hpr-knowledge-base/hpr_transcripts/hpr0769.txt

Episode: 769
Title: HPR0769: Linux Outlaws 215 - Bitcoin Discussion
Source: https://hub.hackerpublicradio.org/ccdn.php?filename=/eps/hpr0769/hpr0769.mp3
Transcribed: 2025-10-08 02:14:55

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Music
Music
Shit's gun production, new media, new roles.
This is Linux Outlaws.
Episode 215 for Wednesday, June 29th, 2011. Bitcoin Discussion.
Hello, everybody. Welcome to a new Linux Outlaws. I'm Fab.
Hi, I'm Dan. Welcome aboard.
And we've got a future back show for you today. This is the long awaited show on Bitcoin.
Lots of people wanted us to talk about this. I put it off because I wanted to research the topic because it's a very complicated topic.
I was just going to say it's really complicated.
I wanted to get some bitcoins, which I got from people who donated them to actually do something with it, to actually use it, to see how it works.
So that I'm just talking about it, which I did. I did that. And today we will talk about everything.
So I recommend you pause the show now and go get yourself a coffee or a tea or whatever you need to get your cranium going.
Because this will be a hard work. This will be an in-depth technical show, probably pretty intense.
And Dan, so I'm going to try to explain this. If whenever you have any questions, interrupt me. I think it'll be good for the listeners because I guess they will have questions as well.
And just to disclaimer, at the front, I'm not a financial expert for a firm. I, you know, economics is usually not something I get into.
I don't really find it interesting. I find it very hard to understand. I actually spend hours researching this, listen to other podcasts.
I mean, there's some good podcasts on Bitcoin out there. The topic is quite on Vogue at the moment. So there's a slightly older security now episode where they basically talk a lot about the technical stuff.
If you speak German, there's a chaos radio express episode where Tim Pritlov and some guests I can't remember the name, but they go into it. They also go into the political stuff, which I also want to talk about.
So I thought at first I'll try to explain what this is and how it works. And then in the end, we talk a bit about the like political issues that arise from this.
Yeah, okay. Sounds good. I think a good idea to, yeah, as you say, give a background first. It's like the history where it comes from and what it is.
I'm filling a huge mic of coffee. So I recommend you do that too. So you don't fall asleep.
I've only got water. So we'll have to see what it goes. If I start snoring during the middle and just, you know, wake me up or something.
Yeah, if you want to read more about this, there's a good Wikipedia article. Just look for Bitcoin on Wikipedia or also a Bitcoin.org, which is kind of the official site.
There's lots of stuff on there. So yeah, should we should we get into it? Yeah, let's do it.
So I think, first off, we basically have to quickly explain about currencies, general currencies, you know, like our normal money.
And people have to understand a little bit how currencies work, especially how fiat currencies work. That is what we have today.
In the olden days, I know this because I'm a historian. So in the olden days, the your currency was backed by gold.
So the US dollar, there was a certain amount of like the paper money, you know, once they invented paper money, there was a certain amount of those paper builds.
And they actually had gold at, you know, gold that was worth the same amount. That's where, you know, Fort Knox comes in.
It's the Federal Reserve, yeah. Exactly. They had a huge storage of actual gold ingots at the, you know,
because you have to, you have to have this because you're spending money and you need a guarantee that this is worth something.
So the state, the state was issuing money and they would give you this guarantee that this money was actually worth that amount in gold because they had the gold lying somewhere.
So like a good way to think about it, I've always thought is you think of paper money as it's almost like an IOU.
It's saying like this piece of paper proves that you own this amount worth of value in this gold or whatever it would have done traditionally.
I'll let you carry on because I'm sure you're going to get to the point where they break the link with that gold.
So the idea was this, you have this guarantee where the state says this paper money you have there is worth $1,000.
And theoretically, you could always go to the state and say here's the paper I want my gold, you know, that was the theory behind it and they'll give you money in gold.
Of course, what are you going to do with the gold then? But, you know, that was the idea. At some point, there wasn't enough gold.
Like the economy was out growing that. So they had to make the leave leap to something which is called.
I guess, you know, if I may explain this, I'm not an expert. So there will be stuff wrong. I'll get stuff wrong in this.
So, you know, don't write me any emails. Yeah, I don't, you know, I'm just trying to give a bit of an overview.
So basically there would invent something that's called a feared currency where where now there's actually more money than, you know, there's more US dollars than they could have ever.
Like there are billions and billions of US dollars. There isn't that much gold probably on the planet because the gold supply at some point ran out.
So the question is, how do you know, you know, the money is worth. The US dollar you have there, I have the euro, you have the pound.
And how do you know that's worth anything? Basically, it's all based on trust. You with your, with your pound note, you trust the government of the United Kingdom, who tells you this is worth something.
And you trust in us. Basically, you buy in the morning, you buy your bread and you wake up every morning and you trust that the money you have in your wallet will buy you bread.
Exactly.
There are instances in history where that fell apart. For example, in Germany, after the war, my grandmother always told me stories how like a bread roll would cost one million mark.
Yeah, because there was, you know, inflation and the money wasn't worth anything. So that is basically what can happen with a feared currency.
But in general, you just trust that this money is worth something. And you just have to think about Bitcoin. You have to think people think about Bitcoin. They think, well, it's so insecure. You know, you don't know how, how much this is worth. How can you trust this?
But the thing you have to understand is with your normal currency, the stuff you have in your wallet, it's the same thing. The difference between Bitcoin and that is with normal currency, there is like a state behind it with the US dollar that's the US government behind that, you know, behind the pound, there is the UK government.
And for example, the big change they made with the euro, which is one point why the UK didn't want the euro is the German government is not directly behind the euro. It's the European central bank, which is kind of all the euro governments behind.
And for example, the German state now, you lose power because as a state, you haven't, we come back to this later as a state, you have enormous amount of power. If you can, you're the one printing money, right.
And if you're not, if you can't print money at will, you lose a lot of, you know, basically, that's how they, how their finance was, you know, if you needed money to buy tanks for your war, you just print more as a state.
It, it values your, your currency in the long run, but you can just print money. And with the euro, you can, you know, you can't do that. They all have to decide that we all do that as a whole.
Yeah. So there's actually a, I'm not really an economics geek, but I've read bits a bit about it. And the term for that is quantitative easing when they print more money.
Because we don't have the link to direct link to gold. It's happened actually recently in the UK and lots of other countries, because of all the global financial situation right now.
There's not enough money in the system going around and banks aren't lending it because they're well, in my opinion, mostly bastards, but let's leave that there.
But banks aren't lending it. They'd rather sit on it. So in order for businesses to do business, they need to have cash that can be moved from one place to another.
And that's where the term liquidity comes from. Like if you have liquid assets, you know, you can move them, you can spend them. And that's what happened in the UK was the government, actually, the Bank of England, who did in charge of like the finances in the UK, printed more money to get more money into the system.
But as you said, that devalues the whole thing, because if there's more of it around by definition, that it's not as rare and it won't be as valuable.
Yeah, and you just said banks are bastards and this is where Bitcoin comes in because the idea behind Bitcoin is that it's an electronic currency.
Basically, as the future, you know, we're all living on the internet and you and me, we have talked a lot about the fact, you know, how hard it is, for example, if I want to send money to the US, it's a difficult process.
It costs a lot of fees to me, even if I, for example, I sent money to my girlfriend, who has an account with the same bank as me.
And I'll transfer some money to her. It takes like one or two days for the money to get there, which is crazy.
There is no real reason behind that because it's all computers. It's the transaction happens in milliseconds.
The point is why it takes two days that the bank is collecting all the money and then they're speculated with all the money for two days.
And that's how, you know, I mean, they also take, they get interest, they get fees, but that is also how they make a lot of money.
People were really fed up with this and it goes back to the 90s. They came up with all kinds of crazy ideas, how to do an online currency.
That basically all died, those were all like this crypto stuff and, you know, complicated stuff.
That all died when PayPal came along because at the moment where PayPal isn't a currency, PayPal is just basically a bank.
It's basically an online bank. It makes it easier for me to send money to somebody else.
Basically, instead of going through my bank, I go through PayPal. I sent them money from my bank and then they can...
The only difference between them and the real bank is they, well, they also don't speculate with shares and stuff.
The only real difference is they make it a lot faster. It's there in a second and that's why it's used.
And I personally don't understand, you know, PayPal is eating the bank's lunch.
They're basically living off this frustration that people have that are like us on the internet.
It's the internet you can collaborate with people all over the world. Everything happens in milliseconds.
We could like record a song right now together. We could collaborate. I could do work for you, right?
I do, for example, I design a logo for, I don't know, let's say for Bradley.
I'll tell them, you know, I'll design a logo for you. He tells me, okay, I'll pay you.
I can design this logo in, like I can do work within minutes and we need this internet era needed a way to transact money fast as well.
And that's where PayPal came in.
It also has a lot to do with eBay as well because obviously eBay generated a way for people to buy and sell stuff.
I mean, eBay in the beginning now, it's Amazon everything. You know, you want to pay your stuff.
You want to get it fast. You don't want to wait two days for the money to arrive and pay a lot of fees.
I mean, PayPal takes a lot of fees as well. But if you compare it with the fee, I would pay to wire money to the US.
I was going to say I have actually found it less.
I know lots of people listen to this. I've issues with PayPal and all this over wiki.
Yeah, we get into that. That's the next point.
The thing I've found with PayPal is, I mean, I've done work with people in America and other places, even within Europe.
And trying to send money over a traditional bank transfer, you get the international bank number, the I ban number and you get this down the internet.
It takes forever and it's really difficult.
And it mattered instantly. I can just email you a thing from PayPal and email you the money.
What they call it, technically, it's not really like that. But they call it emailing you the money.
So I can email you the money instantly and PayPal takes like four percent or five percent of it.
And often it actually works out less than the fees I would have paid with a real bank.
Or, you know, if you want to call it a real bank, a physical bank that I can walk into.
So it's a lot easier.
I don't know. I've often wondered about the money laundering stuff and must go on through PayPal and so on.
Because I don't know how regulated it is.
Well, we get into that later. I mean, there's money laundering everywhere with real in that little bank as well.
But the thing is this PayPal thing that worked for a while.
And, you know, people kind of lost interest in all these real electronic real currencies, right? Because PayPal kind of worked.
And then, you know, Bitcoin in the meantime got invented. Some guy rode a, you know, it's basically his thesis.
Yeah, in 2008.
Yeah. So, but the thing is no, the paper I think came out in 2009, but whatever.
Nobody really used it because we had PayPal like that everybody was using that.
But then I would say like at the end of last year, I mean, people were,
people weren't feeling well with PayPal anyway because they do weird stuff.
They like freeze your accounts and then you have to prove that you're really yourself.
Then, for example, I could, I can't pay legally or I can't pay with PayPal for anything that's like erotic kind of stuff.
You know, that's I subscribe to a porn site.
I couldn't pay them over PayPal because it's against the terms of service.
Which in Germany is stupid because it's totally legal for me to pay somebody to undress.
That is legal in my country. And if it's legal in the other country where the person is, whatever sex they are,
who undresses for me in front of a camera, that would be totally legal.
But PayPal says, no, we're not doing that. And of course, it's, you know, it's their right.
Their right to do that. So, um, and then there was stuff like with WikiLeaks, you know,
they froze their accounts and people were saying, this isn't, you know, this isn't anonymous.
And some, some you'd a paper can just see your account.
And it's really hard for you to then get the money out of there.
So people were getting really disillusioned with PayPal.
And this is where they basically came back to Bitcoin.
So the idea about Bitcoin is that the central idea is that it doesn't have a central instance basically.
It doesn't, um, the central idea is that it's not central.
It's not central. It's not central. It's so, um, we'll talk later about how anonymous it really is.
But the idea behind it is it should be as as anonymous and as privacy oriented as normal IRL money, right?
So the point about money is, um, all our bills, they have, they have a number on there.
But that doesn't get locked. So that doesn't get locked normally.
So it's totally anonymous. I can buy drugs with that.
I can go out on the street and there's a guy says, oh, uh, give me 2000 euros.
And I'll sell you a P90 with ammunition, which would totally be illegal.
But I can do, like, right, I can meet him in some shady street corner.
I can give him the money. He doesn't know who I am.
That's the whole point about money, right? You don't have to know who I am.
You just know this money is, you know, this piece of paper with something printed on it.
It's worth such and such and he'll give me the goods.
So the idea with Bitcoin was to model that on the internet.
And so they actually used a peer-to-peer technology.
The underlying protocol is actually IRC.
Yeah, it's open source as well. That's where that was written.
A guy called Satoshi Nakamoto is the guy who kind of came up with the white company.
And he has since sent distance himself heavily.
So he's not the leader of the project anyway.
I mean, you could think that like the banking establishment was, you know,
probably put a dead horse in his bed or something, because they really don't like the system.
I will get to that later.
But let's talk about the technical stuff.
So the underlying problem with all of these electronic currencies is something called the double-spending problem.
Because as we know, you can, as you know, as the RIA knows, you can copy bits freely.
Yeah, I would argue that you can copy paper as well.
I mean, there are a count of money counterfeiting people.
I know it's not as easy.
No, but I'll explain.
But not as easy as exactly the point.
Because the thing that protects you from paper money counterfeiting is that it's actually pretty hard to counterfeit it.
Yeah, and they've tried over the years to add things like...
They have all kinds of special paper.
They have special ink.
So it's pretty hard.
So the thing is you can do it.
But you basically need professional equipment that is really expensive to do it like right.
To do it in a way that it's not easily detectable.
It's not as easy as me copying a file.
It's right.
Let's say I have a trial, right click, copy, whatever.
If you have a file, if you have bits, you can freely copy bits.
It doesn't take a second.
So that's the big difference.
I mean, you can counterfeit anything.
But the real question is how hard it is to do.
And with money, the incentive to counterfeit it is incredibly high.
Because you want to.
You could just print money.
And you want to basically eliminate that.
Because the double-spending problem is, let's say there isn't actually a thing called a Bitcoin.
But let's imagine I give you a Bitcoin.
I then just give that Bitcoin to another person that would be the double-spending, right.
And you can't both have it.
There must be a way to eliminate that.
Because otherwise I could just fraudulently spend the same Bitcoin 10,000 times.
Yeah, exactly.
So there's technology behind that.
And we'll get into that later.
But you have to understand that the Bitcoin, after this whole thing, really took off.
It's now, at the moment, there are millions of dollars a day exchanged in Bitcoin.
Well, there's a site called bitcoincharts.com.
I'll put a link in the show notes.
If you go there, you see all the markets.
The biggest market is something called Mount Gocks, which was recently hacked, was in the news.
We'll talk about that later.
But basically, they exchange US dollars.
And they currently have a volume of about half a million US dollars a day that is traded 25 million a month.
Wow.
So there's a lot of money being exchanged in Bitcoin right now.
So the problem is, how do they do this?
How do they prevent it?
Yeah.
How can they...
Yeah, in an area where, you know, in the internet, where bits are fully copyable, how can they prevent double spending?
So the thing is, there's actually no bitcoin.
And that's just the name.
Actually, there is no real currency.
The whole system is basically a bank.
It's a huge online bank.
But instead of something like PayPal or all the other ideas where you basically have one central instance,
that would basically have to lock, right?
It would have to have a number of every coin.
And then, once I spend it, they will have to write down, okay, Fab, just spend this bitcoin and you can't spend it again.
Yeah.
And you can do that with signing and stuff.
But the problem is that it's a central authority.
So Bitcoin works different.
Bitcoin, the bank itself, the banking system is the network.
It's what they call a decentral bank, kind of a, you know, kind of a pan on the central bank.
So it uses IRC and bitcoin is basically just a big system of accounts, like a bank, you know, you open an account and it just logs transactions.
So there's no actual coins.
There's no actual money.
There's just transactions.
And every transaction that you do is broadcast to the whole network.
It works basically, you know, over IRC, it works like, like, like, I see works or like, news groups work.
You don't have to send it to everybody.
You have a few peers.
Your client connects to, I have my client running right now.
I've netted it.
So it has like 92 connections at the moment.
So if I would to send you money now, I would enter a transaction that would get sent to those 92 clients and then just like get replicated all the whole network.
Yeah.
And so in some ways, it's similar to a lot of other peer-to-peer technologies, like BitTorrent, say, where that could be a file, like a file of whatever piece of music.
And then that would be replicated peer-to-peer.
Everyone takes a copy of everyone else's copy.
Yeah, it's, well, if you think about how IRC works, you know, if there's multiple servers, I'll send a message and that gets sent to a few clients connected to a server.
And then that gets replicated like on three nodes.
They have like, I don't know, 20 servers.
Yeah.
And it gets like replicated.
Everybody sends it on to everybody else he knows and soon the whole network knows it.
So the thing is there is Bitcoin works in Bitcoin basically uses a global lock of all transactions.
There's one huge lock in there that has every transaction that ever happened in this network from day one.
And this complete lock by now is like half a gig.
I was going to say that must be pretty big.
It's pretty big and every client downloads that and, you know, that's a problem in itself.
But that's how it works.
So the thing is every 10, around every 10 minutes, all the transactions that have happened in this time,
get put in what is what is what's called a block.
This block gets digitally signed and then put into that lock that the ever running huge lock is basically different blocks that are chained.
So every block has a, is it?
It's like, I don't want to go really into a cryptography.
If you're interested in that, listen to security now.
But basically every block is signed with a hash.
And the following block takes the hash from the, from the preceding block.
So they're cryptographically signed.
And you can basically, if you have the whole chain, you can verify every transaction that ever happened.
So in that point, it's not anonymous at all because everybody knows every transaction and that's how the system works.
And the thing is, it basically works like this.
Let's say I have 10 bitcoins.
You know, just don't worry where they came from. Just imagine I have 10 bitcoins.
And the system knows the fabs account has 10 bitcoins.
And then you get a bitcoin account.
And I send you five bitcoins.
Then I create a transaction.
And basically there is no money.
There are no bitcoins.
Basically the only thing that gets recorded is fabs account has 10 bitcoins.
And now he sends five bitcoins to Dan who has zero bitcoins.
And with this transaction fat, now has five bitcoins.
And then also five bitcoins.
And that's it.
And it spreads that information through all of the different clients.
So the whole network.
And the thing is, the only thing that keeps integrity for this system is basically every client is interested in in every other client not lying.
It's like with real money.
Basically with real money, you're interested in that all the money in circulation is real money.
You're interested in that all the money isn't counterfeit.
Because as soon as you get a counterfeit note and you're trying to spend it and the bank sees, oh, this isn't real money, you're in trouble.
Yeah.
So most people don't realize this with normal money.
So everybody is interested in this system working.
That's why the system works.
That's the trust.
Not only have you trust in the institution that issued the bills, but you also have to trust that the money isn't counterfeitable.
And the same thing is in Bitcoin basically every client is interested in the integrity of the whole network.
And that's that's why whenever one of these blocks where they basically take all the transaction that happened in the last 10 minutes, you know, I sent you money, you sent somebody else money.
And a hundred other people sent each other money as well.
You get this block of those transactions put in that lock.
And at that point, every client tests all of these transactions.
And that's also why you have the 500 megabytes block lock 500 megabytes.
Not only you can, you will.
When you install your Bitcoin client and your Bitcoin client downloads that lock, it takes like an hour or something.
Because it'll cryptographically test all the blocks back to day one.
And it'll verify all the transactions.
So it'll verify that somebody sent somebody else money, then he sent that.
So you basically know every a quote Bitcoin.
You know where it originally came from, where it went.
So you know that there's not like the point is if that would want to have my could just say, oh, I've got 10 bitcoins.
Yeah, there's no way to verify it.
And then start trading them.
But only in the moment it's open source.
I could hack my client to give me like 100 bitcoins and then spend them.
But the thing is all the other clients would immediately happen when they realize when that transaction goes through.
It'll see, oh, fat didn't have those 100 bitcoins.
Where did they come from?
So it'll cancel that transaction and kick me off the network basically.
So I was just going to say, so what's the consequences for that?
Would your idea or whatever, you know, would you be kicked off the network?
Well, I don't think you kicked off because you can just create another one.
It'll just cancel the transaction every time I give myself money that doesn't exist.
The transaction will just get canceled and that money doesn't exist because it's basically a huge consensus.
It's basically like it's really interesting.
It's like a social experiment. It's like democracy works because everybody is interested in the system working.
As soon as one client will notice something go wrong and then everybody will go, well,
I don't know where this money comes from.
Basically, it'll say that transaction never happened.
It'll say, I don't know where the money came from.
That transaction will never happen.
The thing is, how does this happen?
The real question is, where does the money come from?
Obviously, at some point, someone has to generate the coins and someone has to know.
Exactly.
It started out with, in the beginning, the first person wrote this program, Japanese guy, whatever, got 50 bitcoins.
The thing is, every 10 minutes we need somebody to collect all these transactions into a block
and then cryptographically sign this block.
Then everybody, all the other clients look at this thing happening.
This guy is signing this block and say, yes, all the transactions are right.
At that moment, it will go into the canonical history that long train running back to day zero.
At that moment, it becomes the official history.
All these transactions have really happened.
The thing is, we need somebody to do this.
We can't all do it.
If everybody would sign all, it would be chaos.
If every client signs everything and everybody could fake it.
We need one, every 10 minutes, we need a canonical answer, basically, to what transaction happened.
This is where the genius thing comes in.
This is done with a hash.
Basically, if you know what a hash is, a hash is a mathematical algorithm that takes an input
and basically condenses it down and produces an output.
It's like a checksum. They use them for checksums on ISO images, for example.
Let's say I have an 800 megabyte Fedora ISO and it spits out like a 15-character string,
which is guaranteed to be different.
If I only change one bit in that ISO, the string at the end will be different.
That's what a hash is.
Basically, it's a cryptographic, strong hash, which means it will condense it.
The trick is it's a one-way function.
There is no way to go back.
Basically, I put in something, I get something out.
There is no way by the resulting, basically, by the result.
There's no way to estimate what I put in.
Yeah, the hash will always be the same length.
That's the difference.
If I make a file that's...
I was going to say 15 gig, that'd be quite crazy.
But say I make a file that's two gigabytes, which for a DVD image wouldn't be much.
And then you've got a file that's 200 megabytes.
The hash will be the same size.
If there was more characters on yours, and I could guess how big your file was
or whatever from the number of characters, then the whole system wouldn't work.
Not only that, but the important thing is that you can't go back.
Let's go back from the ISO example.
Let's say I make a text file.
And I put four characters in that.
A-A-A-A.
Then I hash this.
And I get a hash out.
And I give you the hash, and I don't tell you what I put in the text file.
Yeah.
There is no way for you to know.
The way I don't want to go into how a hash works, because I don't really understand it either.
Listen to security.
Now they explained it.
There's lots of stuff on this on the internet if you're really interested in how that works.
But basically that's what modern cryptography guarantees us that if we have a good hash function,
there is no way you can go back.
So basically, if I give you the task, produce me a hash that comes from a document,
where I put in A-A-A-A.
Right?
But I don't tell you that.
I don't tell you that.
Basically, I only tell you this is the resulting hash.
And I'll figure out what in the document was.
So basically, the only way for you to do this is to put random, basically random characters into the same hash function.
Right?
Until you get the same hash out.
Like a dictionary attack on the password.
Exactly.
You brute force it.
I only showed you the hash.
If you look at that hash, basically, you put random stuff in it.
And when you get the same hash out, you know that's what I put in.
So if I never told you I put in A-A-A-A, to figure that out, you have to just put random stuff in it.
And yeah, and that's a really small example.
I mean, how many, how complicated does it get when you've got a massive file?
Yeah, the thing is, it's not doable if I don't tell you how many characters I put in.
Because you don't know.
You have to start with A and then run through all the characters and then do A-A.
Right?
But if I tell you it was four characters, even then it's hard because you have to run through all the combinations of the four characters.
But you know it's four and you can start doing that.
And this is basically what Bitcoin does.
Basically, Bitcoin gives you the task.
If you want to sign this block, right?
There's a known format.
It's basically you take all the transaction that happens, that happened in the 10 minutes in a certain format.
And then you put another string, you add another string to that, and then you hash that.
Right?
And now all the transactions are known, right?
Every client in the system knows them because they're public.
And the random string you put in, basically you need to put a random string in there, and your goal is to have a hash at the end.
Comes out the end where like all, let's say the first, the first four bits of that hash are zeros.
So basically you have the known stuff that everybody knows and then you put random stuff in that.
And your goal is to get a hash at the end where the first four bits are zero.
So basically you take this data you know and you put that random string in there, a different random string every time.
Right? And because it's random and you can't do the process backwards, your only chance of getting those four zeros at the beginning of the hash is to do this over and over and over and over and over again.
The CPU crunches away, does this millions of times per second until by purely by chance by mathematical probability.
At some point you then get a hash that has four zeros at the front, you go, oh, I've got it.
And at that moment you take that hash, you sign the block with all the transaction and you send that to the network.
And the first person who does this gets 50 bitcoins every 10 minutes.
And that's where the new money comes from.
And that is what what is called mining.
That's what people do when you hear Bitcoin mining.
They're basically they buy a fast computer, they buy GPUs because GPUs are highly paralyzed.
They do this stuff really well.
And they let them sit there and crunch and crunch and crunch and they sign these blocks and then I get 50 bitcoins.
And this this fulfills two functions.
The first function is this keeps the network going but because this generates that lock that huge long lock that that's basically that the network needs.
So it generates this canonical listing of all the transactions.
And the second is it provides a stable way of generating money.
It generates 50 bitcoins every 10 minutes.
And it's called mining because that's basically what they did with gold.
Because you could exactly that's the way they basically generated money in the olden times.
If you lived in San Francisco you could go in the hills with the pickaxe and get gold out of the ground.
But that rate that gold was mine was basically known.
I mean, you know, there's a gold Russian and somebody discovers gold.
But in the end there was a limited supply of gold and that's what guaranteed.
There's only this much money and it like the amount of money we put into this system every year increases by the amount of gold that's found basically.
And this is what Bitcoin does as well.
It artificially scars the scars and basically the amount of bitcoins with this cryptographic function.
Yeah, so I had this as you said, but taking it back to the original point.
So I can't just produce a load of bitcoins myself.
I have to be involved in this whole process.
And the other thing is it's it.
Well, as you said that it's basically it's an incentive.
The whole thing is just an incentive to keep the system going.
To keep the system going and relying on people's goodwill and keeping this going.
And I'm sure there are lots of people who would try hard to keep it going.
But without that kind of financial incentive almost.
We come to we come to that later as well because that will run out at one point.
But the point is this is how you basically you make those 50 bitcoins.
You make them yourself that basically you take all the transactions.
If you if you find this at you sign the block and you append one transaction at the end that says I'll get 50 bitcoins for.
Making this block.
And then you sign it you send it off and you get the money.
The thing is this once you generate this block once you sign it.
And you send it out to the network every client on the network will check this.
They will check that the transactions you put in there really exist.
They all know about these.
They will check that the hash you signed it with was correct.
So basically you prove that you did the work you did the number crunching.
You know that they check that all this is correct.
And and and and then it's just you know that they start the next block with the next transaction.
And basically that is how the money is generated.
The thing is we all know that computer power increases.
And without any regulation on this system there would be more and more and more and more money generated.
Because this doing these hashes takes a certain amount of time if your CPU increase it takes more time.
Less time.
And the thing also is the more people join this network the more people try to crunch these numbers the faster they get found.
So there are two factors in the system building from the beginning that regulate that the amount of money generated stays the same.
The first factor is the network difficulty.
This regulates that a basically a block is signed about every 10 minutes.
And this works and you can regulate how hard it is to generate this hash by increasing the zeros that have to be in front of the hash.
So let's say right now I think right now it's like 10 zeros.
I don't know. Let's say it was four.
We said it was four for zeros.
If the network now says it has to be five zeros it the difficulty is raised is raised it's basically squared you know because it's one bit more.
And the network itself decides and this is like all the clients together right this is how the algorithm works all the client together decide how difficult it is to generate the next hash based on the total computing power within the network.
Because every transaction is every transaction is generated to everybody else and because once somebody signs a block we we know exactly how long it took right.
Right now it's it has it's set up so that a new block is signed every 10 minutes.
So let's say we have a network as it is now there's there's so much computing power and it takes us all every time a block is generated everybody goes on.
I want 50 bitcoins I want to do the next block and they all go go off and compute and it takes us 10 minutes till somebody comes back.
It's like a race basically yeah it's a race everybody tries it and just it's statistical probability so it takes 10 minutes.
Let's say the NSA comes along it says we want a lot of bitcoins and they've got a lot of computing power and they have super computers right and they put them in the network.
And they basically have the because their computers are so powerful they only take half the time then everybody else to generate the next hash.
So they they will win like the next round when everybody goes out they win because they have the most computer power probability blah blah blah and they'll put the next session after five minutes.
And then the whole network goes wow this only took five minutes that means our computing power has doubled in the network or some you know it this might not be correct but it's I'm trying to just.
Yeah the system now is that the capacity is increased if you like exactly speed and so on.
So in the moment where that happens the system increases the difficulty of the next hash and the difficulty only goes up it never goes down.
So basically it's a it's a real complicated algorithm basically this keeps the the number of blocks generated at one every 10 minutes.
And of course it goes up you know at the end it basically more and more computers join so it gets faster and faster so at a certain point then the system says oh it's not 10 minutes anymore it's now at seven minutes right.
Yeah we need or maybe even at five or a two and then it generates the degrees is the difficulty and then it'll probably take 30 minutes for a block yeah but it's just.
Exactly so this is the first factor I talked about so this guarantees that as every 10 minutes a block is generated and the second factor is.
To keep the system stable is how much how much money is generated so the system is calibrated at their only ever being 21 million bitcoins.
That's the maximum that's the maximum it's kept and basically is it does that by right now you get when you when you when you crack one of these hashes you sign a block you get 50 bitcoins.
But it regulates the number in that that amount will go down until you get zero bitcoins for for for doing a hash like that yeah but it basically it's at current thing it's at the current growth it's it's it's probably going to take 10 years or so.
Until we reach that point when we have 21 million bitcoins and then it's over this it's never going to be any more bitcoins yeah.
This solves the problem of inflation because you know there's a fixed amount and we know that.
Yeah it's like the link to gold was if you like yeah exactly but this creates two problems as you said the link to go this creates problems the first problem is what if we need more money right at some point they broke the link to gold because they needed more money the thing is we don't really need more money because bitcoins are divisible to a decimal points.
So right now we're trading in one bit coin amounts but you could see that at the point they become worth more and I'll just send you zero point zero zero one bit coin and it'll look a bit weird but that's basically how the system adapts to their only being a fixed amount.
The other problem this creates is at the point where you don't get any payout or you get very little payout for completing a block basically completing a block is keeping the system working.
You know this this generating hashes to sign a block and the generating hashes is only there so it doesn't go fast.
Because if that wasn't everybody would sign blocks all the time get 50 bitcoins and there will be over so it's basically what's called the proof of work you need to do some work it needs to take a certain amount of time because we need to control that.
And the thing is that's work and that needs to be done somebody needs to do this otherwise the system breaks down if we don't sign all the transactions anymore right the whole the whole system breaks down.
So what do we do at the point where where no money is paid out and the solution to this is already in the system because you can already pay voluntary fees for transactions right.
And so I sent you a Bitcoin I can pay a fee or whatever so I could say I pay 10 Bitcoin cents or whatever a transaction fee and that money all the collected transaction fees of those 10 minutes interval wells that gets paid out to the guy who tracks the block creates the block so in right now he will get 50 bitcoins plus the fee.
So at some point you'll get nothing from the system but you'll get the fee and you can at that point you can imagine that the people who are mining will only because they can basically pick and choose which transactions to put in there and then the other people will pick up the slack but they'll put in the transactions that have fees attached them.
So basically at the point where there's no payout for mining anymore you'll you'll still have people who have computers running to do the work for the network but you'll have to pay fees and let's say if I pay more fees my transaction will get picked up by those people doing mining faster so I can pay so you'll see that at some point there'll be like a market a little like self-regulate.
I was going to say it's a free market essentially.
Yeah so you'll have a certain fee for a transaction and that will be a normal fee and you can probably pay a little bit more and get your money for it.
Get it faster.
So this is what solves that thing.
So basically we've talked about how these blocks get generated and everything.
The thing I didn't go into is that basically with Bitcoin we don't exist as a person basically you get what's called the Bitcoin address.
If you want to start selling or buying Bitcoins you get an address which is like a long random string and that is basically you on the system and when you start your client at first it'll generate that for you and it'll generate also a public-private key pair.
And this is how everything is signed.
Every transaction on the network is signed with the public-private key so you can verify.
That's how it's all verified in the end.
And this is also what's kept in your wallet.
Basically this is the only thing.
The only two things that guarantee you the money you have is this address which is public.
I put mine on our website so people can send me Bitcoin.
And this private key, the public key everybody has, but if I lose that private key my money is gone.
That's the only thing that basically I mean the money will be in the system but nobody will be able to claim it.
It'll just sit in the system.
You need that private key whenever I authenticate myself to the system.
And that's basically what makes it secure.
And that's also a problem.
You get into that later.
I mean what happens when your wallet gets stolen so to say.
So you basically have this address and that that masks the lock in the network, in the system.
Basically just keeps track of everything.
It's anonymous so far that it doesn't say, oh this is FAP.
It just says like 17 WEM that said whatever my Bitcoin addresses.
But it keeps track of everything to the back to the dawn of time.
Everybody knows every transaction where everything goes.
Everything is signed.
So you can't basically you can't break it.
And the network checks all the transaction whenever whenever a block is generated.
So the interesting thing as you said maybe we probably get that late but the interesting thing for me about that is if I were to be able to somehow discover your ID.
Then I could know straight away by looking through the log exactly what transactions you've done and how you've got out of it.
And we'll get into that later and that's why Bitcoin as a you know everybody keeps saying it's an anonymous currency.
That's basically bullshit because it's actually not a it's it's very well you don't know who I am.
But once I put my thing on the website you know who I am.
Right you know this is FAP.
And you can then there's a site called block explorer dot com block as an you know PLO CK.
That lists publicly for everybody to see everything so I could you could put my address in and you can see what money I get from whom.
Well from what address right but you can see.
So everything's public and that's the only way this this system works.
So and we talked about you know the limited supply we talked about the fact I'm just going through my notes.
I made copious notes of course because really hard topic.
So basically the system basically as I said before it keeps itself secure because everybody on the network has an interest in everything being OK.
So every time every time block is generated all the transactions are calculated through all the hashes are checked all the public private key pairs are checked.
Yeah.
Yeah.
And that's how the system works and that it that's that's all there is to it basically it's just it's a it's a incredibly incredibly clever how it's designed.
Yeah.
With all the crypto and stuff but basically it's just a big global bank.
The thing is it's decentralized so the whole network is the bank to say you know to invoke the buzzword the cloud cloud is the bank.
Everybody sees everything everybody checks everything and the the amount of money and the speed that the money is generated isn't decided by some.
Had on show like in the in the American I don't know what the national bank or whatever prints prints the money it's the network.
Exactly it's algorithmically regulated there's only going to be 21 million bitcoins they're going to be generated at you know every 50 or a certain amount every 10 minutes.
That's that's regulated by looking at what's the computing power at the whole network and then adjusting a basically a knob a difficulty of of the process that happens.
Well they're basically in the whole in a whole network there's only two processes that happen this transactions that all the clients do among each other.
And there's every 10 minutes there is this block that that gets signed basically the global history is created.
And you know that's the thing I mean that's the thing then they need to be an incentive for that because somebody needs to do this.
And then every every client also will download a copy of that once it's verified as well.
Yes exactly they'll they'll know everything so that's basically how mining works basically people by computer like you client you push a button and it says start mining.
If you do that on is on a CPU it'll take ages and it'll use more power than you get.
Right now you get a see right now as we're recording bitcoins are currently trading at 13 euros per Bitcoin that is at 9.75 pounds or at a 1750 US dollars.
So 50 bitcoins is a lot it thousands of dollars the thing is currently it takes about a month to crunch that so it's still doable because right the thing is with mining is people have calculated that right now it's actually it's doable because you can calculate how long it'll it'll take you.
It's still profitable yeah it's profitable you need basically you need to calculate how much money how much power your computer yeah needs over that time.
I'm just thinking what yeah I'm sure you're about to get to this but what happens when we get to the point where the difficulty is so high that it costs more in the power and computing and so on.
I'll get to that down to the power to then you get out of it then there's no.
The thing is that will meet the point when they when the payouts get on basically you have to curse you have to curve of computing power equals energy equals money have to pay to the power company.
Yeah that goes up as the difficulty increases and then you have a curve that from the other side or you know goes down basically the payout which is 50 bitcoins which goes down as well.
And when these two you can basically calculate I need to buy a computer I need to buy the best graphic card for the money that can you know that can power something and you can calculate how much money you make and
at some point those two curves will meet and what happens then is we talked about it then basically at that point nobody will mine anymore and you'll basically need to start paying transaction fees to keep the network going.
And you know that's just how it works what people do right now is actually do because it takes about a month to mind this you know on average to get coins I mean Steve Gibson got one in two weeks he got lucky.
He ran it like on his on his quad coin just got I mean it's it's the statistical right you can you could find this hash after trying once.
Or you it's like it's like passwords right when you brute force them yeah it's like a statistical probability how long it takes to but you could also get lucky yeah well the thing is so key a good way to kind of link it back to the whole mining you know analogy I mean real mining if I was digging something out the ground it's the I mean I there is a chance is a very low chance that I could
walk out and stick my you know spade in the ground and hit something straight away and go oh well look at that was just what I was after a piece of gold and you know but at the same time if I have an army of a thousand people all covering an area which would be in this and I would you be similar to me having masses of computers and computing power then I could.
I increase my probability of hitting something because you've got all those people there so yeah as you say it kind of works out the same way.
Exactly so what people are doing right now it's like they do what's called mining pools right basically it's like it's a central it's it's you register with somebody who was organizing this is basically like Boeing or set you at home you know folding at home that can't stop yeah basically.
There's some guy who sets up this mining pool who takes one of these work it's basically workload you know you need to can I generate this hash and creates little discrete work units that take like to let's say two minutes instead of you know it takes this task that takes a month and
up in little things that take two minutes and sense you need a special client special kind that works with the GPU and stuff sense you that work unit and everybody works on that.
Then they finish it the guy hence hence that into the Bitcoin network gets 50 coins and then divides that through all the people that were actively working.
And right now you can make money from that I haven't tried I'm not really interested in this because this is kind of the technical side right it's kind of fun.
It's like right now it's it's what people are calling it geek sport it's kind of cool to do but I'm not really interested in this I'm interested in Bitcoin on the basis of that it's a you know currency and that you can use it.
I know you said before it's also an interest in social experiment as well.
Yeah yeah well we will we'll get to that so basically you know we talked about the fact that's basically how mining works you know that the amount of
bitcoins build decrease and at some point it will just won't be profitable anymore I have no idea when I'm really not interested in this but yeah basically if you want to do it you need a special
client and a GPU and if you go to Bitcoin.org there so all kinds of stuff yeah so right now we're still in the gold rush phase really in the kind of in that people are
rushing in there to try and because there's gold in them there hills as they say you know and at some point people will say oh god that's been
mine so much there's no gold left and then we get into the transaction fee point and at some point there will just be nothing to mine at you
know in 10 years or something we'll have our 21 million and then that'll just circulate one critic point of this whole
system is that it wastes a lot of energy you know that you know there's two people run the GPUs you know that that is not you
know you can't just discount that that's a that's a good argument.
You think about it is that as you've just said because it's like a race almost to get these things done and be the
first one to claim the coins then there's going to be a lot duplicated work because everybody's trying to race to
the same point and all those people who don't win have then effectively wasted in the effort in getting there
in some way yeah exactly when and they duplicate in the same job that everyone else was doing everybody does
every basically it's it's it's thousands of people doing the same a mathematical stuff that is that is just there
to slow people down right yeah don't do anything you don't serve they don't cure cancer as we're
folding at home it's basically just there to to guarantee because it's the only way to go back right to the beginning
it's the only way to to counter this problem that bits can be copy just copied you need you need the process
you need to come up with the process that takes a certain amount of time and that you know that that's that so basically
and basically thousands of people do this and then one win because yeah by by accident or by lucky
studies whatever you know probability they're the fastest they get the money everything starts over again
interesting about this the system is that is it's it's incredibly
resilient I'm being based on on on on ISE it's itself feeling you know just like with normal ISE
if you have a net split and certain people don't talk to each other the system then once the net split
split this over syncs up and exchanges all the data again basically we could we could both have a transaction
and I sent you money and you say okay I got the money but but be totally disconnected from the rest of the network
because I don't know there's some pipe broke down and you know the whole USA for like three hours
doesn't know we had this transaction and and and the whole Europe has hold different transaction
they have their transaction because let's let's just say some cable broke down
so the USA is doing transactions we in Europe doing transactions and we all generate all these blocks
right at some point the cable works again and you think the system fall apart because there's one canonical history
right yeah but the thing is the system is written in a way that you know of course they've been blocks generated
but the thing is the system will will automatically like compile this basically like like it you know
it's gonna say it sounds very much like version control yeah it'll compile this into one canonical history
basically it'll look at all these transactions and then these transactions weren't signed
let's say both of us we did like a transaction and nobody ever heard of it
the rest of the network never heard of it because we weren't connected to it for a week
and then we joined the network and at that point we can just say oh we did this transaction three weeks ago
and it'll just go into the next block so basically it doesn't matter when it happened it'll just you know
you let's off exactly it sounds almost exactly like distributed version control in that you know
it's the same thing we could check out some code from somewhere and work on it between ourselves without telling any other
the hundred developers working on this thing that we're doing it and then we come back with our branch
and whatever and merge it back in so it that's exactly how the whole thing works
like the Linux kernels a great example I mean how many lines of code are in that and how many people working on it all around the world
and it works because they have this merge it merges and there are people who do this canonical thing which becomes the Linux kernel
yeah exactly and basically all the clients it's it's exactly like that
well it with the kernel it's like it's real people like you have to have to patches they collide and Linux it's there and
figures out what needs to go where here it's basically automated it's because it's it's the kernel
it that's a lot bigger it's a bigger problem it's lots of stuff that can happen
this this online protocol here is really really simple there's just transactions going on
and in the end the system just needs to decide do I know where every Bitcoin came from
basically just needs to figure out this tray for all the bitcoins and it'll just drop every whenever
when whenever somebody sends bitcoins that didn't exist they'll just drop that
and it'll just like drop network packets or something yeah it'll just magically do this it's it's really
incredibly incredibly amazing I mean the guy who came up with this is a genius
I was going to say whoever invented this is like and it's like the thing is it's totally open source
right he did this as the thesis and then we brought the client it's an open source client
and and you sure it wasn't the hawkman under an assumed name I don't know yeah it could be some I mean this guy
I mean the name you just read out this but before it's a pseudonym we know that
we know that nobody knows really who this guy is and that's a good reason for it I mean the the people
who did this electron thrown in currency stuff before they patented their stuff
right and this guy didn't because and that's a good reason for this because this in this I mean
I mean we've basically we we just talked about all the technicality stuff and now we'll get into the
politics and all the meter discussion but the reason for this is this is this if this ever
takes over to put all the banks out of business yeah well they'll still be in business for like
speculating and but the main business of a bank which is exchanging money
it's obsolete with this because we are all our no the bank is the network the bank is the cloud
and we don't need anybody it's like the typical internet this intermediation right we cut out the middle
and this is why this guy is anonymous and doesn't you know and I imagine he must be on the front
yeah because you know the banking folks really don't like this and and now we get to this stuff
why people wanted us to talk about this I mean I've not explained what it is yeah we've really covered that
so we covered that so basically the thing is now there were lots of news articles about this
and people were saying wow this is this can never work and you know this is like a legal stuff
and basically it's all started out with why at magazine writing an article about Bitcoin
but own not not because of Bitcoin because of a site called Silk Road
and Silk Road is a it's basically like eBay for drugs
it's a site that exists on the darknet it's just it's not on the actual internet it's just a
tour note it runs as an anonymous tour note you can only access it if you're running tour
and basically there you can over there you can buy drugs or you know online
coke a hash you can buy everything you know hold my Rihanna plans and they'll ship it
they say that's like I haven't been on there but you know I've researched this a bit you know on sites
and I read the white acting stuff basically they say they ship it in a discrete package from Canada
like the pharmacies basically like those Canadian pharmacies where they say we'll sell you Viagra
or well that's legal so I don't know but we'll say it's like Amazon or eBay for illegal stuff
and of course the white this and our two two senators in America won a ban
well they want to they told the FBI they want to side offline which the FBI hasn't
has managed yet because it's on the darknet and I can't really find it
but they're working on it at some point they probably will find them in real life
and you know kill them all
I was going to say there's going to be some some swap teams going into it
but just put the whole spotlight on to Bitcoin because they use Bitcoin because it's generally anonymous
now the thing is the US government wants to outlaw Bitcoin
and I'm going to we're away from the technical point and we're into the discussion also
I'm going to tell you my opinion about this this is an opinion
my opinion is that US government doesn't want to put them out of business because
they don't want to get rid of Bitcoin and make it illegal because of Silk Road
because you can buy drugs I mean this is just for geeks this is people who are too lazy
to buy their drugs on the street right I mean if they take this this side offline
I still you probably know because I live in Bonn in the town where I live
it's a small town I know where they sell drugs not because I buy them
I'm actually somebody who I'm like the hardest stuff I do is I drink alcohol
and I smoke cigars and that's it but you know you can't walk down the street
without seeing where they where they sell hash
yeah because I I always get asked because of my hands up but
so they don't really care about that the public might care but they you know you can
you don't get rid of that problem I think they want to make Bitcoin illegal
because and this is very political and to me very interesting
because the US government doesn't want I mean the banks don't want Bitcoin
but the government doesn't want that as well because they cannot exert
political pressure on this the thing is with with the international banking system
the financial system we have right now a state gets that this was always the case
a state gets a lot of the power they have not only from the police you know
but and from their military but they are they have a monopoly on printing money
and wars get finance but just by just printing more money
you get you get what's happening because because somebody owes you money
you know you you get what's not happening because somebody owes you money
for example the the US could never invade China right now
not because they don't have enough soldiers but because the US economy owes
the Chinese so much money because they make all the electronics
we use all the iPads and that that they just can't invade them
because they owe them so they could basically make their whole market collapse
by the money they owe them so the state doesn't want this monopoly of printing money
taking away from it they cannot it's a method of control definitely
and they cannot control Bitcoin and the thing is by they can't control this
because there's no central so as we said there's no central instance
the the rate that money gets produced is algorithmically
and it's it's done by the network and you can't manipulate it
the other thing is you can't stop transactions
the thing you can do is and Bitcoin isn't really anonymous
I have my address it's on my website right so they know that's my address
so if you if I sell you drugs and my address is on my website
and they know fab has this address and like hypothetically
I'll I'll be selling drugs right so I sell you drugs
the thing the German government then couldn't do is they couldn't stop this transactions
and with PayPal they don't care because with PayPal they can go to PayPal
and PayPal can freeze your account they can stop transactions
they can reverse transactions with Bitcoin you can't
Well the other thing is PayPal interestingly
if you think about it obviously PayPal is a company somewhere with an office
with people employed and so on
so PayPal is very heavily linked into the old system
it's almost like a bridge between this new system
well in PayPal you know PayPal's money in virtual money and all that
as you said it's very much tied into the real world because it's got to have
PayPal's got to have a registered company it's got to have taxes
it's going to have returns accounts all the stuff that every other shop on the street has
that links them into this overall control system
yeah yeah so the thing with Bitcoin is it is a currency
and so but basically it's just transactions like like PayPal but you can't stop it
the government you know it can't stop it
the thing they could do and the thing where I think this outlawing this is total bullshit
is because they can figure out who I am
even like if I put my Bitcoin address on my website it's very easy
if they want to stop these transactions they go to my house and arrest me
they can figure out who the bad website belongs to and arrest me
and even if I don't do that basically Bitcoin isn't anonymous at all
because you have an anonymous address and you can make a new address for every transaction
no problem but
basically you have to send the money to some address right
and then you have to get the money out so you have to do something you have to go to
exchange and we'll discuss in a second saw that work but let's say there's an exchange
and that gives me euros for bitcoins
they know who I am I have an email address or whatever so you leave a digital paper
you leave a trail of bits that
the FBI can just follow just like they follow
let's say I don't know the Colombian mafia and
some let's take gambling gambling websites illegal in the address
in the US and they use banks on the Cayman Islands
and let's say the New Jersey mob makes money from that
if the American police or FBI wants to figure out
they just follow this trail
somebody needs to have opened that account in the Cayman Islands
and there's a massive
but there's a massive loophole in real currency which is cash
physical currency because nobody tracks cash transactions
and if I can always get a printout which is non-traceable which is what I'm doing
when I go to cash machine I'm getting a printout effectively
that I own or a little bit of it
and according to where my bank says
and then you know I can give that to you and there's never any trace
then that's how the whole black market works
that's why when you watch films or even documentaries when they break into some
you know drug dealers den or something he's got a room full of cash
because cash is non-traceable
and that is exactly my point and that's why the whole
discriticism that is leveled by the government
is bullshit because in Bitcoin there's a trace of everything
it's very different from real paper money
it's not anonymous at all
because you just have to figure out who the Bitcoin account belongs to
and then you can trace every transaction they made with every other person
and there is a way
more control if you had you know somebody did have access
say there was one central group at the bank
we can figure out who the account belongs to because as long as
I'm just trading Bitcoins you can't right
I open a random account with my client
I trade stuff back and forth
but at some point
if I'm doing something illegal
I want real money or I want something
and this is the point where like Bitcoin transitions
to the real world I go to the website
an exchange
where I then change my Bitcoins against money
or against anything else
and at that point they can subpoena
they can break into the servers
they can lock everything you know
like with everything else
they can trace you
they can figure out who you are at that point
of course it's
depending on how you do it
it's hard to do but as you just
point it out with normal money
it's even harder
for the police to figure out and still they do it
they exactly know where the mafia is
they might not be able to arrest them all
but they have ways of finding it out
if they want you
I think the key thing to remember here
in terms of how the police can track money
and so on in the real world
anywhere else governments all over the place
with the current system
is look at Al Capone
they didn't get him
for all the murders and things he did
they got him for tax evasion
because they can track your money
and they know what's going on with your money
and that's how they got him
they didn't catch him doing a murder
so basically
I think that criticism against Bitcoin is
it's just
it's fun
I mean it sounds like
I'm some kind of a knuckle guy
and it sounds like a conspiracy theory
but if you look
if you know a study politics
and if you look into
how much power a state has
because they can print money
and they can
dedicate what legal tender is
that's why they don't make Bitcoin
that's the only reason
but you know
we'll see how that plays out
at some point
the thing is
let's say the US government makes it illegal
it just becomes something like
and the thing is the mob
or whoever is buying drugs will still do it
because
they are buying drugs with it
that is already illegal
if you make the currency illegal as well
they don't care
and the thing is
if you make it illegal
it doesn't make it easier to track
your methods to track it
are the same if it's illegal or not
so making it illegal won't change anything
except
that's the only thing they do
the thing that's interesting to me
is you were saying about the exchanges
and so on
at some point
unless
everybody starts accepting Bitcoin as a currency
unless the shops start accepting it
and I can go and buy my loaf of bread
with so many Bitcoins
in the same way as something like all these sci-fi films
we've seen for years
and sci-fi stories like
Blade Runner and so on
because you're doing that with your credit card
or you're doing it with
now they were doing it with mobile phones
they want to do contactless payments
with mobile phones
and that's the goal for Bitcoin as well
yeah exactly
but the thing is the key thing here is for me
the issue with Bitcoin which I've never quite
been able to reconcile is that
we're all relying on the same way
that we rely on the fact that our state
gives our currency value
and I feel reasonably confident
to take inflation and all the rest of it
and market forces
because then we're going to get really complicate
but the thing is
it all relies on this idea that it has value
and if Bitcoin doesn't
have value in the real world
where I can go and spend it
then it's going to have a massive hurdle
to get things you know
but it doesn't have a massive hurdle
because it already has value
it's traded at 13 euros
yeah but the problem is
except how can they trade these things
because if the government then said
Bitcoins cannot be converted into dollars
in our country
okay that's a different
that's a different problem
we can get into that
but first of all
you have to realize that Bitcoin is a currency
it's just as the pound
I mean the trust that is placed in that
the thing that people don't understand
when I talk to them
in the brain of people
there's always they think real money
and they think Bitcoin
and what they don't understand is that
Bitcoin is real money
as you're real money
you're real money is exactly the same
Bitcoin is even
I would personally place even more trust
into Bitcoin because
you can't have inflation
the currency is guaranteed to be stable
by the
cryptographic algorithm
unless somebody breaks that
or finds a way that it doesn't work
anymore
it's a lot more trustworthy
to me than your state currency
because
your state for whatever reason
like I don't know
the economy goes down to something
they change the value of the money all the time
they print more money
they change the
they can change the value of the money
and they do it all the time
so
that basically
itself in the system can't have more
of Bitcoin
of course the exchange rate you have right now
to normal currency
which has to be there like normal
whatever you like to euros
or to pounds
that could take
that is you know
fluctuating right now
it's wildly fluctuating
and people are saying
they're pointing out to people on
identical over the last few weeks
that is only because it's a young currency
because not enough people trust in it
and that will change
I mean
this happens with every currency
other more
you know
IRL real life currencies
if you look at currencies that are new
after the war
when Germany went
okay we have a new currency
that was happening
there were
suddenly there were five countries
where there was one before
and they all had their own currencies
at first they did
fluctuate wildly
and then they kind of
you know they kind of equalize
and now I mean
after currency fluctuate
every day
that's what the whole exchange rate
exactly
that tells you how much a bitcoin is worth
that's basically based on
these exchanges
and the biggest one
being Mt. Gocks
that's the one that was recently hacked
and what these are
there basically like
like markets
on the stock exchange
basically they don't
they're just an exchange
let's say I have bitcoins
you have pounds
then I go there
I say it's basically like
eBay I say okay
I'll sell you
one bitcoin at
at nine pounds
and you say okay
and lots of people do this
and this is how
how like this market
establishes how much a bitcoin is worth
and this is how this
bitcoin chat page
basically it just looks
okay the last bitcoin
to euro was sold at
12.75
you know 12.75
bitcoins for one euro
so this is what a bitcoin is worth right now
and that's exactly what happens when you go to
a travel agent
or if you go in the air
and I'm going to say I've got so many
English pounds and I want to change them into euros
they'll put up on their little screen
this is our rate
and they'll have their profit
what happens at the loan on circuit change
that's how they
how the international financial system established
how much a dollar is worth
and the thing is this fluctuations that you have
you have them with normal currencies as well
because at the moment
the world trade center got blown up
they had to stop trading for the dollar
because the dollar was
was falling
everybody was selling dollars
and it just goes down and the same thing here
Mount Cox was hacked
and I had to
suspend trading
because suddenly bitcoins on this exchange
weren't worth anything anymore
because nobody was trusting the supply
and at the point where the half of the US gets blown up by terrorists
nobody will try
will trust the federal reserve
so okay
this currency is much younger
and it's fluctuating more wildly
but at some point
it'll just be like every other currency
so the key question for me
you say that big exchange
surely they must have
an office somewhere or somebody in a room
somewhere is running it
so they must have a tracing
the physical world as well
but they're known as well
the question is I don't know
I don't know for this exchange
I know I use the bit market
bitmarket.eu which is
there in Poland
and they have an address on their site
and basically they take a little commission
but you don't
they just provide this platform
and they pay server fees by donations
so basically
they just provide a platform
and all these just provide platforms
so I'm basically
they're basically like an escrow service
so let's say we trade
I have bitcoins and I did this
to try it out
basically we agree on a price
you'll buy 10 bitcoins at 12 euros
you say okay
and then we have a transaction
locked on that site
then I wait until you
pay that say paypal
or wire me 120 euros
and at the point
where I got it I push a button
and you get the bitcoins
of course you could scam me
you could pull the money back from paypal
but you know this is just like ebay trading
or whatever you know buying stuff of ebay
of course you can always get scammed
this is why for example
on Gorks they have an escrow service
and stuff like that
but the thing is you know
of course this exchange
I have to send the bitcoins first
so they can send it to you
so they could scam me as well
I think that's what you were on the
but the thing is
this is
with everything this is just a bit immature
because it's in new currency
I mean if you go to this
stock exchange and you sell
shares
I mean there's an agent
that you sent money
who then buys you shares
they could scare you as well
yeah that's what that's what that's the stockbrokers do
that's the whole thing
so it's basically the same
not scamming I should point out
not saying stockbrokers
some say their business is to trade
for you so
if I was rich enough to have some shares
in something I might have a stockbroker
or my shares or sell so many shares
in such a company
which is why in all the films you see people shouting on phones
you know like sell sell sell sell
bye bye bye and in the exchanges
because that's what they're doing
of course it's much harder for them
to scam you because they have to be registered
with the exchange you know they have to name
but it happens as well
there's millions of
of dollars gets scammed that way
every year
and the thing is right now okay
these are people in Poland somewhere
and the site could disappear tomorrow
of course
but also this is a very young system
and if you look at what happened
in the international monetary system
around 1900
you know there were lots of people
scammed and stuff
much more than now
because it's a much mature system
and you could think that
this whole system would mature as well
for me that
over time if bitcoin
continues to you know stay around
and all the rest of it
over time then
in the same way that
that one place in Poland is very
popular at the moment at this one
kind of exchange
they will build up a reputation
over the years of being trustworthy
and then they might
set up like branches
if you think about like a real bank
in the same way that
I go and put my money into
I don't know but at least bank
or something in the UK
or you put it in Deutsche Bank in Germany
we trust the fact that because
it's been there so long
and because there are so many branches
and it's got this international thing
that what it's not going to disappear
overnight that we're not going to come tomorrow
and find that the bank's shot
and I might have gone
but it could actually happen
if you look at at Greece
yeah exactly
people were taking their money out of the bank
because they were afraid that the bank
will fold and their money would be gone
yeah they have a run in the bank
exactly and that happens
and you can turn it around
you could see if bitcoin takes off
you could see Deutsche Bank
doing what mount gocks does now
because they already do this
they change euros for dollars for example
that's one of the things the bank does
but just the same exchange
bet big coins to euros
yeah and at that point
it'll be much more trustworthy
because you have Deutsche Bank there
and they just can't... I mean they could shut down
but they could do that now as well
but they can't just disappear
you know where they are
yeah exactly
this is the whole argument right now about bank regulation
particularly in the UK
because we've had this massive banking crisis
where people were doing stupid things
also in the banks
exactly the same thing
so I think the moral of the story
is bitcoin is a currency like every other
it works totally different in a way
and we come... that's the last point
I'll have
it's a big experiment
in one way
but generally it's a currency like every other
and it's as... you know people are asking
should I trust this blah blah blah
I don't trust this
as much as you trust every other currency
and there's currencies you trust more
you know people trust the
US dollar
a lot more
then they trust the... I don't even know
North Korean whatever
the Himalayan
Yacht dollar or whatever
and that's why a dollar...
what was that?
rich installments making
that's why the exchanges
factor it right when the world trade
gets bad people think oh god
the USA they'll be gone in 50 years
I don't trust their money anymore
I'll trade in euros you know
and this changes and bitcoin is just the same thing
the difference is it's
immature right now it's very young
it seems to work
it seems to do everything it should to
but we don't know the whole system could collapse tomorrow
just like the banking system could collapse tomorrow
and it does every hundred years
basically
in America when we had the crash
stop market crash
so it's basically it's just
very different but it has
it has
some downsides like we said
and it has some upsides the outside
it's very fast it's internet-based
it's basically currency
that's why I find it so interesting
and I wanted to take off because it's
it fits our new lifestyle
basically on the internet it fits this
this micro-payment idea
you know a flatter idea it fits
I want to send you money now
fast idea
the downside is and this is
something that was also discussed you know
somebody got a half a million dollars
supposedly stolen in bitcoins
I linked that in the show
a week back or so
the thing is
if you install this on Linux
in your home directory
you have a directory.bitcoin
and that has your wallet
private key in there
and if I get access to your computer
and I get that directory
I have your bitcoins
and I can transfer them
and then they're mine
thing is
you were saying wow this
currency is never going to take off because of that
the thing you have to remember
with bitcoin is the one difference
to all the other stuff is
well it's not really a difference but
you're basically your own bank
wallet for a reason
if you put all of your money
in your wallet
and you walk down the street
and somebody steals your money
your wallet your money is gone
that's you know real money
it can't be traced
it's the guy who has
the paper it's printed on
has your money
and in the same way the guy who has
your private key
has your bitcoins
so I don't actually see that
as a downside per se
it's just the
shift basically you have to
protect this directory
but there's a different
there's a crucial difference though
I don't walk around with all
of my money in my wallet in cash
so if I did
it would be very easy for people to rob
everything that I have
so in the same way it seems to me
you will have to have different
coins and maybe not put all
of your money in one
wallet because then you know if that
wallet gets stolen
the one crucial difference here
is that
what I mean with
you are your own bank
let's say you do online bank
and you have a windows
computer and you get a trojan
and it steals your
banking credentials
happens to thousands of people
that protects you is that
your bank you pay them fees
and if this happens
and somebody
steals all your money out of your
account they'll basically
give you the money back
because there are laws
for this and that's why you pay fees
they basically
ensure you against this
they actually have insurance
banks have insurance they put
millions of dollars inside every
bank fees but this ensures you
but the technical
system itself isn't more secure
you think you're for let a
pin number for and your
ten list that you're probably
safe in your computer secure
right and the normal banking
isn't secure I could do a social
engineering up your bank
pretend I'm you change my address
and get a pin number
that happens all the time
you put up a fake website
so you send your link and say
oh we need to get you to verify
your login details and that
happens all the time
the thing is that our
financial system is build
with our laws in a way that your bank
ensures you against that and
bitcoin you don't have that
but the thing is that's a
technicality you could see a
website let's say somebody opens
bit and this exists already
you put your
online bank
right they have your
private key
and you do
transactions through them
and you pay them fees and the
same thing happens if somebody
actually they give you the money back
and you could see them making money
like a normal bank basically
if you transfer bitcoins
they keep in an
escrow for a bit and then
speculate with that
and the cool thing with bitcoins
you don't have to do that
so you can
transfer money immediately
and you don't have to deal with those
stupid banks and
their fees and everything
but
that power comes with
responsibility and that
responsibility is that you keep your wallet
secure and i mean you can encrypt
the true crypt
there's a way of
you could also see for this
to reach mass market that
i don't know paypal or like another
site
creates a service around that and then it
would be more like normal money
yeah it would and the interesting thing
for me is that the whole thing
as we've said relies on this trust and so on
and we talked about the current
financial system and the way it
works with different governments
you've got the IMF and all these other
bodies that we don't really know much
whatever so and i'm getting very political there
but um yeah so um
the thing is that i don't think
that the powers that be if you
like you know fight the powers that
be to take the public enemy stance
uh you know that they will never accept
any currency that they cannot control
because they it's a system of control as i said
and government is about control
and i'm personally not an anarchist
so in some way i in some
whatever to whatever degree i agree
that we should have a government and there should be some
control i mean that's a really big
argument that you could spend a long time
talking about but um i don't think the problem
for bitcoin is until i can spend it
in what i see as the real world
like put petrol in my car or by bread
or whatever you know then
and that for that to happen
the whole the governments would need to
buy into it they never will because
they will never trust it because
it gives up their control which
they're never going to do you don't
but you don't have to um
with bitcoin is that we don't need the government
to accept this and it worked i mean
you can spend money i sometimes
no no no no no no
somebody donated bitcoins to me
and i went to bitcoinmarket.eu
i created an account
i gave them
i sold bitcoin
to somebody
and they sent paypal
they paid me money and i sold bitcoin
and i got money back
so it works right now
not only that if you go to bitcoins.eu
there's a huge list of people
who accept um
basically paypal
bitcoins bitcoins payments
and they'll do something for you
there you can buy a root service
you can buy mumble service
i mean right now it's mostly geeks
and it's um
yeah that's what i mean at the moment
it's great if i want to buy stuff online
no no no at the moment you can exchange it
for money hard cash
at that point and aren't you just saving it
in the old system and you know
it seems to me that people are rushing to convert
their bitcoins i'm not rushing you know
i mean people are for me to do anything with these bitcoins
i have to convert them again into
whatever my country can sit as a currency
and the current
then they still have the control so we still need the government
because we need that currency
unless everything would accept the bitcoins
as they are and you know
that would be our currency
our national currency
i don't think that that will ever happen
and it doesn't have to be
yeah that's my point i don't think it will ever happen
yeah but the thing is
your argument is basically
Bitcoin is not legal tender
and what i mean by that is legal tender in the UK
is the British pound
and your only legal tender
and legal tender means
if you go to a bakery and you
you want to buy a brand
and i'll tell you the brand is
whatever and you say okay
they have to accept that money
that's what legal tender means
legal tender means if i pay with yours
in Germany
they have to accept that money
but the currency doesn't have to be legal tender
it's something the thing is
it doesn't happen these days
but that's why people think that
that's what you're talking about effectively
no no no no no
yeah but what you're saying is
if we exchange
at the moment where exchange
is that we believe our value
for whatever reason and so on
and you can redeem them for other things
but in the old days before we had banks
before we had money
you don't even have to go
no no i'll give you three goats
if you don't have to go too far back as that
you could go to your bakery
and pay like if they wanted
and pay for your bread
in US dollars
and in the beginning of Germany
when the market was young
all these allied zones
it was totally
lots of people had US dollars
and you would go to somebody
and pay them in US dollars
and i could do that today
i could go to a big shop
and they do this for tourists
i mean they have a
they have a bad exchange rate
and they take a lot of money
because basically they need to exchange the money
but you can you can go to
i don't know
they have signs we accept US dollars
if it's somewhere where the US army base is near
the thing is the difference
with legal tenders you can't force them
to accept your money
and the same thing is with paypal
that would have been the same argument
against paypal taking off
because i mean paypal is not a different currency
but basically it is
on the internet
it's not a real currency
but basically you can't force anybody
to accept paypal
and then you know ebay
pushed it and more and more people
and they got users and you get to a critical point
where sites then decide
you can pay by via paypal
and these days you can pay nearly everywhere
via paypal
and the only thing that
keeps bitcoin from reaching that
is basically needs critical mass
and for that it needs trust
so if this is
everyone's got to buy into it
if you like
the state doesn't have to
that's my point
yeah that's what i mean
if everybody buys into it
taking whatever the state
out of it
if everybody
in the population of the world buys into it
then it will work
for example i could
well it's still
the jury is still out if this will happen
i can see it happen
because for the simple reason
and i mean right now bitcoin
is a geek thing but you know
who cares behind the technology
behind it? if somebody writes an easy client
that is
that easy to use
and you know
why not?
i mean it's
immediately nobody needs to care that
there's a distributed system behind it
and how mining works
and that's totally
uninteresting like
exchanges your money
you know how they actually do it
you know what they do
the thing with paypal is it's a name
it's become known people trusted
to a certain degree
and they use it
and they trust it in the same way
that they trust a bank as i said to you
so they do it because it's a name
they know it, they've seen it a lot
it's been around a long time
and the exact same thing could happen with bitcoin
it could yeah but i think my
i don't think it's good i think it's a brilliant technology
and i think it works i think if anything
it's more destined to become a geek currency
because or stay as a geek currency
because i'd not convinced that
someone will build the interfaces
maybe like to the other people
who are outside the geek community
and they will buy into it i don't know
that is something that i would need
none of us can predict maybe they will
i hope i'm wrong i hope they do
but i just don't see it happening
well okay
i mean the the thing i think
i mean for me i don't know if it's
going to take off i
i think i would like it to take off
because i think it's a brilliant system
and it solves the problem
that that we had
right? we had people
who wanted to donate to a podcast
and we had hundreds of people
tell us they don't want to use paper
right?
we went out we tried to
to set up google checkout
yeah
and with all these systems
you have the problem that there's one
entity behind that
they could the company could go bust
they could get bought by microsoft
yeah um
they could blow up
you know google checkout
they have their terms of service
and then you can't do donations
and for example
or paper right now you can actually
cancel bitcoins or paper
cancel your account
because obviously they don't like bitcoin
because it's killing their market
but it's stuff like that
paper can just say no no no we don't take your money
if you're
if you have a muslim name
if your name is like
i don't know
if you have an owl in your name
or your first name is
Muhammad we're not going to take your money
or if we just don't like the country that you're in
because i've seen that happen
the business of people emailing us
who listen to the show in places like Syria
who are getting cut off from us websites
because the US government suddenly decides
that you know they don't like
this is why i could see bitcoin taking off
and the thing with bitcoin is
it's been there for a while nobody has used it
and i think i won't go away
like if nobody cracks the algorithm
i mean that could be more bad press
and the chat price goes down
bitcoins are not worth a lot
but it'll never go away
right it's like the atomic bomb
it's been invented
and i mean the US government could outlaw it
but it'll never go away
or our government every government could outlaw
it'll never go away
at some point
it's like 50-50
it could happen that the old governments outlaw it
and become like a hacker pirate
underground illegal thing
or it could happen that
like paypal balls up in the next year
yeah it's possible
that it's the thing with freaky deeks
and they pissed all the geeks off
let's say they do something
and they piss all the normal people off
let's say they get hacked
and all the money is gone
right let's say people figure out
that they steal everybody's
private information
like Facebook or something
and then everybody suddenly says
well look this bitcoin thing
and the thing with the bitcoin thing
is one thing that will never change
the distributed system
that nobody has central control
about and that's the point i actually want to end with
because i mean this discussion
um you know
we have no conclusion we'll have to see what
well outside we can't predict the future
yeah exactly
the point i want to end with is
bitcoin is actually
really a huge social experiment
if you think about it
it's um
actually i heard
you said this basically
it's an experiment in an
macro capitalism
because lots of people that back big bitcoin
are like
real less this people who think
the state should be involved in
libertarians people who think the state
shouldn't regulate the economy
because in economy
in economy
there's basically two schools of thought
one is the state has to regulate it
and the other one is noted really bad
it regulates it will forever have the thing
we have now where like every seven
years there's a bubble and everything breaks
and everybody loses all their money
and then the cycle starts over again
and the thing is with bitcoin that can't happen
because no
state controls this the currency
can become can become worthless
but
in a relation to another currency
it can become worthless
but once you have
bitcoins nobody can take this away
it's not like the state can say
oh we don't like the dollar anymore
it's worth nothing
it's our new currency
it's the cyber dollar
and we give every you know
like they did in Germany after the war
you know your money is worthless
we print new money
and the thing is
with bitcoin actually that can't happen
because there's no central
central authority
as long as there's people
that's that's just
I'm gonna say like as we've already
mentioned that the person who thought of this
you know
they must be
incredibly clever because this could be
it could be I agree but it could be an invention
that changes the whole world
but I just I don't know as you said
we can't predict the future
I don't know I think the
my view is that the the powers that be
have ways to try and make your life
difficult and they will make bitcoin go
away or they will make it
limited to a certain small group of people
in some way they'll find a way
but I don't know I hope I'm wrong
but you know we'll see
yeah I mean I think they will certainly try
like the state level will try
but I I think like
if you take out of account the people
who make the politics
and the financial system
everybody else
should be interested in using this
because this solves
the problems we all had
we all winging about problems for years
that this solves
and the banking establishment
we can't change
we have no power to make them
like bitcoin and they don't
they want to but the politicians
yeah you can vote
yeah you can vote
conceivably
if enough people say we want bitcoin
even if they're outlawed tomorrow
those laws can get changed
and the thing is bitcoin
won't go away that will still be there
so maybe maybe at first
there be a reaction when nobody
you know where to get outlaw
and then maybe it'll come back
I don't know I think the actual
the bigger hurdle for bitcoin
as an idea is that people
are trusted
and this is based on the fact
that people do not understand
what money is
and you know if you've been around
his friend
who wrote a book on
Gayak Tsoche
who wrote a book on basically money
and politics of money
I haven't fully read it
I read some extracts
you know as you've read
I've read really
kind of missing stuff but
here's a lot of these theories as well
and he founded this transnational
republic thing
it's right into that
it's
Jan always says the future is decentralized
you know twitter's crap
we need decentralized micro-blogging
we need status net
and basically this is the whole idea
about currency you know
normal state-run currencies crap
we need the decentralized currency
and the thing is it's an incredible
powerful idea and it's really cool
but people don't understand this
people don't understand how their money works
nothing that's just on the internet
but here you know
I'll check my wallet out
and I've got these jingly coins
and I've got this nice colorful paper
that look
that has a signature on it
from the European Central Bank
it's got to be worth something
but they don't understand
that this isn't
inherently it's not
worth or more trustworthy
than Bitcoin is
I think not enough people
are intelligent enough to understand this
yeah well that's the problem
that's what I'm saying
for people to be able to get the idea
and embrace it if they can
you know I don't know
I hope they will
we'll see
so it seems to me
this is a very philosophical
long and very kind of
in places philosophical discussion
but it seems to me that all of these things
are all ideas
this currency that we have in the real world
is an idea that we believe in for certain reasons
and there's this theory that you can't
kill an idea you know
as long as it's alive in someone
as long as it's alive in somebody's mind
the idea never goes away
and this is the problem that
authoritarian regimes in all
lots of countries have is you cannot
kill an idea
as long as somebody holds it
and it can be transmitted
then you can never kill it
so the thing we need is for enough people
to buy this idea
and you know believe in it
because that's where it's worth comes from
just as our money's worth comes from the fact that we all believe in it
we'd have to believe in bitcoin
it sounds more like a political
kind of vote for me
you know what I mean
if you voted for bitcoin
if you believed in it
and if enough people believe in it
then it could happen
we can end the show on that
you summed it up very well
One more thing I wanted to mention
this is just a little reference back to some finale
it won't keep a guy much longer
but we were talking quickly about
the current accusations against bitcoin
that it's used for illegal activity
and so on
there's a fantastic book by Eric Schlosser
who wrote fast food nation
he's kind of an investigative journalist
he wrote this book
and I don't know why
and the subtitle is
sex drugs and cheap labor in the American black market
and if you want to know a little bit more about how
the black market works
in his opinion but he seems to be very well informed
in America particularly
and how all the drug business works
and all that kind of stuff
and how it actually interfaces to the real economy
and how valuable the black economy is
to the real American economy
really fascinating stuff
go and check out Riefer Madness
it's written by Eric Schlosser
link for the show notes
yeah I'll put a link in the show notes
so that's it
yeah that's all I want to quickly work in there
and I think a very
interesting subject
I really hope we did it justice
I really prepared for this
you know I had notes and everything
I could tell
a hard thing I hope
we got it right
I hope the discussion did it justice
well that's the thing the discussion can continue forever
and go to the links our laws
episode feedback form
look at the feedback for this episode
and you know tell us what do you think there
don't I think
something like this don't email us
I was going to say the problem is
nobody we can't you know
we get so many emails
we can't put them all into feedback
the best thing is a public discussion
where everyone can check them
if you go to the forum
everybody can see it
and know a lot more about certain things
that we do
and they'll have their own feedback
so I think especially a topic
like this is really worth
going there
continue the discussion there
yeah I reckon
I'm wondering now how many people
by this stage because this is going to
incredibly long discussions
we said are still listening
and are still awake so
if you are congratulations
it's really cool
I mean I had
we had an identity card
we had emails to the show
email I had personal emails
I had people in Minecraft telling me
we should talk about this
in the IFC
everywhere so lots of people requested this
and you know I took my sweet time
you know I had this request for month
and I took my time
because I really want to do this
yeah yeah yeah yeah yeah yeah yeah
and another thing
an off topic thing that I think is quite funny
is that this whole concept of you
talked about Minecraft there
and miners and so on
you've now got people
who will be talking about mining as in playing Minecraft
and people talking about mining
as in mining
so I'm just wondering how many people get confused
when we're talking about it
we just need a plugin that
you can somehow generate these
hashes by actually mining stuff
game currency for that point
you get into some really philosophical
shit about what's the real
what's the real world and what's not
if you can actually say this is
made for this I mean
all these games
world of Minecraft has its own currency
there are people doing gold farming
generating
world of work craft currency
then selling that
in the future you can
like there's people exchanging
so in the in the in the future
you can see all these games
actually using Bitcoin
and you can see this this
virtual world's like
using virtual currency
between each other and you know
just close your mind
yeah it does it it is crazy
crazy stuff and so on that
ponderous note I think we leave you to
to you know so I want to go and read some
like Philip K. Dick or something
yeah I mean this is
a sci-fi I mean not all the start
rec where they don't have currency anymore
and then they used like gold bars
but you know
this on site like really something
out of other sci-fi yeah it does
and so we're going to
leave you with a song that you've picked
and it's a really cool song actually
I like it if it's the whole thing
if it's called Bitcoin we need some music
that kind of fits
yeah great song actually
it's I'm going to probably steal this
but already it's
called Broken Kites so apparently
a British as well
I think oh no United States
sorry they're in the United States I should look closer
I was looking the problem there I was
obviously I'm logged into
yeah this sounds like my language is english
I've had that before
well it gets you didn't know your language is english
yeah so anyway this is by Broken Kites
and it's called Mechanize
and as I said it's your pick so
if you like the album title
this parameter reallocation
very geeky stuff
and you can we should say like
being a musician I'm always very keen to point
yourself but you can support the artist as well
obviously you can download this track for free off
Gimendo but on Gimendo they've got some
little deluxe albums for sale through Gimendo
so if you really like them then
you know check them a couple of quid
and make them feel good
anyway so that's
yeah as I said that's my slightly
biased musician point of view there
but yeah check it out really great tune
yeah so we'll see you again for another
more regular show with news and everything
as I said I hope you
you enjoyed this and you know just keep
thinking about bitcoin and
you know it will just
blow your mind it's amazing
we'll see where it takes us
yeah my checklist would be read that book
I told you about watch V for Vendetta
because that fits in nicely you know
an idea cannot be killed
yeah check out some of that stuff and
then you'll be in the right state of mind
to understand bitcoin
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