 Today's episode of the Bitcoin Show is brought to you by usgoldcoins.com, 1-800-HOTCOIN, and mezegrillmezegrill.com, and tradehill.com, and mtgox.com. Hello everybody and welcome to the Bitcoin Show for Wednesday, July 21st. It's 2pm Eastern, we're a little bit late, we're starting a little bit late. Today's episode 27, I'm Bruce Wagner. This is Manny Mena. And today, we have a special guest, Donald Norman from Inter... Well, why don't you introduce yourself? Tell us. My name is Donald Norman, and I'm a member of the Bitcoin Consultancy, co-founder. But on this show, mostly I'm here to promote InterSango right now. But there's so many things to talk about. Okay, so InterSango.com is sort of a new name for something that other people may have heard of before. Well, it's not a new name. The software was released under InterSango, and it's a software that Bitcoin, which I think in the history for the last six months or so, has been the third or fourth highest volume site. But the British Pound only has sort of a smaller share of the market. But the site's been in operation since at least March. We've done a lot of volumes. There was a 24-hour period where, since everyone thinks in dollars, I'm going to say we did about $35,000 worth of Bitcoin trade. Daily? That was, yeah, and daily we've had, you know, weeks where every day we've had $15,000 worth, or 10,000 pounds worth. I'm sorry to end up, but let me make sure I'm clear. So we're talking about, okay, Bitcoin is the oldest entity, right? Yeah, Bitcoin is the site. And it's the site, and it's the site name, and it's the British exchange, it's a plan word. But the software that site was using was called InterSango, which was also developed in-house by Amir Taqi. And, you know, sort of his side project. And what he wanted to do was he wanted to create an open-source platform, an open-source software, so that basically anyone could go open a business bank account and, you know, become an exchange site, yeah. And he's a programmer. He's been working in free software for 10 years. And he's, you know, he's been doing that professionally. And he's been involved with, you know, core Bitcoin development for a long time. So InterSango is the software that runs Bitcoin. And it's free open-source software. Yeah, not only is it a software open-source, but the site has been free. It, you know, takes us a lot of time and there's some overhead, but it's free. I mean, no exchange fees at all. No exchange fees. There's no deposit fees. There's no withdrawal fees. There's absolutely no fees. So like, okay. That's for Bitcoin? That's for Bitcoin and InterSango. The reason when we're expanding, we can't make a USD site, a US dollar site, and call it Bitcoin. It wouldn't make too much sense. So we chose to go with the name InterSango, which is an Esperanto name for exchange. Esperanto? And if you know what Esperanto is, I was reminded what it was. By Donald, wasn't I when we talked? But many didn't know what it was. So Google Esperanto, that's a whole other story. It's all the media. It's a newly or not new. It's an invented language for global communication web. So anyway, but back to this, let me start at the beginning. When did Bitcoin first launch? So I don't know the exact launch date. Basically, like I said, Amir wanted to give people in the UK an opportunity to buy and sell Bitcoins. And it's a code that he worked on, sort of like I said, as a side project. And I know it's been in operation at least since March. Okay. At least since March, which is like 10 years in Bitcoin years. Yeah. And we have something like over 3,000. I believe it's over 3,000 now, unique users. And we've traded in the last month, we've traded what about 150,000 US dollars. Or US dollars? I don't know. Is Bitcoin charts always in denominating US dollars? I think so. Well, it depends, I guess, on the exchange, but most popular would be USDA. Yeah. And so at least 150,000 USD in the last 30 days, I think that's what a Bitcoin chart has to say. Yeah. But we've been, you know, even the month before a lot, and yeah. Where role do you play at Bitcoin? I'm not a developer. I handle the logistics, but I'm also handling just coordinating the team, coordinating everything, doing marketing. The consultancy is another thing that we're doing. Basically, Amir, when Bitcoin started getting popular, Amir started getting a lot of requests to do certain things, to commercially develop Bitcoin. And we're approached by a lot of investors. And that's when I started to go out and play. I've been really good friends with Amir for a long, long time. And he knew he could trust me. And I've been doing some business things myself. And so I got on board. More the business end of it. Yeah. And Amir is a British gentleman. That's right. That's right. And you're an American guy. And I'm an American guy. Okay. Cool. Well, yeah, I'm sort of living. I'm sort of globe hopping. Okay. But the thing is, so we ended up dealing a lot with doing a lot of negotiations with clients and we still are, and developing a code specifically for clients. And that's what the consultancy does. The consultancy develops code for clients. And doing that gave us an idea about a lot of things. The clients were interested in Bitcoin. And then they realized Bitcoin at its current state isn't really that scalable. And the concept is perfect. The security is perfect. But the way Bitcoin was written, it wasn't written in a really versatile manner. And so Amir... You mean the Bitcoin client? The actual client. Yeah. The actual client. And Amir, for instance, I don't know. I haven't actually downloaded the newest patch. But I know in the old one, you know, you click it and you have to wait quite a while just for the GUI to pop up. That should be the first thing. And there's just so many things that needs to be done. But the way that the entire code base is, it's really not versatile. It's really not segregating sections. It really needs to be... Like modular? Exactly. Modular. And that's what LibBitcoin, which is a Bitcoin library, hopes to do. LibBitcoin. Is that library for JSON? Which is, you know, like the back end of the Bitcoin protocol? Yeah. Yeah. Well, I mean, like I said, I'm actually not a programmer. But it's in multiple languages, depending on the functions of the specific processes. And there's, I think just yesterday, Amir sort of released, you know, all the works that he's done on it. And there was a bitcoin.org slash smf forum post about it. And this is something that in the long term, Bitcoin is definitely going to converge towards. Okay. So I'm starting to get the picture. Actually, can you bring up my screen, Ed? So Bitcoin is the original exchange. And then the software was released as free open source. The software that runs the exchange was released as free open source. So it's called intrasangle, intrasangle.com. And now you're kind of rebranding the exchange to the same name, intrasangle.com. That's right. So I see Bitcoin actually redirects to intrasangle. Well, it's now called intrasangle, which is the same as intrasangle.com, right? Well, right now, we have the site separate intrasangle.com is the Euro site, which has only sort of opened up 10 days ago. And we've only had trading in the last five days. And we're doing pretty okay. And then the US site, intrasangle.us, which I don't think we've even had our first trade yet, even though it accepts Dualla and it also accepts bank transfers, ACH, although I think just today we put that up. And it's completely free. Okay. Completely free. And it's by the same, it's the same guy that have run Bitcoin. It's free just like Bitcoin, no trading commission, no deposit, no withdrawal. So many questions. What's your plan for profitability? Well, right now, one thing that we want to do is we want to find some investment that will maintain the overhead. But the overhead isn't a problem. We've already had some offers, but we're holding out for a little bit of better offers. We want to keep the site free as long as possible. I mean, if you look at Facebook and YouTube, for something like this, it makes sense to stay free for a long time. We're also being incredibly legally diligent. We've had specific communication with the FCC, which is, I'm sorry, the FSA, which is the UK regulatory body. And in the US, I've spoken to an attorney. We have our own attorney in the UK who's working full time for us for free. And a lot of people, they see what we're doing and they want to donate. They want to support us. So we've had actually a lot of support. But because we're not bringing in capital and because we have limited resources, there's only so much we can get in terms of exposure. But I think it's important that people know that we're doing this, that we have a history of reliability and security. Even though this code was sort of Gengix's site project, there have been no hacks. There has, like I said, been a history of reliability and security. There's also been a history of really good support. And Gengix is. And we have a person just doing support. And Gengix is on Mirtaqi. How many people are on the team altogether? So right now we have actually three main developers. We have a person doing support. We have a lawyer and myself. Okay, awesome. Yeah, it's services. And those are all full-time. We've also paid, I know we've paid one person something like 20 bitcoins, which is about at that time or whatever, 300 bucks. So for improvements that he did to the site. So we're also trying to pay people who are adding, you know. So then when they add code or improve the site, is that going right into the open source as well? Yeah, okay. Grass-root efforts like these are going to be very important for, you know, Bitcoin's future and stability. Because if people aren't using it, you know, how is it going to survive? Another thing that's really important is creating an infrastructure which is really safe. And the thing is our faces are out there, our names are out there. We've been in a lot of press representing the consultancy, representing Bitcoin. And we're not going to do anything, you know, fraudulent. We're also not taking risks. We're not taking risks with the laws. We're not taking risks in terms of franchising or expanding too fast. All the Bitcoin sites that we own, all the bank accounts are owned by us and operated by us. And it's not franchised in a way that, oh, you know, come, you give us $5,000 and we give you the franchising rights. And, you know, it's in our terms of conditions that you need to worry about the licensing agreements. You know, if you end up stealing the money or something, it's on you. This is something that, this is our face, this is everything that we're doing is us. We've had no security problems. In fact, we've been very progressive in the security field with exchanges. We were the ones that noticed a lot of the, you know, tribal at MT Gox before it was solved. But I don't want to comment too much about that. But it's an exchange actually run by programmers. It's a free exchange and there's no reason it shouldn't be entirely competitive. What kind of headway have you guys been making security-wise that would differentiate you from, you know, other exchanges? Well, for instance, I was talking to a pretty prominent member of Bitcoin the other day and he was saying, well, okay, you know, he's being critical of our exchange and he was saying, he was reading in the fine print on our exchange. You know, this is, you know, whatever alpha software. We really want to make sure if there is, you know, once you have your Bitcoins, you know, preferably take them off the site. Now, when I had my Bitcoins on MT Gox, it didn't say that. But I had Bitcoins on MT Gox, but because I have access to really good programmers, they told me, you know, you shouldn't keep your Bitcoins on MT Gox. So I took it out. Not because of what was said on the site. You shouldn't read the site based on the specific fine print in that sense. You should read the site based on its history of reliability. It doesn't matter how secure our website is. No matter how secure our website is, we would want people to basically, if they're not going to be exchanging Bitcoins, once they've already purchased their Bitcoins, to put them, especially if they, you know, understand security themselves, to keep them in decline. I think everyone knows that. And so that's just something that we're providing. What you should look at is our history of reliability. Our history of the fact that, you know, we've responded to support in timely manners. We fixed all problems. When there were possible concerns, we were almost always the first to notice those possible concerns. We took down the site to address them, even though they weren't price matching or, you know, potential hacks. We took down the site now. Before, now, there were multiple different problems with MT Gox. And one of them was the email issue and people, they were able to re-divert a new password to the email. I'm not sure the exact specifics. But we personally had a friend. It had been going on for, I don't know how long, but over a week, we personally had a friend report that his money was gone and our security specialist looked into it. And in about 30 minutes, he found out what it was. And we tried to contact Mark from MT Gox for a while and we couldn't do it. Later on, when we tried to contact Mark later, we tried to contact him vigorously for hours. We were able to find a friend of his in France who hadn't spoken to him in a year and we talked to him, yeah, is there any way we could contact Mark? Before we made it public. We didn't make the exploit public. We just made it public that there was an exploit. And with this email, the email one, yeah, we end up having to make it public that, oh, there is something really wrong. Try to get Mark to contact us. And Mark said, okay, I fixed the bug. He didn't take the site down as far as I know for that time. He fixed the bug and then what was it? Was it actually fixed at that point? Yeah, yeah, he fixed that and then he made a statement saying, oh, no one has, no one's account was actually compromised due to this method. But the truth is, is that if you look at the reports, it was pretty obvious that a lot of people's accounts were compromised and later he rescinded that statement, later he changed it. But that friend of ours, who did get hacked, has recently, he had 10 bitcoins, which at that time was valued at $200. And he's been recently told, yeah, sorry, you're not going to get your bitcoins back. I don't know the exact explanation, but he's not going to get his bitcoins back. You mean he had 10, he or she had 10 bitcoins on M.T. Gox? On M.T. Gox, it was denominated in U.S. dollars, so it was $200 or whatever. And that account was compromised due to negligence, possibly criminal negligence. But anyways, I don't want to drift on that too long, but the whole point is that we do have a history of reliability. We don't have the funds to market ourselves, but we're providing a free service and we want to provide a free service for as long as possible. We're also being very diligent, legally speaking. And like I said, we have a full-time lawyer in the U.K., Jason Chia. And so I think when investors, and the investors we're talking to, they're really interested, okay, you've followed all the laws, especially in the know-your-customer laws, you maintained amazing security and you have a very good branded name. The only thing we don't have is actual awareness. And that's partially why I'm here and I'm trying to promote InterSango. So to be clear, InterSango is, even though it's free, there are no fees, and the software is free of insurance and all that, it's not a charity. This is actually a for-profit enterprise. It's just a business model like YouTube or Facebook or whatever where you're offering the services free and you're actually open sourcing the software. But ultimately, the plan is that eventually, once it really takes hold and grows and gets market share, then there will be fees. Yeah, but if you look at like Facebook or YouTube, it was a long time before they started doing commission. And if we go with investor, first of all, if we get a lot of capital, we accept donations for one. But if we get a lot of capital, we're going to be able to make this run for a lot longer. And there are a lot of companies that actually even operate in the red. And based on the amount of money that Britco and the British site has, we can generate not a negligible amount of interest from that. Oh, interest on the dollars that are sitting in there. In the bank account. Oh, okay. Well, that's interesting. And another thing that we might be able to do is we might be able to add additional features. For instance, Skype, person-to-person calling on Skype is free, but certain additional features cost money. So we want to try to keep it free for as long as possible. And we want to try to make it competitive. Right now, it is competitive. And I know we only just opened the U.S. site just a little while ago, so I don't expect people to all of a sudden talk to it. But I was pretty surprised at how little attention it's receiving. Okay. Well, now you're getting attention. So let me ask you this. If I'm a wealthy investor, or maybe I'm an early adopter, early miner in Bitcoin, I've got lots of money sitting there, and I might be interested in investing, what's in it for me? Oh, investing in Intersango. Yeah. Well, then you'd have to contact us. We basically have a very well-organized business plan that is quite complex, and I don't want to get into the particularities of that. But obviously, the ultimate plan is to make a profit. It's not to be free at a non-profit forever. Yeah. Okay. Now, the software is free open source. I have so many questions. The software is free open source because anybody can download it. Anybody who can open a bank account, a business bank account, if you're a legal agent and you can open a business bank account wherever you are in any country, you can literally set up a site and use this software and brand it yourself and you have an exchange. That doesn't bother you that this competition could spring up all over the place using your software? No, not at all, because we've had it open source ever since March and it's been reliable for a long time. You look at Trade Hill, they decide to develop in-house, which is another thing that I don't really understand, I mean. The advantage to open source is you've got Yeah, it is. Exactly, like for instance, you know, the fact that they're not using the reference code anymore. We knew that would already happen because it was, you know, in the URL or I don't know whatever, but it was pretty obvious that it was manipulatable. So the point is, yeah, it's open source. I don't think that the profitability from exchanges long term has anything to do with the source code. It's not, in the long term, it's not going to be the source code. It's going to be the reliability, it's going to be the security, it's going to be the marketability, and it's going to be the legal diligence. But doesn't the source code, I mean, it's tied directly to the security, of course? That's right. So, I mean, that's a one aspect for sure. That's right. If you've got a really, really secure... In terms of history, we have the long, we have, yeah. So if you're saying in terms of, if you're saying in terms of software that the profitability comes from software, if you look at empty gox and you look at the type of problems they've had even since releasing this new software that they're a new back end or whatever, and then you look at our entire history, I think that it's obviously not the case that I don't want to say people don't care about security. I think a lot of it is just awareness. But I'm saying in the long term, yeah, it's not the software that's going to make or break the difference. Yeah, profitability has many aspects that go into it. Security is one big aspect. And security has many things that go into it. And software is one big aspect of security. Obviously it's not the only one. There's also just the human factor of if you're careless with your passwords, if you give too many people admin rights or whatever, so you're a little bit careless or not diligent enough, however you want to phrase it, then the best software in the world isn't going to help you if you're not really, really diligent about the security. But the software, being open source is a huge advantage, I think, because you have a million programmers looking at the code and trying to find a flaw. And that's actually, a lot of people think, well, if you're publishing the code, you're giving away the secret or whatever that people could look for a hack, which is true. But the fact is 99% of the people looking at it are trying to solve it with good intentions, only 1% with ill intentions. So my opinion is that the more open-source it is, the more secure it will probably end up being. Yeah, because you had anybody from all over the world that could contribute to it. Just look at Windows and Linux, right? We're also developing a version 2 software for Intersango, which we haven't open-source yet. We may in the future open-source it. But what you just mentioned, a lot of business people, they're interested in closed source and it's not really our position. Our number one goal is to bring a sense of reliability and certain legal status to Bitcoin. And what's going on now in some of the other exchanges really worries us, it really worries us and it really can have dramatic effect in terms of how Bitcoin gets received by the world for the next however long. I mean an event that happens at a place that has 90% of the market share, the entire exchange market, can cause the whole system of Bitcoin not to be developed in two years, not to be up-taken in two years, but in ten. One big flock and a huge ripple effect. Let me interrupt. I'm sorry to take a quick break. I've got a lot of questions for you about the legal compliance things. But we have to thank our sponsors because obviously we wouldn't be here without them and so I want to take a really quick moment and thank our sponsors, all of them. They are usbuildcoins.com Andy Gauss is a brilliant monetary historian and money expert. He's actually my money guru for all things money. 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He gives preferential treatment to his own customers obviously but I can absolutely vouch for him personally for his integrity and his knowledge. He's beyond compare. That's Andy Gals at usgoldcoins.com 1-800-HOT-COIN and we thank him. You know, call him up or send him an email and thank him for sponsoring the Bitcoin show as well as all of our sponsors. And Mezzy Grill. How could you forget? Mezegrill.com. The world's first brick and mortar restaurant. What other kind of restaurant is there I guess? Brick and mortar. That sounds delicious. We're authentic Mediterranean food. Meat's modern flavor. It's like, it's kind of like a chipotle but more upscale and it's much better food. It's Mediterranean food. Super, super healthy. Most of the ingredients are organic and locally grown and sustainable as much as possible. Super healthy. One of it is nice favorite places. If you're in New York or you're ever traveling and passing through New York find Columbus Circle. The very famous southwest corner of Central Park. It's three blocks south. The world's first restaurant to accept Bitcoin. Thank Marwan for sponsoring the Bitcoin Show and OnlyOneTV and Trade Hill. Of course we all know Trade Hill. Tradehill.com the new exchange on the site that offers many, many unique ways to get money in and out and they have more currencies they're adding all the time. They now deal with euros directly without converting them to the U.S. dollars so they have their own market specifically for euros which is cool. And then, and also, MtGLX.com the number one market share web online exchange site, of course. Everybody knows MtGLX and they are here to stay. So no matter what your opinion is of their recent troubles with their crash and their hack and all that everything gets hacked but one thing's for sure they've been around a long time they definitely have the market share and they didn't pack up the bitcoins and run. They're here, they're resilient and they're back online. So we thank them for sponsoring the Bitcoin Show. The entire community believes I think that the entire community believes that the more exchanges the better, the more diversity we have and the more choices we have the better it is for Bitcoin. Overall decentralized exchanges as decentralized as Bitcoin. So thank all of our sponsors for sponsoring and bringing us to you. So yeah, I have more questions for you. I actually have a couple of things to add. In terms of this version 2 software that we're going to be bringing out one thing that we hope to do is to make the base open source but certain things like forex capabilities, closed source and the reason is because we don't want people you know, your sort of kid we want Bitcoin exchanges to be as decentralized as possible but what we don't want is people like, you know 13 year old I guess to open a business bank account you need to be a little bit older but we don't want someone who's 20 years older or whatever to just take the code and open a forex site and then realize that he's in breach of some serious laws. In terms of, I guess I want to say one more thing about Intersango and then move on. So yeah, it's a free site it's completely free to exchange it's going to be operating for free as long as possible we have really good support and I think the problem is just awareness if you go to Google and you type buy Bitcoins I don't think Intersango I don't know if Intersango is even on the first page and if you go to the Wiki for Bitcoin Intersango, it's not even an alphabetical order and Intersango is pretty far down there but aside from the exchange a couple of other things that I want to hit on is what the business atmosphere is what the consultancy is trying to do and maybe possible future adoption future legal implications of Bitcoin In terms of the consultancy like I said we're trying to promote a lot of software we've done a lot of software like I said we did the open source exchange platform software but we also did a lot of software for the stock exchange and I don't know exactly what I think Amir added a lot to the client code the stock exchange which stock exchange the one Nefario is running Bitcoin stock exchange yeah, yeah and then what else we've done In-House we've done two different clients Patrick Straitman released a client and Amir released Spezmulo so these are all projects done by the Bitcoin Consultancy yeah and if you go to the Consultancy site we have a list of all them and the recent one that we're working on is a lot of people have talked about a library and how that's the future of Bitcoin and it's a long term goal and the way the current Bitcoin code is structured it's really Satoshi was an academic he was a genius or he is a genius I'm sure you know he's still out there hopefully but you know he's an academic and it's really not versatile and the business people that approached us that said oh I want to use Bitcoin to do this and to do that a lot of their applications were just not possible with the current code and the amount of altercations that would be necessary for Bitcoin to become commercially adopted and if it does get commercially adopted then its status in the world is going to be massive if it gets commercially adopted the interests to promote it to keep it legal to keep it secure and stable to keep it well I don't think security or I don't think those are really issues but to keep it let's say having a good name in the public as opposed to something that shunned to keep it like that there's going to be a lot of interest and so there's a lot of reasons to move fast there's a lot of reasons to actually build a library that we're not just adding patches on something that's sort of loosely I think what you're describing and for those people who are I know you're not a coder but it's still technical what you're talking about is the code and I think what you're saying is and I've heard this before too the local source code for the Bitcoin client is kind of like it's written by an academic not a coder it's hard to read spaghetti code and then follow it it's a big problem you change one thing you have to actually check the entire thing from A to Z that you're not affecting something else I'm sure Gavin has been working on that because he's a straight up coder and knows those practices especially since I believe they're ungetorious and they have to follow certain rules and protocols this way the code is more consistent but I'm sure over time that would improve because it is an open source project that's right I mean basically a lot of the patches are additions and there may be some fixing up the code that's already in place but really the patches on top would be much faster they'd take much less reviews and the whole process would be faster actually Gavin I'm not sure I don't want to name specific names but a lot of people a lot of the lead developers have said that a library for Bitcoin is something that they have as a long-term goal it's a major project because they have it is a major project I'd write the whole thing and basically ditch the original code and completely replace it it is a major project and a lot of the alternative clients that exist now obviously build off that code but it's something that we've been doing for three months now or something and we're all working 14 hours a day Amir is working pretty much exclusively on this 14 hours a day I wonder if this would happen I mean this is kind of what I foresee I mean just not really knowing what's going to happen but if alternative clients are created with a Bitcoin library that are written absolutely from scratch that prove really solid and reliable that that code base could actually eventually at one point just replace the official client that might be kind of interesting because there have to be compatibility within clients and when we had Gavin on here he did touch up on that that the process is very slow because they have to do extensive testing because you know we're not just dealing with you know like LibreOffice or Ubuntu we're dealing with actual money a lot of money no real mistakes exactly there any mistake could be catastrophic I don't think that the whole point though is either way something's going to replace the code the base code that's going to happen in time whether it's slowly being done and a lot of the things that this library does also might be able to be adaptable to the current code that's not really an issue also the protocol is already in place the protocol is already in place if I wanted to have a malicious client it's just simply going to be rejected by the network so what the whole client does and the client by the way it's not going to replace it's not going to be closed source it's going to be open source the licensing is going to be very specific that's something that Amir has extensively researched we're in talks now with a copyright specialist and that's not going to be a problem this is a free thing and it's going to be written in such a way that anyone that develops external code has to publish their source code so this is going to be a library though we're jumping back and forth between library and client and I just want to be sure if he's a client it would be a front end to JSON which is what the official Bitcoin client is and a library would usually be a third party but that's the reason that the official the current client is like that has nothing to do with the way it should be or the way it needs to be the reason it's like that is already the problem that's the reason it's not versatile the reason why progress is so slow that's the reason why you need to be so careful about adding specific patches because you might have a domino effect if you actually separate the functionality and have a variable not be referenced throughout the code or modular if you actually have a modular then this is a lot less of a concern it's a lot better from a security point pretty much every angle and that's why people a lot of the head developers are talking about this to bring this as a move so nothing's going to change but this is something that we're trying to get support for basically there's no reason to wait there's no reason to slow this down this is another thing that starting back from square one again might make Bitcoin be adopted in two years as opposed to in ten years I'm talking about really mass adopted because if you're talking to a businessman or if you're talking to whoever and I was talking to a journalist recently and I found out he already did an article about Bitcoin pretty high profile guy and he hadn't even downloaded the Bitcoin client and he says let me see how it operates and I click on it and I have to wait a long time for the GUI just to pop up the first time we did it many came over and he wanted to buy a Bitcoin and so he actually came over and he installed the client and then I sent the Bitcoin and we couldn't figure out why it wasn't showing up why it wasn't showing up and then finally I was like did you install that recently and it hadn't downloaded the entire blockchain and it doesn't tell you you're not going to see anything until the entire blockchain is downloaded but yeah I'm not frowning first of all you have to think but the thing is these are more GUI oriented stuff this is a totally different thing but even from that aspect people should be able to customize it and it could be relatively simple to do new users shouldn't be seeing the blockchain probably what they should see is you're up to date something like that you know it's coming on the way it's kind of a bar scale and a message that says you're not going to see any transactions because if there's a lot of numbers then they're just going to be confused they're going to dismiss it they're going to say it's something I don't understand I'm going to play the devil's advocate on this one because I think it's kind of good that it's that way now this way we could work out any usability problems scalability problems before it becomes so easy to use and so mainstream they'll gain wide adoptance the problem is that you can't that's actually a problem these business clients one of the clients is a mobile service provider with 13 million clients and this was months ago that we started talking to this guy since then we've been talking to other people and he says okay well this is not going to work so what needs to be done so the truth is that in terms of scalability this needs to be done the way that for instance I don't know if you've noticed but actually getting up to 8 connections is a lot harder now right than it used to be is that still true because I haven't down the date I've been using it and I've had consistently over 12 to 20 connections well you have to have you have to have the U of P and P enabled on your router because if you only have 8 connections okay but if you only have 8 connections then you don't have port forwarding on and that's bad you actually want to turn port forwarding on exactly it is a default option now it's on by default now yes okay so that's one of the new features but you also have to have your routers configured for U of P and P which most start now by default they're on usually they are usually now how routers work is you connect it for the first time and it has a start up wizard and ask you all this stuff but there's a lot of information online because torrents use U of P and P games use U of P and P U of P and P is a universal plug and play so it's pretty universal if you're not a geek you've got to figure out read the manual read the documentation figure out how to turn on U of P but what's good about U of P and P is that gamers use it torrents use it a lot of people use it you know file shares and what not so it's good that if it's open your client uses it by default now I want to a lot of these things are going to obviously they're just going to happen like I said that's just a tip of the eyes for you there's a lot of issues that's why a lot of the developers already have been talking for a while about a library as a long-term goal but I want to ask you something much more complex than the hardcore coding and that is the legal aspect I shouldn't be talking about the hardcore coding you should talk to Amir about that right but this is the thing that really fascinates me it's even a bigger can of worms and that is the compliance issues like so I've got lots of questions about that so what a limited time left when we okay you have intersigngo.com which is the the euros yeah and then you've got you've got britcoin.com which takes you to britcoin.co.uk okay britcoin.co.co I think britcoin.com was taken by a domain squad or something like that no no brit britcoin.com redirects you to oh really? we have that one? yeah you have it okay someone has a domain a domain someone squatted their domain name probably intersigngo.com or something like that no no we have that one that's intersigngo.com euro intersigngo.com.us is is US dollars yeah the US dollars and britcoin.co.uk is you but all you need to remember is intersigngo.com and then we have links that redirect now very soon the layout isn't pretty you know the best developers usually don't do the prettiest layouts but like I said we've been working on on a new code base and a new everything and when that comes out it's going to look much nicer and it's going to be synthesized into one site okay so when you deal alright when you talk about compliance you have an attorney an attorney in the UK do you have an attorney in the US for the US compliance thing? no we don't have an attorney specific to us but I have spoken to an attorney I don't know exactly what I'm privileged to specifically say with regards to that okay well from the user's perspective what does a site because a lot of the site most of the sites don't even I mean they have varying degrees of interesting compliance apparently you know and they're in different countries and all that sort of thing so as a US citizen using intersigngo.us if you're in full compliance what does that mean as a user? does that mean that you're just like a bank? I have to show documentation no this is what it means it doesn't matter if we're operating an unregulated market if we are facilitating money laundering if we are facilitating you know the slew of illegal activity and we're operating in a jurisdiction we have to comply by those jurisdictions laws now the market itself is unregulated dealing with bitcoins is unregulated but certain other things are regulated so for instance banks already they themselves have a lot of places certain places and measures to stop money laundering and sometimes they do a pretty bad job at it actually but for the most part you know they do their homework and there are certain things that they need to do for this reason we're not going to be accepting deposits from various countries we're not going to be receiving deposits from unwanted banks we of course don't go pick up cash and then just you know now technically if we got your passport had you signed something then we would be able to do that do we disclose this to the government? no if the government comes to us with a warrant do we disclose it? yes do you disclose what? what are you referring to? that you would do that? if someone comes just like anyone who's legally operating and if you have a U.S. dollar bank account I think to accept Douala you have to have a U.S. bank account I know that empty gox does have a business bank account I know that trade hill right last I checked does have and last I checked empty gox does have a business bank account so to have that you need to be operating within the laws of the land it doesn't matter if you're a French company or if you're based in Japan or whatever or what are the terms of condition state and you need to be actively following certain protocols and that mainly is to know your customer 95% of that is just following know your customer laws so what does that mean? so back to this I'm a consumer I'm just an American guy so if I go to interest angle U.S. does that mean that like when I go to the bank across the street I mean I can bring in cash if I want all the cash I want I have to show my government issued ID and I have to prove my residence like a lease or utility bill to prove in fact a bank told me a compliance officer told me that actually according to your customer law in the U.S. the bank some officer of the bank has to actually visit your home and the way they do it I mean it's technically part of the law they have to actually visit your home so what they do is they send someone I think they may pay someone subcontract it they have to drive past your address and make sure it's a residence or if it's a business account actually no it's a business account it's a business account they have to actually visit the address and make sure that it was a business they don't have to come up to your floor and knock on your door but they have to drive past the address and make sure that it's a business yeah so know your customer laws and all this stuff are really really that's what I say it's a can of worms so I'm a consumer if you look at the history of poker sites these are offshore poker sites they're operating from Isleman I know poker stars operating from Isleman and what they had was they had payment processors I believe this is the version of the story the official version is they had payment processors who were operating in the U.S. basically you could take anything you could take some pictures of chairs like I was saying and you could set up a website and you say hey I sell chairs and then you open a business bank account and really it's the business bank account that you have set up for the payment processor and you send money from one to one blah blah through these things and then it eventually goes to the poker site and the reason that it took so long for the U.S. to crack down on these poker sites was because again I'm not 100% sure but I'm pretty sure that's the official unofficial version of the story was because they wanted to link the people operating the poker sites to these payment processors instead of just having some middleman you know what do they call it instead of having some middleman scapegoat you know and Patsy that's what they call it right okay so alright so that's how other things happen so but I want to know is about InterSango that U.S. as a customer am I going to have to prove my identity with a government issued ID if you send us a bank transfer that's enough proof if you use Duwalla or any of the payment processors which is very legitimate right now we're only accepting Duwalla and bank transfers then it's just piggybacking off of that but we also have an entire auditing history so if the government comes and says we have a warrant four months ago this XYZ then if yeah otherwise and the negative and people should like that the negative thing would be was that if the government says oh you know we have a warrant for XYZ and we don't have the information we can't provide the information readily then what's going to happen is doesn't matter where we're based doesn't matter what country we're based at what happens is they freeze our bank accounts or they would have the authority to do that I believe and just what happened with the poker size and then what happens is that you have to appeal for the poker size you have to appeal to the Department of Justice and I assume it would be the same thing you have to appeal to the Department of Justice and it's a six month process and maybe you get your money back I don't know what about your logs are they identifiable to people how long are they held for well actually every transaction see what he said complete compliance which means they know your name and your address and your bank account and they will always know it because that's what full compliance means that's what full compliance is and anyone who doesn't have those records and some people don't anyone who doesn't is facing down a pretty scary road okay so it's interesting and this obviously this counter acts it counters a lot of you know a lot of people have strong feelings about financial privacy and so called anonymity of bitcoin and at least features or benefits of bitcoin and this obviously flies in the face of that but that's because of that's the law now when when things are really bad and when there's huge corruption Western Union charges $600 to send $3,000 from the Netherlands which is the first to nominate US dollars to the UK and GBP I don't know if the reason they charge $600 is because of a corruption of licensing I can't comment on that but I know that that's not laissez-faire government and I know that that's not just barrier to entry either so when things are really that bad I think everyone would support certain revolutions this country the US was based on a revolution which a lot of people in the UK at the time were against parliament was divided about the war you know against the US but to continue the whole point is that that's why we created this open source software if somehow bitcoin does get licensed to a degree and it is manipulated then then people will be able to fight back and the thing is I don't expect that happening in developed countries at all but I expect that happening in undeveloped countries I expect that happening in a place like Zimbabwe I mean imagine and it's a beautiful thing right? so let me ask you this is there a license then as a money transmitter I mean how do you decide no right now any bitcoin operation is unregulated you don't need to get license but you do need to follow certain compliances you're assuming that it's going to be considered a bank or a money transmitter or this or that it does depend on the jurisdiction but in Europe there are certain precedents in the US there are certain precedents as well and in terms of the UK we've actually been in contact like I said we've actually had I don't know if it's something that's a ruling, it's not a ruling by the FSA but it's a very long and very detailed things about what compliance what we need to do and what laws we do need to follow money transmitter it's not a money transmitter it's not a money transmitter they say that about e-gold and that's what they accuse them of I don't know the very specifics of e-gold but e-gold was accused of money laundering e-gold was also accused of fraud operating a money transmitter business without a license is what I read we could put a certain payment processor on our site or payment API or whatever on our site which would make us a money transmitter meaning business so there are certain things that we could do overnight to make us a money transmitting business but we're not doing them can you transmit dollars from one user to another user? no not directly so these are specific things these are features that other people have and maybe people like flocking to certain sites which add these features but these are not necessarily the smartest features to have and not the safest features to have I don't want to comment on the legality of those specific things maybe certain other sites have looked into them but I don't think so there's always the technical aspects, the security aspects and then there's the legal aspects and the legal aspects vary from place to place and in terms of franchising this is why we're not franchising to allow someone else with no assets no capital except for an amount of capital they give us which they might be in charge of deposits magnitudes greater in a month's time we're not going to be trusting them with our brand so if you see the name intersango and you see you go to intersango.com that's us because we're short on time now but I want to get to these things you're talking about this version and the next version offering things like options are you going to offer margin trading and options and things like that in this next video? I'm not sure, this is a legal issue and this is a legal issue that we're looking at and this is something that we made jurisdictionally split so it's not just technical once again it's legal issues so you're still researching the legal issues what I was saying about those features was that even if and when we open source version 2 software we maybe even hope to keep those features closed source the reason being is that it would not be criminally negligent but it would be negligent of us for people to stab themselves in the stomach legally it would be like giving people a gun and I think that anyone who is a professional trader and is going to use those features responsibly anyway they're going to be able to find a reliable site doing that and anyone who isn't should probably have enough capital or look into it before it shouldn't be so easy for them just like it shouldn't be so easy for a person to get a gun a couple more quick questions because we're almost out of time for example the US site can non US citizens or non US residents create an account or is it only for the US? you have to have a US bank account or you have to be able to use Dualla if you're not a US now we may be extending that to Canada soon but really we're also looking at the advantages it's always advantageous to use the exchange in your region okay and what about our IRS declarations done on capital gains if somebody keeps money in there and it grows in value is interesting they're going to report that to the IRS if it's for capital gains well we don't you know if we don't we aren't required to report anything but anyone who served with a warrant is required to report whatever it's an unregistered business there are certain things we're required to report transaction of a certain amount stuff like that but we're setting up an email system as well to notify people of the specifics so that's people need to look into everything but it's the same thing that any legally operating any business bank account is going to need to do one last question are you going to publish this legal body of work like recommendations for somebody so that they know how to be in compliance if they want to set up their own site with this software a young guy who wants to set up a site he can follow the recommendations at least guidelines that takes on tons of legal liability and I'm not a lawyer now our lawyer Jason Chia he has a website of his own it's going to be linked from our consultancy site and he might be able to give free advice we also have been in contact but I don't know if I can public publicize some of the things we have because they're not actual public declarations they're just declarations to us but I'm in the process of asking if we can make those public interesting alright we're out of time we already ran out of time we're going to have to do this again we're out of time alright thanks guys we'll see you again tomorrow 2 p.m. Easter and thanks for joining us on the Bitcoin Show talked a little bit longer about that