00:00welcome to the a 16z podcast I'm Michael
00:02Copeland there are a few things as old
00:05as financial catastrophe
00:07except for maybe finance but in the
00:10latest fiscal meltdown in Greece people
00:12started asking questions about whether a
00:14very new technology Bitcoin and the
00:17underlying blockchain could help one of
00:20those was Wall Street Journal columnist
00:22Christopher Mims so it's just
00:25fascinating to me that you can take this
00:27underlying the technology that is under
00:30Bitcoin and use it to represent
00:33literally any exchangeable good and it
00:36can even in the most extreme case sort
00:37of be used as a mechanism for barter and
00:39so because Greece she weeks ago was at
00:42this point where people are getting
00:43desperate they're sending people I use I
00:46just said you know why couldn't you
00:47represent that with you know the
00:50blockchain technology obviously we don't
00:51have the ability to do that now there's
00:53a lot of infrastructure that we put in
00:54place but could you do that some going
00:56in the future when Bitcoin is more
00:58mainstream when people are used to
00:59paying this way when you have a
01:00generation of people are used to paying
01:02for things with their phone mims is
01:05joined by coinbase CEO and co-founder
01:07brian armstrong in this segment of the
01:09pod for a wide-ranging discussion about
01:12the current state and future possibility
01:14of Bitcoin and the Bitcoin blockchain
01:17when it comes to Greece or the next
01:19financial snafu Armstrong thinks there's
01:22potential for Bitcoin to help but
01:24there's also some education that needs
01:26to happen when I hear people talking
01:29about creating all sorts of other
01:32currencies and putting it on the
01:33blockchain I'm always I'm a little bit
01:35skeptical of that I think what they're
01:36talking about really is like you can
01:38digitize any various types of assets and
01:41and transfer ownership of those in the
01:43blockchain so that could be like shares
01:45of a company or some asset like a piece
01:49of real estate or concert tickets or
01:51something like that but in terms of what
01:54currency will actually be used like if
01:56the Greek government is talking about
01:57making some kind of their own currency
02:00and having on a blockchain
02:01I think they don't really understand
02:02what blockchain means when they say that
02:04and you can't have a discussion about
02:06Bitcoin without asking about its price
02:09and investment potential you know you
02:11shouldn't invest all your money in
02:12Bitcoin or something like that
02:13but should every investor own maybe one
02:16Bitcoin yes I think I think they should
02:18and the reason is not so much as an
02:20investment it's to start learning about
02:23this technology which will be a major
02:25influence on finance in the future
02:28Bitcoin Greece and what's next for
02:31cryptocurrency on this segment of the a
02:35Christopher Mims kicks it off my
02:42interest is really as a technology
02:44entrepreneur my belief of the world is
02:46that technology is this great force to
02:49improve the world and it's probably the
02:51most powerful force changing the world
02:53right now and bitcoin is a great example
02:56it's an open standard or protocol for a
02:59global payment system and I think it
03:02when I read about it back in 2010 I
03:05realized it had the potential to have a
03:07big impact on the world so over a period
03:10of time got comfortable thinking through
03:12all of the endgame scenarios of it and
03:14eventually decided to start a company
03:15around it to give you a little more
03:17detail I was I was actually working as a
03:19software engineer at Airbnb and we were
03:23moving money to 190 countries around the
03:25world and I sort of had a front row seat
03:27into how inefficient that payment
03:28network was all over the world usually
03:31in each country there's a proprietary
03:33system of a couple different payment
03:35systems they're each worth each kind of
03:38is like a mini Oleg Apple II and so
03:40there's not much innovation happening
03:43there usually high fees delays and how
03:45fast money can move and a limited
03:49geographic reach of each of those and so
03:50when I read about that idea to have the
03:52whole world could have an open payment
03:54network it immediately captured my
03:56attention it's funny to say that because
04:00that my introduction of bitcoins well I
04:02feel like people talk a lot about
04:04Bitcoin and kind of a misinformed way to
04:06look at it is if you don't ask that like
04:08gold and so everybody pays attention to
04:10the fluctuating price or what caught my
04:12attention was I was talking to a
04:14remittance company in the Philippines
04:17and they were using Bitcoin as a super
04:20fast super low cost low fee way to
04:24transfer money between countries in the
04:27and the Philippines and of course the
04:29reason they can do it is that they can
04:30get in and out of any given currency
04:33really quickly and bitcoin is just a
04:34conveyance and so I don't know what your
04:36feeling is when I look at Bitcoin I feel
04:38like the sort of minimum viable product
04:40for Bitcoin right now is remittances or
04:44money transfers so in my perspective is
04:47right now it's not so much about Bitcoin
04:49itself is that the technology simply
04:51allows you to transmit money and then of
04:54course you have to have an exchange on
04:56both ends but that's kind of where I see
04:59Bitcoin and I'm curious that what you
05:02see is a sort of Minimum Viable Product
05:04right now or do you see other things
05:05people are doing that you think they're
05:07actually are going concerns right now
05:09yes I think that's a great example it's
05:12actually one of several so I kind of
05:14more broadly think of it as three major
05:17categories where Bitcoin could be the
05:20most useful one of them is what an
05:25example of what you cited which is
05:27disrupting traditional financial
05:29services products so in that case
05:30remittance it might allow it to be
05:32faster or cheaper right
05:34other examples of traditional financial
05:36products that might disrupt would be
05:38things like credit card payments where
05:40now those fees are less or instead of
05:43going to get a loan at a bank you might
05:44be able to get a peer-to-peer loan
05:46through something like BTC jam which is
05:49a startup out there so there's that's
05:50the first category would be disrupting
05:52traditionally what we think of as
05:54financial services the second major
05:56category in my mind would be developing
05:58world use cases where people actually
06:00don't have financial services today
06:02these are the unbanked of the world and
06:05there's something like two to three
06:07billion people in the world who have a
06:10but do not have a bank account or credit
06:12card and so they're living essentially
06:15with cash or they're using some kind of
06:18primitive digital currency like a lot of
06:21people actually send cell phone minutes
06:23or cell phone credit they can SMS it to
06:26each other in the developing world like
06:28this is very popular in the Philippines
06:29and India and places like that and
06:32there's actually some places where you
06:33can go in the Philippines and buy dinner
06:34with cell phone minutes and things like
06:36that you text it to the person across
06:38the counter and so those are all
06:40precursors of digital currency types of
06:44digital currency that people are using
06:46there and we think a whole generation of
06:48kids and people in the developing world
06:50will actually grew up in their very
06:51first quote-unquote bank account will
06:53actually be a digital currency wallet on
06:55their cell phone so that's the second
06:57major category the third one would be
07:00what I call brand-new internet
07:02applications where that are uniquely
07:06enabled by Bitcoin so by that I mean
07:09that it's not disrupting the traditional
07:11financial services industry or something
07:13like that it's actually creating
07:14something that the only way it works is
07:17with Bitcoin so these are very small
07:20today but I think in the future some of
07:22these will end up being many
07:23multi-billion dollar companies and
07:25systems some of these are things like
07:28distributed crowdfunding which like the
07:31lighthouse project is an example of that
07:33there are prediction markets where you
07:35can use the wisdom of crowds to predict
07:39the outcome of certain events there are
07:44there's a lot of them have to do with
07:46micro transactions actually which is
07:48something Bitcoin uniquely enables so
07:50there are things like tipping on the on
07:53the internet with things like change tip
07:55so these are examples of kind of very
07:58new use cases that are uniquely enabled
08:00by Bitcoin which are not big yet but
08:02could actually grow and it's more like a
08:04green fields idea yes I mean you know
08:10there's let's say division about Bitcoin
08:15and the reason that I kept paying
08:16attention to was that there felt like
08:19this burgeoning developer community you
08:21know it reminded me of iOS or Android in
08:24the early days and I was wearing a few
08:26sense of how big that is there is a lot
08:30of developer interest you're right
08:32it's us especially with younger people
08:36like currently in college and things
08:37like that we only have a few pieces of
08:39data on it one of them is that we've had
08:417,000 developers sign up on coinbase to
08:43create apps and we have one of the more
08:46popular developer platforms out there
08:47the other is that we've seen some data
08:52the number of github repositories that
08:54are being created every month that have
08:56something to do with Bitcoin and there's
09:00been about well let's see there's about
09:036,000 total to date which is outpacing
09:06the number of github repositories for
09:08other common payment systems like PayPal
09:10so that's a I think that's really
09:12interesting the early indicator of the
09:15amount of developer interest and if you
09:17look at traditionally things that have
09:19gotten a lot of developer interest like
09:20Linux or Android or whatever it
09:23sometimes takes five years or ten years
09:25but they eventually end up being massive
09:27platforms like Linux runs the majority
09:30of the internet now and it was all
09:32started with a handful of really
09:33passionate developers who got excited
09:35about it so in general that's a really
09:37good predictor I think of where the
09:38future is going you know Chris I I know
09:41you wrote a lot about Greece recently
09:44with Bitcoin and everything like that
09:45and I was I was just curious how did you
09:47get interested enough to go do some
09:50investigation into the Greece aspect of
09:52it specifically yeah it's funny there
09:54was a lot of chatter I forget it the guy
09:58who was rumored to be one of the
10:00inventors of Bitcoin Rho divided on his
10:02blog also very pocketed former Greed's
10:09finance minister who's now suggesting
10:11criminal charges for talking about
10:13setting up an alternate currency yeah so
10:23he you know he said you could create
10:27this an eagle at Ft coin and it would be
10:31based on future tax revenues and served
10:34what's impressive about it and what got
10:36me excited was the possibility that
10:39Bitcoin could truly be this there's
10:42almost blank canvas for money you know
10:45people talk about this mechanism
10:47and for anyone listening to this he
10:49doesn't know what those are you just
10:51think of them as clones of Bitcoin that
10:53can needs change for Bitcoin to be the
10:54simple version I find that it's a gross
10:56oversimplification but anyway this means
10:59that you know things that people object
11:01to about their coin like oh it's a
11:03deflation era currency because there's a
11:06bitcoins can be created become
11:08irrelevant because the central bank
11:09could say hey you know what we want
11:11place the dollar with a you know a
11:14dollar token that is represented on the
11:16Bitcoin blockchain you can do that you
11:19know talk to Michael Casey you speak
11:21Wall Street Journal you know that much
11:23Media Lab advising them on
11:25cryptocurrencies and one of these things
11:27he talked about was you know stores are
11:30starting to think about what if we
11:33represented our you know like not
11:37coupons but like store tokens
11:39store credit Jurong cryptocurrency and
11:43they're you know they're totally earnest
11:46about this so it's just fascinating to
11:47me that you can take this underlying the
11:50technology that is under Bitcoin and use
11:53it to represent literally any
11:55exchangeable good and it can even in the
11:58most extreme case sort of be used as a
12:00mechanism for barter and so because
12:02Greece few weeks ago was at this point
12:04where people are getting desperate
12:05they're sending people I have used I
12:07just said you know why couldn't you
12:09represent that with you know the
12:11blockchain technology obviously we're
12:13gonna be building to that now there's a
12:14lot of infrastructure that we put in
12:16place but could you do that someone in
12:18the future when Bitcoin is more
12:19mainstream than people are used to
12:21paying this way when you have a
12:22generation of people are used to paying
12:23for things with their phone it seems
12:26entirely possible so if you have this
12:28new ability to tokenize anything in your
12:30world you know it means that you can
12:34create currency just based on barter it
12:37means the banks can decide to create
12:39currents and companies can create
12:40currency I mean as long as it's legal
12:42right that's their choice the regulatory
12:45dimension to it so that's just seemed
12:47just so fattening because nothing is
12:49older than currency crises except some
12:53money so this probably never gonna go
12:56isn't it interesting possibly have sort
12:59of a way to kind of Diamond awesome
13:03doesent route around the damage well
13:07Brian I mean I just wanted to ask you
13:08you know given um how far-fetched a lot
13:11of that discussion is you know what have
13:13you seen in terms of discussion or later
13:16that and maybe you can bring us back
13:17there what's going on now
13:21so I mean there's a there's a few things
13:24one is that when I hear people talking
13:26about creating all sorts of other
13:29currencies and putting it on the
13:30blockchain I'm always I'm a little bit
13:32skeptical of that I think what they're
13:33talking about really is like you can
13:35digitize any various types of assets and
13:38and transfer ownership of those in the
13:41blockchain so that could be like shares
13:43of a company or some asset like a piece
13:46of real estate or concert tickets or
13:49but in terms of what currency will
13:52actually be used like if the Greek
13:54government is talking about making some
13:56kind of their own currency and having on
13:58a blockchain I think they don't really
13:59understand what blockchain means when
14:01they say that I I think Bitcoin will be
14:03the currency that that everyone ends up
14:05using on the blockchain and did they
14:07probably don't quite understand what
14:08they're saying when they say that but I
14:12don't know just just from like a more
14:13broad perspective of what we think is
14:16interesting right now a lot of the focus
14:18historically has been on Bitcoin on the
14:20price of Bitcoin and it's because the
14:22early adopt the early adopter use case
14:24of Bitcoin is all around it being a
14:25speculative asset people are buying it
14:27because it's scarce they think it'll be
14:29useful for something in the future and
14:30in that sense it's kind of like a better
14:32version of gold or a better version of
14:34money so there there's a lot of people
14:36buying it and trading it like a stock or
14:38something like that now about that's 80%
14:41of activity let's call it roughly 20% of
14:43activity is people actually using it now
14:45as a payment network on some of these
14:47new types of applications like the ones
14:48I mentioned or doing peer-to-peer
14:51payments or paying their contractors and
14:53their countries things like that and I
14:55think over time what'll happen is that
14:56those two percentages will shift the 80
15:00percent will end up becoming the 20
15:01percent speculative asset and it'll be
15:0480% payment network actually happening
15:06and the reason is that the the
15:09speculative investment aspect is a
15:10bootstrapping mechanism if you will for
15:13the payment network which i think is the
15:14eventual long term potential of Bitcoin
15:17and the much more interesting mechanism
15:19or sorry the much more interesting
15:20metric to focus on other than price is
15:23actually number of daily transactions on
15:25the Bitcoin network and that's gone from
15:27about 50,000 a day to 100,000 a day in
15:32don't realize that that graph is
15:34actually just pretty slowly and steadily
15:35marching up roughly doubling every year
15:38whereas the price is just wildly
15:40fluctuating all over the map where
15:42people are trying to extrapolate you
15:45know what if there'll be a million
15:46dollar Bitcoin eventually or something
15:47like that so my hope and belief is that
15:51you'll see the number of daily
15:52transactions become more of a focal
15:54point that'll continue to double every
15:56year roughly and you'll see this this
15:59payment network emerge where that
16:03becomes the primary use case of Bitcoin
16:04and it's in the speculative investment
16:06use case will actually diminish a bit
16:08more into the background it'll end up
16:09being something much less volatile we've
16:11seen volatility drop every year for the
16:13last three years that ends up being a
16:15little bit more like a commodity like
16:16gold but does the average person really
16:18care about commodities markets or FX
16:21trading probably not they do care about
16:23how they're gonna send money and pay for
16:25things and they want to do that cheaply
16:26and efficiently so her you know Bitcoin
16:32to a million dollars so I mean is that
16:34we're easy going because I mean it seems
16:37like you know that equation becomes more
16:39useful if bitcoins do become more
16:41valuable if you're right this does
16:44become that default mechanism default
16:46use your Bitcoin is a means of exchange
16:48I never want to make predictions about
16:51the price of Bitcoin because it's a good
16:52way to I don't want to be in the
16:56business of giving people an investment
16:57advice right it's just an easy way to
16:59disappoint people but personally yes I'm
17:02long Bitcoin I I buy Bitcoin I'm not too
17:05concerned about the price day-to-day I
17:07tend to dollar-cost average it over long
17:10and what I do tell everyone is you know
17:13you shouldn't invest all your money in
17:14Bitcoin or something like that but
17:15should every investor own maybe one
17:18Bitcoin yes I think I think they should
17:20and the reason is not so much as an
17:22investment it's to start learning about
17:25this technology which will be a major
17:28influence on finance in the future it's
17:31almost like if you went back to the 80s
17:32or the 90s and you said well do we need
17:35a desktop computer in every home maybe
17:39maybe not I mean there's not really that
17:40many things you can do with it yet right
17:42like there's no AOL and there's there's
17:44email work my grandmother I can't get
17:46the family photos or whatever on
17:48Facebook or whatever they need to do but
17:49there was a lot of people who went out
17:51there and they got a desktop computer
17:53because they believed that this was
17:54going to be something important in the
17:56future and they wanted to start to learn
17:57about it and participate in in that
17:59revolution and so that's where I think
18:01people are at more and I encourage
18:03everyone to go there by one Bitcoin not
18:06for the price or the investment aspect
18:07of it but just to learn about it and
18:09have a piece in the game you know one of
18:12the things they talked about in my
18:13article for the journal was look you
18:16know Bitcoin doesn't make you know like
18:18I'm different to two people in Greece
18:20right now yeah and I think the ongoing
18:24challenge for Bitcoin it reminds me of
18:26like you know let's say encryption
18:29technologies for communications I mean
18:31they've been around a long time and
18:33they're still harder to use and they're
18:34only just sort of becoming invisible and
18:37the default but you know we're I
18:42what's the breakthrough like we're it
18:45really just going to be slow but how
18:47does how do we get Bitcoin team into the
18:49hands of everyday people does it need to
18:51be in Google Wallet doesn't need to be
18:53an Apple wallet do I need you know
18:54one-click access to an exchange how we
18:57gonna how are we gonna get Bitcoin
18:59beyond the realm of people who are
19:01reading message boards about you know
19:04how to safely store it on a thumb drive
19:07in a fire throughs box and all that well
19:10I mean certainly our approach has been
19:11to try to make it easy to use for the
19:14average person so it wasn't that long
19:17ago that pretty much every Bitcoin site
19:19out there talked a lot about private
19:21encryption keys and all these
19:23complicated things you needed a computer
19:25science degree to try to understand it
19:26and I'd like to think we were helpful in
19:30making Bitcoin a bit easier to use for
19:31the average non-technical mass-market
19:34person making it secure also was a big
19:37deal I mean if people forget their
19:40password and all their money's gone and
19:41that's kind of a non-starter for a real
19:44financial revolution to happen there was
19:47also a lot of websites out there being
19:49hacked and there's a lot of security
19:52breaches I mean that happened in
19:53traditional financial services too but
19:55Bitcoin has industry has really had to
19:57mature in the last couple years
19:58and companies like coinbase are now
20:01storing you know hundreds of millions of
20:04dollars a Bitcoin and doing it securely
20:06with lots of checks and balances that
20:08are happening in traditional financial
20:11services as well like security audits
20:14and financial audits and all sorts of
20:17so I think those things will all help
20:21but is there gonna be some moment where
20:23Bitcoin just suddenly is mainstream no I
20:25don't think so I think it's gonna be you
20:28know a series of lots of small things
20:30that happen over time you know people
20:32will there'll be some game they want to
20:34play online it turns out the only way to
20:36play it is with Bitcoin and so they'll
20:39or it'll somebody they'll be in a
20:41foreign country and somebody will remit
20:44money to them like $50 and the fastest
20:47and cheapest way for them to get it was
20:48in Bitcoin so now they'll have to go
20:50figure out a way to cash that out in
20:52their local country and that that'll be
20:54another way right so I think you'll see
20:56it bit by bit and these in these areas
21:00grow in insert in in different ways and
21:03like we've seen with the number of
21:05transactions per day it's roughly
21:06doubled in last year but it's been a
21:07pretty steady thing there wasn't there
21:09wasn't a moment where suddenly it
21:11doubled in a week or something like that
21:13the one the one counter example to that
21:16I can think of would be countries that
21:18are going through periods of financial
21:19crisis like Greece where how'd you know
21:22which you wrote about recently where
21:24like for example in the Greece situation
21:27happened we saw roughly 3x our 300%
21:30growth of our normal by cell volume
21:32across all of Europe not just in Greece
21:34because of course the Greek bank
21:35accounts were frozen and people it was
21:40purely people in the rest of Europe who
21:41wanted to go find out about Bitcoin the
21:42number of Google searches went up
21:44dramatically for it so certainly I mean
21:47every year in the world somewhere
21:49there's some kind of financial crisis
21:50and I think those will be periods where
21:53people start to look out look for other
21:55options and start to really think about
21:56what it means to have their money in a
21:59bank account is that trusted and things
22:01of course I'm curious what you've seen
22:03on the usability challenges around
22:06Bitcoin I mean I feel like it's still
22:10unapproachable topic for some people and
22:13that they feel like it's it's
22:14complicated or they still don't quite
22:15understand Bitcoin I mean what have you
22:17seen as ways that the average person out
22:20there has gotten their head wrapped
22:21around this this new concept
22:23we're started using it yeah it feels
22:26usability challenge for Bitcoin honestly
22:28is magnified by the fact that we have
22:32this usability challenge that's yet to
22:34be solved in terms of digital money so I
22:37mean David woman this amazing writer who
22:40wrote a whole book about the end of cash
22:41and you know he and I talked about this
22:43regularly and I'm like you know I'm like
22:46cash is not going away because it's so
22:49incredibly useful and I mean especially
22:51in the u.s. got this problem of you know
22:54we had Apple pay coming in and then
22:56nobody's quite sure about the adoption
22:58figures their Google Wallet has been
23:00mostly a failure today you know it's
23:03just so easy to pull out a credit card
23:06yes there's a structure there but
23:09because of the history of that you know
23:11the cost gets eaten by the merchants you
23:14know they had deals with Visa and
23:15MasterCard but they're not even allowed
23:16to you know give you a discount if you
23:19use cash so we have this pretty good
23:22payment system in place so the usability
23:25problem is I mean this is what people
23:27always say about product adoption if
23:29something is painful if you solve a
23:32difficult painful problem adoption will
23:35be very rapid if you're merely better
23:37than something that's good job
23:39something's gonna be slow and can even
23:41be not in Lisbon so I mean I would kind
23:44of throw that back to you I think that
23:47you know the reason I talked about
23:49Greece was you know people in Greece are
23:51at a really painful situation I heard a
23:53radio interview mechanical engineer in
23:56Greece who had literally kind of seen
24:00this coming and I had withdrawn
24:01synthetic 50,000 euros and had bundles
24:05of euros in cash stored in the back
24:09panel of his refrigerator
24:11since the thieves would be able to find
24:13it and I thought wow here's the guy who
24:16could use a store of value that could be
24:21more easily transmitted and is more
24:22liquid even at the price
24:25like Bitcoin katene known about it but
24:28you know outside of these crises or
24:31countries where you people are really
24:32unbanked you know I would ask you know
24:36why is it that bitcoins gonna give me
24:39the hazards user that is gonna make me
24:42say wow that's that's really a difficult
24:44problem I out Bitcoin solves it for this
24:48yeah I totally agree with that I think
24:50if you're talking about winning on
24:53usability the easiest place to go is
24:57people who have high pain points around
24:59their current options or another way to
25:01put it would be their their next best
25:03alternative is dramatically worse not
25:05just a little bit worse so I kind of
25:08think of it as a spectrum of of how
25:11frustrated people are with their current
25:13options right so if you think of it like
25:15a 1 to 10 scale one being the least
25:17frustrated you have things like people
25:20swiping their credit card at Starbucks
25:23it's very painless sure the merchant has
25:25to pay - you know 2% plus which is a bit
25:28frustrating for them but not too bad and
25:30then you go up the ladder a little bit
25:32maybe like a 3 or 4 on the scale is
25:34online shopping right you have to put
25:36your credit card in and a website it's a
25:38little bit scary you think it might get
25:40hacked like Target did or you have to
25:42type 16 characters in a four for the
25:45date and five for your zip code and then
25:47three digit security code it's kind of
25:48frustrating or they expire every every
25:50couple years but still not the end of
25:53the world right now if you go up to
25:55scale a little bit more you have people
25:58who let's say I want to send $100 to my
26:01family in Mexico and it cost me $12 now
26:05that's starting to be a little bit more
26:07of a pain point right now maybe like a 6
26:09or a 7 on the scale and I'm starting to
26:12feel like the pricing is predatory even
26:14or something very inefficient right if
26:18you keep now you can keep going up that
26:20scale quite quite a bit further right so
26:22to your point about the person in Greece
26:24withdrawing $50,000 in character that's
26:26a good example there's also people who
26:28are trying to remit money from the UK to
26:31Somalia for example and all of the banks
26:34have shut down that service
26:38so literally people have resorted to
26:40flying suitcases of cash to Somalia and
26:43you could argue they have a very high
26:45pain point there their next their next
26:47best alternative is is very much
26:49dramatically worse now at the top of
26:51that scale you have things like people
26:55in the developing world who don't have
26:57any financial services whatsoever you
27:00have like the whole banking model really
27:03doesn't work in those in those
27:04demographics with like a checking and
27:07like a bank branch in the corner you
27:09also have things like micro transactions
27:13which just aren't possible in the
27:14existing financial ecosystem right or if
27:17you want to build a global crowdfunding
27:20site or prediction market or something
27:22like that where people all over the
27:25world without having to register can
27:28within a couple seconds put money into
27:29this thing or see it tip it's like
27:32literally the only way to build it is
27:33with Bitcoin there is no next best
27:35alternative and so you could argue those
27:37people have the highest pain point and
27:39they're willing to tolerate the biggest
27:41usability challenges to get something
27:43anything going you could there's other
27:46examples of that to you like if you're
27:48in Nigeria and you want to buy an iPhone
27:50pretty much every website will reject
27:52you if you're selling some kind of
27:55high-risk service or you know you're in
27:57the adult industry or whatever this is
27:59people find themselves in very difficult
28:01situations to accept payments but that's
28:06how you show I'd like to think about it
28:07is there's like a spectrum of options
28:08now someday if the world if Bitcoin
28:11becomes more and more popular like we
28:12all think it will then yes even the
28:15Starbucks across the street will be
28:17accepting Bitcoin because they still
28:18don't want to pay 2% they'd rather pay a
28:20fraction of 1% but that's going to be
28:23the last group to adopt it and the
28:26usability can help us get there faster
28:27but I think it's better to focus on
28:29people at the highest pain points Chris
28:31we talked a little we touched a little
28:32bit earlier on sidechains
28:33I thought it might be interesting to
28:35talk about that just for a couple of
28:37minutes because I think it could have a
28:38big impact you know I understand there
28:42is this kind of technical trickery that
28:45means that you can't create an unlimited
28:48number of independent
28:51watching that are still linked to the
28:54main Bitcoin blockchain
28:56such that any token on these
28:59quote-unquote cytosine can still be
29:02exchanged for bitcoins think on a
29:05one-to-one basis and the idea is if you
29:08can have these fudging you can have a
29:11lot more experimentation but you could
29:13have something that's just kind of like
29:14another Bitcoin but it has a new
29:16protocol that for example allow it to be
29:19transmitted in a lot more quickly
29:21because as I understand it is the more
29:23transactions there are there are
29:25challenges in fulfilling this dream of
29:28Bitcoin being a transaction that
29:31instantly resolves and then you know
29:34they're just people have other ideas and
29:36then like I said earlier you know people
29:38might want to put other things beside
29:40Jesus I mean let's not forget it I think
29:42it's Ecuador recently banned Bitcoin and
29:45said we're gonna create our own
29:46cryptocurrency that's how our entire
29:49nation is gonna work
29:51which to me is wildly it feels like you
29:54know as much as Bitcoin is is important
29:57that you have this very solid main means
30:01of exchange you know my perspective is
30:04giving people people the experiment is
30:06good the same way that you know letting
30:08people build all of these protocols on
30:10top of the original protocols we've been
30:13able the internet is what gave us
30:14everything from the web to YouTube I
30:17mean so my perspective of course is an
30:19outsider's perspective is you're not
30:21going to realize the full potential of
30:23their coin unless you get something like
30:24sidechain but some like you're somewhat
30:27skeptical with that let's love to hear
30:29your view on punching how they work and
30:31whether let go no I'm actually pretty
30:34positive on sidechains I think I think
30:36they're great I am skeptical of
30:38countries like Ecuador saying they're
30:40gonna create their own digital currency
30:41since if you centralize the digital
30:43currency it seems to miss the whole
30:45point in my book and I do think there'll
30:48be other countries who try to do that
30:50but I don't think they'll be successful
30:51but but sidechains generally I think are
30:55it's essentially a way to allow
30:58experimentation just like you said and
31:00you can have a one-to-one peg they call
31:02it so if you have a Bitcoin on the mean
31:04blockchain you can transfer it over to
31:06this side chain and experiment with
31:09the main thing there was a lot of
31:10experimentation before side chains these
31:12were alt coins people called it and that
31:17worked somewhat but the downside of it
31:19was that it was difficult for anyone to
31:21get a large amount of traction on any of
31:24these site alt chains and so because
31:27they all needed to separate mining
31:29computers that would that would run each
31:31one the beauty of the side chains that
31:33they can all use the one Bitcoin block
31:35chains hashing power and if we if
31:40there's a side chain that runs in you
31:42know out there in the world for some
31:43period of time and it demonstrates that
31:45it's viable there haven't been any bugs
31:47found in it that could actually be
31:49elected to be the new main Bitcoin
31:52blockchain with better properties like
31:54these faster confirmation times or
31:56whatever it ends up being and so the
31:59great part about that is that it means
32:01Bitcoin can evolve over time it actually
32:03has a mechanism built in to do upgrades
32:06just like your phone gets upgrades
32:08downloaded from Apple or Google or
32:10whatever and so if you other protocols
32:13that are out there like tcp/ip which is
32:15a foundational protocol the internet or
32:17SMTP which is out there for email
32:19they have very slow they can't really
32:23update or change that that often because
32:27it requires massive amounts of
32:28infrastructure to be upgraded it's a
32:30very high risk upgrade because a lot of
32:33those things haven't been tested at
32:35scale before and so it's really awesome
32:37to see a Bitcoin have a mechanism for
32:40upgrades essentially built into it which
32:43gives me a lot more confidence that it
32:45will survive the test of time
32:47well Brian lemme just exactly you say
32:51thank you for your time and your
32:53thoughts on this I'm a journalist I'm a
32:56little sad this is going to be public
32:59because I feel like there to recount
33:02sorts of material in this conversation
33:04but I but I hope people will do it you
33:07know I just kind of closing tonight I
33:11hope that anybody who listens to this
33:14understand that bitcoin is something
33:18that is easy to be derisive about
33:22because of its lecturing praise and good
33:25association with things like gold but I
33:28think we're really at a turning point
33:31where even people like me who are fairly
33:34non-technical um should start paying
33:38attention to it because there are some
33:40really interesting opportunities
33:42cropping up here and there and I see a
33:44lot of early adopters especially among
33:47banks and that to me is always a sign
33:50that this is going somewhere real
33:52because they're not gonna spend all
33:54their money and analyst time on things
33:56that aren't going to make the money I
33:58agree it does feel like Bitcoin is at a
34:01bit of a turning point and a lot of that
34:03is due to the excellent coverage that's
34:05out there from journalists like yourself
34:07who are starting to really dive in one
34:11level deeper and look beyond just the
34:14basic headlines around what the price is
34:15doing this week or something like that
34:17so I really appreciate you taking the
34:19time as well and it's it's been great to
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