 Welcome to Primetime at EMC World, The Cube. Now we have a new format every Cube event we go to. We try to bring in Primetime news around the event that's orbiting around the news here. I'm John Furrier, my co-host Dave Vellanta here for our editorial Primetime segment. Dave, obviously breaking analysis coming next. We're going to do a review of what happened in our news program this morning around EMC World and storage and all that innovation. But this at the table, the big theme is transformation. Not just here at EMC World, but around the world, around for CIOs and enterprises. Whether you're an enterprise for businesses or an enterprise for a large cloud service provider. Enterprises and and clouds need innovation. They need to have really massive growth in infrastructure. So Dave, I've got to ask you, okay, it's a balancing act. We heard from Vic from EMC, CIO, that it's no brainer the C level suites have to transform the business. But the IT doesn't have the IQ, some say, as we say. And they need more skills. They got to move faster. They got to add more value. They have to invest massive growth. What is this balancing act for the CIO? A realistic view that they face. Infrastructure as a service, platform as a service. The classification of businesses is not that easy. I think that CIOs are shifting their businesses from really focusing a lot on non-differentiated heavy lifting, a lot of infrastructure management. We always hear about the 70-30 pie. People spend 70% of their time keeping the lights on, 30% of their time innovating. A lot of that keeping the lights on is because of that non-differentiated heavy lifting infrastructure management, infrastructure deployment, keeping it up and available, and then making the applications work on that infrastructure. We've seen the DevOps trend, the hyperscale trend, a lot of these modern infrastructures and modern thinking come into the data center really through the hyperscale guys. It's starting to seep into the enterprise. The challenge is that a lot of the hyperscale, think about Facebook. We're talking about Google. We're talking about largely very few applications serving hundreds of millions of users versus many, many hundreds or thousands of applications versus serving several thousand users. So the infrastructure, the applications within the data center are just way much more complicated. And that's the balancing act right there. Okay, so now let's drill down on cloud and data. So obviously the data-driven businesses, analytics, et cetera is driving the real-time business transformation. Not only just how they're rolling out, but how they get information. But the infrastructure right now is where the rapid changes. Dave, storage at the center of the value proposition. We've been saying it since 2010. What is the update right now? What do CIOs need to focus on relative to storage and their software environments now with the data center operating system? Well, storage to date has been an expensive container that's purpose-built for a particular workload and application, and that's changing. With the advent of Intel cores and super-fast microprocessors and the cost coming down in flash, the whole architecture is changing where you can now run that on a software layer without massive degradations in performance. So I think CIOs are transforming the infrastructure from a container to one that is much more agile, much more facile to change, and way lower cost so they can spend more money on that innovation that we talked about. And part of that is big data analytics and other processes and people to develop new applications. One of the great things I love about working with you, Dave, is we have theCUBE, we have our respective operations, the research and the publishing and the TV and the data science working together, and we get to peek into the future. And we're always pointing at the most relevant things in the future. We did with software-led infrastructure and big data, and we've covered that and we continue to cover that. That's growing like crazy. But now in our recent CUBE events and recent research, you have enterprises and clouds looking down the barrel of OpenStack, AWS, applications, tsunamis, data-driven and mobile apps, and API economy in the data center. What is your take on making all that work? From a CIO's perspective, they're looking at software-led infrastructure and big data, no problem, they get that, but now they're looking at other dynamics, Amazon, OpenStack, apps, and APIs, final word. Well, I think you're right on, John. I mean, Amazon has basically taken this complex data center with all these wires and all this code and all this stuff and turned it into an API. And not only have they turned it into an API, they turned it into an API with a rapid acceleration of services that you can buy with a credit card. And so that is totally transformative. So most CIOs don't have the resources you call ITIQ, they have the resources to mimic that, but they're going to use a combination of outsourcing to companies like Amazon and partnerships with companies like EMC and IBM and HP and others to actually bring that hyperscale-like capability into their own operation. Okay, well, we're going to go right to our Dallas operation. We're going to hear from what's on the news today. Obviously a lot going on, Acer, Windows RT, 3D printers, experts say Bitcoin is here to stay. And obviously a lot of amazing networking technology and storage, so we're going to go right to Dallas right now and hear from our news desk on what's happening today. Cut, time. Good morning, I'm Kristen Velletti and welcome to news desk on SiliconANGLE TV for Tuesday, May 6th, it's Monday, May 6th, 2013. Since its creation, Bitcoin has come under scrutiny over its plausibility as a currency. Now Canada wants to deploy taxes on Bitcoin transactions. Join us now to provide his breaking analysis surrounding Bitcoin's infrastructure as SiliconANGLE founding editor, Mark Risen-Hopkins. Morning, Mark, happy Monday. Good morning. Just in time for Canadian tax season, the Canada Revenue Agency says that users of Bitcoins will have to pay taxes on their Bitcoin transactions, stating that there are two separate tax rules that apply to the electronic currency, depending on whether they are used as money to buy things or if they were merely bought and sold for speculative purposes. Mark, there's been a lot of debate about whether Bitcoin even counts as a legitimate currency. So what are your thoughts on the taxation of Bitcoins? Is it fair? Well, I mean, there's, I guess, a philosophical question as to whether income taxes are fair in and of themselves. I'll try to leave that aside for this conversation and just assume that taxes are fair at face value and talk about whether taxes are fair for Bitcoin. So any country, presumably, has the right to tax its citizenry and the money within its borders in the way that it sees fit, whether it be an income tax or some sort of a commercial tax or something like that, or taxes on business itself, or any of the thousands and thousands of taxes that exist, thousands of different types. So I'd have to say that it's fair for Canada to decide that it taxed it, just as it was fair when America said that. So America has initially, or made initial statements specifically to Bitcoin and what is fair to tax or what they intend to tax on Bitcoin. But the assumption that everyone that has operated with Bitcoin has worked with has basically said, look, we're gonna treat this as if it were any other type of currency income. And we're going to report our earnings. I mean, I guess there's people out there that are trading on Silk Road and buying and selling illicit substances that are not gonna report their earnings, but I don't think they were going to, regardless if they were using Bitcoin or not, a vast majority of transactions on Bitcoin are legitimate. And most people that are doing transactions to a great enough value, i.e. the taxable amounts, are reporting that on their income. I know I did, and I didn't really do a whole lot of Bitcoin transaction, but what little I did was included in my income tax this year. So do we know how other countries have approached Bitcoin when it comes to taxes? Has there been a lot of talk about this? Oh yeah, it's something that was talked about very early on. And it's interesting because there was a story and wired earlier today that it was called Bitcoin, not as secure or safe from regulation as you thought it was. And basically it makes the point by, it was by Daniel Kaminsky who did a very good job kind of showing all the different aspects and strong points and weak points of Bitcoin. But one of the things he pointed out is look, every transaction is done in public. And if you dodge your taxes or avoid your taxes for long enough with Bitcoin to such a, into a great amount, it's not going to be a difficult detective work to try to track you down. It's only pseudonymity. So as soon as you make a purchase with a wallet that you own and they start to backtrack that to you, it's only a matter of time before they figure out all the other little parts of your wallet on the blockchain. And they could come after you for some amount of untaxed or income that hasn't been taxed and you're in all kinds of trouble. So it's better to be safe than sorry. Do you feel that the taxing of Bitcoins is a good thing or a bad thing? Does it give more weight and legitimacy to the currency? Or does it turn those users away who find the appeal of Bitcoin and its anonymity? So I don't think taxing Bitcoins really airs out any kind of legitimacy. You can tax a rock in this world. I mean, anything that has any kind of perceived value will end up getting taxed by the government. And you don't even have to be alive to get taxed. So I mean, I think, but it would be, I think what would lend it some more weight and legitimacy than Bitcoin currently has, I guess would be for the IRS or the CRA to accept Bitcoin as payment for your taxes. As we talked to, I don't know if we talked about it here on the show, if it was just on a blog post that we published, but there was a government agency, or actually a government contractor that processes the municipal fines and payments for thousands and thousands of cities across America that is now accepting Bitcoin as payment, which did air some legitimacy or some additional legitimacy. I think as we see these types of things where governments are taking payment in Bitcoin increase, then we can talk about legitimacy, increased legitimacy for Bitcoin as a currency. A study of the Bitcoin exchange industry has found that 45% of exchanges fail. The study conducted by computer scientists Tyler Moore and Nicholas Kristen followed 40 exchanges on the web and concluded that of the 40, 18 have gone out of business, 13 of which closed without warning and five closing after suffering security breaches and four other exchanges suffered serious attacks but remained open. MT Gox, the largest Bitcoin exchange, is one of those exchanges recently falling victim to a huge number of DDOS attacks over the past month during a Bitcoin surge. Mark, do you think MT Gox is becoming a weak link in Bitcoin's infrastructure? So this is actually a hotly contested point within the Bitcoin community, within and without, mostly because MT Gox handles as they say in their website, 80% of Bitcoin to dollar transactions. It's very difficult to say this is not a weak link. You're only as strong as your weakest link. Bitcoin itself is a decentralized currency. So technically, MT Gox could go offline tomorrow and never come back and Bitcoin itself would not be fundamentally affected. Here's the problem though. Bitcoin has a liquidity issue. It cannot exist without, it cannot persist, I should say, without the existence of marketplaces like MT Gox. And because there's not a kind of a default way to transfer dollars to Bitcoin and back. Now, there's a growing kind of secondary local market that is starting to take a lot more prevalence over some of the smaller centralized markets like MT Gox or Bitfloor, these other ones that exist out there. But they kind of pale in comparison when it comes to transaction volume to MT Gox. So yes, it's a weak link. That doesn't mean that I think MT Gox is gonna go down tomorrow. They have amazing security and they've withstood every attack so far. There's a reason why they have 80% of the transactions in Bitcoin for Bitcoin to dollar. But yeah, they're a weak link. Anytime you have something centralized as a weak link and many Bitcoin enthusiasts and early adopters are calling for the creation of, if not necessarily make it part of the Bitcoin standard itself, but maybe the creation of a marketplace that is decentralized in the same manner that Bitcoin is. So there's not a central site that you go to but a protocol that you use. Mark, we know all investments inherently come with a deal of risk. But does Bitcoin come with more risks than potential rewards? And how is Bitcoin doing at the moment? So there was an interesting little write-up at the Wall Street Journal this morning about where some of the founders see Bitcoin, founders of the Bitcoin Open Standard and key contributors see it going and see the benefits. Of course, the benefits are well known and talked about if you do any searches on the web for Bitcoin. I mean, it's decentralized and not controlled by a government and we can go on and on. We've talked about these things before. The risks are obvious. It's a volatile currency. And it remains to be seen whether or not this volatility is inherent to the currency or if it's something that will dissipate over time. It's been, I think, three years, basically, two or three years since I started tracking. So it's two and a half years since I started tracking the price index on empty Gox as compared to press mentions. And it's almost still to this day one to one. You can see the little knee of the curve as it goes up on the press mentions and the same thing on the empty Gox spot price. That's not a good thing when your currency can be manipulated by the press or by numbers of press mentions because ways of manipulating press mentions and press buzz are myriad numerous. They write books about it. So are the risks worth the reward? I think so. I personally think that despite all these risks and all these kind of weak spots in the early development of Bitcoin, there's still a lot more reward than risk because, you know, we don't...