 Hi everyone, I appreciate you guys all coming out tonight My name is Tyler. I've been a product manager For just shy of a decade now I spend most of that time working on the Chrome team at Google and then late in 2017 I moved over to Reddit where I've been leading up the knowledge team for product Which is the ranking search and relevance work that we do but I do my day job all day So I kind of want to spend now focusing on something that I just want to talk about because I think it's really cool And that's Bitcoin. We're gonna kind of do a whirlwind introduction to Bitcoin. It's not gonna get super technical We're kind of working at the product management level But it should hopefully give you enough to understand the basis of how to learn more if you're curious And then I'll kind of rush through the Q&A session because every time I give this talk the slides are the same But you guys always come up with new questions. So that's the exciting part for me all right, so first of all And the question that you always have to start with when you first encounter Bitcoin is what is Bitcoin? You know, we all know that it's sort of something money related that people are using it to buy things on the internet Or maybe to gamble or maybe to do drugs and crimes and crazy things But nobody seems to understand at least at first blush What actually is a Bitcoin or what is Bitcoin the system? And I think the simplest place to start when explaining what Bitcoin is is that Bitcoin is a digital currency But that's a boring place to describe it because obviously you all knew that already before you came here But more importantly, it's because all of our currency is basically digital to a first approximation almost every dollar that exists exists only as ones and zeros Which means that there's nothing particularly interesting about being a digital currency So why is it that Bitcoin is so unique so new so interesting? And the answer is that it is a trustless and permissionless digital currency It's trustless in the sense that if I send you a Bitcoin You don't need to trust anyone else in the world including me to know that you have it And it's permissionless in the sense that nobody can stop you from accepting Bitcoin from me And no one can stop me from sending that Bitcoin to you now That's very different from money in the bank money in the bank You have to trust that the bank still has it if the bank was to go under you would be out of luck And if you want to spend your money in a way that the US government doesn't approve of that's actually very difficult Even if you're not in the US because it turns out that banks generally speaking comply with US banking laws So generally speaking US dollars are not trustless and not permissionless But it turns out there is a form of money that we're all pretty familiar with that already embodies these properties pretty completely And that is cash physical cash so money in a bank doesn't have these properties But $20 bills I can hand you and you'll know you have it and you can take it no one else can stop you So when you think about what Bitcoin is why it matters what's interesting about it? I think the simplest way to break it down is that Bitcoin is digital cash There are other analogies that you can use digital gold digital bearer bonds digital real estate each of these has their sort of advantages and Disadvantages they're all imperfect in their own way, but I think digital cash is the easiest place to start It's the very first scarce digital resource that has ever existed It's the first time that I could give you something digital and we would all know that I didn't have it anymore That's totally unlike anything else online if I send you a hilarious gift or a cool document or a secret password There's no way to prove that I don't have that thing anymore. Maybe I deleted it or maybe I kept the copy for myself Why wouldn't I which means all of the economic value that's been generated on the internet so far is all Predicated on how cheap and easy it is to replicate information, but none of it has been able to take advantage of scarcity Scarcity has not been able to migrate to the internet in the same way until now so Bitcoin is the first scarce digital good, but how is it that it's actually accomplishing these things? What is it that it's doing that is so new that nothing else has been able to do before? well, there's a rich and interesting debate about what constitutes good money and But I want to table that question for just a moment and talk about what it takes to be money at all So in order to function as money a system has to accomplish two basic things at a minimum One only you can spend your money and two you can only spend your money once There's other things that might make currencies work better or worse But if you can't ensure those things you can't possibly work as a currency now The only you part is relatively easy as you may or may not have already heard bitcoins are stored in wallets Wallets are essentially pairs of numbers one number is the public key and one number is the private key You can think of the public key is kind of functioning a little bit like an email address Anybody can know it anybody who does know it can send you Bitcoin And then you can think of the private key is functioning essentially like a password You need to keep it secret Anybody who has access to the private key can spend any of the Bitcoin stored in the public key This is all a very crude over simplification when you start getting into the technical details But it's enough to get you through most of the basic use cases of Bitcoin This is very elegant and it's well implemented, but it's not new This is the same basic cryptographic trick that powers essentially everything secure on the internet if you've ever typed in a password It's doing something approximating the same things that we're doing when we're storing and spending Bitcoin The place where Bitcoin is interesting the place where it's new and compelling is in the only once part now Keeping people from spending the same money twice is a problem in cryptocurrency circles known as the double-spend problem But it's actually a much older problem than cryptocurrency in computer science circles It's known as the Byzantine generals problem It's a problem of decentralized cooperation if I don't trust you and you don't trust me And we don't trust any of the people that we communicate through how can we come to a shared agreement on anything is Basically the Byzantine generals problem now if you think about how currency works Fiat currency works how we managed to solve the double-spend problem with digital US dollars The answer is that banks solve it for it for us And the way that they do that is using a very old piece of technology called the ledger and the ledger is just an accounting tool It is a list of all the transactions that have taken place And it is a list of all the account balances in the system And so when you write two checks that spend your 20 dollars in the bank twice If you're trying to do a double-spend on a bank the first check you write will clear because the bank will say aha You have 20 dollars, but then they will debit you 20 dollars and the next check that you try and send Will bounce because you no longer have the money So the bank is using a ledger in order to enforce double-spending now if you look at it At its limit. This is actually a time-stamping problem neither of these Checks are invalid until the other one has cleared So what we're doing with a ledger is we're deciding what happened in what order now banks accomplish this and it's very Functional and effective, but it's centralized the way that we're doing it is we're saying bank Everybody trusts you about what happened in what order and we'll all just corrupt Well, just coordinate by using whatever the bank decided as the truth And that's the reason that digital US dollars don't have trustless or permissionless properties because there is a centralized entity That's in control that may or may not make the same choices with your money that you would choose to make All right, so I just told you that the only way we solve this with US dollars is through a centralized entity But then I told you that Bitcoin doesn't have a centralized entity or I actually probably should have mentioned that There is no centralized entity to Bitcoin. It's decentralization is critical to what's interesting about it So if there's no centralized bank that's maintaining a ledger how is it that we're solving the double-spend problem in the context of Bitcoin and The answer is my favorite thing about the whole Bitcoin system, which is that Bitcoins don't exist. There's no such thing as a Bitcoin. You don't have a Bitcoin I don't have a Bitcoin the Winklevye don't have any bitcoins. There's no such thing as a Bitcoin Which is why? When you send someone a Bitcoin, you don't have it anymore because you never had it in the first place The only thing you ever had was the ability to update a ledger a central ledger called the blockchain The blockchain is nothing more or less than a list of every transaction That's ever happened in the Bitcoin ecosystem and by implication the account balances of everyone who participates in the Bitcoin Ecosystem so by sending all of our transactions through the blockchain We essentially accomplish the same thing that US dollars accomplish with a bank We decide what transactions happen in what order and so we know whether or not a transaction is valid because we know whether Or not the account that's trying to spend it still has the Bitcoin available So the blockchain as I mentioned is a shared public ledger It is exactly the same kind of ledger as a bank is maintained except that it's maintained by a group of accountants a network of people or companies or pools known as miners and what Bitcoin miners are doing is they're competing in a race to try and confirm transactions In order to update them on to the ledger now Anybody who can connect to the Bitcoin network from any node can download the blockchain for themselves and by downloading the blockchain You know the complete state of the ecosystem You know everyone's account balances Including most importantly your own and the reason that it's important to know your own account balances by drawing by Downloading the blockchain is because you're not taking anyone else's word for it If you're able to verify it yourself, you don't have to trust anyone So the fact that anyone's able to download the blockchain is the reason that Bitcoin is trustless As I mentioned miners are the accountants that are actually updating the blockchain and anyone can become a miner Anyone could devote any of their computing resources. I actually did it for a little while. It wasn't profitable, but it was fun You so by becoming a miner you can if you so choose mine your own transactions now in practice Most of us will never be tempted to do this But this is important conceptually because it means that any powerful miner in the system can't decide not to mine your Transactions or they can but it doesn't matter because any other miner in the system can choose to and nobody can stop anyone else from participating The fact that anyone can mine anyone's transactions is what makes Bitcoin permissionless No matter how important any given miner is you don't need their permission to participate because at it at the limit You could always get some mining equipment and mine your own transactions, and they'll all go into the network the same way Okay, so if anyone can become a miner and we're trusting miners to maintain the integrity of the ledger How can we trust miners and that's my second favorite thing about the Bitcoin ecosystem Which is that mining Bitcoin is pointless. Oh, sorry Mining Bitcoin is pointlessly expensive. It is deliberately wasteful when you talk about hashing There's no value to it and there can be no value to it because it is essentially Zero-sum competitions kind of like advertising in that way no matter how much coke and Pepsi spend on advertising They're still competing with each other over the same market So you can double the amount of advertising dollars and it doesn't necessarily change the ecosystem The computing resources that are securing Bitcoin operate in much the same way The reason that miners are willing to do this pointlessly expensive activity is Because they're paid for it in Bitcoin and the reason that that's interesting is because what we're doing is we're effectively Forcing anyone who wants to be a miner in the Bitcoin ecosystem to buy Bitcoin with electricity They're provably sacrificing power and computational resources And in doing so they're compensated for Bitcoin Which means that if they wanted to mess with the system They would be messing with their own wealth because we've proven that they've invested some of their wealth in the ecosystem And your influence as a miner over the blockchain is Proportional to how much of your resources you've invested in Bitcoin How much of it you've transferred into a Bitcoin value and therefore how much you should be incentivized To be supportive of a good Bitcoin ecosystem healthy Bitcoin ecosystem Generally speaking as long as at least half of the miners in the ecosystem are greedy not necessarily altruistic But just self-interested then the healthiest Chain will continue to be the longest and Bitcoin will operate as intended as it has so far So when I talk about this is going to be the most technically intense slide So bear with me and then we'll get back into the sort of Higher order view when we talk about what mining actually is in practice the way that it works is this you can kind of imagine the Bitcoin blockchain like this each block is connected to the previous block all the way back through to the Genesis block back in 2009 What I say connected to what I mean is that the new block Contains the hash of the old block And that proves that it was developed after the old block was created because hashing is a one-way mathematical function The only way to find the answer to a hash is to already have the pieces or to guess and check now in addition to the Transactions that are in a block. There's also a magic number known as the nonce and the nonce has no value No purpose except to be a random number and the reason that that random number is there is because Bitcoin has a rule That says that every block in order to be valid has to have a certain number of leading zeros in its hash So for those of you who don't know what a hash function is a hash function takes any number Which includes complex description of all the transactions in a block and then converts it into another number in a way That's hard to predict Sort of you you can calculate it easily, but you can't go backwards easily And so because there's no way to go backwards the only way to solve this problem is guess and check Which means that what miners are doing is they're taking all the transactions that they know about and they're setting the nonce and they're trying a bunch of different values for the nonce until they get one that just Randomly happens to give them the right number of leading zeros So they're sitting there going is it one note is it do know is it three note Is it for no and they're using thousands and thousands and thousands of computers to guess as fast as they possibly can And then depending on how fast they guess the Bitcoin network automatically makes the problem harder to keep Bitcoin blocks Coming out approximately every ten minutes So that is in practice what mining actually is it is competing to guess the nonce in a Bitcoin block The first miner that guesses a nonce that happens to have the number of leading zeros They need shouts to the rest of the blockchain I got it and they throw it out and because it's easy to calculate whether or not they did the hash right The network can very quickly confirm that they did it right So what they're able to do then is sign a special transaction called the coin-based transaction That will pay all of the transaction fees in that block and what's called the block reward to that miner So they do a bunch of computational work and they get paid a bunch of Bitcoin in exchange now That block reward is where new Bitcoin come from you may have heard kind of confusing conflicting things about there only being 21 million Bitcoin, but they're also being new Bitcoin created every ten minutes The reason is there will eventually be 21 million The amount that's getting created every ten minutes is cut in half every four years until it eventually dwindles to zero in about 2120 I believe Okay, so I promise that was the most technically dense slide. We're back to thinking about it like a product manager All right, so earlier I sort of set aside the question of whether or not Bitcoin is good money and just talked about whether or not it could function as Money but functioning as money in and of itself is not enough to justify how much attention and excitement there is Around the Bitcoin ecosystem So I want to talk just a little bit about some of the properties that Bitcoin has that might make it interesting But I do want to emphasize that anybody that tells you for sure that they understand what the best money is is lying or Possibly to themselves, maybe not to you they might be confused, but nobody actually knows these things for sure This is a natural experiment that we're all watching the outcome of in real time So these are things that we think are interesting about Bitcoin But not necessarily decisive in the competition about whether or not it's going to be the money of the future All right So there are four things that are interesting powerful and true about Bitcoin The first one is that Bitcoin can't be counterfeited remember Bitcoin don't exist So there's no way for you to mimic one because they aren't anywhere There's nothing for you to mimic the only thing that exists is the blockchain and the blockchain is the same blockchain That everyone has access to which means once you understand how to verify a Bitcoin transaction Or if you are using a piece of software that understands how to do that for you You don't need to trust anyone you can confirm that this is in fact real Bitcoin that someone has sent you and that's a property That isn't necessarily true of any other currencies. There's very very sophisticated Counterfeits of all the major currencies euro yen $80 there's also very sophisticated counterfeiting occasionally of precious metals So I don't know if you guys saw this but a few months ago There was actually a bit of a controversy in Canada Gold bar was actually tested and found to be I think it was tungsten But it was not gold. It just looked yellow So it turns out that even gold is at risk of this but Bitcoin any ordinary Individuals should be able to provably verify it themselves instantly without having to rely on anyone else No one can take your Bitcoin from you This is wildly different from money in a bank if you get in trouble with the law Then your money in a bank is gone because the law has the ability to freeze it The bank has the ability to freeze it if they're worried that you're doing something illegal And they think they might get in trouble for it bank is not obligated to honor the dollar in the way that you might think But Bitcoin in a mathematical sense if you have access to your private keys No one can take that access away from you. No one can prevent you from transacting within the system That means that Fundamentally if you're living in a part of the world where you don't trust the banks or you don't trust the government Or if you're engaged in a kind of activity that causes you to not trust your local banks or government Then that allows you to have money that cannot be interfered with by third parties or authority figures Bitcoin can't be censored. So this is kind of the flip side. No one can take your Bitcoin They also can't render it useless by preventing anyone from taking it from you So banks have all of these laws around gray area industries where they're not exactly illegal industries But they're frowned on and banks just generally don't like to get involved with them because of the fact It makes the government frustrated. So these are things like sex industries gun industries the marijuana industry all of these things that sort of operate in the ambiguous areas of the law all of those places really struggle to operate with credit to operate with Digital dollars because the banks just choose not to allow them to take transactions not to do anything in that business With Bitcoin if you have the ability to submit a transaction to the network that Transaction is equal to all the other transactions in the network. No one can prevent any transaction from being mined No one can prevent me from sending you Bitcoin Finally, and I think probably the property that is the most immediately intuitively obvious Bitcoin is fundamentally scarce It cannot be inflated unlike every other fiat currency There is no authority figure no central bank that can decide to print more the amount of Bitcoin is fixed It is fixed going forward. We can all rely on it. No one necessarily knows How valuable those Bitcoin will be but we know how many of them there will be and that's not something that you even know for gold Because with gold and with silver and with other precious metals if they become precious enough Then that will cause people to reclaim metal that they have in like silverware and jewelry sell that in the market Or it will cause people to mine less and less profitable mines, which means that the supply of precious metals is Responsive to the demand. It's not perfectly responsive, but it is responsive So as the price rises the supply will grow to meet it. That's not true of Bitcoin Bitcoin is the size that it is and it will always remain that size Which arguably might make it a very good store of value if we all decide to use it that way But I actually think thinking of Bitcoin as money is the least interesting way to think about it And before we transition into the Q&A session I want to kind of give you guys a little bit of a window into the part of it that I actually think is much more Compelling now I suspect that you all have probably heard the phrase that history is written by the winners and To the extent that any of you have studied history There's something almost literally true about it almost everything we know about the past is mediated through specific authorities Monks that happen to be writing about battles or People whose accounts survived and was carried for and propagated by those who thought it was worth preserving that viewpoint Some of those accounts are incomplete. Some of them are inaccurate. Some of them are outright deceptive We don't necessarily know the past with perfect clarity because all of our understanding of the past is filtered through people That we have to trust in order to know what happened That's not true of Bitcoin. That's not true of the information that's stored on the Bitcoin ecosystem Bitcoin's blockchain is arguably a new category of knowledge a category of neutral knowledge that you can come to know Without having to trust or be mediated by any authority figure by any central source of knowledge or authority There are things stored in the blockchain that we don't know yet how interesting they will be in the long run We don't know what else we might store in a data site like that but the fact that we can now trust that since 2009 the Bitcoin ledger has Objectively recorded every transaction that's taken place in the Bitcoin ecosystem is unique in human history And if we get good at leveraging that tool to coordinate as a society and to record things more Irrevocably and immutably there is a chance that our grandchildren's grandchildren will look back in this time as the dawn of recorded history The time when we actually could record things in a way that other people of future generations could come to know for sure Without having to rely on trusting any particular people along the way And I think that's the most compelling and interesting thing about the blockchain although. It's cool that it's worth a lot to All right, so with that I'd love to kind of turn it over to any questions that y'all have Yeah, yeah, it's a great question. So if I may rephrase a little bit for the folks on the live stream Those of us who are holding Bitcoin with our own private keys before the Bitcoin cash fork now hold both Bitcoin and Bitcoin cash Or did after the fork may have liquidated one or both sides for most of the time after the fork the net value of the two coins in US dollars sum together was more than the value of the coin pre fork Which argues against the idea that scarcity is the thing that's compelling because if I doubled the number of digital things And now all of a sudden I have more money like where did that money come from there's a couple of thoughts One thought I would have is that Bitcoin cash and Bitcoin are essentially two different Philosophical statements about what the best kind of cryptocurrency system is and having two different Systems that are attempting to solve the problem isn't necessarily bad like there is a solution out there Or I believe there is there might not be this is all an experiment We're finding out as we go But having there be multiple bytes at the apple could arguably increase our odds of finding a solution Which could arguably increase the net economic value of the system now that's just pure sophistry But it's a possible thing to think a thing that I actually think in practice is that a lot of the money sloshing around in cryptocurrency isn't super wise and so trying to infer things from the price can often be a little bit maddening because it moves in ways that are effectively noise and Don't necessarily tell you very much about the underlying fundamentals. I think As you if you've been following the sort of general cryptocurrency market in the last month or two There's been a lot of growth and a lot of smaller coins. There's been a lot of sort of like rapid rises and falls I don't know that those things all necessarily have an explanation So much as the explanation is human psychology and we're all sort of looking in a very interesting mirror When we decide what we think cryptocurrency is worth because it is literally only worth what we all collectively think it is worth If we all collectively thought it was worthless It would be if we all collectively thought it was precious It would be so as we're figuring out what that means There's a lot of like feedback loops both large scale and small that create very sort of like abrupt shifts up and down That I would encourage you to Assume our more noise than signal most of the time For whatever it's worth for those who are curious my stake in the matter is that I Prefer bitcoin to bitcoin cash But that I am unwilling to compromise my cold storage in order to liquidate my bitcoin cash So I technically do hold bitcoin cash But only because i'm not willing to compromise the cold storage security that I have set up Yeah, uh So I can give you a sort of unsatisfying answer to who which is that the who was a person or set of people who went with the pseudonym Satoshi Nakamoto They never revealed their real identity A couple of people have claimed to be Satoshi Nakamoto a couple of people have been accused of being Satoshi Nakamoto My personal belief is that we'll never know They were certainly a person or people who cared a great deal about privacy To a degree that most of us would find kind of insane They were we know a few things about that Person or set of people i'm gonna i'm gonna use he because that was the pronoun that he chose to use So he Was certainly an expert in cryptography was certainly a skilled programmer Was certainly not as skilled a programmer as he was at cryptography And was also very active in the cypher punk community and you can see a lot of influence of earlier cypher punk work Things like bit cash and chow mein cash bit gold Things like this so anyway the not super satisfying answer is it's a secret And we'll probably never get to know What their motivation was You know, I can't tell you for sure what the real motivation was but what I can tell you his stated motivation was Is his stated motivation was that he was opposed to the bailout of the banks as a result of the crisis in 2008 In the genesis block is embedded a headline about the chancellor deciding to bail out banks again And then he also discussed this a fair amount in the forums So in some sense bitcoin is meant to be a the hardest of the hard currencies Like no one can decide to do quantitative easing with it Um, but there's a lot of other things that it accomplishes which maybe They did or didn't intend my personal favorite conspiracy theory is that satoshi nakamoto is the singularity traveling back in time and inventing digital cash So that it'll be there when it arrives uh There's also people who firmly believe that satoshi nakamoto was the cia or the nsa or some other three letter agency I don't know But what's cool about bitcoin is that it's kind of a fundamental press Precept of the system that you shouldn't have to trust satoshi nakamoto to trust bitcoin In fact, if you had to trust satoshi nakamoto, then he would be the central point of failure that bitcoin was meant to solve So his dream and I think the dream of the people who are excited about bitcoin Is that it just doesn't matter that, you know, maybe his intentions weren't a farious But it turns out we can actually understand the system from top to bottom And it does the thing it promises to do And so that's that's the kind of the dream the promise of bitcoin if you will Yeah, yeah, so as the blockchain increases it's demanding an increasing amount of resources Is that at some point going to hit a cliff where we're going to be in a problem or how do we think about that? Um Well, I would say the block size has been a huge debate for a long time in the community It's at this point descended into a stage where a lot of the things that you'll hear are just straight wrong For example, one of the things that's interesting about the block size problem is that the principal problem is not actually about storage or initial computation It's actually about relay speed between miners But that's a little bit of the reads what what's important to know is that in general bitcoin demands Computational resources and in general those computational demands will increase over time The hope is that we can keep them increasing slowly enough that the increase in computational capacity will outpace it So morse law basically metcast law rather beating The pace of bitcoin growth the principal way that I believe that could be achieved is through what's called layer two technologies Things like the lightning network, which is just starting to hit the main net The idea behind a layer two technology is that we're transacting in a way that's denominated in bitcoin But we only settle up occasionally rather with every rather than with every transaction So you can think of the comparison point as being like a bar tab You know the bartender doesn't swipe the credit card every time that you have a drink They swipe it at the end of the night And that saves on credit card fees. That's why bars do that The same principle sort of writ large through a program is what lightning network is intended to do And if we do a good enough job of that then that will lighten the load on the original blockchain to the point Where hopefully we can scale and continue to support it Regarding the double spend issue, maybe I'm not fully understanding this but what would happen if you attempted to double spend the main one With it with the blockchain of the eccentric rapid rate that the second one will go through Yeah, so if you actually try to do a double spend like tactically, how would it work? Nobody do that It's bad But the answer is basically bitcoin appears New blocks appear at a statistically random time that's meant to be targeting every 10 minutes So it aims for every 10 minutes, but it's stochastic. So it might happen in a minute It might happen in an hour just is a random process And so when you announce the transaction to the network, it gets relayed to every miner very very quickly So within seconds But it doesn't get committed to the blockchain until it gets included in a block Which is a function both of when the block appears And how many other people are bidding to get into that block because it's essentially an auction Where the miner is going to look around and be like well, I've got room for x transactions So I'm going to take the x highest price transactions because that's how I make the most money So there's there's no super precise way to tell you how fast a transaction will clear But what you can say is the size of the transaction tells you how much effort it would be worth trying to double spend it So when you swipe a credit card that transaction doesn't clear instantly either That actually clears over the course of like 72 hours And the reason that you can still walk out the store is because Some combination of the banks and the credit card company and the merchant have decided to assume the risk That you are probably honest and that you can probably be allowed to walk out the store even though it hasn't cleared The same thing can happen in the bitcoin network in the same way you can say to yourself Ah, you're buying a coffee double spending a coffee would be a very elaborate way to steal a coffee Probably just walk out with your coffee on the other hand if you're sending me a million dollars in bitcoin Probably wait for a couple more confirmations before I do anything right because you might find it worth it To actually pay a minor to try and do a double spend So it's a sliding scale of security. How long you wait tells you how much money someone would have to spend in order to double spend Uh, and that's that's kind of how the system operates basically My understanding it makes what makes the blockchain network really trustworthy is that Uh, as long as you can verify if you think the one percent of the nodes agree on something you can say Yeah, yeah, so how should we think about the security of blockchains, especially when they're smaller So the blockchain is protected is subtly different. It's protected if 51 of the hashing power is honest or greedy If there nodes don't necessarily have to be mining you might run a node at home to verify your own transactions But not actually run any mining because you don't have cheap power Um, and that's totally valid use case. So nodes don't tell you anything of themselves What you look for is hashing power If you and I were to collude on a blockchain We're both miners and between the two of us we have 51 of the of the mining power What that means is what we could do is we could go off into a secret network That's just the two of us and start mining just the two of us with whatever new rules or secrets or double spends We want to do and because we have more hashing power between the two of us than everybody else left behind Our network will grow faster And then when we eventually release that we'll have the longest blockchain and then everyone will abruptly shift to our view of the world In practice the problem is you have to accrue 51 of the hashing power without anyone noticing because if you accrue it And then suddenly turn it off everyone's going to be like wait a second Why did the hashing power drop in half? Shouldn't we be worried and then everyone will stop doing high value transactions until they figure out what's going on So in order to actually do a double spend attack you need to develop that hashing power in secret Which means you can't be mining with it. Which means it's not making you money Which means it is very expensive. So it is very hard to launch a Actually profitable 51 percent attack There's a couple of exceptions to that one exception is if you're using the same hashing power as another blockchain Then if I have most of my hashing power on bitcoin That was lucky If I have most of my hashing power on bitcoin But then I can skip over for a few minutes and just 51 attack your network and then skip back to mining bitcoin Then you're very vulnerable because then actually it's very easy for me to develop the hashing power without being committed to your network And that's why these days most of the major uh Altcoins have a different Proof of work or system than the original bitcoin Shah Solution because they don't want to be vulnerable to a 51 attack from bitcoin's network Which is extremely large another reason that might be an issue especially with smaller networks Is that the person who's involved might not be profit motivated? So for example, if I am sufficiently invested in bitcoin that i'm willing to spend Destroy threats to bitcoin. I might be willing to lose money attacking your network Even though it's not profitable So the 51 attack is very easy to justify in a world where there's only one cryptocurrency But in a world where there's multiple cryptocurrencies competing the logic gets a little bit slippery Yeah, totally. What are the trustworthy resources in crypto? Gosh, I wish I could give you a good answer to that Yeah, I mean, I guess what I would say is You know the majority of the new content that I see breaks on reddit first If you've been on reddit, you know that it's trustworthy is not necessarily the first adjective that would spring to mind It's you do you do have to wade through some tripe? And you do have to like be in an intellectually defensive posture, but there is real information there I I follow a lot of people on medium Uh, I I'm not going to name names because I don't necessarily follow them because I think they're right I follow them because they're talking about the space What I would encourage you to do is to Follow individuals more than sites that have coin in the url or in the title Any any source of content that is monetizing you via ads Is incentivized to say all sorts of things to say to you in order to get you to click more And there's lots of things to say in the bitcoin space that might get you excited to click So like generally take everything there with a grain of salt find individual people who are expressing opinions that you think are interesting And follow them on twitter and on medium and then for like the town square experience. I recommend r slash bitcoin and r slash bitcoin markets What is reddit doing with blockchain or ethereum? Uh at the moment talking about it a lot Speaking of I guess people in the community I like to talk a lot about bitcoin a lot I usually talk to roger bearer on my podcast when we talk a lot about Bitcoin core versus cash, uh, I get a lot to say deed, yeah one of the biggest things though is like the I guess the Bitcoin coming kind of useless because of transaction costs and speak to apparent to cash Um, do you think the lightning network person can solve for all that all the problems and yeah, yeah, so, uh Roger bearer and a lot of the people who are supporters of bitcoin cash argue that bitcoin's high transaction fees make it less useful in practice which sort of breaks the bootstrapping and Makes the case that bitcoin cash Would be well suited to replace it because it's a similar system, but with cheaper fees My feeling on it is uh Well a couple of things when people tell me that bitcoin is going to fail because of high fees It sounds to me like new york is going to be abandoned because of high traffic It's like that's a symptom of it being useful Not the thing which will kill it now I certainly think it would be more useful if we could find a way to scale better So that individual people participating could participate with cheaper fees like I think that's desirable But I don't actually think you can fail by being too popular Uh, and you know, it's sort of a self-correcting system Like if people started to become suspicious bitcoin wasn't as useful Then they would stop paying as much to transact in it And then the transaction fees would drop to the point where it got back to being useful again the The reason that bitcoin can sustain such high transaction fees and still be a useful system Is because right now the most useful thing to do with bitcoin is hold it And not to spend it there aren't that many places that you can spend bitcoin So unless you need a combat ready currency unless you're out there buying drugs on the dark net Probably the only reason you bought bitcoin was to own bitcoin And so there isn't really a ton of compelling Need for microtransactions or for lots of stuff, especially now that there's a bunch of cryptocurrencies competing for that space Um, the other thing that I would say is that in general The challenges of building a crypto economy are non-linear Which means that it is more than twice as hard to be twice as big So being the size of bitcoin Especially being the largest cryptocurrency Encurs a great deal of other challenges that aren't necessarily faced by currencies in second third and fourth place One of those is scale So if you were to take all of the transactions that are taking place in bitcoin And then move them all to the bitcoin cash network the bitcoin cash networks fees would rise now It's a complicated debate about what that would mean and whether it would rise to the same amount and who knows But what we know for sure is they're currently being sheltered from a lot of traffic because a lot of that traffic is being dealt with By bitcoin similarly a lot of the attacks that happen on a crypto system happen on bitcoin first You see a lot of the regulation stuff talking about bitcoin Nobody bothers passing regulation against tron who cares? Let's wait and see whether it matters before we bother regulating it similarly a lot of the most compelling features of altcoins The one that always stands out to me is strong privacy guarantees Strong privacy guarantees can only be known when there is strong incentive to break those privacy promises So until a privacy centric concern currency is a sufficiently big deal But a nation state is legitimately trying to break it We don't really know if it's private because that's the way you know in a crypto system Whether or not something is secure is by getting somebody really powerful and really motivated to try attacking it It's the only way to be sure Yeah, I think that uh in general the thing that the blockchain does is it is an immutable record So in any world where you would like to write something down In such a way as you could be sure that no one could ever erase it or ever change it Then it is a useful tool. So for example, uh, this is basically how deeds work Land deeds is that they just have this sort of chain of history about who owned it stretching back as far as we can And the level of legal defense you can have over you actually owning your land is basically a function of how long that History goes now in america, we have a pretty strong land registry So mostly this isn't an issue although not exclusively But there are parts of the world where the land registry is essentially a bribery system And you own the land if you can bribe the official to say to everyone that you own the land Now in a world with a blockchain you could record these records in such a way as no one could be bribed You could imagine a similar system for provenance of art or for fair trade coffee Or for ensuring that you have environmentally sourced materials or any market where you want to know for sure A thing that happened in the past all of those things would be useful for a blockchain now right now The blockchain is way too expensive to be recording all of these things as transactions We have to find other ways to do that But in principle having a shared neutral ledger would allow us to do that Another class of use cases that are really compelling that you'll hear a lot of people talking about particularly in the ether or ethereum space Is uh decentralized applications Or smart contracts and the idea behind a decentralized application Is that it sort of acts like a company that nobody's in charge of a company with no shareholders if you will So someone writes up a contract that has a set of rules about when it buys things and when it sells things And then that contract is independent keeps operating in its own way Imagine a self-driving car that could also charge you for a ride and by its own gas And that's kind of what a decentralized app could be now Super cool super sci-fi But it is important to remember that the way that the blockchain works Is pointlessly expensive and we talked about that that's central to how it is what it is Which means that even if we get good at scaling Doing things in a purely decentralized way will always be more expensive than doing them in a centralized way Because centralization is cheap So a lot of people who get excited about decentralized apps or dApps will immediately leap to Oh, everything's going to be decentralized. We're going to have a decentralized this and a decentralized that and you know Some of those things will get decentralized and it will be awesome But many of them will not because the companies are working just fine We probably don't need a decentralized twitter. It would be insanely expensive And centralized twitter is pretty okay for what twitter needs to be right so like As you're getting excited about the ecosystem of crypto every time somebody says to you We're going to decentralize the blank. Ask yourself whether a really expensive version of blank is still compelling Because if it's not Decentralizing it probably won't be a very interesting thing to do I do think that there is a game theoretic advantage to building off of bitcoin as opposed to building a new blockchain And I think you can see that pretty easily if you look at bitcoin cash Bitcoin cash is essentially bitcoin minus the segwit changes Which most people would argue are an upgrade and then plus a block size increase, which is an upgrade but which is a Relatively unsophisticated technological change, right? This isn't monero or zcash or any of the sort of like fancy new cryptography and that A particular chain is actually at last I checked it was the number four cryptocurrency by market cap I don't know where it is at this exact moment But it's huge and it's much more significant economically than a lot of more technologically advanced coins And the reason is because it's compelling to be building off of the bitcoin network I personally am a bitcoin maximalist which believe which means that I believe in the long run There will be one cryptocurrency that matters and it will be bitcoin There are many intelligent people who believe other things So I don't want to necessarily tell you guys that that's like the truth But the thing that I believe is that and the reason I believe that is because I think fundamentally currencies are competing more on network And community than they are competing on technology And I think bitcoin cash is a really good proof point of that in practice right now where we can look at bitcoin cash and say They're not competing technologically Their technology is very similar to existing entrants in the market All of their advantage over the many things that they're Outvalued over is in the network and ultimately I think the network is the most decisive And that's why I think the first mover advantage is so significant because ultimately bitcoin will always be the first It will always be the one that is the original the scarcest Everything will have to compete with that Awesome You can see Yeah, I think if I take sort of a long enough view I could imagine intersecting the blockchain and Pharmaceuticals or or biotechnology in general any place where Information history is critical The blockchain can be a useful tool. So if you want to be sharing or Restricting access to data and interesting cryptographic ways health data is obviously very sensitive data in a sort of more practical answer I would say to you probably not in the next five years. I'd be surprised even in the next 10 In the in the near term There's a bunch of problems that need to be solved Before we could store enough stuff in a blockchain that it would make sense to start storing Stuff in the medical field or the biotech field And in general a lot of the challenges in that field Is more about Legal and cultural constraints than about the difficulty of moving the data around per se and then you know the blockchain doesn't do anything to solve that it's just a way of sort of It's a it's a way of sharing data without anyone being in the middle But I don't think the challenges of biotech right now are about middlemen per se And then there's also a lot of things we need to solve about bitcoin Or about any of the cryptocurrencies before they're likely to do anything other than be a speculation on whether they'll eventually be useful Make it go Do you think that there is a way to accomplish Sort of a decentralized source of truth without it being insanely expensive or do you think that these two things are You know sort of intertwined So do I think there's a way to avoid the sort of pointless expense of the proof of work system? I don't think there is and the reason that I say that is because fundamentally Uh securing the bitcoin blockchain has value and that value is uh It's you know, it's worth some amount of money Which means that people are always going to be willing to spend some amount of resources in pursuit of that payout Now it can either be direct and measurable and built into the system the way that proof of work is Proof of stake is a solution that a lot of people bat around about trying to solve some of these problems Proof of stake basically says rather than mining by wasting computation power You mine by locking up money and then voting with that money um For a whole host of complicated reasons Uh proof of stake is not yet widely used. I think it is The problem is that people will always be willing to do whatever they can to get the payout as long as it costs less than the payout Right, so either I can spend ten dollars searching for ten dollars in mining revenue by buying computers and you know wasting the hardware power Or I can spend ten dollars hiring thugs to go house to house and find people who are voting with their money And force them to vote the way that I think So as long as it's worth more to get than it cost me to do I will always do it which means that the amount of resources wasted securing bitcoin will always be proportional to the value of securing bitcoin And and I don't think that has to do with the fact that the resources wasted right now are electricity and computation power I think we could make them other resources But fundamentally it will always involve wasting resources because it is this um It is this uh zero sum game between the miners, you know again I would liken it to advertising like advertising is fundamentally wasted resources It doesn't produce value for society, but you you still have it Yeah, so what do I think is the sort of long-term future of bitcoin? Is it going to be like the one money to rule them all or is it going to be an interesting tool? Or is it going to be a crash and burn failure You know it is early enough that anybody who takes a guess at this should have some really wide confidence intervals Like and if you do decide to get involved in bitcoin You should make sure you do it with the belief that like crazy stuff could happen Before I got involved in bitcoin myself the first time that I heard about it Somebody explained it to me and I Confidently spent 20 minutes assuring them it was impossible and that it couldn't be done and they were wrong And so whenever I think about what's possible in bitcoin. I always remember that I always remember when I first thought about bitcoin. I thought it was literally impossible And so that means that things that I currently think are literally impossible are still valid and in play So always have this sort of like large Question mark at the end of any predictions you make about bitcoin My personal belief is that it will not replace all money But that it will be worth quite a bit more than it is today It's my personal belief the reason that I think that is because if it does the things that it seems to be doing It is useful at a much larger scale than it is currently being used If it doesn't it will be worth zero But if it does in fact do those things if it continues to do those things and we slowly gain more confidence in it Then over time I expect it will occur quite a bit of value I would be surprised if it displaced fiat currency because governments have a lot of reason to want fiat currency And people have a lot of reason to want governments I would expect that it would change fiat currency We had fiat currency in a world of gold backing and I could imagine a world where Bitcoin sort of enters into the reserve market in a way similar to the way that gold plays in the reserve market now Where central banks keep it as part of their reserves to back their currency when they need to support its value But that's pretty strong speculation There's a essay called an institutional investors guide to crypto assets It's an institutional investors guide to crypto assets that I think does a really good job of articulating A pretty precise argument for a price point for bitcoin I think if I recall correctly it was between $250 and $800,000 a coin was the argument that he made And the argument is about different people who hold gold for different reasons and why some percentage of them might choose to hold bitcoin That seems to me to be the most likely success outcome for bitcoin that I see today What happened with the number of miners going way down from just thinking the ban on China or China cracks down in China Yeah, totally. So let's Let's take that in two steps. One is let's just assume literally the miners are disappearing and then two Let's kind of explore and practice what might happen if China cracks down on it. So If the miners literally disappeared then that is a problem for bitcoin The difficulty resets every two weeks remember I said that it sort of automatically adjusts to keep blocks appearing every 10 minutes That adjustment is based on how many people were mining in the last two week period or how much hash power more accurately So if a large amount of hash power disappears blocks will appear more slowly And unfortunately the timer that we use to measure when two weeks has elapsed Is the blocks so when the blocks happen more slowly the difficulty adjustment happens more slowly too So it is possible to imagine a drastic enough drop in mining That bitcoin would get stuck forever Because it would take so long to get to the next difficulty adjustment that we might as well not have it now in that world We would do what's called a proof of work change Which is a giant mess and I hope it never comes to that. It's not necessarily the end But it would be pretty bad In practice though Well for starters china has been banning bitcoin about every two months for like the last three or four years So at this point when somebody says china bans bitcoin, I don't I don't even react to it anymore So i'm going to bet large sums of money that next like six months China's still going to have the largest hashing power in the world But let's say they did let's say they actually were like you know what All this excess power was meant to subsidize the economy. We didn't want it to get diverted into crypto Knock it off Well, the first thing that would happen is that the people who currently own miners would sell them Because they're still worth money. The miners don't care where they're running the actual computers that do this They're specialized computers known as asix application specific something computation. I don't know it means they only do bitcoin They don't do anything else. They're not generalizable computers. So once you say I can't bitcoin mine anymore They're just worthless. They're piles of garbage, but they're still worth a lot to whoever it is That's allowed to still mine bitcoin. So you would sell them maybe on the black market Maybe legitimately to people overseas, but that hashing power would probably not exit the system because it still has so much value At which point we would be fine and Anybody within china who wants to be mining Still can mine as long as they have access to a clandestine power supply and a clandestine Internet connection so you don't actually need anyone's permission to mine And there's no way for china to like scan the internet for mining to shut it down They can find large like, you know, these big old warehouses next to hydroelectric dams And phone up those people and be like, we know what you're doing in that giant warehouse next to the hydroelectric dam But if you're just at home and you're running an s9 in your basement It's really hard to tell whether you just leave the whites on too much. It's like not there's no Obvious way to detect bitcoin mining So it wouldn't disappear even if it was cracked down on very aggressively But if you could make it disappear, that would be pretty bad Yeah, there's a guy on reddit who posted a whole long description of his like Set up in the desert He has like a bunch of uh solar panels out and I think it's death valley and it's completely off the grid And he's just mining just straight from the sun. It can certainly be done It requires a decent amount of technical know-how And if I'm being honest, I would be surprised if that was the most efficient investment ever Generally speaking, it's almost always cheaper and easier to buy bitcoin than it is to mine it directly unless you have like Some reason to have access to it more cheaply than expected But one reason for that would be you have a bunch of solar panels sitting in death valley doing nothing in which case Yeah, you can absolutely mine cheaply that way for sure For someone to buy a home of bitcoin is that they have to open let's say an account for the bitcoin exchange First site of currency exchange platform And a couple years ago. There was an incident that this exchange platform Mt. Gox. Yeah Was hacked So my understanding is given how many friends that I have are currently investing in some form of Crypto currencies and that Me myself included are in tricks into looking into it, but how secure it is to Boning a bitcoin or the lake. Yeah, and then what can you do to basically? Prevent yourself or reduce the chance of being the target. Yeah, don't get goxed Yeah So a lot of the people who had bitcoin a few years ago had it stored on what was at the time the largest exchange Which was Mt. Gox Mt. Gox was hacked All of that bitcoin was lost the majority of the people who had bitcoin there now have very few or no bitcoins from that era Which obviously sucks for them So you don't actually necessarily need an account with an exchange to participate in the bitcoin ecosystem So for example, if you and I just wanted to transact with each other, we can do that directly So if you just happen to want to buy 20 dollars of bitcoin off of me, then we don't need a bank We don't need coinbase or gemini or or any of these others exchanges to mediate it But of course the easiest way to get bitcoin is to go to one of these businesses that exist to sell you bitcoin Or to sell you cryptocurrencies in general So that's certainly the way that the majority of people do it And I think it's probably the way that I recommend most people get introduced to it It is A lot of people in the bitcoin ecosystem will tell you very aggressively that if you are holding your bitcoin In an exchange, it's not your bitcoin what you instead have as an iou for bitcoin And you know, it's not just mount gox that got hacked. In fact, since mount gox, there's probably been five or six major exchange hacks Bitcoin is very difficult to work with and exchanges have to keep a lot of it online because they're constantly allowing people to withdraw and submit and make trades And so hackers are really interested in targeting those exchanges. I generally don't keep my bitcoin on exchanges But it's worth remembering that when you take your bitcoin off of an exchange and bring it into a personal wallet of whatever variety It's the equivalent of taking gold out of the bank and bringing it home You're no longer at risk of the bank going under But now you're responsible for your own gold and so For any given person whether you're more worried about the risk of coin base going under or being hacked or more worried about the risk of you being hacked Is a personal question and you know, I what I can tell you is if you use bitcoin perfectly It will protect you perfectly But perfect is very hard to beat And so I don't think it generally makes sense to handle an amount of bitcoin yourself that you would be sad If you screwed up and lost it or if somebody hacked it from you I Have screwed up and lost my own bitcoin and I've spent a lot of time thinking about it. And I think at this point I've destroyed something like Three total bitcoin in various errors, which sometimes I multiply that out and it makes me a little sad But uh, it's part of the process. It's fine You should be handling it in quantities that you're comfortable with much like you would handle cash So you wouldn't go to your bank and say I'm worried you're going to go under give me 50 000 in cash right now I'm going to go home and keep this safe. You would be like, oh my god 50 000 in cash Get it in the bank get it away from me and you should think about bitcoin in a similar way Personally if you're looking for an exchange to buy bitcoin from in the us my recommendation would be gemini I've had lovely experiences with them, but I do not make that recommendation to suggest that they are immune to being hacked They haven't been hacked yet, but everybody in the bitcoin space is at risk of that including all of us individually Uh in the front. You've been very patiently letting me pass you over. You want to shoot your question, have you? No, good god, no John McAfee offered to eat his own dick if it didn't reach 500 000 Here's what i'm confident of people who make predictions about the bitcoin price are always wrong Maybe not in any specific instance, but over a reasonably long timeline always wrong. It always does the craziest things Yeah, yeah, so a couple of questions One is is there a fair way to evaluate the price of bitcoin? Some sort of objective equation like the black souls equation for stocks or something equivalent for bitcoin uh, and then the other is You know bitcoin is deflationary Traditionally currencies are inflationary. What kind of implications does that have for us as a society for it as a system? What I would say is actually historically Inflation is sort of like the death state of currencies like what typically happens is that people started with precious metals as a currency and then through various means Debased those currencies and then those currencies get obsolete and replaced by others that are still backed Uh, the only time in history that that hasn't been true has been like since the 70s when we went off The gold standard on the modern floating currencies and we all kind of don't know what that means yet exactly We're still we're still doing that. We've only been doing it for like 50 years um, what I would say is uh at a macro level what it means for us as a society to be using an inflationary versus a Deflationary currency is way above my pay grade. I do not know but at a micro level I would rather hold the deflationary currency. Yeah, so is there is there an objective equation? And I mean there are people who are attempting it. I mean, it's only been around since 2009 man Like this all the science on this is really new. There is anybody who tells you I've figured it out is guessing or lying or both Uh, the thing that I find the most compelling is the belief that it will rise No particular pitch about how high it will rise has struck me as more compelling than any other I think the one that I mentioned earlier an institutional investor's guide to crypto assets is thoughtful I don't believe it, but I think it's very thoughtful. Um, there's also a tool that you can search for called the world bitcoin network Calculator, which lets you just basically spit a whole bunch of assumptions into a tool and it will spit back a number at you I also think that number is meaningless, but you get a lot of dials. So it's it's very comforting in some ways The amount that bitcoin is worth is a function of how much we all think it's worth Which means it's kind of like, uh, I don't know if you all have heard of a kainzian beauty contest But rather than trying to guess the underlying truth We're all trying to guess what each other would guess Which means that the answer isn't stable. There isn't a true value of bitcoin There is only the collective guess that we all have at any given moment And I believe that as more people have learned about bitcoin That on net there have been more people excited about bitcoin And that means to me Yeah, I believe in network effects I believe that as more people have found out about bitcoin more people have wanted to buy it That on average some percentage of the people who find out about bitcoin get excited And that on average most people have not really found out about bitcoin yet Which means on average the natural level of equilibrium value once it's been sort of saturated through the system Should be higher than it is today, but that's only predicated on a belief that it works And 10 years ago, I would have assured you with equal confidence. It did not work So who knows what I'll say to you 10 years from now So, uh, what does it mean for light coin to be the silver to bitcoin's gold? And what do we do in 21 20 when we've run out of new bitcoin and we need to keep paying the miners The last question the answer is transaction fees. So in addition to getting The block reward the miners also get the transaction fees for every transaction in the block The hope is that over time enough people are using the system that the net economic value of the transaction fees Actually ends up replacing completely the block reward And we've actually gotten to the point a couple of times where transaction fees outweigh the block reward So believing that we could reach that by 21 20 if the system is healthy is I think pretty Uncontroversial, I think the more interesting question is whether or not the system will be healthy If it is there will be enough transaction fees to pay the miner the light coin to Bitcoin question light coin is the original alt coin. They were the first people to spin off a bitcoin And they basically took the bitcoin Infrastructure and sort of multiplied everything by four So the blocks happen more frequently and the number of light coin is larger And their basic answer was like you're going to want something for cheap transactions Now in practice, I don't think that's actually a real utility But there is a real utility to offering a cheaper version of a thing in a market where a bunch of people are speculating And they don't really understand and they're like, oh, I'll just take the cheap one Uh, and there's also a real utility to light coin as being a test bed for new features So recently it's been kind of a front runner of new technologies because it's so technologically close to bitcoin But because it's sort of a smaller ecosystem and a little bit easier to rally Do you have a preferred old storage that you recommend and then for ICOs You just think of them as like an intrinsic value on what the concept of the alt currency will be or is there actually Any kind of for a reason for why one ICO plus ICO? Yeah, I I personally think of ICOs as chucky cheese tokens I I don't I don't touch them and I find a lot of the movement in that market to be like very Obviously dumb money not to imply that everyone who's buying it is dumb There's lots of smart people doing it, but the money itself is behaving in ways that are not Attached to reality So I it's not that there aren't interesting projects in that space There are certainly very interesting projects that have done an ICO but the ICO itself without exception I am very suspicious of as far as cold storage is concerned my personal cold storage solution that I like is a laser engraved BIP 38 encrypted Wallet what cold storage means is you're storing it in a way that's not connected to the internet That's the cold and cold storage and if it's not connected to the internet then it's impossible to be hacked So if you're worried about being hacked the best possible solution is to store it in a way that is not actually a computer BIP 38 encrypted basically means that you need both the number encoded on the card and a password that I have stored elsewhere In order to be able to spend the bitcoin Yeah, BIP 38 encrypted is the Yeah, if you go to bit address.org they can walk you through creating a BIP 38 encrypted password Um, and depending on how paranoid you want to be there steps you can go even beyond that But I think there's a reasonable place to start Last question make it a good one Yeah, totally so I don't unfortunately know CRCW so I can't comment on that but I can comment on gvtc Gvtc is an investment vehicle for investing in bitcoin without actually having to hold bitcoin directly It's founded by a guy named Barry silbert the idea is that you basically buy shares of gvtc And they represent something approximating a tenth of a bitcoin They typically have been trading at a fairly high premium relative to bitcoin on spot There's a couple reasons for that one is that if you buy bitcoin then you have to manage bitcoin But if you buy gvtc then they'll manage the bitcoin for you so you don't have to worry about the security The other is that you can more easily buy gvtc in things that are like retirement accounts So if you believe that bitcoin is going to grow very fast over time and you would like tax shelter it The gvtc is a useful vehicle for that I personally don't own any gvtc Partially because i'm comfortable owning my own bitcoin and then partially also because i'm not a super big fan of their fee structure Which I think is a little bit stiff, but if you believe that owning Uh bitcoin exposure in a retirement vehicle is sufficiently valuable Then there can be rational reasons for being willing to pay that premium and that fee structure Um generally speaking I think you should be very very very suspicious of crypto investments You should start with the assumption that somebody is trying to part you from your money And then like work backwards from there because for sure for every good idea that occurs There's 10 people who have taken that good idea and wrapped it in a scam Like the fact of an idea being good does not mean that the actual investment vehicle is a good idea And there's a lot more wrong answers than right ones in crypto. So I encourage you to have a very skeptical posture Uh, I was usually waiting for a question to cue into this, but you guys were great and didn't talk about price. I'm proud of you Um, so generally speaking when people are thinking about investing in crypto They are thinking about investing too much in crypto There are a couple of things I want you to think about when you're thinking about investing in crypto One is you should own an amount that you can be comfortable putting away for five years and not touch Now you know if you paid any attention that over the course of five years There's going to be some drastic drops because there's been drastic drops like every two months So if that makes you nervous if you need to have your bitcoin handy in case you need to sell it You own too much bitcoin You should own a small enough amount that you're comfortable with the idea of it sitting there and just hoping it all works out But not trying to run to the door before everybody else gets there The reason you don't need that much is because 21 million is a really small number Now we don't have great intuitions about how small that is But to give people a sense of what it means about how early adopter we are at this moment I projected bitcoin's ecosystem at the current price onto some inequality curves based on some countries in the us Or in the world today. So on the left here, this is based on income inequality in japan In the middle, this is based on income inequality in the us Which is also pretty good approximation for income inequality globally And on the right here is based on income inequality in sim bob way, which has very high income inequality So in a world where everyone wanted bitcoin and everyone split all the bitcoin equally We would all have roughly 45 dollars worth of bitcoin If you own 50 dollars worth of bitcoin, you own more bitcoin than it would be possible for everyone to own If of course the system turns out to be more realistic and has a distribution of inequality more like the ecosystems that we've seen today Then you might expect that owning that amount of bitcoin would actually set you even further ahead because the majority of people will have less Now The columns here as I mentioned are the different projections of inequality The rows are basically percentiles in the ecosystem So we talk a lot about the one percent in the news If you talk about wanting to be part of the bitcoin one percent And you believe that bitcoin will have an income inequality curve roughly similar to the income inequality curves of the world today Then you need to own a little under 400 dollars worth of bitcoin And you are in the bitcoin one percent So you could put 400 dollars worth of bitcoin in a cold storage account throw it in a drawer Wake up 10 years later and be like, huh bitcoin turned out to matter. I'm super rich Or maybe not maybe it all falls apart But a lot of the people who start getting excited about crypto are actually getting excited about buying crypto And then selling it later for more us dollars Don't do that. It's gambling. It is reasonable to think that crypto is worth more than it is today It is reasonable to desire to own crypto and you should decide for yourself how much you might want to own But don't own it because you think it's a shortcut to getting more us dollars Because predicting the short term movements is extremely difficult to do and losing all of your money in that movement is extremely easy to do So instead think of it as a decision about how you feel about the long-term likelihood of this ecosystem mattering And then decide how much of a stake you're willing to risk And then put it away