Lets Talk Bitcoin E46: Life in the Cloud

Participants: Adam B. Levine ABL! " #ost Andreas $. Antonopoulos AA! " Co%host &r. 'tephanie $urph( '$! " Co%host Benn( " B! ")uest * Cloud#ashin+.com Admin Emmanuel % E! " )uest * Cloud#ashin+.com Admin

,-T./ $0',C! ABL: #ello1 and 2elcome to episode 46 of Lets Talk Bitcoin for /cto3er 4 st1 5647. 8isit us at letstalk3itcoin.com for our dail( +uest 3lo+1 all our past episodes and1 of course1 tippin+ options. 9ell 3e in Atlanta for their Cr(ptoCurrenc( Conference1 46*7*5647 " 46*6*5647. ,f (oure +oin+ to 3e there1 3e sure to visit letstalk3itcoin.com*meetup and sa(1 :#i.; <or those of (ou una3le to attend1 video%conference passes are availa3le at 3itcoinvideopass.com and1 of course1 3oth streamin+ passes and &8& sets are cheaper 2hen (ou 3u( 2ith Bitcoin. $( name is Adam B. Levine1 and toda(1 2ere talkin+ a3out the realities of the situation. <alkevin+e1 controversial author of Swarmwise and founder of the Pirate Part(1 has done the math1 and thinks the price of Bitcoin is off1 2a( off1 orders of ma+nitude off. Andreas e=plains his lo+ic and talk a3out ho2 value is relative and determined 3( 2hat (ou 2ant to +et from (our mone(. Then1 , intervie2 Benn( and Emmanuel of Cloud #ashin+1 a hosted minin+ service that aims to +ive 2ould% 3e miners instant +ratification and positive return%on%investment ./,! for a nominal fee. ,n our continual >uest to discover if minin+ is reall( suita3le for an(one 2ithout five fi+ures to invest1 these +u(s hope (ou think the(re the ans2er. 'ome of (ou love altcoins1 some of (ou hate them1 3ut the fact is that lots of different coins are offered up as donations to Lets Talk Bitcoin and 2e 2rap up toda(s sho2 2ith a discussion a3out ho2 to pick 2hich ones to take versus not. But first1 Local Bitcoins1 for 3etter or 2orse1 is a hi+h%traffic and influential source of in%person Bitcoin sales. 'tephanie shares a recent stor( a3out 2hat Andreas calls a cross%site scriptin+ attack that drains (our Local Bitcoins account of funds. /nce a+ain1 ,m ?oined 3( Andreas $. Antonopoulos and &r. 'tephanie $urph(.

'$: There 2as a scam recentl( on Local Bitcoins that 2as +oin+ around and1 of course1 Local Bitcoins is not free from scammers ?ust like an(2here in the Bitcoin 2orld. But1 this 2as a scam that hadnt reall( 3een pulled off 3efore and 2hat 2as +oin+ on 2as there 2as a user 2ho 2as messa+in+ sellers on Local Bitcoins and sa(in+1 :#e(1 (ou kno21 , have lo2 feed3ack 3ut ?ust to put (our fears at ease ,m sendin+ (ou a picture of m( passport photo1; and there 2as an attachment to the messa+e. <irst of all1 thats prett( stran+e that some3od( 2ould send (ou a picture of their passport photo. ,f (oure a seller on Local Bitcoins1 (oure pro3a3l( not +oin+ to 3e doin+ the 2hole @AC @no2%Aour%Customer! thin+ and re>uirin+ a pictureBt2o forms of +overnment ,&1 or 2hatever. Theres a red fla+ ri+ht there. #o2ever1 some people clicked on the picture and 2hat happened 2as it took (ou to a ver( 3lurr( lookin+ scan of a passport photo 2here (ou couldnt see an( details an(2a(1 3ut it 2as meant to distract (ou from the fact that all of (our 3itcoins on (our Local Bitcoins 2allet 2ere 3ein+ stolen. C chucklin+!C AA: /uch. '$: And 2hat happened 2as1 this someho21 clickin+ on this picture " and , dont kno2 e=actl( the :computer science%(; details1 3ut 3asicall(1 2hat happens is if (ou click on this attachment and! open it in the same 2indo2 as (our Local Bitcoins 2indo21 it e=ecuted a Davascript that 2ould initiate a 2ithdra2al from (our Local Bitcoins 2allet. AA: Thats kno2n as a cross%site scriptin+ attack or E''. Thats 3asicall( 2hen soft2are runnin+ in one of (our 2indo2s or ta3s is attackin+ soft2are thats runnin+ in another one of (our 2indo2s or ta3s. ,n this case1 the passport Davascript Tro?an1 essentiall(1 is attackin+ the Local Bitcoins ta3. '$: .i+ht. 'o1 a lot of sellers on Local Bitcoins keep their coins in their 2allet on Local Bitcoins 3ecause1 3asicall(1 from there its prett( eas( to fund escro2s that later +o into transactions. 'o1 its convenient to have 3itcoins alread( loaded into Local Bitcoins for the purpose of tradin+1 3ut in this case1 this person e=ploited that fact. -o21 there is a 3ri+ht side to this. /f course1 2e can learn from this attack: dont click on an( attachments in Local Bitcoins1 ri+ht1 and 2atch out for Davascript. Those are the t2o lessons , think 2e can take from this. But1 Local Bitcoins has a securit( feature called t2o%factor authentication 2hich (ou can use 2ith! an app like )oo+le Authenticator1 2hich creates tokens that e=pire ever( 76 seconds. ,n order to lo+in or 2ithdra2 3itcoins from (our account1 (ouve +ot enter the token and the token is on another device1 perhaps1 like (our cell phone or somethin+ or a different computer. ,ts a little 3it of a 2a( to ensure that (ou are actuall( the person 2ho o2ns the account and (oure approvin+ an( 2ithdra2als that happen. ,n m( mind1 this is a 3i+ plus in the column of t2o%factor authentication1 and also1 ?ust 3ein+ reall( careful and 2atchin+ out for scammers

and 3ein+ super%skeptical of an( kind of attachments like that on a site like Local Bitcoins. AA: Lets tr( some advice for securit( ne23ies 2hen it comes to Bitcoin. <irst of all1 advice num3er one1 , think its +reat to 3e careful 3ut its ver( difficult to not click on thin+s 2hen (oure on the 2e3. /ne of the 2a(s ,ve found to protect m(self a+ainst those kinds of attacks is to have m( 3ro2ser in1 essentiall(1 Davascript%denial mode 3( default. , run some soft2are called -ot'cript or -o'criptF on Chrome1 its called -ot'criptF on <irefo=1 its called -o'cript. Basicall(1 2hat this is1 is a Davascript%2hitelistin+ service. ,f (ou visit a pa+e (ouve never visited 3efore1 3( default1 all the Davascript1 <lash1 and other e=ecuta3le content is disa3led. /nl( if (ou select to ena3le pro+rammin+ and code on that pa+e can (ou see it. Thats +oin+ to 3reak thin+s like (our online 3ankin+1 2hich (ou can then selectivel( re%ena3le1 3ut its also +oin+ to 3reak like this cross%site scriptin+ attack. )enerall( speakin+1 (ou do not +o runnin+ around the ,nternet 2ithout 2earin+ some kind of proph(lactic and -ot'cript is1 essentiall( that. The second piece of advice1 of course1 is dont keep cash on these services. /nline 2allets suffer from this risk 3ecause the ke(s are not in (our control and the(re protected 3( a simple pass2ord. The(re ver( eas( to +et out. 0se paper 2allets1 distri3ute (our funds 3et2een multiple services1 and! tr( to keep it offline as much as possi3le. The third piece of advice is multi%factor authentication. Guick primer: multi%factor authentication means usin+ more than one 2a( to authenticate (ourselfF somethin+ (ou remem3er or somethin+ (ou kno21 2hich is a pass2ordF somethin+ (ou have1 2hich 2ould 3e a token such as a smartphone application1 ke( fo3 or somethin+ like that. Perhaps1 even a 0'B ke(chain and then1 somethin+ (ou are1 2hich is the third factor of authentication (ou can use. That 2ould 3e a 3iometric like a fin+erprint. 'omethin+ (ou have1 somethin+ (ou kno21 somethin+ (ou are or as Chris #off puts it1 :'omethin+ to 3eat out of (ou1 somethin+ to chop off (ou and somethin+ to steal.; ABL: Clau+hin+C! '$: AikesH ABL: 'o1 , am +oin+ to make a confession here. , am1 currentl(1 not usin+ multi% factor authentication. , sort of made a decision that , ?ust 2asnt +oin+ to use 2e3 services so , dont keep mone( in an(thin+ online and the thou+ht has 3een that for the most part1 thatll protect me. , also have paper 2allets1 of course1 and thin+s like that % offline 3ackups1 3ut ,m not actuall( usin+ t2o%factor authentication. Andreas1 do (ou think +iven m( particular use cases1 , should 3eI AA: ,f none of these services have access to either (our Bitcoin funds or (our 0.'. dollar funds for a 3ank account then its! reall( not a pro3lem as lon+ as (ou keep the funds limited and (ou onl( fill them up 2hen (oure doin+ a transaction. ,ts not as +ood as usin+ t2o%factor authentication1 3ut actuall(1 , think its a 3etter solution than usin+ t2o%factor authentication1 havin+ 466J of (our mone( on

online. ,d rather have 5J of (our mone( on online and not use t2o%factor authentication. ABL: 'o1 t2o%factor authentication improves the situation 3( makin+ it so that someone has to compromise t2o separate devices or t2o separate vectors as opposed to 3ein+ a3le to ?ust stum3le across one1 compromise that one1 and take ever(thin+ (ou have. Thats the advanta+e. ,t doesnt make it impossi3le to have mone( stolen from (ou it ?ust makes it so that its more comple=. AA: ,t makes it so that the one%factor that most people use1 2hich is somethin+1 (ou kno2 % the pass2ord. The pro3lem is that can 3e ver( easil( captured from a 2eak endpoint throu+h a ke(lo++er. The advanta+e of havin+ a token like )oo+le Authenticator is that its much harder to 3reak into that. )enerall( speakin+1 2hen (ou see compromises that involve t2o%factor authentication1 its 3ecause the service itself 2as 3roken. There 2as a 3u+ some2here else or in the last case 2e sa2 in 2as a .-) +eneratin+ poor >ualit( si+natures1 3ut effectivel(1 , dont think 2eve ever seen a service protected 3( t2o%factor authentication 2here some3od(s had the second factor compromised. ,f (ou use it ri+ht1 it is secure. '$: There is a small cost to usin+ it thou+h1 ri+ht1 and that is that if (ou use t2o% factor authentication1 it can take a little 3it of e=tra time and effort. ,ts not reall( as thou+h theres another pass2ord to lose 3ecause all (ou reall( need to do is 3e a3le to have access to )oo+le Authenticator1 or (our Au3i@e(1 or 2hatever. ,ts not like theres an e=tra thin+ to for+et like a pass2ord1 3ut it is an e=tra step and an( time (ou introduce an e=tra step theres somethin+ else that could potentiall( +o 2ron+. AA: .i+ht1 a3solutel(. Thou+h1 , think 2hat 2ere seein+ a+ain and a+ain the lesson is that 2ithout t2o%factor authentication1 mone( stored in an online account1 2hether thats $t. )o=1 or Coin3ase1 or Local Bitcoins1 or an( of them reall(1 is not safe. ,ts not safe 3ecause these companies are not doin+ a +ood ?o3 2ith securit(. The(re doin+ a relativel( +ood ?o3 2ith securit(. ,ts not safe1 simpl( 3ecause (our computer is not safe1 and no one can protect a+ainst that e=cept for t2o%factor authentication. 'o1 the pro3lem here is that the endpoints are 2oefull( insecure and 2eve reached a point in societ( 2here 2e have invented the di+ital currenc( that can 3e stored on an(thin+ 3ut 2e havent (et invented an(thin+ that can store di+ital currenc( securel(. ABL: This kind of 3rin+s us naturall( into the topic of hard2are 2allets 2hich1 there have 3een a fe2B, think ,ve seen one po2ered 3( a .asp3err( Pi and , kno2 that theres a concept floatin+ around called the TreKor that actuall( is slated to ship at the end of /cto3er. AA: ,ve pre%ordered and ,m e=pectin+ to receive t2o of those. As soon as , +et them1 ,ll let (ou kno2.

ABL: 9hat is it that a hard2are 2allet does that is su3stantiall( different fromBA hard2are 2allet is not t2o%factor authentication: a hard2are 2allet is a distinct device that is onl( for Bitcoin and1 therefore1 can 3e treated as a secure environment1 ri+htI AA: 9ell1 a hard2are 2allet could 3e t2o%factor authentication or % a hard2are 2allet1 essentiall(1 is a second factor in the authentication scheme. #o2ever1 a true hard2are 2allet is one that processes transactions. 'o1 it si+ns stuff. ,t has ke(s on it. , think thats reall( the issue is 3ein+ a3le to store ke(s in a tamper% proof environment that can 3e controlled 3( the user and usuall(1 2hen (ou have a hard2are 2allet it has another factor. ,ts not that! the one factor is 3etter than the other its that t2o factors are 3etter than one. ,f (ou have a hard2are 2allet (ou still need the P,- or pass2ord to protect that hard2are 2allet. /ther2ise1 it +ets stolen1 so does (our mone(. ABL: , see1 so its ?ust that the device in that case is a factor and the otherB AA: E=actl(. ABL: Bok1 , see1 , see. AA: The device is the somethin+ (ou have and (ou need the second factor 2hich is somethin+ (ou kno2 and if it had a fin+erprint scanner1 (oud have a third factor 2hich is somethin+ (ou are. ABL: /ne of the natural thin+s that comes up 2ith either a hard2are 2allet or a second device used in a t2o%factor authentication schemeF 2hat happens if ,m on a 3oat and , lean over the side and m( phone falls out of m( pocket and then1 m( phone is +one and thats m( second authentication device. ,ts not like , can ?ust load )oo+le Authenticator on another one of m( devices. ,t 2as tied to that specific device1 ri+htI AA: Aeah1 (oure +oin+ to have to +o 3ack and use the reset mechanisms on each one of those sites to reset the t2o%factor authentication s(stem1 and usuall(1 that 2ill involve providin+ some other proof of proof of identit(. Then1 it +ets into the manual process and its not eas(. ABL: &o (ou think that this is1 , mean % the direction that 2ere +oin+ no2 2here 2ere essentiall( addin+ additional la(ers to tr( and make it so that (ou cant ?ust +et throu+h one la(er and 3e there. &o (ou think that this is the correct direction to +oI , had a conversation 2ith Deffre( Paul a couple months a+o 2here he told me a3out 'neaks La21 2hich is that users cannot or 2ill not adhere to operational securit(1 3asicall(. The(! 2ill not secure their computers 3ecause the( either cant or the( 2ont.

AA: Thats a3solutel( true so the 2a( (ou resolve that is (ou take operational securit( and (ou 2eave it into the normal 2orkflo2 or function that the user is doin+ so that the( dont kno2 the(re doin+ operational securit(: the( simpl( do it. , think in the case of these hard2are 2allets1 2hat (oure doin+ is (oure makin+ the t2o%factor aspect disappear of it into the 3ack+round 3ecause (ouve ph(sicaliKed the mone( and provided a second factor at the same time. B( hidin+ the securit( 2e can +et users to adopt it1 3( makin+ it a part of the normal interaction of mone(1 so (ou appl( the securit( 2ithout even kno2in+ it1 is ?ust part of the cultural norm or the protocol if (ou like. ABL: 9ell1 , look for2ard to hearin+ 2hat (our thou+hts are on the TreKor 2allet once (ou +et (our hands on it1 Andreas. That sounds prett( e=citin+. AA: Aeah1 ,m lookin+ for2ard to it and (ou kno21 2hats interestin+ a3out this is that these devices are reall( ena3led 3( this parallel revolution thats happenin+ in amateur hard2are1 in the a3ilit( to take an /LE& screen and a .asp3err( Pi or a small microprocessor and thro2 somethin+ to+ether like the TreKor 2ith some 7& printin+. Aou couldnt reall( do that ten (ears a+o. , think its reall( e=citin+ ho2 those spaces are conver+in+ 2ith Bitcoin. ABL: Dust as in a side here1 Chris A3rams ?ust L5MN1MOP refunded from B<L a+ainst their 2ill to Pa(pal over the last t2o 2eeks. '$I!: /h%hB. $usical ,nterlude!

AA: This 2eek1 , 2as readin+ an interestin+ article from <alkevin+e. <alkevin+e is the founder of the pirate part( and prett( 2ell kno2n li3ertarian freedom pundit. #es 2ritin+ a3out Bitcoin and the core underl(in+ value of Bitcoin1 and his 3asic premise is that Bitcoin seems to 3e vastl( overvalued and partiall( caused 3( ille+al price fi=in+. #is premise is that the current valuation of a3out L4.O 3illion at a3out a hundred%and%somethin+ dollars per 3itcoin is actuall( vastl( inflated and does not represent the underl(in+ value of Bitcoin. #e 3ases this ar+ument on doin+ an anal(sis of mone( velocit( 3( lookin+ at the transactional velocit( of Bitcoin and lookin+ at ho2 these 3itcoin s! are 3ein+ spent. , think the e>uivalent in Bitcoin terms is :3itcoin da(s lost;F , think is the statistic that 2e see most often. 'o1 3ased on his anal(sis the 3ottom line is that Bitcoin should 3e valued at a3out L4.56 instead of L456. #es sa(in+ its valued t2o orders of ma+nitude hi+her than it should 3e and that the real econom( is onl( a3out L47 million 0.'. dollars not L4.O 3illion 0.'. dollars. ABL: ,snt that speculationI ,snt the 2hole price that Bitcoin has under it ri+ht no2 3ased on speculationI

AA: , think thats reall( the ar+ument that <alkevin+e is sa(in+. #es sa(in+ there is no market 3ehind it1 that! there is no transactional velocit( to Bitcoin. ,ts reall( speculation. ,ts 3asicall( price%fi=in+ speculation more than an(thin+ else 2ithout an( underl(in+ fundamentals. #eres the thin+ thou+h: he ver( convenientl( e=cludes1 ri+ht off the 3at1 dru+s and +am3lin+. ABL: CLau+hin+C! 'o1 the t2o 3i++est parts of the Bitcoin econom(Bthe(re not the 3i++est parts % 3ut the(re primar( components for sure. '$: The(re si+nificant. AA: , think hes talkin+ a3out the relative volatilit( and li>uidit( of the market and dismisses dru+s and +am3lin+ as illi>uid1 lackin+ in velocit(1 lackin+ in stickiness1 lackin+ in true value. #e +oes on to talk a3out1 :9hat a3out ne2 products and servicesBI; B( the 2a(1 , am horri3l( paraphrasin+ and pro3a3l( 3utcherin+ his ar+ument1 and o3viousl(1 , disa+ree. The 3ottom line is that hes talkin+ a3out the market 3ein+ overvalued 3( t2o orders of ma+nitude. ABL: , think that this is ho2 markets 3ehave. $arkets look to the future and sa(1 :/k1 2ell1 its not a3out 2hat its 2orth toda(1 its a3out 2hat its +oin+ to 3e 2orth later.; /3viousl(1 the price that 2e have no2 takes into account a lot of people 2ho have 3ou+ht 2ith the idea that the(re holdin+ as an investment. , think that its hard to make the ar+ument that its not ?ustified 2hen so man( people are usin+ it as a means of savin+s. , think that savin+s has its place in a s(stem like this and its not manipulation or speculation even1 reall(. ,ts savin+s. AA: Aes. Basicall(1 , could take this e=act article and do :search and replace; :Bitcoin; for :+old1; and 3ased on <alkevin+e ar+uments1 +old has Kero velocit( 3ecause its not reall( used to transact on normal products and services and is entirel( a stored value. /n his 3asis1 , +uess +old 2ould 3e overvalued 3( three orders of ma+nitude1 not t2o1 3ut does the value of Bitcoin reall( demand on the velocit(I Because1 , think thats the assumption at the core of this article. ,f (ou accept the assumption that the value of Bitcoin does or should depend primaril( on the velocit( of the currenc( then (es1 Bitcoin is overvalued. , think that reall( reflects the fact that most people dont think that velocit( is the onl( core value characteristic of Bitcoin and that the savin+s effect1 the future potentials1 the innovation premium1 if (ou like1 lookin+ at a 3it like a tech ,P/ " all of those factors pla( into the price in a 2a( that the( dont in other traditional commodities or stocks or other t(pes of assets. '$: Aou kno21 ,ve seen a lot of articles in the past. ,ts kind of interestin+ to see <alkevin+e 2ritin+ a3out this 3ecause ,ve seen a lot of articles in the past1 includin+ from people like $a= @eiser1 2ho sa( :-o1 no1 no1 Bitcoin is vastl( undervalued 3( at least t2o orders of ma+nitude.; 'o1 ma(3e the truth some2here in the middle and thats 2hat 2ere seein+ ri+ht no2 in the current price. , mean1 theres lots of people 2ho sa(1 :/h1 look at the amount of 3itcoins

that there 2ill ever 3e in e=istence1 and look at the 2orld population1 and look at the percenta+e of the 2orld population 2ho are Bitcoin users1 currentl(1 and the potential for ne2 users.; And suddenl(1 (ouve +ot L461666 3itcoins1 for one Bitcoin. The price of a 3itcoin is 2hat some3od( is 2illin+ to pa( for it. 9eve said that over and over a+ain on this sho2. There are lots and lots of people determinin+ that price ever( moment of ever( da( throu+h Bitcoin tradin+1 3u(in+1 and sellin+. Thats the current spot price1 the market price1 thats 2hat the price is. AA: Part of tradin+ on that price is readin+ articles 3( <alkevin+e1 decidin+ that (ou ma( a+ree 2ith him and sellin+ lots of Bitcoin or disa+reein+ and 3u(in+ Bitcoin. <alkevin+e is doin+ the ?o3 of addin+ more information to the market here. '$: .i+ht1 3ut most people1 it seems1 either dont a+ree 2ith him or there are enou+h people 2ho disa+ree 2ith him that its holdin+ up the market for 3itcoins at the current market price. -ot enou+h to hold it up at L461666 per Bitcoin1 3ut some of those people1 as 2e said 3efore1 are 3ankin+ on that in the future that 3itcoins are +oin+ to 2orth L461666 or at least more than L446 % 2herever the(re currentl( at. AA: ,d love to think its rational pricin+ that has put the price of Bitcoin at L45O 3ut then , look at the &o2 Dones ,ndustrial Avera+e at 4O1666 pts.! and , kno2 that people are insane. ABL: CLau+hin+C! '$: CLau+hin+C! ABL: Aou kno2 that people respond to stimulus and that sort of 3rin+s up an interestin+ >uestion. AA: CLau+hin+C! ABL: Aes1 in 3oth 2a(s. AA: 9as that a GE t2o pun or GE four pun!1 2herever 2ere at no2I ABL: ,t 2as accidental1 3ut (es1 indeed. #o2 2e +et the price in Bitcoin an(2a( it +oes is a totalBits like a 3lack 3o=1 ri+htI $t. )o= has one price. 9hen , 2as talkin+ 2ith Dosh .ossi1 hes talkin+ a3out his Button2ood soft2are and ho2 he 2ants to essentiall( collect prices from all of the 'atoshi '>uares live1 that are +oin+ on ever(2here all the time and also Local Bitcoins and use that as a 2a( to a++re+ate and +enerate a spot price. .eall(1 2ith conventional markets1 (ou have to use these 3road measures. Aou have to pa( attention to the entities like $t. )o= 3ecause the(re 2here all the tradin+ happens1 3ut in a decentraliKed

net2ork1 and especiall(1 a decentraliKed net2ork like 2e have 2ith Bitcoin1 2here re+ulation is constantl( spreadin+ out. <irst off1 re+ulation is doin+ it and then also1 companies failin+ under the 2ei+ht of their o2n success1 as 2eve seen 2ith $t. )o=. ,t seems like the market is almost anti%monopol( and is continuin+ to spread out despite the fact that the incentives normall( 2ould have as lar+e a concentration of traders on either 3u(in+ or sellin+ as possi3le. #ere1 thats not the case. AA: #eres the thin+1 thou+h. Even if (ou look at these price fluctuations or price differences 3et2een the various e=chan+es1 the( all cluster around the midpoint and the( all form a ver( 3eautiful Bell curve over time. , kno2 , cant sa( 2ith e=treme accurac( 2hat the current price of Bitcoin is. , can discount or1 rather1 dismiss a n! overvaluation 3( t2o orders of ma+nitude and , can dismiss that 2ith a fair amount of statistical certaint(. , can sa(1 for e=ample1 that if all of these e=chan+es are tellin+ us that the price at a3out L4761 the chance of the price 3ein+ L4.76 instead1 is 4 in 4616661666 one%in%ten million!. 'impl( 3( lookin+ at the Bell curve1 (ou can do that calculation. Aou can see 2hat the pro3a3ilit( is. ,ts four standard deviations off the core. Aou can sa( theres uncertaint( in the market and theres price fluctuation in the market and price uncertaint( 3ut its not in the orders of ma+nitude 2ere talkin+ a3out here. Theres no chance of that. ABL: ,s this people pickin+ their favorite reasonB.3ecause some people look at savin+s like hoardin+. 'ome people look at hoardin+ like savin+s. ,t sort of is ?ust semantics a3out ho2 (oure +oin+ to represent it. ,s this peopleBis this <alkevin+e pickin+ the thin+ that he most 2ants Bitcoin to 3eI 9hich is transactional1 3ecause if its transactional1 then its u3i>uitous: that means its chan+in+ the 2orld1 2hereas1 if its savin+s1 then ma(3e thats not so true. $a(3e hes ?ust focusin+ on that and to him thats the onl( valid sort of reason 2h( there can 3e value 2here in realit(1 Bitcoin as a protocol ?ust like the ,nternet1 is super%a+nostic and doesnt care 2hat +oes on. ,t doesnt care 2hat (ou do 2ith it1 and frankl(1 it doesnt care 2hat metrics (ou pa( attention to it. 9hatever metrics (oure lookin+ for1 so lon+ as its somethin+ thats complementar( 2ith the overall protocol1 (ou can find value for it or not in it. AA: 8alue is an emer+in+ metric. ,ts not a core aspect of the protocol. ,ts somethin+ that emer+es from the social 3ehavior around it. At the end of the da(1 all of this anal(sis is tr(in+ to look at Bitcoin as an asset class and tr(in+ to fi+ure out 2hat t(pe of asset class it is. ,s it a currenc(I ,s it a 3ondI ,s it a stockI ,s it a commodit(I 9hat e=actl( is BitcoinI The ans2er reall(1 is that Bitcoin is a cr(ptocurrenc( asset class and 2e dont have anal(tical tools for fi+urin+ out the statistical value or the >uantitative anal(sis that needs to 3e done in terms of value of that market 3ecause 2e dont have the tools. Advertisement Q4 'tart!

Deffre( Tucker: #ello1 ,m Deffre( Tucker1 Bitcoin enthusiast and host of the upcomin+ Cr(ptocurrenc( conference in Atlanta1 )eor+ia % /cto3er O th. 9eve +ot a marvelousl( li3ertarian%infused da( of discussion a3out 2hat is indisputa3l( the future of mone( and (ou are invited. <or those of (ou that cant attend1 2eve partnered 2ith Lets Talk Bitcoin to offer video%conference passes availa3le for +overnment currenc( and1 of course1 Bitcoin. <or more information1 3itcoinvideopass.com. Advertisement Q4 End!

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ABL: /ver the last fe2 months1 2eve 3een 2atchin+ the net2ork hash rate sk(rocket as A',C manufacturers ship overdue product to an=ious customers. As the net2ork passes the one Petahash P#! mark1 2ere ?oined 3( Benn( and Emmanuel1 t2o of the minds 3ehind the Cloud #ashin+ pro?ect. )entlemen1 lets talk Bitcoin. The first >uestion that , have is: is there still an opportunit( in minin+I ,t seems like the cost of participatin+ in that net2ork is +ettin+ increasin+l( hi+h and the time%frame to actuall( recoup (our investment is +ettin+ even smaller. E: ,f (oull allo2 me to ans2er that >uestion1 its Emmanuel speakin+ here. A3solutel(1 2hat 2ere seein+ is a 3it of a shift in the usual mindset of miners 2here the( used to ./, in the space of t2o to four months1 dependin+ on deliver(. 9ere seein+ that shift to2ards the latter end of the calendar. &ependin+ on 2hen (ou receive (our hard2are and dependin+ on 2hen (ou made the purchase1 the net2ork difficult( could have literall( overtaken (ou. ,n terms of1 :is it profita3le to mineI; 9ed sa(1 a3solutel(1 it is profita3le1 its still profita3le to mine. ,t depends on (our strate+(. ,t depends on (our capital and it depends on 2ho (ou decide to partner 2ith to 3e successful. ,f 2e look at 2hat people have 3een doin+ in industr( as thin+s stand no21 people 2ill 3e makin+ orders from the four ma?or manufacturers. There 2ill 3e more comin+ online soon. The( 2ould 2ait a period

of three to four months. 9hat our model is and the 2a( in 2hich 2eve approached that is to essentiall( use economies of scale to our advanta+e to purchase a lar+e amount of hashin+ po2er and then1 to redistri3ute that to customers. 9e 2ill 3e1 pro3a3l(1 one of the first companies to literall( ena3le (ou to lo+ on and make a purchase of hashin+ po2er and to 3e minin+ 2ithin ten minutes. Thats a complete shift from 2hat the market is used to and , think that thats a model for (ears to come. Another thin+ as 2ell is1 people sa( that the mone( to 3e made in minin+ is 2ithin the first t2o to three months. 9ell1 that is true1 dependin+ on 2hat (our model is 3ut also1 if (ou have the a3ilit( to consistentl( or constantl( add to the armor( of (our hashin+ po2er that (ou have1 it +ives (ou a much 3etter stance to prett( much fi+ht the net2ork difficult( and (ou cant do that as a solo miner. The 2hole market is +oin+ to shift. 9e 3elieve minin+ 3elon+s in the cloud ?ust as supercomputin+ does. 9eve 3een pioneers in that field and 2e 3elieve its prett( much the 2a( to +o. ABL: Lets 3ack up for a second here. Can (ou tell me ho2 (ou +ot into the space and if (ouve had an( ventures in Bitcoin thin+s 3eforeI #ave (ou 3een minin+ 3efore (ou +ot into this Cloud #ashin+ 3usinessI E: /h1 (eah. , started off minin+ 2ith m( CP0 2hen it 2as interestin+. Then1 , +ot 3ored of it. Then1 , kind of left it alone. Then1 the )P0s came into 3usiness and , +ave that a 3it of a +o. Then1 m( 2ife started +ettin+ a 3it anno(ed from the heat and the noise and the lack of spare room 2hen people came to visit. 'o1 , kind of parked the minin+ pro?ect to the side a 3it. 9hen A',Cs came online1 , thou+ht ma(3e , could venture there 3ecause the hard2are 2as smaller1 it 2as supposedl( less nois( and (ou could +et more densit( out of it. As time elapsed1 more people 3ecame interested. 'o1 , 3e+an actuall( sellin+ o2nership of the machines to friends and famil( 2ho 2ere interested in Bitcoin ?ust to 3e a3le to +ive them the a3ilit( to do so. ,d mana+e it. The(d ?ust have to pa( the 3ills. That 2as the initial Cloud #ashin+ model and it 3urst itself onto the ,nternet in April of! this (ear. 9e started sellin+ contracts online and the rest is histor(. 9e prett( much +re2 or+anicall(1 from runnin+ minin+ e>uipment in the 3edroom1 to runnin+ an or+aniKation no2 2ho have 41766 individual customers. ABL: Alri+ht1 sound like (ouve made some prett( fast inroads into the space. Lets talk a3out minin+ for a second. The point of minin+1 , 2ould ar+ue1 is to incentiviKe the distri3ution of the Bitcoin net2ork to the +reatest e=tent possi3le1 3ut in the fe2 (ears that 2eve +one from 566P to the point that 2ere at no21 that reall( hasnt 3een the e=perience. ,t seems like1 3ecause 2eve +one so fast throu+h the +enerations of hard2are1 its 3een ver( difficult for people to keep up1 and essentiall(1 2here a couple of (ears a+o1 (ou could mine 2ith (our CP0 as (ou started out1 no2 someone 2ho 2ants to e=perience it for the first time ?ust at that sort of curiosit( level doesnt have an(thin+ like that1 doesnt have an(thin+ near like that. Aour service aside1 2hat do (ou think of this trend1 +enerall( speakin+I ,f (ou hadnt 3een a3le to access it in the 2a( that (ou did1 do (ou think that (ou 2ouldve started minin+I

B: Aeah1 ,ll +o into this a 3it. The advent of CP0 minin+ 2as1 essentiall(1 as most people involved in Bitcoin minin+ are a2are1 to verif( the transactions on the Bitcoin net2ork and incentiviKe people to 3e connected to the Bitcoin net2ork. The entr( into that market 2as lar+el( in the tech field in the 3e+innin+ 3ecause the confi+uration of minin+ soft2are 2as not e=actl( user%friendl( or ease of entr( 2as >uite hi+h for the avera+e individual that doesnt have 3ack+round e=perience 2orkin+ from a console or somethin+ of that sort. ,n the 3e+innin+1 people started developin+ )0,s to make it easier to 3e+in to confi+ure a minin+% platform soft2are pro+ram and then1 from there1 it 3e+an to scale to more sophisticated tools and no21 monitorin+ tools and thin+s of that sort. But1 it still has a lar+e learnin+ curve for people and so1 one of the ideas that 2e had in the Cloud #ashin+ model 2as1 ho2 do 2e ease the entr( point into minin+ and at the same time help people understand 2hat Bitcoin minin+ is and 2h( its still advanta+eous to the Bitcoin net2ork that people still are minin+ 3itcoins. The incentive is there. People dont necessaril( mine ?ust 3ecause the(re spirited to 3e miners. The( do 2ant to 3e re2arded. The lon+%term plan for Bitcoin 2as that people 2ere +oin+ to 3e minin+ 3ecause the(re re2arded on the transactions that are takin+ place in the 3lockchain. ,n essence1 (ou are still incentiviKed in five (ears or! ten (ears time. To +et into that market as an individual that is lookin+ to +et familiar 2ith minin+ and ?ump into it1 its not as simple as ?ust1 :+o do2nload a pro+ram and start runnin+ on (our CP0; if it 3ecomes >uickl( evident that theres no re2ard there for (ou. 9e 2anted to make it possi3le for people to understand that the re2ard is still there1 (ou ?ust have to 3e a3le to see ho2 to +et to it. The Cloud #ashin+ desi+n is to 3e a3le to a3le to 3rin+ a person into minin+1 sho2 them that theres an estimated ./, that is potential1 and then that theres a difficult( that (oure runnin+ up a+ainst. 9ere tr(in+ to make some of this more transparent to people that are 2alkin+ into this and +oin+1 :/h1 minin+1 this makes sense. Dust thro2 some machine on and , should 3e makin+ mone(.; 9ell1 2ith the cost of po2er versus the difficult( risin+ and the amount of e>uipment (ou need to overcome those costs. 9e 3elieve that theres a scala3le model that can 2ork and 2eve implemented that into the 3usiness model of Cloud #ashin+ to 3enefit the customers. 0ltimatel(1 2e have a +oal of 3enefitin+ the Bitcoin net2ork alon+side that. ABL: ,t seems like one of the 3i++est challen+es that (ou run up a+ainst in minin+1 ho2ever (oure +oin+ to do it1 is not necessaril( the fact that the difficult( is +oin+ up so much as it is ho2 (oure timin+ (our purchases relative to the rest of the 2orlds release schedules 3ecause no2 there are several manufacturers in the space. E: /3soletion1 (eah. ABL: Aeah1 so if (ou +et a 2hole 3unch of hashin+ po2er in the 3e+innin+ then1 t2o da(s later theres a +iant release and suddenl(1 (oure s2ept a2a(. #ave (ou 3een a3le to counter that riskI

E: To some e=tent1 2e 2ere a3solutel( affected 3( those risks at the advent of the compan(. 9e made su3stantial orders of e>uipment that 2e 2ere 2aitin+ to 3e delivered. Customers 2ere1 o3viousl(1 frustrated 3( the dela(s. Bein+ a cloud compan( and 3ein+ a3le to have the capital and the li>uidit( to +o onto the open market1 2ere a3le to still service our customers 3ecause of a skill that 2e have. -o21 in respects to individuals to make those kinds of purchases and 2aitin+ three to four months 2here the ./,1 literall(1 d2indles a2a(F no21 2e 3elieve that that model 2ill eventuall( die out 3ecause people mi+ht not 3e a3le to stomach the risk. A lot of mone( has +one into pre%orders and a lot of people are still people are still 2aitin+ for deliver(1 and a lot of people have lost mone(1 and a lot of people have 3een dissatisfied 2ith ho2 its 3een handled and mi+ht not even pla( a+ain. The model 2ere offerin+ is ver( different. Essentiall(1 the kind of orders 2e make1 it +ets peoples attention. ,t +ets the attentions of the manufacturer so (ou can 2ork closel( 2ith them to ensure customers are not 3urned 3( those kinds of dela(s. ,f (oure an individual makin+ an order throu+h the 2e3site1 (oull 3e treated differentl( from if (oure a lar+e or+aniKation lookin+ to have a lon+% term 3usiness relationship to prett( much service (our customers and1 at the same time1 3enefit the manufacturer. , think the manufacturers themselves1 the( 2ould 3e prefer to deal 2ith lar+er or+aniKations rather than loads of customers constantl( +ettin+ 3ack to them1 :/h1 m( A',C doesnt 2ork. /h1 the po2er unit has 3lo2n up1 ho2 do , sort this outI; Those kind of issues 2ill prett( much 3e d2indled a2a( if (ou ?ust took it to the cloud. The(ll 3e dealin+ 2ith one entit( or1 sorr(1 actuall(1 four or five entities instead of the man(. Thats ho2 2eve miti+ated our risks1 2orkin+ 2ith the manufacturers ourselves directl( and 3ein+ in the kno2 of the pro?ect scope and an( potential dela(s so that 2e can ade>uatel( make ultimate arran+ements for an( dela(s. Thats kind of 2here 2e are no2 and thats 2here 2ere seein+ that mature as a model. ABL: &o (ou see 3asicall( have units standin+ 3( so 2hen people 3u( them the( ?ust s2itch over to their account instead of creditin+ (ouI , assume (oure runnin+ them (ourself 2hen (ou dont have customers to run them for1 ri+htI E: Aeah1 the 2a( in 2hich 2e 2ork " ,ll +ive (ou a small 3ack+round of our model 2ithout sellin+. 9ell purchase lar+e >uantities of A',C hard2are. 9ell put them in data centers and a data center 2ill have an a+reement 2ith us to mana+e them1 or 2e have our o2n person to mana+e it dependin+ on 2hich cit( its in. -o21 the e>uipment1 2ere minin+ 2ith! constantl(. A customer 2ould +o throu+h our 2e3site to make a purchase for hashin+ po2er. -o21 for the 76 th of 'eptem3er this (ear1 as soon as the( make that purchase1 2ithin ten minutes the( 2ould 3e minin+ automaticall( 3ecause our hard2are is alread( availa3le1 its alread( there. 'o1 there is no dela(. There is no pre%order. There is no 2ait. ,ts instantaneous. Thats 2hat people are used to in the cloud space. The(re not used to makin+ a purchase and 2aitin+ three to four months or not 3ein+! +iven a definite time for deliver(. The(re used to makin+ a pa(ment and +ettin+ 2hat the(ve paid for1 instantaneousl(. Thats the model that 2eve s2itched to and thats the model 2e 3elieve is palata3le for the mass market. Another thin+ is1 2ith! re+ards to

difficult( increases1 ho2 do (ou deal 2ith customers 2orried a3out the da(%to% da(1 2ell1 sorr(1 the 3i%2eekl( difficult( increases and ho2 do (ou prett( much keep them motivated to mine or to keep them motivated toBthe(ll kno2 that the(ll actuall( +et an ./,. 9hat 2e do is 2ell essentiall( onl( sell up to 66J of an( capacit( that 2e have. At the end of each month1 2hat 2e do is 2e purchase on the 3ehalf of the clients1 that hashin+ po2er that 2e have as a reserve1 so that the( +et an increase in hashin+ po2er so that it allo2s them to either sta( online or at least not feel the mass effect of the difficult( on their returns. Thats a 3etter model than sittin+ on a piece of hard2are that ever( t2o 2eeks the returns are droppin+ 3( 56%76J. Thats the model 2eve adopted and thats the model the market 2ill 3e used to. Thats 2hat 2eve 2orked out 2ith talkin+ to customers1 +ivin+ them an idea of the kind of thin+s that tick them off and tr( to adapt to the needs of the customers on our front. B: ,ll also comment on the net2ork hash rate unpredicta3ilit( that a lot of miners are seein+. This is clearl( a risk that miners are takin+ 2hen the(re 3u(in+ hard2are on the market that has the pre%order 3asis. 9eve often said to people that its a lot easier to look at the net2ork hash rate to determine 2hat (our potential return is 3ecause the net2ork hash rate is in flu= on a constant 3asis1 2hereas (our difficult( chan+es are 3uilt into the al+orithm of the Bitcoin desi+n and so1 if (oure in the kno2 in terms of research and discussin+ and findin+ out 2hat the suppl( chain challen+es are of various manufacturers1 its a little easier to predict 2hat the net2ork hash rate mi+ht look like at a certain point in time in a +iven period. 9e dont kno2 in a (ear from no21 3ut 2e mi+ht 3e a3le to sa( in three months1 3ased on these companies1 2e can someho2 +au+e that the net2ork hash rates +oin+ to 3e 3et2een E and A. Then1 if 2e sa( that (our hash rate 2ith Cloud #ashin+ is this and that 3ased on our model1 the hash rate of (our account 2ill increase 3ased on the estimates of the net2ork hash rate increasin+ in a proportionate 2a(1 (ou have a 2a( of 3ein+ a3le to calculate1 2ith some de+ree of accurac(1 2hat (our ./, could 3e. -o21 2e dont kno2 if a compan( is +oin+ to come out of the left field that no ones heard of and dump an enormous amount of hashin+ po2er onto the net2ork1 perhaps an A',C manufacturer that no3od( sa2 comin+. Thats al2a(s a possi3ilit(. Theres nothin+ an(one can reall( do to prevent those kinds of thin+s happenin+ e=cept for 3e prepared. That kind of preparation that 2e take is in the accumulation of +ood 3usiness partnerships 2ith A',C manufacturers that 2ant to support not ?ust us1 3ut the fact that 2e are redistri3utin+ this hashin+ po2er to the customers. This is a reall( ke( point in one of the reasons 2h( A',C manufacturers have 2orked 2ith us so closel(: 3ecause the( 3elieve in the 3usiness model that 2e have. 'ure1 theres a lot of companies that ?ust 2ant to make a profit. Theres a lot of individuals that ?ust 2ant to dump a lot of mone( into minin+ hard2are and immediatel( mine for themselves. 9e +et that. 9e understand that theres al2a(s +oin+ to 3e that market out there 2here theres people that are ver( 3ull on the lon+%term of Bitcoin. The(ll put mone( into minin+ and take the risks1 3ut the attitude that our customers have is that Cloud #ashin+ is +oin+ to support them and that the manufacturers are +oin+ to support Cloud #ashin+ and1 in turn1 ever(one should

3enefit. 9e found that the manufacturers 2ho understand our 3usiness model 2ant to keep our customers in line 2ith the net2ork hash rate increases as much as possi3le. The! reason 3ein+ is that1 like an( manufacturer1 (our +oal is not to sell a product to some3od( once1 its to sell a second and a third and a fourth time. 9e 3elieve in the same model. 9e 2ant our customers to 3e return customers1 repeat customers. 9e 2ant them to tell their friends that this is 2orkin+ for them. <or us to sell one contract to one person is not our ultimate +oal. 9e 2ant people to 3elieve in the model and understand that there is a lon+% term 3enefit to cloud minin+ and that it actuall( has a 3enefit to the Bitcoin net2ork1 3ecause 2hat 2ere doin+ is makin+ possi3le that one or t2o or a small +roup of individuals do not have all of this minin+ po2er for themselves. As a result of that1 more people are involved in Bitcoin. ,ts distri3uted as a currenc( to more individuals out there1 and hopefull(1 that 2ill help the Bitcoin net2ork thrive. ABL: /ka(1 , have a couple of >uestions off of those t2o ans2ers. CLau+hin+C! <irst off1 is the increase of hashin+ po2er standard or is there a cost associated 2ith itI E: The 2a( the model 2orks is 2e essentiall(Bthe customer 2ould make a pa(ment for the contract. ,n the contract1 2e specif( the t2o different costs associated 2ith a contract. /ne is a mana+ement fee1 then the other is a reinvestment fee!. 9e essentiall( ena3le the customer to make a pa(ment of up to 76J of 2hatever the minin+ revenue is. 9ere soon +oin+ to allo2 that 3e varia3le1 make a pa(ment of 2hat the( 2ould 2ant to reinvest in hashin+ po2er1 and that 2ould automaticall( 3e deducted from the pa(outs. 'o1 that 2ould automaticall( +o into hashin+ at the end of each month. ,f the( made L466 and the(d set it 76J1 the(d take L76 and use that to 3u( more A',C miner hashin+ po2er for themselves. ABL: ,m ?ust 2onderin+ 2hat the ratio is there 3ecause it seems likeBas someone 2ho mi+ht 3e interested in one of these1 ,m tr(in+ to fi+ure out if that actuall( is even somethin+ that 2ould actuall( 3e 3eneficial for me to pursue 3ecause 76J of 2hat 2ereB E: /h1 a3solutel(. ABL: Bso1 76J 2ould 3e 3u(in+ (ou more than ?ust takin+ the pa(ment 2ould 3eI E: /h1 a3solutel(. The price that (oud 3e pa(in+ 2ith a reinvestment is a lot less than (ou 2ould 3e pa(in+ 2ith a contract so theres a massive 3enefit there. ,f (ou 3ou+ht in at the con tract!Bone thin+ people need to 3e a2are of as 2ell is the massive increase in hashin+ po2er 3ut also the cost per +i+ahash is droppin+. ,f (ou look in Danuar( 2ere lookin+ at cost do2n 3( ma(3e M6J per +i+ahash. 9e could 3u(1 in the future1 on the 3ehalf of the customer. 'o1 ma(3e1 in three to four months time1 the(re +oin+ to +et multiples of 2hat the( started 2ith as a

miner. #o2 2ould do that as an individual minin+ and ho2 could (ou ensure that (ou have the hard2are on the da( (ou 2ant the hard2are to start minin+ 2ithout makin+ a loss. Aou couldnt do that as an individual unless (ou have a lot of capital and a lot of patience. &oin+ it in the cloud +ives (ou that 3enefit 3ecause its mana+ed on (our 3ehalf. B: /ne of the thin+s that allo2s industr( to scale is to have a lot of people 3ackin+ that industr( and 2e looked at that as part ho2 the model has to inte+rate. 9hen 2e desi+ned Cloud #ashin+1 2e realiKed somethin+ that 2as ver( criticall( important and that is that its not all a3out ho2 much hashin+ po2er (ou have. The num3er1 specificall(1 isnt that important. ,ts a3out ho2 man( people are part of somethin+ that are collectivel( 2orkin+ to2ards a +oal. Because the Cloud #ashin+ customer 3ase is 2ell a2are that 2hen the( si+n%up1 this is somethin+ that the(re si+nin+ into1 that is a collective initiative in a sense1 to 3e a3le to increase the cloud minin+ capacit( for the 3enefit of all customers. Even thou+h its 76J as an individual1 that 76J +oes a lot further than that same 76J that (ou 2ould 3e takin+ in as an individual miner and then1 hopefull(1 takin+ that mone( and puttin+ it to2ards1 sa(1 (our ne=t purchase of an A',C 2hen (ou reach the ./, point that (ou can no2 afford (our ne=t one. /n (our 3ehalf1 ever( month1 this increase is takin+ place. ,ts ad?usted in (our hash rate in our s(stem. ,ts visi3le to (ou as a client and (oure immediatel( minin+ 2ith that ad?usted hash rate as soon as soon as it takes effect1 2hereas1 as an individual miner thats 3u(in+ hard2are1 (oure actuall( sittin+ and 2aitin+ for that hard2are to reach a ./, point 2here (ou can no2 +o and 3u( the ne=t thin+. 9ith us1 thirt( da(s later or ho2ever1 ma(3e less1 (ou have immediatel( taken some additional hash rate and put it into (our account and no2 (oure minin+ 2ith that. This is the a3ilit( to scale 2ith the net2ork hash rate increase 3etter than 2aitin+ on the ne=t hard2are to sho2 up at (our doorstep. ABL: 'o1 , hear the decentraliKed ar+ument and , think that , a+ree 2ith (ou on the decentraliKed ar+ument 3ut dont (ou1 as the service provider1 actuall( control all of theseI ,t seems like people arent actuall( minin+1 the(re more the recipient output. ,nstead of it +oin+ to (our 2allet it +oes to their 2allet. B: .i+ht. 'ure. ABL: ,snt there a differentiationI &o the( choose 2hat pool the( participate in or is there an( controlI B: 9ell1 ,m +lad (ou asked that >uestion. /ne of the thin+s that 2ill 3e rolled here 2ith the ne=t 'eptem3er mine is the cloud hashin+ technolo+( 2hich is +oin+ to offer a pool technolo+( to miners in a ver( innovative 2a(. ,tll 3e the first mine that 2ere a2are of that allo2s people to 3oth mine in the cloud 3ased on the Cloud #ashin+ model as 2ell as allo2in+ those customers1 as 2ell as others that are not customers of Cloud #ashin+1 to mine throu+h the Cloud #ashin+ minin+ portal. That 2ill essentiall( make it possi3le for an(3od( that 2ants to

mine 2ithin the Cloud #ashin+ cloud1 (ou mi+ht call it. 9ere kind of droppin+ the cloud 2ord a lot here 3ut it! allo2s people to access this cloud and 3e a3le to participate in it as 2ell. /n the topic of decentraliKation1 one of the stickin+ points that has 3een often de3ated is 2hat makes it decentraliKed. ,f (ou 2ere1 for e=ample1 a lar+e pool and 2eve seen this out there 2ith other minin+ pools. 9hat happens if (ou reach O4J of the net2orkI Theres a ver( common concern amon+st miners out there a3out the O4J attack potential that a minin+ operation could achieve if the( had so much hashin+ po2er that the( could overtake the net2ork and do 2hat the( call a dou3le%spend. /ne of the technolo+ies that 2ere implementin+ into the minin+ desi+n that makes this ver( advanta+eous for the technical miner is the a3ilit( to select transactions that a person 2ants to mine 2ithin our s(stem. This is somethin+ that 2e havent seen out there done 3efore 3( other mines. This allo2s people to select the transactions and1 in essence1 makes it a trul( decentraliKed model from the outsider connectin+ to our mine 2hich means that1 in essence1 a O4J attack 2ould 3e hi+hl( unlikel( if not ne=t to impossi3le. 9ere takin+ the po2er a2a( from ourselves and puttin+ in the hands of people connectin+ throu+h our portal. ,ts 3ecome ver( commonplace no2 that 2ere often asked 3( customers and en+a+ed 3( people in +eneral conversation in Bitcoin a3out these Bitcoin minin+ calculators. <or e=ample1 one of the more popular ones that has 3ecome almost a staple in conversation as of late is the one on the )enesis 3lock 2hich is the+enesis3lock.com. The( have a minin+ dash3oard 2here the( are allo2in+ (ou to look at a matri= of all the different manufacturers and their hard2are and their costs and so on. 9hat these tools are essentiall( desi+ned to do is +ive a person perspective on 2hat their potential ./, is. 9hat these thin+s fail to do is +ive a person a perspective on 2hat chan+es 3ased on ne2 hard2are 3ein+ introduced on the suppl( chain 3asis that 2e talked a3out. The miners have ?ust a fe2 fields to fill%in and suddenl(1 the(re a3le to predict1 3ased on these calculators1 2hat their ./, is. ,ts a little deceptive to people 3ecause 2hat (our ./, is is lar+el( 3ased on (our scala3ilit( not ?ust 3ased on the fact that (ou can plu+ in a num3er and that the net2ork is +oin+ to scale 3ased on E1 A1 and R. The )enesis 3lock1 for e=ample1 sho2s the avera+e over some period of time of difficult( increases and then comes up 2ith a prediction of the difficult( in the ne=t month or the ne=t couple of months over 2hat the( 3elieve 2ill 3e1 (ou kno21 some period of time. 9ell1 theres also a suppl( chain aspect to makin+ that even a pro3a3le possi3ilit(1 (ou should sa(. Aou cant continuall( increase the net2ork over and over and over a+ain 2ithout havin+ some prett( massive suppl( chain issues that 2ill 3e hard to overcome for all manufacturers once the net2ork reaches a certain siKe and the difficult( reaches a certain siKe. E: Can , also add to thatI Theres also an economics aspect to that1 in terms of if 2ere talkin+ a3out the net2ork 3ein+ at 4O P#*s1 for e=ample1 or 56 P#*s. #o2 man( millions of dollars 2ill need to 3e spent to cover the difficult( rises of M6J 2hen 2ere talkin+ a3out a O4J%st(le attack ever( thirt( da(s or so. /n top of that1 2ere talkin+ a3out an infinite amount of mone( 3ein+ a3le to 3e thro2n into a market. .i+ht no21 theres 2orth L4.4 3illion and ,m talkin+ the Bitcoin as a 2hole. ,m no lon+er talkin+ a3out the minin+ market. , mean1 thats pro3a3l(

L466 million. 9ho kno2s1 ma(3e less. ,ts notB, dont think the tool is meant for e=act calculations of 2hat hashin+ po2er is. ,t +ives people an indicative fi+ure1 3ut at the same time1 its deceptive 3ecause people dont kno2 2hat other factors are necessaril( +oin+ to affect the +ro2th of the Bitcoin net2ork. <or e=ample1 if 2ere +oin+ to have consistent +ro2th a3ove O6J1 2ere +oin+ to need to ne2 technolo+(1 ma(3e 44nm technolo+( that costs L46 million ?ust to +et to the foundr( and to make an ./,1 ho2 man( millions of dollars more do (ou have to sellI Thin+s a3out this havent 3een thou+ht of and , think people need to 3e a2are that ?ust plu++in+ into the )enesis 3lock is not a sure thin+ to 3e sa(in+ that (ou 2ill not make a profit or (ou 2ill make a profit. ABL: &o (ou think that this is a one%2a( trip for us and that the difficult( at this point1 3ecause there are so man( pla(ers involved1 can onl( +o up or do (ou think that the price1 actuall(1 is +oin+ to pla( a role at some point in that the price1 actuall(1 needs to +o up in order for minin+ to continue to 3e profita3leI E: 9ell1 price is al2a(s a thin+. There are three thin+s here. /ne1 the cost of electricit(: so if (ou can +et electricit( dirt%cheap then1 (ou could mine 2ithBif (ou mine 2ith the 3est e>uipment and (ou +et electricit( reall( cheap then (ou could run (our hard2are as lon+ as humanl( possi3le compared to havin+ another piece of hard2are thats less efficient in a state like California 2here (ou mi+ht not +et the 3est ener+( rates. Thats one aspect. Aour strate+( could 3e 3ased on a lon+%term strate+( 2here (ou could see that (ou ?ust essentiall( 2ant to hit (our ./, 3ased on 2hat the costs1 2hat its costin+ (ou to run. Then1 theres another model of1 :Let me make as much mone( as , can in ne=t three or four months1 3u( as much hard2are as , can1 make m( ./, and +o home.; The other model is kind of like our model is1 :'ee it out for the ne=t t2o to three (ears1 make (our mone( 3ack tr(in+ to spread it over a three (ear period so that1 at least1 (ou can 3enefit from an( rises in that 2indo2 or space.; , do 3elieve that! ever(thin+s +oin+ to 3e controlled ultimatel(1 3( price. ,f Bitcoin does not +et adopted then 2ere minin+ for no reason. ,f the adoptation (sic) continuall( +ro2s then 2ere +oin+ to see hi+her and hi+her prices of Bitcoin. Even price has an effect on minin+. Aou find suddenl(1 that people turned off their A',C that 2as decrepit1 a (ear or more! a+o 2ould no2 decide to turn it 3ack on or their <P)As or their )P0s ?ust 3ecause its costin+ more than the electricit( ?ust to run. 9ere +oin+ to see volatilit( in the difficult(. 9ere +oin+ to see volatilit( in the hashin+ po2er comin+ onto the net2ork 3ased on prices. Aeah1 2e hope prices 2ill +o hi+her. 9e 3elieve it 2ill 3ecause adoption1 ultimatel(1 is a +oal. 9ere seein+ +reater and +reater adoption in other countries 2here the(re not actuall( talked a3out a lot in the ne2s. ABL: Benn( and Emmanuel1 if someone 2ants to learn more a3out Cloud #ashin+1 ho2 should the( +o a3out itI E: Dust simpl( visit Cloud#ashin+.com. 9e have an intuitive video that +ives (ou an intro to the concept of cloud minin+ and hopefull(1 it makes sense. ,f (ou have

an( >uestions ?ust drop an email to infoSCloud#ashin+.com. 9ell 3e happ( to help. ABL: 9ell check%in 2ith (ou in a3out si= months and see 2here the hash rate is. Thanks for ?oinin+ us on Lets Talk Bitcoin. E: Thanks1 Adam. Advertisement Q7 % 'tart " Eas(&-'! Promoter: Eas(&-' is the '2iss Arm( knife for (our domain names1 helpin+ meet their customers individual needs since 4PPM. Eas(&-' has 3een an outspoken critic of '/PA and C,'PA. Eas(&-' 2as an earl( supporter of Bitcoin and no2 the( are proud to sponsor this sho2. &o 3usiness 2ith a compan( that shares (our values. )et a 47J discount 2hen (ou pa( 2ith Bitcoin. )o to 3itcoin.eas(dns.com and 3e sure to use discount code LTB. Advertisement Q7 " End " Eas(&-'!

Lets Talk Bitcoin Promo " 'tart! '$: Aoure listenin+ to Lets Talk Bitcoin1 the premier audiocast providin+ ne2s and insi+hts that cover the rapidl( evolvin+ 2orld of di+ital mone(. /ur t2ice% 2eekl( sho2s include anal(sis of late%3reakin+ ne2s1 updates on ke( technical1 3usiness and re+ulator( intervie2s1 and in%depth intervie2s 2ith the ke( people drivin+ the ne2 di+ital econom(. Lets Talk Bitcoin offers sponsors an attractive 2a( to reach a tar+eted and savv( audience. <or more information1 email sponsorsSletstalk3itcoin.com. Lets Talk Bitcoin Promo " End!

ABL: 'o1 +u(s1 2e have to have a meetin+ a3out this 3ecause ,ve 3een tr(in+ to fi+ure out ho2 to proceed and its reall( hurtin+ m( 3rain. , +ot an email from1 , dont recall his first name % his last name is <ranko. #es the creator of the <rankocoin1 3asicall(. #e has let us kno2 that he 2ants to donate to us in <rankos. , looked into his currenc( a little 3it. ,ts derived from Litecoin e=cept it has a fe2er num3er issued than actuall( even Bitcoin does. , think it has half the num3er issued that 2ill ever 3e issued of 3itcoins. ,n theor(1 its +oin+ to 3e >uite rare and it has a ver( fast transaction time: it has a3out thirt( seconds per 3lock. , emailed him 3ack and asked 2hat advanta+es his currenc( has that 2ould make it so 2e should 2ant to accept it 3esides the t2o technical differences that he had done and , havent heard an(thin+ 3ack from him1 3ut it kind of has 3rou+ht up a

lar+er point. 9e +et these re>uests sometimes from people 2ho have alternative cr(ptocurrencies and , dont reall( kno2 2hat standard 2e should 3e settin+ for 2hen 2e should accept somethin+ for donations for the sho2. Because1 on the one hand1 the(re not reall( 3u(in+ an(thin+ from us and the( 2ant to donate to support 2hat 2ere doin+1 3ut on the other hand1 its definitel( a marketin+ move on their part 2here the( 2ant us to sa(1 :9e accept this.; Then1 that adds to the utilit( of their...so1 its not like its a selfless thin+. ,m 2onderin+1 2hen (ou +u(s are lookin+ at 2hat ne2 alternative cr(ptocurrencies to pa( attention to or to setup a 2allet for1 2hat are the criteria that (ou useI '$: Thats such a +reat >uestion. , 2ish , could sa( , actuall( had some hard and fast criteria. ,ts more like1 , have to see it 3ecome a 3lip on m( radar more than a couple of times. , made a fortunate investment in Litecoin a3out a (ear a+o 2hich ended up doin+ reall( 2ell1 3ut ,m kind of skeptical a3out a lot of the other cr(ptocurrencies especiall( since no2 there are so1 so man( of them and :Altcoin; reall( has to differentiate itself to stand out in the current climate. , ?ust dont kno2 if 2ere at the point 2here thats reall( likel( to happen (et and , cant see the clear leaders in the pack. , havent 3een super1 super 3uKKed a3out altcoins latel(1 e=cept for ma(3e1 ma(3e Litecoin1 3ecause it seems to have cleared a certain 3ar. As far as acceptin+ donations to the sho21 , 2ish there 2as an eas( 2a( (ou could have a multi%currenc( 2allet. , kno2 people are 2orkin+ on that 3ut , dont kno2 of one that e=ists (et. ,f 2e could have that1 it 2ould 3e eas( to administer. 9e could ?ust have a 2allet and 2hen some <rankocoins come in1 2ell see a little notification and 2e could do 3asicall( 2hatever 2e 2ant 2ith those <rankocoins. 'pend them1 save them1 +ive them a2a(F convert them to 3itcoins1 2hatever 2e 2ant. 9ere ?ust not there (et. AA: This >uestion that (oure askin+1 Adam1 is the same >uestion that pla(s out thousands and thousands of times ever( time an altcoin comes up for an( 3u(er1 an( seller1 or an( user. This is the fundamental adoption >uestion1 the 3alance 3et2een the net2ork effect1 convenience1 and the e=istin+ value of Bitcoin versus the value of an additional coin and in that (ou have to 3alance out the net2ork effect. As , said1 (ou have to 3alance out the adoption difficult(1 the technical difficult( of char+in+ in multiple currencies. Aou have to 3alance out the forei+n e=chan+e risk of convertin+ it1 ho2 converti3le it is1 2hat kind of li>uidit( there is in the market in order to convert it1 ho2 man( access points there are. Aou have to look at the histor( of the currenc( and ho2 sta3le it is in terms of fluctuations or also in terms of minin+ difficult( 3ecause thats another aspect of cr(ptocurrencies that pla(s on and determines sta3ilit(. All of these1 essentiall( compromises or trade%offs1 happen in the mind of an( consumer 2hos decidin+ 3et2een Bitcoin and another currenc( and , think this all +oes to demonstrate 2h( it is so difficult to unseat the kin+ of cr(ptocurrencies1 2h( it is so difficult to sa(1 :,m +oin+ to +o 2ith a completel( different alternative.; And the reason is that it has a lot of cost to do that. As a result1 it has to have a reall( compellin+ reason1 and >uite honestl(1 , dont think (ou have that.

'$: But does that mean the( dont have an( valueI , mean1 , dont think so. , think there could 3e someB AA: The( have dump value. '$: Aeah1 the( have dump value 3ut , dont kno21 theres part of meB, kno2 , ?ust said that ,m not like1 super1 super e=cited a3out an( of the altcoins 3ut there is a part of me that kind of sees like1 :/ka(1 like1 (eah theres some Primecoin1 its fun in prime num3ers and PPcoin1 its +ot the proof%of%stake and <eathercoin1 has like1 +reat promotion and that mi+ht 3e interestin+.; At times1 , do feel e=cited a3out altcoins and it doesnt hurt to diversif(1 (ou kno2. ,f some3od( 2ants to +ive us someBsome1 uh1 (ou kno21 pick (our favorite coin then1 , dont reall( see the pro3lem 2ith that. $a(3e1 it feels like a headache 3ecause 2ere kind of tr(in+ to decide1 :9ell1 2hat do 2e actuall( think a3out all these altcoinsI ,s this +oin+ to re>uire me doin+ research on them and do 2e convert them to Bitcoin1 and essentiall( cash out1 or do 2e han+ on to themI; and that decision feels over2helmin+ and 2e ?ust dont 2ant to deal 2ith it. Could that 3e sort of 2hats +oin+ onI AA: ,ts enou+h to make that decision 2ith Bitcoin. ABL: CLau+hin+C! '$: CLau+hin+C! AA: CLau+hin+C! % Aou kno2I '$: .i+ht1 ri+ht. AA: 9ere runnin+ multiple sho2s ?ust to decide if 2ere holdin+ Bitcoin or 2hat even the value of Bitcoin is. , think1 then1 multipl(in+ that 3( a 2hole set of other coinsBit can reall( 3e a hu+e headache for merchants. 'o1 its easier than adoptin+ multiple <iat currencies 3ut its not as eas( as ?ust havin+ one. ABL: , see a couple of options here for ho2 2e could push for2ard on this 3ecause1 'tephanie1 to (our point1 , think it reall( is a usa3ilit( thin+. 9hen , installed the <eathercoin 2allet 3ecause 2e had a listener 2ho 2anted to donate to us in <eathercoinF that 2as the fourth 2allet that , had setup on this particular computer. ,n addition to that1 , had Primecoin 2hich , 2as pla(in+ around 2ith 3ecause , 2as tr(in+ minin+ 2ith it actuall(1 2hich 2as >uite interestin+. Bitcoin1 Litecoin1 and then1 <eathercoin % and 2hen , setup <eathercoin1 , actuall( had pro3lems 2ith m( computer. -ot that it 2as a pro3lem 2ith <eathercoin1 ?ust that like1 that 2as1 apparentl(1 the num3er of 2allets that m( computer felt comforta3le runnin+ and the num3er of 3lockchains that it felt1 (ou kno21 so1 , reall( think that so lon+ as (ou need a separate installation for each ne2 cr(ptocurrenc(B

'$: The feather that 3roke the camels 3ack. CLau+hin+C! ABL: CLau+hin+C! " Aeah1 e=actl(. Aes1 e=actl(. 9hen , run three of them at once its all fine1 3ut 2hen , run four of them , tend to +et some insta3ilit( in m( s(stem. , see a couple of 2a(s for2ard on this. , can either see settin+ up a 3ount( s(stem 2here 2e have a minimum value threshold 2here people can send their 2hatever%coin%it%is to an escro2 address that 2e have setup and at the point that 2e reach 2hatever the threshold is1 sa( its like1 one Bitcoin 2orth of 2hatever the altcoin is that 2ere talkin+ a3out. Then1 2e +o throu+h the trou3le of settin+ up a full 2allet for the sho2 and doin+ all that stuff or , could also see us partnerin+ 2ithBor it 3ein+ a service thats provided 3( an e=chan+e like 8ircure=1 2here the(re alread( dealin+ 2ith all of these altcoins % and the( deal 2ith a lot of altcoins. As a result of that1 the( could essentiall( +ive us an application that 2ould let people send somethin+ to a sho2 account that 2ould 3e a3le to 3e denominated in an( of those thin+s and then1 2ed have the a3ilit( to chan+e it into other cr(ptocurrencies or keep it in that 3ut not have to maintain all of the 2allets on a series of actual computers that 2e have to control. '$: .i+ht1 3ecause the e=chan+es ri+ht no21 like BTC%E or 8ircure=1 the( do sort of have multi%currenc( 2allets 2here (ou can lo+ in and see (our finances and it has a 2allet for each of the altcoins thats on that e=chan+e and people1 (ou kno21 (ou can send funds to it or 2hatever. Then1 (ou can easil( trade 3ecause the(re alread( in the e=chan+e. , +uess , see a pro3lem 2ith storin+ the coins on an e=chan+e 3ecause thats 3asicall( a 2e3 2allet1 and the(re vulnera3le to hacks1 3ut , reall( like the idea of1 :#e(1 lets have an address for each of these coins1; once 2e reach a certain threshold1 and , think one Bitcoin e>uivalent of those altcoins is a +ood threshold to have. Then1 2ell put that up as a donation address. ,m all for1 like1 please1 if some3od( 2ants to +ive me mone(1 , 2ould like to make it convenient for them to do that1 (ou kno2 2hat , meanI ,f someone 2ants to support Lets Talk Bitcoin1 lets make it eas( for them to do that in 2hatever 2a( the( 2ant to. ,m kind of errin+ on the side of1 :Aeah1 lets put up an address for ever( coin1; 3ut , realiKe that mi+ht look a 3it cluttered potentiall(1 on the 2e3site. ABL: , dont think its a pro3lem 2ith the cluttered look. , ?ust think that there are so man( of these currencies that are +oin+ to fail 3ecause the( dont have ver( man( fundamental advanta+es to them and the( dont haveB(ou need somethin+. ,t almost doesnt matter to a certain e=tent 2hat an+le (oure +oin+ to approach the pro3lem of cr(ptocurrenc( from1 3ut (ou need to do somethin+ that is differentF 3e it ho2 (ou market it or 3e it ho2 (ou1 (ou kno2Bthe innovations of the currenc(1 fundamentall(1 itself. Aou still need to have those differentiations and , feel like a lot of those currencies that are out there1 its ver( difficult to make that claim to. Be(ond that1 , dont think that its 2orka3le1 'tephanie1 3ecause 2ere talkin+ a3outBtheres more than 4O6 cr(ptocurrencies out there ri+ht no21 and , have to ima+ine that thats +oin+ to continue to e=pand.

'$: .i+ht1 a3solutel(1 3ut , mean 2ere onl( +ettin+ donation re>uests for ma(3e1 ten of those1 ri+htI ABL: .i+ht no2. CLau+hin+C! '$: CLau+hin+C! ABL: .i+ht no21 (ou kno21 2hile 2e acceptBthis1 of course1 3rin+s me to the other part of this conversation. 9e started acceptin+ Litecoin donations , +uess a3out three months a+o and the first couple of sho2s 2ere prett( successful and , can look 3ack and actuall(1 sho2 44 and sho2 47 2ere t2o of our hi+hest%tipped sho2s 3ecause 2e +ot sin+le donations of 466 litecoins to each of those sho2s. That actuall( 2as more su3stantial than the Bitcoin donations1 at that point. 'ince then1 2e +et pro3a3l( 3et2een 6.O%4 litecoin per episode on a +ood episode1 and sometimes 2e dont +et an( litecoins. 'o1 the >uestion 3ecomes1 is there a minimum threshold 3e(ond 2hich 2e should not 3e +eneratin+1 , should not 3e spendin+ the time to +enerate the addresses to run the client if 2ere +ettin+ these small amountsI 'hould there 3e a minimum thresholdI '$: $a(3e1 2e dont have an individualBBitcoin1 Litecoin1 <rankocoin1 PPcoin1 ever( sin+le coin address for each sho2. $a(3e1 2e ?ust have a +eneral sho2 fund for the altcoins that are not Bitcoin or ma(3e1 not Bitcoin and Litecoin. AA: Aeah1 2e can have three%dimensional 2allets. Essentiall(1 the 3ottom line is that all of these coins1 at their core1 use the same elliptic%curve%cr(pto+raph( s(stem for the pu3lic and private ke(. The onl( difference 3et2een a Bitcoin address1 a Litecoin address1 and a <eathercoin address is 2hat prefi= (ou stick in front of the address 3efore (ou send it out. Aou can take a sin+le private ke( and from that (ou can +enerate a pu3lic ke(1 2hich is a point on the curve1 for Litecoin and encode it for Litecoin and then (ou can take the same ke( and encode it for Bitcoin and the same ke( and encode for it <eathercoin and the same ke( and encode it for PPcoin. Essentiall(1 2hat (ou 2ould do is (ou 2ould have one 2allet 2ith one private ke( that unlocks all of the pu3lic ke(s of all of the other coins. , think 2ere +oin+ to solve this pro3lem over time and the default 2ill 3e multi%currenc( s(stems. ABL: 'o1 2hen can , have thatI AA: , 2rote to Protech ,mplementation1 2hich! 2orks on top of B,P%75 3ut unfortunatel(1 turnin+ that into a 3usinessB2e need one of those opportunistic entrepreneurs. ABL: CLau+hin+C! '$: CLau+hin+C! " Aeah1 , ?ust +oo+led that1 :multi%cr(ptocurrenc( 2allet; and , found a thread on the Bitcoin forum that 2as su++estin+ some soft2are for

9indo2s and then1 the ne=t post 2as1 :Aes1 complete 2ith 2allet%stealin+ Tro?an free of char+e.; 'o1 2ere not there (et. AA: B( the 2a(1 thats one of the disadvanta+es1 ri+htI ,f (ou solve the ke(% mana+ement pro3lem 3( t(in+ all the ke(s to a sin+le private ke( then1 if (ou lose that one1 mmm%hmmm1 (ouve lost all of them. '$: .i+ht. Adam1 ma(3e 2hat 2e need is a n! altcoin%enthusiast treasurer for Lets Talk Bitcoin and , 2ould 3e happ( to 3e that. 9h( dont 2e ?ust have ever(3od( send their altcoins to m( 2allet on 8ircure= and ,ll 3e the administrator of that. ABL: /ka(. '$: -o1 ,m ?ust kiddin+ a3out that 3utB ABL: 0ltimatel(1 if its not (ou doin+ it1 its me1 'tephanie. Aes1 to a certain e=tent1 theres a little 3it less trust1 , +uess1 3ut it doesnt reall( matter. AA: Aeah1 ,d like to also start considerin+ takin+ other forms of pa(ment as 2ell so , 2ill 3e the treasurer for 3eer and pot and1 uhB ABL: CLau+hin+C! '$: CLau+hin+C! AA: B, 2ill convert those in m( di+estive s(stem. ABL: Thank (ou1 Andreas. Thank (ou ver( much. AA: Aoure 2elcome. '$: #as an(3od(Bactuall(1 thats a +reat point. #as an(3od( ever offered to donate ph(sical stuff to Lets Talk BitcoinI $a(3e other thin+s like +old1 or silver1 or stocks1 or , mean1 , kno2 some or+aniKations have offers of those 3ut 2ere havin+ the pro3lem 2here1 :#e(1 take m( altcoins1; ri+htI ABL: Aeah1 no1 2e havent1 uh1 theres 3een no ph(sical offers1 (et. ,ts 3een altcoins and a+ain1 the other thin+ a3out altcoins of course1 is that its not ?ust a donation. ,ts a donation 3ecause the( 2ant to donate to us 3ut the( 2ant us to care a3out the cr(ptocurrenc(. Thats the fundamental thin+. ,ts not like the(re donatin+ 3ecause 2ere the 3est people in the 2orld. The(re donatin+ 3ecause theres an advanta+e if 2e +et interested in it and start talkin+ a3out it 2ith our audience. 'oB AA: Aou mean like1 spendin+ ten minutes talkin+ a3out <rankocoin that does A&& 3lockchain confirmation ever( thirt( secondsI

ABL: E=actl(. CLau+hin+C! AA: Aeah. ABL: E=actl(1 theres a reall( fine line to 2alk here1 , think. ,m ?ust not sure ho2 to approach it1 (et. '$: 9ell1 , dont kno2 if 2eve resolved an(thin+ 2ith our on%air meetin+ 3ut its a +ood pro3lem to have1 ri+htI People are offerin+ us donations like1 (eah1 thats +reat. Even if theres strin+s attached to it1 even if the( 2ant us to promote their coin or 2hateverF /ka(1 fine1 ,ll take (our mone(1 ri+htI CLau+hin+C! ABL: CLau+hin+C! " <air enou+h. , mean1 this is a pro3lem. Thats the fundamental part here1 that this is a pro3lem and Andreas1 2hether its solved in the manner that (ou descri3ed or 2hether its solved in a manner 2e cant even conceive of here1 , think it 2ill +et solved and that makes me feel +ood. AA: Thats the 3eaut( of frictionless currencies1 ri+htI The fact that all of these coins have ver( little friction and are ver( fun+i3le and ver( eas( to transport and trade is 2hat makes them ver( easil( transfera3le or converti3le from one to the other. The advanta+e is that unlike the enormous friction 2e have convertin+ fiat to Bitcoin and 3ack. Convertin+ Litecoin to Bitcoin1 (ou kno21 <reicoin to BitcoinI Ah1 thats eas(. /ne of the advanta+esB2hat 2ere seein+ here is this proliferation of coins is also a s(mptom of the fact that (ou can convert them more easil( so its easier to adopt. /utro $usic " <ade ,n! ABL: Thanks for listenin+ to episode 46 of Lets Talk Bitcoin. Content for toda(s sho2 2as provided 3( Andreas $. Antonopoulos1 'tephanie $urph(1 2ith Benn( and Emmanuel from Cloud #ashin+. This episode 2as edited 3( $atthe2 Ripkin. $usic 2as provided 3( Dared .u3ens and DaKKto2n. ,f (ou cant +et enou+h ori+inal thou+ht and discussion1 read our dail( 3lo+ at letstalk3itcoin.com. 'i+n%up for our 2eekl( ne2sletter at the2eekl(3itcoin.com. To +et in touch1 send me mail directl( at adamSletstalk3itcoin.com or visit letstalk3itcoin.com*talk to 3e directed to our listener su3%reddit. 'ee (ou ne=t time. /utro $usic " <ade /ut!