff. [8:58]

AL: Anthony, the Ethereum project... I think I first read the White paper that Vitalik

circulated right before I was getting on a plane to go and talk about DACS, in Washington at

a retreat that we put on for five days and I read it on the plane. I was likeWow, this isreally cool. I agree with you. I think Vitalik is a really, really interesting guy. Hes one of the

reasons why I actually got into Bitcoin journalism, ironically, because the publication he was

initially involved with had a really innovative... like... were not going to release the next

article until enough people pay us a total of... I think they were going for half of a Bitcoin,

back when they were very, very inexpensive. It was small amounts but the point is that it

was a really innovative model that used this thing. Vitalik, I totally agree with you, hes

really kind of going down this rabbit hole but its an ambitious project. You guys are trying

to do things that are hard. If you look at other projects in the space, theyre not as

ambitious. Do you think that theres a reason there? Do you think that this is like a moon-

shot type of project? Or, are you guys really feeling like this is accomplishable? [10:00]

ADI: Im really confident just because I trust Vitalik so much and Ive gotten to know him

very well. Hes an extremely straight forward, reliable and, in my opinion, genius. Ive

spoken to other people and our other developers working on the project and they are very

confident about what were doing now. That gives me a lot of confidence. Ive never seen

something like this grow so quickly. Weve got 50/60 Skype groups going right now, with

hundreds of people involved. Weve got 25 meetup groups across the world, including one

which just had its first in Tehran, in Iran, yesterday or the day before. Ive never seen

something like this blow up the way it has in such a short time. I mean, we started this in

January, the beginning of January. I got involved in the project at the end of December andstarted this, really, in January. What weve been able to accomplish, I think, over a few


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short months has been spectacular. The community is really coming behind us and its this

community growth and the excitement that were seeing, which is leading for people to

start up meetup groups just because theyre so enthusiastic about it. *10:59+

SM: Are you talking about meetup groups for Ethereum? [11:03]

ADI: Weve got over 25 now, meetup groups for Ethereum. [11:05]

SM: OK, wow! [11:06]

AA: Yeah, one popped up in my area recently. Its rather interesting. Im going to go visit it

this week, I hope. [11:11]

ADI: Yeah, so were calling in to them on a regular basis. Were just saying Hey, can you

come do a Skype call in to the group. Theyre not just 4 or 5 people, theres meetings of 30-

40 people involved in these things. Thats where you can really tell what people are feelingabout a project. Its also the excitement of other guys. I mean, MasterCoin theyre

thrilled about what were doing. Were going to be doing some work, hopefully, with...

collaborations with Open Transactions. They are one of our partners, actually, our strategic

partners. Weve got even companies like AVG, the anti-virus guys that are excited and

reached out to us and got some ideas for monetization strategies for their virus software

program. Its really touching a lot of different people and its really exciting to be involved in

this. [11:51]

SM: What would go on at an Ethereum meetup? [11:56]

ADI: In general, a representative, or somebody who has reached out to sayI want to start

up this meetup. Can you give us some tools? We give them some educational tools. We

usually have one or two of the leadership team call in, answer questions from the people in

the space there and let them know whats going on with the product sale and when we plan

on starting to sell Ether which, of course, is the currency of Ethereum. Its information that

they want to understand better how the project came about, what obstacles were facing, if

we need people to get involved. Were an open source project on one side of things so

theres lot ofopportunities for people to start helping and assisting us. Its unique. Its an

extremely unique situation and its being run by a really well organized team. Were just

moving really quickly. In a couple of months, to be able to have this team that we puttogether; not have an issue with developers. Like, weve got a plethora of developers

helping us out which seems to be the common problem in the space right now, especially

with the next level of cryptocurrencies. People are just having to struggle to get developers

on board. We just dont have that issue where people are just flocking to it and helping us

out. Most of them are volunteers. [13:05]

AL: You have not sold any Ether yet. That is something that was originally scheduled for the

end of January and has moved a couple of times. Can you share some of the genesis of that

process? [13:18]


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ADI: The plan initially, was to launch in Miami. At the time, it was going to be called a

fundraiser and we had to take a step back because there was too much money that we were

being told was going to come into the project. We had to be sure that we had done things

properly, in terms of security regulations. We just had to take a step back and decide which

country we were going to go to and ask to be a jurisdiction for Ethereum. We eventually

decided to go with Switzerland. We were immensely helped by the Open Transaction guys,who had already set themselves up there. A lot of good connection. It looks like, right now,

were going to be (??) asa currency by the Swiss government. Also to be able to be sold as a

piece of software. Well not have the tax implications that we initially thought we might be

having. Its really forming to be a perfect situation for us. Were setting up there. Weve

got the hub in Toronto and the hub in Switzerland and weve got a bunch of others that

seem to be forming right now. Were setting one up probably in San Francisco, and New

York, and were calling them Wholons. Thats thename for our hubs. I think a Wholon is

like a part of the whole and the whole itself. I think thats the term. I wasnt familiar with it

before but thats what were calling our hubs in different cities. We decided to take a step

back, regroup, make sure that we were doing things properly and also, come up with plansand strategies for where the money is going to be put for us. It really was the wisest

decision we ever made and were just taking our time right now. Were probably a couple

of weeks away. There will be lots of announcements before we start selling Ether. We

really were able to slow down and Im glad that we did. *14:53+

SM: Anthony, tell me more about this Switzerland thing. What are the specific advantages

of being a company based in Switzerland? Are you saying youre going actually be a

company that is based out of Switzerland for the initial crowd funding with Ethereum? How

did you go about that and do you think Switzerland is going to become like a Mecca for

Bitcoin businesses now? [15:15]

ADI: I think what we have is a great opportunity to lead the way there and actually work

with the Swiss government. A lot of the interaction in Switzerland is directly with the

government and thats what weve been able to do. I think were going be a... were going

to be able to write certain things because they are using us as a test model. Its gone

amazingly with what theyve been able to do for us over there and the connections with the

lawyers and connections with the OT guys who have been able to open the doors for us and

really expedite things. If we were to try to do this in some other place, this would have

taken months or maybe even a year to get all this done. Our main entity is in Switzerland.

Weve got some designers out there. Weve got some employees out there. CharlesHoskinson has been there for the last many weeks getting things set up. He is also with

Mihai, they are two of our founders there. Weve got eight founders in total; two of them

are operating out of Toronto. Weve got one fromJamaica. Weve got one from Israel.

Thats going to be our main setup there and we have to actually keep infrastructure there.

Its not like were just setting up a shell company. Thats actually part of it and thats going

to be our main focus there. Ive got accounting and Ive got legal going on and out of

Toronto, HR is out of there. Weve got the video production; weve got some of the security

guys. [16:30]

SM: It sounds like with something like Ethereum, obviously, the ultimate goal is to be aDAC, is to be decentralized and not have a centralized company that is issuing software, or


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anything like that. Now, were kind of in this awkward in between phase where were trying

to get to that from where we are now. What is the plan as far as evolving toward being a

completely decentralized organization? [16:55]

ADI: It is definitely our plan, I think, between one or two years to take it to that route.

Thats definitely where we want to go. A large part of what were doing is were going into anon-profit. Were going to wait to see how much actually comes in before we make that

percentage decision as to whats going to be going into a non-profit and what would be

going into a before profit entity. Our plan, what wed like to do, is to say as much as

possible that we can put into the non-profit. Thats going to be me working with

universities. Weve got two of the top cryptography people from the University of Waterloo

that have joined us and be working with us. We want to set up educational programs. We

want to set up... we think that needs some type of structure. Thats where the non-profits

going to come into play. Before profits stuff is going to go towards building the apps that

are going to be done on top of Ethereum. Its goingto go towards funding the accelerator

space in Toronto that were doing. Were trying to set one up in New York, as well. It reallywasnt that we had to do it in that sense, was we had to also have a portion of it as before

profit and I dont know the details much but because of the set up that we have in

Switzerland, thats what we have to do. We are trying to balance the non-profit and before

profit to separate them. Our goal is to have as much going towards the non-profit and really

build up our infrastructure and build up the very low end parts of Ethereum, which is like

the reference client and things like that. Then separate that between the higher level stuff

which are the applications and the more higher level activities that well be doing. [18:20]

SM: Are you concerned that working with a university could slow things down, at all?

[18:25]

ADI: Yes, thats a concern of mine. I think having certain people, like Neal Koblitz are

working for us and some of the people at Metallics we worked with, it is something that I

definitely think might be a little bit more... like were travelling in mud doing that but I think

it will have to be monitored and were actually going to be the ones whoare going to be on

top of that. You might be right; it might be an issue and I guess well just have to see what

comes out of it. Its not going to be all our eggs in one basket going to the university.

[18:51]

SM: I want to know more about Switzerland too. What are the specific legal, tax, whatever,advantages of being in Switzerland for a Bitcoin business? Not that that exactly describes

Ethereum but, why Switzerland? [19:06]

ADI: You know what, I wasnt involved too much in the decision making in that I havent

been to Switzerland to figure that out. Its Charles Hoskinson thats organizing things out

there. All I know is its worked out perfectly in that we dont have any tax events that are

going to happen on the sale, yet we can still sell ourselves like were selling software. That

takes us out of the whole issues of having to deal with SCC, or having to deal with security,

or just having to do IPOs, or any type of prospectus, and things like that. [19:34]


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AL: Is it fair to say that that you had lots and lots of options and picked the one that you felt

like, and apparently, have gotten the best deal for what youre trying to do? *19:43+

ADI: Yeah, Id say that. We researched it and thats going to be the best place and then

with the connections and the people that we had to have gone through that before, it was a

perfect fit. [19:52]

AL: Theres an area of the Ethereum project that Ive been highly critical of and it is that the

founders have a special rule set that was designed for them and that only applied to them

and not to anybody else. I know that Ive brought this up in the past and I know you guys

have kind of changed it a couple of times. Do you have any thoughts on that? Can you

share the genesis of why it makes sense for an Ethereum founder to get a special rule set

just for them, when other people starting other types of currencies arent doing that sort of

thing? [20:28]

ADI: The rule set is that its not just the founders. Its actually the whole team of peoplethat have been working on this since December that will be getting a certain percentage.

Its still getting worked out. What weve seen from the community though is, (and we think

we have a good pulse on the community) that it doesnt seem to be the things that people

are concerned about. I think were doing it in a way that will be very small and doing it in a

way that we think people have to get rewarded. Were taking on positions here; taking on

risks here. Were not creating something and then leaving this project. Its going to be

something that were going to be guiding it through for the next year to two years. Ive had

to now take the focus away from some of the things that Im working on to be working on

this more full time. That is being split between 50-60 people that have been working on the

project and havent had any payment as of yet. Were completely self-funded andbootstrapped at the point right now. Its hasnt been cheap doing all this stuff with all the

setups, in Switzerland and in Canada here. I think were being fair with what were doing.

We still havent officially decided exactly what percentages that will be done. I think its fair.

I think the team thinks its fair and it seems like from the voice of the community that they

are more excited about what were trying to accomplish than thinking about that. [21:45]

AL: Yeah. I have a lot less problem with it now compared to when I did, when we were

talking about a launch at the end of January when there hadnt been a lot of work done to

that point. It was mostly on paper still. [21:54]

AA: I think theres a valid argument to be made. The bottom line is, this is open source

software. If you really like the idea and the concept and source code and the work thats

been done, but you dont like the teams approach to fundraising, you could always clone

and create Litethereum, build an alternative team around Litethereum, which is silver

contract to Ethereums gold contract... (laughter) and then, you could try and create an alt

contract and see if you can compete in the market. If people think thats a better way to

IPO it, theyll reward that and if people think that the original team that has people like

Vitalik and it is better suited to solve this problem and continue to maintain it, theyll back

that. I understand some peoples concern but, at the same time, Ive heard so much

hyperbole around this that, just because youre using the coin to fundraise for the teamthats developing the coin, somehow thats a scam. I think thats ridiculous because Ive


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used the source code, I can go in there and create a clone of Ethereum in about 10 seconds.

Theres already three implementations of it in three different languages and launch my own.

If anybody thinks they can do it better, they have that opportunity. Its not a closed source

system, you have a choice here. [23:14]

AL: That impacts substantially though, people who have invested in it. There are twoarguments to be made here. The first is that; is it a competitive disadvantage to have

special rules for certain groups? Again, like I said, when I was having more of a problem

with thisit was going to be five people and they were people who... again, I like all you

guys, its not about that I dont want you to get paid, its just that in a world that is open

source and the only competition that can beat you is the competition that takes your

finished product, forks it and then gives it away for a tenth of the price of what youve done,

it seems like that would matter to people who are buying Ether as a product. [23:49]

ADI: I think what weve got to focus on here is the team that weve got behind it, as well as

the strategic partnerships that were building. I, honestly, am not concerned aboutsomeone else being able to bring together this type of community and this type of team

that weve been able to do. Weve been able to attract a lot of developers; a lot of people

who are realizing that theyre going to be rewarded for what theyre doing. *24:12+

AL: You guys have done a fantastic job. I really dont mean to diminish that, at all. As far as

the projects that are out there, as far as community building, investing stakeholders and...

theres not even a token yet, and the community, for sure... I mean, like Ethereum is a

project that has a ton of buzz and a ton of very good thoughts about it in the community

contrasting with a lot of the other projects. [24:33]

ADI: Its a balance Adam and its been a balance that weve been working with the

community... [24:37]

AL: Sure. [24:37]

ADI: ...and changing. I think were people that... were going to feel confident... and youre

not going to appease everybody. Ive always used, whenever Ive done the Bitcoin space, as

a 90%. I try to do everything, whether it be what I did with the Alliance, what I did... I want

90% plus to approve. If you cant get that kind of approval, youre going to be fighting

uphill. I think weve got that and I think weve got the encouragement from the community.Youre going to get people that arent onboard but well do the best we can to be fair. I

think thats what were going to do. *25:07+

AL: Im going to continue to press you on this, Anthony, just on a slightly different angle.

The other argument against doing something like this is that you, essentially, again... it

depends on how large this is, so I could be completely out of line here... but the other

concern is that you create a situation where the people who are working on the project

have a situation where, win or lose, with the project... theyre good because they got all this

money up front that they could use as money during this exciting period. I think that thats

the... anyways... Im sorry, I am a squeaky wheel. That is the definition of what I am and I


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really do try to bring that to every project that I involve myself with because I complain

about a lot of these things before other people do. [25:45]

ADI: I appreciate you doing that and its you doing that thats going to be better and make

us... if we can appeal to someone like yourself and youve already saidyou already feel a lot

better on the ways things have gone over the last few months. Thats great. I encouragethat and I think the whole team encourages talks like this. [26:03]

SM: Adam, I was wondering is your issue with the different set of rules for certain people or

is it with the idea that certain people are getting paid? It sounds like youre issue is with the

fact that its built into the code that there are different rules for some individuals. *26:19+

AL: Yes. At the core of my issue here it is that I feel like any time you set up special rule

systems for whoever, and whatever the intention is, it just muddies the water. It just makes

it so that now its not a simple situation. Im doing the same thing with LTBCoin. With

LTBCoin, were figuring out how were going to vest people initially in it and thats probablygoing to look a lot like what Ethereum is doing here. I have all these same problems and I

have all these same concerns because, ultimately Anthony, youreone of eight founders and

the team thats going to be getting the distribution is 50, but there are a lot of you making

this decision, whereas with our project, a lot of these core decisions Im trying to outsource

as much as possible but I have to make a lot of these decisions myself. Im very conscious of

the optics issues and really trying to figure out what the best path forward is because

everybody is trying something different and I cant figure out which one is right. You guys

have been really successful at building and vesting stakes and I think the Wholon idea is

fantastic. Again, just the fact that you guys are showing up on conference calls and doing

the outreach stuff is more than... nobody else is doing that. That is the most importantthing here. I just feel like it would be such a shoe in if it wasnt for this one level of added

complexity that makes it so I have to worry about that part. Again, like I said, Im a squeaky

wheel. [27:33]

ADI: I understand where youre coming from and weve had a lot of debates and a lot of

discussions. When youve got eight people on the leadership team, youre going to have

both sides of it. Were at a comfortable point actually. I think the most comfortable weve

ever beenas the eight because you have some people on one side (?? Inaudible) and

people on the other (?? Inaudible) to the point where everybody seems to be happy. I think

were pretty comfortable. *27:55+

___________________________________________

ADVERT:

This is Kris Joseph bringing you news on Nxt, the first true second generation cryptocurrency

for March 25th2014. If youve been into the Bitcoin Talk forums lately, you may have

noticed that the Nxt thread is now more than 2,500 pages long. The Nxt community usesthis thread to discuss everything from Nxt core features, to philosophy, to the true identity


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of BCNext. Its a thriving discussion but its a little hard to follow if youre only interested in

one topic. New forums dedicated to Nxt have been set up atwww.Nxtforum.org. It looks

and feels a little bit like the Bitcoin Talk forum (thats intentional) but there are now

separate topics there for Nxt features, applications, marketing, tech support and more.

Check it all out atwww.Nxtforum.org. For more general information on Nxt, head to

www.Nxtcrypto.orgorwww.myNxt.organd stay tuned for more news on Nxt on the nextLets Talk Bitcoin broadcast. *29:08+

___________________________________________

AA: The last week or so, maybe a bit more than a week, Ive been playing around with the

proof of concept test blockchain on Ethereum, been mining Ethereum, I have more than

4,000 Ether right now, which I mined on my laptop. By the way, its testnet Ether so itsworth nothing. It allows me to build contracts, and fund those contracts, and send

payments back and forth, and then try out the code. Im currently playing with the high

level language which is C like. Ive played a bit with Epsilon but Im not a huge fan of

Epsilon. I know thats heretical to say among programers but I prefer procedural languages

for things like this. Ive been playing around with it, and building a few contracts, and doing

fancy things and really enjoying it so far. I think its definitely been a very interesting

learning experience because itsjust so radically different than everything else weve seen

before. Every other blockchain technology weve seen before is pretty much a clone of

Bitcoin and single focused. Ive found it very, very interesting. Hows progress going

towards a final release? Do you see incremental releases going on for a while up to thepoint where you get the final release in Q4? [30:25]

ADI: Yeah, thats the plan. Thats also another reason why we didnt launch a month,

month and a half ago was because we thought it would be a great idea to have something

that someone can actually try and have a proof of concept out there that people could toy

around with and see that we have something tangible, and then take it to market. Were

looking at... I still think Q3 or Q4. Until then, I believe there will be incremental releases.

[30:50]

AA: It sounds good. Im looking forward to continuing to work on Ethereum and, basically,learning from it. I think, as with the blockchain coins, I think youre going to eventually have

some alts pop up in that space too, which is probably a really good thing for competition,

and feature picking, and testing, as it has been in the altcoin space. Weve learned a lot

from alts against Bitcoin. We certainly will learn even more with Ethereum. Do you find

that a promising potential? Do you find that a scary potential? How do you feel about alt

Ethereums? [31:26]

ADI: I think its great. Yeah, bring it on, I mean, whatever is good. A lot of people are

excited to get their coins put onto Ethereum and Ive got no concerns about other ones

coming out. If there is a competition, then thats fine. Its going to... just like Bitcoin. Im
http://www.nxtforum.org/http://www.nxtforum.org/http://www.nxtforum.org/http://www.nxtforum.org/http://www.nxtforum.org/http://www.nxtforum.org/http://www.nxtcrypto.org/http://www.nxtcrypto.org/http://www.mynxt.org/http://www.mynxt.org/http://www.mynxt.org/http://www.mynxt.org/http://www.nxtcrypto.org/http://www.nxtforum.org/http://www.nxtforum.org/


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great with it. I think Ethereum is amazing. I think if something else comes along, thats

great. Its just going to be pushing us forwardoverall. Thats all I really care about. *31:51+

AA: I would consider it the best form of flattery to have someone validate the idea that we

need a contract platform by building another one. (Laughter) [32:00]

ADI: For us, its about getting more and more people into it. We initially have started with

the product sale that we were going to be capping it at a certain amount. Weve since

decided were not going to do that because we want as many people to be able to purchase

Ether, at the beginning, as possible. I mean, what would happen if a couple of big fish would

go in there and just buy everything right up at the beginning. Weve left the model of the

product sale being uncapped. We just want everybody to be involved and everybody to

have a piece of it because thats where the community grows once you have skin in the

game. [32:30]

AA: Im interested in many of the applications in Ethereum that are simply not possible withexisting coins. I think many of the examples we see, in the early examples for Ethereum, are

things that are possible with other coins. Theyre currency focused, or theyre escrow

focused, or they are simple contracts that could really just be an altcoin instead. Im most

interested in the things that you simply cant do with a coin; that you need a contract

language to do; things like doing title and deed registry for real estate transactions, or will

and estate planning beyond the simple multi-sig and escrow capabilities. Those are things

that are simply radical enough that they cant be done with existing platforms and I think

thats where you start seeing the power of having this approach to contracts. *33:23+

ADI: I completely agree. Its going to open the doors to a lot of things and were confidentwere going to be able to take it there. [33:31]

AL: Weve been talking about this for a while, this kind of plan for if you were going to do a

conference, what would you do differently, what would you do right. You are doing an

enormous conference. [33:40]

ADI: The event itself is 11-13thApril. Its at the Metro Toronto Convention Center, which is

Canadas largest conference center. Weve got two tracks that will be going that can fit

about 500 in each room. Plus, we have an Expo hall which can fit about 1,000 people and

weve got 30 or 40 booths in there. Then we have a fireside chat room which is going to bea more intimate setting and I hope that, Adam, you want to be involved with that and Kyle

from CoinTalk to be interviewing people on a much more personal nature. Weve got the

banquet dinner on the Friday. We really want this to be a community feel. Weve had some

that are more business oriented with the conferences and we want to be a good mix. Its

being put on by the community up here in Canada. Its a complete 100% volunteer basis

and any money that we do happen to make, if there is anything, will go back to the Alliance

here. Its been something thats been an easy sell for the speakers. I think weve got over

50 that are coming; people from different communities. Im really hoping that we can get

the speakers altogether to get that good community feel that I felt in Argentina, which is...

Im not sure if you concur, Andreas... but my favorite conference so far, in terms of thecommunity that was involved in that. [34:49]


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AA: Yeah, without a doubt. [34:50]

ADI: Thats really the type of feeling I want to havewith this. I had an excellent time in

Austin. It was a lot of fun; a lot of the same speakers will be in Toronto that were there. I

had a wonderful time. I think what I like about our venue is that its going to be a muchtighter venue, not in terms of space, but in terms of proximity to the talks. I think

everybody will have more chance to run into each other, which was one thing that I felt a

little bit awkward with in Austin. It was just the way that the rooms were separated and I

didnt get a chance to meet some people that I knew were there. I just couldnt find them a

lot of the time. I hope this is going to have a nice, smaller feel to it but I had an excellent

time in Austin though. [35:27]

SM: Anthony, I saw you once which I was kind of surprised at but I know we were both

there. (Laughter) [35:33]

ADI: I say to Andreas, Andreas, I think I saw you once right at the beginning of your first talk

and then that was it. [35:38]

AA: I was actually looking for you. I wanted to talk a bit more about things and it was

impossible. It was spread out but also very busy. At the same time, I think it was a great

conference. I really enjoyed it. It was up there with Argentina as one of my favorite

conferences of the last twelve months. I can tell you, Im really looking forward to Toronto.

[35:57]

AL: Bitcoins big but its not that big yet. *35:59+

ADI: Yeah and Im hoping that we can deliver on the... weve got Inside Bitcoins, is literally I

think two days before our event but I think weve got a great cast of speakers and I would

encourage you guys to come a day early and we can spend some time together, just in a

more intimate setting than, I think, weve ever been able to do. Im really, really excited

about it. [36:17]

SM: Im coming early and staying late. (Laughter) *36:19+

AL: Yeah, same here. [36:21]

ADI: Alright. [36:21]

AL: Anthony, one of the things that we had talked about last time that I was curious if it

managed to happen... you were talking about doing either a reduced cost... like part of the

conference where new users could come in. Did that ever manage to materialize? [36:35]

ADI: Yeah, were actually doing that. Weve got a free aspect. Everything that we do with

the Alliance has a free aspect to it, whether it be our membership, whether it be a

conference that we put on. On both days, weve had to add a second day just because ofthe amount of people that were coming. Weve had, I think, 300-400 people register for the


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free sessions, which is in the morning on the Saturday and now on the Sunday, where you

can come and learn about Bitcoin. I think its something similar to what you did, Stephanie,

in Austin. In fact, I want to talk to you about, perhaps, doing the same thing up in Toronto.

[37:01]

SM: Im game for it. *37:02+

ADI: Awesome. Its going to be about getting your first wallet; having experts that can

answer questions and then, theyll be able to go through the Expo hall. Yeah, we are doing

that free session. Weve got different levels of tickets for the events. I think our base price

for the tickets is $200, which gives you access to the two main speaking rooms and the Expo

hall, for the Saturday and Sunday. Then, we have the dinner, which I think is $275, so $75

on top of the initial price. Then, theres the VIP package, which is access to the VIP events,

including the fireside chat area and the speakers banquet dinner on the Friday night.

[37:36]

SM: Is there going to be anything to showcase all the great community spaces, like Bitcoin

Decentral? Is there going to be a tour or anything, or after parties there to show off whats

been going on locally? [37:48]

ADI: Yeah, definitely. Theres also going to be a Hackerthon. Were going to be running

that out of Bitcoin Decentral. Its about a ten minute walk between Bitcoin Decentral and

the Conference Center, so everything is nice and tight there. Well also be doing... there will

be some sponsored event parties on the Saturday night. On the Friday, with the dinner,

well probably be doing something in the afternoon at Bitcoin Decentral, so thats why Id

like you guys to get there early as well be doing cocktails and stuff and then walk over tothe Conference Center. On Sunday, well be doing... (??) artshow thats going on during the

event, where artwork will be created during the talks when theyre going on and then well

be having an auction on the last day. [38:26]

AL: Awesome. [38:26]

ADI: Something similar to what they had with the auction in Argentina. Any artwork thats

left over, well hang around Bitcoin Decentral and people coming to the meetups will have a

chance to buy. It will all be Bitcoin-themed work. Its about doing these little different

things and I hope that were going to accomplish that. *38:42+

AA: I really like what were seeing right now, which is conferences started up by the

community, focused on the community needs and focused on building stronger community

by getting people to network, rather than focused on raising money or discussing the return

on investment based on capital allocation by venture capital firms unless the regulators step

in... Oh my god, Im already falling asleep just talking about it. (Laughter) These

conferences are so much more fun and so much more interesting. You get to talk about the

cool technology, you get to meet the programers, you get to meet the people who are

building new and exciting innovation and, if youre lucky, you dont get to meet any of the

investor class, so its really great. *39:28+


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ADI: Its about balance, Andreas. Youve got to have both in these things and, for me, the

more the community part of this, its the better. I think thats what were going to be

attracting. [39:38]

AA: We didnt have balance in some of the recent conferences and I found that very, very

boring. Im not worried because if you have a vibrant community event, the investor classwill show up, if nothing else, just to mooch off the innovation. You cant have an event,

where only the investor class shows up and the community stays at home. Thats a terrible

event to have, so Im really glad that were seeing the spirit of the community being shown

in these events and getting a much more vibrant event as a result. [40:12]

ADI: Its been my goal since day one to do that and thats one of the reasons why I even

travel to global conferences just to really see how we can do things and make a spectacular

event for the community. [40:22]

SM: All the ones Ive been to, so far, have had good things about them and worse thingsabout them, and sometimes the balance tips more toward the good and sometimes more

towards the worse, but you can learn from of them and make a better event. [40:34]

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16/24

AL: Anthony, recently the Bitcoin Foundation has been in the news and the news hasnt

been so great. Its kind of been interesting because its not really the Foundation so much

as some of the core members of the Foundation who have been finding themselves in hot

water. Your earliest project was, and continues to be, the Bitcoin Alliance of Canada. Weve

talked about some of the problems with the Foundation before. Im curious do you have

any thoughts or comments on whats going on there now? *42:49+

ADI: I take it as when you are involved in an organization like that is that its representing

something that is disruptive technology. At any time, someone thats involved in that is

having issues, its definitely not a good thing for Bitcoin. I sometimes dont want my phone

to ring because it tends to be the press calling and telling me something I hadnt known yet

and they want to take half my day now to start talking about that. Weve got to move

forward from that and I think theres great people coming into the Foundation. Im always

eager to work with them and I think theyve just announced in Canada that theyve got their

interim board of directors. I think theyre working closely with the Montreal embassy. I

hope to have more discussions with them. There are people that are doing an amazing jobwith the Foundation and well get some more people in there and I think its going to be just

fine. [43:46]

AL: You think that over the long term the Bitcoin Foundation, once they restaff up and

recover, is going to be a relevant organization moving forward? [43:54]

ADI: I do. I dont think theyre going to disappear and I think theyve probably made some

moves recently because of whats happened and that is going to strengthen what theyre

trying to do. I hope they succeed. I mean, the better that they can do, the better were all

going to do. Im a member of the Foundation and I want them to succeed. I want to seemore good press coming out. This will, hopefully, push them more to get where they want

it to be. [44:18]

AL: Where they want to be is an interesting question. One of the points of contention

about the Bitcoin Foundation has been what kind of an organization are they, because I also

am a member but that hasnt really mattered too much about being able to understand

what the Bitcoin Foundation really is. There isnt much more clarity when youre a member

than when youre not. Specifically, the Bitcoin Foundation could be a trade organization,

where they represent industry and then theyre only representing the industry members

who are choosing to be members. Thats a pretty standard type of organization. Thereskind of this broad perception in the community thats been around just forever... I dont

know if anybody has even encouraged it... that the Bitcoin Foundation represents the

Bitcoin community. The Bitcoin Foundation has never really come out and explicitly said...

their website doesnt say We are not the voice of the Bitcoin community. It doesnt say

that so, Im asking what do you think the Bitcoin Foundation wants to be? Also, what do

you consider the Bitcoin Alliance of Canada, relative to those two options? [45:14]

ADI: I think from day one, the Foundation has wanted to represent Bitcoin. I think that was

their goal that they were accepting memberships from around the world. To me, that is

that they wanted to represent Bitcoin and they wanted to do it internationally. I think thatsfine but I think they have made some mistakes initially that has led to an imbalance and


17/24

people that felt that they werent included in a lot of things. From that, weve got great

leaders that have got together from other organizations and formed the Global Bitcoin

Alliance, which has just launched in Germany, last month. Its actually a great thing thats

come out of the affiliate plan and structure of the Foundation, is that national organizations

have come together. We want to just share resources, share the best practices, share the

models that weve done and gone through and help facilitate and speed the growth ofcommunities worldwide. I think the Foundation have wanted to represent Bitcoin from the

start. I think they made some mistakes, initially. I think it can still be fixed and I think it can

work with national organizations too and we can all just work together for the common

goal. [46:19]

AL: Now, you mentioned that we can work with national organizations but I just heard you

mention an international organization that sounded like forming out of Germany that I

actually, have not heard anything about. You said this happened last week? [46:31]

ADI: No, it actually happened last month at the event in, I think... it was in Berlin. [46:36]

AL: Ah, interesting. [46:38]

ADI: Yeah. The Global Bitcoin Alliance came about from national organization leaders, such

as myself, meeting at conferences and we want to set up a very loosely knit organization

that is just sharing resources. Theres no contract between each other. Anybody can be

part of this. You can be at meetup group. Were just going to be a resource for events; well

be a resource for best practices. Actually, at the Expo in Toronto, theres going to be some

tracks for the Global Bitcoin Alliance that will guide people how to set up communities. This

is what weve done and we dont want people to have to reinvent the wheel. We want it tobe nice and easy but we dont need to have a tie to each other with any type of contract.

We can just sayHey, we are going to be open with each other, well be transparent, well

share, well be inclusive of anybody who wants to be there. You dont need one

organization from one country. Its better to have multiple organizations. Lets get

everybody involved. Were very loose; we only basically communicate when were just

sharingHey, what happened to you guys last week, or do you find that a better process at

the meetup group. Were going to develop processes and best practices to form

communities around the world. Thats our focus. I dont see ourselves as a lobby group or

anything like that. Were just a group that is going to help form larger Bitcoin communities.

[47:53]

AL: Is it safe to describe this as an international alliance of national alliances? [47:58]

ADI: I call it a collaboration of independent groups. [48:02]

AL: OK, I like that. Can you contrast that to the model that the Bitcoin Foundation is

approaching other... because theyre trying to become an international organization too?

[48:12]

ADI: Im one of the founders of the Global Bitcoin Alliance with teams from Argentina, fromIsrael, and a bunch of other countries that came together and thought that something like


18/24

this should be started. It came about, actually, with the Foundation trying to set up these

contractual agreements with national organizations that are out there and we didnt think

that that was the best way to go about things. Through some discussions, we thought of a

better approach which we liked, which is to be very, very loose and not needing any of these

type of documents and just sharing resources and best practices. Thats where this came

about. I am involved with it. Its not going to have the... I dont think, the effect of theFoundation, in terms of scale. Were just here to know that were partnering; that we all

agree that just for the better interest of building these communities of Bitcoin. Lets work

together; lets collaborate. Yet, we need as many points of separation as possible. *49:05+

SM: Yeah, I think thats really important because what youre doing, effectively, is

decentralizing something like the Bitcoin Foundation, whereas they are a pretty centralized

organization and sometimes are even, sort of, misunderstood by the public as representing

Bitcoin. I dont think you would claim to be about that, at all. This is just a networking thing

where anybody is welcome to join and well see what comes out of it. I think thats so

important because a lot of the best projects and opportunities come out of thosenetworking opportunities. Kudos to you for that. [49:42]

ADI: Also, I want to make sure were clear too. The Foundation, if it wasnt for the

Foundation, I would not have been, probably, building the communities that Im doing. Ive

learned from what theyve done and they were first to market. Of course,maybe they

made some mistakes and thats fine but theyve done a great service to me and Ive learned

to be more open with the models that were doing. I really have a lot of respect for the

people that are working there right now. I do communicate with many of them now. I think

theyve learned as well and through communications and the outreach to these different

national organizations and said, perhaps you guys are going about these affiliate programsisnt right, or it could be done a little bit differently. I think theyve learned from that and

theyre willing to adapt, as well. Ive seen changes. Im really happy that they exist. I really

am. I think they have done a lot of great things for the community. I think that they helped

me to get where I want to be and I look forward to working with them in the future. I am

optimistic for the Foundation. [50:40]

AA: I see the Foundation as two distinct things. One, kind of, as a professional association,

which can coordinate some responses to public policy issues, talk to people and, without

any authority really, just act as a source of information. Then there is the leadership team

and I think on the leadership team, there are some serious, serious problems, conflicts ofinterests and some very big issues that need to be fixed. I do see, at the same time, there

are a lot of very, very talented people involved at different levels within the Foundation

doing work within various working groups; whether thats in the Foundations Education

Committee; whether thats in coordinating speakers for conferences, not Bitcoin

conferences necessarily but making sure that conferences are attended by qualified

speakers and providing a contact point for conference organizers, who dont necessarily

know how to navigate the community very well - all of those functions. Recently, I agreed

to join the Foundations working group on dealing with poverty issues through Bitcoin. They

dont have a name for the committee yet. Various names have been suggested but its

basically focused on financial inclusion, economic development, measures against poverty,dealing with issues such as remittances and micro-lending. Id like to call it the Committee


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for the Other Six Billion, which has been a passion of mine since the beginning in Bitcoin and

something Ive talked about a lot. I joined that working group as the Chairman in order to

foster some development of those concepts and see where we can apply some good

thinking among some very talented people who are doing working in that space. There will

be some announcements coming out of that. Im involved with the community now in a

couple of different ways - firstly, because Im a member, secondly, because Im part of thisspecific working group and thirdly, because I do sometimes go and speak at conferences at

the invitation of the Foundation. For example, when I went to Greece and did the Disrupt

Conference, that was at the invitation of the Bitcoin Foundation. For that purpose, I think it

serves its goals well but I draw a very bright line between the working group and the

membership and the leadership issues. Ive been asked to join the Board. Ive been

nominated for the Board and I have absolutely no interest in getting involved in that layer of

management or leadership in the Foundation, primarily because I think some of the existing

people and structure of that Board, as well as the by-laws that determine the rules by which

that Board works, are brokenvery broken. Im focused on working in the parts of the

Foundation that actually work well. Anyway, so thats my contribution to the Foundation.Ive got mixed feelings but Im trying to keep my work focused on the places where I can

have an impact and stay away from the places that I think are slightly toxic. [53:45]

ADI: I think that name is excellent thoughCommittee for the Other Six Billion; thats

perfect. [53:49]

SM: What exactly are you hoping to accomplish? Do you think that some organizations will

come out of the working group that will actually address these issues... like micro-lending

institutions? What do you see happening from this? [54:04]

AA: Well, thats still up for discussion and part of my job is to get the right people. I think

people who are committed and active in that space, to sit down and talk about these things.

Im working with some of the well known charities in the space and some of the people who

are working on issues such as remittances, and micro-lending, and things like that... things I

think will have an impact. Were trying to discuss what exactly can this working group do. I

can tell you the one thing that has become very apparent is that our focus will be on

decentralized solutions. Were not looking to find some big wealthy NGO and persuade

them to jump on board with Bitcoin. Thats a centralized approach. Were looking for

decentralized solutions and perhaps, at first, all that means is putting together some reading

materials that describe scenarios or use cases, where Bitcoin can be used and sayThis ishow you would use Bitcoin in a remittances scenario. This is how Bitcoin could help in a

micro-lending scenario. I think, at first, just informational content would be a great first

goal and then well take it from there, with the emphasis always, always on decentralized

solutions to this problem. [55:20]

AL: One of the interesting things about the Foundation though, that Ive kind of noticed, is

that it seems like a lot of their problems kind of revolve around the fact that they are kind of

centralized and that because of that, the Foundation, and specifically the leadership that

youre talking about, can be a bottleneck for actually doing any good work. I think the

reason why the Foundation... [55:37]


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AA: Oh yeah. [55:38]

AL: ...is important right now is because they have a bunch of money, right? [55:40]

AA: It was foundationally compromised from the very foundation by being centralized in a

decentralized currencythe structure, the by-laws. It is a poorly structured, hierarchicalorganization with stifling rules designed for a pre-decentralized era, which has... its almost

antithetical to the very essence of Bitcoin, the way its organized. It completely sucks. The

problem is that it still is there and we have to deal with it. Im hopingthat we can see some

changes in leadership and I hope those changes in leadership can go in and radically modify

the by-laws and make it a much more open, much more decentralized, much more member

focused, much more global organization, or simply remove a lot of its activities and allow it

to act more as an umbrella for regional organizations, in a much more decentralized fashion.

Either way, its going to need some radical changes otherwise quite simply, its going to be

pushed into irrelevance and oblivion as other, more effective, more decentralized, more

scalable, more active organizations take root and start producing outputs and producingvalue. I think youre going to start seeing that with some of the other... you know, the

Global Bitcoin Alliance and the various associations that are popping up. Those are in direct

response to a need thats not being met and to problems that exist in the existing system.

[57:08]

AL: I think that thats a really interesting point and its one that Ive been very happy to

make about MtGox a number of times, really, at any available opportunity is that this thing

that has companies fail or has... again, talking about MtGox, has companies fail and

sometimes repeatedly. In the case of the Foundation, because again, they have these kind

of core issues that were set up at the beginning, each of these projects has catalyzed its owneventual competition. Theres always an opportunity to right the ship. Theres always an

opportunity to change things but once youve spurred competition, the competition doesnt

stop just because youve fixed stuff. The situation that we have now, like Anthony was

saying, really is directly because the Foundation had these kind of obvious flaws that

became more obvious as time went on but people figured it out and started working on

solutions. Its very interesting to me. *57:59+

AA: Its the little grain of sand that starts the crystallization of the competition around it but

I love the fact that you pointed out the comparison to Gox. I would say the Foundation is

the empty Gox of professional associations in Bitcoin. (Laughter) Its problems go directlyback to a complete failure of leadership - completely closed, insular, arrogant, sheltered,

uncommunicative leadership, part of which was Carpeles himself but theres another couple

of relics left on that Board that pursue the exact same approach with their leadership. The

Foundation is the Gox of foundations. In fact, Im surprised that it didnt blow up in the

wake of the Gox scandal because there were a lot of significant conflicts within that

environment. Unfortunately, the problem is that the very people who are at the heart of

this problem have the least amount of awareness and are not about to resign and walk off

and allow the Foundation to become a more effective organization, and to revise its rules,

and to reform itself. Thats not going to happen from the inside out. Thats going to require

pressure. Im actually a big fan of getting many of the industrial members... sorry, industrymembers... (laughter) of the Foundation to start tugging at the strings because they can do


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that. They have the power to do that and to sayLook, enough is enough. Step down,

reform, fix yourselves or were just going to take our stuff elsewhere. The Foundation

without its industry members is just the individual members, and theyve ignored them for a

couple of years quite effectively, so theyd walk very happily. *59:51+

SM: I guess this brings up the age old philosophical question of working within the system,versus just going outside the system, or starting something new. [1:00:05]

AA: Both! [1:00:06]

SM: Mhmm. [1:00:07]

ADI: As many as possible. [1:00:09]

SM: I know that the Foundation has funding, right? Theyve got acertain amount of name

recognition, and so forth, so theres going to be an advantage to working with them therebut it sounds like you dont think that they are irreversibly broken, Andreas. It sounds like

you think they can be reformed and could get on a better track. Is that right? [1:00:30]

AA: I think theres a possibility and I also think that, in the meantime, they do provide a

vehicle for promoting the things I care about, like the working group for the other six billion,

just because of sheer inertia. However, Stephanie, I would say one of the things that are

interesting is, you said theyre funded. They certainly have received many funds. Where

are those funds? Who controls those funds? [1:00:57]

SM: Yeah, thats a great point. [1:00:58]

AA: When were they last audited? Are they actually solvent, or have all of those funds

disappeared into a big, black hole? Just remember who was in the leadership until recently,

who is in the leadership today and what their track record with ethics has been, and I would

suggest that I would be not surprised at all if the Foundation implodes in a giant

embezzlement problem some time down the line, or funds get stolen within quotes, or

without quotes, and something like that. I mean, its bound to happen because these things

dont happen because of technical failures, they dont happen because of bad actors, they

happen because of failures of leadership. The Foundation is the very definition of a failure

of leadership and therefore, these things will happen to them eventually. Its just a matterof time. I think thats one of the reforms we need to see. If that doesnt happen, youre

going to see a blow-up probably. [1:02:04]

SM: Youre not worried about being associated with that if a blow-up does happen?

[1:02:09]

AA: Again, Im keeping my involvement to a very, very specific thing. Im a member and Im

on a working groupan unpaid, volunteer working group thats composed of people who

are not even members of the Foundation, necessarily. It receives no funding and sends no

funding to the Foundation, so the only thing we have is the organizing name. Ive purposelykept my involvement to that, despite multiple requests to join the Foundation to become...


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to be nominated for various positions. Im not interested and part of the reason Im not

interested is because I dont trust the structure that it has today, or the leadership to be

able to deliver ethical leadership and predictable results. I fear that there will be a crisis.

Yeah, Im trying to use the Foundation as much as I can to promote the things that are

important to me and then, beyond that, Im keeping arms length. *1:03:09+

ADI: Yeah, Im in the same position. Ive been approached, as well, to be doing work with

the Foundation but Ive decided not to, I think, for many of the same reasons. Maybe being

on a committee or on a group might make more sense. I think thats something for me to

think about too, Andreas. [1:03:27]

AA: Exactly. Keep in mind, there are a lot of people within the Foundation, who work in the

Foundation, who are ethical, responsible, hard-working, principled people. The problem is

that when you work for an organization thats rotten from the top, they get chewed up.

Theyre going to get tainted by this association, even though theyre not at fault. Already

we saw that, I think probably, Matonis, who came in as a breath of fresh air a while ago, hasnow been effectively tainted by the latest scandals and people were calling for his

resignation, even though Matonis had been the answer in the past to the leadership

problems and had provided some reform and fresh approaches. Thats going to continue

happening because until you fix the real problem, its just going to start tainting everybody

else who comes into contact with it. You have to be very careful how much you get

involved. [1:04:33]

AL: OK. (Laughter) [1:04:34]

AA: By next week, Ill probably be fired from the working group. (Laughter) *1:04:38+

AL: I was going to say, itdbe like*** Andreas, do you want to just go ahead and insult

Peters mother or something? (Laughter) *1:04:43+

ADI: Yeah, wow! I was really trying to choose my words carefully. [1:04:49]

SM: Thats what people like about it though. *1:04:53+

AA: Youve heard this show before, right? *1:04:55+

ADI: I have, I have. [1:04:57]

AL: Its true. Thats actually the best thing to do, Andreas, in this situation because you are

affiliating yourself. Stephanie is totally right and you, again I think, articulating this stuff at

the beginning, its not going to endear you to them, but theyre not inviting you because you

have endeared yourself to them. They are inviting you because you have legitimacy that

they desperately need, just as Matonis had a ton of legitimacy and had that basically all

leached away from him just through this association. No, I think that again, I also was kind

of concerned. [1:05:23]

AA: I still respect John... and I still respect John and I think... [1:05:26]


23/24

AL: I still respect John too... exactly. [1:05:28]

AA: ...hes done a great job but unfortunately, yeah, he got splashed by the effluent.

[1:05:34]

AL: I think that that is very appropriate for you to be very clear about what type of role

youre taking there because, at this point, it has become kind of a toxic organization (I say,

as a member of that organization). [1:05:43]

AA: Lets make it clear. Its not just about individuals. The problem with a foundation is not

just about individuals, although there are some very problematic situations with some of

the individuals. The problem is the structure itself, the rules and by-laws of the Foundation

are broken and they will create concentrations of power and hierarchical stress points in the

Foundation that both attract and reward bad behavior, and then ossify that bad behavior so

that it cant be excised by the members. The members in the Foundation have no power.The founding members of the Foundation have more power than the Board, and as a result,

it creates tremendously unbalanced, non-responsive, non-representative organization that

is far too concentrated and hierarchical. Its as if you try and you say Here is a

decentralized currency. Whats the worst, most unresponsive, most hierarchical, most

concentrated power structure we could put on top of it. Oh great. Lets do that. *1:06:47+

AL: OK. Why dont we do it better? Again, I know everybody has a billion projects but the

Foundation, last time I checked, had 1,200 or 1,300 members. We have orders of

magnitude beyond that, and 80% of our listeners are based on the US. If there is no US

competition... again, it just seems like youre throwing time behind this anyways. I did, sixmonths ago, and then I kind of felt like my efforts with the Foundation werent really... it

just didnt feel like anything was being accomplished. Anyways, clearly this is way off topic

for the show but it just seems like this is such an obvious explosion thats coming, such an

obvious problem that appears to be unavoidable, no matter what we do because its just

built into the rules that this thing is going to blow up. [1:07:31]

AA: Yeah, were going to get Goxd by the Foundation eventually, if we dont fix it first and

thats going to be unfortunate for Bitcoin. Im really hopeful that other organizations that

have started evolving will put pressure on this but honestly, I think the only recourse, at the

moment, in this particular organizationread the by-laws and the way to address issues inan organization is to learn the rules better than the people who, supposedly, run by the

rules inside the organization and then, beat them over the head with the by-laws. I think

thats a very effective trick. Read the by-laws. Effectively, at this point, the only group that

has any power are the industry members. [1:08:14]

AL: Well, with that in mind, I think that were going to wrap this episode of Lets Talk

Bitcoin. Thanks to Andreas, Stephanie and Anthony for being on today, guys. This was a lot

of fun and a very interesting, meandering conversation that we had here. [1:08:25]

ADI: I really enjoyed that, thanks a lot. [1:08:27]


24/24

SM: Yeah, I think this is important to talk about. I dont disagree that its off topic. I think

its very important. *1:08:32]

AL: I didnt say it was off topic, just meandering. (Laughter) *1:08:35+

AA: Alright. Im going to go take off my snowboots and brush my teeth because my mouthtastes of snowboot right now. [1:08:44]

ADI: See you guys in three weeks or sooner if anybody is going to CoinSummit? [1:08:47]

AA: Yes, Ill see you in CoinSummit. *1:08:49+

SM: Awesome. [1:08:49]

AL: Yeah, Ill see you in CoinSummit too. *1:08:50+

__________________________________________

CREDITS:

Thanks for listening to Episode 95 of Lets Talk Bitcoin.

Content for todays episode was produced and edited by Adam B. Levine and DeniseLevine, and featured Andreas M. Antonopoulos, Stephanie Murphy, Anthony Di Iorioand Adam B. Levine.

Music for this episode was provided by Jared Rubens and General FuzzAny questions or comments? [email protected]

Have a good one! [1:09:16]
mailto:[email protected]:[email protected]:[email protected]:[email protected]

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Let's Talk Bitcoin - Ep 95