 Welcome to episode three of the Bitcoin show. Today's a really, really big day. Thank you all for joining us today in Studio 3. At OnlyOneTV, we have Gavin Andresen, the number one tech lead of the Bitcoin project, and also our regular hosts of the Bitcoin show, and I'll show the Bitcoin in Spanish, Manny Mena and Edward Gal. And now on Skype, we have one of the founders of Tradehill.com, the new trading and Bitcoin purchasing and selling a trading site called Tradehill, and that's Jared Kenna. So welcome. Thanks Bruce, great to be here. And I should say that Gavin obviously just came straight here from the CIA, so tell us the story. It's true. I was contacted by Incutel, which actually is an investment arm of the CIA, so it's actually a private company whose job is to find interesting new technologies and find out if the CIA can use them for the kinds of things that the CIA does. Every year they have an emerging technology conference that they put on where they invite ordinary people doing interesting things to come and present, and this year the theme of that conference was the mobility of money. And so obviously they're interested in Bitcoin because Bitcoin makes your money very mobile. You can pay anybody anywhere in the world with your Bitcoins. So they give me a call. After thinking pretty hard about it, I decided I would do it because it's an open source project. I figured going to the CIA and talking very openly about what Bitcoin is and what it can do wouldn't hurt the project. It's not a secret. It's not a secret. It's totally open, right? It is. Were they interested in it as an investment? The CIA invests in things, is that what they were thinking? The CIA doesn't tell you what they're thinking. That's probably right. So it's a little bit hard to figure out. I mean, the other people who were, I should say this was a three-day conference. The first day is unclassified, so I can talk about it. The second and third days actually are classified, and I wasn't invited. Wow. So I know what happened. I know what went on the first day. I can talk about what went on the first day. I have no idea what they're doing now. Oh, I'm sure they're talking about, the second and third day, they're talking about the first day. But secretly. But you know, they had somebody from Pekal there. They had an economist from the Federal Reserve Bank was there. They had somebody from Facebook payments was there. Wow. And also a person from Bargley's Bank. I made some really great connections there. Wow, nice, nice. It's amazing. It's mind-boggling. So what do you think their interest in Bitcoin, they don't tell you, right? Well, they don't tell me. I mean, you can speculate. I mean, obviously, you know, paying people covertly is part of what the CIA does. And so a payment system that they could use to pay somebody covertly is very interesting to them. Who knew? A lot of people might speculate that the government would be coming down against Bitcoin, but they could actually figure out how to use it for their own purposes, just like everyone else does. Right. They're talking about the branch of government. Right. They're setting it against the CIA. They actually see something useful in this kind of it. Interesting. Yeah, that's right. Who knows? You can look at the good, you can look at the bad. It just depends. So what do you think of all this, Jared? Can you hear us? I think the best thing you can come up with is if the CIA would talk with the Senate and tell them it's not just for buying drugs. It's also for buying drugs from the CIA. It's not just for drugs anymore. I mean, I don't know anybody. Well, actually, I can't say that now. I know one person who's looked at that website that says the list of things, but nobody that I know in the Bitcoin world actually goes to that website and purchases anything. I mean, it's really, really hard to get there. First of all, it's very, very technical. You have to be running special software through a special, like, alternate internet security system. And then have another level of security on top of that. So the ordinary person can't even get there. I've been trying. You've been trying? Yeah. I mean, it's amazing. I mean, from what they said. But the thing is, that's what makes headlines and that's what people like to talk about because anything that's scandalous makes headlines. But the fact is that cash is really the best form of payment for drugs. It always has been and always will be 99.99999% of drug transactions. I'm sure happened with the US dollar of cash. So I mean, I don't think we should outlaw cash quite yet. Similarly, cars and cell phones. I mean, just because something can be used to purchase something illegal doesn't mean that, you know, there's anything wrong with the tool. Yeah, and I thought it was interesting when I was at the CIA, of course, I did get asked the question, you know, what do you think about, you know, bad people using Bitcoin for bad things? But I wasn't alone. They also asked that of the PayPal person and, you know, the person from the Federal Reserve actually was very frank about saying, you know, US Federal Reserve notes are used for bad things. And he was actually admitted that. He was very upfront. Actually, I really liked him. I thought he was very good and explicitly said that if you make payments more convenient for ordinary people, you're going to make them more convenient. That's just the nature of these things easier. Exactly. I mean, they talk a lot about prepaid cards. You know, and there's a lot of controversy over prepaid cards being used for criminal activities. But, you know, the benefits outweigh the costs. Absolutely. We have many more questions for you. I want to thank our sponsors really quickly. This episode 3 of The Bitcoin Show is brought to you by Ambivert Creative. AmbivertCreative.com, they create your corporate identity. So they'll do everything from your website, your logo design, stationery, all that sort of thing. And bluecanarynightlight.com, which creates a beautiful little blue canary. Nightlight, very, you know, very nice. And they accept Bitcoin for payment, a really nice little product. The couple created one for their daughter and they decided to make a business and they sell nightlights for Bitcoin. And bitcoinbonus.com, which is really cool because anytime you shop over anything, almost anything online, go to bitcoinbonus.com and you will find a link for that.com site where you can order something and you'll get payback. You'll get basically kickbacks in the form of Bitcoin. And it's excellent. I've heard amazing reviews from people before they even became a sponsor. And tradehill.com. Tradehill.com is the new easiest way to buy Bitcoins and sell Bitcoins online. The new exchange site, which Jared Kenner is one of the founders of. So we want to thank them. So back to this. What did the CIA, I mean, did you get feedback from them? Any hints about their thoughts or their direction or how much they know about it? No. They didn't even speak. They just listened, right? I mean, you can find out what some of their concerns are by listening to their questions. You know, I definitely appealed to some of the more geeky people in the audience. You know, they have geeks who work there and they have suits who work there and a range of people who work there. And at this conference there were, you know, a good mix of people. I think pretty much all of the other talks were kind of on the suit level. So I had a couple of people come up to me afterwards and saying they thought bitcoin was really cool. They thought it was great. I had one interesting interaction that actually sold the bitcoin while I was there. You sold the bitcoin to him? To one of the CIA people, because I had shown Bitbills. I had a couple of Bitbills in my wallet as, you know, an example of a physical bitcoin, a bitcoin you can hold. And he thought that was very cool and wanted to buy one from me so he could show his boss. Bitbills are awesome. We met a dog actually, it's a sidebar, one of the creators of Bitbills that I actually asked you about. Because when it first was created I called up Gavin right away and I said, who are these people? Do we know them? Do we trust them? And he said, oh yeah, absolutely. It's Lama from the forums and all that. And he actually just moved to New York. So we've been hanging out for the last couple of days and they're awesome. They're going to be a new sponsor, you'll see. But anyway, they're awesome. I love Bitbills. So actually, you sold a Bitcoin to a CIA agent and if that's illegal, do you think it was entrapment? No. That's, I gotta admit, it crossed my mind. It's like, am I being set up here? Is I taking cash for this Bitcoin? No, I'm pretty sure. I will have to do that. So we can go back and figure out how much I paid for the Bitbills. Yeah, well based on some people's predictions, that could be a million dollars before it's over. For the record, I sold it for 20 bucks. But will you have to declare taxes on the million or the 20? Well, I don't have the Bitbills anymore. I have the $20 bill. Oh well, that'll be worth 10 by then. So Jared, what do you say about all this? So it's talking about how long ago I was looking forward to this interview. And I was just like, man, I can't wait for them to get out to the CIA. And now I'm actually part of it. So it's facing how fast things change and the speed that Bitcoin has picked up. I think like Bitbills, they just take you out of nowhere. And there's just so many good ideas. There's so many people that just want this to succeed. And honestly, I think when it's a really big time, there's just a community. It's just that thousands of people are more than that now. They're just working towards one common goal that benefits everybody. And it's just amazing what they can accomplish. The response, I'm sure over 5,000 users now probably will love that now. I get an email about it in 15 seconds. And I try to answer every single one as quickly as I can. But I can't always do that. So it's been a huge success. We've made a goal to stay in communication with all the users. So it's just, I don't know if I'm going to say we're surprised. But we didn't. Yeah, we're surprised. We didn't expect that big a response that fast. So we actually had to do that. As far as like in the beginning we accepted money. We're no longer accepting money back. We are going to continue to accept wire transfers. And all the other new options up. Okay. Yeah, Bitcoin is a community thing. It is definitely a team effort. Everything that happens is a community. You know, there's a lot of talk about trust in the community. Because we're talking about money, we're not talking about email. We're not even talking about credit card numbers. We're talking about money, like cash. And so one of the things that is mentioned all the time is trust. But we were talking about this the other day. I haven't met anybody in the Bitcoin community that has failed to be trustworthy, except for the, you know, there have been a couple hijacks of, you know, but we don't know who they are. But as far as people who are in the community and, you know, public figures or whatever in the community, they, so far nobody has proved to be untrustworthy, which is a really, really, it says a lot for the people involved in Bitcoin because they're freedom. The people who respect and appreciate the values of freedom and openness and open source and all that. And it's a beautiful thing. Even though Bitcoin can be, you know, we say it's like cash, it can be as anonymous as you want it to be and so on. People generally, they're not hiding. They're just normal people that just respect freedom and care about this. So it's definitely a community effort. By the very design, it's designed to be a community thing. Everybody has to put in their part or now with a new client, they don't even have to mind, but that's what I always thought was a great aspect of it. Just getting everybody involved and then everybody in that community has the same incentive to make sure that it succeeds and grows. Exactly, yeah. It's also educating the whole world about what free open source software is, too. The concepts behind free open source software are very unique and most of the public don't even understand that. So you're surprised about the success of Trade Hill right off the bat, but you made the right choice because you became a sponsor on OnlyOneTV. So of course, like I said, when you become a sponsor on OnlyOneTV, you hire a whole PR firm. We spent the day on Saturday with Business Week and Smarter Money was the day before, New York Observer yesterday. How'd you go about this? The Observer article? That came out online, right? That was really cool. Did you see that yet? New York Observer did a great article. Yeah, it just came out. And then Al Jazeera English is about to come out any minute. And then tomorrow morning at 10 a.m., I guess we're going to be doing Bloomberg, sorry, Bloomberg. Yes, that's huge. So yeah, it's like all this press and stuff. Bitcoin is exploding right now in the media. So it's a very, very interesting time. I got to say it makes me nervous. It's just being the technical lead. Yeah. Because I know they're going to be growing pains as we scale up and just hoping we're not setting expectations too high. That's my one... What kind of expectations could we be setting too high? Well, you know, as transactions volume scales up, people, well, we've already seen, for example, people having trouble getting connected to the network. If they download and run the Bitcoin client. Right. You know, we just fixed that for now, at least. But, you know, it's trying to move carefully so that we don't break things. Right. While also things are breaking because we're scaling up. It's a big challenge. Yeah. But the good thing is that all... I think of any technology project, since the invention of computers, there's never been a project like this where so many eyes are on it, right? It's true. And it's not just people are invested in other projects, but not money. Right. You know, we're talking about money. So all these coders all over the planet are not only invested with their time and their energy and coding it and reviewing the code and all that, but they're actually putting their money into it and talking to their parents and putting their money into it and so on and so on. So they really literally have a huge investment, monetarily in it. So many are... You must be getting feedback from people everywhere with suggestions. I do. My email box is a very interesting place. Six months or so. I get an email from people all over the world interested in opening exchanges or interesting projects or maybe it's been press interviews. Yeah. You need to have... I have an assistant. I have two... I have one assistant here and I have one in Uzbekistan and I have one in Egypt and you can pay them by Bitcoin. Actually, there's a little interesting story about that. The one in Uzbekistan, you know, I had paid him $100, which is like phenomenal. His mother is a pediatric physician, works full-time at the hospital. She makes $200 a month in Uzbekistan and I paid him $100, right? And then he didn't want it. He didn't need it right then. Okay, so whatever. So I said, how about I put it in Bitcoin for you? And this was months and months ago and he forgot about it. And he actually emailed me. He said, can I borrow $50? And I was like, wow, exactly. Have you seen your balance? And he's like, I told him what it was. I forgot. I was like, $4,500 or something. And he's like, yeah, he was like, oh my gosh, you're a genius. I said, nah, it's Satoshi and Gavin. I'm not the genius. I just talk about it. Well, in the community. I mean, I think the idea that it's a community, it really is a community effort. Totally. I mean, I've been kind of thrust into the lead role somewhat reluctantly. And I may eventually step back from that just because, you know, I actually frankly prefer working on technical problems than talking to the press or, you know, hearing about all the latest crazy business plan and all this other stuff. What's the highest, the highest good, you know, like we found this ancient Mac and we made it a telepumpter. You want to use your skills where they're best used. I think that people who are not very bright like me just to talk about it. And you can actually make it work, make it happen. When was the last time you chatted with Satoshi? I haven't had email from Satoshi in a couple months, actually. The last email I sent to him actually, I told him I was going to talk at the CIA. So it's possible that that may have had something to do with his design. He was having a good time, yeah, too. But he actually said before that that he was going to be busy with other stuff and he was going to be stepping back. So what's he doing now? I don't know. We're going to get some t-shirts made because somebody in the forum had this. You probably saw this idea. They have black t-shirts. I am Satoshi Nakamoto. Is that Nakamoto? Yep. My question was, could they make me a t-shirt that says I am not Satoshi? Yeah, I saw that. That's right. Everyone thinks you are. The press asks it all the time. I know. Somebody was using that pseudonym in our chat room, our live chat room. It's Satoshi Nakamoto. It was only two people at the moment. And somebody came in and said, oh my gosh, my two favorite people, Satoshi and Bruce, are both in the chat room. It's like, yeah. We'll see now that's proof I'm not Satoshi. We were both in the chat room at the same time. Proof. Proof positive. Well, this is probably a good moment to again thank our sponsors. You know, the Bitcoin show is now a daily show. Monday through Friday every day at 2 p.m. Eastern time, New York time. And it's a global show. So tune in at OnlyOneTV.com every day. And we also have the El Show the Bitcoin in Español on Wednesdays at 4 p.m. Eastern time, which is weekly. Which is really phenomenal, because we're going to reach the whole Spanish language world, oh my gosh. There's so much to talk about. We decided to do that because we sit around talking about Bitcoin every day anyway. If you're with me, we'll just do it on the air. But we have four sponsors now that have specifically targeted the Bitcoin show because they're Bitcoin enthusiasts. And they are Ambivert Creative. Ambivert is a-m-b-i-v-e-r-t creative.com. They're the ones that create your corporate identity. So you have a business. You have a new startup. You're going to set up a website, a shopping cart, whatever it is. And you need a really cool-looking logo and a really cool-looking identity so that all the colors match. And it looks really professional. You want it to look Fortune 400, right? So you contact Ambivert Creative. They know what they're doing. And of course, they accept Bitcoin naturally. And BlueCanaryNightLight.com Check it out. Just go to BlueCanaryNightLight.com There's this lovely little BlueCanaryNightLight. You know, it sounds goofy, but when you see it, you're going to go, oh, I need one of those. I didn't realize I needed one. And they accept Bitcoin. It's very cool. You need one for your daughter. All right, I love the song. They might be Giant's song. It is, yeah. I didn't even know that. It's from the lyrics. So they might be Giant's song. There's a little BlueCanaryNightLight. You got to buy one. I got to buy one for a couple of friends who are the might be Giant's fans. I was reading their website, and they've got a huge fan base on Facebook, and they've got all these people saying how great their product is. Oh my gosh, okay, well, order. They accept Bitcoin, and the prices keep falling in Bitcoin. Next is BitcoinBonus.com BitcoinBonus is, like I was saying before, BitcoinBonus is really cool. Before I even... I'd heard about them, but before they became a sponsor, I got an email and a phone call the same day from two different people who said, have you heard of this thing, BitcoinBonus? It's really cool. One guy's a website designer, and he sets up hosting accounts for his clients, like a couple, two, three a week, and he was saying every time I set up a new hosting account for one of my clients, at that time it was like 50 Bitcoin. I don't know if that's still true, but whatever, you get some number of Bitcoin but don't they have like buy.com and best buy.com and trade deals on it? Everything's on there, like almost everything you would ever want to shop at is on there. So you go to BitcoinBonus.com and that's, you know, he's the guy who's set up the meetup in Washington, D.C. too. So if you go to meetup.com and do a search for Bitcoin, you'll meet meet him, but yeah, it's an awesome, awesome benefit to the Bitcoin world to all the... every shop, but really. 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I wanted to ask Galvan. Once you actually did the talk at the CIA were you approached by any of the other companies like PayPal or Visa MasterCard or any other merchant processors? Like did they give you any feedback on Bitcoin? Like what were their thoughts on that? They did actually had a I actually attended a dinner the night before for the speakers and got to chat a little bit with them. I mean they weren't decision makers, right? So they're not the kind of people who make the decision about whether they could possibly accept Bitcoins or not, but had good conversations and most of them hadn't heard of Bitcoins before they saw the speakers for the conference and so I think it was great just to put Bitcoin out there as there's this new thing. What was their feedback? Was it positive? It was very positive. I mean everybody I think everybody thinks Bitcoins are a great idea. I presented it in my talk as an experiment because I really do see it as an experiment. There's all sorts of Everybody does. How can you know? All sorts of things to figure out. Which for, I mean one of the other speakers actually was the CEO of Heartland Payments which is a huge payment processor and they had him there because they had a gigantic data breach. That's an extra basic payment processor? Yes. Yeah, they sell the little readers that you swipe your cards through. They had a data breach. They had a huge data breach which almost killed their company and they're like the fourth largest payment processing company in the U.S. So he talked about how they worked through having this huge data breach, how the data breach happened, how the hackers got in and how they recovered from it. He is a decision maker. He could decide, when you swipe it's going to be some way of doing bitcoins. But they're going to wait and see, right? Bitcoins way to cutting edge. It's still very liquid. Way too liquid. Very volatile. One day you could be finding something. One bitcoin and the other day you could be nearly through the bitcoin. Yeah, they always new APIs that are going to tap into like trade hill and find out what's the value right now compared to a U.S. dollar. So if you're charging $15 for that t-shirt then it'll be able to quote it in bitcoins like up to the minute and so on. So, you know, because you see something that was one bitcoin and it used to be a dollar, right? And now it's, what is it? 20, 30, you know, it's like crazy. So yeah, anybody who has a website that sells things in bitcoin you have to constantly either constantly lower the price consistently or have one of these automated systems. Jared, are you always doing anything for to give merchants an API that they can tap into the current last price? Yeah, for sure. That's definitely on the list. It might be the low that you have to talk to the program. One thing that we've received so much volume that we haven't done as much development as we'd like to. We're doing a lot of processing right now. We anticipate you know, a few people coming in there and make sure transactions are going good and do some more development. Instead, they want, we just got slammed. And instead, they want, we said we need a lot more people. So we just immediately started hiring people calling friends, we go, they're really well qualified and just saying, hey, you want a job? I mean, we're based in Chile and I called friends in the U.S. and they said, hey, by the way, you're playing tickets in Chile tomorrow. Will you come and work for me? As long as you're paying me a bit more. And how do we develop all of you? Things are getting, we're getting with the groove and everything. So we're going to really start pushing out a lot more. Cool. Cool, breaking up a little bit on Skype. It's been four things that I got. No, what was that? We're breaking up a little bit on Skype. It's in, it must be Chilean, it's not New York. Is that the CIA? Yeah, that's it. The ticket packets, the ticket packets, they're monitoring us. But you can still hear us, right? It's funny to think we've only been open a week and we're already talking about these kind of things. You're going to see a lot of development. We've got some really, really cool stuff coming. We've got amazing feedback. Every week we get 20 to 50 people that need us and say, hey, why don't you implement this or can I help you with this? And the community is just amazing. So we're going to start seeing a lot of really cool stuff. That's awesome. There's so many things happening. I wanted to mention one of the coolest things that Bitcoin has going for it is a site and a service called clearcoin.com. Have you heard of that, Gavin? Actually, Gavin founded a site service called clearcoin.com which is very, very needed because the way I describe it is it actually does what PayPal claims to do because people use PayPal because they think that PayPal is going to stand behind them when they have a transaction and if the person's not legit, they're going to get their money back which may or may not happen or maybe the exact opposite. But clearcoin actually gives Bitcoin a way to escrow the payment. So if you don't trust the seller or if you don't trust the buyer, either way. Either way. The buyers and sellers can basically buy or sell or both happy. Both happy. And if the transaction goes bad, there's actually two choices which you set up before creating the escrow and the buyer and seller need to negotiate. Either the funds will eventually get returned to the person who's providing the coins or you can set up a charity escrow where the coins, you know, buyer and seller can't agree, the coins will get donated to a charity. I mean, what if that goes bad and I, like, I shipped my HDTV to somebody and they claim that they didn't get it and it goes bad and then my coins are donated to a charity? How does that... Well, their coins are donated to charity, right? So if you're providing the good... Their coins are donated, yeah. If you're providing the physical good, then, yeah, the charity will get the coins instead of you. So there's still some trust issues there and on the other end of the transaction you would rather the coins go to charity than to you and they're willing to take a hit to their reputation as somebody, a deadbeat who doesn't, you know, raise his coins. Yeah, it's a good thing to have in any case because Bitcoin is basically cash, it's cash-like, of course, but you can think of it as cash and just like with cash, if you're going to meet some stranger on the street corner who's going to open his trunk and give you an HDTV who you're doing business with, it's like anything else. Yeah, well, the truth is, I mean, there are a whole bunch of things I'd love to do for Clearcoin, but this little leather project has kind of gotten in the way. How's the volume with Clearcoin? Is it overwhelming as well? No, it's been manageable. Well, after this show, it will probably be overwhelming. You'll have to hire some more people in Uzbekistan and Egypt. Is that an automated process or is that manually... It is completely automated. There you go. I set it up to be completely automated. That makes a lot of sense. It does. If I had to step in and resolve every dispute or had to hire somebody to step in and resolve disputes, then I'd have to charge what credit card companies charge. He's an expert developer. If you said it wasn't automated, that would be really disappointing. We have little elves in the tree who do all the work. Well, since you're the lead developer of the Bitcoin client, what do you guys have in the pipeline? Is there anything usability-wise? I guess the hot topic now would be security-wise for Bitcoin. A lot of people don't realize that now that they have a wallet on their laptop, they're carrying a laptop for $10,000, maybe even more, even $500 that has monetary value attached to it. Is there anything in the pipeline that's going to facilitate that? The target for the next big release or the .4 Bitcoin release, the big feature that is in the process of moving carefully because we don't want to lose people's coins is encrypting your private keys. Allowing you to set a password that you have to enter just before you send the transaction. You don't enter it when Bitcoin starts up, but before a transaction you'd have to enter your password. That doesn't give you 100% security because if there's some bad software keyboard, logger, virus exactly, keyboard, logger, virus Windows. There's a nasty virus called Windows. It certainly doesn't solve the problem, but it does make the problem better in that, for example, if you back up your wallet and you don't back it up encrypted, then it will be backed up with encrypted private keys attached to your password. Your backups will be safer. The new client, the wallet won't be encrypted, but the keys inside of the wallet will be encrypted? So it's kind of like the same thing as your wallet being encrypted? It is, yes. Effectively. If we encrypted the entire wallet, they have to type your password at start up, which is a security risk because your wallet is in memory, unencrypted and it's much better just to enter the password when you have to send the keys. You have a chance for your virus software to run and figure out if there's something bad on your system. See, Satoshi is pretty smart. I mean, I got it. That's really smart because you don't want to enter your password every time. Most of the time, you just go in and you look at your balance and you maybe get an address and send somebody an address and all those things, there's routine tasks. There's only occasionally when you want to actually send a payment that you need to enter it. And so only a keyboard logging virus would be able to grab your password. That's a really, really big issue because we created this cycle, bitcoinme.com which is kind of the Bitcoin for the average person. It's again, a living document. It's ever changing and improving. But the biggest obstacle we have, besides buying Bitcoin, now we have Trade Hill and also local exchanges which are great so it's easier to buy and sell Bitcoin, of course. The other one is security, absolutely. So many people have invested in Bitcoin really significant. It used to be pocket change and then among salary and now they have like some people have a real significant amount of money there and they're like, what do I do? Well, you've got Bitbills but even that you're going to end up with a physical shoebox or something that you've got to deal with. So it kind of defeats, I mean Bitbills are great for what they're great for but it also kind of defeats one of the advantages that it's electronic and it's virtual and if it's encrypted, you could actually put it out there somewhere and make it accessible through the web and then just you have it, you know, no matter where you go, you can get it. Yeah, there's actually a misconception where like Bitcoin, like how Bitcoin works is actually works through encryption. The use of public key cryptography but nothing's actually encrypted. That's right, yeah. Yeah, so I actually found that out today you know, catching old Bitcoin news and I was like, oh, you know, that's really interesting. Yeah, well doing encryption right is hard. Yes. You know, I mean to really you know, make sure there's no possible way to get in and like I said, the next version will be better, it'll be a step towards more even more secure solutions in the future and really the only way to get you know like 99.99% security is to involve two different devices. So you can imagine having to start a Bitcoin transaction on your computer and then verify it on your cell phone, for example. Is that going to be in the client? Well, not in this version. Definitely not in this version. That's what I want to move towards and go towards. There are a bunch of technical issues, not the least of which is sending information to a cell phone. How do you do that? Especially internationally, globally. Exactly. Carrier fees is their open source to do that. There's lots of issues there. So it might end up being, that might be solved by another Bitcoin client. Another Bitcoin client with a registered IP address or somehow maybe an app that runs on your cell phone or something like that. Here's a hackathon. Yeah, that's right. Our hackathon here, we host a Bitcoin meetup which is on meetup.com. That happens monthly here. There's three spin off groups from that. There's a weekly hackathon every Saturday and then a promotathon of volunteers who want to help volunteer to do all sorts of things to help promote, like creating, you know, entering businesses into the directory and charities that accept the coins and all that. And then the legal think tank we're trying to form but so far we've only been getting 99% of our inquiries. We want to know what the legal think tank thinks and we're still trying to get some lawyers in the legal think tank to think. But anyway, the hackathon is very, very productive. They've already created the Android app. They've already created a market which is in beta you don't want to put, you know, you don't want to put much, just alpha. Okay, so you only want to put, you know, some play coins in there. But it's really cool and it's getting better all the time. Now they're working on, you know, really improving that. But yeah, that's one of the things they're working on with some sort of, I don't really quite understand it, but something where another client that would be fast and it would be it's backed up and the backup has like, they have the password and you have the file and there's another copy where they have the file and you have the password. So the cloud never has both at the same time but it is backed up, something like that. Which is needed. They're also talking about something, because the blockchain is going to be an issue. I think the blockchain is like two, three hundred metrics right now, but that can grow exponentially as the bottom transactions grow. Yeah, I've often wondered about that. One of the issues that they wanted to tackle was that the relevant part of the blockchain into the client this way, when you download, not many phones have the capacity to hold the entire blockchain. So I'll be interesting to see how that goes. Well, you know that the Hackathon, the Bitcoin app for Android, they call themselves bitcoinlabs.com, where Hackathon Group has created this thing, bitcoinlabs.com. So the app is just called Bitcoin and it's by Bitcoin Labs. They actually have a server, they call it an end node or something like that. I'll probably get it wrong. I'll be corrected. But anyway, it's not used for anything too secure except to check your own balance. So it goes out and it reads the whole entire blockchain and just sends you your balance. So there's that part. It's not secure because it doesn't matter. Even if it made a mistake, you can't spend what you don't have. But it does let it check the balance and so that way your phone doesn't have to have to change. So I think there'll be a lot of innovation like that. Yeah, definitely. I just remembered something that I really wanted to ask you. All right, a big issue that was seen with mining was that deep bit, which is the biggest mining pool out there. They control nearly 50% of the actual mining capacity. And a lot of people are worried about certain attacks that could arise from that. It doesn't necessarily mean that they have to be able to have evil intentions. It could be that they just get compromised and then they use that to advantage. The most, I guess, worst case scenario I could think of because the attack is very limited in what the attacker could do. It would be what if somebody was connected with a central bank or something along the lines of that. They'd prevent Bitcoin transactions from actually being verified. I was just wondering what are your thoughts about how we have more interesting insight or more useful insight that many people would have? Tyco actually had a really interesting suggestion in the forums that I haven't had a chance to think through. But basically the idea is all the people who are connected to a mining pool would monitor the mining pool for bad behavior. And if they notice that the mining pool reversed a bunch of blocks or that the mining pool had transactions in that block, they could just stop mining. That would make it much harder even if a mining pool got more than 50%. If it tried to do anything bad then all the people who are supporting that mining pool would say, we're just going to stop and let the other pools move to another pool or whatever. I think that's a really good idea and the fact that it was Tyco who suggested it. He doesn't have any bad intentions. Anybody could just compromise it and then it becomes a risk to the whole entire big mining community. And you don't even need 50%. It's not a magical number. Somebody could be running 15% or 20%, but it's just going to be exponentially lower that Tyco pieces. So writing some code in the individual miners that looks for that and disconnects or stops mining if they notice funky things happening where we'll have to be careful of what a funky thing is. Because funky things do happen on the Bitcoin network and it's pretty resilient to most funky things. I was going to say, the hackathon, we should do this show every day. You can even do it every day. The hackathon guys, of course they talk about this. Everybody, just like the forums, the hackathon often turns into a real live forum. So security, obviously. I'm always trying to figure out a new way to break the system, to figure out what could go wrong because that's what security is about. One of the things that they talk about is, and I think you've touched on that here with miners but also just with anybody as a whole, one of the projects that they're talking about is I call it Fire Alarm where monitoring systems, this could be happening by different groups of people all over the world who are watching that ledger. And anyone could watch it and look. If there was an older transaction that suddenly got changed, boom, red alert. It could absolutely tweet an SMS to everyone and say, stop halts. It could trigger, actually, maybe that could even exist in a Bitcoin client where it says boom, amber alert, red alert. There's something wrong, go to this site, almost like a virus. If you see something that's drastically wrong, it should not ever happen. This is the blockchain where the actual full blockchain that has already been verified in the past to actually change an old transaction would require an exponential amount more power than what's even available today. Isn't that how it works? Yes. As our hashing power has grown exponentially, unbelievably and we're now what? Difficulty went up like 50% again. 40 times larger than the world's largest supercomputer or something crazy. Wow. I think that is becoming less of an issue although the concentration of power in these mining pools is I think a bigger issue. But the whole policing thing, would that have to be an offshoot of the actual Bitcoin project or would that be up to the actual mining developers to take care of that? It would probably be, while I'm imagining the code will be written by somebody kind of involved in the miners but we'll see. I don't know. Anybody can submit patches and Actually anybody can watch for this. You don't have to be part of the mining pool to watch for those discrepancies. Right. I would love to see a site like Bitcoin Monitor or Bitcoin Watch. One of those, look for double spins. It would be great for somebody to just try to connect to as many nodes in the networks as they can and watch for attempted double spins. I mean of course the Bitcoin Network but it's just like the building is designed to not make a fire but if there's something completely unexpected that happens it's just really, really important that it's discovered immediately so things can stop. It's been really helpful to me to look at is it Bitcoin Watch that has a list of unconfirmed transactions? I forget which website has a big list of unconfirmed transactions and just you know I think it might be. But as a developer that's super helpful for me to look at is the networking code doing what it's supposed to What does that mean? Those are transactions that are out there and the miners have decided not to include them. The miners either decided not to include them because they don't include enough fees or they involve a small number of Bitcoins and they haven't matured enough or they depend on some other transaction and just transactions got out of order. Is it important for the average Bitcoin user to run the client to be appear on the network for the strength and protection of the network? No, not really. No, I mean yeah, miners give the strength and protection. I mean it helps if you are seeing a sudden influx of users who don't have ports on their firewall open so they're making eight outgoing connections and not accepting any incoming connections. Is that bad for them? That can be kind of bad for the health of the network but if you can turn on universal plug-in play and connect to the network, that actually does help if you have more than eight connections. Is that supported within the client? Yeah, the latest versions of the client have a checkbox for universal plug-in play. So if we can educate people to how to turn on your BNB and their router and then run the client with that on then that will help strengthen the network? Yes, and they can tell easily. If you run in the client for a while and you only have eight connections then you're not accepting incoming connections because Bitcoin will make eight outgoing connections and then accept as many... So there's only eight people in Manhattan that's why I don't know. So you're part of the problem? I'm not anymore. Once I got my electric bill, no. That's what I want to advocate. It is something that the average user can do to help strengthen the network that it actually takes some of that market share of mining away from the mining pools that seems like it would be more... I don't know, it would be better for the health of the network. Although they can only run it as fast as their CPU with a normal client, right? Very ineffective. Yeah, CPU mining probably doesn't even... it's kind of bad for the environment. You're wasting electricity. I would like to ask a question for the normal viewers here that are non-technical. You probably get this question all the time. What do you recommend as far as to store your Bitcoins where and how? For safety right now. Because there's a lot of things that work. But we're not today. It depends on how many you have. So if you have as many Bitcoins as you would carry around in New York in your back pocket, in your wallet then I don't think you need to do anything special. If you're super prepared, you may get mugged, right? You may lose them. If you have a lot more than that then it's hard right now, quite frankly. Before I went to France actually I thought real hard about how to keep my Bitcoins safe in case somebody burgled my house and took my computer and took my backup drive and so I actually spent some time making sure that I copied my wallet file very carefully copied my wallet file encrypted it and made sure that the encrypted version was safe and then backed that up and actually took my backup disks and put them in a safe in my basement because if somebody took those disks they're probably their backup copies that if you get a copy of the wallet then you have the private keys and you can sign a new owner to them. You really have to think about where all the places my wallet has been and either make sure that they're erased and if you've lost track of your wallet maybe it got backed up somewhere on somebody's disk or maybe that laptop that I gave to my brother-in-law then probably what you want to do is make a new wallet and send all of your coins to the new owner How about for the less technical is there any other more direct route that doesn't require buy bit bills buy bit bills that'll work and frankly I wanted to give my mom I promised to give my mom 100 bitcoins a while ago and uh... I'm gonna do it um... but I'm sending her bit bills because I don't trust that she doesn't have any viruses running on her computer and she's not technical I asked her, like I said, can you come out with a 1000 bit coin denomination it'll eventually go a new cosmetic because you know how it would be cool to have a 1000 dollar bill because you can have a 1000 bit coin denomination, you know somebody who knows what that'll be worth and do you recommend it? Yeah, exactly so we're running short of time but we have a big announcement right Jared? are you still with us? yeah we're gonna do it we saved it for the very end because we know people are hanging in with us because Gavin's here and we're all here this is so cool you want me to say it or you want to? I'm just gonna say something real quick you one of the coolest things about bitcoin in the beginning was bitcoin faucet and I don't think Gavin knows what my ID was on the forums, we can talk about that later but Gavin and I used to talk about the faucet quite a bit and we thought it was really cool and then it started getting abused that if there's anything cool and good, it's gonna be abused but the funny thing is it brought a lot of people into bitcoin so back when it was I think 0.05 bitcoin which now seems like a lot it just brought a lot of people into bitcoin it gave them a chance to experiment with it to use it and to see how it works so basically it was taken from there but I'm looking at basically faucet 2.0 that you can use in real life so Bruce this is the announcement tradehill.com there's a big injunction with only one TV only one TV in tradehill are announcing a really amazing thing we're going to create a one time event we're calling it maybe one time event I know I shouldn't say that at first event bitcoin fire hybrid appropriate for New York City it's gonna be an event it's gonna be giveaway free bitcoins the green American bitcoin giveaway a lot of it is about save bitcoin we really want to get the message out to the world that bitcoin is for ordinary people it's not just for criminals or anything like that bitcoin is just like the cash in your pocket it's for ordinary people to buy and sell and transact whether it's coffees or toaster lunch we pay our rent for the studio in bitcoin by the way our banner insisted on it watch for the iris that's on them because we're paying them anyway bitcoin fire hybrid is going to be an event starting today we're going to send out a press release to everybody and we're going to do a fundraising telephone and this is about if you want to help promote bitcoin to the masses and whether you're an individual or you are a corporation who wants to donate a large number of bitcoin and also we're going to mention obviously the larger your donation the more mentioned you're going to get for your business or whatever it is in fact if you're a very large donor we're going to talk to you privately because what we'll do is we'll arrange a deal where you pay basically no transaction fees on trade hill trade hill has most generously donated that as well so we're going to do a sort of a telephone it's going to be kind of like jerry loose telephone to get donations between now and july i'm sorry june 25th right yeah i got july june 25th the next 10 days the next 10 days we got 10 days and we're going to raise as many remember this is happening in internet speed so we get 10 days to raise as much bitcoin as we can go to bitcoinme.com and click on the tab that says fire hydrant right okay and soon we registered what bitcoinfirehydrant.com so that's not up yet but soon but right now go to bitcoinme.com and you can click on the tab called fire hydrant and you're going to see the donation address which we already set up for this so you can go there right now and send a bitcoin or you know 10,000 bitcoin you know whatever if you were an early adopter you probably got a bitcoin right now people ask me how many do you have more than 10 more than 10 more than 10 and less than 9 so anyway we're going to do this giveaway and we're going to do the giveaway actually on june 25th that's a saturday june 25th at 11am so what we're going to do is we're going to do this telephone between now and then every day on the bitcoin show we're going to talk about raising as many bitcoin as we can you'll be able to look at the blockchain and see how many are donated to that address and we'll be publicly announcing it on that website and on the show and we're going to raise as many as we can and you're going to be able to physically get a certain amount I don't know exactly what it will be maybe something like $20 worth of bitcoin per person and everyone will arrive here at 11am and only one tv studio is on 5th avenue between 30th and 31st we'll have all that on the site and if you physically stand out here and line up to me like an apple launch to me the i bitcoin launch that you lined up all the way down to wall street in front of the stock exchange and down Broadway but anyway just come on out and stand in line and you're going to get free bitcoin we're going to set you up with a trivial account and put bitcoin in it exactly it might even be $1000 per person wow and how many people donate it might end up being $1000 per person maybe who knows it also depends on the price of bitcoin if it goes up 10 fold in the next week then it could be one of that basically there's no limit to putting it in the week so that's exciting so we're going to just check out go to bitcoinme.com and click on the fire hydrant and we'll keep all the details up to date there and we'll be talking about it every day on the show that's exciting free money and that also helps show people that bitcoin is good because now the media looks like they're trying to demonize it especially with those two senators and slope road so I think that would be really awesome any grandma any person out there a homeless person who cares they can have some big coins and then that might inspire the people that came here and got bitcoins to trade for stuff like hey I'll save your $20 in bitcoin for this gift card or something like that and hopefully that'll be a nice catalyst and more people use it exactly bitcoin is for donating to charity for making money fluid to third world countries it's for monetizing the web and it's for buying lunch it's for all the normal things that human beings use money for protecting against the occurrences yeah exactly and tyranny over money I think the best way to defend bitcoin and protect bitcoin and ensure that it survives is acceptance obviously a lot of people are really opposed to bitcoin right now well let me take that back maybe it's a smaller group that's really powerful that's supposed to be here and if the entire United States or the entire world is using bitcoin you're going to have a whole lot more time telling you you can't use this it's wrong and evil if everybody's using it that's right thank you I'm being a bitcoin developer extraordinaire and Jared my Tray Hill is amazing you're rocking the world with so many ways to get money in and out of bitcoin it's just amazing and thank you all for joining us definitely all responses so thank you so much guys we'll see you tomorrow same time