The Talk Show

00:00:00 ◼   ► yoko is jeopardy things when they I got my speech I super nice guy just I was [TS]

00:00:08 ◼   ► hating the fact that people give him all this crap for actually playing the game [TS]

00:00:11 ◼   ► well if you see the backlash I have actually seen this where he is or are [TS]

00:00:17 ◼   ► this is actually interesting yeah he's sort of like a Moneyball you know hehehe [TS]

00:00:22 ◼   ► jeopardy like Moneyball is to baseball yeah alright I asked him I was like how [TS]

00:00:27 ◼   ► much did you spend on strategy how much memorizing her time is like totally [TS]

00:00:31 ◼   ► strategy like ed memorize some stuff but he basically figured out how to play [TS]

00:00:35 ◼   ► daily doubles during the games which is the people miss that you can win during [TS]

00:00:41 ◼   ► the game you don't get Final Jeopardy and so you basically wins during the [TS]

00:00:44 ◼   ► game and the most the highest grossing winners have also played the game that [TS]

00:00:50 ◼   ► way I mean Ken Jennings was a little different but he was early after the [TS]

00:00:54 ◼   ► change some of the rules and yeah but I actually who's the new guys name [TS]

00:00:57 ◼   ► what's-his-name our third shoe r32 I actually became aware of him cuz I saw a [TS]

00:01:02 ◼   ► piece that Jennings Road about him defend you is great it was really nice [TS]

00:01:06 ◼   ► so they do sort of like the traditional way to play jeopardy the gentleman style [TS]

00:01:12 ◼   ► if you would [TS]

00:01:13 ◼   ► is you you pick a category if you have control of the board you pick a category [TS]

00:01:17 ◼   ► that appeals to you and you pick the the lowest tonight you know go from the top [TS]

00:01:23 ◼   ► down so in the first round your pic $200 than the $400 if you keep getting it [TS]

00:01:28 ◼   ► right and work your way down to the wire money and you know I guess there's some [TS]

00:01:33 ◼   ► correlation between higher money and harder questions [TS]

00:01:37 ◼   ► well little bit I think the actually we are they do make the they do make the [TS]

00:01:42 ◼   ► questions a little harder as it goes down as it goes down the board not [TS]

00:01:45 ◼   ► always but typically and the producers asked you to go from top to bottom and [TS]

00:01:49 ◼   ► they don't tell you to do instead of rule but they say look most people do [TS]

00:01:53 ◼   ► best this way it's less confusing the audience prefers a [TS]

00:01:57 ◼   ► it's probably a better way to play we're gonna make you do it and it's just in [TS]

00:02:01 ◼   ► the heat of the moment it's very hard to make the right judgment but daily [TS]

00:02:04 ◼   ► doubles are occur predominantly unpredictable locations right they're [TS]

00:02:09 ◼   ► not randomly located that there is if you study the game and look at where [TS]

00:02:13 ◼   ► they've been [TS]

00:02:14 ◼   ► you can you know there's some spots that are higher percentage significantly [TS]

00:02:18 ◼   ► higher percentage chance of being a daily Double than others and its if you [TS]

00:02:22 ◼   ► have control of the board it is to your advantage to 200 yeah he's he's got the [TS]

00:02:28 ◼   ► right combination of buzzer timing domain knowledge it's fairly broad and [TS]

00:02:33 ◼   ► deep in like trivia categories and the strategy I think he's winning against [TS]

00:02:38 ◼   ► sometimes stronger overall players who can master the strategy that's very [TS]

00:02:42 ◼   ► Moneyball it's and it's great and I think the thing is he comes across as a [TS]

00:02:46 ◼   ► feckless on-screen because you know I do this when I'm thinking really hard I go [TS]

00:02:51 ◼   ► slack is playing the game so there is this like this geeky at all tonight [TS]

00:02:56 ◼   ► Asian guys as bentsen racism is is winning the game it's like really is [TS]

00:03:01 ◼   ► very funny so is his Twitter handle is Arthur underscore a theft and I think [TS]

00:03:07 ◼   ► it's hilarious because he's clearly making fun of like the effortless thing [TS]

00:03:11 ◼   ► about it is very funny on Twitter he's very personable in the interview and I [TS]

00:03:16 ◼   ► know for all we know is just one like 20 more games because it's right [TS]

00:03:20 ◼   ► tape months ago so you can talk about it but it is very enjoyable I just like [TS]

00:03:24 ◼   ► playing the game always like to point of the game is to win is not to you at home [TS]

00:03:30 ◼   ► may not like what he's doing great right thing they can Jennings pointed out in [TS]

00:03:34 ◼   ► his piece on him is in addition to the fact that it's to your advantage to get [TS]

00:03:38 ◼   ► the debt huge advantage to get the daily doubles it also by skipping around the [TS]

00:03:46 ◼   ► board from category the category it gives you an advantage over opponents [TS]

00:03:49 ◼   ► because you know if you get it right where you're going next [TS]

00:03:53 ◼   ► and you are ready for that category where is your opponents are don't even [TS]

00:03:56 ◼   ► know which category to be thinking about whereas if you play that traditional way [TS]

00:04:00 ◼   ► and somebody picks you know potent quotables for 200 even if you don't [TS]

00:04:05 ◼   ► doesn't get it you're ready for the next one to be potent quotables for 400 yeah [TS]

00:04:10 ◼   ► it's totally true with so it's a bit since I think it plays into the game [TS]

00:04:13 ◼   ► theory thing and and people have their own preset notions about what they they [TS]

00:04:18 ◼   ► want but you know I am enjoying enjoying watching my boys and I watch them play [TS]

00:04:23 ◼   ► it's very fun yeah it reminds me anything with game 3 but like one of my [TS]

00:04:28 ◼   ► favorites is the history of blackjack yeah we're blackjack it's kind of funny [TS]

00:04:37 ◼   ► because it's like the rules date at least back to the 1800's and were [TS]

00:04:44 ◼   ► apparently you know came about without the help of any sort of computer [TS]

00:04:48 ◼   ► modeling whatsoever and without computer modeling there's really no way to tell [TS]

00:04:52 ◼   ► what perfect strategy is and whether the house actually has an advantage or not [TS]

00:04:58 ◼   ► and so for decades [TS]

00:05:01 ◼   ► decades and decades you know through the until the 1960's typical players in a [TS]

00:05:07 ◼   ► casino like what was considered here's the right way to play actually we're [TS]

00:05:11 ◼   ► playing at a tremendous disadvantage to the house the basic gist of the way most [TS]

00:05:17 ◼   ► people played in a casino and and if you you know and if you sat down and were [TS]

00:05:21 ◼   ► unfamiliar with the game and we're sitting next to somebody who was you [TS]

00:05:25 ◼   ► know clearly a season blackjack player in and ask for help from this is the way [TS]

00:05:29 ◼   ► you would learn to play is that you should never dust whenever you get to 12 [TS]

00:05:35 ◼   ► or 13 you just stop because you could bust and busting is an automatic loss [TS]

00:05:40 ◼   ► and it's you know you know the dealer just takes your chips and it doesn't [TS]

00:05:44 ◼   ► matter what the dealer does you know that's part of what makes the game a [TS]

00:05:47 ◼   ► little complicated is [TS]

00:05:49 ◼   ► if you bust the dealer takes your bad and it's gone and even if the dealer [TS]

00:05:53 ◼   ► subsequently goes on to bust you don't you know there's no time in that [TS]

00:05:56 ◼   ► situation even though in theory it's a tie because you both busted and so [TS]

00:06:02 ◼   ► that's so devastating that the players you know developed this strategy never [TS]

00:06:08 ◼   ► never never take a card if you can bust with the pot you know and in some people [TS]

00:06:12 ◼   ► would play well maybe if they had a 12 maybe they would hit on 12 because [TS]

00:06:16 ◼   ► attend the bus but it ends up that so horrendous horrendous strategy for the [TS]

00:06:21 ◼   ► player in this case ya edwards who worked at I think IBM is he was the [TS]

00:06:26 ◼   ► first guy to beat the game and he did it with not by like working it out through [TS]

00:06:32 ◼   ► formulas but just through brute force computation that he just programmed in a [TS]

00:06:37 ◼   ► simple game of blackjack and just ran it millions and millions of times you know [TS]

00:06:42 ◼   ► given this hand you know if you play this way what you know what happened and [TS]

00:06:46 ◼   ► came up with you know the basic strategy and it's you know it's very different [TS]

00:06:50 ◼   ► from that but what happened then is players who would read the book and [TS]

00:06:54 ◼   ► Thorpe also invented card counting which gave the play actually gave the player [TS]

00:06:59 ◼   ► you know an advantage of 23 percent which is which is huge but even without [TS]

00:07:03 ◼   ► the county park even just the basic strategy where you could just learn [TS]

00:07:07 ◼   ► these simple rules if you have a fourteen and the dealer has a 16 you [TS]

00:07:11 ◼   ► stay if you have a 15 in the dealer has 10 cards showing you have to hit the [TS]

00:07:18 ◼   ► players who had that strategy would do very well and before the casino sort of [TS]

00:07:21 ◼   ► adjusted the game you could maybe even have a slight advantage in the in like [TS]

00:07:25 ◼   ► the sixties you can actually play the game without counting cards have a [TS]

00:07:28 ◼   ► slight advantage but it was like a social thing though where where if these [TS]

00:07:33 ◼   ► other guys at the table we're playing the traditional way and then there's a [TS]

00:07:37 ◼   ► guy who's actually playing the mathematically right way they they would [TS]

00:07:41 ◼   ► some of them would get angry you know they'd be like what the hell you doin [TS]

00:07:44 ◼   ► hit 15 [TS]

00:07:45 ◼   ► because it would seem to be random it would seem to be counter-intuitive it [TS]

00:07:49 ◼   ► seems like you're playing the game wrong even though I mean this is this is the [TS]

00:07:53 ◼   ► the Indiana Jones moment when he shoots the guy we just got the whip like you're [TS]

00:07:58 ◼   ► like wait a minute that's not fair 2008 the point is it's not you're there to [TS]

00:08:04 ◼   ► play the game this is reality TV now I want some seasons of survivor and that [TS]

00:08:08 ◼   ► was the thing that was fascinating I think it all developed into a pattern [TS]

00:08:11 ◼   ► eventually but it was passing it was something like Boston Rob who is much [TS]

00:08:15 ◼   ► reviled he figured out a new way to play the game a few seasons in and it [TS]

00:08:19 ◼   ► transformed the game dynamics and everyone watching him how to play the [TS]

00:08:22 ◼   ► game differently after that but it pisses you off if you're in the middle [TS]

00:08:26 ◼   ► of the situation because it's an evolving game dynamic in which [TS]

00:08:29 ◼   ► everything in your head that you built your strategy around the suddenly wrong [TS]

00:08:33 ◼   ► and you hate that other person because they've changed your not playing the [TS]

00:08:36 ◼   ► same game anymore [TS]

00:08:37 ◼   ► yeah because I watched survivor in a couple years but I did watch first [TS]

00:08:41 ◼   ► couple of years and then I do remember Boston Rob he was great he was the best [TS]

00:08:46 ◼   ► villain he was exactly who he was and I think of all the people and i think i [TS]

00:08:50 ◼   ► watch for five seasons like the guy on the very first season [TS]

00:08:56 ◼   ► Richard Hatch Richard Hatch who he really thought I'd take the plea deal he [TS]

00:09:03 ◼   ► went to jail because he thought he was sprayed on larry is unlike its [TS]

00:09:06 ◼   ► straightforward tax situation but I bet he as the winner of the first series and [TS]

00:09:12 ◼   ► you know seemingly played it pretty smart became like the one that's how you [TS]

00:09:17 ◼   ► play the game [TS]

00:09:18 ◼   ► yeah you know Richard Hadlee then he came back in the day whatever the [TS]

00:09:22 ◼   ► tournament was the all-stars thing a few seasons into it he comes back he tries [TS]

00:09:27 ◼   ► to play the game the same way and he is not like a few days in his favor [TS]

00:09:33 ◼   ► statement was I was bamboozled there is a game changer you're out but the kids [TS]

00:09:38 ◼   ► walk around with your wang wang looking at people and we'll get right well and [TS]

00:09:43 ◼   ► the other thing he seemed unprepared for the fact that the first season [TS]

00:09:47 ◼   ► nobody knew a nobody knew the game and be nobody knew what he was doing [TS]

00:09:52 ◼   ► where else when he came back for the you know what was it like the jeopardy [TS]

00:09:57 ◼   ► champions champions it was clearly everybody there you know as a survivor [TS]

00:10:02 ◼   ► player had watched the first season of Survivor aware of is you know he really [TS]

00:10:08 ◼   ► needed like a new strategy and you know there's a thing called the Markov chain [TS]

00:10:13 ◼   ► and I talked I found out about it because of the game chutes and ladders [TS]

00:10:16 ◼   ► of all things to someone wrote this whole area [TS]

00:10:18 ◼   ► shoots and ladders are snakes or is called stakes letters someone years ago [TS]

00:10:22 ◼   ► wrote this hilarious review / analysis of that kids came looking at it from [TS]

00:10:27 ◼   ► this mathematical standpoint a Markov chain is a mathematical system that [TS]

00:10:34 ◼   ► undergoes transitions from one state to another in the state gonna state space [TS]

00:10:38 ◼   ► it's random things so it's the next action is not followed up on it because [TS]

00:10:43 ◼   ► of the previous action and there are games that are the games are most [TS]

00:10:49 ◼   ► interesting are the ones in which it is there's not a predictable outcome based [TS]

00:10:53 ◼   ► on the sequence of things in which you do so chutes and ladders the diced are [TS]

00:10:58 ◼   ► everything it's really a game that teaches kids how to play games but in [TS]

00:11:01 ◼   ► poker the number of possibilities are two huge outdoor crowd counting they [TS]

00:11:07 ◼   ► still become too huge to be predictable as an outcome from starting states and [TS]

00:11:12 ◼   ► so there's this issue about the tension between games that have Markovian [TS]

00:11:16 ◼   ► properties and non Markovian properties about which ones are fun or not because [TS]

00:11:20 ◼   ► you know as a parent you know shits about her socks and Candyland sucks [TS]

00:11:24 ◼   ► because they're they're [TS]

00:11:27 ◼   ► chain on Marco V and the worst Candyland isn't even really a game because it's [TS]

00:11:34 ◼   ► entirely deterministic you know that there's a deck of cards once the cards [TS]

00:11:38 ◼   ► have been shuffled in you've decided what order the players gonna play in it [TS]

00:11:42 ◼   ► the outcome is already determined that there's a day spa component to it which [TS]

00:11:46 ◼   ► is ostensibly Markovian but the chain Markovian [TS]

00:11:49 ◼   ► each car's plate and sequence so it's just it is horrible but it teaches kids [TS]

00:11:55 ◼   ► how to its simple method he just kids how to play rules and follow the game [TS]

00:11:59 ◼   ► and there's winners I don't think I don't think you can get a lot of his [TS]

00:12:05 ◼   ► lessons whenever we lucked out Jonas ever play for cancer too long but now [TS]

00:12:11 ◼   ► we're to sellers of Catan which is much better if anything Candyland it you have [TS]

00:12:18 ◼   ► no choices and there are devastating you know bad cards you know they get the [TS]

00:12:27 ◼   ► candy cane and send you all the way back to the beginning like you know I don't [TS]

00:12:32 ◼   ► know it doesn't seem like you get any good lessons out of it you don't learn [TS]

00:12:35 ◼   ► any strategy and you learn that you know something terrible happened to you at [TS]

00:12:41 ◼   ► any moment he teaches you the essential hopelessness of life or not the working [TS]

00:12:45 ◼   ► world is like as well yeah it's it's sort of a full of philosophical [TS]

00:12:52 ◼   ► depressing game because it's sort of like you know it's like going back to [TS]

00:12:57 ◼   ► college [TS]

00:12:58 ◼   ► philosophy 101 and you know do you is there such a thing as free choice you [TS]

00:13:02 ◼   ► know in Candyland there is there is no free choice it's reinforces the [TS]

00:13:06 ◼   ► elementary school and college and the job and there's the house near ticky [TS]

00:13:11 ◼   ► tacky about it but the hill is your life did this is the future you know like [TS]

00:13:17 ◼   ► with sufficient knowledge you can already you know you could predict [TS]

00:13:20 ◼   ► exactly when and where you're going to die and you're never gonna get the [TS]

00:13:23 ◼   ► governor only piece of paper given play blackjack game [TS]

00:13:31 ◼   ► a little bit I like the elected instincts you want to win now it's [TS]

00:13:36 ◼   ► actually but I just lose inches like I don't have any I don't have any playing [TS]

00:13:42 ◼   ► jeopardy jeopardy is a different kind of battle but I I just never happen don't [TS]

00:13:46 ◼   ► have the I can't stick to wander off and look at the other things ready for some [TS]

00:13:52 ◼   ► reason when you were on Jeopardy did you do to get daily doubles yeah I think i'd [TS]

00:13:59 ◼   ► i'd never I didn't get a lock I was I was so IBM researchers know Watson one [TS]

00:14:06 ◼   ► of things they do they did this one group in all this game theory and [TS]

00:14:09 ◼   ► analysis and they found that people who were in jeopardy if in three categories [TS]

00:14:13 ◼   ► are sort of regular Champions masters in Grand Masters and I was clearly in the [TS]

00:14:18 ◼   ► regular I eat out a couple wins I'm happy that I want but I wasn't like a [TS]

00:14:24 ◼   ► natural player like some people are so I did I did ok that's the Daily Double [TS]

00:14:30 ◼   ► you know it ties in with blackjack as it is is the one part of jeopardy thats [TS]

00:14:35 ◼   ► well the final Jeopardy is a bit of a gamble but you know it's a gamble where [TS]

00:14:39 ◼   ► where you don't know the question you know where is the regular questions it's [TS]

00:14:44 ◼   ► it's a combination of skill like your actual ability to recall the answer [TS]

00:14:49 ◼   ► know the answer and physically to hit the buzzer first but you do you know you [TS]

00:14:55 ◼   ► get the question so it's not your not gambling i mean you do in n you can [TS]

00:14:59 ◼   ► maybe see you are if you only have certain of the answer and you get a buzz [TS]

00:15:04 ◼   ► in any way and take a chance you got it right as you lose the money if you get [TS]

00:15:08 ◼   ► it wrong in the daily challenges never buzzing when you don't know the answer [TS]

00:15:11 ◼   ► for sure because you lose the money you have in someone else's most likely get [TS]

00:15:16 ◼   ► it right and he backs you must double the different cuz you they've had it [TS]

00:15:19 ◼   ► they've had the time to think about someone misspoke and then the other [TS]

00:15:24 ◼   ► person disposed and got it and they need said almost exactly the right thing I [TS]

00:15:27 ◼   ► remember as a kid when it was newer when when [TS]

00:15:30 ◼   ► you know when it wasn't so ingrained in the culture of marijuana regularly [TS]

00:15:34 ◼   ► anymore but it's been years since I've seen one where somebody forgot to put [TS]

00:15:38 ◼   ► the answer in the form of a question is when I was a kid that happened fairly [TS]

00:15:41 ◼   ► regularly and inevitably somebody else would buzz in with the same answer in [TS]

00:15:47 ◼   ► the question to take the dollars there's actually a tiny rule which is in regular [TS]

00:15:53 ◼   ► jeopardy in the first half of the game they will alert you and you can we [TS]

00:15:57 ◼   ► stayed in double jeopardy you cannot if you say it without being questioned its [TS]

00:16:02 ◼   ► automatic wrong is that a new role I don't remember a couple years I've got a [TS]

00:16:07 ◼   ► couple years ago I know it's funny they just because the second half he later [TS]

00:16:11 ◼   ► became get it but that's your problem doesn't and you have to have the heart [TS]

00:16:16 ◼   ► of a gambler to the really play aggressively on the daily doubles like [TS]

00:16:20 ◼   ► this is it richard too hard to see you [TS]

00:16:24 ◼   ► yeah he's in cuz you if you can it's more likely you are to know the category [TS]

00:16:27 ◼   ► you may have answered questions in the category C you know the kind of [TS]

00:16:30 ◼   ► direction they're taking and then you can go all out and so Roger Craig who is [TS]

00:16:35 ◼   ► now the number that for where authors display stand so far [TS]

00:16:39 ◼   ► number four all-time regular-season winner Roger Craig he won $77,000 in one [TS]

00:16:44 ◼   ► day because Daily Double [TS]

00:16:46 ◼   ► and they got another and it made sense because he knew the category and he [TS]

00:16:51 ◼   ► could have lost but daily doubles twice in a row but it didn't it's funny it [TS]

00:16:57 ◼   ► didn't I don't think it was a bad game decision because he was competent enough [TS]

00:17:02 ◼   ► and he could have much money at that point so there's a point where you've [TS]

00:17:06 ◼   ► already won enough money when enough days like you know you're gonna be in [TS]

00:17:09 ◼   ► the term Tournament of Champions [TS]

00:17:11 ◼   ► you have to psychologically want to win more than you were afraid to lose you [TS]

00:17:18 ◼   ► have that's exactly right and do something about that like we're sitting [TS]

00:17:21 ◼   ► position and you're like I could get the highest score writer like let's say [TS]

00:17:24 ◼   ► you've got thirteen thousand and I've got eight thousand [TS]

00:17:28 ◼   ► and you get the daily WTO and normal conservative person is gonna think we'll [TS]

00:17:33 ◼   ► have all i'm up by five thousand already I don't want to risk it I wanna stay up [TS]

00:17:37 ◼   ► even if I get it wrong whereas it's probably a better game theory strategy [TS]

00:17:41 ◼   ► to just go for it you know you know the other players play you know you're doing [TS]

00:17:47 ◼   ► you look at the board if there's time left because you can win the game right [TS]

00:17:50 ◼   ► there on that play [TS]

00:17:51 ◼   ► yeah I mean I lost I did at Wrigley Doublemint the game and I thought I lost [TS]

00:17:55 ◼   ► at five grams and I was going close the enemies of terrible game we're all [TS]

00:17:58 ◼   ► playing we're all off my debt all five grand and I said George Sand's instead [TS]

00:18:03 ◼   ► of George Sand I will never forget you know also tall but I still came back [TS]

00:18:07 ◼   ► after a bit I got another daily double doubles in a row and if I had said [TS]

00:18:12 ◼   ► saying I would have won the game so it was the right choice it was a category I [TS]

00:18:16 ◼   ► knew I'd answered I think the other three or four questions correctly so is [TS]

00:18:20 ◼   ► absolutely right choice and I lost in exactly the right way to lose the thing [TS]

00:18:33 ◼   ► they just finished the five minutes ago a black day the thing that drives the [TS]

00:18:40 ◼   ► blackjack players not if they think that they know the right way to play somebody [TS]

00:18:44 ◼   ► else is playing differently is that then after the guy plays wrong according to [TS]

00:18:51 ◼   ► them whether it's the modern era if you don't play the mathematical basic [TS]

00:18:55 ◼   ► strategy are back in the sixties when people started to and then the next card [TS]

00:18:59 ◼   ► comes out and if it had been the other way around would have you know busted [TS]

00:19:04 ◼   ► the dealer and everybody would have won or whatever they blame the player as [TS]

00:19:08 ◼   ► opposed to as opposed to excite you know like so you know let's say I've got a [TS]

00:19:16 ◼   ► fifteen on the last player to go I've got a fifteen and the dealer as it [TS]

00:19:21 ◼   ► twenty and its 1968 and everybody thinks I should just stay because I could bust [TS]

00:19:25 ◼   ► but I know that I should what I should do is hit because 15 against it dealers [TS]

00:19:30 ◼   ► 10 I'm probably gonna lose anyway to terrible hand but I'm gonna lose less if [TS]

00:19:35 ◼   ► I hit lose less out of a play the same here and a thousand times [TS]

00:19:39 ◼   ► I'll lose fewer time so I hit and I take let's say seven and I bus 22 now then [TS]

00:19:47 ◼   ► the dealer turns over their cards and and updated the dealer has 16 and [TS]

00:19:53 ◼   ► they're so the DRS to hit and pulls a 42 have 20 and the dealer wins whereas if I [TS]

00:19:58 ◼   ► had just done what everybody thought I should do and stay on this particular [TS]

00:20:02 ◼   ► hand the dealer would have busted and everybody else who is still in the game [TS]

00:20:06 ◼   ► with a 10 ICC statistically gonna annoy people because that's going to happen [TS]

00:20:09 ◼   ► frequently enough so you come out ahead right and in specific games are going to [TS]

00:20:13 ◼   ► be leaving people and most people don't you know they they don't have any [TS]

00:20:18 ◼   ► concept of you know statistical what's the what's the phrase at large enough [TS]

00:20:25 ◼   ► sample said to be statistically valid right now you know one hand anything [TS]

00:20:30 ◼   ► could happen right some asshole could have it twenty and hit and get an ace to [TS]

00:20:34 ◼   ► make 21 mean it's like the stupidest thing you could do but you know [TS]

00:20:37 ◼   ► sometimes it's gonna work right when I was 13 cards in the deck is an ace it [TS]

00:20:43 ◼   ► doesn't make the right play but then somebody will say we'll see if you won [TS]

00:20:46 ◼   ► its proof that you did the right thing and if you lost its own [TS]

00:20:50 ◼   ► into insanity is people develop their theories in the areas of their not [TS]

00:20:54 ◼   ► statistically valid I mean gets back to the Moneyball thing right Moneyball is a [TS]

00:20:58 ◼   ► battle between people going by their gut which is often wrong and by the [TS]

00:21:02 ◼   ► statistics which which are statistically you know we're in this piece the [TS]

00:21:07 ◼   ► magazine and Michaels wrote a great article called three strikes you shot [TS]

00:21:12 ◼   ► about ten years after Moneyball and what it changed in baseball and there's tons [TS]

00:21:17 ◼   ► of people who still reject ten years later watching the results of it they [TS]

00:21:21 ◼   ► still think everything is a flu shots right there in the big game you know the [TS]

00:21:24 ◼   ► big show they know what's going on and so you obviously don't know cause you to [TS]

00:21:29 ◼   ► play baseball in whatever it's like I'm sorry the statistics are right they are [TS]

00:21:32 ◼   ► and it kind of sucks but they are actually correct yeah absolutely [TS]

00:21:38 ◼   ► less romance [TS]

00:21:39 ◼   ► statistics yeah you still hear about that they're still like old-time [TS]

00:21:42 ◼   ► baseball scouts who just you know don't look at the numbers and just look at how [TS]

00:21:46 ◼   ► the guy looks you know judge eventually they will be and there's a there's a [TS]

00:21:52 ◼   ► little things to like there's a surprising you know it's one of those [TS]

00:21:55 ◼   ► things it's kind of hard to measure because it's it's effectively subjective [TS]

00:22:00 ◼   ► but that better-looking players handsomer young men tend to be scouted [TS]

00:22:06 ◼   ► hired then home layer players sure right and that's you know just you know one of [TS]

00:22:12 ◼   ► those ways you know that good-looking people just have you know better fortune [TS]

00:22:18 ◼   ► in all aspects of life but even in like sports they end up getting better [TS]

00:22:22 ◼   ► scouting reports then players this is a cross I haven't been forced to bear [TS]

00:22:27 ◼   ► there's a site called jeopardy hotties but i wanna tell you what's funny about [TS]

00:22:33 ◼   ► it is it is it is I went to this site and I was like I'm not on it so boring [TS]

00:22:40 ◼   ► boring article which is funny I was no picture of me there's a link to me but I [TS]

00:22:44 ◼   ► look through it I gotta say things about it was non hetero normative and it was [TS]

00:22:49 ◼   ► not on gender normative so the people that the person who had posted these [TS]

00:22:53 ◼   ► pictures for years and years it is not like I only like certain aspects of [TS]

00:23:01 ◼   ► society attractive blonde women it's all kinds of people and I agree the men the [TS]

00:23:07 ◼   ► women the people of different you know [TS]

00:23:09 ◼   ► orientations and so forth like it's also next is a celebration of his duty across [TS]

00:23:15 ◼   ► the lot of different storms but I'm not so terrible analyst of talk show the [TS]

00:23:23 ◼   ► talk shows so we're talking about mark off and all these statistics whatever I [TS]

00:23:30 ◼   ► know you and some questions we hinted around yeah let me do the first sponsor [TS]

00:23:36 ◼   ► in that will get dig into it because that's really why I feel like it's the [TS]

00:23:41 ◼   ► whole bit clinton has reached a breaking point and then build up we have to [TS]

00:23:44 ◼   ► establish credibility members [TS]

00:23:48 ◼   ► this kind of related as the Laughing Man so there's a lot of gambling our first [TS]

00:23:54 ◼   ► sponsors are good friends at igloo igloo is an internet you'll actually like I [TS]

00:24:00 ◼   ► love that too looking to build with easy to use apps that help you work with your [TS]

00:24:04 ◼   ► teams shared calendars private twitter-like microblogs microblogs file [TS]

00:24:12 ◼   ► sharing and more on our website you can go check it out but where they might [TS]

00:24:17 ◼   ► need to talk to you about his SharePoint so igloo partnered with Osterman [TS]

00:24:22 ◼   ► research to study the challenges businesses face when implementing [TS]

00:24:26 ◼   ► SharePoint SharePoint is Microsoft Internet product that dates to like 1983 [TS]

00:24:33 ◼   ► or something to build a whole page about it you can go see it go to this site [TS]

00:24:37 ◼   ► includes software dot com slash the talk show and he came from the show and then [TS]

00:24:43 ◼   ► they have the way people are linked to their new research but there's five main [TS]

00:24:47 ◼   ► points that they got from the research number one SharePoint doesn't work well [TS]

00:24:50 ◼   ► on mobile igloo has responsive web pages for all the aspects of it so everything [TS]

00:24:58 ◼   ► looks great on any kind of mobile device [TS]

00:25:00 ◼   ► any kind of cell phone with a WebKit browsers gonna work great with sure with [TS]

00:25:06 ◼   ► seconding SharePoint is too expensive [TS]

00:25:11 ◼   ► third it requires too many people got a license of a lot of people just to get [TS]

00:25:16 ◼   ► started using it and then the last point is that ends up no one no one actually [TS]

00:25:22 ◼   ► use it it gets put into place in you know from top down [TS]

00:25:27 ◼   ► orders from I T department and then with such a pain in the ass to use what [TS]

00:25:31 ◼   ► happens is the team's end up using other products anyway are going you know [TS]

00:25:35 ◼   ► around the system to share just to get stuff done cuz nobody actually use it [TS]

00:25:41 ◼   ► lou is a thin layer team will actually use they show you their website does [TS]

00:25:47 ◼   ► show you exactly how they do these things better with actual case studies [TS]

00:25:52 ◼   ► from actual customers and reports from analysts they just one product [TS]

00:25:59 ◼   ► Leadership Award from Frost and Sullivan and IDC picked include a power their own [TS]

00:26:03 ◼   ► customer community so go check them out here is the last thing you need to know [TS]

00:26:07 ◼   ► it's free to use with up to 10 people and very affordable after that so you [TS]

00:26:14 ◼   ► can get started tried out with up to 10 people if you only have fewer than 10 [TS]

00:26:18 ◼   ► people you can just keep using it for free [TS]

00:26:21 ◼   ► amazing so go to English software dot com slash the talk show and and check [TS]

00:26:26 ◼   ► them out [TS]

00:26:27 ◼   ► ok [TS]

00:26:28 ◼   ► so I've been putting it off I am vaguely familiar with it but I need you to do I [TS]

00:26:36 ◼   ► really do I need you to explain this to me because I kinda am and I you know and [TS]

00:26:42 ◼   ► I was good at math I really you know more mathematically that kind of kind of [TS]

00:26:47 ◼   ► get the basics of math but I don't know I feel like and it's it clearly I mean [TS]

00:26:57 ◼   ► it's maybe even with the the criminal stuff going on at the Mount dioxin the [TS]

00:27:01 ◼   ► other place now it would still be in the news more and more you know it seems [TS]

00:27:08 ◼   ► like it's a rising tide regardless of those things but then you know what I [TS]

00:27:15 ◼   ► want that too so we'll start from the top [TS]

00:27:18 ◼   ► ok I think there's three things you break it down to three things that you [TS]

00:27:23 ◼   ► have to understand all of which are relatively easy to understand [TS]

00:27:26 ◼   ► ok so big queen has like I guess it's three different aspects one is that the [TS]

00:27:34 ◼   ► bitcoins themselves are just a bundle of cryptographic information of which the [TS]

00:27:38 ◼   ► person who possesses it's sensibly has a secret that only they know about [TS]

00:27:43 ◼   ► whatever quantity of bitcoins are in a particular address as it's called the [TS]

00:27:49 ◼   ► second is that only transfer bitcoins other people you don't receive them you [TS]

00:27:54 ◼   ► only send them and that is again a cryptographically signed transaction and [TS]

00:27:59 ◼   ► that he becomes permanent in a way that I could talk about so you have a Bitcoin [TS]

00:28:04 ◼   ► in you wanna give it to me so I never receive it [TS]

00:28:07 ◼   ► you not technically what's interesting is a transactions are all one way only a [TS]

00:28:12 ◼   ► transaction sends money from one addressed to another and the big wedding [TS]

00:28:16 ◼   ► dresses and wallets are interchangeable terms like the address is this like the [TS]

00:28:20 ◼   ► destination it contains some some of bitcoins from you once at OC which is [TS]

00:28:25 ◼   ► the tiniest up to whatever quantity have so so I've got an address and you send [TS]

00:28:33 ◼   ► me money and I send you money but I don't receive money per se so there's [TS]

00:28:38 ◼   ► there's a big way address [TS]

00:28:40 ◼   ► there's a transaction and then there's the issue of how transactions become [TS]

00:28:45 ◼   ► permanent which is Bitcoin mining those are sort of the three pieces think each [TS]

00:28:50 ◼   ► of them like when you lump it all together it's like what the hell so [TS]

00:28:54 ◼   ► fundamentally what between is about is decentralized trust so no two parties in [TS]

00:29:01 ◼   ► a bit quiet transaction or in any aspect the big quake was system need to have [TS]

00:29:06 ◼   ► any implicit trust in each other like the system itself handles trust by using [TS]

00:29:11 ◼   ► public key cryptography which essentially assures that once you create [TS]

00:29:16 ◼   ► a secret a public keep it publicly peer uses one of multiple different formulas [TS]

00:29:21 ◼   ► but let's say uses a diff is one that people as the diffie-hellman key that [TS]

00:29:28 ◼   ► works and what would you do when you create public-private key pair is using [TS]

00:29:31 ◼   ► very very large prime numbers and you went with two pieces at the end so I [TS]

00:29:36 ◼   ► don't have to I mean you can look up the details of what he wanted her to pieces [TS]

00:29:39 ◼   ► in one piece is a private key that you possess and you keep it absolutely [TS]

00:29:44 ◼   ► secret no one else may never have access to it onto store anywhere has access [TS]

00:29:48 ◼   ► because this private key proves your identity [TS]

00:29:51 ◼   ► the possession or in the possession part of it like you being able to deploy the [TS]

00:29:55 ◼   ► key gives you all the power over a transactions that involve that [TS]

00:30:00 ◼   ► particular public key public-private key pair of you if you got your hands on my [TS]

00:30:06 ◼   ► private key you could send my bitcoins to somebody else [TS]

00:30:13 ◼   ► exactly and this is truly public key cryptography is used all over the place [TS]

00:30:17 ◼   ► as the basis of SSL TLS used for web encryption is used in age transactions [TS]

00:30:23 ◼   ► in the same way so for example to if you had my private keys for SSH [TS]

00:30:28 ◼   ► you could log into during fireball over SSH exactly can't get on the command [TS]

00:30:35 ◼   ► line on daring fireball done that if you had my private keys yeah and the notion [TS]

00:30:40 ◼   ► with public key cryptography is that the public part of this you can be freely [TS]

00:30:44 ◼   ► distribute it and no one can of computation power in the world over I [TS]

00:30:50 ◼   ► forget how many years of its the heat death of the universe [TS]

00:30:52 ◼   ► or not that would allow you to use any known technique to reverse engineer [TS]

00:30:59 ◼   ► brute force attack and recovered the private key so resistant it's an [TS]

00:31:03 ◼   ► asymmetrical key system and so the public he gets used broadly I get any [TS]

00:31:08 ◼   ► system this is this is how you can sign something with the public case you take [TS]

00:31:14 ◼   ► your data and you sign up with the public hearing results result is a [TS]

00:31:19 ◼   ► cryptographic hash that only the recipient with the private key ally [TS]

00:31:24 ◼   ► owner the private key can decrypt that so it's a way for a one-way method for [TS]

00:31:28 ◼   ► someone to send you something securely that only you are the possessor that [TS]

00:31:32 ◼   ► private he can read that's how it gets used you know a lot of time it's true of [TS]

00:31:36 ◼   ► web pages when you do a web transaction the first thing that happens asshole [TS]

00:31:40 ◼   ► digital certificate thing of which we've now found that was recently last three [TS]

00:31:44 ◼   ► days [TS]

00:31:45 ◼   ► not just go to fail but there's a new one that dates back many years and is [TS]

00:31:48 ◼   ► also suspicious and how safe that says let's keep that in mind let's come back [TS]

00:31:54 ◼   ► but the idea that you're [TS]

00:31:57 ◼   ► you have information you want to pass in general the way cryptography is used to [TS]

00:32:02 ◼   ► secure a secret in in Bitcoin it's not securing a secret it's proving ownership [TS]

00:32:07 ◼   ► and identity so in the Bitcoin system you know there is no inherent value [TS]

00:32:13 ◼   ► what's the value is that a set of numbers representing some quantity of [TS]

00:32:18 ◼   ► bitcoins can only provably belong to a person who owns the private key that [TS]

00:32:23 ◼   ► corresponds to that address that contains a number of bitcoins so nobody [TS]

00:32:28 ◼   ► else so no one else can do anything with those crazy cannot prove ownership [TS]

00:32:33 ◼   ► because they cannot because the private key can be used to sign transactions [TS]

00:32:39 ◼   ► that by using the publicly available he can be proven to only have been signed [TS]

00:32:44 ◼   ► by someone who possesses a private key so there's an absolute way to prove that [TS]

00:32:48 ◼   ► you own a thing because you have the private key and there's I don't think [TS]

00:32:52 ◼   ► any other systems things that are parallel but there's no method in the [TS]

00:32:57 ◼   ► real world that corresponds that there's no physical method you know biometric [TS]

00:33:03 ◼   ► identification is one of things but there are ways to fool that [TS]

00:33:05 ◼   ► and you know to the curve I got nothin cutting off and pickling people and so [TS]

00:33:10 ◼   ► forth [TS]

00:33:10 ◼   ► joked about the iPhone 5s so big queen the idea that there is no way to because [TS]

00:33:18 ◼   ► of the process by which they're made there's no way to forge a Bitcoin you [TS]

00:33:22 ◼   ► can't counterfeit and you can't fraudulently transferred from one party [TS]

00:33:27 ◼   ► to another with the access to that first parties private key so that'll be [TS]

00:33:34 ◼   ► surprised if I had a copy of a Bitcoin belong to you now have the I can copy [TS]

00:33:41 ◼   ► the Bitcoin and I can have it on my my computer I can't do anything with it [TS]

00:33:45 ◼   ► because i dont have you were private key that's right what's weird is big claims [TS]

00:33:50 ◼   ► are not store any where some level at the weird thing is let's get to the [TS]

00:33:54 ◼   ► transaction work this explains the next thing so so big win at some level is [TS]

00:33:59 ◼   ► it's a series of transactions is not actually late term banking system is [TS]

00:34:06 ◼   ► ridiculous of course but so you know I do things as weird as like when I was [TS]

00:34:10 ◼   ► serving office space with Jeff Carlson he would send me rent check I paid the [TS]

00:34:14 ◼   ► rent for the whole office and he would go to our credit union he would fill out [TS]

00:34:17 ◼   ► a thing it would make a check and ship it from the Midwest in an envelope it [TS]

00:34:22 ◼   ► would wind up at the office I would take it I would scan the check and a scanner [TS]

00:34:25 ◼   ► electronically deposited destroy the check and that's our banking system [TS]

00:34:29 ◼   ► right like that's the USA USA USA as I mean people are our listeners in europe [TS]

00:34:35 ◼   ► like what I don't think most people in Europe I i most people our age in Europe [TS]

00:34:41 ◼   ► have never even like sent it check yes exactly like checks in in this is [TS]

00:34:46 ◼   ► America checks of now the volume of texts gone way way down because a whole [TS]

00:34:52 ◼   ► bunch of reasons including electronic deposit but so let's to wire transfers [TS]

00:34:59 ◼   ► easier case so because my my my credit union has added three wire transfers a [TS]

00:35:04 ◼   ► couple years ago from person to person stuff so when I don't wire transfer you [TS]

00:35:08 ◼   ► know it's a ledger transactions my bank has a record that its story know it owns [TS]

00:35:13 ◼   ► a certain amount of money and it transfers at another bank of that bank [TS]

00:35:16 ◼   ► agrees that you know yes and that value is transferred forgetting the federal [TS]

00:35:20 ◼   ► the Federal Reserve involved forget there's like some weird thing but like [TS]

00:35:25 ◼   ► they're just transferring money in numbers around but there's no security [TS]

00:35:27 ◼   ► in that process and it's abused all the time you hear all the stories about [TS]

00:35:30 ◼   ► money being transferred out people's bank accounts Ashley companies being [TS]

00:35:34 ◼   ► happy money being transferred in Western Union things and checks being cut the [TS]

00:35:38 ◼   ► system is a secure but in essence it is just that is it is a decrement occurs in [TS]

00:35:44 ◼   ► one banks ledger increment occurs in another that's the transaction between [TS]

00:35:48 ◼   ► doesn't work that way but Quinn has this thing called the public block chain in [TS]

00:35:52 ◼   ► this is distributed worldwide and its gigabytes in size now it is a record of [TS]

00:35:57 ◼   ► every single transaction has occurred since Bitcoin went live like for over 45 [TS]

00:36:02 ◼   ► years ago now and the transaction ledger if you wanna figure who owns a Bitcoin [TS]

00:36:07 ◼   ► you can trace back the address to its origin and the most the current owner is [TS]

00:36:12 ◼   ► the person who is most recently signed it with their private key they've they [TS]

00:36:15 ◼   ► are versatile person who is most recently received it by virtue of the [TS]

00:36:20 ◼   ► Queen being signed over with the previous owners private key so and so I [TS]

00:36:27 ◼   ► have an address addresses you know one-two-three-four a be CDF right and [TS]

00:36:32 ◼   ► you can transfer money to me at that address by signing a set of bitcoins [TS]

00:36:38 ◼   ► with your private key that corresponds to this but Quins that transaction [TS]

00:36:43 ◼   ► occurs it's locked into the block and i own those there's no transfer from 2.22 [TS]

00:36:49 ◼   ► recognized globally by analyzing the chain that I now possess those and have [TS]

00:36:53 ◼   ► the authority to spend them in some way and that's why all this very very [TS]

00:36:56 ◼   ► different than any monetary system or transaction basis before and it's [TS]

00:37:01 ◼   ► definitely novel yeah it's almost like a central ledger except that it's not [TS]

00:37:05 ◼   ► recording deficits in addition [TS]

00:37:07 ◼   ► transfers and that's what's baffling so you have to [TS]

00:37:09 ◼   ► entire sequence of transfers and the most recent transfer winds essentially a [TS]

00:37:14 ◼   ► surprise ownership so this is where you get into the third part which is like [TS]

00:37:17 ◼   ► our transfers made permanent how do they become a permanent record and that's [TS]

00:37:22 ◼   ► where you get to Bitcoin mining which defeats some people because it seems [TS]

00:37:25 ◼   ► it's so we are at some level mining is the process of finding a so so miners [TS]

00:37:33 ◼   ► run extremely specialized hardware that all they do is they generate tons of [TS]

00:37:37 ◼   ► shock one cryptographic hashes based on specific numbers so the system works [TS]

00:37:45 ◼   ► like this [TS]

00:37:46 ◼   ► people are constantly engaged in between transactions and they generate these [TS]

00:37:52 ◼   ► transactions to say johnnie the city one bit quiet so I use my software its signs [TS]

00:37:57 ◼   ► over 120 your public-address sign in with my private key that transaction is [TS]

00:38:03 ◼   ► then broadcast on the global set of peer to peer nodes and are used by Bitcoin [TS]

00:38:08 ◼   ► miners and other people involved in ecosystem miners are constantly grabbing [TS]

00:38:12 ◼   ► a set of transactions and they get a small fee small to large be sometimes no [TS]

00:38:17 ◼   ► fee for each transaction that they grabbed still take let's save the number [TS]

00:38:20 ◼   ► of thousands transactions they'll take those and they combine that with some [TS]

00:38:26 ◼   ► other information that's unique to me it's randomly generated and they start [TS]

00:38:30 ◼   ► churning away on creating Shah one shoes so a shot one hash hash is where you [TS]

00:38:37 ◼   ► take input it runs algorithm that performs a number of transformations on [TS]

00:38:42 ◼   ► it and the number that comes out the end is predictable it's always the same [TS]

00:38:45 ◼   ► based on the same input but any change to the input no matter how slight [TS]

00:38:50 ◼   ► results in a non deterministic Lee highly variant outwards so if I put in [TS]

00:38:57 ◼   ► John Gruber into child when I get one thing if I put johnnie Graber the result [TS]

00:39:02 ◼   ► is you cannot predict what will be will be so vastly different and there is no [TS]

00:39:06 ◼   ► known way to easily predict how [TS]

00:39:09 ◼   ► to reproduce the same hash from different input so i cant just create a [TS]

00:39:13 ◼   ► slightly different record the same hash so the actor hashing proves that I did [TS]

00:39:19 ◼   ► it because you can take the same inputs run into the same algorithm and produce [TS]

00:39:23 ◼   ► the same results so here's what mining is mining is you're trying to find a [TS]

00:39:30 ◼   ► certain hash but you don't know how to create a hash that match that pattern [TS]

00:39:33 ◼   ► you just have to create billions upon billions of them in Bitcoin you're [TS]

00:39:37 ◼   ► looking for a house that has a certain number of an starting zeros and the more [TS]

00:39:42 ◼   ► computation power that enters into the Bitcoin ecosystem because it's now a [TS]

00:39:47 ◼   ► ridiculous amount the harder the level of finding that number is a keep [TS]

00:39:51 ◼   ► increasing the difficulty is a dynamic thing that's reset every two weeks by [TS]

00:39:54 ◼   ► the system and you have to find like like a hash that's less than you know [TS]

00:39:59 ◼   ► the numbers incredibly long as her meet its long you have to find a half that [TS]

00:40:04 ◼   ► has a certain number of leading zeros and you could churn for you know you [TS]

00:40:09 ◼   ► could run through a trillion transactions and you might not find one [TS]

00:40:12 ◼   ► that meets those parameters [TS]

00:40:13 ◼   ► III since I think so I've heard it described not mathematically similar but [TS]

00:40:20 ◼   ► in layman's terms similar to looking for prime numbers it's a needle in a [TS]

00:40:25 ◼   ► haystack search you're looking for prime numbers each one gets harder and harder [TS]

00:40:31 ◼   ► to find because he has accepted this is random is the problem prime numbers you [TS]

00:40:36 ◼   ► know what you're looking for and you don't there's no I think at this point [TS]

00:40:40 ◼   ► they don't know where the next prime numbers right there's no prime number [TS]

00:40:44 ◼   ► space in this case there's a space of all possible hashes and because you [TS]

00:40:48 ◼   ► don't know which inputs will these two parameters one is you don't know which [TS]

00:40:52 ◼   ► inputs produce which crashed so you don't know how to predict getting one [TS]

00:40:55 ◼   ► with a bunch of zeros and the other is that you're taking up a whole bunch of [TS]

00:40:59 ◼   ► material as a minor and sticking it together it has to be that material [TS]

00:41:03 ◼   ► isn't set by you can't define the starting point of the transactions that [TS]

00:41:07 ◼   ► your mining so but involves a real amount of computational power the last [TS]

00:41:14 ◼   ► time I checked it was I think it was two hundred times the computation power of [TS]

00:41:18 ◼   ► the top 500 supercomputers in the world to find to mind but claims worldwide and [TS]

00:41:26 ◼   ► at this point I've read that it it's much more expensive to power the [TS]

00:41:36 ◼   ► computer that's doing like you said most of the people doing now have specialized [TS]

00:41:40 ◼   ► hardware if I just put software on my side like a brand new Mac and just had [TS]

00:41:46 ◼   ► it start mining for bitcoins I my expectation is that I would spend more [TS]

00:41:51 ◼   ► on electricity running a computer than the value of the Bitcoin might [TS]

00:41:54 ◼   ► eventually trying that's that's right I don't know what it is exactly the same [TS]

00:41:58 ◼   ► exact price a bit fallen but this thing about difficulty lake so big queen [TS]

00:42:03 ◼   ► started on PCs right and then people got more powerful PCs in stock more the [TS]

00:42:07 ◼   ► mining and so I stuck more processors and then they started using graphical [TS]

00:42:11 ◼   ► processing units of course GPUs are very efficient at certain kinds of [TS]

00:42:15 ◼   ► calculations then they started using these things for programmable gate [TS]

00:42:19 ◼   ► arrays I think I forgot the name from there is a specialized term there like a [TS]

00:42:23 ◼   ► programmable chip that you can program even more speed then they went to a 60 [TS]

00:42:29 ◼   ► which are custom circuitry designed specifically to do char one calculations [TS]

00:42:35 ◼   ► a 600 and 1000 metre process to I think they're down 28 29 or something to a [TS]

00:42:40 ◼   ► financial crisis now whatever the smallest things at that level it speeds [TS]

00:42:44 ◼   ► up in speeds up the tab the efficiency ratio of power to calculations not only [TS]

00:42:49 ◼   ► can you calculate faster but the power for calculation get slower you cannot [TS]

00:42:54 ◼   ► compete on a PC or even a field programmable gate array it is called [TS]

00:42:58 ◼   ► against custom [TS]

00:43:01 ◼   ► dynamometer race in other words though that in just four years we've we've gone [TS]

00:43:06 ◼   ► through several generations [TS]

00:43:09 ◼   ► of Computer Engineering hardware computer engineering [TS]

00:43:14 ◼   ► devoted specifically to Bitcoin mining year and it's it's not generalizable to [TS]

00:43:21 ◼   ► modernizing hardware for this one specific so here I just found the number [TS]

00:43:26 ◼   ► here's the numbers at this exact second there are three hundred and fifty-five [TS]

00:43:30 ◼   ► thousand had a flops trillion that's quadrillion operations per second [TS]

00:43:38 ◼   ► 355 Quinn chilean floating point operations per second are being used [TS]

00:43:43 ◼   ► globally to mine bitcoins and the top supercomputer in the world has what is [TS]

00:43:50 ◼   ► it has like under a hundred terrified so this is this is here to add them all [TS]

00:43:56 ◼   ► together the 500 or not 3000 teraflops this is hundreds of times more than the [TS]

00:44:03 ◼   ► top 500 supercomputers in the world combined being used for the specialized [TS]

00:44:07 ◼   ► purpose consuming god knows how many gigawatts energy just to find this [TS]

00:44:13 ◼   ► needle in the haystack that lets them in a kind so when when a minor Mensa coin [TS]

00:44:17 ◼   ► when they find this number they broadcast their solution there proof of [TS]

00:44:20 ◼   ► work worldwide across the peer-to-peer network it happens on average in less [TS]

00:44:25 ◼   ► than 10 minutes every 10 minutes every 10 minutes a new Bitcoin is found on [TS]

00:44:29 ◼   ► average somebody finds in fact there are these concerns because it was too hard [TS]

00:44:33 ◼   ► for any individual to bear this so there are groups of minors worldwide that band [TS]

00:44:37 ◼   ► together no one of which has more than I think still twenty or thirty percent as [TS]

00:44:41 ◼   ► a concession all worldwide capacity which is a whole other issue there and [TS]

00:44:47 ◼   ► so some minor in this construction is found in the broadcasting it out there [TS]

00:44:51 ◼   ► to get out there as fast as possible [TS]

00:44:54 ◼   ► someone else and the next microsecond might find a different needle in the [TS]

00:44:57 ◼   ► haystack the moment that's broadcast it gets a broadcaster block and the block [TS]

00:45:03 ◼   ► is a break that that's placed on top of the ball or more during the break [TS]

00:45:07 ◼   ► includes a reward to you as a minor which is 25 bitcoins and that still [TS]

00:45:11 ◼   ► current exchange rates is not [TS]

00:45:13 ◼   ► horrible right now thats whats exchanges like 600 bucks where's that she get 25 [TS]

00:45:19 ◼   ► of them when you finally every four years on average that that we would have [TS]

00:45:26 ◼   ► so was fifty bitcoins for the first four years or so and I was 25 it'll be twelve [TS]

00:45:30 ◼   ► and a half in a few years and this is part of the decreasing money supply is a [TS]

00:45:34 ◼   ► finite number of bitcoins I will ever be mined in the current protocol system [TS]

00:45:38 ◼   ► about 21 million so you're a minor you go boom I found one but that's still you [TS]

00:45:43 ◼   ► don't win you don't win when you find a Bitcoin it's great but you then you have [TS]

00:45:47 ◼   ► to broadcast this out your blog that has all the transactions that are in your [TS]

00:45:52 ◼   ► block and some other numbers and information in it has to be accepted by [TS]

00:45:58 ◼   ► notes all over the world who thin immediately begin calculating the next [TS]

00:46:02 ◼   ► block in each block is cryptographically tied to the one before it [TS]

00:46:06 ◼   ► this is the wonderful secret sauce of Bitcoin this is actually almost more [TS]

00:46:10 ◼   ► important than the public key cryptography lets you protect each [TS]

00:46:14 ◼   ► Bitcoin quantities identity and and ownership the block chaining is it [TS]

00:46:21 ◼   ► builds upon each transaction each block so if you so what can happen in this [TS]

00:46:27 ◼   ► happens frequently is minor in yo Africa [TS]

00:46:32 ◼   ► finds a pic when they transmit their block out and its worldwide [TS]

00:46:35 ◼   ► simultaneously within some short period time another minor has also found based [TS]

00:46:40 ◼   ► on the same previous block they have found a new a new magic number eight and [TS]

00:46:45 ◼   ► they broadcast Thurs so now you have two different chains which have each have [TS]

00:46:50 ◼   ► different ending blocks all the rest of the same going back to 2009 and initial [TS]

00:46:55 ◼   ► deployment but this the variance in what could happen though is different nodes [TS]

00:46:59 ◼   ► on the Bitcoin network because they're still centralized hit accept different [TS]

00:47:04 ◼   ► chains so you can have two different chains that are growing parallel but one [TS]

00:47:08 ◼   ► of them but they don't have the same information for the last block in this [TS]

00:47:12 ◼   ► can go on sometimes for one or two blocks and at a certain point one of [TS]

00:47:15 ◼   ► them has probably shown to do more work like it's clear that it happened faster [TS]

00:47:20 ◼   ► and more work was consumed [TS]

00:47:22 ◼   ► and then they'll be this reconciliation which I believe is automatic in which [TS]

00:47:26 ◼   ► all the nodes in the world except the longer chain that is the chain that has [TS]

00:47:30 ◼   ► more blocks on it faster when that happens all the variants chains which [TS]

00:47:35 ◼   ► may have one or two blocks that are not the same as the one that's been accepted [TS]

00:47:40 ◼   ► those are discarded all the transactions that were exclusively in those blocks [TS]

00:47:45 ◼   ► and did not get minted into these new blocks have to be committed against New [TS]

00:47:51 ◼   ► blocks and you see why this gets complicated so somebody who founded [TS]

00:47:55 ◼   ► found one of those blocks ends up with with nothing because I expected because [TS]

00:47:59 ◼   ► it was a smaller chains precisely and this is a is a process that's that's [TS]

00:48:05 ◼   ► actually this is part of the elegance of you know it's a little crazy at one [TS]

00:48:09 ◼   ► level but it is also a really beautiful idea that then no one has to agree on [TS]

00:48:14 ◼   ► anything you don't have to go into a reconciliation bill which block whatever [TS]

00:48:17 ◼   ► it's no longer block wins and I think yeah I think whatever anybody would [TS]

00:48:21 ◼   ► think about Bitcoin whether you think it's really super is going to [TS]

00:48:24 ◼   ► revolutionize all of digital commerce in may be real world commerce and that it's [TS]

00:48:29 ◼   ► maybe you think it's a great even with the recent stuff it's a great place to [TS]

00:48:33 ◼   ► invest your money or you think the whole thing has gotten ridiculous scam I think [TS]

00:48:41 ◼   ► everybody would agree that mathematically it's beautiful it's a [TS]

00:48:44 ◼   ► beautiful system it's it's gorgeously designed if you disregard any the [TS]

00:48:49 ◼   ► currency speculation part of it I just admire in the paper that you know [TS]

00:48:53 ◼   ► so-called photo she is maybe a composite multiple people but is still preserved [TS]

00:48:58 ◼   ► his or her they are in on it [TS]

00:49:00 ◼   ► anonymity that paper is actually incredibly legible I've read it and I am [TS]

00:49:05 ◼   ► NOT a I'm not a cryptographer and I my math background is not deep enough to [TS]

00:49:10 ◼   ► really really get it but it's actually model of clarity about what's going [TS]

00:49:15 ◼   ► about what the antennas and how it works and all of the [TS]

00:49:19 ◼   ► attributes and that people have have persisted and the idea so so you know [TS]

00:49:23 ◼   ► this is you understand but this has been quite as you have a quantity of currency [TS]

00:49:29 ◼   ► that's protected in a public key which we all understand how public-private [TS]

00:49:33 ◼   ► he's working so only the owner private he can do it [TS]

00:49:35 ◼   ► a transaction transfers value from one party to another miners make their money [TS]

00:49:40 ◼   ► by doing these fiendishly large number of calculations but they have to be on [TS]

00:49:46 ◼   ► the winning side if multiple blocks are being minted it once the longest chain [TS]

00:49:51 ◼   ► for it to be perfect so here's the other part is beautiful and again doesn't [TS]

00:49:55 ◼   ► really relate to whether it's valid as a currency or anything else but it is a [TS]

00:50:00 ◼   ► fantastic transaction system if you don't care about the value at all [TS]

00:50:03 ◼   ► there's no contradicting is a beautiful transit system so here's the deal the [TS]

00:50:08 ◼   ► amount of computation I described is ridiculous right after a few blocks go [TS]

00:50:13 ◼   ► by you would need more computational power than exists in the Bitcoin network [TS]

00:50:18 ◼   ► to go back a few blocks and create a new chain so if the longer chain always wins [TS]

00:50:23 ◼   ► if any entity like a consortium controlled more than 50% in some people [TS]

00:50:28 ◼   ► say the threshold is lower but let's say just at the Dr practical level but the [TS]

00:50:33 ◼   ► theory is if you own under control more than 50% of the bit Queen mining [TS]

00:50:40 ◼   ► capacity worldwide you will always win you will always have the longest chain [TS]

00:50:44 ◼   ► because you can always calculate faster you can outpace everyone else put [TS]

00:50:48 ◼   ► together so this would let you do things like to start the system and double [TS]

00:50:51 ◼   ► spend in a mess of transactions you could do all kinds of bad things the [TS]

00:50:55 ◼   ► Consorzio don't like this and so when anyone consortium has reached a point [TS]

00:51:00 ◼   ► where they're worried about having too much capacity they voluntarily split off [TS]

00:51:05 ◼   ► the breakdown hope things are do all sorts of stuff because it's not in the [TS]

00:51:09 ◼   ► benefit of the system's integrity even for them to real that much control it [TS]

00:51:13 ◼   ► would destabilize [TS]

00:51:15 ◼   ► the validity of the system but it also means that it's a government entity [TS]

00:51:19 ◼   ► let's see iraq says we hate between Russia primary simple says it's going to [TS]

00:51:25 ◼   ► stay W us destroy Bitcoin and you know Putin maybe he's got whatever they would [TS]

00:51:29 ◼   ► have to spend an enormous amount of money ridiculous amount of money to [TS]

00:51:33 ◼   ► build up the capacity just to match the current system then they would have to [TS]

00:51:37 ◼   ► be out there meeting like crazy in you know and be able to overtake everyone [TS]

00:51:42 ◼   ► else in the world and continue their free time and also people would notice [TS]

00:51:47 ◼   ► this is an anonymous process they know where the traffic coming from the know [TS]

00:51:50 ◼   ► what the addresses are so there's really it's not that there's no way for someone [TS]

00:51:55 ◼   ► to subvert the system by gaining control of more than 50% or even a lower [TS]

00:51:59 ◼   ► threshold of mining capacity more that the bar is so high and so expensive now [TS]

00:52:03 ◼   ► it's just very very unlikely one lie I wanna keep gone but here's one last [TS]

00:52:11 ◼   ► question I have about this before we do thanks a bunch of break which is that my [TS]

00:52:16 ◼   ► understanding of its common knowledge that one of the other things about the [TS]

00:52:23 ◼   ► Bitcoin system from the get-go is that there's an upper bound on the eventual [TS]

00:52:28 ◼   ► total global bitcoins that will exist that at a certain point that's it [TS]

00:52:33 ◼   ► the last Bitcoin block will be mind is a trait yeah this is this is the the [TS]

00:52:40 ◼   ► twenty its 21 is approximately 21 million it's just below 21 million and [TS]

00:52:45 ◼   ► this is big queen is clearly influenced by Ludvig when he says that he was the [TS]

00:52:50 ◼   ► Austrian economist that affects a lot of people with specific economic views and [TS]

00:52:56 ◼   ► one level is a test of economic theory by not allowing there's no inflation [TS]

00:53:03 ◼   ► Bitcoin per say you can't print new money the money gets released at regular [TS]

00:53:08 ◼   ► intervals by the by the minors and we should also point out there's this thing [TS]

00:53:14 ◼   ► I was mentioning that as as more computational capacity enters the system [TS]

00:53:18 ◼   ► the difficulty factors adjusted because it's the system rebalances to try to [TS]

00:53:23 ◼   ► take about 10 minutes between each block being rented [TS]

00:53:26 ◼   ► and if because she's been increasing so fast it's more like seven or eight [TS]

00:53:33 ◼   ► minutes but if for instance like everybody involved in this is stupid 99% [TS]

00:53:39 ◼   ► of people got their equipment off the difficulty factor then reduces so [TS]

00:53:44 ◼   ► everyone could be using CPUs again or whatever so you're not you not dependent [TS]

00:53:48 ◼   ► on ever increasing computational papers pencils [TS]

00:53:51 ◼   ► there because a shot one thing by hand so I mention that in part because the [TS]

00:53:57 ◼   ► the Queen creation isn't a factor of computation the computation is intended [TS]

00:54:03 ◼   ► to keep production at a steady pace instead of having inflationary thing [TS]

00:54:08 ◼   ► where someone could certainly be green Queens every five seconds is also the [TS]

00:54:12 ◼   ► system is there a layman's explanation for how there can be an upper limit like [TS]

00:54:17 ◼   ► how there can be a last but Quinn mind yet they do them of the algorithm [TS]

00:54:22 ◼   ► actually should say that there's there's the original paper that she wrote [TS]

00:54:26 ◼   ► there's an implementation that he or they created in the first couple of [TS]

00:54:32 ◼   ► years I understands very deeply involved before he disappeared and then there's [TS]

00:54:36 ◼   ► the Bitcoin foundation other parties that engage in saudi and protocol [TS]

00:54:39 ◼   ► improvements and software updates so the nodes the big cleanup workers have to [TS]

00:54:49 ◼   ► agree to a software upgrade in the roll it out and deprecated previous version [TS]

00:54:53 ◼   ► so there have been changes and improvements over time so right now the [TS]

00:54:58 ◼   ► way the protocol works is that mining delivers 25 bitcoins every 10 say 10 [TS]

00:55:04 ◼   ► minutes on average less and the protocol states that on a certain point after a [TS]

00:55:09 ◼   ► certain number of coins are generated and you can see a table you go to Lake [TS]

00:55:12 ◼   ► Oahe PTAs a table of it will show you what the point is actually estimate the [TS]

00:55:16 ◼   ► date for when this happens suddenly instead of 25 twelve and a half and then [TS]

00:55:21 ◼   ► in the equivalent of roughly four years or a certain number of blocks blocks [TS]

00:55:25 ◼   ► go by it'll be 6.25 and then it will be three point you know 125 and down yeah [TS]

00:55:33 ◼   ► exactly so you'll you'll get closer and closer to 21 million never quite achieve [TS]

00:55:37 ◼   ► it but most coins we mind within I think it was at 12 or 16 years almost all the [TS]

00:55:42 ◼   ► Queen's will be mind and I'll show in other words it's sort of like a calculus [TS]

00:55:45 ◼   ► thing where you know they're never may never exactly be a blast Bitcoin but [TS]

00:55:50 ◼   ► eventually it'll approach this limit of 20 1,000,000 and get ever and ever [TS]

00:55:55 ◼   ► closer and and there'll be ever so fractionally less value in getting a new [TS]

00:56:02 ◼   ► Bitcoin [TS]

00:56:03 ◼   ► here's the last thing free response but here's the thing that what's good what [TS]

00:56:06 ◼   ► this system the system suspect will happen every transaction can have a [TS]

00:56:12 ◼   ► mining fee attached I think some must have a mining fee attached and others [TS]

00:56:16 ◼   ► can be done for free [TS]

00:56:17 ◼   ► however miners preferentially take transactions that have these attached [TS]

00:56:21 ◼   ► they're not required to take empty transactions are typically those get cue [TS]

00:56:25 ◼   ► to me wait longer before their Premier League committed so this is an [TS]

00:56:28 ◼   ► interesting bit of microeconomics microphones Bishop of like a microscale [TS]

00:56:33 ◼   ► thing that goes on his arms in your money john but i dont wanna be a mining [TS]

00:56:36 ◼   ► fees I mark 0 on that it might take like a couple hours worked to get big dinner [TS]

00:56:42 ◼   ► maybe longer sometimes and until it's peaked in then more blocks oriented [TS]

00:56:46 ◼   ► after its not really permanent so that idea of instantaneous transfer his true [TS]

00:56:51 ◼   ► except that until the transaction is permanently baked into a block and at [TS]

00:56:56 ◼   ► least a few blocks of it added after it to ensure that the chain is the correct [TS]

00:57:00 ◼   ► chain we we can't really count that it's true there are some ways around in some [TS]

00:57:04 ◼   ► predictability for it but what the idea that over time those mining fees will [TS]

00:57:08 ◼   ► increase so that as the or decreases people have to pay more per transaction [TS]

00:57:14 ◼   ► fee which right now is calm the argument that the transaction fees it does not [TS]

00:57:19 ◼   ► have required ones most cases but transaction fees will be likely much [TS]

00:57:24 ◼   ► smaller compared to say credit card transaction fees or wire transfers or [TS]

00:57:28 ◼   ► other especially international money transfer that they will be increasing [TS]

00:57:31 ◼   ► number of transaction fees [TS]

00:57:32 ◼   ► that are given to minors to keep them actually engaged in the system and [TS]

00:57:36 ◼   ► making new blocks even when we were disappointed 00001 Bitcoin you get a [TS]

00:57:44 ◼   ► working example of free market economics yeah because if you can't get your [TS]

00:57:50 ◼   ► transaction notice your blog mandatories no mandatory you can just put it out [TS]

00:57:56 ◼   ► there and somebody wants to they can verify it put in the chain for free or [TS]

00:58:00 ◼   ► no fee but if you want to motivate people to prioritize your transaction [TS]

00:58:08 ◼   ► you can offer them yeah and if it's high enough they'll choose to do it and then [TS]

00:58:12 ◼   ► you really will be some there will be some mandatory fees very likely but [TS]

00:58:17 ◼   ► they'll be exceedingly tiny the mandatory ones when those and this this [TS]

00:58:21 ◼   ► sort of pure free market economics at work you could see how this draws [TS]

00:58:28 ◼   ► libertarian minded people to the whole Bitcoin world yes we take a break we'll [TS]

00:58:37 ◼   ► come back and is more I wanna talk about it quite well I do thank our second [TS]

00:58:41 ◼   ► sponsoring our good friends at over 80 [TS]

00:58:45 ◼   ► are however quite simply is the best way to buy and manage domain names you have [TS]

00:58:53 ◼   ► a great idea to get a domain name for it catchy memorable domain name however [TS]

00:58:59 ◼   ► gives you everything you need to get the job done research they have a whole [TS]

00:59:03 ◼   ► bunch of top-level domains to choose from [TS]

00:59:07 ◼   ► help you find that mean you're looking for maybe give you suggestions on [TS]

00:59:10 ◼   ► something close to it [TS]

00:59:12 ◼   ► everybody knows it's hard to find a good one hundred makes it easy [TS]

00:59:17 ◼   ► all sorts of domain registrars of course have searched like that the difference [TS]

00:59:24 ◼   ► between Harbor and typical domain registrars you do you just have to see [TS]

00:59:27 ◼   ► it to believe it because everybody else they're they're trying to make money [TS]

00:59:30 ◼   ► every other way other than just by selling you the domain names up cells [TS]

00:59:35 ◼   ► and also to scare me stuff checkboxes you have to uncheck to get out of these [TS]

00:59:40 ◼   ► add-ons and follow-ups all sorts of nonsense the worst sort of business just [TS]

00:59:47 ◼   ► a lot of scams policy and anybody who's ever used them however is just straight [TS]

00:59:54 ◼   ► forward I mean just go check out their website and you'll see right away that [TS]

00:59:58 ◼   ► they just doesn't even look like other domain registrars no nonsense they make [TS]

01:00:04 ◼   ► money by charging you for domain names and that's it [TS]

01:00:07 ◼   ► they have great great great customer support including something called [TS]

01:00:12 ◼   ► phthalates transfer service so if you've already got a domain and another [TS]

01:00:17 ◼   ► registrar and you're unsatisfied with that registrar and there's a very good [TS]

01:00:21 ◼   ► chance that you are because most register stink you can go to hover sign [TS]

01:00:26 ◼   ► up and they're Valley transfer service will help you or just do the work for [TS]

01:00:32 ◼   ► you you just give them access to the registrar and they'll take care of all [TS]

01:00:36 ◼   ► the DNS stuff all the stuff we need to do to move a transfer registered domains [TS]

01:00:41 ◼   ► from one store to another it's a great service and for most of us it's you know [TS]

01:00:48 ◼   ► it's because we're not experts even I have a bunch of domain names but I [TS]

01:00:52 ◼   ► almost never moved them or change anything to do with them so I'm not a [TS]

01:00:55 ◼   ► DNS expert [TS]

01:00:56 ◼   ► the people that however are this is what they do all day every day so you're in [TS]

01:01:02 ◼   ► great hands [TS]

01:01:03 ◼   ► everybody I know and I know a bunch of friends abuses rally service they swear [TS]

01:01:07 ◼   ► by it they just it sounds too good to be true that you just sign up and let them [TS]

01:01:11 ◼   ► do all the work for you but it actually that's actually how it works where do [TS]

01:01:16 ◼   ► you go to find out more easy going to hover dot com H O R dot com slash talk [TS]

01:01:23 ◼   ► show and I know you came from the show so happy to have him as a sponsored [TS]

01:01:31 ◼   ► really just go check them out and you'll be happy to back to be a couple of [TS]

01:01:43 ◼   ► things I want to ask you about we should talk about why I wanted to but yeah I [TS]

01:01:49 ◼   ► want as part of it [TS]

01:01:50 ◼   ► tell me about it so you may not even be one individual names said the credit for [TS]

01:02:03 ◼   ► creating Bitcoin goes to a Japanese mathematician named said Toshi [TS]

01:02:12 ◼   ► Nakamoto nobody knows an end the very least it's a pseudonym if it is one [TS]

01:02:21 ◼   ► person if it is the work of one person it's Santoshi Nakamoto is apparently a [TS]

01:02:25 ◼   ► pseudonym yeah it's i mean that's the way it's weird because you're not [TS]

01:02:31 ◼   ► anonymous I guess it has to be sitting there is no one has no one has proved [TS]

01:02:36 ◼   ► proven who this person is or if a single person today there's a suspicion and you [TS]

01:02:42 ◼   ► know when you read stuff you know is often when it's the work of one person [TS]

01:02:45 ◼   ► that way it's written and read the paper the paper reads like one person wrote it [TS]

01:02:50 ◼   ► so it's a group one person drafted it does not have the feel is a very [TS]

01:02:54 ◼   ► specific style doesn't have a feeling of a committee yeah I mean it's not a [TS]

01:02:58 ◼   ► citizen in the statement of a very specific there's a style to his person [TS]

01:03:01 ◼   ► posted prob someone as expected to be just an individual because this person [TS]

01:03:07 ◼   ► was actively participating in the early between us [TS]

01:03:09 ◼   ► sessions for years and you know there's a typical things would happen with the [TS]

01:03:13 ◼   ► guy who was arrested for Silk Road the Silk Road Silk Road was arrested in the [TS]

01:03:21 ◼   ► Bay Area he had posted something I know but you know in this is putting this is [TS]

01:03:27 ◼   ► like this is a purely a very common friend 62 forensics technique and I [TS]

01:03:31 ◼   ► heard about like oh this is so brilliant white you know I shoulda guessed what [TS]

01:03:36 ◼   ► they do is they look at the first time someone post under an identity on some [TS]

01:03:40 ◼   ► online thing and they traced back and see who fucks who follow them on Twitter [TS]

01:03:44 ◼   ► who reference them who link to a website who favorite like so they went back and [TS]

01:03:49 ◼   ► they found the Silk Road guy because they were fingerprints all over him [TS]

01:03:52 ◼   ► pointing to the entity that you know he eventually became so that's really a big [TS]

01:03:58 ◼   ► part of how they found it and you have to be very careful about so anyway that [TS]

01:04:03 ◼   ► no ones found that kind of pain was with you know they even though the guy posted [TS]

01:04:09 ◼   ► a guy probably another in other words you're saying like if somebody wanted to [TS]

01:04:13 ◼   ► uncover the Mac elope goin actually think predates Twitter but I say or [TS]

01:04:19 ◼   ► somebody else created a Mac elope like you know pseudonymous colin is the first [TS]

01:04:25 ◼   ► person who retweeted it linked to it did you go to Tumblr and in favor of it love [TS]

01:04:30 ◼   ► it under which is very clever so no one has found his fingerprints and a lot of [TS]

01:04:34 ◼   ► people have looked in some very clever journalists have looked after get there [TS]

01:04:38 ◼   ► is it wired someone did a piece with a look through a lot of likely subjects [TS]

01:04:41 ◼   ► they talked to a ton of people and they're pretty sure it might be this one [TS]

01:04:45 ◼   ► person but it's just there's not enough evidence to show that is the reason [TS]

01:04:51 ◼   ► people care who Satoshi Nakamoto is is because Satoshi Nakamoto has like five [TS]

01:04:55 ◼   ► million bitcoins I think it's it's it's a 45 percent of the outstanding but [TS]

01:05:01 ◼   ► Quins it's a huge number because they were the only person mining initially [TS]

01:05:05 ◼   ► and so whoever that is tryna money even with the current you know the drop to 50 [TS]

01:05:12 ◼   ► dollars Bitcoin this person conceivably has like I don't know what it's like a [TS]

01:05:16 ◼   ► billion dollars eight hundred million dollars it's a huge amount of money if [TS]

01:05:19 ◼   ► they wanted to convert it slowly [TS]

01:05:21 ◼   ► cash now because between all the addresses are public people now watch [TS]

01:05:26 ◼   ► those early bitcoins and see if they get transferred you know to get two [TS]

01:05:30 ◼   ► exchanges are cashed out are used for things and apparently they're all very [TS]

01:05:33 ◼   ► static so that's another aspect of bitcoins that all the transactions are [TS]

01:05:37 ◼   ► done in public the identities are not tied to the bitcoins a person's identity [TS]

01:05:41 ◼   ► isn't but the big coins you can see them move through time and that's an aspect [TS]

01:05:47 ◼   ► of both like and hate about it so you can get somebody who owned like you said [TS]

01:05:54 ◼   ► maybe some five million maybe five million probably too big a number of [TS]

01:05:56 ◼   ► these only 21 it's a big percentage though let's just call it a million [TS]

01:06:04 ◼   ► a lot of money somebody can watch those a million you know look at the Beverly [TS]

01:06:08 ◼   ► bitcoins and if a bunch of them start moving you could you could safely assume [TS]

01:06:13 ◼   ► that it's no wonder whether Nakamoto is a group of some sort of entity or [TS]

01:06:20 ◼   ► something like that but this is the part that to me makes it seem most like a [TS]

01:06:26 ◼   ► science fiction film probably a novel because I think the math is not his [TS]

01:06:32 ◼   ► cinematic is you know but either way it's like a science fiction story is [TS]

01:06:39 ◼   ► that there's a a sort of heroic mystery figure at the top of it you know an [TS]

01:06:47 ◼   ► individual who wrote this paper and made this system and then disappeared very [TS]

01:06:53 ◼   ► cinematic in that sense and it's almost now like a mythic figure yeah not to [TS]

01:07:02 ◼   ► exaggerate in the least right that there's this mythic figure who created [TS]

01:07:05 ◼   ► this beautiful system stands to be enriched personally tremendously by if [TS]

01:07:12 ◼   ► if they so choose [TS]

01:07:14 ◼   ► and then and and was very very very active at the outset and I wasn't just [TS]

01:07:20 ◼   ► like the white paper dropped in the system within the place there's you know [TS]

01:07:24 ◼   ► I guess was it mailing lists I don't know but there's a lot of online [TS]

01:07:28 ◼   ► communication from Satoshi Nakamoto [TS]

01:07:33 ◼   ► just disappeared and the dog did he did he write like ok I or did he just like a [TS]

01:07:43 ◼   ► goodbye letter now and I enjoy her number I think they just stopped hosting [TS]

01:07:49 ◼   ► is not funny I you know that I think that they just don't think they actually [TS]

01:07:59 ◼   ► say goodbye they basically stopped posting and then but an anointed was [TS]

01:08:05 ◼   ► somebody the person is Gavin Edwards something was the head of the bed queen [TS]

01:08:11 ◼   ► foundation Gavin and Andreessen scientists at the Bitcoin foundations [TS]

01:08:16 ◼   ► again very soon as I understand I believe he was sort of anointed as the [TS]

01:08:20 ◼   ► person to carry on the software work but my recollection is that is that it [TS]

01:08:26 ◼   ► wasn't like okay and now I've done my work and I'm leaving was more like like [TS]

01:08:31 ◼   ► just stop posting and I found the numbers 1.5 million coins and so that's [TS]

01:08:36 ◼   ► like eight hundred million dollars in today's exchange rate of 5% of the ones [TS]

01:08:41 ◼   ► outstanding it's about 5% of the ones that will ever exist a little a little [TS]

01:08:45 ◼   ► more so it's it's a it's a big chunk and there's still one of the rumors is that [TS]

01:08:52 ◼   ► a so here's the thing with bitcoins you have to keep that private key secure but [TS]

01:08:57 ◼   ► if you lose the Prodigy put coins are gone forever [TS]

01:09:01 ◼   ► you can't spend that we can transfer them I'm in a Bitcoin miner and he were [TS]

01:09:05 ◼   ► chatting and two interesting things one is I did not know initially but he was a [TS]

01:09:11 ◼   ► few months before he and I met he was generating a significant single-digit [TS]

01:09:15 ◼   ► percentage of all homes worldwide which was interesting and the other was he [TS]

01:09:20 ◼   ► said I've gotta drive over there it's completely dead it is for you [TS]

01:09:24 ◼   ► never recover those and I was at a time when I think it was $100 like a drive [TS]

01:09:29 ◼   ► that has a two million dollars tried everything he could spending $1,000 on [TS]

01:09:36 ◼   ► Dr savers or whatever and so when you lose the key they're not a sponsor this [TS]

01:09:43 ◼   ► week but talking about you too bad Backblaze is hard drives people you know [TS]

01:09:51 ◼   ► there are there issues about storing private keys for Bitcoin so there's [TS]

01:09:57 ◼   ► something called cold storage and you transfer your private key either you've [TS]

01:10:01 ◼   ► never had an internet-connected machine you sign on your transactions on a not [TS]

01:10:06 ◼   ► ever connected you know glue and the USB port WiFi radio removed whatever your [TS]

01:10:14 ◼   ► stuff on a non connected machine and then you signed transactions and you see [TS]

01:10:19 ◼   ► them out but you're extremely careful you move those the public Internet and [TS]

01:10:24 ◼   ► this is critical because if your private key stolen as as happened on a mass [TS]

01:10:29 ◼   ► scale over the last few years at multiple online wallet services and [TS]

01:10:33 ◼   ► exchanges if someone steals your private key they can transfer the money to [TS]

01:10:37 ◼   ► anywhere they want to and in the same thing so the cold storages are some [TS]

01:10:41 ◼   ► places I understand someone actually printed out the key information is like [TS]

01:10:46 ◼   ► a pile of paper as an additional backup in case the spinning media hora sixties [TS]

01:10:51 ◼   ► makes sense so there is no one you know one of the coin services went down and [TS]

01:10:57 ◼   ► forgetting which one another one [TS]

01:10:59 ◼   ► shut down and they did lose some number of coins but they said almost all of the [TS]

01:11:03 ◼   ► coins were in cold storage and they will be transferring them back to their [TS]

01:11:06 ◼   ► owners [TS]

01:11:07 ◼   ► the ones they lost their lives storage was modest and those are gone forever [TS]

01:11:10 ◼   ► for whatever reason but the ones that are cold storage are totally preserved [TS]

01:11:15 ◼   ► ok so tell me about these exchanges wow what is it what what's the point of this [TS]

01:11:25 ◼   ► gets in the basic nature of like you know since I lose money if you try to [TS]

01:11:29 ◼   ► explain this to join unlike a generous and he said as he said to you and he's [TS]

01:11:33 ◼   ► old enough [TS]

01:11:34 ◼   ► like what is actually money i transfer my kids sometimes you know and they know [TS]

01:11:39 ◼   ► that money buys things they can be exchanged for a great line from there is [TS]

01:11:43 ◼   ► a beatles parody group called the rebels that Eric Idle and some other people [TS]

01:11:47 ◼   ► involved in someone said you're just in it for the money and their joke [TS]

01:11:51 ◼   ► responses no no we're not in it for the money so much as the the goods and [TS]

01:11:54 ◼   ► services that money purchases [TS]

01:11:56 ◼   ► you know it's Jonas is still at the point where money is like gravity and [TS]

01:12:02 ◼   ► it's something he accepts and understands the gist of but that it's [TS]

01:12:09 ◼   ► sort of it's at the bottom of you know those why you know kids are so it's the [TS]

01:12:19 ◼   ► greatest thing about childhood is is the natural inclination of almost all [TS]

01:12:23 ◼   ► children to just keep asking why why why they get you know parents of course you [TS]

01:12:28 ◼   ► know you get sick of it but it's actually it you know it shows how what a [TS]

01:12:34 ◼   ► fantastic state their brains are in their trust seeking answers you know and [TS]

01:12:38 ◼   ► they're coming up at the you know whyyy gravity is one of those things that he's [TS]

01:12:41 ◼   ► never he's never asked me about how exactly is it that we stick to the earth [TS]

01:12:47 ◼   ► and money i think is exactly the same sort of thing it's just there and he [TS]

01:12:52 ◼   ► accepts it and never has gotten to the point where you wonder why I still think [TS]

01:12:57 ◼   ► I'm not sure the kids ask her we volunteer we like to the series of [TS]

01:13:01 ◼   ► parenting lectures at some point came up it was like I tried to explain it and [TS]

01:13:06 ◼   ► money [TS]

01:13:07 ◼   ► sounds ridiculous when you explain it why does this piece of paper I'm giving [TS]

01:13:11 ◼   ► you peace of paper with George Washington case on it and you can go [TS]

01:13:14 ◼   ► anywhere and exchange it for something and people always accepted as legitimate [TS]

01:13:18 ◼   ► and that's ridiculous it's completely ridiculous right so when you start to [TS]

01:13:23 ◼   ► explain but according to people why there's value in it you're like this is [TS]

01:13:27 ◼   ► just crazy and it was easier than money is crazy to is a little bit less crazy [TS]

01:13:32 ◼   ► and I you know again that to get into the political aspects event I guarantee [TS]

01:13:37 ◼   ► you with technical minded show somebody out there is gonna be offended by what [TS]

01:13:41 ◼   ► I'm about to say [TS]

01:13:42 ◼   ► but it it was a lot easier to explain when the EUS was on the gold standard [TS]

01:13:48 ◼   ► yes you could say a correspondent to a specific amount of gold that had an XP [TS]

01:13:53 ◼   ► USA government-owned a tremendous still does own it but I found this tremendous [TS]

01:13:57 ◼   ► amount of gold gold has no true value real value on you know because it's a [TS]

01:14:03 ◼   ► rare mineral that people consider to be beautiful and etc and dollar bill was [TS]

01:14:09 ◼   ► the us- government promising that this dollar bill represented dollars worth of [TS]

01:14:14 ◼   ► gold [TS]

01:14:15 ◼   ► exchanges if you wanted to hear that and that I am i understand you know there's [TS]

01:14:20 ◼   ► a whole bunch of there's always been a political political friends that thinks [TS]

01:14:24 ◼   ► the US-made a true mistake getting off the gold standard get back onto it and I [TS]

01:14:29 ◼   ► owe it not that I think that that's actually a good economic theory I think [TS]

01:14:32 ◼   ► the explanation is that it appeals to many people because it's understandable [TS]

01:14:36 ◼   ► and was its supposedly prevents inflation there's a lot of reasons why [TS]

01:14:40 ◼   ► people like its inflation it's a real thing it prevents printing money it [TS]

01:14:44 ◼   ► controls governments women's game go to war is usually necessarily because they [TS]

01:14:48 ◼   ► can't do all these things that a lot of people here and they think that the gold [TS]

01:14:53 ◼   ► standard answer to them returning to it having the route I just think a big part [TS]

01:14:58 ◼   ► of the appeal is that it's there's no dot dot dot step in which is what you [TS]

01:15:06 ◼   ► have with our current system here so here's the thing that would [TS]

01:15:10 ◼   ► fundamentally what fiat currency or like it was like a 1000 cash money what money [TS]

01:15:15 ◼   ► proved by governments backed by governments has is that you can pay your [TS]

01:15:19 ◼   ► taxes in it and the government pays its bills and it was doing the economist [TS]

01:15:25 ◼   ► articles about becoming and fundamentally that's what a lot of them [TS]

01:15:28 ◼   ► said was was it's the government to use of legal tender as a means of exchange [TS]

01:15:33 ◼   ► not just that it establishes value you know and there's there's the extra angle [TS]

01:15:38 ◼   ► that some people that talk about coercion the recent weeks that money is [TS]

01:15:41 ◼   ► because you know governments have militaries in the forces to if you [TS]

01:15:44 ◼   ► didn't accept money you know they're backed by the police say the body of the [TS]

01:15:48 ◼   ► police military and [TS]

01:15:49 ◼   ► you go to jail there's a penalty you know for how you use it so there you can [TS]

01:15:54 ◼   ► get to a political argument about that but fundamentally it's when you pay the [TS]

01:16:00 ◼   ► american government most governments you have to pay in the currency that they [TS]

01:16:04 ◼   ► accepted the issue that currency to pay all of their bills and so that starts a [TS]

01:16:09 ◼   ► virtuous cycle that gives it value right it's a barter system in which the [TS]

01:16:13 ◼   ► government is the dollar bills are is a former barter we just accept the value [TS]

01:16:18 ◼   ► of the government puts on it and the USA government least with some intervention [TS]

01:16:22 ◼   ► allows the dollar to flow to represent what the market actually thinks it's [TS]

01:16:25 ◼   ► worth is a means of exchange so pick which is weird because that's where you [TS]

01:16:30 ◼   ► get them out of the box and these other exchanges as one aspect of the ecosystem [TS]

01:16:34 ◼   ► is that is moving money in and out of it clean so it's one thing if you are a [TS]

01:16:38 ◼   ► minor in the early days you could run like you can running like a Mac Pro and [TS]

01:16:42 ◼   ► making coins are actually having coin suspended they might not have been worth [TS]

01:16:46 ◼   ► damage each but you know there was some people accepting them they were you can [TS]

01:16:50 ◼   ► use it to exchange that's what some people but you need to move money in and [TS]

01:16:53 ◼   ► out of the system has no inherent value as more and more merchants accept [TS]

01:16:57 ◼   ► Bitcoin which is still going on Overstock will accept Bitcoin through [TS]

01:17:01 ◼   ► intermediaries that establishes value for it but the more you can buy within [TS]

01:17:07 ◼   ► the system less you have to transact in and help but the exchanges exist as a [TS]

01:17:10 ◼   ► way to take dollars and turn them into bitcoins in and vice versa up with some [TS]

01:17:16 ◼   ► good reason I had this one or two mark andreessen [TS]

01:17:19 ◼   ► netscape really interesting guy guy I think was was seen has not very break [TS]

01:17:25 ◼   ► for a while about how we invest in what he did and then it all started to pay [TS]

01:17:28 ◼   ► off and then everyone thinks he's brilliant I think he's brilliant I think [TS]

01:17:32 ◼   ► he was so far ahead of his time as investor that it took a lot like with [TS]

01:17:37 ◼   ► Paul Allen where everyone thought pollen was an idiot for about a decade and that [TS]

01:17:40 ◼   ► everything he thought would happen happened you know satellite television [TS]

01:17:44 ◼   ► and everything just about so he'll the Seahawks even won a Super Bowl so back [TS]

01:17:55 ◼   ► to like 1985 and people that the Seattle Seahawks are gonna [TS]

01:17:59 ◼   ► so you can see you can see that you could say look in two thousand people [TS]

01:18:02 ◼   ► but Marc Andreessen upon we're not very smart in 2014 like in terms of where [TS]

01:18:09 ◼   ► technology when and how they make money so Marc Andreessen wrote this piece cuz [TS]

01:18:12 ◼   ► he's involved with base he's his Andreessen Horowitz they invest in [TS]

01:18:19 ◼   ► between companies and it's part of part of their you know what they're into and [TS]

01:18:24 ◼   ► I think it's it's a pretty sure it's using Vista I hate to see the wrong [TS]

01:18:28 ◼   ► companies are so many bit because we acquit based Andreessen Horowitz put in [TS]

01:18:33 ◼   ► twenty five million dollars as part of the show that was part of the lead [TS]

01:18:38 ◼   ► investor with them but when $5,000,000 few months ago so I go to Queen base and [TS]

01:18:42 ◼   ► I say I want to buy $50 with the Bitcoin and the late great ok verifies [TS]

01:18:46 ◼   ► information do this will text you this thing you should I say I'm like this is [TS]

01:18:51 ◼   ► okay it's like setting up a banking thing or whatever and they're like your [TS]

01:18:54 ◼   ► bitcoins will be available like three to five business days like this its sister [TS]

01:19:00 ◼   ► what's going on in the problem is Bitcoin despite a lot of claims I hear [TS]

01:19:05 ◼   ► this from people who say it's incredibly liquid is not very liquid when you want [TS]

01:19:09 ◼   ► to go into legal tender and so exchanges exist to make that happen but between [TS]

01:19:15 ◼   ► banking regulation where a lot of these exchanges amount Cox fell afoul this [TS]

01:19:19 ◼   ► they have to actually have to deal with certain banking laws in some cases not [TS]

01:19:23 ◼   ► all depends how they construct themselves and there's like reporting [TS]

01:19:26 ◼   ► requirements and whatever between that and just some aspects of like how many [TS]

01:19:31 ◼   ► people participate in the system how you move the coins around to be able to [TS]

01:19:35 ◼   ► exchange value without being too heavily [TS]

01:19:39 ◼   ► exchange can't take so many bitcoins MPs so much you don't have actual legal [TS]

01:19:43 ◼   ► tender and that would be bad change in the volatile place a bit quiet and they [TS]

01:19:49 ◼   ► could be quite sure and maybe a run on the exchange which has happened [TS]

01:19:51 ◼   ► essentially the same way a divided state law says that a casino must have the [TS]

01:19:59 ◼   ► cash in the building [TS]

01:20:02 ◼   ► as they have casino chips in circulation which makes sense right [TS]

01:20:08 ◼   ► perfect sense if everybody in the casino all at once wanted to cash in the chips [TS]

01:20:13 ◼   ► that they have in front of them [TS]

01:20:15 ◼   ► casinos legally obligated have enough cash to cover and this is why the [TS]

01:20:19 ◼   ► wonderful the FDIC is one of the best agencies we have in america I'm [TS]

01:20:25 ◼   ► confident the former head of the FDIC I'm confident even though she did not [TS]

01:20:29 ◼   ► get her role extolled as much she was not one of the boys in the room [TS]

01:20:32 ◼   ► Sheila she is the reason that the entire American economy Sheila Bair which has [TS]

01:20:40 ◼   ► left the FDIC she cut deals that prevented the USS economy from falling [TS]

01:20:44 ◼   ► apart by keeping banks open and she made that happen and the FDIC's [TS]

01:20:49 ◼   ► 2002 and 2008 right she she display everyone talking about all these other [TS]

01:20:56 ◼   ► people she is actually the reason our economy did not collapse and we do not [TS]

01:21:01 ◼   ► actually go into depression I'm confident history will prove that [TS]

01:21:03 ◼   ► because the top of the people in the top name all these guys are crapping shit so [TS]

01:21:11 ◼   ► anyway the FDIC exists as an entity because we had bank runs in the regular [TS]

01:21:15 ◼   ► the depression happen thanks did not have enough money your money is in he [TS]

01:21:18 ◼   ► wrote mr Thompson's house and it's it's it's the Bailey savings and loan the [TS]

01:21:23 ◼   ► scene so what's my money doing over there so when you have a run to the bank [TS]

01:21:27 ◼   ► banks are not obliged to keep a hundred percent of their deposits on hand they [TS]

01:21:30 ◼   ► lend them out and make money the FDIC is the backstop and see the Federal Deposit [TS]

01:21:37 ◼   ► Insurance Commission they said they take premiums from banks and they use that to [TS]

01:21:41 ◼   ► have a fund that backstops certain amount of loss thanks go under and the [TS]

01:21:46 ◼   ► FDIC's out their clothes in Bankstown it's kind of cool if you've heard the [TS]

01:21:49 ◼   ► FDIC no it's cool I think Planet Money do they basically they show up on a [TS]

01:21:57 ◼   ► Friday they're all dressed in plain clothes and they show off their [TS]

01:22:01 ◼   ► credentials and they shut down and they take it over and no one of the bank has [TS]

01:22:04 ◼   ► allowed to talk about it they spend the weekend on the books whatever it opens [TS]

01:22:07 ◼   ► on Monday it's like is like it is like a spy operation because they do not want [TS]

01:22:13 ◼   ► to know [TS]

01:22:14 ◼   ► they'll come into town I understand the rent rooms in hotels now the same hotel [TS]

01:22:17 ◼   ► they do people that do not want to run on the bank is the accounting version of [TS]

01:22:22 ◼   ► gangster movie called the cleaner and that's what they do they do it I tell in [TS]

01:22:30 ◼   ► pulp fiction right yeah you know we all sit here and I don't want any attention [TS]

01:22:35 ◼   ► and no no no not Reservoir Dogs Pulp Fiction when they go look we just want [TS]

01:22:40 ◼   ► to clean this mess up [TS]

01:22:41 ◼   ► nobody's gonna know the better right but it's it's a 10 numbers are alleging the [TS]

01:22:48 ◼   ► bank apart into small pieces in the top so I don't make sure but the FDIC [TS]

01:22:56 ◼   ► backstops banks of banks don't have enough money on hand the FDIC is there [TS]

01:23:00 ◼   ► to pay depositors up to a certain amount which is you know you're so small [TS]

01:23:05 ◼   ► depositors never get and so people don't panic don't know we don't runs on the [TS]

01:23:10 ◼   ► bank because people believe that the US government in the form of the FDIC will [TS]

01:23:15 ◼   ► backstop thanks and we saw that in the 2008 crisis there is no FDIC for Bitcoin [TS]

01:23:20 ◼   ► and maybe one will be created but when when there's a run on an operation [TS]

01:23:25 ◼   ► exchange has some of the big win some money cash and they cannot cash [TS]

01:23:28 ◼   ► everything out once and are not obliged to the way they run so let's get down [TS]

01:23:34 ◼   ► like you said that the government you know and it really does annoy me in [TS]

01:23:38 ◼   ► Marco had a good piece this week about it doesn't make any sense to talk about [TS]

01:23:42 ◼   ► the government as a single entity and complain that the government is also the [TS]

01:23:46 ◼   ► government is you know is comprised of of thousands of individual organizations [TS]

01:23:54 ◼   ► from the federal to the state level FDIC is a great example of the government [TS]

01:23:59 ◼   ► work because the main point of it is if you had to see a bank and you see that [TS]

01:24:04 ◼   ► the bank is in the ICU and I believe it's probably not even legal they open a [TS]

01:24:09 ◼   ► bank that part of the FDIC you can't do it like it is open I think tank that's [TS]

01:24:15 ◼   ► all you have to do is to be like a governing regulator there's different [TS]

01:24:18 ◼   ► choices the FDIC insurance but it seems that all of us every single citizen [TS]

01:24:23 ◼   ► can just you don't have to worry about doing the research and figuring out is [TS]

01:24:27 ◼   ► this bank legit is you know if I go in there and put my paycheck in deposit you [TS]

01:24:32 ◼   ► know created checking account and put my whole paycheck in there is that money [TS]

01:24:36 ◼   ► safe you have to worry about it just is you really mean I have to do is have [TS]

01:24:40 ◼   ► faith in the USA government and at one point you remember for a long time the [TS]

01:24:44 ◼   ► FDIC said she noted by the commercial on TV for bank deposits are insured up to [TS]

01:24:48 ◼   ► the maximum $100,000 by the FDIC and then during the crisis they lifted that [TS]

01:24:53 ◼   ► amount of forget to 19 Oakland now because there are enough people who like [TS]

01:24:58 ◼   ► you know you're my parents other house and hundreds of thousands of dollars in [TS]

01:25:02 ◼   ► the house which they plan to live on for the slides in the bank and more than a [TS]

01:25:06 ◼   ► hundred grand in one account and if a bank fails you only ensured in some [TS]

01:25:11 ◼   ► other countries they immediately lifted it to unlimited because they did not [TS]

01:25:14 ◼   ► want any depositors to not be made whole they felt it was a better risk to [TS]

01:25:19 ◼   ► prevent a run on the bank especially by high net worth individuals who might [TS]

01:25:22 ◼   ► have a million bucks and then to worry about the problem of reclaiming my later [TS]

01:25:28 ◼   ► it worked out and the limit I think that that limit was pretty old it you know it [TS]

01:25:36 ◼   ► was like a hundred thousand dollars in nineteen fifty dollars I don't know [TS]

01:25:41 ◼   ► which you know is a far cry from $100,000 in 2008 it's very easy for [TS]

01:25:47 ◼   ► people who are in the age range from like 50 to 80 to 100 grand in the bank [TS]

01:25:52 ◼   ► because of house sales basically they downsize people's parents lived in the [TS]

01:25:57 ◼   ► Bay Area and they've got a million dollars for their house they never [TS]

01:26:00 ◼   ► expected windfall and they might have like a tiny pension whatever they don't [TS]

01:26:05 ◼   ► even know how to handle it so there is nothing there's no backstop and so with [TS]

01:26:09 ◼   ► mount gods so bangkok's has all kinds of weird things you may know it started as [TS]

01:26:13 ◼   ► they called Magic the Gathering online exchange teach you know that I did yes [TS]

01:26:22 ◼   ► so they thought they were going to be a man and what I read the other day [TS]

01:26:27 ◼   ► pointed out that if they'd actually invested in Magic the Gathering coins [TS]

01:26:30 ◼   ► back when they started they would [TS]

01:26:32 ◼   ► cards rather they would probably have a better return than what's happened if [TS]

01:26:36 ◼   ► some cards are worth like to that so many cocks people been documenting for [TS]

01:26:43 ◼   ► years the deficiencies in their programming their security their [TS]

01:26:47 ◼   ► response they they had they didn't find the right paperwork her acting the way [TS]

01:26:52 ◼   ► in the united states and the USS see is that it was five million dollars from [TS]

01:26:56 ◼   ► them because they didn't have they were operating as essentially a kind of [TS]

01:27:00 ◼   ► entity that they were in and they just didn't do the right work like I think [TS]

01:27:03 ◼   ► they could have been operating as identity there are between exchanges of [TS]

01:27:06 ◼   ► operated states that have filed the paperwork correctly so the the earth's [TS]

01:27:13 ◼   ► tilt whole unclear what happened because they have a release enough information [TS]

01:27:19 ◼   ► they claim they've lost what was the number it's a crazy number it's like [TS]

01:27:23 ◼   ► seven percent of all outstanding bitcoins is $750,000 in Queens owned by [TS]

01:27:33 ◼   ► its users and a hundred thousand its own and the issue is we don't know what lost [TS]

01:27:37 ◼   ► means yet because we haven't done a forensics thing in Japan there are based [TS]

01:27:41 ◼   ► in Japan for their offices where it could be they lost all the private keys [TS]

01:27:45 ◼   ► they didn't do a good job and they didn't recover gone from the system [TS]

01:27:49 ◼   ► right and there's some suspicion that there are potentially hundreds of [TS]

01:27:53 ◼   ► thousands or maybe even as many as millions of bitcoins that will never be [TS]

01:27:57 ◼   ► recovered because the private keys are lost there's no recovery process where [TS]

01:28:01 ◼   ► they can be reclaimed so that's one concern the other is it might have been [TS]

01:28:04 ◼   ► left someone got access one party was saying is article recently couple days [TS]

01:28:09 ◼   ► ago about how included all the SSH he is like its private keys in its server code [TS]

01:28:17 ◼   ► and things like that so so it's crazy so like theirs they just are not you know [TS]

01:28:25 ◼   ► they clearly without you know alleging anything it's clear they were not [TS]

01:28:30 ◼   ► rigorously technically technically they were not competent the other thing is [TS]

01:28:36 ◼   ► always that and again I can verify but I saw the other day that they apparently [TS]

01:28:40 ◼   ► the whole system that computer system they were not using any sort of source [TS]

01:28:46 ◼   ► control software was like so so there's that save all kinds of technical [TS]

01:28:53 ◼   ► deficiency but so one suspicion is there's a problem call transaction [TS]

01:28:57 ◼   ► malleability that is suspected might be the cause of a really good analysis [TS]

01:29:02 ◼   ► couple days ago that that suggested that the scale what happened it couldn't be [TS]

01:29:06 ◼   ► so there is a flaw in between in the big Queens software clients and some of the [TS]

01:29:12 ◼   ► implementations I understand it's not a protocol but well she said so this [TS]

01:29:18 ◼   ► transaction thing I was talking about what should happen is I am sending you [TS]

01:29:22 ◼   ► one between John and the transaction that my software generates which [TS]

01:29:26 ◼   ► probably is a standard between library that the Bitcoin foundation essentially [TS]

01:29:30 ◼   ► maintains its open source that Transocean transaction has a transaction [TS]

01:29:34 ◼   ► and even some unique information I signed it and boom so what should be [TS]

01:29:38 ◼   ► impossible for someone else to generate a transaction that is looks like mine [TS]

01:29:43 ◼   ► and validated and even has the same destination so it doesn't hijack who the [TS]

01:29:49 ◼   ► money is going to rate it just looks valid and has the same recipients under [TS]

01:29:54 ◼   ► that should not be possible and it is in fact possible to create fake [TS]

01:29:59 ◼   ► transactions [TS]

01:29:59 ◼   ► transactions [TS]

01:30:00 ◼   ► after a legitimate one is created so other parties can allegedly create bad [TS]

01:30:05 ◼   ► transactions in there have even been denial of service attempts were many bad [TS]

01:30:09 ◼   ► transactions are created for each good one if the bad transactions are taken up [TS]

01:30:13 ◼   ► first they get back into the record and the problem is some software didn't [TS]

01:30:20 ◼   ► validate whether the transaction I D had changed and if they know dorothy was [TS]

01:30:24 ◼   ► just the idea if they notice it had changed it would have invalidated that [TS]

01:30:29 ◼   ► transaction or some other aspect there like so so the coins are actually [TS]

01:30:33 ◼   ► transferred but the exchange for instance this case would not recognize [TS]

01:30:38 ◼   ► it because the transaction I D didn't match so I've done everything right I've [TS]

01:30:42 ◼   ► sent you a coin you say never got it [TS]

01:30:45 ◼   ► exchange say it says in go through and I look and I'm like my software says it [TS]

01:30:49 ◼   ► doesn't look in the block the block says it was minted and you say no my chances [TS]

01:30:53 ◼   ► never went through an ego and mount box apparently had an automated system that [TS]

01:30:58 ◼   ► when a transaction appear to not go through they would send it again it's [TS]

01:31:02 ◼   ► unclear how often would send it again so if you were a malicious party you could [TS]

01:31:06 ◼   ► concoct away in transactions with Matt mountain gods to create false ones and [TS]

01:31:11 ◼   ► get the same money multiple times but because you can't change all the [TS]

01:31:14 ◼   ► printers you can't the seal the coins it's more away to leak money out from [TS]

01:31:18 ◼   ► transactions that are that had some legitimate basis to start with and then [TS]

01:31:22 ◼   ► you can sort of suck money out or people intentionally send more money than they [TS]

01:31:27 ◼   ► meant to end the recipient doesn't even know that more money was sent so that [TS]

01:31:31 ◼   ► was one suspicious does not appear like that the scale of it would make sense [TS]

01:31:34 ◼   ► it's more likely they're bad security led to someone still hold the private [TS]

01:31:38 ◼   ► keys [TS]

01:31:39 ◼   ► well what's the solution to this [TS]

01:31:42 ◼   ► you know how if somebody wanted to get involved [TS]

01:31:45 ◼   ► and buy some bitcoins in have these [TS]

01:31:49 ◼   ► I mean I guess the solution is to find a reputable and technically competent [TS]

01:31:53 ◼   ► exchange but how how how is a normal person supposed to figure out to [TS]

01:31:58 ◼   ► determine what is a reputable and technically competent exchange well I [TS]

01:32:04 ◼   ► think this is what the market trying to do now is you know even though the [TS]

01:32:08 ◼   ► valuation of bitcoins arbitrators enough people involved the system using it that [TS]

01:32:12 ◼   ► even with Matt Cox failure and and all this stuff happening value has not we're [TS]

01:32:19 ◼   ► talking right now to see those 60 hasn't crashed I'm talking and 20 but but the [TS]

01:32:28 ◼   ► the the market and go from $1,000 a Bitcoin 220 you know it went from [TS]

01:32:33 ◼   ► looking right now the current standard as we talk is somewhere in the $600 [TS]

01:32:38 ◼   ► range I actually think and again I am Bitcoin dummy but as you know I've never [TS]

01:32:46 ◼   ► put a nickel into it and then still not tempted to but this is a curious [TS]

01:32:51 ◼   ► observer I would actually say that that what's happened to the value of between [TS]

01:32:55 ◼   ► in the last few weeks actually shows a significant amount of stability you know [TS]

01:33:00 ◼   ► like going from a thousand to 600 is a pretty significant crash but not what I [TS]

01:33:05 ◼   ► would have expected when I first heard about the mailbox and I thought well [TS]

01:33:08 ◼   ► there goes that's the toilet flush you know bitcoins gonna drop down to $25 a [TS]

01:33:14 ◼   ► Bitcoin should have happened if it actually made a fatal event or near [TS]

01:33:18 ◼   ► field event is the value should have just gone off by like 50 percent what [TS]

01:33:22 ◼   ► should happen is people will be trying to get liquidity out of it they would [TS]

01:33:25 ◼   ► have been unable to and they would have accepted lower lower amounts until it [TS]

01:33:28 ◼   ► was like $10 a Bitcoin and in the market collapse instead it went down like a [TS]

01:33:33 ◼   ► five hundred and it's rebounded a bit which means that there are people who [TS]

01:33:37 ◼   ► believe they have enough value in the system and retaining their big win in [TS]

01:33:40 ◼   ► the system that they weren't panicked and tried to exchange around 900 and [TS]

01:33:45 ◼   ► I've sort of avoided linking to a lot of the Big Concept they just don't [TS]

01:33:48 ◼   ► understand it but I know that there's a lot [TS]

01:33:50 ◼   ► of you know sort of hey this is actually a good thing for Bitcoin and then [TS]

01:33:55 ◼   ► there's the skeptics which I kind of agree with this is no this is not now [TS]

01:33:59 ◼   ► cops is not a good thing for Bitcoin you can argue that I I think it's it's sort [TS]

01:34:04 ◼   ► of halfway in the middle which is no its not good that it happened i mean and no [TS]

01:34:08 ◼   ► matter whether it was crime or just incompetent it bad either way but the [TS]

01:34:11 ◼   ► fact that after this bad thing happened which was bad that it was relatively [TS]

01:34:17 ◼   ► stable value wise I think should is a good thing it shows that you know [TS]

01:34:22 ◼   ► there's a certain stability to it you have to all the volatility I think this [TS]

01:34:27 ◼   ► was actually pretty remarkable in some of that comes now because you have [TS]

01:34:30 ◼   ► people like the the Winklevoss twins who have put a pile of money in and they own [TS]

01:34:35 ◼   ► it is a on a single digit percentage of their other parties and so this is one [TS]

01:34:42 ◼   ► of the things that came out the other day I think it was a few hundred people [TS]

01:34:47 ◼   ► on fifty percent of all the coins in which is an undue strain were big [TS]

01:34:52 ◼   ► winners of democratizing you're like ok you know and then like he was like a few [TS]

01:34:56 ◼   ► thousand people on 75 percent so there's this issue about always mentioned [TS]

01:35:03 ◼   ► earlier samarkand rhesus 01 the company's you can look at and I have no [TS]

01:35:06 ◼   ► connection to it in fact might even be seen as a skeptic because I had all this [TS]

01:35:10 ◼   ► back and forth with Marc Andreessen who is incredibly funny on Twitter in a [TS]

01:35:13 ◼   ► really great sparring partner by the way is really a good sport and we'll talk [TS]

01:35:17 ◼   ► about all this stuff which is impressive as most people who have piles of money [TS]

01:35:21 ◼   ► and think there were no everything and they don't want to talk to you but they [TS]

01:35:24 ◼   ► don't listen he listened to the talks he's very funny and so he wrote the [TS]

01:35:27 ◼   ► op-ed piece for The New York Times that the deal book section about why the [TS]

01:35:32 ◼   ► Queen was so wonderful because it reduced transaction fees to practically [TS]

01:35:36 ◼   ► nothing or nothing it would be a great thing for all these parties I i disagree [TS]

01:35:39 ◼   ► with a bunch of his statements I rode along thinking he and I went back for [TS]

01:35:42 ◼   ► that it was very it was elusive to me his thinking about how you make between [TS]

01:35:47 ◼   ► the two a stable thing that this becomes part of the international banking system [TS]

01:35:52 ◼   ► like he is not a political rabble rouser what he wants in the wake of Aussie [TS]

01:35:56 ◼   ► vaccine [TS]

01:35:57 ◼   ► him and the rest of the folks who are trying to make this work is they want a [TS]

01:36:02 ◼   ► system that's outside the inefficiencies that had known as the security of [TS]

01:36:05 ◼   ► Bitcoin is outside of the inefficiency the banking system but doesn't need to [TS]

01:36:09 ◼   ► be above the law and not subject to regulation scrutiny they basically want [TS]

01:36:13 ◼   ► something that makes money move as fast as email and I get that there's a reason [TS]

01:36:18 ◼   ► so marks invested in his base that's where I put 50 bucks in no way between [TS]

01:36:23 ◼   ► dropped in value health because I put 50 bucks worth $25 my faults like washing [TS]

01:36:28 ◼   ► your car so corn-based is clearly a place to start because they're trying to [TS]

01:36:33 ◼   ► do everything right and they're not trying to be chartered in a boat off the [TS]

01:36:38 ◼   ► coast of Iceland and under somali law they're trying to do it so it's [TS]

01:36:42 ◼   ► interesting place to start from a group that's trying to see how they can comply [TS]

01:36:46 ◼   ► work within the system [TS]

01:36:47 ◼   ► Quentin hardy wrote this piece based partly on market my exchange rate this [TS]

01:36:54 ◼   ► thing for the new york times I recommend reading in which he talked about the [TS]

01:36:57 ◼   ► rise of a kind of super rich transnational class he said I threw down [TS]

01:37:02 ◼   ► he said he was sitting with some very very wealthy people he said if I threw [TS]

01:37:05 ◼   ► down passports from was three or five countries all them stay like singapore [TS]

01:37:09 ◼   ► united states whatever which one would you pick up and the guy started the [TS]

01:37:12 ◼   ► debate which one they didn't say the country that I from the Tamil [TS]

01:37:14 ◼   ► nationalist influence he worries in part that pic when less people become it [TS]

01:37:20 ◼   ► takes money outside of the spirit of national influence and make it lets [TS]

01:37:24 ◼   ► people were extremely wealthy sort of live in a cloud above the world so there [TS]

01:37:28 ◼   ► is some of that thinking especially when you see that you know between is [TS]

01:37:32 ◼   ► controlled by relatively small number of people there controlled by a relatively [TS]

01:37:36 ◼   ► small number of people is one reason why the currency remains stable because they [TS]

01:37:39 ◼   ► have the economic wherewithal to not need to pull them out of the system at [TS]

01:37:43 ◼   ► all over [TS]

01:37:44 ◼   ► I would say this though I mean who knows where them and you'll value of it is [TS]

01:37:48 ◼   ► going to go right now though $600 Bitcoin if there's a limited 21 million [TS]

01:37:55 ◼   ► that's somewhere around 12 billion dollars for ivory Bitcoin there could [TS]

01:38:01 ◼   ► ever be human if you double that or triple it you're talking 2550 billion [TS]

01:38:08 ◼   ► dollars now who knows maybe it'll go up tenfold twenty-fold 30 fold and then [TS]

01:38:12 ◼   ► become more and more but as it stands a tired the entirety of Bitcoin is only [TS]

01:38:20 ◼   ► worth ten twenty thirty billion dollars I don't see that as a global dis I can [TS]

01:38:30 ◼   ► see why governments are in that ready to jump in and try to regulate [TS]

01:38:35 ◼   ► brake inflation within the Bitcoin system to make the coins liable enough [TS]

01:38:40 ◼   ► individually they can divide them into tiny pieces explain to me the actual [TS]

01:38:45 ◼   ► bitcoins how is that how can you put $50 in the coin base and have anything [TS]

01:38:50 ◼   ► a Bitcoin 600 bucks this is the ridiculous part so it's almost like [TS]

01:38:55 ◼   ► owning a fraction of a share of stock at some level because be queens are only [TS]

01:38:59 ◼   ► essentially therefore transactions I can only send you money so if I have 50 [TS]

01:39:05 ◼   ► bitcoins in a in my wallet and I want to send you 49 I have to do exchange [TS]

01:39:12 ◼   ► transactions I actually seen you 49 and I sent myself one and this is the way [TS]

01:39:17 ◼   ► the fact that I have to send changed myself there's a flaw in most current [TS]

01:39:21 ◼   ► clients that makes those transactions essentially trackable and researchers [TS]

01:39:25 ◼   ► have shown they can do this thing that even after hundreds of transactions they [TS]

01:39:29 ◼   ► can actually trackback between city origin by unappealing all these change [TS]

01:39:33 ◼   ► transactions see where the money went so I can send you a tiny tiny amount of [TS]

01:39:38 ◼   ► curse of the current smallest unit is one times tend to the negative 88001 [TS]

01:39:45 ◼   ► that's called a set of sheets the basic and the protocol could easily be adapted [TS]

01:39:51 ◼   ► to have smaller fractions or even reverses one between his ass Atocha or [TS]

01:39:57 ◼   ► something there's no there's nothing that prevents that from happening [TS]

01:40:00 ◼   ► without lets me send tiny amounts of money but I sent essentially the things [TS]

01:40:06 ◼   ► people can wind up with all these wallets like you can have piles of [TS]

01:40:10 ◼   ► Bitcoin addresses and then eventually may consolidate them so you take one [TS]

01:40:13 ◼   ► addresses got 43 but there is one of those points 05 and you essentially pay [TS]

01:40:18 ◼   ► yourself all of the small ones he wanted one address and has you know 750,000 so [TS]

01:40:25 ◼   ► there is a lot of mucking around and people typically use client software [TS]

01:40:29 ◼   ► that handles the details but the client software masks a lot of transaction that [TS]

01:40:33 ◼   ► can leak some of the anonymity and there's also even talk about those coin [TS]

01:40:40 ◼   ► I've heard of it i dont getting so and Ars Technica just launched our Scorpio [TS]

01:40:47 ◼   ► dozed Wednesday oge coin yeah it's real thing it's a real thing actually is [TS]

01:40:53 ◼   ► has value and it was a parody was launched two months ago in December 31 [TS]

01:40:58 ◼   ► three months ago december and people are investing it's big it's got different [TS]

01:41:05 ◼   ► properties then it's it's a code for it from Bitcoin which is open source it is [TS]

01:41:10 ◼   ► different properties including mining technique that is not consumed [TS]

01:41:13 ◼   ► eventually the power of our son occupations it's got a non scaling [TS]

01:41:20 ◼   ► discuss whatever is using it using something that does not require the [TS]

01:41:26 ◼   ► scaling capabilities you need to do [TS]

01:41:28 ◼   ► engines actions and and there's late coin which is a different standard [TS]

01:41:33 ◼   ► standard there's something called 0 coin where one guy who's a researcher who [TS]

01:41:38 ◼   ► wanted to create pure anonymity that you could put into Bitcoin after being sort [TS]

01:41:44 ◼   ► of rebuffed about embedding inside that claimed he and other folks are going to [TS]

01:41:48 ◼   ► launch a Bitcoin like currency that will allow Bitcoin like coins and totally [TS]

01:41:53 ◼   ► anonymous coins that no two transactions can be connected to one another to be [TS]

01:41:58 ◼   ► exchanged in so there's always an explosion of crypto currency as well [TS]

01:42:02 ◼   ► those quite as the funniest one but has it it's real people started as a parody [TS]

01:42:08 ◼   ► yeah and it turns out that like it's actually got some properties people like [TS]

01:42:12 ◼   ► including the initial it's the number of very funny just like the initially a [TS]

01:42:18 ◼   ► hundred billion coins can be mined by the end of this year but there is a [TS]

01:42:22 ◼   ► fixed rate of five billion coins after that so there's a built-in inflation and [TS]

01:42:25 ◼   ► it does not shrink over time you're losing me well if it is no time limit on [TS]

01:42:34 ◼   ► how many those coins can IC IC I know it's crazy but crazy love it it's sort [TS]

01:42:40 ◼   ► of funny and it's sort of weird but it's back to I think some of the points you [TS]

01:42:44 ◼   ► had earlier in is that is why I like to make sure everyone listening to this no [TS]

01:42:52 ◼   ► matter whether you're in Europe or America banking is ridiculous bank is [TS]

01:42:56 ◼   ► ridiculous banks existed to the bank's existing structure fees from us and they [TS]

01:43:01 ◼   ► run the most insecure system in the world the booths care system i think is [TS]

01:43:05 ◼   ► like chip and pin is actually and why he's here but that's great for doing [TS]

01:43:08 ◼   ► that kind of transaction but like wire transfers are totally unsecured as its [TS]

01:43:12 ◼   ► past in the clear ATM has the ATMs have certain kinds of encryption and security [TS]

01:43:17 ◼   ► they're really good others at a ridiculous so you can't you know when [TS]

01:43:21 ◼   ► you can add a dollar bill you don't know if it's real what percentage of some [TS]

01:43:24 ◼   ► number about the percentage of $100 bills and circulation the world that are [TS]

01:43:27 ◼   ► that are [TS]

01:43:28 ◼   ► counterfeit fraudulent yeah so the the fact is Bitcoin in systems like the [TS]

01:43:35 ◼   ► something like it will get incorporated into the banking and transaction system [TS]

01:43:39 ◼   ► if not into our currency system because of this property that because that the [TS]

01:43:46 ◼   ► cryptographic nature of it prevents a whole bunch of bad behavior [TS]

01:43:50 ◼   ► France doubles spending Prince counterfeiting it prevents legitimacy [TS]

01:43:55 ◼   ► and ownership it's very hard I mean so people have to these exchanges and [TS]

01:44:00 ◼   ► wallet services in stolen private keys but if you do security correctly which [TS]

01:44:04 ◼   ► people can do then it doesn't matter she get hacked into the keys are still [TS]

01:44:09 ◼   ► protected by another layer of passphrase and their unrecoverable by the thief so [TS]

01:44:13 ◼   ► there's ways to do it correctly it so there is a way where instead of doing a [TS]

01:44:17 ◼   ► credit card transaction the way we do now which is you know ridiculously [TS]

01:44:20 ◼   ► unsecured and just do the numbers and times to do it over the phone that you [TS]

01:44:26 ◼   ► be able to see ya so what if you know what if he's released a web based you [TS]

01:44:31 ◼   ► know signing thing that used that let you use permit was very much like [TS]

01:44:36 ◼   ► Bitcoin but was entirely on their system you'd love it because you said [TS]

01:44:40 ◼   ► Verified by Visa which i think is still in use you go to the merger would pop up [TS]

01:44:44 ◼   ► the visa window and you can check that was a secure connection and you punch [TS]

01:44:49 ◼   ► your password into visa site and it would then confirming you are legitimate [TS]

01:44:52 ◼   ► but your password never went to was like an extra step in that was it's [TS]

01:44:56 ◼   ► reasonable to me that you we could change the credit card system so that [TS]

01:45:00 ◼   ► you couldn't do a transaction over the phone in the same way that we accept you [TS]

01:45:07 ◼   ► can't send cash over the phone right like a vial you 25 bucks I there's no [TS]

01:45:12 ◼   ► way that I can do it right now talking to you over Skype there's no number I [TS]

01:45:15 ◼   ► can read to you that could do it [TS]

01:45:17 ◼   ► I think it's reasonable that we would lose the ability to call somebody over [TS]

01:45:21 ◼   ► the phone and give them a credit card number and have it count because our [TS]

01:45:25 ◼   ► phones more and more are computers with an IP connection that you can run a nap [TS]

01:45:32 ◼   ► or connect to a website and do cryptographic communication will be as [TS]

01:45:39 ◼   ► simple as you know like to factor kind of thing is I could be registered with [TS]

01:45:43 ◼   ► different coins systems or credit card systems in my phone and I call to make a [TS]

01:45:47 ◼   ► transaction that like great ok we like to process that can you read us the six [TS]

01:45:51 ◼   ► digit number that's just been texted to your phone or burundi [TS]

01:45:54 ◼   ► obese authenticator app and you pulled up and you go it's improbable blood and [TS]

01:45:58 ◼   ► that verifies my identity or at least five stolen information is still a lot [TS]

01:46:02 ◼   ► of information from somebody is not just a routine drive by credit card theft and [TS]

01:46:07 ◼   ► but so there's lots of aspects of Bitcoin that I believe this is why you [TS]

01:46:11 ◼   ► know they had a congress held hearings last year about Bitcoin in a friend of [TS]

01:46:16 ◼   ► mine attended them and he was stunned in in the coverage indicated this is well [TS]

01:46:19 ◼   ► how positive in interested senators instead staffers worrying and [TS]

01:46:24 ◼   ► congressmen and women were about the positive aspects of it and the banks are [TS]

01:46:30 ◼   ► very very interested in the regulators are interested in it they don't just [TS]

01:46:32 ◼   ► want to prevent activity or captured taxol that's certainly part of it it's [TS]

01:46:38 ◼   ► also that they do actually see the positive parts of having a [TS]

01:46:43 ◼   ► cryptographically robust I didn't eat secured system that we don't have now [TS]

01:46:48 ◼   ► into those kinda cool I did not expect to see that much openness the people who [TS]

01:46:52 ◼   ► work or between users he the notion typically the government would get [TS]

01:46:55 ◼   ► involved the new people coming in like andreessen the Winklevoss and so forth [TS]

01:46:59 ◼   ► they're much more than having government involvement at a certain level to [TS]

01:47:04 ◼   ► provide both like trust and to remove more the criminal element as well I mean [TS]

01:47:08 ◼   ► I think like any government regulation is like almost everything in life [TS]

01:47:13 ◼   ► everything where you know moderation is the key [TS]

01:47:17 ◼   ► you know there's too little and there's too much and so on and the polar ends of [TS]

01:47:22 ◼   ► politics there's always going to be people [TS]

01:47:24 ◼   ► pushing for the extreme you know do it true you know almost anarchist [TS]

01:47:28 ◼   ► libertarians who want almost no government regulation over every any [TS]

01:47:34 ◼   ► aspect of life period and on the other end people you know who push for too [TS]

01:47:39 ◼   ► much and I think you know I think Bitcoin and government regulation over [TS]

01:47:46 ◼   ► these sort of Bitcoin in other things like it is no regard for the right [TS]

01:47:52 ◼   ► amount of government regulation is not zero if you've ever tried to pay [TS]

01:47:56 ◼   ► somebody in another country [TS]

01:47:58 ◼   ► anything except through Paypal which has its own issues and problems and its [TS]

01:48:04 ◼   ► weird actually PayPal works as well yeah because every other method is horrible [TS]

01:48:09 ◼   ► to pay you have to pay huge piece or it's impossible takes a long time never [TS]

01:48:13 ◼   ► gets there and there's some there's a huge thing about remittances this is one [TS]

01:48:16 ◼   ► thing that increasing mentioned I think it's worth bringing up is that there is [TS]

01:48:19 ◼   ► a potential benefit for poor people for the poorest people the world especially [TS]

01:48:23 ◼   ► immigrants who live in far-flung countries from other parts of family [TS]

01:48:27 ◼   ► there's a huge amount of money extracted when if you live in America and you say [TS]

01:48:32 ◼   ► money back to you on something like this there's a huge fee that comes out this [TS]

01:48:36 ◼   ► and it's it's not 10 percent I think it's typically multiple percentage [TS]

01:48:40 ◼   ► points and then there's often banks have remittance and other views [TS]

01:48:43 ◼   ► plus the government me take a child as well for incoming money so just like [TS]

01:48:47 ◼   ► Voice over IP at the crack earliest Lake 1200 bps dial-up you could still get a [TS]

01:48:53 ◼   ► voice over it or whatever like the minute Voice over IP became a real thing [TS]

01:48:57 ◼   ► that changed the relationship between all these far-flung people and people [TS]

01:49:02 ◼   ► were able to talk to the family and then Skype video even at low bandwidth let [TS]

01:49:06 ◼   ► them see their families again and so there's as hundreds of billions of [TS]

01:49:10 ◼   ► dollars in the system that are that are sucked out because each year hundreds of [TS]

01:49:14 ◼   ► billions dollars are transferred among countries by poor people essentially [TS]

01:49:17 ◼   ► sending money back home and there is an advantage there and in just in for a [TS]

01:49:20 ◼   ► buddy in the show you in the middle class and above or you know things like [TS]

01:49:23 ◼   ► the unbanked and the non-bank the people who can't or the unbanked unless bank or [TS]

01:49:29 ◼   ► something its [TS]

01:49:30 ◼   ► people have a hard time having a bank account because of the chemical [TS]

01:49:33 ◼   ► imbalance or because they didn't leave that doesn't have bank right like this [TS]

01:49:38 ◼   ► food deserts push in the us- what's your name from the great senator from [TS]

01:49:46 ◼   ► Massachusetts has brought this up to push to turn post offices in the bank's [TS]

01:49:55 ◼   ► let people do simple simple banking at the post offices because there is a Post [TS]

01:50:01 ◼   ► Office accessible to everybody in low-income urban areas so it's only [TS]

01:50:10 ◼   ► three people opposed to her existing banks commercial it's it's expensive to [TS]

01:50:15 ◼   ► be poor [TS]

01:50:16 ◼   ► this is a horrible thing if you're the working poor it's one the most expensive [TS]

01:50:19 ◼   ► things one was expensive ways of life because you have to check cashing [TS]

01:50:23 ◼   ► outfits to get your money [TS]

01:50:25 ◼   ► excessive fees because you don't qualify for the level of things don't have fees [TS]

01:50:28 ◼   ► you pay subprime mortgages you pay like every part of the system is designed to [TS]

01:50:32 ◼   ► keep you down and say it's unintentional it may just be systematic is systemic [TS]

01:50:37 ◼   ► but there's all this predatory action it's and it's it's actually a time gone [TS]

01:50:44 ◼   ► long but the us- post offices anybody's curies Google in read about it's [TS]

01:50:50 ◼   ► actually pretty clever because it works two ways one it would help a lot of [TS]

01:50:54 ◼   ► people who don't have access like you said underbanked non-bank people to it [TS]

01:50:59 ◼   ► would actually help the post office because the post office is [TS]

01:51:03 ◼   ► self-sufficient financially they r operate on the postage that they sell a [TS]

01:51:10 ◼   ► lot of people who are sort of opposed to the post office that day you know should [TS]

01:51:13 ◼   ► just go private or whatever because they think it's sucking up tax money but it's [TS]

01:51:18 ◼   ► not [TS]

01:51:18 ◼   ► but the problem they're running into is that as the world goes digital the [TS]

01:51:22 ◼   ► people are sending less unless mail and so that you know it's getting harder for [TS]

01:51:27 ◼   ► them to keep postage rates low and stay in the black if they got into banking it [TS]

01:51:32 ◼   ► would be it would infuse them with you know funds to be solving sure you know [TS]

01:51:40 ◼   ► the post office not to get too deep to the post of a scam is that the congress [TS]

01:51:43 ◼   ► even though it's essentially a private agency run its own funds congress forces [TS]

01:51:48 ◼   ► them to find their pension at a level that is so far ahead the post office [TS]

01:51:53 ◼   ► required to contribute a level that's far I have solvency and essentially no [TS]

01:51:57 ◼   ► corporation no other part of government no steady state or federal is required [TS]

01:52:01 ◼   ► to fund the pensions their way into the post office actually in better shape [TS]

01:52:05 ◼   ► than it seems accepted obligated to put money away that it does not need to it's [TS]

01:52:09 ◼   ► the weirdest thing it's it's part of the it's it's a longstanding political [TS]

01:52:13 ◼   ► problem but but yeah be great for us to far-field there but it's there are great [TS]

01:52:18 ◼   ► benefits to something like Bitcoin that relies on that doesn't rely on using [TS]

01:52:22 ◼   ► physical pieces of paper or parts of the banking system that are designed to [TS]

01:52:26 ◼   ► extract money at every step that the bars are putting the way not to not for [TS]

01:52:31 ◼   ► sensible reasons like reducing fraud or reducing I don't know the country's know [TS]

01:52:38 ◼   ► where my is moving to pay tax at these things in place for that but a lot of [TS]

01:52:41 ◼   ► the banking system the private banking system is set up for the purpose of [TS]

01:52:44 ◼   ► extracting the most bees from the most people as banks make massive profits off [TS]

01:52:49 ◼   ► typical banking operations so bitcoins potential or things like big way would [TS]

01:52:54 ◼   ► be to break some of the monopoly of banks holding money so you know about [TS]

01:52:59 ◼   ► this thing called hawala rate this a longstanding transfer system ok so we're [TS]

01:53:06 ◼   ► very long haul is a system a chain wala is then it's it's sure you've heard [TS]

01:53:15 ◼   ► about the system it's it's it's not the storm system but it's originated a lot [TS]

01:53:21 ◼   ► of Islamic countries and the ideas that you have people now all around the world [TS]

01:53:24 ◼   ► but used to be traders all around this region's they have account books [TS]

01:53:28 ◼   ► and so now you here's what you do you go to a place you live in Pakistan he said [TS]

01:53:32 ◼   ► he got a hundred dollars to my brother in indiana and goes great and he breaks [TS]

01:53:37 ◼   ► the thing is legit has some codes he calls it the Gunners in DNA says give [TS]

01:53:41 ◼   ► that guy hundred bucks when a guy says okay yeah and then they transfer some of [TS]

01:53:48 ◼   ► the some point of some reconciliation like them there is no somebody in [TS]

01:53:52 ◼   ► burundi [TS]

01:53:53 ◼   ► they work it out its yeah it's a lot of people involved in this I'm sure those [TS]

01:54:00 ◼   ► abuses of with the times but it's a system it's instantaneous money transfer [TS]

01:54:05 ◼   ► based on you know there's some sort of feel like that $101 to send $100 yeah [TS]

01:54:16 ◼   ► it's actually it's but it's there's no other ppl she's actually very [TS]

01:54:20 ◼   ► informative of course as you get the idea is that it's it's in in the [TS]

01:54:27 ◼   ► communities like that even when they're spread out across the world there is a [TS]

01:54:30 ◼   ► lot of trust because there are huge consequences because they're based on [TS]

01:54:33 ◼   ► familial relationships or cultural ones and some countries might be killed if [TS]

01:54:39 ◼   ► you violate the system other countries it's not clear to go to jail or not but [TS]

01:54:42 ◼   ► you be breaking this [TS]

01:54:43 ◼   ► outcasts lost your life from your entire community you would never be able to do [TS]

01:54:47 ◼   ► anything so there's a social component but declined as hawala it's just done [TS]

01:54:52 ◼   ► cryptographically so there's no trusted you can work with untrusted so there is [TS]

01:54:56 ◼   ► a model for this actually has existed just without the cryptographic component [TS]

01:55:00 ◼   ► a lot of people point to halt as something that's a way to bypass banks [TS]

01:55:04 ◼   ► you bypass there are fees but you bypass all the infrastructure put in place and [TS]

01:55:08 ◼   ► as a sort of existence proof that the system could work [TS]

01:55:11 ◼   ► sustainably and if you take trust if the if the one who all is that you need to [TS]

01:55:16 ◼   ► enough people to trust each other [TS]

01:55:18 ◼   ► absolutely that you take trust up by using cryptography [TS]

01:55:22 ◼   ► me take one last break her third final sponsor answer good friends at [TS]

01:55:27 ◼   ► audible.com [TS]

01:55:31 ◼   ► has the largest selection of audio books anywhere in the world [TS]

01:55:36 ◼   ► hundred and fifty thousand titles more everyday they have two ways you could [TS]

01:55:46 ◼   ► just go there and purchase individual books but for real savings you can sign [TS]

01:55:52 ◼   ► up for an audible listener program and you get booked credits each month for a [TS]

01:55:58 ◼   ► loan through the sort of person who loves when the talk show goes long [TS]

01:56:02 ◼   ► because you've got a long commute or some other area where you just love [TS]

01:56:06 ◼   ► listening to audio content of hours to fill audible with more e-books than you [TS]

01:56:14 ◼   ► could our audio books I should say than you could ever listened to in your [TS]

01:56:17 ◼   ► lifetime you should go there and check them out they always want every time [TS]

01:56:21 ◼   ► they sponsor they always want the host of the show to make a pic to pick up [TS]

01:56:26 ◼   ► interesting book I have 1 I've been reading about halfway through on the [TS]

01:56:34 ◼   ► advice of my good friend Scott Simpson spiral author name rich Cohen CEO AGN [TS]

01:56:41 ◼   ► and the book is called monsters the 1985 Chicago Bears wild heart of football [TS]

01:56:49 ◼   ► ostensibly to look back I was just written a just-released think about a [TS]

01:56:53 ◼   ► month ago maybe six weeks ago so it's a new book looking back at the 1985 Bears [TS]

01:56:58 ◼   ► anybody who grew up in the eighties you remember the 1985 Bears they won the [TS]

01:57:02 ◼   ► Super Bowl but there was more than just a football team that was the team had [TS]

01:57:06 ◼   ► the Super Bowl shuffle that Klein oh yeah there was a great day they had a [TS]

01:57:12 ◼   ► video that was like it was like a number one video on MTV they were in a made it [TS]

01:57:17 ◼   ► during the season it would have William the refrigerator Perry he was like a [TS]

01:57:23 ◼   ► three hundred and seventy five pound defensive guy who they would bring bring [TS]

01:57:27 ◼   ► any given handoffs when they needed one yard because he was so big he could [TS]

01:57:31 ◼   ► never fail not to get one yard huge number of colorful characters just as it [TS]

01:57:38 ◼   ► was it was almost like that [TS]

01:57:40 ◼   ► 1985 Bears were almost like the World Wrestling Federation brought to [TS]

01:57:45 ◼   ► legitimate sports and it's not a special thing about this book is not a sports [TS]

01:57:51 ◼   ► sports book it's sort of a port says pop culture book and again if you guys know [TS]

01:57:59 ◼   ► anybody know Scott Simpson follow his Twitter whatever you know he's not a [TS]

01:58:02 ◼   ► sports head my wife had to not a football fan and really enjoying the [TS]

01:58:09 ◼   ► book really really interesting book and and it's it's just one of those things [TS]

01:58:13 ◼   ► where I was 12 when the 85 Bears were around in it I just took him for granted [TS]

01:58:17 ◼   ► but now hindsight in reading the book it's like it's a recall what an oddball [TS]

01:58:24 ◼   ► crazy ass team that they were and they were also tremendously successful that's [TS]

01:58:30 ◼   ► my recommendation they've got the unabridged version of it on audible [TS]

01:58:34 ◼   ► check it out [TS]

01:58:35 ◼   ► Monsters by Rick on and just in general where do you go to find out more about [TS]

01:58:43 ◼   ► audible you want to listen to audio books here's where you go [TS]

01:58:47 ◼   ► the URL is audible podcast dot com slash the talk-show audible podcast dot com [TS]

01:58:55 ◼   ► slash the talk show and they'll know you got there from from this podcast show my [TS]

01:59:01 ◼   ► thanks to check them out if you like books here one last thing I thought we [TS]

01:59:07 ◼   ► could talk about before we sign off is no go to fail [TS]

01:59:11 ◼   ► situation which is interesting in and of itself because it's a really i mean you [TS]

01:59:17 ◼   ► know all security updates and security problems in the in a popular OS are [TS]

01:59:21 ◼   ► important but this is a pretty bad and it's also so just he would be bad no [TS]

01:59:27 ◼   ► matter what the actual nature of the bugless but the fact that the nature of [TS]

01:59:32 ◼   ► the bug was it's superfluous line of code that said go to fail is almost [TS]

01:59:40 ◼   ► unimaginably it is too neat rate like if you put that in a movie be like oh come [TS]

01:59:46 ◼   ► on go to fail my initial reaction was this is absolutely a plant rate Marco [TS]

01:59:56 ◼   ► army has to the good question which was if Apple employee I don't exactly this [TS]

02:00:01 ◼   ► way but this is my version of it is if an Apple employee worse aborn let's say [TS]

02:00:05 ◼   ► they were on a plant they weren't hired by the NRC to be coming up employee in [TS]

02:00:09 ◼   ► whatever but the SAU go you not gonna do when they come with the government is my [TS]

02:00:14 ◼   ► whatever you can we talk and you can talk about this because I would be a [TS]

02:00:19 ◼   ► national security violation you go to jail for a huge Matt I'm a huge penalty [TS]

02:00:23 ◼   ► felony in fact you might actually be reminded or we know god knows what I [TS]

02:00:26 ◼   ► couldn't even though american citizens are or disappeared but more like there [TS]

02:00:30 ◼   ► are rules now that we don't totally understand about under which people are [TS]

02:00:33 ◼   ► charged in which the information is not become public right so someone comes and [TS]

02:00:37 ◼   ► says whatever you need to put Atletico do with the analyzed this and you can [TS]

02:00:41 ◼   ► tell it work if it comes up you know maybe be fired thats your problem [TS]

02:00:44 ◼   ► whatever [TS]

02:00:46 ◼   ► like that is not implausible scenario I have heard [TS]

02:00:52 ◼   ► but I've read again you know a lot of this is speculation how we can improve [TS]

02:00:58 ◼   ► it but what I've read is that the way that the NSA goes about this and it's [TS]

02:01:04 ◼   ► sort of an open secret is that it's not so much threatening and it's not so much [TS]

02:01:09 ◼   ► like you gonna do this or you want to but that it's an appeal to patriotism [TS]

02:01:13 ◼   ► and that they may identify people within companies who you know and now how they [TS]

02:01:20 ◼   ► identify them I don't know but there they do and who knows maybe you know in [TS]

02:01:25 ◼   ► the modern era [TS]

02:01:26 ◼   ► you know a lot of that come out of Facebook and Twitter a social-networking [TS]

02:01:33 ◼   ► where they are you know somehow see what their interests are and try to identify [TS]

02:01:37 ◼   ► people who are going to have a sort of pro law enforcement or pro an essay [TS]

02:01:45 ◼   ► minds and that they appeal to them on a patriotic basis and that it's that [TS]

02:01:51 ◼   ► there's really no coercion I mean I think maybe the only part that's [TS]

02:01:54 ◼   ► coercive is probably the UK you know we'd like to talk to you and you can't [TS]

02:01:59 ◼   ► tell anybody about this conversation and so that part is you know you love it [TS]

02:02:06 ◼   ► would be that because they'd be like re just for them talking to me I'm not [TS]

02:02:09 ◼   ► gonna make a stand because they'd find people who are very tricky though for [TS]

02:02:14 ◼   ► the NSA spying but it makes sense to appeal to their patriotism see here's [TS]

02:02:18 ◼   ► what we would like you to do and here's why we it would help your country here's [TS]

02:02:24 ◼   ► you know what would be able to do know you do this it will help us because [TS]

02:02:28 ◼   ► we'll be able to use it to identify [TS]

02:02:31 ◼   ► you know bad guys who are planning bad things to do in the USA and that [TS]

02:02:35 ◼   ► although I thought that was initially I thought that seem more likely but as [TS]

02:02:40 ◼   ► it's come out if you like Marco in and his gang talked about it on my cell take [TS]

02:02:47 ◼   ► podcast quite a bit too is that it doesn't pass the smell test in that this [TS]

02:02:52 ◼   ► particular flaw is probably was probably a mistake because for two reason the [TS]

02:02:57 ◼   ► point is it's extremely broad once you know about you can exploit it and anyone [TS]

02:03:02 ◼   ► can and so the NSA doesn't get it exclusively and that seems like a big [TS]

02:03:07 ◼   ► deal and Stephen relevant to his blog he was the longtime Peter science professor [TS]

02:03:18 ◼   ► teacher is responsible for the tool he created one of the early tools that we [TS]

02:03:24 ◼   ► used to use on UNIX systems in the early days to scan for stuff he's a really [TS]

02:03:27 ◼   ► smart encryption guy very well-respected the FTC is chief technology officer [TS]

02:03:33 ◼   ► chief technologist four-year recently and he said you know the problem with [TS]

02:03:37 ◼   ► the sea manana si did this is just too clumsy it's too easy to spot you know it [TS]

02:03:41 ◼   ► once you find it is gone anywhere else could get to it he said what's much more [TS]

02:03:44 ◼   ► likely in this is why I hear on the idea that that it was just an emerging trees [TS]

02:03:52 ◼   ► or something is that it's so it's a weird thing so I'm testing which is why [TS]

02:03:57 ◼   ► it wasn't spotted its remember this this this has been misrepresented its not [TS]

02:04:01 ◼   ► that it validates a certificate incorrectly bad certificates fail the [TS]

02:04:06 ◼   ► problem is that once you've led the certificated doesn't validate that the [TS]

02:04:09 ◼   ► key for the session was signed by that certificate so you had UK so the key can [TS]

02:04:15 ◼   ► be any can be from any party so your earlobe and you pass along all the [TS]

02:04:20 ◼   ► certificate stuff and everyone's happy with that they need to send a key signed [TS]

02:04:23 ◼   ► by something else and he goes through that's very very weird exploit its very [TS]

02:04:29 ◼   ► effective if you want to use it as you can see how quickly people came up with [TS]

02:04:33 ◼   ► proofs to show you the the problem but his thing was relevant thing which makes [TS]

02:04:36 ◼   ► less sense if he does something like this they put in some weird random [TS]

02:04:40 ◼   ► number thing that they take her with something so they only they're the only [TS]

02:04:43 ◼   ► ones who know the number that triggers it and you can't figure it out unless [TS]

02:04:46 ◼   ► you do some deep analysis we figure there's actually a flaw in the degree of [TS]