 Today's episode of the Bitcoin Show is brought to you by Mt. Gox and Thank You Economy Book and MemoryDealers.com. Hi everybody in bulk. Welcome back to the Bitcoin Show. I'm Bruce Wagner and today we have a really exciting day actually. It's even more exciting than normal because we have some of that new state-of-the-art cutting-edge Bitcoin software to talk about that is now available. What I've been saying is going to be available, I said within the next year, within the next six months, within the next three months and now the first generation of it is really here today. So today we're going to talk about new software called Safebit and my guests are Steph and Thomas and Alice Glar, developers and founders of Safebit. How are you guys? How are you doing? How are you? Hey. Good, good. So Steph is joining us from Switzerland and Ellie where are you? I'm from Tel Aviv, Israel. From Tel Aviv. Okay, that's right, Israel. Okay, cool, cool, cool. So we're very global as always and so tell us, okay, let's start from the beginning for those of you in the audience and me who don't know what's going on. Safebit is a free open source software project. Is that right? Okay, and who did the development, most of the development or did you share that equally or what? I started developing it almost six months ago, but now I'm starting to gather more developers around me and getting some investment in the project. Okay, and Steph, did you develop the server side of it? Exactly. And so I was working on Bitcoin.js for about the same amount of time and we realized that Ellie has a really amazing GUI and I have a server and so we started talking to each other a couple of weeks ago and now we're ready to make it official that I'm going to be consulting with Ellie and helping them integrate their client with our server. Awesome. All right, cool. So it's like a marriage made in heaven when you guys discovered the two pieces. I mean, when you started, I mean, obviously, Steph, and you started the server side of it prior. Is that right? I would say about the same time. About the same time? What do you think, Eli? Well, Ellie, did you have Steph and server side model in mind when you started? I'm sorry, I didn't get the question. When you started your client, did you already have Steph and server side in mind? I mean, like, was this developed synchronously or did you not know where it was going to go? No, actually, when I started, I started with the official Bitcoin client and then I met Steph a couple of months later and we started chatting and realized that would be a great partnership together. Oh, okay. So then when you met Steph and you decided to develop for his server, then did you have to like kind of start the client, start over a bit or at least some of the under-the-hood mechanics to make it compatible with Steph and the server side? Yeah. Yeah. Okay. So tell us, now, the entire project on both sides is free open-source software. Is that correct? Yeah. It is. That's awesome. All right. And now, what are the key features and benefits of SafeBit as opposed to the standard Bitcoin client? Well, let me start there. So obviously, with our server, you don't need to download the blockchain upfront, right? So you can pretty much start the client and you can get going right away. Now, one thing that I want to make absolutely clear to your viewers is that we just, we're just announcing the cooperation right now. So right now, the client that you can download and try out still relies on the original client. So we're now starting to move everything over so it actually integrates with my server and then you will get all of these features over the next couple of months rolling out. Yep. Okay. So the software that they would download, you're saying it relies on the standard Bitcoin client right now? Right. Or now, yeah. So I mean, is there a, so there isn't a server side aspect to it yet? Is that what you're saying? Right. What you can do is you can download it and if you're running the original client already, you can integrate it with the RPC API and you can try it out and you can see the interface which looks really amazing and Eli has done an amazing job. And that's part of the reason why I was so excited to work with him because I think our server is pretty good, but we don't have a good GUI for it. We don't have a good user interface. And I personally have absolutely no talent in writing user interfaces. So I think this is where we can really work well together. And I'm hoping that in a couple of months we can integrate the code that I've written and Eli's written and we can put them together. And I think the result will be pretty good. One of the things that fits very well is that both our software is written in JavaScript. So Eli's written everything in JavaScript, I've written everything in JavaScript. So we have absolutely no compatibility issues to bridge. We can just literally take my code, put it in, flip some switches and it should work. That's great. How did you guys meet? How did you two meet? Actually, through someone through the Bitcoin talk, I think, someone just threw me a word about Bitcoin.js. I started looking at it and then I think Thomas sent me an email. And from that, I looked down at a small scotch talk and started rolling from there. It's amazing how people can meet through the internet and then they can actually start collaborating. And then they can work day to day through the internet. Have you ever met physically, face to face? Not yet. My gosh. The next Bitcoin conference, we'll have to do that for sure. We're gonna be working on scheduling that maybe the same time, like New York in August or something like that again. But anyway, we'll talk about that. So now this, okay, so the client, which is Safebit, right? Is that, will it run on any platform, Windows, Mac, Linux? It's supposed to run on any platform, be it desktop, Linux, Mac, or Windows, or iPhone, or any smartphone, Android, iPad, or eventually even Google TV and Apple TV and stuff like that. Basically anything that supports HTML5. So, okay, so what you're saying, Safebit is a web app. Right. Okay. Safebit? Yeah. But what? It's not just a web app. With the, Stefan's Bitcoin JS, it has a lot more capabilities than just a regular Bitcoin wallet or a posted wallet. We're doing something different in terms of a posted wallet. We're providing some different features on that. Yep. Okay, so, all right, now I'm seeing it. If you flip over to my screen there and you can see, okay, this is in the Google Chrome Store. You go chrome.google.com slash web store. Chrome.google.com slash web store. And I think I searched for Bitcoin and I found it Safebit. So it says five stars, seven ratings. It's under productivity. And that's, here are some screenshots that you can see. All right, so let's, let's see, what is that? The various different screenshots that show you transactions, some graphics, bar charts, send coins, receive coins, buy and sell. You can actually buy and sell too. Does it integrate to exchange sites or is that a future coming? No, no, currently what you see there is basically mock-up. The current application has the standard receive Bitcoin. We're still negotiating, looking for a partner to buy and sell Bitcoin directly from Safebit. We're already partnering with Bitcoin and Israel, but we're still searching for that in the global arena. Okay. I see in the screenshots you've got Mt. Gox, buy Bitcoins, that's an example I guess. And then you've got your receive funds. We're not affiliated with Mt. Gox and not with Amazon. Right, okay. So the functionality of buy and sell Bitcoins is not there yet, but send and receive Bitcoins is. All right, so what this is, let me make sure I understand. So this is a web app that you buy, what is it, free in the Chrome Web Store? Yeah, it's free. You don't buy, Safebit is free and it's gonna stay free. But you can use it once you install it through the Chrome Web Store, which is just a distribution channel I guess, right? And you're not really installing it. I guess you're just kind of setting up an account to use it, is that right? It doesn't actually install code on your device, on your computer or your phone? Yes, it does. Well, it repassures it, so it starts up more quickly and it's integrated with Chrome and so you get a nice icon where you can start it right from the Chrome front page. Okay, so any device that can run a Chrome browser then you can use this in. Now what about Android? Will it work with that? Android we're talking on a local application, probably it's gonna be a web application with some kind of typing somehow to the platform, but for now they're not supported on mobile devices. For now it's not supported on mobile devices yet. So yeah. It's probably a good idea to explain. I mean, the basic platform that we're using is JavaScript and HTML based. And the nice thing about that is that almost any platform including mobile devices and smartphones can run that. Right. So basically once you've got your code running on one platform, you don't have to rewrite the whole thing again in Java and then in Objective-C for iPhone and so on, but rather you write it once and then you change the UI based on the form factor and then you're able to deploy it to all of these mobile devices. So whereas I don't see anyone working on a BlackBerry app for example right now or a WebWare app, all of these devices run HTML5. So once we have sort of one interface for the desktop and one interface that works on the mobile form factor, we can pretty much deploy it very easily to all of these different devices. And again, what I really like about what SafeBit's done so far is just the beautiful UI. And I'm hoping that together we can put in all the engine and all the backend stuff that makes it works well and all the features that you see in the mockups actually implemented. And that's why I'm excited about it and that's what I wanted to share with you. Okay. So yeah, the beautiful UI the way it's developed is the completely universal cross-platform plan. So once it's all fine tuned, it'll just automatically roll out on basically every platform. But that's not what excites me the most. What excites me the most is the backend of how the wallet is encrypted. So tell me about how the wallet is encrypted securely, where it's stored and how it's backed up and things like that. Okay. So we talked about this at length yesterday and the way we're planning it is we want to implement several different versions or ways you can store and manage your wallet. And so it goes from the basic wallet which is stored on your device persistently just like the original client and it would be encrypted with your password if you want or not. And you could use that for small amounts of Bitcoins where you don't want a lot of pass on a lot of security overhead. And you can of course then go for the next step up. You want to back up your wallet as well. So you've got some kind of cloud storage like your Google account and your wallet just stored on there or you could start encrypted. So there's a bunch of different options that you can actually go for with this model. So and finally, of course there's the latest stuff that Gavin and I are working on for the original client and me through an algorithm for BitcoinJS is split keys where you have multiple devices such as a server and a client and they sort of split the keys up and you need the permission of both and then there you can then implement all the security features that used to from hosted wallets without actually having to trust the server. And finally as a fourth option there's obviously hosted wallets themselves. And I don't know if Ali is planning to provide that service himself or if we're going to partner with someone else but just based on the client we want to just make it a flexible architecture where you can have all of these different wallet types all together and then based on your use case you can pick what you want and use your coins the way you want to. Okay, so the, now in the state right now is this is preview version, this is an alpha release in its current state, how does it work? It actually stores the wallet, it encrypts the wallet from the beginning, right? And then is the wallet stored locally on the device? No, no, it actually uses the official Bitcoin wallet so whether you're downloading the new Bitcoin wallet that uses encryption or you're downloading the old one that doesn't have those encryption basically uses that. It connects to the official Bitcoin wallet or any other Bitcoin wallet that supports JSON RPC and basically creates a good overlay on that. For now it's just a nice UI on top of the origin of both Bitcoin clients, nothing more. Just again, preview version. Right. It's not the final. Okay, okay. So some work to do. And the funny part is that what I have basically is I have all the libraries, the JavaScript, the signature stuff, I have the server and I don't have the proper UI, right? So that's when Ali came to me and he's like, I saw the stuff that you're working on that's kind of interesting and I realized that we pretty much have like the two halves that you need to make a good client and so it sounds like a marriage made in heaven. That was amazing basically. I don't know how Stefan did it but what he did with BitcoinJS is just amazing. The work that went in there, I could have seen it. Wow, amazing. Okay, perfect. And it sounds like you both had the two matching keys that just fit each other perfectly. So yeah, we have a lot of respect for each other and I think at least in Ali's case it's definitely earned. Yeah, it sounds like it's mutual. Okay, so the, all right now, the ultimate plan is that it will have its own wallet that it will be separate from the standard Bitcoin client wallet, right? And it will be always encrypted and then the idea is that that encrypted wallet will also be automatically stored and backed up at least a copy of it on the server side, is that right? Right, so if you go with the absolute maximum security available then you would have a split key set up. You would have part of your key on your device, part of your key on the server. The server would use an extra verification system, you know, like sending you an SMS for whenever you wanna do a transaction or something like that and both types of keys or both parts of the key will be backed up separately and so get a tremendous amount of security far beyond what you would get even at a bank today. So this is really exciting. That's only possible with Bitcoin and basically what we need for that is a new opcode that's being introduced in the Bitcoin network and that's what Gavin's working on at the moment which is called OPVAL and the plan right now is for that to land in the original, in the official client by February. Okay, so I don't know if that timescale will work well because it sounds pretty tight but if it is then hopefully we're going to be ready in February to use it right when it comes out and when it launches on the network. All right, okay, so now that's pretty technical but let's see if I follow. The bottom line then is once that's finished, once that's implemented, if I have, if I'm using a safe bit right on my laptop and I drop my laptop in a lake, the split key thing is that I mean, how will I be able to recover it? The thing is backed up on the server but I have to have a backup of my password somewhere. Is that right? Right, so you would have probably a paper backup because that's low tech is always the safest as I found out. So I'm a big proponent of paper wallet backups but you could have it backed up on a USB key or something like that. And if you dropped your laptop in the lake it would be no problem you just install a new computer, you'd set up the client again, reauthorize it, reconnect to the server and you'd be ready to go again. What's more interesting though is, let's say somebody spews your laptop, right? And it's not just that your laptop is password protected or your wallet's encrypted or whatever. Even if they, let's say they install a Trojan and have complete control of your laptop and they give it back to you and they wait for you to enter your password so they can look it up. Even that wouldn't give them access to your money because there's the extra channel where you can, where you get another verification for example via SMS. So even if your computer is completely hacked and completely owned and you can't trust it at all your money's still safe because the server does extra verification steps for these highest security split key accounts. So the server is doing two factor authentication. That's what I was actually talking to Ed about on the way in today was saying the one weakness is gonna be what they really need is two factor authentication and that's exactly what you're talking about. So can, could it be, I mean, so you're talking about like the server could do SMS verification, things like that. Could you also implement something with like a physical like a UB key, USB key or some other kind of two factor authentication? It's up to the server side, right? Yes, of course. So whatever the server side wants to implement, they can. One of the things with the UB key is the UB key can't protect you from fake transaction information. So if your computer really is hacked and it says, you know, you're going to send, you know, 10 bitcoins to your grandma but in reality it's sending 2,000 bitcoins to, you know, some Russian scammer, then, you know, the display has to be correct. So if the scammer is able to control your display, then the UB key won't do you any good. Whereas with the SMS verification, if you get an SMS back and you can read in the SMS what the transaction details are. So if it says in the SMS, you know, 1,000 bitcoins to Russian scammer, then you just don't enter the verification code because you notice that the verification details are one. Wow. They built- Yeah, well, implement security features based on our testing and we'll see basically what the users are wanting and what their ability. One of those features are going to be the iron key that is extremely encrypted, extremely hard to hack, this phone key that you can use and you can store a save bit on it and we can back it up even if you lost it and next day you can get a new one. We'll go a bit safe and secure. Mm-hmm, wow, okay. There was actually a talk just this weekend at the Prague conference by Clemens Kapp who's a professor in Germany and what they've done is they've developed an open source hardware device which includes a display and enough CPU power to actually do cryptography on it. So what you could do with that is you could actually have your keys stored on a hardware device and of course it's very easy for clients to support that so you can probably going to be able to use that with most clients and obviously again we want to be one of the first to support that so we definitely have an eye on that as well where you have just a hardware authenticator and then the hardware authenticator has a display that is very secure and you can trust it. Wow, okay. So if I install this app right now, if I install this version of save bit right now and I, do I need to install the official client first? Or can I, if I install it now without the official client will it create its own wallet? No. No, it just won't connect and it will show you in a screen. Basically it will show you, it won't show you anything. It won't show you anything, okay. So right now you have to have the official client installed first and then you can install save bit for the GUI. When is the next version going to be available that's going to have its own wallet and actually connect to the server? Well, it's hard to commit to deadlines but I'll give those questions to you. I said earlier, again, I don't want to commit to deadlines as well, but we're aiming to bring save bit as soon as possible to the client and to Bitcoin users. A lot of people are wanting to see this alive. I'm hoping that by the end of the first quarter, 2012, it will be out there, at least in a better version. By the end of the first quarter, 2012, okay. And I want to add that the server site for BitcoinJS is fairly stable. So you remember the New York conference, obviously. And during the New York conference on Saturday, I actually started the first permanent BitcoinJS exit node server at exit.truecoin.com. And that server has since then been running without any problems, without any crashes. I've updated it a few times so I had to restart it but other than that, it hasn't crashed on its own. It's just been running perfectly. That was actually unexpected. So I didn't think that the first version was going to be this stable, but it looks that the BitcoinJS server is pretty much ready to go so I can focus fully on helping include the client-side libraries that communicate with the server, with the UI that is still. Great. And this current preview version, is it communicating with the server right now at all or no? No, the current version, it's just a UI preview. So it's just a preview of how the UI is going to look. But it's functional, so if you run the original client and you're a little bit technically inclined, you can probably get it to work. We'll definitely come back on the show as soon as we have the final thing that works perfectly out of the box. Yeah, yeah, okay, this is exciting. So all right, for those of you who are watching us live right now, you can actually send questions. If you have any questions for Ellie or Steph and send a SMS text message to us number plus one 646-580-0099, you'll see it right there on the screen, or send an email, you can do that, we'll get it instantly here and we can ask them the questions to feedback at onlyonetv.com. Feedback at onlyonetv.com, I'll spelled out, all right? So let me take a break really quick and thank our sponsors who are bringing us to you every day, we're so appreciative of Mt. Gox. Mt. Gox, obviously everyone knows the number one Bitcoin exchange online. You can buy Bitcoins, sell Bitcoins, transact Bitcoin transactions, you can even use it as an e-wallet, there's so many things. Mt. Gox is the ones with the two-factor authentication of the UB key we were mentioning earlier. But they have been around the longest and obviously the most famous leader in Bitcoin exchanges online. 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But I say 95% at least are doing it all wrong. And then people receive it as spam and they're annoyed and it's just all bad. So you don't want that. This is the Bible on how to do it right so that you can instead of just selling stuff, you can actually build relationships. And so anyway, check it out. It's thankyoueconomybook.com is where you can learn all about it. Thank you economybook.com and the book is called The Thank You Economy by Gary Vaynerchuk. And memorydealers.com, memorydealers.com, the, we call it Roger Ver, Bitcoin Jesus. He is the owner of memorydealers.com. They're famous, they have, besides being Bitcoin evangelists, they are one of the largest online retailers that accept Bitcoin and they sell physical Bitcoin too. But their main business is, they have the largest inventory, one of the largest inventories in the world of fiber optic networking devices, switches, routers, anything you can do with, having to do with networking, infrastructure, hardware, memory, you name it, even mining equipment, graphics cards and all that stuff. So check it out, memorydealers.com. All right, so yeah, as I said, live viewers, send an SMS to 646-580-0099, you'll see it right there, or feedback at onlyonetv.com. And so, all right, so the official client is going to have this, what do you call it, split key, is that what it's called? By February? Yeah, split key is the general term. Okay, now the split key is that, to make sure I understand, is that the actual private key that's split, or is it the password to access the wallet that's split? It's the actual key. The actual keys are actually split. So it's almost like taking your wallet file and slicing it right down the middle, like those old, what are those like hearts or something like that, so half a coin. So I get half of the private keys and the other half are actually stored on the server? Exactly. And then nobody can access it at all without both? Yes. All right, so how, okay, how do I, if I lose my laptop, like in the analogy where I accidentally dropped my laptop over the bridge and it's in the lake, how does the other half of the private keys get restored? Right, so we always think of loss and sort of theft as two different scenarios. And the split key idea is something that protects very, very efficiently against theft. So you would have to have some sort of backup solution independent of the split key solution. But the split key solution is designed to do is to make your Bitcoins very accessible so you can use them whenever you want and very easily and without a lot of hassle. But at the same time, a hacker can just take control of one of your devices and then spend all your coins. So it's designed to give you usability and protection against theft. And then backups is a completely separate issue where you can use paper backups or USB backups, whatever you want, you can backup both key, both halves of the key in the same place or you can back them up in different places. You know, if you're really paranoid, but, and you can make as many copies as you want and you can back them up any way you want. So it has nothing to do with backups. All the backups methodologies are still available and there's still better ones being developed. But what this does is it really makes it easy and you don't have to have any hardware in order to have secure verification for your transactions and you don't, you don't get your Bitcoins stolen. I just want to know that we're also developing backup solutions for Bitcoins be it the split key or just your private keys and other form. So that will be a service customer take this as well, at some point. So when you, okay, once this is all implemented and the split keys and all that and then you have half on the server, half on your machine, you still have to do backups because you have to have both or you lose the access to it. Are you going to recommend, what would you recommend for the average user? Are they going to be backing up, for example, if they back it up to paper, are they backing up only their half of the private keys or would they back up both? So, I mean, everybody right now has a different vision. So if you ask Ellie, you'll probably tell you something slightly different, but the way I picture it is the client side keys, you just print them out and the server side keys, you get in the mail and then you have two pieces of paper and you just store them any way you like. And to me, that's the simplest solution. It's very low-tech, just a piece of paper, right? And you can put it in your safe or you can store one with your grandma and one with your brother or whatever. And so, neither of them can spend your points necessarily. So it's really neat that the split key really helps you even with the backing up. And you can make as many copies of them as you want. There's nothing stopping you from doing it. So it's kind of a nice way to have a little bit more security. So any place that you would consider secure for a backup right now, you can use the same thing for these split keys as well, except you have the additional benefit of, let's say you don't trust your safety deposit box entirely, so you just put one half of the keys in there and you put the other half in your safe at home or with friends or whatever. Okay. And you might have to have, I mean, if you don't trust, okay, yeah, I see what you're saying. If you don't trust your safety deposit box, you, there's different kinds of trust because you might only store half of them there, but you also need to have that same thing backed up somewhere else. So it's not only that someone might get access to them, but you might lose access to them. There are two different scenarios of everything, right? If you don't wanna lose your only access, even if it is to half, because you still need both halves to make the whole. Okay, on a day-to-day basis, when you're using this to send and receive transactions, do you, let's say in the future when you have the split key thing, right? Obviously those keys have to come together just to make a transaction. So is the other half of the private key from the server coming down to your local client or is my half going up to the server? Where does the, where do they get married before the transaction happens? So it really depends on which model you use. So there's different approaches to the split key algorithm. The way it's going to be implemented in the original client is you have two separate keys and it really doesn't matter if it's signed first. It's like, you know, at check, it requires two signatures. It doesn't really matter who signs it first. It's just at the end of the data it has to be both signatures on there. So clients probably would sign on the client's side first, then submit it to the server and then the server would do the final signature and then publish it. The only reason it might make a difference is for security, if the machine was vulnerable, anytime, if the machine had a virus, for example, and anytime the entire key was assembled together on that machine, that would be a vulnerable time when it could be captured, right? Exactly, that's what we want to avoid. We want to never have the full key on any computer, be it the client or the server or your mobile device or any device at all. The whole security comes from the fact that you can separately sign in different places. Yeah, you sign separately, but then, I mean, in order to actually spend it or make a transaction, they have to come together even if it's just for a moment of that transaction. No, no, not at all. So imagine the situation. Let me give you a metaphor, right? So you have this check, right? And you want to spend a lot of money from your business account, right? So it requires two signatures. So what you'll do is you'll put the first signature on it, you'll fill out all the checking details, you know, the recipient and the amount and everything. The check is fully filled out. The only thing that's missing is the second signature, right? So you've already signed yours and you've then handed over to your partner and he'll look at it over, is the recipient, right? Yes, is the amount, right? Yes. And then he'll just put down the final signature as well. And now the check has both signatures and now it's valid. And that's exactly how it works with Bitcoin. So the transaction needs both signatures to be valid. So you'll check the transaction, you'll put in your client signature, you'll submit it to the server and the server will use some method like an SMS, for example, SMS verification or, you know, they might call you or they might send you a fax or who the hell knows? It really is up to the server. But when they verify that you indeed want to make this transaction, then they'll put down the second signature as well and then they'll publish it. Okay, well maybe I'm splitting hairs but tell me if I'm wrong or off base or what. But the, okay, so you've got the client and the server being two separate partners in a checking account that requires two signatures, right? And then the blockchain is the actual ledger, the actual banking system we'll say. So if the client has to sign it and then sends it to the server, for that moment the server then has both signatures. Like your partner now he has your signature, he sees your signature and then he has his own. But what you're saying is they actually sign them separately and they submit them to the blockchain separately? Right, no, no, no, no. But remember that a signature, especially a cryptographic signature is only valid for what it's signing. So yes, the server sees your signature but it's only valid for this particular check which you've already signed and you already said that you want to make this transaction. So the server, yes, they see your signature but it doesn't mean that they can just copy and paste it over to a different transaction. Okay, so now I think we're getting to the core of it that I'm finally gonna understand. So what you're saying is that this split key transaction stuff that's gonna be coming out in February, by February, that's a fundamental change to the Bitcoin network, the way transactions are processed on the Bitcoin network? Yes? Right, I mean, depending on how you look at it, right, Ellie, maybe you want to explain it. I see one head nodding yes and one head nodding no. So. The other thing's approach is like Seth has said basically changing the Bitcoin net protocol basically adding a new feature to it. Seth's approach is a bit more conservative and it's basically creating something that is outside of the Bitcoin network and just communicating between the two clients and creating the private keys, the first signature and the other signature separately without ever involving the Bitcoin protocol only just generating the two different signatures separately. So my, I'm going towards Stefan's idea because I prefer not to change the Bitcoin net protocol but who knows, we'll see how it goes from there. So is it, I mean, is this ability already built into the Bitcoin protocol? Is that what you're saying? No, no, no. So there's two approaches, okay? So one involves changing the Bitcoin network and one doesn't. And Gavin right now is working on the one where you have to add some new features to the Bitcoin network to make it work well. And I have developed one that sort of outside of the network and it just uses some fancy cryptography in order to make it work. And so both aren't finished yet. The one that's going to be in the network is hopefully coming out in February. Mine is hopefully coming out somewhere around that time as well. And then, you know, it really depends on which one's going to be better. I'm not particularly invested in either one, to be honest. I'm just trying to make mine the best that I can make it. And then really what the experts decide will be the one that everyone uses, I think. And it really doesn't matter. They'll both do the similar thing. Yeah, I mean, we just want the feature, right? We don't care who provides it. It's all open source anyway. I don't make any money if they use my algorithm. It's just, you know, as long as I have the feature, it's also maybe Bitcoin's on the line, so. Yeah. Are there any other side benefits? Like, for example, comparing your method versus the official client's method or whatever. Are there any advantages? Like, for example, could I do a three-party transaction? Could I do a five or three out of five have to sign it? Things like that. Does one method have an advantage over the other in additional possible features? Yeah, I mean, I could talk the whole evening, but basically my method, I think, is a little more difficult to get right and to finalize and to test and all that. And it's probably, yeah, it's more difficult. It's just more difficult to implement. Whereas, Gavin's method has a disadvantage that it creates a lot more data to be stored in the blockchain. So with my method, for one transaction, you have one public key and one signature to be stored. Whereas with the original client's method that they're working on, is they have to store every single signature. So if you have a check with five signatures, they have to store five signatures. So I would say that in the very long run, so when we really have a lot of cryptographers interested in Bitcoin, and Bitcoin is maybe getting a little bit more mainstream, I think that my method will be more efficient. But in the short term, it's probably simpler to use the Bitcoin client scripting language and the stuff that Gavin's working on. Okay, so in any case, one way or the other, it's definitely going to happen. It's just a matter of the experts deciding which is a better strategy. These are the technical details. The guy behind the current, you don't have to worry about this rule, figure something out about that. Yeah, that's what Bank of America and Citibank said. Don't worry about that. Wall Street, don't worry about that. Those are just derivatives. Don't worry about that. Yeah, that's the difference with Bitcoin. Bitcoin, if you want to know what's going on, you can at least find out. Yes, that's right. You can go as deep as you want down that rabbit hole. Okay, well, this is really cool. So, and is that, do you see that, all of that, is it what you're talking about is going to be included in this next version that you're talking about first quarter or whatever of 2012? Yeah. Sorry. We won't commit at this point, but most probably yes. Most probably yes. Okay, cool. Now, do you have any other people helping you on this project or is it just the two of you? Yeah, we're currently, we just started with getting the first initial investment and we're starting recruiting the more developers and we have a few advisors on various topics. But yeah, same bit of growing rapidly, I could say. Okay, so you're recruiting, anybody? Volunteers or are you actually hiring people? Hiring. Hiring. Okay, so that leads to my next question. So you're viewing this as a business, as a business. So you're looking for investors, you're hiring. What's the business model? How are you gonna, if this is free open source software, what's the business model? Most likely it will be using additional services like the backup, like more extreme security, some kind of a DNS system that we're looking at right now and more features in to save it one way or another. You have to charge, eventually you have to charge somebody for something because it's not free to send SMS messages, it's not, I mean, not everything is free. So it's services, it's add on services like that that you'll be able to sell. And also partnerships, like partnerships with an exchange site. If there's a preferred exchange site that's built into the app, then maybe there'll be some kind of a partnership arrangement where you get revenue from that too. Yeah, well, Bitcoin exchange is one of the revenue generating products that I think will be inside David as soon as we release a more stable version. But that's just one of them. So it sounds like there's many, many different opportunities. What about point of sale? Is there anything specific about this that, I mean, obviously just receiving Bitcoin payments on any kind of device across the board seems like that would be an ideal way for a small business at least to get set up accepting Bitcoin point of sale instantly, right? Yeah, from a Bitcoin jazzy site, we've already worked pretty closely with BitPay. So I could definitely see myself creating a contact between Ellie and Tony and Stefan. And you're talking about bit-pay.com. I always, it's called BitPay, but I, but you have to put, if you're gonna check it out it's bit-pay.com. Definitely have my stamp approval right there. What? It definitely has a nice stamp of approval for what it's worth. Right, right, yeah, yeah. So that really works well. Okay, cool. And also if you end up partnering with one of the exchanges, like if you end up partnering with Mt. Gox, for example, they have point of sale stuff, like vouchers and all kinds of, they're actually developing point of sale hardware, all sorts of things. So it's all gonna integrate one way or the other. Like you said, it really doesn't matter, you know, well, I mean it matters, but we know for sure that it's gonna happen. It's just the best one is gonna get flushed out and rise to the top, whatever the best solution, the easiest best way to do it. And then all these options that there are so many that everybody's working on is just, makes it obvious that there's gonna be some real major improvements in the ease of use and security and all these things, it's really exciting. That's what we're all about. Yeah, so first quarter, that's the, all we can narrow, we can nail you down to, huh? Does it depend on how many investors you get, contacting you? Not really, at this point, we're currently already closing the first round and talking with more investors on the second round. We're still offering for offers, obviously, but I don't think it's gonna be a problem. Okay. And it's not gonna be related. Is the company called BitSafe? Is that the name of the company? The company is not incorporated yet, but most likely it will be called SafeBit. Okay, SafeBit, I said wrong. SafeBit. Yeah, I'm continuously amazed at your ability to say brand names wrong, but I guess it's just so many, huh? There's so many, I just can't believe it. I keep saying BitSafe, but it's SafeBit. Yeah. You can remember it's Italian, it's Italian with the dot it, right? SafeB.it. SafeBit. There's so many and they all have a bit in there somewhere, but... I just came back from the Prague conference and I still, you know, I'm still, my head is floating with all the different names and brands and people I have met is pretty crazy. Yeah. How was that? I heard Max Kaiser was one of the speakers. Yes, he did both a talk and also he led a panel where they were talking about the future of money. There were a couple of interesting talks. What I thought was interesting was that there were a few talks that were critical of Bitcoin, so there were both speakers from a technical point of view for Bitcoin, then there was Rick Falkvinge and Max Kaiser who were sort of evangelizing for Bitcoin from a more non-technical perspective, then there was David Birch who was sort of from a payments perspective, so he'd worked with MasterCard and he's working with Transport for London who've got these little Oyster cards, they're very convenient and so they all brought very different viewpoints sort of to the table and the basic narrative that came out at the end was that Bitcoin is actually, everybody agrees that the base technology is really good and now everyone's looking to client developers to make better clients because it needs to be really usable. Right now my grandma can't use it, she just can't and until we get to that point where she can use it and safely without getting stolen or whatnot, that's going to be a very, very hard and long road and it's probably going to take years but we have to start now and we have to do it quickly because the need for Bitcoin is definitely there. Exactly and we had, yesterday we had Ben Wallace who wrote the article for Wired Magazine which is out on the newsstands right now, December issue of Wired Magazine which you can also get online and I was just rereading the article for the second time and I was reading about you Stefan and you know and I was actually this morning on the way in I was reading it again and I saw the talking about you and I was like this is exactly what happened when you had, we've all had been I think pretty much everybody's been hurt one way or the other, we've stumbled and tripped and lost Bitcoins in the process. One of the guys talked about he was an early adopter and he got into Bitcoin when it was less than half a cent or something like that and I said please tell me that you bought a lot of Bitcoin, right? And he goes, yeah I did. He goes I bought like $200 worth and I'm like okay please tell me you still have them and he says no he was so excited when they doubled in value and it was worth a whole cent that he sold them you know. So there's that and then there's super technical people like you Stefan who you know just one little slip up and boom you know wiped them out and people like me that are just idiots and trust the wrong banker, e-wallet you know and then they disappear and take all your money. So anyway all of these things I believe there's a reason for that happening. I think that it's obviously it's made me really devout about security and you know know your banker or don't have a banker at all you know and you know basically trust cryptography and free open source software more than any people including yourself and for you Stefan I mean this must have really kind of emboldened you to kind of evangelize and say okay I'm gonna fix this problem so that this what happened to me doesn't happen to other people. Yeah and you know your viewers probably remember me from when I was on your show before and I was pretty excited about Webcoin and one of the reasons that even though Webcoin was very close to being finished I eventually stopped the development was because they couldn't solve the fundamental security issue with it and that is that the client code itself is still served by the server right. So whenever you have something that runs in a browser you know ultimately the code is still served by the server and you're still in the same sort of dilemma that you are in with you know PayPal or my Bitcoin where the server just has full access to your money and if they want to cut you off or they want to just go away or steal your money they can do it and it was only very recently that I actually figured out a way to get around it was what my talk in Prague was about so hopefully you'll be able to see that as a video pretty soon but there's different approaches so I definitely am interested in finishing Webcoin but I'm even more excited about SafeBit because it's just so much more usable and I'm really hoping that we can make SafeBit a really really good client. Now SafeBit is, okay that brings up a point so the code is not served by the server I mean well you download it first you download it into your browser or you download the code actually to your PC or where does the code live for the client? The code lives actually on your hard drive but Google is doing a really good job of making sure that it's not compromised in any way that's why we chose Google Chrome Web Store for the initial preview version so that I don't think it could be read about compromised code and stuff like that. Okay so it's not really a web app even though I think of Chrome like a Chrome Store as a web app store but it's not a web app it actually just downloads, it's an app store that downloads the app to your local machine. Exactly, it's web technologies but it's deployed in different ways so on a mobile phone it could still be a native app it's just in the inside there's web technologies running. Okay, okay. All right cool so the app is actually installed on your local machine and I mean it's independent of the platform so it doesn't matter if I'm running Windows or Ubuntu Linux or Mac it's as long as I have Chrome it's a local app and it's gonna run through Chrome. Right. Platform independent that is really slick. Okay cool this is the future for sure you guys are right on the cutting edge of it. So exciting, well but you gotta hurry though I want it before the end of February. It's gotta be done right? Hurry. We're playing web browser software so it's gotta be 100% rock solid and you can't release it a day too soon. Yeah. I agree. Okay cool so is there anything else that you wanna tell people about Safebit, Bitcoin in general? I would love if people followed us on Twitter on BitcoinJS there's a lot of technical tweets but you know I try to mix in a little bit of news if anybody news using BitcoinJS or if they're developing clients and so on if there's anything cool coming out that has anything to do with what I'm doing you can find it on my Twitter, BitcoinJS. Your Twitter and it's what is your Twitter again? Just BitcoinJS. BitcoinJS so it's on Twitter obviously it's twitter.com slash BitcoinJ like John S like Sam right, BitcoinJS right, got it. Okay and Ellie how about you do you have a Twitter? Do you tweet? Yeah I have a Twitter, L-E-S-R-E-L-I-S-K-L-A-R you're welcome to follow me. It's not just Bitcoin related there. Okay. So it's at E-L-I-S-K-L-A-R right? Exactly. Got it, okay cool. All right we'll be following you guys. We have to do this again. You gotta let me know as soon as you got something to announce and we'll have you back and you can tell the world about it. I so appreciate you're taking your time from Israel and Switzerland all over the place. It's always a pleasure to talk to you Bruce. Yes absolutely my pleasure. All right it's a mutual adoration society here we all love each other. Exactly. All right thanks guys. And thanks for joining us. All right take care. We'll see you next time on the Bitcoin Show.