{ "episodeId": "SLP4", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "jw_weatherman": { "name": "JW Weatherman", "role": "guest", "tag": "JW" } }, "segments": [ { "speaker": "stephan", "time": "00:01", "start": 1.1, "text": "Hey guys, welcome to Stephan Livera podcast episode four, and for today I've got a really fantastic guest, I've got JW Weatherman. So welcome, JW." }, { "speaker": "jw_weatherman", "time": "00:11", "start": 10.53, "text": "Yeah, thanks for having me, man. I'm, looking forward to chatting today." }, { "speaker": "stephan", "time": "00:15", "start": 14.75, "text": "Awesome, awesome. So I'll just give JW a quick intro for the listeners. So JW Weatherman, obviously this is his pseudonym, he is a software security expert who has come into Bitcoin now. He's the writer of the Bitcoin threat model. He's a podcaster and content creator within Bitcoin, and another one of his projects is Mathbot dot com, which is basically a project that tries to Create online education in terms of teaching math and teaching fundamentals of programming to children or adults as well. and the reason I wanted to get him JW on today was basically to talk about why Bitcoin and not the others. So I think what we could do is maybe let's start with some of the positive reasons in favor of Bitcoin. So JW, did you wanna, did you have any comments to start with on that point?" }, { "speaker": "jw_weatherman", "time": "01:08", "start": 68.24, "text": "Yeah, yeah. I think the, the best thing that's in favor for Bitcoin is probably just understanding how open source software works. so open source software is very collaborative and, it's not, it's not like Microsoft versus, Google, right? It's all of the smart people working on the problem Working together. And even if they're working on a different project, like even if, let's say they're, they're, they forked, the open source project and they're, they're working on their own thing called Fredcoin, The, the natural thing that happens is that if Fredcoin does anything useful, then the Bitcoin guys would pick that up, right? So there's no-- there's nothing hidden in open source software. Like every useful thing that's done is exposed to the whole world, and everybody is free to copy the things that are useful and continue to collaborate and build something better. And that's why if you look at something like databases, there tends to be a small number of databases, right? You have something- Like SQL Server or MySQL or SQL Server is a bad example, it's closed source, but something like MySQL or, another database. But if you want a SQL database, you tend to use MySQL, right? And maybe there's, there's one or two other ones that are, that are popular that are playing around with something kind of interesting. but this is even worse if you look at something like a protocol, because the whole idea of a protocol is like a language. It becomes more useful the more people that use the same language. So something like Bitcoin in an open source context, it's probably better to compare that to something like, the internet protocols like TCP/IP And, and the way that that works is if somebody had an idea to make the internet protocol better, they might fork it, they might screw around with some stuff to experiment, but if they do anything useful, they wanna get it into the standard because everybody's using that same thing to communicate. And, and really, money is a protocol. Money's always been a technology since before we really used the word technology, to solve specific problems that humanity's facing in, coordinating. Trade. so all of this combines together to, to really work for the benefit of the leading project, right? because if anybody does anything useful, it's gonna have a tendency to be there. So hopefully that makes sense. But I, I think overall, that's the reason that, That Bitcoin is special because it's the first, it's the biggest, it has the smartest people working on it, it has the most people working on it, and this is all open source, so it's really basically impossible to have a competitive advantage." }, { "speaker": "stephan", "time": "03:58", "start": 237.93, "text": "Yep, yep, fantastic point. And, I think from an economic point of view, we can look back to some of the writings of Karl Menger, such as his essay on the origins of money. And in that essay, he basically- Presents this argument of money as the most saleable asset. It's, you know, in other words, the most liquid asset, and it makes sense that as soon as one money kind of starts to get found, it kind of has that reflexive nature that pushes it to the top and pushes everything else down. And I think the points that you were making there, JW, were fantastic in terms of the network effects around that, and I think particularly what you were referring to there is often around the develop- of Bitcoin. And what, what we find is that really the best developers, some of the best developers in the world are working on Bitcoin, and they're working on, you know, Bitcoin core development at the protocol level, and then you've got other guys who are working on, you know, the wallet software and other ways to integrate it all together. some other network effects that we could talk about are in the examples of exchanges. So, notice how most of the exchanges are Basically, Bitcoin is the, is the reserve currency of the crypto world. And so even if they offer fiat to other altcoin pairs, the volume on those is terrible. So anyone trying to move a large amount of coins would end up moving the market when they tried to move a large amount of coins. And so these are kind of all tendencies that point us towards use of Bitcoin. Now JW, you've made a good point in the past, with your comments around proof of work mining. So, maybe you wanna comment a little bit on, on- How that is another factor and another network effect in favor of Bitcoin." }, { "speaker": "jw_weatherman", "time": "05:45", "start": 345.48, "text": "Yeah, I think, I think what's going on with, with the, with many of the competing currencies, many of the altcoins, and I, I do completely agree incidentally about the most saleable asset point that Manger makes. I think that's an effect of what money is, right? We're trying to come up with, you know, I have chickens, you have goats, you don't want chickens, I don't want goats. Vice versa, and we're trying to come up with a third thing that we can use to facilitate that trade. Well, the more that third thing gets used, the more valuable it is to use in trade because the more people will want it, the more people will tend to have it and be willing to give it away. and if you, if you understand what money is, like if you understand the reason that a civilization adopts money, you understand that it becomes the most saleable asset, because that's, that's the whole purpose of adopting it, right? the whole purpose of adopting it is to facilitate trade. So it's this interesting evolution that we see happen in all different civilizations, as their economies advance, and you don't end up with multiple monies. that's, that's not money, that's called barter. we have one- Small exception that really confuses people, well, a couple. One is silver and gold. the only reason we had silver, and that was in a sense a step back towards barter, is because gold was too precious. too-- another way to say it is, it didn't subdivide very well. when you buy-- want to buy a can of soda, you know, if you're trying to scrape off with your fingernail, the, the appropriate number of micrograms of gold, it just doesn't work very well, especially given that they didn Back then. So they, they used silver, but that was a step back towards barter, it was a bad thing, it was a compromise, and, and that's why banking became such a big deal, because it allowed us to get rid of silver and deal with gold's, limitation in being subdivided. so, that, that's one point. The other point that I think people really get hung up with when you say something like the most saleable asset, is they look around the world and they see that there's, you know, tons of competing currencies" }, { "speaker": "jw_weatherman", "time": "07:54", "start": 474.13, "text": "realizes that's not a result of market activity, that's a result of the threat of government violence. if I could, all of my contracts would be written in something other than US dollars probably. I would certainly pay all my debts in something other than US dollars. Maybe it'd be gold, maybe it'd be Bitcoin, I'm not sure. But, but I don't, as a US citizen, have that option. If I tried to write a contract in Bitcoin, it would be enforceable in US dollars. If I try to write, a contract It's actually a government mandated exchange rate of dollars to gold, that makes that impossible, right? So there's all these rules that are, you know, there's a guy with a gun saying you can't do these certain things that puts us in a place where we use currencies like, you know, you think the guys in Venezuela wanna use the bolivar right now? No, they don't, but they're stuck with it, because of the threat of government violence. So If you take that out and you look at history, you do realize that we had a tendency to use gold and silver was kind of a stopgap and it wasn't ideal and it caused a bunch of problems, and so we, we are working to get back As an economy, right? As a global economy, we'd much rather have one thing, which is that most saleable asset. but as far as, exchanges and, and, and, and that network effect, I think that that is, I think that's another way to look at it, and I think those are all also really good reasons that we would have a tendency to use one thing. and, you know, I think with the proof of work, what's going on? Is that basically there is a, there's a misunderstanding about the purpose of proof of work and what it does, and if you're trying to sell a scam coin, it's a really good idea to take advantage of that misunder-- that technical misunderstanding of the purpose of proof of work in order to, in order to encourage people to mine it, which encourages people to own it, which is basically, dumb money marketing, right? So the purpose of proof of work is to, consume electricity Electricity, because electricity is a real world asset that people value, to prove that you've consumed electricity so that you have skin in the game when you're confirming a set of transactions or when you're forming a block, so that if you do something that isn't legitimate, like you try to include an invalid transaction and the network rejects it, you have become poor, right? So it's a security mechanism to punish miners that don't behave. and on the other side, it's, it's a mechanism Mechanism to reward miners that do behave by mining valid blocks. So you want that to be at the height of human capability, like you wanna burn that electricity as efficiently as possible, And what all the altcoins do is they say, \"Oh, we're gonna do something that is less efficient, and somehow that's gonna be good for, good for security, right? They claim it creates more decentralization.\" but all it really does is make the network that much easier to attack. Unfortunately, you know, the, the misinformed, get really excited about being able to participate in this stupid scam, and it, it is a good marketing tactic." }, { "speaker": "stephan", "time": "11:04", "start": 664.01, "text": "So yeah, great point. And I think one point to add there is just around, we're now starting to see some attacks on some of the coins that have a weaker hash rate, or they've tried to do something complex and have a bit of a hybrid mechanism of, you know, combined with, combining proof of work with some other thing, with some other thing. And what, what happens then is we get, we end up with attacks being performed and double spend attacks performed on other chains, and this has happened, I, I believe, on Verge coin and some others. And what What this does to the market is it provides less surety in the coin, and it means people, if, if it gets attacked, well then why would people want to store, attacked in such a way that you can't use it or attacked in such a way that it's, there's inflation? Well, then why exchanges now don't want to list that altcoin or people feel less- comfortable to store value, and I think that's a good point that you, you were sort of, talking around there just then JW as well, is the importance of having efficient production of hash power such that people feel You know, that credible commitment and that, that, that, comfort to store value." }, { "speaker": "jw_weatherman", "time": "12:18", "start": 737.9, "text": "Yeah, I mean, if, if people understand what's going on, they, they will, they will realize that what they really want is they want the maximum amount of electricity to be consumed in the most efficient way possible, in confirming their transaction. And the reason that they want that is that it disincentivizes the attacker. Because the attacker that wants to do a double spend, that wants to steal their money, needs to spend money on electricity in order to do that. And if he can spend money on electricity ten times more efficiently than the honest actors in the network, then he can attack the network by spending ten times less money. And that's not a good thing, right? You want it to be as expensive as humanly possible to steal funds or to attack the network in a way that allows you to steal funds through double- Spends. so that's why it's so important that, that we don't try to create coins that are, quote, ASIC resistant. because ASIC resistance, a better way to say ASIC resistance, which ASIC stands for Application Specific Integrated Circuit, but it just means it's, a computer that's specially designed for only this one task. Which means it's like a roofing hammer versus a, you know, a regular framing hammer that you can use for everything, including roofing. It's special. Which means it's better at that particular task than anything else that isn't designed for that particular task. So we want that because we want that electricity to be burned as efficiently as possible, because we want the attackers not to have another way to burn the electricity any more efficiently. So if whatever the network is using is at the height of human capability, so if you look at Bitcoin, we're running stuff that's around the ten nanometer range, that is the height of human capability. It is systems and, machines that are designed to solve this problem, to, to burn this electricity in the most efficient way that we know of. As far as we know, there's not even any alien technology out there that can do this more efficiently. That's what you want. You want that to be what's protecting your network. Because then that's the only thing that's available for the attackers to attack your network, and then the incentives work out pretty well where it's more cost effective to defend than it is to attack. But if you take the approach that these altcoins have taken and you sell out your security because it's good marketing spend, then, you know, you're a short lived scam and, you know, eventually you're going to suffer the consequences like all of these coins have, you know, eventually and will continue to." }, { "speaker": "stephan", "time": "14:59", "start": 899.04, "text": "Yeah, great points, JW. so that's kind of, comments on mining in terms of which algorithm we use and what, you know, proof of work, so on. How about now mining from a centralization and decentralization point of view? I think it would be fair to say that Bitcoin's mining is more decentralized than the others, because we've got more full nodes running and we've got more miners that are geographically distributed. Though there could be some improvement but do you have any comments on mining decentralization compared to altcoins?" }, { "speaker": "jw_weatherman", "time": "15:34", "start": 934.48, "text": "Yeah, yeah, absolutely. So the, the real issue here is that, you don't really want decentralization. What you want is security, and decentralization is a tool that allows you to provide some security if it's done properly. So I'll give you an example of a way that you could have decentralization and not have any security. let's say that you come up with, with a mining algorithm and, you don't write any software to do the algorithm. You just have a step-by-step guide in a document, and you tell people to use pen and paper and solve for blocks. Now I, I'm a little hesitant to even suggest this because I think there's probably gonna be an altcoin in the next week called JW Coin that somebody's gonna be marketing, 'cause this is a really stupid idea, but it would, it would probably appeal to, you know, a number of people. and the reason for that is that it would allow anybody to grab a pencil and a piece of paper, with-- and that would be the maximum capital investment required, and they could start solving this math problem, to verify blocks, and if they solve the math problem and work, they could get rewarded with these, you know, these, these retardo coins. The problem is that that would be extremely decentralized, right? W- it, it would be no, no barrier to entry, right? Anybody with access to a pen and paper and an internet connection could immediately be helping to secure the network in theory, right? But the problem is that even if that was decentralized, it could become immediately centralized. It could overnight go from The most decentralized network with, you know, people all over the world with pen and paper to one guy that took the time to write the code to actually solve the math problem on his, just, you know, MacBook Pro, right? so it's not enough to be decentralized, to have security. You need to be decentralized in a way that you can't be easily centralized, right? In other words, with all of the hash power that a bunch of people could be doing with pen and paper, it would pale in comparison comparison to what you could do on your MacBook Pro. So let's say that you had, you know, point o o o o one, hashes per second happening, something like that, but then I write the code and I run it on my MacBook Pro, and now the network has a thousand hashes per second, and I own, you know, ninety-nine, nine hundred and, or nine hundred and ninety-nine point nine nine hashes per second, then I've immediately centralized the network in one fell swoop, and, and that, that's not Good, right? So it's not enough to be decentralized, you need to be decentralized in a way that is very expensive to create overnight centralization. And that's the problem with any of these coins that are attempting to be ASIC resistant is somebody creates an ASIC and then the next day you're no longer decentralized and the attacker has control of your network." }, { "speaker": "stephan", "time": "18:33", "start": 1113.38, "text": "Yeah, and then i-in that time, they might need to, again, you know, once they start changing the proof of work algorithm or changing the algorithm that secures the network, then the-- it takes time for the creators of the mining hash power equipment to go and, you know, make efficient, technology that works to that. And as you were saying, then they wouldn't be at the limit of human ability. And so again, we're kind of falling back into that same problem. So i-it's for good reason that You know, a proof of work change or a change to the algorithm should be, you know, people should be quite skeptical of that, and it should be, it should be quite a process before that occurs." }, { "speaker": "jw_weatherman", "time": "19:14", "start": 1154.22, "text": "Well, so let's, let's look back at the guys with paper and pencil, right? There's, there's some things that are great about that, that anybody can have it and there's lots of people all over the world that are doing that. And the reason that that's valuable from a security standpoint is that if, somebody wanted to come to everybody's house with a gun Or they wanted to go after all the miners with a gun and say, \"You're going to, you're going to ignore these transactions, or you're gonna include these transactions.\" That would be very difficult because all over the world, you have people with pen and paper, and you have to try to, you know, track down where these people are at and attack them all at the same moment, right? So that's the upside of that approach. The downside is that they're not working at the height of human capability. So what we really want is we want the, we want both, right? We Geographically, and with administrative, distribution too, right? It doesn't do us any good if we have, you know, computers all over the world in different locations if they're all controlled by one guy, because then the guys with the guns just go get that one guy, and it doesn't really matter to you. So we want administrative decentralization, we want geographic decentralization, but we have to have the mining happen, like you said, at the height of human capability. So what we really want is we want ASICs that are commoditized. as you march closer towards, cheap, available access to the computers that can operate at the height of human capability, that's your march towards security. So something like a proof- The fork change that you're referencing on any of these coins is an intentional and very deliberate act to weaken the security of the network, and that only makes sense if you're, if you're a scammer." }, { "speaker": "stephan", "time": "21:02", "start": 1262.13, "text": "Yeah, yeah, good points, good points. Okay, so let's, now talk a little bit about some of the financial components of the network effects that are working in favor of Bitcoin. One example of this would be futures. Futures are currently only existing for Bitcoin on CME and CBOE. do you have any comments on that?" }, { "speaker": "jw_weatherman", "time": "21:22", "start": 1281.98, "text": "Yeah, I think that over time, we should expect that, that the, the old, the old financial network, the old financial system is going to begrudgingly, probably, accept more and more of the new financial system. I think eventually, you know, this is a little bit controversial, but I think eventually, in spite of all of the scams and the ICOs, we will see stocks and bonds and other financial assets, fully digitized, and we won't- We'll see people authenticate their ownership of those assets through a private key, and I think that it only makes sense that those things are gonna be on the most secure network available. just like, you know, if you're building an application today, you build it on the internet because it's just the most, it just makes sense. I think in the same way, if you were going to digitize an asset, you would put it on the public blockchain, which is Bitcoin. so I think all of those things are going to happen eventually in spite of scamming, because those guys are taking advantage of a, a grain of truth in order to sell a bunch of lies. but I don't think it's gonna happen overnight, and I think it's completely fine that we still don't have an ETF, a Bitcoin ETF or whatever. I think if you look at what happened with the internet, there was a lot of negotiation between the old world system and the new world system, and eventually the old world system just, it either submitted and joined or it just became unimportant, and I think that's what we're gonna see here as well." }, { "speaker": "stephan", "time": "22:53", "start": 1372.82, "text": "Yeah, yeah, great points, agreed. And I think that sort of ties into the next point, which is around the fact that upper layers are being built on top of Bitcoin. So an example would be the Lightning Network or Liquid Assets or other- proposals to tokenize assets, but people are building, the smart people are building on top of Bitcoin. Do you have any comments on that?" }, { "speaker": "jw_weatherman", "time": "23:16", "start": 1396.21, "text": "Yeah, I think it goes back to the, the internet analogy, the internet protocol analogy, or really any open source software that's on a protocol. if you, if you actually want to solve a problem right now, and you're not going to pretend to solve a problem, so let me give you an example of pretending to solve a problem. Bitcoin Cash. Right? These guys said, \"Hey, we need more transactions per second, so we are going to increase the block size and get-- wait for it, a linear improvement in scale. So we're going to take the critical security parameter, we're gonna monkey with that thing, and we're gonna do it so that we can do double the transactions per second.\" It's absolute insanity when you're working on something that, we expect viral adoption, and we don't, you know, we don't wanna go from- I don't know, twenty-one transactions per second to forty-two, we need to go from twenty-one transactions per second to twenty-one million transactions per second. So we're not gonna jack with like a critical security parameter in order to get irrelevant scale. But if you're actually trying to solve a real problem, you're going to, you're gonna contribute to Bitcoin, right? In one way or another, you're gonna build on top of that, just like if you were trying to, you know, build any kind of application right now, you'd be building on top of the internet if you're trying to build a financial application like Lightning that supports fast transactions or Liquid that supports assets, you're gonna build that on top of Bitcoin. There's just no reason not to. the financial incentives not to are really only if you're going after that sweet dumb money, and unfortunately we've seen a lot of that." }, { "speaker": "stephan", "time": "24:57", "start": 1496.96, "text": "Yeah, good points, good points. I think the next one that would be a great one to touch on is just the fact that of all the cryptos that exist today, Bitcoin is the most decentralized and it has so far resisted All sorts of attacks. Let's talk about some of the attacks that Bitcoin has resisted thanks to its decentralization. Do you have any comments on that?" }, { "speaker": "jw_weatherman", "time": "25:19", "start": 1519.11, "text": "Yeah, I actually, I mean, I, I have, I've gone back, so I'm relatively-- I guess I'm coming up on, maybe I'm getting close to a year, I guess, well, not quite. last November is really when I got super interested in Bitcoin. and so most of the attacks, maybe all of the attacks, That really gave Bitcoin a run for its money happened before I got involved, but I have gone back and kind of looked at that, that history. Bitcoin Cash has definitely gave it a run for its money, that was, you know, a lot of people know about this, but it was basically an attempt to increase the block size to a dangerously high level that would cause centralization, and that would be good for some people and obviously bad for the rest of us. and it kind of fell on the heels of SegWit 2x, which was also an The block size to a dangerously high level to cause centralization. I think that fell on the heels of, man, I'm starting to get out of my depth a little bit on the history, but Bitcoin Unlimited, which I think fell on the heels of Bitcoin XT, and I'm pretty sure there was something before that, but, but the pattern is all the same, right? Like there's been a concerted effort to increase the block size to a level above which we believe, is safe as far as encouraging decentralization or maintaining the level of- Decentralization, we think is safe. but there, there have been a couple new ones since I've been around that I think are interesting." }, { "speaker": "stephan", "time": "26:44", "start": 1604.3, "text": "I think yeah, SegWit 2x would be a good one." }, { "speaker": "jw_weatherman", "time": "26:47", "start": 1606.88, "text": "Yeah, yeah, yeah. So, let's see. So GRIN is one that's ongoing right now. GRIN is basically an attempt to create, coin. and I haven't, I've been hesitant to call it an attack. I think this is probably the first time. Nah, maybe, maybe I've called it an attack once, in the, in the last couple weeks, but- The, the, the challenge with GRIN is that it's based on something that's interesting. So mempool is actually an interesting concept, it has a lot of value in at least an academic sense, if not in a, you know, in, in an implementation sense. so I think a lot of us have been hesitant to treat GRIN as negatively as we've treated Bitcoin Cash, but really, GRIN is just a more-- well, GRIN is a less ham-fisted version of Bitcoin Cash. what Grin is attempting to do is compete with Bitcoin as money, which is going to, slow the adoption of Bitcoin. and it's, it's trying to do that by Mixing some actually interesting stuff with some poison pills, and the poison pills involved in Bitcoin are, are basically two things. One is it's using an insecure mining protocol. So we talked about how we want, We want the people that are securing the network to end up with commoditized hardware, right, that anybody can get access to for relatively cheap, that works the height of human capability. What Grin has done, and what a lot of these altcoins have done, is they've specifically designed an algorithm that makes that difficult, right? That is ASIC resistant. so that is, that's a big problem from a security standpoint. but if people are confused about that, they would tend to, you know, start investing in Grin and maybe owning Grin, only to find out eventually that it's actually not a good money because it's based on, it has a security flaw, which is its mining algorithm is designed essentially to be And secure. and then the other, the other problem with GRIN is it has a monetary policy that is very inflationary. i-in the year twenty-one forty, when Bitcoin no longer is issuing any new coins, or it's issuing dust, right? It's issuing the tenths of a Bitcoin or something. GRIN will still be issuing about two percent per year, which if you believe the Fed, is about where the Fed is right now. So we have a hundred and twenty years before GRIN is gonna suck less than- Than the current Federal Reserve with the US dollar. so that's, that's obviously not good and not ideal, from a, from a monetary standpoint, right? Yeah." }, { "speaker": "stephan", "time": "29:24", "start": 1764.15, "text": "Yeah." }, { "speaker": "jw_weatherman", "time": "29:24", "start": 1764.47, "text": "So, yeah, I think Grin's an interesting attack, I think insecure side chains are also an interesting attack. So there, there's been a few little things, since last November, but really SegWit2x was the last big hurrah, I think, and probably the last one that's going to have nearly as much chance. I think, I think we're looking pretty good from here on out." }, { "speaker": "stephan", "time": "29:45", "start": 1784.67, "text": "Yeah, yeah. But I think for people who are sort of new to Bitcoin and cryptocurrency, it might be good to just outline a little bit around what happened with SegWit 2x. did you wanna comment on that or shall I?" }, { "speaker": "jw_weatherman", "time": "29:56", "start": 1796.42, "text": "actually, go for it, man, 'cause you probably, you probably, were watching this closer than I was at the time and, and have a little bit more" }, { "speaker": "stephan", "time": "30:03", "start": 1803.45, "text": "insight than me. Sure, sure. Okay, yeah, well, I'll, I'll just quickly outline a little bit around the SegWit 2x. So essentially, there was a bit of a debate, kind of, and all of the kind of Bitcoin XT, Bitcoin Unlimited stuff was sort of coming to a head around the middle of last year, to 2017, and people were basically coming to a point where they're saying, \"Okay, fine, we're gonna agree amongst the big, some of the big, Hash power, you know, mining, pools and also some of the large Bitcoin companies, and they were saying, \"Okay, fine, we're gonna have SegWit and also raise the block size two X.\" And so- What happened over that time is that despite a large amount of the Bitcoin hash power supposedly, you know, in quotation marks, signaling that they would move to the SegWit 2x chain, and despite many of the large Bitcoin businesses also saying, \"Yeah, we're gonna change over to SegWit 2x and we're gonna change the BTC ticker to become the SegWit 2x chain,\" despite all of this Bitcoin resisted that attack, and the way it did so was through many people discussing with each other on Twitter and so on, and also through things like the futures prices. So at the time, some of the exchanges, such as Bitfinex, released a token, and they had B1X and B2X. And at that time, now I recall, people could basically trade in a BTC and convert it into a B1X and a B2X, which represented Each side of the fork, and what happened is there was kind of like a market, and in that market, to my memory, I remember the price of B two X, as in the coin representing SegWit two X, was zero point one five, whereas the B one X coin was zero point eight five, and so you could see already from that the market wasn't very confident in SegWit two X. And, and there was even further that came to a head when it actually came time to try and do the fork, there was a problem with the- software and there was not, sufficient level of review of the code, and then Jeff Garzik, one of the people who was pushing SegWit 2x, basically had to try and quickly release some new patch And there were miners who got stuck on an old block because, I can't remember the detail, but essentially there was an off-by-one error in the code. So, basically the reason I bring this up is just to point out that despite, you know, Large Bitcoin businesses and hash power, Bitcoin still resisted that because ultimately, miners are kind of employees of the Bitcoin system, so to speak. The Bitcoin holders are the ones who kind of pay the miners in a sense, in their inflation, and so they were able to resist that And that's another reason that people can have confidence in Bitcoin's monetary policy, which kind of lines back to what you were saying there around Grin and their two percent monetary policy and other coins which all have much more inflationary policies." }, { "speaker": "jw_weatherman", "time": "33:13", "start": 1993.0, "text": "Yeah, absolutely. There's, there's no question that the coin that is the most secure is going to win. The-- every, everybody recognizes that, right? Because something with a security flaw, we're pretty confident at this point that anything with a security flaw is eventually going to be exploited. So the question isn't whether the most secure coin is going to win, the question is, can we, as attackers, deceive enough suckers? Can we get enough people that either lack the economic knowledge or the technical knowledge? to understand what's happening here, to buy our garbage, before it becomes clear that it's garbage. and so yeah, great" }, { "speaker": "stephan", "time": "33:52", "start": 2031.54, "text": "point." }, { "speaker": "jw_weatherman", "time": "33:52", "start": 2032.12, "text": "I think that's, that was always the play. I think the reason that- And again, I'm, I have the benefit of hindsight looking back, but I think the reason that that, those bugs were there is that nobody really took it seriously. Even the scammers, I don't think took the Segwit 2x coin seriously. maybe they would have if they had gotten some traction, but from day one, it was obvious that this was a security flaw to everybody, right? And because apparently not everybody, but say eighty-five percent of all of the investors could tell that this was a really, really bad idea. and it wasn't a new bad idea Idea, right? Because it was like SegWit 2x was the fifth or something version of this idea. and there was some analysis, I think I saw some analysis that said that somewhere around three megabytes, we start to see more latency and more tendency for centralization. so SegWit 2x actually wasn't an increase from one megabyte to two megabytes, because SegWit itself was an increase from one megabytes to two megabytes. but it was a doubling of the doubling. So it got us, I think it, somehow it made They even ended up around eight megabytes, but, but like I said, I didn't live it, but I know it was at least a doubling of the two megabytes in SegWit, so maybe it was four megabytes. but either way, it was above the, the only real research on the topic that had been published said, you know, somewhere around two, three, it starts getting dicey. I don't think it was coincident-- coincidental that they wanted to choose something that was above that, that safe threshold, because if you could pull that off" }, { "speaker": "jw_weatherman", "time": "35:26", "start": 2125.79, "text": "Hash power, let's say you own fifty percent of the hash power, if you can pull that off and cause, enough latency in the network to where people that aren't right next to you, aren't as profitable as people that are right next to you, which is essentially what we're trying to avoid, then you can end up with a hundred percent of the hash power And if you have a hundred percent of the hash power, then you control the network and you could, you know, you could change anything you really wanted to about it in theory. But at the end of the day, it also illustrated something that I don't even think the attackers quite understood, that you just said, and that is that the only thing that matters is what people wanna buy. That's where the value comes. If I buy it, I value, I hold it, I create a market value for it, I'm willing to buy more of it, and if somebody does pull off an then that thing is gonna be less valuable. So in the long run, it doesn't work, but maybe in the short run, you can screw over some people that don't know what's happening." }, { "speaker": "stephan", "time": "36:24", "start": 2183.51, "text": "Yeah, great points, JW. that brings me to the next point I wanted to discuss, which is around the concept of affinity scamming, which is one of the ways people scam people in this space. So let me just quickly kind of define it and read from basically the Wikipedia page, and then JW, you can comment on that. So affinity fraud is a form of investment- Investment fraud in which the fraudster preys upon members of identifiable groups such as religious or ethnic communities, language minorities, the elderly or professional groups. The fraudsters promote affinity scams, frequently are or successfully pretend to be members of the group. They often enlist respect-respected community or religious leaders from within the group to spread the word about the scheme by convincing those people that a fraudulent investment is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraudster's ruse. Now, the parallel that we see in the crypto world is people who are well-known Bitcoiners will come out and become an ICO advisor. Do you have any comments on that, JW?" }, { "speaker": "jw_weatherman", "time": "37:29", "start": 2248.66, "text": "Yeah, I think, I think this is, this is definitely what is going on. in a way, I think that, you know, the affinity scam is just, good PR, right? If you hire a really good PR firm, they'll help you segregate your target market, they'll help you figure out what messages are gonna resonate and which spokespersons you should use for which sub, you know, subgroup. so in a way, it's very natural, but if what you're selling isn't useful and it's actually a scam, then- And, you know, then I think you could definitely label it, you know, affiliate, scamming or affiliate fraud, or sorry, affinity. and I do think that it's, it's, it's natural that this would happen in a sense, right? Like if you, if you look-- I like the reference to the religious community, 'cause if you look at the Mormon community, if there's one thing that I know about the Mormon community, it's that multi-level marketing scams spread like wildfire in there. If you can get one of those things" }, { "speaker": "jw_weatherman", "time": "38:28", "start": 2308.34, "text": "You have a cash cow because they're, they're a tight, tight knit group, they talk, they have, you know, pretty close relationships, you know, they're basically a network of people that's relatively efficient, in communicating opportunity, let's say. So if you can get a scam in there, it, it performs really well. I think the libertarian community in a sense is, you know, it is in a way a religious group, right? It's an ideological group, and I think that what you've seen with some of these, crap coins is that they Targeted the libertarian community, and sold them on their slight, slightly correct but, but ultimately wrong understandings of economics in order to get them to buy into things that are, that are really bad ideas." }, { "speaker": "stephan", "time": "39:13", "start": 2353.32, "text": "Yeah, great point, great point. And it's a similar, so yeah, you'll, you'll see that in certain altcoins, and then we'll see that in terms of some ICOs and some other, projects that get someone to be an advisor and just kind of, you know, or they do partnerships, right? That's the other way that they all try to affinity scam. so I think these are all great points, and I think the next section that we should do is let's do a little breakdown on some of the large altcoins and what we perceive as the problems in some of them. So, how about, EOS? Do you have any comments on EOS, JW?" }, { "speaker": "jw_weatherman", "time": "39:50", "start": 2389.95, "text": "Yeah, so EOS, I think the idea that it was marketed as was the Ethereum, like the Chinese version of Ethereum. a lot of these, a lot of these altcoins I haven't spent a ton of time with because they're just Such a bad idea. Like, once you understand that money needs to be one thing and that people are gonna have a tendency to, select the thing that holds its value the most and is the hardest to steal, then the idea of like competing currencies, unless they can actually outperform Bitcoin, become really uninteresting, right? Like, I don't need to know a ton about EOS. All I need to know is that it doesn't have a reasonable chance of competing with Bitcoin and I know that it's a failure, right? So it, it's hard For me to get super interested in these things. The other problem that I've faced as a security researcher looking at these, that's kept me from being super interested in becoming an expert on any of them Is that if you look at the top ten list, and I actually did do a top ten review of cryptocurrencies back in November, and it, it doesn't even match the top ten list now, right? Like these, these altcoins, these frauds, they re- they, they have a very short life cycle, right? There, there's a big marketing spend, there's a big buildup, there's a massive influx of dumb money, and then there's a, there's a, a pretty rapid demise. I mean, it could be over a period of years, but when involved years isn't, isn't a lot. but yeah, EOS is essentially, the idea of EOS and the idea of a lot of these things is it's as good as Bitcoin plus. So EOS is all about, like Ethereum, it's as good as Bitcoin plus you can get smart contracts on it. Now, how do they do that? you know, at the time that they're selling the tokens, well, that's not important, right? What's important is that we have a sentence. I think EOS, maybe it was Tron, one of these Speed, a white paper from somebody else, did a quick find and replace, and even failed to do a, an effective find and replace and still raised hundreds of millions of dollars." }, { "speaker": "stephan", "time": "41:56", "start": 2516.11, "text": "so- Yeah, that's right. I think that was Tron, yeah." }, { "speaker": "jw_weatherman", "time": "41:58", "start": 2518.41, "text": "Yeah. So these guys aren't, they're, they're not even taking their own scam very seriously. It's hard for me as a security researcher to take it very serious myself. but" }, { "speaker": "stephan", "time": "42:07", "start": 2527.28, "text": "it isn't" }, { "speaker": "jw_weatherman", "time": "42:08", "start": 2527.74, "text": "that, right? It isn't Bitcoin plus smart contracts. It is, it isn't a secure asset and so it's not interesting whatever features they might have on top of it, you know, some people have called these feature coins, but you can't have a feature without the base layer, and you can't have the base layer without be-beating Bitcoin for it, because it's a winner-take-all game, that's what money is. so Yeah, that's, it's, it's not a good idea." }, { "speaker": "stephan", "time": "42:35", "start": 2555.36, "text": "Yeah, great point." }, { "speaker": "jw_weatherman", "time": "42:36", "start": 2556.28, "text": "I think the market's finally beating the heck out of everybody that, that," }, { "speaker": "stephan", "time": "42:40", "start": 2560.42, "text": "yeah. I think essentially the pr-- some of the problems with EOS is they basically sacrificed decentralization so that they could get high transactions per second, but, you know, as we were saying, that's, that's you're giving up the game. I think the next one to look at would be Ripple. one comment I'll just make on Ripple is that this company, they issued one hundred billion XRP tokens, and they own something like sixty percent of the supply. So when new people come in, they're basically-- they come in and buy XRP, they're basically enriching the founders and enriching Ripple." }, { "speaker": "jw_weatherman", "time": "43:15", "start": 2594.98, "text": "Yeah, I, I'll, I'll comment on Ripple, but I do wanna just mention that EOS, the way that you characterized that was far more legitimate than I think is reality. They didn't make a design trade-off to get faster transactions per second and, oops, that compromised security. They, from the beginning, had no chance of building anything of value, and it's very obvious to anybody with enough technical depth that they didn't even intend to, they didn't even try. so, you know, these, these are definitely frauds, they're definitely scams, and if we had a, if we had an effective justice system, these people would easily be convicted, right? There's, there's no, it's, it's not hard. Like the guy that built the, the, the thing that you set under your trailer that sends out radio waves and supposedly keeps mice from entering, right? Like he's in jail right now, but that had far more basis in science and, and possible truth than any- thing that the EOS guys were doing. so it's important to, to, set that as a baseline, like you guys should understand, these aren't people that are experimenting and maybe will stumble across something wonderful. These are people that aren't even experimenting. Like from day one, they aren't investing heavily in development, all of their money and all of their energy is going into marketing and getting poor fools to be confused. So I think that's, that's an important sort of backdrop for this stuff." }, { "speaker": "stephan", "time": "44:41", "start": 2681.43, "text": "now, the," }, { "speaker": "jw_weatherman", "time": "44:43", "start": 2682.85, "text": "the Ripple is, Ripple is a great example of this, right? The, these guys will present themselves as, \"We're trying to be the regulated token, we're trying to be the token that works friendly with banking.\" if you believe that, you know, if you're not one of these crazy, libertarian anarchist nuts that thinks that Bitcoin's gonna destroy banking, we're the token for you, right? We're, we're the token for the regular guy that actually And Bank of America and the US dollar are still gonna be here in fifty years. So it is an excellent, it's an excellent pitch, but now let's look at the reality and you'll see just how, dishonest and illegitimate this thing is. So one thing to understand right off the bat is that there's two things happening here. There's a, a consulting company called Ripple, and then there's a token called XRP. So the scam is, and the way that it's been executed pretty effectively, is that the consulting company will do something and then make it p Press release and confuse people to think that there's something happening with XRP so that the price of XRP goes up. I'm gonna give you the quintessential example that they pulled off. The consulting company made a deal with BBVA. BBVA is known in the US as a bank that has a tendency to do a lot of pilots, a lot of experimentation, almost none of it goes anywhere, but maybe it's part of their marketing strategy or maybe they legitimately are trying to be new and innovative. But they have a re- Reputation for doing a pilot with just about anybody that has, a story. Now, they don't actually put any skin in the game, right? BBVA didn't actually spend any money to make this happen. But the guys at Ripple, at the consulting company, they were able to get BBVA to agree to do a pilot. Now, this isn't a live pilot, there's no real money involved, but the idea was that the Ripple folks in the consulting company were gonna do some experimentation. And show BBVA how they could do faster settlements. Now, nothing actually came of that, but the Ripple company was able to do a press release, and what the press release said was, \"Ripple does a deal with BBVA in order to facilitate interbank transfers,\" right? Boom, great headline, people are very excited. So what do they do? They go buy Ripple. But you can't buy Ripple, you buy the XRP token. Now, the XRP token is often called Ripple, but had nothing to do- With the pilot. In fact, BBVA eventually let out a press release, or maybe it was just the VP that was in, in charge of the, of the project, made an announcement and essentially said, \"Look, we did a pilot with these guys, it didn't go anywhere. We do lots of pilots, there was no value in anything that the Ripple consulting company brought us.\" Now, that didn't stop the XRP token from pumping in value quite a bit, but that's exactly the kind of nonsense that we're dealing We're dealing with here. And Ripple is one of the biggest, right? They're one of the most respectable, I think. And so I, I think it's really obvious that these guys are charlatans, right? These aren't scientists that are working on interesting stuff. If you buy into it, you're buying into a Ponzi scheme at best, and you're hoping that if you're smart, you're hoping that the Ponzi scheme is gonna be effective, and you're gonna get out before the house of cards comes down. You're not investing in something like nuclear fusion, which may or Successful. There's, there's no actual science happening" }, { "speaker": "stephan", "time": "48:06", "start": 2886.03, "text": "here. Yeah, yeah. And one other point I would add, just to the whole Ripple thing, is that some of their products use XRP as part of the product offering, and some of them don't. And the other thing is, one of their products actually is something to do-- it's sort of similar to like correspondent ba-- like how banks would trans-transact money internationally, right? Which currently the SWIFT network is in place for. And what has- has happened as a result of some of these, cryptocurrencies and, you know, related, projects is that SWIFT has gone and improved their game. So, you know, because it's all centralized anyway, why would they use your, like Ripple's one when they can just use what they've already-- the improved, you know, the upgraded version of what they're already on? but anyway, let's move on. let's now, so as you touched on this before, how about let's, let's go into BeeCash and how they're a bit, you know, centralized?" }, { "speaker": "jw_weatherman", "time": "49:03", "start": 2942.53, "text": "Yeah. So, so BeeCash actually, I think it's finally over, right? I think it is, it's on its last leg. So if you have any B-Cash left, now's the time, in my view. Now, I could be wrong because, you know, the thing with scams is it's really hard to time when to get in and when to get out. And if you can time getting in and out of the scam well, especially if you're the guy running it or he's your brother or something, you can do better on a scam than you can do on, you know That's doing the fleecing, or are you part of the, the outer circle that's getting fleeced? and maybe more importantly, you know, if you have any ethics at all, are you gonna be able to, feel like a, a healthy, happy human being participating in these, these, you know, vile, wealth-destroying creations? so B-Cash is, you know, essentially just increasing the block size, right? They, they, they made an exact copy of Bitcoin and they increased the block size. by, a hundred percent, which was what Segwit 2x was attempting to do. and then the only thing that, the only other thing that differentiates them is that they didn't include a security fix, that was included with Segwit. There was a bug in Bitcoin called transaction malleability, which basically allowed you to change certain parts of the transaction. They weren't really critical parts, and it's not like you could change the amount or the source address or the destination address, but you could change the transaction enough to where layer two solutions like things like Lightning and other interesting things that would be built on top couldn't easily be built on top because there was just a little bit of unpredictability. so it was a security flaw, but it- It just wasn't a super high priority security flaw for a long time in Bitcoin. It eventually got fixed with the SegWit release, and it actually had, some interesting, side effects of fixing this. One is that there was a way that, that miners could pretend to be doing work. They could essentially fake proof of work by, let's say, fifteen percent, I don't know what the exact percentage was, and the problem with that is that the whole point of proof of work is to prove that you spent, say, a hundred thousand dollars on electricity or three thousand dollars on electricity. If, if you didn't actually spend that amount, you spent fifteen percent less, then you have an advantage and you've also deceived the network in how much it would cost to attack it. so it's not-- it wasn't good, but it wasn't a deal breaker, it was kind of a known thing. It really came to a head with SegWit two x and B-Cash because some people, we believe, were exploiting that flaw and taking advantage of that, and it was making their business much more profitable. So implementing that security fix would have- Prevented them from, from profiting as much as they were by faking that they were doing work that they weren't doing, that gave them an advantage over the other miners that they were competing with. And so when that security fix got implemented in Bitcoin, bCash popped up, and bCash was, a copy of Bitcoin that increased the block size to a dangerous level and didn't include the transaction malleability security fix. and, you know, it's, it's had a good run, but I think, like I said- You know, security flaws are eventually exploited. Everybody knows that. The game is just how much dumb money can we get between now and then." }, { "speaker": "stephan", "time": "52:26", "start": 3146.21, "text": "Yeah, yeah, good points. Okay, let's, move on to Ethereum, and talk about how, you know, I think they're quite centralized and their monetary policy is very uncertain, and also there aren't that many full archival nodes running on Ethereum. So did you wanna comment on that?" }, { "speaker": "jw_weatherman", "time": "52:44", "start": 3164.2, "text": "Yeah, there are so many problems with Ethereum that I couldn't even do it Justice, but it, it's like EOS or anything else, right? Like they have done an excellent job on marketing, they had the most beautiful website, that probably any cryptocurrency has had, but they didn't spend a whole lot of money on, on actually designing a secure, system. And that's because I don't think they ever thought that they could. They've always been very clear that they don't want to be compared with Bitcoin. You know, they wanna say Bitcoin can be money and will be smart contracts, or Bitcoin can be money and will be the world's computer. That's not an accident. It's because they know that if people can see clearly that it is a head-to-head competition, and they have any level of technical depth, they're not going to believe that Ethereum is gonna stand up in the long run. So instead, they try to- To, to, to make it seem like they're not competing at all. Now, the reality is they are competing because a smart contract is only useful if it's built on top of money. Or another way to say that, at least, is that it's a whole lot more useful if it's built on top of money. so if I could write a contract with you that says, you know, I'm gonna, I'm gonna do X, Y, and Z as far as labor goes, if I get fifty percent done, I get this payment, when I get to a hundred A smart contract. Now, imagine writing a smart contract like that, but the payments aren't in money. That's not nearly as attractive, right? It's not nearly as useful. Yeah. So the, the reality is that smart contracts, are a really cool concept, they will eventually be, used, broadly. and in some sense, they are used broadly now between multi-signature, wallets and the Lightning Network, which are both smart contracting systems. Or Systems that use smart contracts to be, to be possible. but Ethereum was able to make it seem like Bitcoin was slow and not making progress, but really at this point, I think the jig is up, because the simplest smart contract, and for many months really it's been up, because the simplest smart contract is a multi-signature wallet, right? Where you have, or, or a multi-signature address where multiple, signatures have to be applied in order to move funds. Well, you've been able to do that in Bitcoin for a real- Really long time, but you can't currently do that in Ethereum. there was a lot of multi-signature wallets that were full of this frothy ICO dumb money, and, the guy that actually wrote the programming language, I think it's called Solidity, on top of Ethereum, wrote this, this wallet, right? And it is the simplest smart contract you can create, and it was so riddled with security flaws that after, I don't know, ten million dollars had been stolen, everybody had to pull their money out. So there is no smart con- contracting on Ethereum. meanwhile, on Bitcoin, we, we have had multi-signature wallets for quite a long time or multi-signature addresses or transactions or whatever. and also now we have, time-lock transactions that allow us to create something like the Lightning Network. So smart contracts are good, they're moving forward. Ethereum never had a chance of being really useful, but again, did a great job marketing and definitely sucked in, quite a bit of dumb money." }, { "speaker": "stephan", "time": "56:03", "start": 3363.42, "text": "Yeah, good points, good points, agreed. Alright, let's now proceed to the next level of, altcoins. We've got the privacy coins. So I know you've, you had an interview on Monero with, Fluffy Pony, who is the lead maintainer. one of the main comments I think we can say about Monero is that it's just, it's not scalable. It, they took some technology that, you know, Is interesting, but then it just cannot scale to the level that Bitcoin can. did you wanna comment on that?" }, { "speaker": "jw_weatherman", "time": "56:35", "start": 3395.09, "text": "Yeah, so I mean, I, I, I've talked a lot about Monero. It's probably the thing that has got me the most flack because 'Cause the, I mean, the thing about a lot of this stuff, a lot of multi-level marketing are just flat-out Ponzi schemes. Part of the reason they're effective is that people don't want to believe that they've been screwed over. They don't wanna accept the fact that they've been ripped off. So if you have invested in a Ponzi scheme, You, you would almost, in many cases, rather just lose your money than go through the mental anguish of recognizing that you've been had. and that maybe, and this is the most painful part, that you were complicit in having people that you love and care about being had as well, right? If you can get somebody to buy your scam, that's step one. If you can get somebody to suck in their friends and family into your scam, that's wonderful, because now you have, you have somebody that is very deeply- invested and will struggle psychologically to accept that they've actually harmed the people around them that they care about. So you've actually created this wonderful sort of insulation barrier between you and the victims, right? And it's almost a Stockholm syndrome thing, like the victims are on your side. So the problem with talking about something like Monero, is that especially in the Bitcoin community, it is sort of the most-- or it's the least hated altcoin, right? Fluffy Pony is a very attractive, character. Very gregarious and, and fun. You know, he's done some brilliant marketing. I mean, the, the guy says that he doesn't market, but he is the best marketer in the space as far as I'm concerned, because he has been able to appeal to the smartest people and suck the smartest people into his scam. The problem is that this is a game about creating money, right? If, if we were looking at a bunch of startups and they were trying to ship out pet food to customers, you could say, \"Mmm, you know, maybe pets dot com and my Will both exist and they'll have, you know, sixty and forty percent of the market share. But when you're talking about money, it's a winner-take-all proposition, right? It's a, it's like an internet protocol where it's so much more useful if we all get on the same page or a language, right? It's so much more useful if we all speak the same language that, that We're going to end up with a, a single global money. And there's a little bit of economic science that you'd have to study to really believe me when I say that, but, but because of that, it doesn't really matter, even if Monero was able to have a slightly better, privacy experience, which is very, I think, arguable at this point, partly because there's so few transactions that happen on it. I certainly wouldn't recommend anybody use it for secure transactions, because if I was part of the surveillance apparatus, I would Focus a lot of my energy on that. With very few people moving in and out of Monero, I think it'd be very easy to figure out what's going on. but the, the other issue with Monero is that, like you said, it doesn't scale, and since it doesn't scale, in other words, you could never use this as money. What are we doing here? It doesn't matter how private it is if it can never become money. 'Cause what's happening right now, and I think a lot of people don't understand this, is that if you are investing in something like Bitcoin or Monero or Grin or any of these other coins, what you're doing is you're investing in a technology hoping that it will be adopted as money. Because if it's never adopted as money, it is just a set of ones and zeros that's useful for nothing else. so- If it can't become money and you're investing in it and it's purely digital, what are you like, what are you doing here, right? So that, that's really the problem with Monero, and, and I think it, it helps illustrate the problem with a lot of these things." }, { "speaker": "stephan", "time": "01:00:22", "start": 3622.47, "text": "Yeah, got it. Alright, and we'll, just in the last few minutes, we'll hit the last one, Zcash. And so I guess some of the, opening comments I'd le- I'd put on Zcash are that There has been some recent research done by the University of Col- University College London where they were able to de-anonymize certain addresses, and I, I think what, what, what it, what it's getting at here is that in Zcash, not every transaction is in the shielded pool, so some transactions are in the normal set and What they were able to do was find that the number of people you-- because the number of people weren't, weren't kind of using the anonymity functions by default, then the ones who were using it were somewhat able to be de-anonymized, and this relates to the addresses used to pay the shadow brokers who, were also responsible for releasing the WannaCry exploit. and also, I think Zcash also has a, a bit more kind of \"Quote unquote governance, which might also be worth a comment as well. Did you wanna comment on that, JW?\"" }, { "speaker": "jw_weatherman", "time": "01:01:33", "start": 3693.59, "text": "\"Yeah, I think, I think Zcash is, it's kind of funny because...\" I, I like to try to, to, when I can, create analogies, of other sort of technologies. So if you can imagine being in a boardroom and somebody comes in and they say, \"Hey, we're going to, we're gonna create this new solution and, it's gonna compete with the, you know, the big competitor, right?\" and what we're gonna have to do is we're gonna have to introduce this massive amount of trust, because you're gonna have to trust that when we set it up, we do it honestly, Users are gonna have to trust this. and, when we're done, we're-- the advantage that we're gonna get is that if you opt in, you're gonna get a certain feature. Now, we, we can't actually give you that feature by default because it's so inefficient, like it would never work. But if you trust us to set it up, then we can give you this feature that maybe if you use it, which you can't use it normally, but if you choose to use it It could provide you this benefit. You would sound like an absolute madman, and if you, if you then said that the thing that we're building is a digital money, you would sound like ten times the madman, because there's no way that if you're trying to create a digital money that's gonna compete with Bitcoin that is designed Specifically so that there is nobody that you trust, right? That's the whole idea of cryptography, is you assume everybody's an attacker and everybody's evil. and if you're going to take it to the point of actually being money, which is the most critical thing to keep us all alive, because it's the, it's the glue and the, the fluid of the economy, and then you're going to say Well, we're going to make it so that you have to trust that we set it up properly. Otherwise, we can silently create more money and steal all of the value of your money. And the benefit for that is a feature that sucks so bad it has to be turned off by default. Like, this is, this is absolute, you know, this is nuthouse stuff. But if, again, if you're marketing, marketing it to a bunch of people in, you know, South Korea that don't speak English and, and don't, can't probably even, understand Understand what the heck this technology claims to be, which is where a lot of this dumb money came from, or, you know, the guy that works at the, the, the grocery store that heard about Ripple and is now really excited about this new privacy coin but has no technical knowledge at all, then, you know, you, you can make something that works, but I really think that if you see it in that light, you can see why I have just such disgust and disdain for this, and it's really unfortunate with something like Zcash because there are respectable people associated with these projects, and it's just disappointing to, to, to see that, because they're, they're, you know, they've sold out their reputations for, for, a few pieces of silver, and, it's, you know, this is, this is a short-lived scam, I think it's got, you know, maybe three" }, { "speaker": "stephan", "time": "01:04:36", "start": 3876.82, "text": "yeah, good points, JW. Okay, well, I think that's, they're basically the key points, I suppose. To summarize and just kind of wrap a, a nice bow around this, we would say, you know, you've gotta pay attention if you're new to the space, you've gotta pay attention to the network effects and pay attention to what is really something that's, you know, scalable, makes economic sense, i-i, you know, has the right network effects around it, has the right developers, has the right incentives for, you know, people to buy it These are all things that we have to consider when we're, you know, when people are looking, when they're trying to learn about cryptocurrency and understand why Bitcoin is special. So hopefully in this episode, JW and I have been able to explain that to you guys. and I suppose now let's just, where can everyone find you, JW? your Twitter account is, at weathermaniam. and also, if you wanted to chat about Mathbot." }, { "speaker": "jw_weatherman", "time": "01:05:32", "start": 3932.68, "text": "Yeah. so, let me, let me just, kind of, respond to that last comment as well. I realize that most people that have listened to this episode, they're, they're-- At this point, I know, because I've tried to communicate these things on Twitter, I've tried to communicate these things in one-hour podcasts for, for a little while now I know that there's many people that have heard this that just don't buy it, that don't quite understand, for example, why money has to be one thing, that see that there's competing monies in the world and think that that will continue, that assume that money is like other technologies where, you know, competition is generally a good thing, right? so at this point, what I've ended up doing is creating a class that I teach, and it's eight hours, it's very intensive. It starts at the basics and works all the way through the economics that Understand and the technology that you need to understand to at least avoid ninety-five percent of the garbage that's out there. Eric Lombrozo comes in and does a one-hour talk on the technology and Safedina Mos comes in, the Bitcoin Standard guy, and he does a one-hour talk on the economics, so, but I guess what I wanna say there mostly is that it's okay if you don't believe me. I understand at this point that it requires a lot more work than I can do in a one hour lecture, but I would, I would recommend that at least you take seriously the possibility that what I said is true and investigate it." }, { "speaker": "stephan", "time": "01:06:58", "start": 4018.49, "text": "Yep. Yep, great points. Okay. and, is there any, any other projects you'd like to speak about at this point, JW? Or? Yeah," }, { "speaker": "jw_weatherman", "time": "01:07:07", "start": 4027.37, "text": "yeah, yeah. Thanks again, man. Thanks for, for giving me a chance to plug MathBot, twice. So, The, the thing that I spend most of my, my time working on right now is Mathbot dot com, so go check out, go check out the website Mathbot dot com. It's basically, a game that allows you to learn math, by programming a robot. it's great for basically anybody between five and ninety-five. and so if you're thinking about maybe changing your career and going into programming, or if you've got, you know, a, a seven-year-old kid and he's struggling with math, Especially if he thinks he's not good at math, that's exactly who, who I care about most because all kids are good at math, they're just rarely taught it properly. check it out, and then give me feedback. you can hit me up at weathermanm on Twitter and let me know if, you know, there's a bug or if it was fun or if you're stuck. so you can pretty much get some pretty good free math tutoring out of me and programming tutoring out of me at this point, 'cause it's early There'll be little bugs here and there, but, in exchange for a little frustration, you'll, you'll get a lot more attention from, from me and the other, the other folks in the email, when it's all polished up. So check out mathbot dot com and, let me know what you think." }, { "speaker": "stephan", "time": "01:08:27", "start": 4107.28, "text": "Excellent. So guys, I will put a show notes page on my blog. Go to stephanelivera dot com and search s l p four, and that will be the episode here with JW, and I'll put some of the links to the points that we've discussed. And I'll also link to, to Weatherman I am, which is JW's Twitter, and mathbot dot com. Otherwise, thanks very much, guys, and, have a great day. See ya!" } ] }