{ "episodeId": "SLP47", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "giacomo_zucco": { "name": "Giacomo Zucco", "role": "guest", "tag": "GIACOMO" }, "guest_2": { "name": "Guest 2", "role": "guest", "tag": "GUEST" } }, "segments": [ { "speaker": "stephan", "time": "00:10", "start": 9.67, "text": "Welcome to the Stephan Livera podcast, a podcast about Bitcoin and Austrian economics. Listen in as I interview the best and brightest entrepreneurs, business leaders, software developers, economists, writers, and analysts. This is episode forty-seven and my guest is Giacomo Zucco. Hardcore Bitcoiners already know who he is, but just for any listeners newer to Bitcoin, Giacomo is a well-known Bitcoin advocate, supremo of bHB Network, providing Bitcoin and blockchain consulting. He's well known for his comedic speeches and has been around Bitcoin for a long time, so here's my chat with Giacomo. Giacomo, welcome to the show." }, { "speaker": "giacomo_zucco", "time": "00:47", "start": 47.03, "text": "Thank you very much for inviting me." }, { "speaker": "stephan", "time": "00:48", "start": 48.45, "text": "Yeah, Giacomo, I've really liked a lot of your material that you put out and the talks that you do, so I just wanted to get you on. And actually, funnily enough, just, last night I saw you posted this important thread where you mentioned that there is a critical or catastrophic vulnerability that will kill Bitcoin." }, { "speaker": "giacomo_zucco", "time": "01:06", "start": 65.66, "text": "Yeah, it was, actually, a lot of fun. basically, I, I think that, it was triggered by the fact that somebody Messages, to give my opinion about the, the, the, the thread about the, un-understandable, unintelligible, Andrew Dessantis' tweet with, Bryce Wyner, rebouncing it about this SegWit vulnerability. And so I was so annoyed that I, that I just said, \"I will, I will tweet a couple of tweets about the new vulnerability, mocking these people believing in everything.\" My expectation was not that some- Nobody would, would, really have been fooled by that, because, i-in my opinion, the irony of the tweet was, immediately obvious since the, the beginning, because, for example, the, the, the first part, the first tweet, the, the very, beginning of the thread, starts with, exclamation marks mixed with ones, one numbers, which is t-typically, when you're mocking somebody not very good with a keyboard, and then, I, I suggested I'm dumping Bitcoin, in order to buy Ripple, Satoshi's Visions, Ethereum, and DentaCoin, specifying that DentaCoin is the most immune coin to these vulnerabilities. So the, then of course, with point one, I started with the time travel, communication mechanism, and then I moved to, to mocking the, the scientist, the, the, the scientist drawings on the screenshot. So in my opinion, it was super- Obvious, it was a joke. But actually, I'm still receiving now, some, some nice, death threats in my personal messages, and some people, especially tweeting in, in Chinese or Japanese using automatic translators, that are basically, falling for, for that in, in Asia. So it's, it's, very fascinating and also, it was unexpected for me, but it's, probably also very telling of the state of informational asymmetry and- And also, educational asymmetry and cognitive asymmetry maybe that we-- that, that there is in this market, the, the general crypto market for sure, and but sadly also the Bitcoin market. some people didn't get, get the joke, which is, really a, a pallid." }, { "speaker": "stephan", "time": "03:33", "start": 213.38, "text": "Yeah, I think it could just be that to some, it, it looks like it's inside baseball and really only people who are closely following it understand it. So obviously, people who are closely following the scene Kind, kind of know these jokes and know the references, but maybe, you know, to an outsider, they could get confused." }, { "speaker": "giacomo_zucco", "time": "03:51", "start": 231.31, "text": "Yeah, that's a good point. I mean, getting the joke in a sense of, fi-finding the joke funny requires probably a little bit of knowledge, not just about Bitcoin, but about also like the Bitcoin gossips and, and personalities and communities. So this is a very like insider joke. So getting in the sense of finding it funny, it's probably difficult for insiders, but getting in the sense that, You shouldn't base any kind of serious consideration on this kind of tweet when you immediately talk about DentaCoin and then you talk about time travel and then you talk about, I mean, get, not getting the joke, meaning treating this as something serious. I think it, it, it qualifies a level of absolute, lack of understanding of not just Bitcoin, but probably internet and, and Twitter and irony and life and, and- Physics and, and basically everything, which is," }, { "speaker": "stephan", "time": "04:52", "start": 291.71, "text": "in my opinion. Yeah, I, I thought it was hilarious thread. Yeah. Look, people, people should, come, we should, people should come out, I should title this episode, Giacomo rage quits Bitcoin." }, { "speaker": "guest_2", "time": "05:02", "start": 302.23, "text": "Yeah, exactly, exactly. And we'll get a lot of" }, { "speaker": "stephan", "time": "05:04", "start": 303.93, "text": "clicks on the download." }, { "speaker": "guest_2", "time": "05:05", "start": 304.95, "text": "The, the herner, the Yeah, the Mike Hearn move, yeah, Giacomo creates Bitcoin, capitulation, Bitcoin cap, bear market capitulation." }, { "speaker": "stephan", "time": "05:15", "start": 315.16, "text": "look, anyway, we should get, we should bring it back to some, more real topics that I had. So I've got a few topics prepared, Giacomo. One of them I thought would be good to get your thoughts. So there's been a bit of a trend. Now, there are positives and negatives here. So some people have been talking about this concept or releasing custodial lightning wallets. Now, on one hand, people could The correct Bitcoiner ethos is that you should run a full node, hold your own keys, but then the flip side is, actually, it might not be a big deal. People aren't maybe not putting a lot of money in, and maybe it's more like a gateway drug. They start using the Lightning wallet with just a small amount, and then they go and learn more. What do you think?" }, { "speaker": "giacomo_zucco", "time": "05:54", "start": 353.92, "text": "So I think there, there is a, a couple of considerations that we can, we can make about this. The first one is, the, the consideration, the general rule about, a rule" }, { "speaker": "giacomo_zucco", "time": "06:07", "start": 366.67, "text": "It's true that some, sometimes, often actually, security is in direct trade-off with, user experience of, or, or, or, intuitiveness of, of a system or, or time you spend to study it and to use it or costs. So sometimes you have to compromise and low security systems can be a gateway drug for high security systems. So i-it's true that sometimes before you can get to an expert level and have a su- Super complex, called multi-sig wallet with Glasser protocol and hardware wallets. You can just, pass through a simple Bitcoin investment through a custodial, or before you go to a full Lightning network node with, with complex, submarines, warps, things, you just use, some centralized service like ChangeDeep. But the problem is when you are not using, you're not aware of being used Using, a low security alternative, and you think, or you are, you are misguided, you are, you are brought to think that you are using a high security, but somehow, high, simplicity alternative. Just to give you an example, when, when, when I, tell you that you can, keep your Bitcoin on an exchange, the trade-offs, especially after M-T-Gox, are pretty much, Clear. But when I start to sell you a, a, a fiduciary account like a Bitcoin wallet, so I try to confuse you with some kind of security circus, and I let you think that you are doing more security than, than you actually are, that's actually a dam-- a net damage. So i-it's correct that you can move from custodial solutions, to non-custodial solution, and custodial solution can be a good gateway drug for this kind of things, but, custodial solution don't need light network at all. g- if you remember, there was, f-for micro, for Bitcoin, I mean, Bitcoin was always bad for micropayments and instant payments by definition, because even when, nobody was using it, so fees were very, very low and sometimes, in-existent and zero-conf double spend were very rare and sometimes in-existent, still it was a lot of friction to, to, to use the on-chain, part of Bitcoin. Which is not, i-i-is not really, useful for instant and, and cheap, transactions. So people, in order to micro-tip other people, were using, a centralized solution, custodial, called Change Tip. It was a solution in which you charged your Change Tip account, fiduciary account, with one Bitcoin on-chain transaction, and then you could just tip people off-chain using this custodial solution. So I don't think the- There isn't anything inherently bad about that. It's, if, if the trade-off you're making is very, very clear. But, Lightning Network is an evolution of that, meaning that, you are now, we are now reaching to a trustless, permissionless, and non-custodial alternative of, micro-trans-, micro-, micro-payments and micro-transactions and fast transactions. and, and now the trade-off is, is clear. We are safer, not as safe as with on-chain Bitcoin trans- So there still is a trade-off. When you're using Lightning Network, your keys are basically hot, so it's less secure. The, the, the security model is punishment-based instead of validation-based, so it's less secure. also you can have some kind of, DDOS attack. So, in a way, Or, or you can lose your key, you can lose your, your device, and it's not just like, B32, seed where you can just recover everything from the seed. In this case, in Lightning, you have more, backup problems. So you are giving up a little bit of security to get a lot of, good UX. But with, but with, custodial Lightning Network, this is very confusing. I mean, this is security circus. What, what is the- Advantage, f-f-from a custodial Lightning network compared to a more simple, more clear, less confusing and, and less, let's say gas-lightning, custodial solution like, ChangeTip. So, th-this is, that I don't like. It's not that it's custodial, but it's just cust- it's pointless, and it's pointless because it's, used in order to, to, to make people think they are using something more- Than a simple, change tip like, like solution. Of course, there is one counter argument to this, which is, the fact that if and when everybody is using the trustless solution, so everybody, or a lot of people is using Lightning Network, then a Lightning Network custodial solution is better than a change tip like custodial solution, because, on a, a change tip like custodial solution, you can only tip people on the same system. So It has very low social scalability, it has a lot of friction, i-i-is not an open standard, it's a proprietary, closed system. While which w-if you use a, a centralized, proxy to the open, the centralized Lightning Network, you can have all the easiness, all the, the, the simple UX of a centralized, trusted solution, but you can still interact with other people using Lightning Network. This would be the case of, I mean, you, you sh- Surely remember people in the late nineties, especially managers and entrepreneurs, asking their secretaries to print the emails for, for, for them. So they were just getting paper, printed paper, so they weren't using email in its full power, but, the, the reason they were doing that because it was, to, to, to get connected with other people using the same open protocol of email. So it can make sense, but I will expect this, I mean, it, it doesn't- It doesn't make sense now, there was a, there was a somebody pointing out that, a custodial Lightning Network wallet could be s-a rational thing if there was a lot of market and of e-commerce going on on Lightning. So in that case, basically a lot of people using Lightning, I want to use Lightning too, I'm not technically enough to run a Lightning node, then I just use this kind of proxy. But why is people using custodial Lightning Network, solution? Solutions right, right now. Not because of that, because you can still not really, I mean, unless there are very few people that installed, Bitcoin, I mean, Lightning Network custodial wallets in order to buy stickers from, from Bloxstream or whatever, or to, to buy Pixel on Satoshi's place. But these are very, very, I mean, fringe scenarios. So most, for most of the cases, I think that the, the explanation is a security circus. So these people think they are using They are using something technological, something exciting like Lightning Network, and they're actually just using a centralized account. So in this sense, it's a net negative." }, { "speaker": "stephan", "time": "13:39", "start": 818.57, "text": "Yeah, I think you made a lot of great points there. I particularly like the point you made where you were comparing it back to Change Tip, and at least in the sense that it can, while you're interacting from a custodial hosted wallet, you can still interact with the open internet. And if more and more people start using internet commerce and, you know- Doing lightning tipping, let's say, that may be another angle of adoption. And the other cool thing, well, I guess another observation that you, you know- Might think about here is, it might be easier technically to build a custodial Lightning wallet, and because there's so much excitement, that could be why a lot of people are trying the custodial angle compared to the, let's call it the, the more trustless or, you know, trust-minimized model." }, { "speaker": "giacomo_zucco", "time": "14:27", "start": 867.06, "text": "Sure, sure. That's, that's part of the general trade-off we were discussing. Centralized solution are simpler to build, to, to bootstrap and to, to maintain and to evolve, for, I mean, unless The, the, the centralized alternative becomes so widespread that basically you can just piggyback and leverage, an open standard already maintained by, by thousands of other people. So, la-- to make a comparison, if you have a private network for, an information technology network, for your company in nineteen ninety-two, it doesn't make any sense to use the Internet because it's just more expensive, more complex to bootstrap. You just use a, a mainframe. Mainframes are perfect for a closed, proprietary environment. So if you are in nineteen ninety-two, you just use a mainframe, but then use the internet instead only for external interaction, to interact with other people with the open standard. But if you are in two thousand nineteen, well, even if you want to create a closed system for your company, closed and proprietary, so you're not really leveraging the internet technology because you could just use a mainframe, you still use the internet, not- Because it's technologically efficient, but because it's socially efficient, because everybody else is already using it and you are still using it for any, any other use case, and so it's, low cost to reuse it also for the close, the close environment. Which, I mean, I could, I could do the same comparison with, WhatsApp over the internet or walkie-talkie. If you have to send a vocal memo to a guy in, in, in your same building, you should use a walkie-talkie, technically speaking. Speaking, it's more efficient, but use a, a vocal memo over Telegram or WhatsApp, which is crazily inefficient technically speaking, because the voice will be, will be encoded into packets and they will go to your WiFi, then to your router in some IP random path, and then back to the 4G of the local telephone operator, back to the cell phone of your friend in the same building, which is crazy. The reason you do that is, is because everybody else is using that That and you are also using that for every, everything else. So it's basically social scalability, as Nick Sabo calls it. So this makes sense, but this all, all, only makes sense when there actually is, this kind of, penetration of the market. It's a similar question of, I mean, using Bitcoin to pay for coffee. right now it doesn't make any sense, economically, but also technically. It makes sense when, you use Bitcoin For the things that you can't do without Bitcoin, so to pay, to buy from the black market, to save your, your savings from inflation or confiscation, to use, to do, advanced, micropayment things like, like, machine to machine, because, PayPal won't allow you, regul-- I mean, from a regulatory point of view, not from a technical point of view, to do micropayments. So you do that only because you can't do that with fiat legacy. Alternative. But, you don't do the, the normal fiat legacy payments with Bitcoin if you can avoid that, because it's, more complex and also economically a little bit, inconvenient. So, you will, we will pay for coffee in Bitcoin when everybody, everything else will be done in Bitcoin and the, the, the momentum, the inertia, the, the gra-the gravity force of the open alternative will also attract all the- Closed, legacy alternatives." }, { "speaker": "stephan", "time": "18:11", "start": 1091.41, "text": "Yeah, I think the comments you make there are very much echoing this idea that it's really about what level of infrastructure there is set up to do a certain thing. So in that example where you're saying you text your friend or you voice message them using WhatsApp, well, the infrastructure is much better for you to do that than for you and your friend to both carry around walkie-talkies, that kind of thing. So it's ultimately, once we get to that point where enough people are using Bitcoin and Lightning payment, that it becomes- Kind of the easiest route for people to use. another thing you've been commenting on recently is around altcoins. So as we enter two thousand and nineteen Do you still believe that altcoins, some of them are more like an honest but maybe misguided attempt, or are they maybe are they scam coins that are distracting from the overall journey to global sound money? How do you think about some of these altcoins?" }, { "speaker": "giacomo_zucco", "time": "19:04", "start": 1144.39, "text": "So I still think that a very, very limited number of altcoins are extremely interesting and also good faith experiments, mostly, and maybe even useful for both the Bitcoin evolution and some specific use- use cases, at least arguably, right now. A typical example is, is Monero. Monero is an interesting experiment of different trade-offs between, scalability basically and privacy, because it's using the on-chain privacy idea where you still have every node storing every information forever, but they store this information in an encrypted way with a ring signature and confidential- Transaction. and so the, the, the, the, the, the proofs are larger and heavier, so the validation is more difficult. So all the scalability problems of Bitcoin are made, i-i-are made orders of magnitude worse in Monero, but you test this, this alternative in order to get more privacy. I, I would say arguably more privacy, because the point of, of privacy and anonymity and, and fungibility is also about anonymity set and, and liquidity. So if, if you use just a Bitcoin trustless tumbler like, Joy Market or Wasabi, Changyin Coinjoin or, or, or TumblerBit or whatever, and there is more liquidity on this tumbler than there is liquidity on the Monero transaction right now in, in terms of value, then you're actually more private in Bitcoin than in Monero. So it, it really depends if there are less users in Monero than users in, in, in the Bitcoin tumbler you're using, then- There is a be- best, better privacy in Bitcoin. That's why things like Zcash don't make any kind of sense, because in, in, in Zcash there is an optional, privacy, which is optional but more expensive. So you are supposed to pay more to have privacy, which is okay, but that means that nobody is using shielded transactions. So in Zcash, everybody is using normal transaction, and again, security circus, they think it's more private just because some market- Is telling them it's, it's more private just because they read it somewhere by, by, by, by some people, but it's not true actually. It's way less private because there is a very small anonymity set, very, very few people are using the cash, and very, very few people are using shielded transaction, so that even if you do use shielded transaction, you aren't private at all because the anonymity set is super small because nobody else is using it. So getting back to Monero, I can imagine that this experiment is interesting Testing for studying the, the trade-off that, that, can be, that, that can be, helpful to evolve or, or, build around or on top of Bitcoin. and also I can imagine that for some specific use case, if you really, have to mix your coins, maybe, adding to your Bitcoin mixing also a, a, a Monero, I mean, a Monero transaction on BSV and then a Monero transaction and then back to Bitcoin Coin could also be something, interesting. But, there are at least two arguments for which I still think that even these honest experiments, would better off if done without any new coin. The first one is a typical monetary argument. So the point, the Bitcoin works because it's perceived by the market as scarce, as digital scarcity. Digital scarcity exists because you have a, a finite, predictable supply So twenty-one million, et cetera, et cetera, less than twenty-one million. but, this is a, a scarcity of Bitcoin only. If you, if you use other altcoins as substitute, substitute goods for Bitcoins, so if you can use digital scarcity with Bitcoin or Monero or Litecoin or Ether or whatever, and the market just treats, these alternatives as basically the same thing, digital money with very low, frictions in exchange, then you- You don't have a predictable supply or capped supply anymore. You have a potentially infinite supply because the cost for producing new Bitcoin is very, very high. You have to do proof of work at the proper, at the proper difficulty, while the cost of producing an altcoin is basically zero. You, you, you take the code, the open source code, you change a parameter, a-and then you launch, and the only real cost is marketing, but, but that's an unpredictable cost and it's not an inelastic cost, it's an elastic cost. The more- your coin has value, the more m- you can invest in marketing, just like it happened with, with Ether. So it's a very bad form of money. So this, this first po-first point would be that, if altcoins are sustainably possible, then scarcity is sustainably impossible. So, Bitcoin can fail because of altcoin, but altcoins can't win, a-and not coexist in a meaningful manner with Bitcoin. Of course, that doesn't mean that- That, that the price on the market of any altcoins would be absolutely zero. Zero is, I mean, nothing that had a price at a certain p-point in history, would be for sure, forever zero because it can still be sold as a collectible. Maybe in two thousand and thirty, some people will, exchange a Litecoin private key, for a price because it's a historical collectible. So, nothing really goes to zero, but, it will be probably irrelevant. So the first thing is that, if you want to launch an legit experiment like Monero, but not just Monero, consider also maybe Namecoin, for, for nom- namespace, decentralized, app- A, a signation, assignment, sorry, or consider SiaCoin for distributed, replicated and distributed, storage or, maybe, the, the new very, very cool MimbleWimble protocols like Green. these projects are interesting and motivated also by legit ex- legit use cases sometimes, maybe, and legit, technical, scientific, inquiries for sure. Unlegit, or goals by, by the people promoting them, most of the people promoting them, but they would be better off if they could be, either, a, a Bitcoin side chain, which means a new architecture with totally different rules and features, technically speaking, but, reusing the same, value content which is Bitcoin. If you think about that, if you want to, to, to evolve from, from, V, from V H, as to DVD to Blu-ray, you do evolve the medium, the infrastructure, but that doesn't mean that you have to throw away all the movies that you, that you, I mean, Hitchcock movies were on some kind of support, and now you can still enjoy them on the new support. You don't have to rebo strap Hollywood history and cinematic, standards every time you change the, the kind of support. If you go from, from, gas, engine To Tesla, electric engine, you don't rebuild all the roads and the road system and the road signs just in order to use the new, technology. So the, the point of side chains would be to launch the new alternative experiment like Monero, MimbleWimble, but without trying to rebooster the asset again, which is also creates a second class of problems, even assuming-- and I, and I, and I don't assume that, I think that's false. Even assuming that digital- A scarcity can exist with, an unpredictable number of altcoins recognized by the market as, as money. still, you have a problem of liquidity that I was talking, I was talking, about before. So let's consider, for example, the, the, the very naive view that you can save money, using, Litecoin as a transactional coin while at the same time storing your value long term in Bitcoin. So you have Bitcoin as a store of value value, and then your counterparty, the merchant, likely has Bitcoin as a store of value, but you use Litecoin as just a transactional money. This doesn't make any sense because in order to do that, you have to sell, to move your Bitcoin out of your cold storage to a market, so you pay an on-chain transaction with, or, or whatever with Bitcoin, anyway, any-anyway, you move Bitcoin, then you pay a market fee to change Litecoin, then you send the Litecoin to your merchant, then the merchant- We likely have to, to move, to, to change on the market again and to move back to cold storage. So, yeah, you can get some efficiency by batching, so you can do a few Bitcoin transaction from and to exchanges, and then back to storage. But still, the, the point is that, this doesn't make any sense. You are paying more, you are paying more fees. It only makes sense if you assume that either you or and the merchant are actually using Litecoin as a long-term store of value. But if you are assuming that, then you are assuming not a new form of transactional-- you are not really differentiating the functions between store of value and transactional money. The same thing applies actually with Monero. So assume you are, you are keeping your, your, value, in, in your co-- Bitcoin Core wallet, and the merchant will eventually have to do the same. So the value proposition of long-term censorship-resistant store of value is served by Bitcoin. Then now you want to be private and you have to che- to move Bitcoin to a market to sell those Bitcoin for Monero, to send Monero to the, for the merchant that will have to sell, to, to move back to the market, exchange for Bitcoin and get the Bitcoin back to the, to the, to the cold storage. Of course, the assumption that the cryptographic privacy of Monero compensate for the lack of privacy of any kind of market. I mean, if you go on a market, you will have to mask, to, to go on, on Probably, masking your IP with Tor, but you will leave traces, you will leave, privacy leaks everywhere. You are basically compensating the everything you are getting from the altcoin by the fact that money has to be usually both a store of value and a transactional instrument at the same time. So for this reason, I'm skeptical about, about this project, even when the underlying technology is interesting. So for example, Zcash is not Not technologically interesting for me or Ethereum isn't at all technologically interesting for me, but Monero is, but that doesn't mean that a side chain will be better. Even if you can't do a, a, a trustless side chain, which is still very, very, speculative concept, maybe you can do a, a trusted, same high trusted side chain like Liquid or like Rostock, or maybe you can just do, I mean, if you really can't do any of that, I think the best thing would be, to do a Of burn, so basically the new coin is generated every time you destroy Bitcoin, which is like a one way side chain, which would be better than creating new coin from scratch. Not a re-not really a side chain, but at least you don't inflate Bitcoin and, and you can get the new coin trustlessly without passing through a market, at least in one direction, if not in the other. And, and if you cannot do that, maybe the, the fork, improperly called fork, basically- Basically the UTXO airdrop strategy, it's, it's better, it's better than, than the pure f-from scratch altcoin. Of course, it, it has been used in order to, to scam people, for example, by Bcash and now BSV and BNB. So it was, it was dishonest, it was, it was scammy because, people like Roger Ver and others used the fact that there was a UTXO airdrop in order to promote their altcoin as Bitcoin. But if you don't do that, if If you create a new coin, like a new green, a new MimbleWimble coin, and instead of creating a new monetary value from scratch, you just give that monetary value, to people based on their Bitcoin UTXO, that's, I mean, that would be for me the third best. The first best, a side chain, the second best, a proof of burn, like one way side chain, and the third best, a UTXO airdrop. So at least you don't force to, to people to move through a market in So they can move, trustlessly from store of value in Bitcoin to the new, features of the new coin, and, and at least you aren't inflating, Bitcoin supply and digital gold overall supply. So that's the reason I'm still ske-skeptical about, this experiment, even when they are interesting." }, { "speaker": "stephan", "time": "32:27", "start": 1947.38, "text": "Fantastic comments, Giacomo. I think the other thing, and you were touching on this, is just this self-reinforcing nature of liquidity, and it may very- Well, be that some altcoins out there may be marginally better on one or two certain attributes. So let's say, in my, it might, even if we concede that it is better from a privacy point of view, it just, it may not be better on an overall point of view. And ultimately, if something's gonna win in the market for money, it sort of has to win overall, would you say?" }, { "speaker": "giacomo_zucco", "time": "32:58", "start": 1977.74, "text": "Yeah, yeah, that's exactly the point. Privacy, is, is, is just a, a sum of local privacy of that transaction plus global privacy of your Or anonymity set and saving in, in fees is just a sum of the saving you do, from a technical point of view of that transaction, plus the saving you do in order to, to, to not change on the market between one and, and the other coin. So yeah, what, I, I would, I will really agree with your, definition. money usually has a strong, interconnected, f- I mean, needs a strong, strong- Interconnected functions in every field. You can't have just one money which is better for this and one which is better for that. I agree." }, { "speaker": "stephan", "time": "33:46", "start": 2026.27, "text": "Fantastic. And I think the next idea I was keen to discuss with you is just around this discussion that's been taking place over the last year or two around Bitcoin's financialization. So some people have come out and said, \"Well, is it that Bitcoin needs an ETF and the financialization, or does finance need...\" Bitcoin." }, { "speaker": "giacomo_zucco", "time": "34:08", "start": 2048.16, "text": "Huh. Very good question. I will, I will argue for the second. Bitcoin, I think Bitcoin doesn't need financialization because financialization usually provides all the things that are already provided for traditional, for traditional, market, asset class. So, I mean, all the things that you think you can get from financialization like, regulation, legitimacy, security that your government will- Will not try to, to, to, to get it or, or anything else like, or free marketing like, because legitimacy is also used as marketing, or, or social acceptance. These things, are already there for US dollars. So, why do you need Bitcoin if you already have these things in the US dollars? Maybe you need Bitcoin because you want censorship resistance and, impossible to inflate, money. But if that's the case That's, the, the reason you can't have it with the dollars is exactly because the dons-- the dollar is financialized and regulated and easy to regulate and to censor and basically completely controlled by government, government-like institution like central banks and, and financial, surve- surveillance mechanism. So, if you want to pay when people doesn't want you to pay, when people don't want you to pay, you need Bitcoin, not because- it's, i-it's financialized, but because it isn't financialized and regulated. So the, there is a s-a strong trade-off. But if you, if you, one could argue that not only Bitcoin doesn't need, financialization and regulation, but, it's the other way around. Any kind of financialization could bring, value, Could just drain value out of Bitcoin, just like a financialization of gold made basically possible the great censorship and the great expropriation of gold from the market. So when, when gold was a, a, a effective alternative to fiat money, inflation, basically the, the, the, and also to, financial global surveillance, What governments di- did was to, to ban gold basically. Roosevelt in, in US and Hitler in Europe and every, every, everybody, every government which tried to establish a very, a close control over the population had to ban the monetary use of gold. I mean, using gold as monetary mean was a criminal offense in the US under Ros-Roosevelt and or even, gold representative like, IUs. But that, that's the reason you, you-- that's the, the only way you can implement a fiat monopoly, in your market. So, one could argue that you have, I mean, that was possible, banning gold was possible because gold was heavily financialized, so there wasn't many people using, gold in their private face-to-face transactions and many people using, gold IOUs, and so it was easy to inflate the gold- The paper gold supply and to ban gold and so on. And some could argue that if Bitcoin gets heavily financialized, it becomes easier to censor because you can't censor the base layer, but you just censor the, the, the second trusted regulator layer, which is actually true. I mean, if ever-- if nobody uses Bitcoin directly and everybody uses Bitcoin through a centralized payment processor, then censoring Bitcoin is super easy, and then there isn't any point for Bitcoin in the first place. Anymore. So, this, Bitcoin doesn't need financial-financialization, but it could financialization if, if, if, not balanced by, an exit option, an easy exit option, could even be dangerous for Bitcoin. On the other way, I think that financial-- I mean, the financial world needs Bitcoin because for the simple reason that it's a, a heavily uncorrelated asset. So when you build a financial portfolio, you want, decourelation, you want Things that are, that are de-correlated, un-correlated or, to, to your traditional asset classes. And Bitcoin is such a thing, such a thing. Not altcoins actually, most altcoins are strictly correlated with Bitcoin, with some noise, which is basically correlated with marketing, efforts of the, of the centralized altcoin team. But if you take off this, the, the marketing noise, like the new partnership of, Ripple or Iota or DentaCoin, if you take these, these- As a marketing out, you have basically a strong correlation between the altcoin and Bitcoin, so it's basically just a, like a Bitcoin derivative, so they are useless to, to create, to create a diversification. You, you don't diversify your portfolio with altcoins, but if you have a traditional portfolio of, cash, equity and obligations, then you can, and, and commodities, then you can, you can diversify Buy it with Bitcoin because it's, it shows a strong, non-correlation. So, it doesn't mean that Bitcoin has to go up to, to provide this value. Bitcoin, Bitcoin can go up or can go down. The point is that it doesn't have to go up and down together with the, the asset classes you already have in your portfolio. And the correlation is a powerful, non-correlation is a powerful tool for your, portfolio, Portfolio strategy. It can be used and also controlled and balanced and, and, and, and put in check, with many strategies in order to have a better per-portfolio performance overall. So I think that the, I mean, governments w- right now control and regulate the fina-the regulated white financial market. They don't need Bitcoin and they shouldn't be afraid of Bitcoin. But the, the, the market actors that are operating in this, white market Like, the, the, the investors basically, they have any reason, and they should have any reason when they start to understand it, to be interested in getting Bitcoin. But of course, if you are a Swiss, or, or American investor and you just want to, in-- to, if you just want to speculate on the non-correlation of Bitcoin price, you don't need to, to build, like, to, to, to, to learn to run a full node to store your- Or seed, you don't want that because you're already a regulated investor. You just want to call your bank and to ask to your bank to buy these, these, these shares, these, these bonds and these, and this Bitcoin. so, there is a, a, there is a market for financialized Bitcoin, which is not the same market for Bitcoin first level users. It's a mas-market for Bitcoin second level users or Bitcoin pure investors. So people who doesn't care about, using the censorship resistance, property, they just care, about the fact that other people care that this, that this is a useful function." }, { "speaker": "stephan", "time": "41:34", "start": 2494.45, "text": "Fantastic. I've heard some people describe that as people who want Bitcoin-flavored risk. Now, on that topic, you mentioned how there, there would be a market for financialized Bitcoin. Now, then the question comes How much of the overall supply could these financialized Bitcoin services hold versus some of the OG hodlers and newer, you know, hardcore Bitcoin holders?" }, { "speaker": "giacomo_zucco", "time": "42:00", "start": 2520.05, "text": "That's a, that's a very good question. arguably, th-this is also a question that somehow address the, the point about, security risk for Bitcoin if too much value moves to, moves to a censorship-prone, layer, like the financial regulated layer. the, the, the, the bet is that- it will be not too much. I mean, right now, I, I can't measure or predict how, how much is too much, but I will say that, a, a strict minority of the market should be on those markets or on those regulated markets. Otherwise, I mean, Bitcoin isn't, isn't completely, doomed, but, there are serious security risks because, if, if the regulator can just, can censor the- A great part of the liquidity or of the market, suddenly, that's, that's a huge security and, and usability problem for, for Bitcoin. So it would be, of course, it would be great, that, this financialization, which I think is inevitable and ultimately also good because it, it, it increases the, the value of, o-o-of the, of the collateral Bitcoin, even if there is fractional reserve or anything else It still increases the value of the collateral. So it's, it's inflation in a way, but, but it's inflation which brings, new, new demand to, to the same, to, to, to, to the supply basically. So, yeah, that's a risk. I, I don't know, frankly, I don't know how to measure, even how to imagine a measure of that. What I can say is that usually that's not a fatal risk, it's not a ultimate risk. If you still have an easy exit option. I, I make you the example of gold. So gold is heavily financialized. That means that the, the, the price of gold can be manipulated once or twice or three times by some strong regulatory inter-intervention, my, by, maybe by the, by, by the, by some Central bank of, the, the Federal Reserve or the China Central Bank can, they can manipulate the, the, the price of gold because it's heavily financialized, but up to a certain point, they cannot completely manipulate forever the price of gold because the market can skip. I mean, when you exaggerated with the fractional reserve, you can actually withdraw gold. When, when you really need to store gold for some reason outside the regulated market, you can, because it's physically possible. W-while with fiat, it's actually impossible to escape the regulatory trap because fiat doesn't exist outside regulatory, economically and, and even digitally speaking, fiat doesn't exist outside, I mean, except for a very low amount of, of, US dollar cash, paper cash, which still it's used in the black market, but it's super easy to manipulate by the Federal Reserve because the supply is just trivial to change. While gold, I mean, is still more resistant to manipulate I mean, a heavily financialized gold is more easily, is more easy to manipulate than non-financialized gold, but still somehow difficult to manipulate over certain, certain point. So there is like a security feedback, a security, a security, measure, ultimate security measure. Bitcoin arguably is even better than gold because, I mean, getting your gold out of, of a caveau is super expensive and slow and difficult, while getting your- Bitcoin out of, of, of a custodian solution is arguably easier, and if the custodian solution doesn't, doesn't want to give you back the Bitcoin, you know why and you get it immediately. While with gold, there is more plausible deniability because it's difficult to move, et cetera. Also, Bitcoin is easy, easier to, to, to hide than, than gold, e-easier to transfer across, continents, so it's, arguably even better than gold from that point. point of view. So, i-it is a security vulnerability, the fact that, the financial sector could, own, a, a huge amount of Bitcoin liquidity or market cap in a regulated part. but, but the thing is that- Basically, i-if something bad happens to that kind of regulated Bitcoin, by definition, the only interesting Bitcoin becomes the unregulated Bitcoin. So the, the regul-- the white-listed Bitcoin basically becomes worthless because it's not, it's, it's not anymore resistant to, to inflation, because you can inflate with fractional reserve, it's not resistant to, to, censorship and expropriation and confiscation, because you can confiscate it, because it's- It's, regulated and custodial, so, there is no value proposition on the whitelisted Bitcoin anymore. The whitelisted Bitcoin, the Bitcoin flavor at risk, has value only insofar the market thinks that it's strictly convertible and easily convertible and redeemable into a real Bitcoin with strong censorship-resistant properties. if that's not the case for a while, the market will price it, and so the, the whitelisted Bitcoin will, Basically go towards zero, and the, the real Bitcoin will become only the black market Bitcoin." }, { "speaker": "stephan", "time": "47:33", "start": 2853.27, "text": "Right. And I suppose your ability to withdraw that Bitcoin out into your own full node obviously kind of gives you a, a possibility of saying, \"No, look, it, this is, Bitcoin proper and not, you know, financialized Bitcoin.\" And I suppose we would anticipate in some sort of fractional reserve system that a difference in the price would emerge and- Bitcoin, full reserve Bitcoin would trade at a different price to the suspect fractional, fractionally reserved Bitcoin." }, { "speaker": "giacomo_zucco", "time": "48:05", "start": 2885.09, "text": "Yeah, absolutely. Yeah. That's why it's important to, to understand that, I mean, not your keys, not your Bitcoin, if you don't hold, if you're not the only person or party holding the keys for your, for your, Bitcoin, UTXOs, you-those aren't really your Bitcoin, they can be taken from you. You, you aren't-- you don't have any guarantee of the censorship-resistant properties. And also if you don't run your own validating full node, not your new Bitcoins, meaning that when you receive Bitcoin and you don't have a full node to validate that you received Bitcoin, if you use a, a mobile wallet with, bloom filters, you aren't really validating, y-your Bitcoin. You can be fooled, you can be tricked, you can be scammed, you can be hijacked by, any kind of, external attack or special interest." }, { "speaker": "stephan", "time": "49:00", "start": 2939.84, "text": "Right. And speaking of attacks, I think that's probably another coming topic of- Bitcoin has obviously faced many attacks over its now ten-year history. There may be bigger attacks to come, and we can, you know, talk about how likely are they to succeed. One example might be a nation state trying to hijack the network with a mining attack. Perhaps they could rent some hash power, maybe, or, or like maybe some rich, you know, person or rich group of people could try to, say, and put in a short position on Bitcoin and then try to attack the network. Do you think such a thing is likely to happen or, you know, possible?" }, { "speaker": "giacomo_zucco", "time": "49:40", "start": 2980.13, "text": "I don't know if it's likely. I, I think it's definitely possible. There is a very good modelization, economical and game theoretical modelization of this scenario by, by Eric Voskuil. You can find it on the, on the Libbitcoin, crypto economics, repository on GitHub. Eric, created this very nice model. he thinks that this, this, this, event, this, scenario scenario is not just possible, but basically necessary. I, I, I don't think it's necessary, but I think it's definitely possible. A scenario in which, the government unders- I mean, if, so he doesn't think it's necessary, if Bitcoin is going to succeed in, in, in being, resistant to, regulation, then, the only thing that government can do if Bitcoin is, is succeeding and, and, and spreading and resisting regulation is to- To try to censor it, mining, so acquiring, renting or, or whatever, printing money, or extorting money through taxation and using this money that it printed or, or extorted in order to buy or build or, or rent, asics and mine Bitcoin. When you mine Bitcoin, if you reach the majority and if you, can keep the majority of the hash power, you cannot change the rules of Bitcoin, so you, you cannot change The validation rules, but you can censor transactions because you can just say, \"This kind of transaction, for example, the transactions that aren't quite listed in this list, aren't going to be confirmed on the network.\" So the interesting thing is that, now there is a, a, the, the, the Eric Bostwick scenario," }, { "speaker": "giacomo_zucco", "time": "51:27", "start": 3086.76, "text": "depicts, now a race between the government, mining and the black market mining, meaning that the government has a subsidy for continue spending, in, in hash rate by taxation, while the black market has a subsidy, to try to overcome the fifty, the fifty percent of hash rate by the black market transaction. So the idea is, let's assume there is a demand globally For censorship resistant transaction, for, for, for transaction of a certain kind. Let's say that, let's say that the government wants to censor these transactions, so they pay in order to quite as in power to censor these transactions, but there's still demand. So when the demand gets high enough, the black market will simply pay more fees, and the fee mechanism in Bitcoin is already, basically, it's ready for that. Basically, if you are, I don't know, if you are a Venezuela guy that wants to, to- Move, Bitcoin, to another guy without the go-government, sending you to jail if, if you are, whatever, a China, a guy that wants to export capital or to sell, ag-against, commercial blockades and embargos and, and stuff like that, then you will put a very high fee. And so, if the government doesn't, take that fee into a block because they are act-actively censoring, some miner will eventually over- Power the government because there is, there is money to be made into, into competing with the government. So this is interesting security scenario of a race between governments and black markets. it's not a, a, a scenario with a clear long-term winner. It could go on for, for a lot of time, and, I'm not sure that's a realistic case, because, you know, when you talk about game theory and especially, I mean, public choice and politics, there are a lot of re- Cursive arguments like, if, if the governments understand that that's the case, they may not even try to do that because, that would be pointless in the long run, et cetera, et cetera. So yeah, it's a very fascinating, A, a hypothesis, a hypothesis. or there is a, a, a, a, there is a, let's say, trivial, variant of this hypothesis, which is the government not spending money to acquire hashing power, but to destroy hashing power, which is also interesting, because if, the, the amount of hashing power destroyed is high enough, then Bitcoin will adjust adapt difficulty, with the difficulty adjustment. But as we know, the difficulty adjustment for, for very good reason is not super fast or, or super, or, or, or, or, or powerful. you, you can just, you can only adjust some percentage of the difficulty, I think like twenty percent or something like that, and you can just do that every two thousand something block, two thousand sixteen block or something, and if the, so let's assume that tomorrow the China government, managed to acquire and destroy all the ASICs in China, and let's assume that you drop The Bitcoin hash rate by sixty percent. So you don't stop Bitcoin, but you can really make the, the, the Bitcoin user experience worse for a very long time, of course There are two objection to this scenario. The first objection is that it's a unrealistic scenari-scenario, because you have to make sure that you have a, a, a group of government employees that will go to seize Azix, and they will really destroy the Azix instead of just lying to their supervisor and employing the Azix in secret in their own facility. So corruption, in public choice is a very, powerful force. So you have to have a government without corruption Which is basically impossible. And the second argument is that, eventually, I mean, I'm not sure that's, that's something doable very, very often, but, the Bitcoin, market could fork away from this kind of scenario with some kind of, proof-of-work adjustment. I think that would be very traumatic and it could create a lot of coordination problems. So it would like be the super last resort, like the, like the atomic option for, for, for- Bitcoin, but in extreme scenarios, there is also this atomic option, which means that, the government is less like-likely to try to go in this extreme scenario because if there is an atomic option, you don't always have to use the atomic option. The, its, its existence itself can be enough to be a deterrent." }, { "speaker": "stephan", "time": "56:15", "start": 3374.88, "text": "Fantastic explanation. I think it's just that, yeah, so ultimately the very existence of it as a threat or the possibility may kind of stop. A person from trying that attempt to attack Bitcoin. Now, another way a government could attempt to, let's say, outlaw Bitcoin, and there are different pathways we could think about. So one angle is, hey, that would create competition, and other governments or other states around the world might want to make it legal to attract Bitcoiners. But then the flip side of that is, okay, maybe the governments can successfully collude and do things similar to immoral organizations like the OECD, who try to coordinate governments. Government efforts on taxation and try to raise taxes everywhere." }, { "speaker": "giacomo_zucco", "time": "56:59", "start": 3419.11, "text": "Yeah, I think that the, the, the tax example is very, very good in showing that, government competition can be, can be an exploitable arbitrage windows for, for a while for sure, but it's usually not very, an equilibrium, i-is not a stable equilibrium long term, because, the, what defines a government, at least in the way we usually use the word, is the, the, the taxation pro- process and in the modern world is also the inflation, the currency inflation process and the legal, the legal tender laws and the monopoly o-over money. So th-these are like, constituent elements of what we define a-as a government today. so being this the case, you can have a, a, I mean, you can have a opportunistic government that right now, doesn't participate to the ban of Bitcoin or even, or even it's very friendly to Bitcoin, in, again, in the interesting, modelization of Eric Bosque, it says that in this case, this specific government isn't part of the government as an, as a, as an economical abstraction, but is part of the black market in a way, so you can have competition among governments, but usually, you have collusion in the long term because the interests of all these agents are ultimately aligned, In favor of taxation and inflation. If you think about tax, I mean, tax havens, it, it was a thing. I mean, the eighties, in the nineties, you could effectively avoid taxation, and inflation in some, in some cases, just move, just, arbitraging ac-across different nation states. You know, all the theory of the sovereign individual, you just do, geographic arbitrage between nations. But right now with factor one after the other, every single government in the, in, in the herd started to report, tax information to FAFCA. And I mean, Oh, sorry, we'll just explain that just" }, { "speaker": "stephan", "time": "59:09", "start": 3548.98, "text": "for, listeners who don't know where, don't know what that is. That's FATCA, Foreign Account Tax Compliance Act, and essentially, basically, the US government requires other- Governments and other banks to declare which of their, which of their customers are US citizens, and then they try and use that to basically identify taxation and revenue. And other countries are using a similar thing called CRS. Sorry, go on." }, { "speaker": "giacomo_zucco", "time": "59:33", "start": 3573.15, "text": "Yeah, exactly. And of course, also the other countries are leveraging the same system. So for example, Italy, since there is a new, ex- automatic exchange of information based on FACTA, Italy will leverage that in order to have information to all the Italian residents. Residents, doing business in abroad with other banks. So there are some places in, that are, that still didn't sign this kind of agreements like, Dubai, but they're, like, like every year they are less and less and more cornered. Like Switzerland was a very clear example of resistance to, toward this, to this global, Orwellian surveillance, but, basically they suffered a, a commercial, I would call it a commercial embargo threat from- From the US until they surrender their, their bank secrecy. And the same topic, also applies to, to sound money, to hard money, to, resistance to inflation. Basically, there were some kind of competition among, central banks, but, that basically t-tended to converge over a US-centric and Federal Reserve-centric global system. Right now, you see some kind of differentiation from- That because you have maybe China and other, maybe Russia trying to, get away a little bit from the, basic monopoly of the US dollar, of the reserve, global reserve cur- as a global reserve currency, but it's still, I mean, the, the, the, the, the global trend, the long-term trend is over collusion of states in this regard. So I think that, this, idea of regulatory arbitrage like Bitcoin will be banned here. But maybe it will be, still, I mean, allowed but even encouraged there, could work well short term, but not long term. It's just like, I mean, the same thing, a little bit less scammy, but it's the same thing for the ICOs. Basically, if I do an IPO, if I just sell the shares of my company to the public investors, I will have to spend a lot of money for compliance and regulation and paperwork and certifying the, Accredited investors and, and so on, and then I will have to, avoid that these shares are bearer instruments on the secondary market because otherwise the government can't control the, the, the, the money, so they will want, everything to be nominal and not bearer instruments, so I have a lot of regulatory cost. If I do an ICO and I tell all the people that I'm giving them, them voting rights and dividend just like a share, but it's not legally a share because it's different So I'm trying to trick the regulator into, into thinking that I'm doing something which isn't a share, but I'm trying to trick the investors into thinking that I'm doing something which is actually is a share. This can maybe work for a while, but eventually, just for, as we have seen with the ICOs, eventually, the regulators will understand that these are used as share by the market, so they will try to regulate them as shares, and investors, they will understand that the company- is actually, legally defining these things not as share, but just as collectibles, without any relation with the, with the, with the revenues of the company or the profits. And so they will understand that they have been sc- both the regulators and the investors will understand that they have been scammed by the ICO, runner. So, it's not a long, long-term solution." }, { "speaker": "stephan", "time": "01:03:14", "start": 3794.13, "text": "Right, and the other thing I wanted to bring up that I'd like to get your comments on. So right now, we are seeing a little bit of this whole regulatory whack-a-mole game with exchanges who have trouble getting a bank account, and often, even, you know, despite Interpol coming out with a report saying Bitcoin isn't really used that much in money laundering, it still seems to be the case that many banks are obviously, they live in fear of losing their banking license, and because of AML laws and so on, they still are kind of Scared to bank Bitcoin companies and Bitcoin exchanges. But to that same point that you were making earlier, that the more the world is sort of clamping down and a lot of the old tax havens of the past or bank secrecy laws and so on that used to exist in Switzerland have kind of been eroded and clamped down, the more the government keeps closing and clamping on things like AML KYC, the more it starts to eventually push people all the way over to the other side, and what we're starting to see now is things like this whole Patreon Mastercard drama of Patreon shutting people down because they're worried about their banking relationship with Mastercard, at the same time that drives more people into the arms of Bitcoin overall." }, { "speaker": "giacomo_zucco", "time": "01:04:24", "start": 3864.84, "text": "Yeah, I think that this raises, some points, some, I would say a little bit philosophical points about, government intervention in the economy. So basically, the, the government, as a concept, as an economical exception, has the, any interest in, in controlling the economy, but it is very bad at, at controlling the economy because it's, since it is the government, so it's, violently monopolistic, it becomes, very inefficient and very corrupted for public, public- Choice reasons and, and so it doesn't, basically it doesn't work. So one thing that government usually does, is to, to outsource some basic functions to some, almost market entity that is, is, more efficient because it's coming from the market, but is basically included, legally into some kind of, regulatory privilege and regulatory monopoly. the, the ti-the typical schoolbook example Of this is the, is the, Eastern, India's company to, to, I mean, when, when the American, patriots, rioted against the, the, the British, the British crown, they didn't really attack first the British government, they did attack the East India Company, a private but monopolistic company. so this is the same for a monetary function. The governments try- To manage inflation directly, with the, the, the national, I mean, the, the, the direct printing, but they were very bad at that, so they tend to delegate this kind of printing to, this almost external, still political, but almost not government dependent, I mean, not strictly politically dependent central bank. So it's more like a technical, technical entity outside the government, and especially commercial banks that are part of the- Cartel, a legal cartel, so they are part of the violent monopoly, but they are, they are almost competing, so there is some kind of pseudo-competition and that keeps them a little bit more efficient and more anti-fragile. So, the, the, the, with, with, basically with, monetary, with fractional reserve, the banks are, the commercial banks are u-are helping the government to inflate the, the cur- Currency. And the same goes for, for, traceability and censorship and surveillance enforcement, which is basically performed not just by the government directly, but also through these third party outside, outsourceers that are commercial bank cartels. So, the interesting thing is that the government understood very, very, very quickly, historically, that it doesn't have to ban, it doesn't have to inflate the base currency too much. Because, commercial banks can just inflate it more or, if they want to create a, a bubble like with the subprime mortgages, they don't have to create the bubble necessary directly from the government. They can just impose some, they can just pass some legislation that will make commercial banks, behave in a certain way, in relation with, interest rates or, or mortgage evaluation or stuff like that, so they can just drive commercial banks Thanks to do their job instead of them for, for some very, I mean, compelling reasons. The same applies to KYC regulation, but, but also to other things, you know, like, you have, prostitution. government did historically try to ban prostitution, but it was such eradicated phenomenon that it was impossible to go around and just arrest people, so they just, try to, shut down the centralized counterparties, market counterparties. parties that wants to, that can be used by prostitution in order to promote the service or to, or to pro- or to pay the service like, like, Craigslist or backpage or, or anything like that. Same goes for, for marijuana or other recreative substances. you can ban it, but it has very strong popular demand and popular support, so you can't ban it forever, without getting unpopular. So you just, basically- You ask the banks to not open bank accounts to legal marijuana companies, so that you are, you are effectively, banning something without banning it formally, which is the same for Bitcoin. they don't, the, the government don't have to outlaw Bitcoin for now because they can count on the fact that the banks will, will continuously try, avoid to, because they're scared, not because, not, not because of business reasons, because from a business perspective, you want more clients, you want to serve the market, but, yeah, they are scared of the regulators. So since they are scared of a future, regulatory, regulatory retaliation, most of these banks are basically, not, allowing crypto business, which is odd because now what's, what, what this is causing is that it is- Driving two things, as you said, the first thing is that it's driving even more people, away from banks because they will just stay in the gray market and the black market directly without, without even passing by the white market. And the second thing is that, g- I mean, Bitcoin and shitcoin exchanges are trying to become banks themselves. So since they cannot use banks to open their accounts, they are trying to enter the regulatory cartel, with the government directly with some kind of, selling points like, \"We will help you to regulate, we will help you to surveil, we will help you to trace and to crack down and stuff like that.\"" }, { "speaker": "stephan", "time": "01:10:30", "start": 4230.81, "text": "Yeah, that's an excellent point, and I think you're, you're really hitting the nail on the head there, that governments often deputize private companies and use regulation as their means of doing that. And what we're seeing now is some of these large Bitcoin exchanges trying to go that same angle. but I, I think ultimately then, in some ways, you know, there are, there's some bullish arguments there as well at the same time as you said, that it may just drive people to just stay entirely within Bitcoin, just earn Bitcoin and spend Bitcoin and just, you know- Totally stay within that economy. So that may be an interesting thing we see play out. but look, Giacomo, I know I've kept you for a little bit, over an hour now, so how about you just give the listeners, an update on what you're up to, maybe just some closing thoughts and anything they can look out for coming up from you, and also obviously tell them how to find you online." }, { "speaker": "giacomo_zucco", "time": "01:11:19", "start": 4279.56, "text": "So they can find me online mostly on Twitter, I'm mostly active there. so Giacomo Zucco, my name," }, { "speaker": "giacomo_zucco", "time": "01:11:30", "start": 4290.15, "text": "Up two is mostly, trolling other people like you have seen with the, with the, with the Bitcoin emergency threat, but I also try to do some work. So basically, I, I do consulting for a living. So I, I consult company about, about Bitcoin since, since some years. That's my first, for-profit occupation, consulting and teaching actually, and trying to move more and more from consulting to teaching because consulting is getting really boring, and, and teaching is more interesting. So of course, I'm not a developer, I'm a theoretical physicist as, as education, so I cannot teach, like, Jimmy Song style or, or stuff like that, the, the, the code directly, but I, I, I have, I think I have some, some, education skills that I, that I can use for profit. And for non-profit, I mostly use the proceedings, the, the, the profits of, of, the, the, the consultancy part in order to boost and help and, and fund and sponsor, f-open source, nonprofit activities. right now, for example, I would love to sponsor people working on Wasabi Wallet or people working on, on, the BTC Pay server or a joint market initiative or, or a, RGB Open Ten Stamps, Proof Marshall. There are a lot of interesting projects that I try and I would like to help. I, until the last, September, I did that with, my BH HB network initiative, which is basically me and my wife and, and, and, and other friends, and, in September we decided with, Alena Vranova, now of Casa Hodl, to build together a new instrument to do that, called the DB, which also created a lot of, a lot of controversy because it's actually a foundation. So somebody is scared by the, by the tragic fate of the Bitcoin Foundation, but it's something different. and we are super late with that. Mostly for, no surprise, regulatory reasons. So we want to be sure that we can accept donation from businesses, from incorporated businesses, that of course we'll have to be able to write off the donation as an actual donation to a legal entity. But at the same time, we want to be able to donate these, these bitcoins to, anonymous or pseudo-anonymous developers in exchange for, a proof of PR on, on, on GitHub basically. So that's, that's tricky, we were probably underestimating the- The, the regulatory part of that, so we are late, but, I think we are coming, so I hope to give some news in the, in, very soon about, the B and, and what the B wants to, to do." }, { "speaker": "stephan", "time": "01:14:14", "start": 4454.34, "text": "Fantastic. Well, look, Giacomo, I think this has been an excellent conversation. I've really enjoyed speaking with you, and thanks very much again for coming on." }, { "speaker": "giacomo_zucco", "time": "01:14:22", "start": 4462.17, "text": "Thank you for inviting me. It was fun." }, { "speaker": "stephan", "time": "01:14:24", "start": 4464.39, "text": "I think Giacomo offered some great insights in this episode. Let me know what you thought of the episode, and you can find me on Twitter, my handle is at stefan livera. If you like this material, please help me out by sharing it, liking it, thumbs up on YouTube, give it a rating, review. Also, go to my website, www.stefanlivera.com, to find out more. If you want to get rid of your fiat money, come and donate it to me at patreon.com/stefanlivera. If you want to donate using" }, { "speaker": "stephan", "time": "01:14:54", "start": 4494.11, "text": "forward slash Stefan Livera. Thanks guys, chat next time." } ] }