LET’S TALK BITCOINEpisode 92 – Playing Catchup

Participants:

Adam B. Levine (ABL) – HostStephanie Murphy (SM) – Co-hostJonathan Mohan (JM) – LTB Correspondent Josh Mohland (JM) – Creator of Dogecoin tipbot on RedditDavid A. Johnston (DJ) – Co-founder of BitAngels Network and Board Member in Mastercoin FoundationMarco Peereboom (MP) – Founder of Coinvoice and ConformalSheldon Wisefield (SW) – RoboCoin owner with CoinVault ATM in Houston, Texas

Today is March 15th 2014 and this is Episode 92.

This program is intended for informational and educational purposes only. Cryptocurrency is a new field of study. Consult your local futurist, lawyer, regional manager, investment advisor and pathologist before making any investment decisions for yourself. Content on the LTB network may also cause your brain to hurt... what... with the ideas and all.

ABL: Welcome to Let’s Talk Bitcoin, a twice weekly show about the ideas, people and projects building the digital economy and the future of money. Thanks to everyone getting involved over at LTBcoin.com. If you’d like to learn more about LTBcoin, and be part of the initial community distribution, please check out LTBcoin.com. [0.45]

My name is Adam B. Levine and today, we’re playing a bit of catchup.

The last time I spoke with David Johnston, co-founder of the BitAngels Network, he told me that he has 28 projects he’s investing in so far, surrounding the distributed applications sector. LTB correspondent, Jonathan Mohan caught up with David, not so long ago, at the Miami conference to talk the Master protocol and our future of distributed apps

Then, Stephanie Murphy submits her first interview from the Texas conference which took place last week, outside the city of Austin. ‘It’s Marco Peereboom – it’s a Dutch name so I’m not even going to attempt to tell you people what it is... (laughter)’. They talk Coinvoice and Conformal, Zero Trust security and from-scratch open source Bitcoin implementation. Not to be missed

Finally, Jonathan Mohan catches up with Sheldon Wisefield, an early RoboCoin owner with Coinvault ATMs. They get inside the head of the early ATM operators and the thought behind these early run machines

First, you asked for it... here it is. Dogecoin – the very currency phenomenon that adds the fire of memes to the house that Bitcoin built. Today on Let’s Talk Bitcoin, we’re joined by Josh Mohland, the creator of the Dogecoin Reddit tipbot and a Doge aficionado who agreed to lend us his perspective on the topic. [1:58]

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Adam B. Levine interview with Josh Mohland

JM: I’m doing pretty good. How about yourself? [2:00]

ABL: I’m doing pretty good. I’d like to play a clip for you to start things off. I was trying to figure out how to pronounce Doge, this morning and I was like – Doggy because I’d heard everybody say Doggy, so I bothered looking it up and I discovered that the origin of the Dogecoin name, actually, is from a web cartoon that I was very familiar with, at high school in 2002/03, called HomeStarRunner. Let me play this clip for you: [2:29]

StongBad: Ah, I’m almost done with this third quarter projection analysis spreadsheet and still no sign of... HomeStar: What is up my dog?StongBad: *groans* I’m not your dog.HomeStar: [inaudible] you quack me up... quack me up. That’s why you’re my doge.StongBad: You’re DOGE?! What are you talking about? I’m Strong Bad. [2:55]

ABL: OK that is, literally, the genesis of the name of what eventually became Dogecoin. Taking a step back from this for a second, I’m usually a Bitcoin guy and I’m interested in altcoins to do innovative things and Dogecoin does make a few changes but I’m curious, tell me from your perspective what got you into Dogecoin and what’s attractive about it? [3:19]

JM: I was originally into Litecoin. I was mining Litecoin for a while before I even found out about Dogecoin. It was kind of around the same time where it seemed like every other day or so, another altcoin was coming out and it just got to be so absurd that I was on the Bitcoin Talk Forum one day and I saw Dogecoin and I’m like – Oh, this is great. I’ve got to check this out. I started mining and got a couple of million because it was the first day, just as a joke. I thought it was funny and I started giving it to my friends. I went right back into mining Litecoin, after I got a few million, and then it just took off. [3:54]

ABL: There’s a disconnect in what you said there that I want to address. You said that it was ridiculous, there were too many coins coming out and then Dogecoin comes out and you jumped on that. [4:05]

JM: Yeah. [4:06]

ABL: Where is the logic in that? What was it about Dogecoin that made it attractive? [4:12]

JM: I thought it was the most absurd thing I had ever heard of. (Laughter) [4:15]

ABL: Literally... this is the same line of thinking where one goes to a really bad, old movie at the theaters because you’ve never seen a movie that bad in the theatres? Is that it? [4:25]

JM: Yeah, pretty much. I thought it was... seeing all these different coins come out and then going on Cryptsy and saying – Oh my goodness, there are like 50 coins that are trading and then seeing Dogecoin just pop up on the Bitcoin Talk Forums, it just seemed too perfect. I had to just get a few. (Laughter) [4:40]

ABL: From your perspective, it was better for it to be bad than for it to be boring? [4:43]

JM: Yeah, precisely. (Laughter) [4:45]

ABL: Interesting. OK. You mined it for a little while and then you went back to Litecoin and what happened? How did you wind up creating a tipbot around it? [4:55]

JM: I was on Reddit one night and I noticed that over in the Dogecoin sub-Reddit, they were asking someone to make a tipbot so I thought – Hey, why not. I’ll give it a shot. Less than six hours later, we had the tipbot up and running, I gave away a few tips, had to type in all the captions by hand and then, I woke up the next morning and it had blown up. It was on the front page of Reddit. (Laughter) [5:16]

ABL: What about this? The two things that you’ve described for me, so far, have been something that you’ve done because it was easy, right? I mean, if you spent six hours creating the Reddit tipbot, that’s clearly not a trivial task but compared to other types of projects, that’s a relatively short term thing. In the mining too, you mined for how many days... and got a couple of million? [5:35]

JM: I think I mined for about a day. [5:37]

ABL: OK. [5:37]

JM: On the first day, yeah. [5:38]

ABL: That’s something that I’ve noticed before. You talk to people who create new coins and you talk to people who are really interested in new coins and a lot of times, like you, they’re miners who have experienced this process of using your computational power to turn it into crypto-money and are interested in doing more of that, once the opportunity dries up in whatever they’re working on. Taking a step back from that perspective, what is Dogecoin to you if it can’t be easily mined and if you can’t create a service for it that takes a couple of hours? [6:06]

JM: I think, in those early days, it was very easy. The challenge now is the bot has gotten so big, maintaining it is almost a full time job. When we first started, I was pretty surprised. I didn’t think we’d reach 1,000 users. We’re up to about just over 36,000 users that are using the bot right now on Reddit. [6:23]

ABL: Wow! These people are actually using the bot? They’ve actually sent and received something? [6:27]

JM: Yeah, yeah. We send about the equivalent of maybe 2.5 bitcoins a day, on Reddit, in just tips alone. [6:35]

ABL: Wow! You might not know this – do you know how that stacks up against the Bitcoin tipbot? [6:41]

JM: I believe, I think we’re actually a little bit more popular right now. It’s hard to tell because they don’t release... [6:48]

ABL: Yeah, I was going to say, that sounds like pretty high numbers, relatively speaking. [6:49]

JM: Yeah, they don’t release too many metrics. I think the last report that I saw that Bitcointip had put out, was in October 2013. At that point, I think... I want to say they’re up into $60,000 US value number of tips with Bitcoin, on Reddit. [7:06]

ABL: What do you ascribe to the fact that so much tipping is going on and that, frankly, you have 36,000 people who have actually used the tipbot for Doge? Do you think it’s that it’s low value? [7:16]

JM: It’s hard to say. I think there are just so many factors involved on why it’s so popular. It’s weird because, to be honest, Altcointip had been around for almost, I’d say, a year before I even came on the scene with this one. My bot was, basically, just a fork out of Altcointip with one specific currency in mind, which was Dogecoin. Bitcointip had been around for... they were the big player before, so it’s weird seeing Dogecoin taking off when there were perfectly valid ways of tipping others on Reddit before this. [7:49]

ABL: I’ve been calling Dogecoin, like a meme coin. I think it’s the first of a new class of cryptocurrency that focuses on more of like an inclusive community built around an inside joke as their primary means of marketing, above technical innovations or any sort of initial redemption. You’re going to see some coins come about in the near future that allow you to redeem them for certain things. Dogecoin doesn’t really offer any of those things and yet, it has become something of a phenomenon within the cryptocurrency space. Do you think that it’s about the meme? What do you think it is about? [8:21]

JM: My favorite description of Dogecoin is it’s the first Bueller [PR note: Ferris Bueller – Ben Stein, “... Bueller? … Bueller? … Bueller?”] of cryptocurrencies. It’s kind of ridiculous, it’s very easy, it’s very approachable and the meme just kind of adds that layer of awesomeness to it. As far as from a technical standpoint goes, yeah you’re right, it doesn’t really share anything truly innovative, other than the fact that it seems to have just blown up over night. [8:41]

ABL: Of course, the other side of this is, like you said, it has blown up and one of the ways that that has manifested is a sub-Reddit that I’ve been on a number of times and posted on a couple of times and that’s actually how you and I connected for this interview. It’s a very, very active sub-Reddit. It’s probably more active than the Bitcoin sub-Reddit is at times. Again, I’m just trying to... do you have any insight as to what’s going on there that is different than other altcoins out there? If it’s not the meme... you’re saying that the meme might add something to it... do you have any idea what it is? Did this just happen to be a

perfect storm and it blew up and then, just like Bitcoin, once you get to a certain size, you get attention just because you’re a certain size? [9:23]

JM: I think that has a lot to do with it is because we have so many subscribers and it just keeps growing. You have that snowball effect. Originally, I noticed that a lot of the folks that were first coming into the sub-Reddit, they were new to cryptocurrencies. They had never done anything like this before, so having to explain change addresses, what a blockchain is, those type of things – we were all helping out, basically, from day one. We’ve noticed a lot of the growth comes from people who have never been exposed to crypto before but happened to get a tip on Reddit and said – Hey, this is actually worth something? [9:54]

ABL: Part of the Dogecoin community ethos then is tipping people on Reddit with Dogecoin that are not inside of the cryptocurrency sphere, right? I mean, is that what you’re saying? This is coming from people who are actually sending tips to other users on Reddit in other places, besides the Doge forum and [pull back these?]. I’ve seen people attempt to do this with Bitcoin before but I wasn’t sure how effective it was. You’re saying that it’s been very effective with Doge? [10:18]

JM: It’s been extremely effective. I think in the first week of the bot being up, I actually got banned from so many sub-Reddits. (Laughter) There are a few of the larger sub-Reddits that the bots are completely banned from but, for the most part, some of them have turned around because they see people getting tips in their sub-Reddits and actually enjoying it. It’s a really exciting time. Dogecoins kind of buck the trend of... seeing its value rise was just absurd. I remember waking up one morning and I looked at my phone and there were like... my friend was like – Dude, it just hit 45 satoshis. You’re kidding me. This meme coin that was just absurd, just hit 45 satoshis. I was shocked when it hit that. I think now it’s up to 200 and something satoshis over on Cryptsy. Seeing the rise of this coin, it’s very fun. (Laughter) I think we’re having just a blast over in our Dogecoin and now that we’re just getting to this size, it’s pretty awesome to see the possibilities of this going forward. [11:18]

ABL: What do you think the possibilities are for going forward? Where do you see Dogecoin in three months? Where do you see it in a year? [11:24]

JM: Well hopefully, it continues to grow and the community continues to be so charitable. The fact that we sponsored the Jamaican bobsled team was probably the most absurd and awesome thing that I’ve seen us do so far. [11:36]

ABL: Let’s talk about that for a second. You guys did... you sponsored the Jamaican bobsled team and that wasn’t an effort that was led by anyone in any sort of official position, it was just something that emerged organically. Did you guys fundraise for that? How did that come into being? [11:50]

JM: One user on the sub-Reddit had noticed that the Jamaican bobsled team needed money and posted something. Of course, it got up to the front page on our Dogecoin. Everyone said – Hey, this is an absurd idea. Let’s take the cool running story of the Jamaicans going to the Olympics and attach it to a coin that started as a joke and suddenly has value. It just ballooned after that. I think they raised the $30,000 they needed or the 20 some odd million Dogecoin in about 24 hours. [12:16]

ABL: Wow! The hope going forward then is that this isn’t just a new currency thing because ultimately Doge is what... a little over two months old? [12:25]

JM: Yeah, just about. [12:26]

ABL: That is another point though, is like a lot of these coins, we see that. Doge blew up early but there are a lot of coins that really focus on the community and focus on – Oh, it’s such a great place to be and they give out lots of coins and everyone is very generous at the beginning because you’re still trying to vest stakeholders. Is there a certain point at which you think that this dynamic just doesn’t really grow anymore or do you think that the specific fundamentals of Doge lend it to a longer tail for this? [12:55]

JM: You know, I think it’s really too early to tell, especially with the first block halving is going to happen roughly around Friday of this week. I think after we see the first halving take effect, we’re going to see what happens to the network, see what happens to the hash rate, see if it goes down or if it goes up, see what happens to the price. For a coin that’s two months old that has this amount of growth, it’s too early to tell really. [13:23]

ABL: If somebody wants to learn more about you, find out about your projects, are there any URLs or domains you’d like to give out? [13:28]

JM: Yeah, you can go to Dogetipbot.com or check us out over on Reddit. [13:32]

ABL: Give me your top three cryptocurrencies right now. (Laughter) [13:36]

JM: Off the top of my head, it’s the big three – Bitcoin, Litecoin and Dogecoin. [13:41]

ABL: Bitcoin, Litecoin and Dogecoin. In that order? [13:44]

JM: Ahh, put Dogecoin up on top. I’m a big fan of it. (Laughter) [13:47]

ABL: It’s Dogecoin then Bitcoin and then Litecoin at number three? [13:51]

JM: Yeah, yeah. Each coin has its merits, each coin has its strengths and I’m a big fan of all three communities. [13:57]

ABL: That’s awesome Josh. [13:59]

JM: Great. [13:59]

ABL: Thank you very much for your time on this. [14:00]

JM: Thanks for having me on. [14:03]

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ADVERT:

This is Chris Joseph bringing you news on Nxt, the first true second generation cryptocurrency for March 15th 2014. A cryptographic audit of Nxt has been completed by Bitcoin Talk Forum’s Jesse James. His review of the curve25519 and crypto classes in the Java code reveals no red flags in Nxt’s implementation, aside from a sign in bug that the developers already knew about and are working around. In other news, the newest version of Nxt 0.8.9, supports clientside transaction signing which means that Nxt clients can now create transactions without transmitting an account’s private key over the network. For more general information on Nxt, head to NxtCrypto.org or MyNxt.org and stay tuned for more news on Nxt on the next Let’s Talk Bitcoin broadcast. [15:10]

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Jonathan Mohan interview with David A. Johnston

JM: I’m here with David A. Johnston, the co-founder of the BitAngels Network and one of the principals in the investment that happened on Mastercoin. [15:23]

DJ: Yep. Mastercoin came through the BitAngels process back in August and I ended up as the due diligence lead and so I kind of nerded out on the protocol, read the White paper half a dozen times, talked a lot with J. R. Willett about four conversations to wrap my head around how it all worked and ended up being the largest deal funded by the BitAngels in 2013, what is now a $5m worth of Bitcoin was put into the exodus address during August. [15:52]

JM: I may be Guyanese but you drank the Kool-Aid – that’s a history joke. (Laughter) I was speaking to you earlier and I heard about Mastercoin and then when I heard that you were getting involved that and the BitAngels Network was getting involved, it kind of peeked my interest. Hey, this is actually something that I should look into. It’s kind of confusing. Mastercoin is Bitcoin but it isn’t Bitcoin? It is an altcoin but it isn’t an altcoin? Can you kind of explain what the heck is going on there because it’s a little confusing. [16:18]

DJ: The easiest way to think about the Master protocol and the tokens, the Mastercoins, are it’s a standard way to record extra information in the blockchain. In fact, Master is actually an acronym for Metadata Archival Standard Transaction Embedding Records. It’s literally what it does – it embeds these records in the blockchain using transactions. It’s a standard for how do you read that metadata. Is that a contract? Is that a stock? Is that a bond? Is that a token in a distributed application? It’s just a standard by which all the clients that use this protocol specification will interpret that extra data. Specifically, this is very important for the Bitcoin community, is the core developers, as part of 0.9 are enabling a new type of provably-prunable outputs. This is really critical because it gives the Master protocol a way to encode this information without causing any bloat in the blockchain because these are prunable records, the nodes can choose to prune them out and they don’t end up with millions of additional transactions or metadata attached to those transactions that they don’t have to keep track of. That’s a really important technical improvement that has made Mastercoin have a good way to operate the Master protocol and a good way to be a good steward of partnering with Bitcoin and not creating an extra burden. They’ll, I’m sure, evolve a standard by which miners and others that are operating nodes will be incentivized to run, what Gavin is calling these ‘archive nodes’ and they’ll essentially get a separate revenue stream for operating and

storing this extra data in the metadata level. Really, that’s the basic is we want to do these advanced features. These are things that would be difficult to include in the core Bitcoin protocol because they create new risks and new attack vectors and so it’s better to experiment with them as a separate protocol that isn’t included but is built on top of Bitcoin. That’s really the core proposal. If you read the White paper written by J. R. Willett, he describes it as TCP/IP is the Bitcoin layer and we’re trying to do advanced things on top with HTTP which is the Master protocol. [18:42]

JM: Pretty much what that example means is with TCP/IP, you could type in a string of numbers and get a server or you could type in Google.com and have it render Google. Obviously, one is easier for humans to do than the other and HTTP offered a lot of other easier things like click on a link and having it magically go there. That made the internet human-friendly. [19:01]

DJ: Exactly. [19:02]

JM: What you’re saying is, right now, you’re going to make Bitcoin human-friendly? [19:04]

DJ: We’re going to try to make Bitcoin and more advanced features human-friendly. [19:08]

JM: Tell me about... we were actually talking about something called ‘Contracts for Difference’. Can you explain how all those things fit together and how you’re interested in that three letter acronym? [19:18]

DJ: This is an interest I’ve had for about a year in the Bitcoin space is these more advanced features that we can built on top of the Bitcoin blockchain. One of those things that really makes a big difference is having a protocol where you can incentivize the development of these features. I watched other projects that had been working in this space. When Mastercoin came along, it really offered a platform where we could build, not only Contracts for Difference, but distributed exchange, user currencies, smart property. To sum it up, Contracts for Difference is one of the more advanced features of the Master protocol that’s being implemented right now. The first features that are required to be underlining that is the distributed exchange and the ability to issue tokens and then be able for it to do bets on top of the blockchain. Once you have those functions, you can use that to do Contracts for Difference. For the audience that have never heard of Contracts for Difference, the basic idea is, I’m taking a bet on one side and somebody else is taking a bet on another side. Let’s say we’re betting on the price of soy beans. The price of soy beans is going to be more than $50 a bushel and the other guy says it will be less than $50 a bushel. We both put some money, as part of this bet, into a pool and the data source tells us what the price of soy beans is at the end of our bet. It’s controlled by, essentially the blockchain by that data source, how much money goes to me if I was right or how much money goes to him if he was right. In this way, you can essentially get financial exposure to, literally, any asset which you have a reliable data source for. That’s the core of the CFDs. Today it’s used in the market for somebody who wants to bet that soy beans are going to go up but they don’t want to buy the physical commodity, you can use this type of setup. [21:09]

JM: If I were to do a Mastercoin contract and trust the API for the Chicago Mercantile Exchange as a pretty good decider for what the price of a commodity was, we could do this altcoin or Bitcoinesque transaction where I take one side, you take the other side and then a

month, or three months from now, I would be able to lock in the value of that currency... that commodity, excuse me, in that contract and then trade it as if it were that commodity? [21:34]

DJ: Exactly. That’s a good way to describe it. The nice thing is, there is no central party. [21:38]

JM: Right. [21:39]

DJ: Right. You don’t have to have a central party managing this process or holding the funds. It’s essentially held in escrow by the blockchain and is unlocked by one condition or another and paid out on one condition or another, all of which can be done programmatically. The only thing you have to trust is the data source and so in the protocol, what we’re looking for is ways to 1) both parties have to agree on the data source, obviously before the CFD is created and we’re also considering ways where there would be back up data sources, if for some reason that data source failed, was unavailable, corrupted or something like that. That will sort of be the next step is how do you manage the risk of the data source but at least, when it comes to the escrow, the terms of the CFD and knowing that the funds are sitting there... I mean, you know – you can just audit the blockchain, you can just look at the address and you know the funds are sitting there for that particular contract. [22:29]

JM: I don’t understand what value is there is being able to send a barrel of oil, being able to send an ounce of silver and know that it’s going to... I don’t get why that has value. Can you explain just what it’s used in the real world and why, bringing this into the cryptocurrency space, is going to be of additional value to us? [22:45]

DJ: The future is uncertain, right? Nobody can predict it and so this is often used as a way for people to hedge risk. If I wanted to hedge my risk that, let’s say, I’m producing a product and one of my main costs is... (let’s go back to our soy bean example) If the price of soy bean shoots through the roof, I’m going to be in trouble because, alright now my product has become much more expensive and so CFD is one of many ways in which you can hedge this type of risk and say – OK, I’m going to take a contract of the price. I’m betting that it’s going to go up and somebody else will bet that it’s going to go down. I’m safe from that risk, to a certain extent, depending on the length of the contract. The classic example is Southwest. Southwest did a brilliant thing back in 2002/03 – they bought a lot of oil options, they bought a lot of oil contracts, basically, hedging their risk on the price of gas and diesel for their planes, going up. While everybody else was struggling with these new high oil prices back in 2003/04/05, when it was starting to go from $20 a barrel, to $80 a barrel, to $100 a barrel, airlines were completely decimated, as far as their profit margin, except Southwest. Southwest had hedged their commodity risk when it came to their fuel. They had done it for enough years in the future that they had this competitive advantage over all the other airlines for years in a row. That’s a really good real world example of what a company did to hedge a risk. I don’t know if they used a CFD or one of the other options contracts but it’s the same sort of principle. [24:23]

JM: In this space, that would mean that a company would use this in order to hedge and then have to use BitPay, or something to convert out to be able to then buy that commodity? How would this work? Could you give me an example of how a company could use a Contract for Difference using the Mastercoin program and actually like... just from beginning to end? [24:43]

DJ: Let’s just use the Southwest example. Let’s say Southwest had used this system and they hedge and took the contract and they had the additional money that is the difference between the price that went up and what the price originally was. That’s the bet they took as part of the CFD and so if they were to use this system, it would be the same thing. They end up with this pool of Mastercoins or this pool of Bitcoins, whatever they’ve used for the CFD and then they can turn that back into dollars or euros or yen if they need to but, of course, as the Bitcoin economy continues to grow, they’ll probably have a place you can buy oil or whatever, directly with Bitcoin. Because these currencies are tradable and fungible, then it doesn’t really matter what currency you use to do this type of activity. You’re just going to trade it back into whatever you need to buy that asset. [25:32]

JM: When we’re talking about Contracts for Difference, the other side of it is this idea of – Oh, if only we could fix the volatility problem with Bitcoin. When we say Contracts for Difference for commodities, we really could just apply that to anything that has a spot price that we can look at. Really, what you’re talking about is the ability to peg Bitcoin to the dollar and then be able to trade dollars over the Bitcoin network, in effect. [25:57]

DJ: That’s definitely one of the most controversial aspects of the Mastercoin protocol, especially when the protocol was first proposed by J. R., he had written it in a way where it was using escrow backing, instead of Contract for Difference, in order to accomplish this. We’ll see how that flushes out. I definitely don’t want to make any claims because there are a lot more complexity to when you’re dealing with that particular use case. [26:25]

JM: Let alone the legal implications. [26:26]

DJ: Let alone the legal implications and maybe this is a good point to stop and say we encourage everybody... this is just an open source software toolkit and you really have to know your jurisdiction and you have to know your local laws and you have to implement this open source in a way that makes sense. Just like with the Bitcoin protocol, it’s an open source resource and you have to implement it differently in China, than you do as an exchange in the US, or as you do in Tokyo. Know your jurisdiction; know your local laws. We really encourage people to understand that when they’re building things that implement this. The Foundation is just focused on creating the open source standard and we want it to be a resource the community can use to build all sorts of projects. [27:09]

JM: Maybe I’m being a little dense here but what’s the difference between doing a Contract for Difference on Mastercoin versus a Contract for Difference on the Chicago Mercantile Exchange? Is it the fees? Is it the ease? What is it that’s the differentiating feature because I just don’t even understand how I’d do a Contract for Difference? I don’t understand how doing it on Mastercoin is better. [27:28]

DJ: Sure, great questions. Similar to the Bitcoin payment network, you’ve got a fraction of the fees that you would pay in a traditional... Chicago Mercantile Exchange. You’ve got a completely decentralized system so you can audit anything that’s going on and so you’ve complete transparency. You have no central party that you’re trusting with the money and so we’ve had that issue in the Bitcoin eco-system where trusted third parties, if they failed then it took forever to get the funds back to the people that rightfully owned them. One, this gives you a distributed way to store all the records, the Contract for Difference gives you a way to do it extremely efficiently, extremely cheaply and it gives you a way where you don’t have a

trusted third party. That’s a big advantage. It really opens it up to the world of people that want to build this... and more even important, perhaps, is it’s programmatic. You could now build this into additional applications that use this for all sorts of things. We’re not even envisioning today, in this conversation, about commodities and currencies and things like that. [28:33]

JM: Walk me through this. I have an interest in hedging against something. I want to buy a commodity and know that six months from now, I can still have that commodity. [28:41]

DJ: At that price. [28:42]

JM: At that price. I go into a contract using Bitcoin on the Mastercoin platform and I say – Hey, I want to buy one barrel of oil. What happens to the other party? There’s always a second party who is the opposite, who is the counterparty to that bet. What’s in it for them? What do they do? [29:01]

DJ: Right, exactly. You always have to have the maker of the bet and a taker of the bet. Ultimately, people will only do things that they think are rational. If you’re offering a bet that’s sort of lopsided or ridiculous, people aren’t likely to take that contract. Let’s say you make the bet that the price of oil is going to be $100 in a month, and it’s $100 today. I’ll take that bet. I’ll take the bet that the price is going to be $100. If the price goes up, then you’ve essentially got protection from that price rise and if the price goes down, your pocketing that money. You can write the contract a number of ways so it’s not like there’s necessarily a single standard. A lot of times there is a premium or some money set aside if it’s for the person that’s taking the bet, depending on the conditions or making the bet depending on the conditions. Yes, you always have to have a counterparty. It has to be an economic incentive for both people so you’re making money if you’re betting it’s going to go down and I’m making money if the bet goes up. Let’s say it’s the $100 bet and it goes to $110. We both put $100 into that pot. [30:14]

JM: There’s $200 in the pie? [30:15]

DJ: Yeah. Let’s say there’s $200... but you could do it a few ways. You could each put in $50; you could each put in $200. It depends on how much swing you wanted to make available or margin on both sides of the bet. Let’s say we each put in $100 and it goes to $110 and I took the bet that it was going to stay at $100 or go lower and you took the bet it was going to stay at $100 or go higher, you’d end up with $110, so you can now buy your barrel of oil at, essentially, the $100 price because you’ve got $10 of my dollars. I ended up with $90 left in the pot. You’re picking up whatever the difference is. Let’s say it went to $90, I’d end up with $110 and you’d end up with $90. It doesn’t matter to you because you still spent $100 to make sure you could get your barrel of oil at $100. [30:59]

JM: Let’s say some genius wanted to make a six month bet with regard to fixing the Bitcoin to the price of a dollar because they just didn’t care if Bitcoin went up or went down, they just wanted $1000 to be $1000, I’d be more than happy to take the counterparty risk to that at whether or not Bitcoin’s going to go up in six months, relative to the dollar. You have your schmoes who all want no volatility in Bitcoin versus the dollar, to take that very valuable service and give us the returns for that. [31:27]

DJ: You’d have to find a counterparty, but yes, if you could find a counterparty then, yeah. Maybe for their particular application, that’s useful for them. [31:36]

JM: Right, right. [31:36]

DJ: Maybe they’re in something where they need some sort of standard unit that won’t change, for whatever reason. You’re certainly not in the same position and you would be happy to collect the difference between it going up over a certain period of time and there is a lot of fluctuation. I don’t try to make price prediction’s day by day, or week by week, or even month by month. My strategy is simply to buy and hold over the long period. I don’t try to be a day trader and so for somebody that doesn’t want to see that volatility day by day or week by week, even if it’s uptrend over a year or two years, that may be valuable to them for their particular business application. [32:13]

JM: Just to reiterate, you don’t ever, in this chain of custody of money, get the actual commodity. What you’re getting is the spot price of the commodity so that you could then go and purchase that commodity. [32:25]

DJ: That’s exactly right. There is no delivery of the physical product. [32:28]

JM: When people are saying – Well, how does it affect the real world? Well, it’s a financial instrument that allows you to make sure that you can go out and purchase that thing. It’s not having you get the thing. [32:35]

DJ: Exactly. [32:36]

JM: Right. [32:36]

DJ: That’s correct. That’s a good way of thinking about it. [32:38]

JM: We keep talking about shorting Bitcoin, shorting Bitcoin. Would a Contract for Difference be something that would allow markets to short the Bitcoin? [32:46]

DJ: I think it could certainly be a tool that is used for that. Some people may have reasons that they want to do that but I think that’s actually a good thing. I think that the market providing different options to different people. I think what this doesn’t provide for is the type of nonsense that you do see in some of the financial markets where you have people placing bets in which they have no collateral or they have no money, often called ‘naked shorts’, or ‘naked puts’, or ‘naked buys’, where they don’t even have that asset, they’re just making the bet and they’re hoping they win and if they don’t win, then basically they have to go find the money or they default on that contract. That’s not really possible in this kind of system. This is a system where you have to have the money to make the bet, one way or another. [33:33]

JM: That gives another question which is, are the funds that you send as collateral outside of your possession and no longer in your wallet during the term of that contract? [33:41]

DJ: Absolutely. It’s being held, essentially... [33:44]

JM: In the blockchain. [33:44]

DJ: ...in the blockchain, exactly. [33:45]

JM: OK. [33:46]

DJ: Yeah, you’ve agreed to that voluntarily based on whatever the terms of the contract are and it will be for whatever period you’ve decided. [33:55]

JM: It’s a trustless-based contract. [33:57]

DJ: Right. It’s not, I will send funds to this address. It’s, I have sent funds to this address. [34:02]

JM: Right. Again, it’s held in escrow and the blockchain is the thing that executes on that. [34:06]

DJ: If you will, exactly. [34:07]

JM: How far do you think Mastercoin is from having something like this? [34:11]

DJ: It will be interesting to see how quickly it gets developed. It’s definitely on the radar of the core developer team. First you need the distributed exchange and then you can build all these type of systems on top of that because that’s where you have the recording and the moving of all these different tokens and such around. It’s on the short term roadmap. I don’t want to get into an exact date because I don’t want to get into the two weeks, two weeks..... (laughter) [34:37]

JM: Soon TM. [34:38]

DJ: Exactly. We try to be pretty conservative but it’s definitely on the radar. I definitely want to give credit to Vitalik for suggesting originally the Contracts for Difference and he did some work on the Master protocol to hammer out some of those details. I definitely want to give him credit for that suggestion and when he did, the core developers were very excited about this, as an improvement to what had originally been proposed in the original spec. Now, it’s in the official Master protocol spec. It is in the spec; it’s going to get implemented. [35:06]

JM: When we talk about things that have markets adopt Bitcoin, where do you see Contracts for Difference taking off because I hear that Europe is really big on this and Australia, apparently, is really big on this down under. Is this something that will bring those markets much further into Bitcoin? We keep talking about – Well, when are the hedge funds going to get involved? When are the hedge funds going to get involved? Is this something that will really wet the beak to the point that they can’t ignore it? [35:32]

DJ: I think it will bring in a whole new demographic of people that work in these type of financial instruments once they realize how efficient they are. They’ll be the ones bringing a lot of expertise to this system and bringing in a lot of institutional funds into this. The cool thing with the Master protocol is we can actually build that as use case on top of Bitcoin. Literally, all the money for this will have to flow through the Bitcoin network in order to get

there, which is a fun side effect of building protocols on top of Bitcoin is it massively increases use case and utility of Bitcoin itself. [36:06]

JM: You know, I’m guaranteeing you that right now there is someone thinking – Oh great, that’s exactly what Bitcoin needs, more bankers. You know what? Our boats big enough for everybody. If they play by our rules, there is very little that they could actually do to us and, quite frankly, if you see someone on a sinking ship, how could you not send them a life raft, right? [36:23]

DJ: Right, right. [36:24]

JM: The more the merrier, right? (Laughter) [36:25]

DJ: Yeah, we’ve got to help these guys out. [36:27]

JM: We’ve really got to help them from drowning there. Thank you so much for talking and I would love to see Mastercoin actually be able to do that. I will be the first person to take the hedge against the dollar aside of the Bitcoin equation. [36:40]

DJ: Sounds great. [36:41]

JM: Have a great day man. [36:42]

DJ: You too. [36:43]

___________________________________________

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_______________________________________________

Stephanie Murphy interview with Marco Peereboom

SM: This is Stephanie Murphy for Let’s Talk Bitcoin. I’m talking with Marco from Conformal. Hi Marco, what’s your last name? [38:33]

MP: It’s Marco Peereboom. It’s a Dutch name so I’m not even going to attempt to tell you people what it is. [38:37]

SM: (Laughter) I see. Welcome to Let’s Talk Bitcoin. [38:40]

MP: Thank you. [38:40]

SM: We’re at the Texas Bitcoin conference. Tell me about Conformal. I know a little bit about them but what... maybe if our audience is not familiar... what do you do? [38:48]

MP: Well, Conformal started out as a security and privacy company. We did an online backup solution, Zero Knowledge, an online backup solution. Being a bunch of crypto nerds, going into Bitcoin was relatively simple for us. We started building a services business around Bitcoin. We did a full node replacement for BitcoinD, for the people who are familiar with that. Now we are, basically, building our service on top of that code. [39:18]

SM: A full node replacement. That means you rebuilt the Bitcoin reference client from scratch, essentially? Is that what you’re saying? [39:25]

MP: Not essentially, yes. That’s exactly what we did. We rewrote the entire client in a different language called Go and we are putting up the last shiny bits and it’s going to be ready for production. It’s open source and everybody can check it out and play with it. [39:38]

SM: Wow! OK, that’s a huge thing. Why did you want to do that? What motivated you to create a new Bitcoin reference client in Go? [39:48]

MP: Well, that’s a very interesting question and it’s a very expensive proposition because it’s more than a man year. In fact, I’m not going to give you the exact numbers but it was... it took a lot of development time, a lot of folks. There’s not a lot of documentation out there but the reason was two-fold. If we are going to stake a business on Bitcoin, we need the infrastructure of Bitcoin to be as sound as it can be. Being money, it’s doubly important for it to be right. The success of the internet is not because there was one TCP/IP implementation, it’s because there were hundreds of them. For us, it was very important to have multiple clients so that if there is a fork of sorts, then maybe not all the clients are affected and then the majority rule would kick in and the faulty clients would then get forked and the chain would effectively become unaffected of that. Pure selfish reasons for the resilience in the Bitcoin network and the fact that we can give it away and help some other folks along the way and strengthen the Bitcoin community. That’s just gravy. [40:53]

SM: Wow! OK, that’s really cool and I see the value in it like you compared it to the internet having multiple implementations of TCP/IP. Do you kind of see Bitcoin as one of those base layer protocols that other things are going to be built off of, like TCP/IP? [41:08]

MP: I really do. I think that Bitcoin is going to be a payment method of the future and therefore we need to bring it to the people. Bitcoin is extremely complicated. It has been boiled down quite a bit and there are a lot of folks that really, truly understand it. However, once you get into the actual nuts and bolts of it, it requires a very significant amount of man hours and resources to actually deal with the little bits and pieces. Having more expertise than just one group of developers, having multiple groups of developers that do this, that’s healthy for the entire community. I would welcome another twenty implementations. It’s just good for us; for all of us. [41:46]

SM: Yeah. Just to clarify. This works with Bitcoin. Is that right? This is not any type of altcoin or anything like that? [41:53]

MP: This is purely Bitcoin right now. The code is modular enough that adding something like Litecoin would not be that complicated but currently, it only does Bitcoin. [42:03]

SM: OK. What have you used it for so far? I know this is kind of new just finishing it but what have the implementations been like so far? [42:12]

MP: We obviously built our entire Coinvoice project on top of it. Coinvoice, for the folks that don’t know, is an invoicing service or we are payment processors so we can take either payments in BTC and then disperse in USD, or the other way around. We can accept payments in USD and disperse in BTC. The entire backend is running on BTCD and the other wallet implementations that we made. When you make a payment on our website, what happens is that it flows through the Go that we have written and it gets put out immediately in the mempool. You get instant gratification that a payment actually has hit the network and then you just sit there and wait for your confirmations to show up. The code is in production today and we use it. It’s great. [42:57]

SM: A little more about Coinvoice. This is something where you can invoice somebody in dollars and get paid in Bitcoin or vice versa, is that right? [43:07]

MP: That is exactly correct. Let me use my favorite example. One of our first customers was a German journalist and he writes publications for a US company. Once a month, he writes up an invoice on our website and he invoices the publication company US dollars and we pay him then in Bitcoin. [43:29]

SM: That’s cool. That’s very useful. Is there a fee for that service or are you processing the payment? How does that work? [43:36]

MP: Yes, there is a fee involved. There are actually two fees. There is a fee for going from USD to BTC and there is a different fee going from BTC to USD. The reason for that is that obviously when we disperse the BTC, we assume a risk because if there is something wrong with the transaction, or whatever you want to call it, so we have a higher risk. Currently the number for that is 4%. The other way around is the standard market fee of 1%. [44:01]

SM: OK. Gotcha. 4% - that’s almost like a credit card fee, right? That’s kind of similar to that. That would be if you’re going from USD to BTC. OK. Gotcha. I’m thinking about it now and it’s cheaper than buying bitcoins on an exchange, typically. [44:20]

MP: That’s the idea. Not only that, it’s also instant, effectively, so we can disperse to bitcoins very, very quickly. There is no wiring fee involved with that particular transaction. There are a few benefits that exist there. One of the things that I would like to mention on this is that normal businesses, they accept credit cards and there is a mark up on the credit card that the consumer just simply doesn’t see. I hear the criticism – Oh, but it’s so expensive. It’s the cost of doing business. Moving money is just simply not free. [44:54]

SM: You’re just making that process transparent instead of building it into the price where people can’t see it, right? [45:01]

MP: That’s right but if you build a business, you should obviously build in your processing costs into the price of your business. The guy who sells widgets in a store has done that because they know that you don’t show up with a credit card. I hate to say this but there are not a lot of people doing cash transactions any more. [45:20]

SM: Right, right. [45:21]

MP: There is a cost of moving money around the world. We make it easy, secure and actually, relatively cheap once you measure it up against banks and some other institutions. [45:33]

SM: What about the cost of building this BitcoinD implementation and Go? [45:39]

MP: Well, we have a handful of developers that are working on this full time. At this point, we’re down to about two guys who are working on it full time because it’s just wrapping up things and adding more people, at this point, would just not help... would not make it go any faster. I’m not sure I should say this but the way we call it is a ‘one woman, nine months’ not ‘nine women, one month’ to produce a baby. [46:00]

SM: Right. (Laughter) [46:01]

MP: We’re now finishing up and so there is no longer the amount of people on it. Let me just say a couple of nice things about BTCD which are really cool. [46:14]

SM: Sure. [46:15]

MP: One of the things that we did from the beginning is that everything has to be tested automatically. You can literally... when you download the code, run the tests in virtually every line of code in the codebase is tested and validated. We can, pretty quickly, move or detect if we made a mistake when we put out a new version. In fact, deploying a new version, usually is a couple of hours worth of time. [46:44]

SM: Wow! That’s pretty good. What are some of the other differences between the... I don’t know what to call it... the conventional Bitcoin client and the one that you’ve built? [46:54]

MP: The big one... but actually BitcoinD is starting to do the same thing, so I’ll take that as a compliment that they like what we did, is we made some separation between the different parts within the code. What we did is we split up the chain from the wallet and, in fact, we also split the whole wallet portion from the GUI, the one that shows you how much... or how many bitcoins you have sitting on your computer. We made that in three distinct layers that can do different things based on what you need. If you need to write an application that only requires chain questions, you can only, basically, run one portion of the code that handles all the chain related portions. That gives people, who want to write code, quite a bit of flexibility to pick and choose the building blocks that they need to implement whatever it is that they want to do with it. [47:48]

SM: Is there ever a chance that this could become the reference client? If enough people start running it and miners start using it and so forth? [47:56]

MP: Well, that’s a tough question. I don’t want to be the only guy out there. [48:01]

SM: Right. [48:01]

MP: I really don’t. I mean that. You know what? I hope that... let me say something else nice about our code because I’m pretty proud of it. The BTCD code is very cleanly written and brand new people that show up, and some folks have shown up and they say – Oh, I can completely read this a couple of hours in. The BitcoinD code is a little bit more... it’s evolved over time and therefore, it’s large and not always clear what the intent is. I’m not trying to say anything ugly. It’s a well written code, it’s just complex; very, very, very complex code. Since we got to do a from-scratch implementation, we were able to take some of the complexity out and just simply remove it from the codebase. I’m not trying to say anything ugly, it’s just our code is slightly more readable because it wasn’t evolved. It was a clean room implementation. [48:55]

SM: Right. I’m picturing there are a couple of different ways you could build a three-bedroom house. You could take a one-bedroom house and put an addition on it and then put another addition on it or you could build it all at once – a three-bedroom house and they both accomplish the same purpose but they’re just constructed a little bit differently. I see kind of a comparison there. [49:16]

MP: I think that’s a fair comparison, I really do. The thing is that the additional thing to add there is that the three-bedroom house that was built in one go was also not really designed at that time. It was a bit more ad hoc. Again, to say something nice about the BitcoinD client, it’s an impressive amount of code, it’s very complex, and it does what it does very well but let’s have more of them. Let’s have more diversity so that the network itself becomes more resilient. [49:48]

SM: Do you know of any other projects ongoing where people are trying to build more of them? [49:52]

MP: Well, there have been a couple of failed attempts. There was actually one from a German fellow. Actually, he had a company called Bits of Proof and he had done a full client implementation, although I think that they have, at this point, dropped off out of the community which is unfortunate. I really was hoping that they would stick around as well. The thing is if you start playing in Bitcoin, the reference client seems deceptively easy until

you get to the details. Like I said before, it’s an extremely complex piece of software and a lot of people underestimate the amount of time involved in getting it off the ground. We have a professional development team. Most of us are crypto geeks so we were able to get into it and we have different people working on different areas of that codebase. [50:49]

SM: Yeah, congratulations. That’s a really cool fete. Is there anything else that you wanted to talk about for this interview. I mean, we touched on Coinvoice, we touched on, obviously, the client but what other projects are you working on? [51:02]

MP: We are, obviously, now starting to... we are, at this point, ready to put Coinvoice out there to the larger community. We are not VC backed so we don’t have the crazy schedule that you’ve got to deliver the next hundred million dollar project every other day. [51:18]

SM: Yes. (Laughter) [51:19]

MP: That gives us the time to spend a little bit more time and do things right. We really care about quality quite a bit. When we just started, it wasn’t as polished and it’s getting more and more polished over time and I think, at this point, we are ready to start on large volumes of customers. We have all kinds of plans in the future for it and one of the important ones is we are starting to go and start localizing because, obviously, folks in Southern America want to be able to just handle the website in Spanish, so we’re working on that. We have a couple of translations, so those are going to come up pretty quickly. We started doing ecommerce type deals so we have now two reference API implementations, where you can directly integrate it in a cart and then charge Bitcoin and then being paid in US dollars. [52:13]

SM: Wow! Yeah, that’s cool. [52:14]

MP: Right. You can literally just add it to your... right now, we have two implementations, one for WooCommerce on WordPress. [52:21]

SM: Hey, I use that. [52:23]

MP: Alright. [52:23]

SM: Cool. (Laughter) [52:24]

MP: The other one is Drupal and Ubercart. We have written two references for that. Actually, there is an underlying library and they both use that same library and the actual plug-ins literally translate between Coinvoice and whatever line items the invoice consists of. We’re going to add a couple more, so we’re thinking about OsCommerce, we’re thinking about Magento and there are a couple of other really large carts out there that we are going to integrate with and make available to the general public in the next couple of weeks. [53:00]

SM: Making it easier for people to facilitate Bitcoin payments or fiat payments all around the world. [53:08]

MP: Right. The idea is that not everybody can and is capable of running a wallet, right? It’s a complex piece of technology so what we’re trying to do is make it easier for people to use Bitcoin and we get something for free. We get liquidity in and out of the Bitcoin network because people just simply don’t have to go to an exchange to do their transactions, so they

can get paid in Bitcoin and then use the Bitcoin to pay for different services and vice versa. We are hoping that more people can adopt Bitcoin using our service and again, that will just bump up liquidity, badly needed liquidity into the Bitcoin network so that when something bad happens, the price swings aren’t as dramatic. [53:53]

SM: OK, cool. Anything else you want to add? [53:56]

MP: No, thank you so much for interviewing me. [53:59]

SM: Thank you and where can people find you online? [54:00]

MP: Just Coinvoice.com. [54:02]

SM: Just Coinvoice.com and then for Conformal, do you have a different website or is that at Coinvoice? [54:07]

MP: No, actually that’s Conformal.com as well. All our code, all our reference code is out there and can be found on GitHub under the Conformal site. [54:15]

SM: Excellent Marco. Thank you so much. This has been a real pleasure to talk to you. [54:19]

MP: Thank you. [54:21]

________________________________________

Jonathan Mohan interview with Sheldon Wisefield

JM: I’m here at the Miami conference with Sheldon Wisefield who is one of the chosen few, one of the distinct the brave who have a RoboCoin coming his way. [55:14]

SW: Absolutely Jonathan. It’s very exciting to be able to announce that Coinvault ATM based out of Houston, Texas will be one of the first ATM terminal operators with a fully functional, bi-directional, FINCEN compliant, AML, KYC to give the consumer the opportunity to have a fiat currency in, fiat currency out option, effectively we are going to be the onramp to the Bitcoin world in Texas, Houston being the fourth largest city in the nation, representing a global economy in petrochemical finance, engineering and technology. [55:51]

JM: That’s quite the mouthful. [55:52]

SW: I’m telling you. This event here, these last two days, has been absolutely mind-blowing to meet such dynamic people that are in a space that truly, is the evolution of the next major paradigm shift that we’re going to deal with. [56:07]

JM: You’re going to be launching a Bitcoin ATM in Houston. [56:11]

SW: That’s exactly the plan. [56:14]

JM: When is that coming? When is the ETA on that? [56:17]

SW: We’re looking at the last week in February, first week in March. The location is going to be a central business district location. It’s going to be in a coffee shop style environment that’s going to give the consumer an opportunity to use the internet because our ideal clients identified as being, obviously, technically and computer literate, they’re looking for that experience and it’s got to be a convenient location to the customer. [56:41]

JM: Why Houston? [56:43]

SW: Houston is the fourth largest city in the nation. We think that with Houston’s demographics and the diversity that Houston represents and we do have a meet-up group, a Bitcoin meet-up group in Houston and we think that this will be a good proving ground and gives us an opportunity to build some core data, legitimize what it is we’re going to do, as our objective is to launch multiple markets across the United States and then international strategy to go into some other foreign markets. [57:12]

JM: It’s kind of blowing my mind that America is finally getting an ATM. I always felt like this one would be the last in America and it seems like we’re kind of... we’re not trailing Canada far behind by too much. [57:23]

SW: I think that the challenge has been about the fear. The concept or the acronym of fear, as I define it clearly is as False Evidence that Appears Real. People aren’t willing to take action in the US because of that fear factor. We’re of the opinion that, in order to be a pioneer, in order to make a paradigm shift, you have to be willing to step out of the norm and that’s what Coinvault ATM is positioning itself to do. [57:48]

JM: What I love about your model, specifically, is the way that you look at what an ATM means. I mean, a lot of the other businesses have their traditional pay for the space sort of revenue share for being able to be given the privilege to put their ATM at a retail location. Your view on it is a little different. Can you tell me a little more about that? [58:09]

SW: Jonathan, let me tell the listening audience that what we’re bringing to the world is a paradigm shift. We’re bringing to the marketplace something that will drive track. We are the destination. People think that Miami Beach is the destination and it is when they’re coming to Miami, it’s South Beach, where we’re at here today. The reality of it is this terminal is going to drive thousands and thousands of customers to a destination that those customers otherwise would not end up in. Therefore, unlike a traditional ATM automated teller machine, we’re providing a BTM, a Bitcoin terminal machine, which will create the destination for these people to go to, to get on and off the Bitcoin highway to have fiat currency. You’ll have international travellers. Houston represents a global marketplace with two international airports where people will go to our terminal from all over the world, to convert their Bitcoin to the fiat currency, known as the United States Dollar, they can then spend and that customer would not come to our retail merchant. As a result of that, a billboard pays for the numbers of views that how many eyes are going to see that billboard. A newspaper, you pay advertising costs because of its circulation and a Bitcoin terminal retail locations will pay us a fee per transaction based on the number of transactions coming

through that door because we know that that customer is going to also spend money in that retailers location. [59:44]

JM: You also know that that customer wouldn’t have been there were it not for the ATM. [59:47]

SW: Exactly Jonathan. [59:48]

JM: Effectively, what you’re doing is you’re looking at a retail organization and you’re saying – Hey look, use us as a square footage loss leader and what we do is allow you to up sell the customer on all your margined items. [59:58]

SW: Jonathan, I couldn’t have said it better. [59:59]

JM: I just think that’s such a novel idea that like all things in Bitcoin, it defies the fiat equivalent. [1:00:06]

SW: That’s correct. [1:00:06]

JM: Rather than you paying a merchant $1000 a month when, in fact, what they’re doing is paying you for every Bitcoiner you brought their way because they could sell them coffee or trinkets or whizzwats or whatever it is that the store has. I just thought it was phenomenal that you’re making the system work for you, my friend. (Laughter) [1:00:23]

SW: Absolutely. The idea here is it’s got to be built on a win/win relationship and we know that in a free enterprise environment, it’s about bringing value and we’re going to bring value to a retail merchant in a capacity they really don’t understand the model. We’re going to actually pay the retailer a utility reimbursement charge, so the retail merchant doesn’t have the concern it’s going to cost them to put the terminal in their location. We’re going to have a compensating factor that, based on the total number of transactions, will get a rebate back per transaction. At the end of the month, we know that the utility cost that we may have contracted to reimburse them for that space is going to be far less than the number of transactions, based on the number of customers that we put in that store. [1:01:08]

JM: You’re in Houston. If there’s a business in Houston that would want to get in touch with you, as it relates to maybe being in their store, how would they go about doing that? [1:01:15]

SW: Absolutely. They can contact us through the info@CoinvaultATM.com and through our info@CoinvaultATM.com, one of our representatives will certainly follow up with anybody that would be interested. If you want to use standard, old time telephone technology, dial 281-236-3625. The Coinvault ATM terminal is a really unique opportunity. We understand that the consumer needs to have an on and off ramp and we’re going to be that opportunity for the consumer. [1:01:50]

JM: I look forward to when you announce exactly where it is in Houston. [1:01:53]

SW: Absolutely. That will, obviously, be a media event and so, at this point, we’re withholding the exact location. [1:02:01]

JM: It’s gonna happen. [1:02:01]

SW: It’s gonna happen. [1:02:02]

JM: Alright man. [1:02:03]

SW: It will happen quicker than later, based on the delivery of our first machine. [1:02:09]

JM: I look forward to seeing it. [1:02:10]

SW: Thank you so much for this opportunity Jonathan. [1:02:12]

JM: Have a great day. [1:02:12]

SW: Thank you too. [1:02:13]

____________________________________________

CREDITS:

Thanks for listening to Episode 92 of Let’s Talk Bitcoin.

Content for today’s show was provided by Stephanie Murphy, David Johnston, Jonathan Mohan, Sheldon Wisefield, Marco Peereboom and Adam B. Levine

This episode was produced by Adam B. Levine, with additional production by Stephanie Murphy and Jonathan Mohan

This episode was edited by Denise Levine, Matthew Zipkin and Adam B. Levine

Music for this episode was provided by Jared Rubens, that Doge song and General Fuzz

Any questions or comments? Email adam@letstalkbitcoin.com

Have a good one! [1:02:46]