LETS TALK BITCOIN

Episode 92 Playing Catchup

Participants:

Adam B. Levine (AL) Host
Stephanie Murphy (SM) Co-host
Jonathan Mohan (JM) LTB Correspondent
Josh Mohland (JM) Creator of Dogecoin tipbot on Reddit
David A. Johnston (DJ) Co-founder of BitAngels Network and Board Member in Mastercoin
Foundation
Marco Peereboom (MP) Founder of Coinvoice and Conformal
Sheldon Wisefield (SW) RoboCoin owner with CoinVault ATM in Houston, Texas



Today is March 15
th
2014 and this is Episode 92.

This program is intended for informational and educational purposes only.
Cryptocurrency is a new field of study. Consult your local futurist, lawyer, regional
manager, investment advisor and pathologist before making any investment decisions for
yourself. Content on the LTB network may also cause your brain to hurt... what... with the
ideas and all.


AL: Welcome to Lets Talk Bitcoin, a twice weekly show about the ideas, people and
projects building the digital economy and the future of money. Thanks to everyone getting
involved over at LTBcoin.com. If youd like to learn more about LTBcoin, and be part of the
initial community distribution, please check out LTBcoin.com. [0.45]

My name is Adam B. Levine and today, were playing a bit of catchup.

The last time I spoke with David Johnston, co-founder of the BitAngels Network, he
told me that he has 28 projects hes investing in so far, surrounding the distributed
applications sector. LTB correspondent, Jonathan Mohan caught up with David, not
so long ago, at the Miami conference to talk the Master protocol and our future of
distributed apps

Then, Stephanie Murphy submits her first interview from the Texas conference
which took place last week, outside the city of Austin. Its Marco Peereboom its a
Dutch name so Im not even going to attempt to tell you people what it is...
(laughter). They talk Coinvoice and Conformal, Zero Trust security and from-scratch
open source Bitcoin implementation. Not to be missed

Finally, Jonathan Mohan catches up with Sheldon Wisefield, an early RoboCoin
owner with Coinvault ATMs. They get inside the head of the early ATM operators
and the thought behind these early run machines

First, you asked for it... here it is. Dogecoin the very currency phenomenon that
adds the fire of memes to the house that Bitcoin built. Today on Lets Talk Bitcoin,
were joined by Josh Mohland, the creator of the Dogecoin Reddit tipbot and a Doge
aficionado who agreed to lend us his perspective on the topic. [1:58]


______________________________________________


Adam B. Levine interview with Josh Mohland


JM: Im doing pretty good. How about yourself? [2:00]

AL: Im doing pretty good. Id like to play a clip for you to start things off. I was trying to
figure out how to pronounce Doge, this morning and I was like Doggy because Id heard
everybody say Doggy, so I bothered looking it up and I discovered that the origin of the
Dogecoin name, actually, is from a web cartoon that I was very familiar with, at high school
in 2002/03, called Homestar Runners. Let me play this clip for you: [2:29]

Character 1: Ah, Im almost done with this third quarter projection analysis spreadsheet
and still no sign of...
Character 2: What is up my dog?
Character 1: Im not your dog.
Character 2: (??) you crack me up... crack me up. Thats why youre my doge.
Character 1: Youre doge? What are you talking about? Im Strong Bad. [2:55]

AL: OK that is, literally, the genesis of the name of what eventually became Dogecoin.
Taking a step back from this for a second, Im usually a Bitcoin guy and Im interested in
altcoins to do innovative things and Dogecoin does make a few changes but Im curious, tell
me from your perspective what got you into Dogecoin and whats attractive about it? *3:19+

JM: I was originally into Litecoin. I was mining Litecoin for a while before I even found out
about Dogecoin. It was kind of around the same time where it seemed like every other day
or so, another altcoin was coming out and it just got to be so absurd that I was on the
Bitcoin Talk Forum one day and I saw Dogecoin and Im like Oh, this is great. Ive got to
check this out. I started mining and got a couple of million because it was the first day, just
as a joke. I thought it was funny and I started giving it to my friends. I went right back into
mining Litecoin, after I got a few million, and then it just took off. [3:54]

AL: Theres a disconnect in what you said there that I want to address. You said that it was
ridiculous, there were too many coins coming out and then Dogecoin comes out and you
jumped on that. [4:05]

JM: Yeah. [4:06]

AL: Where is the logic in that? What was it about Dogecoin that made it attractive? [4:12]

JM: I thought it was the most absurd thing I had ever heard of. (Laughter) [4:15]

AL: Literally... this is the same line of thinking where one goes to a really bad, old movie at
the theaters because youve never seen a movie that bad in the theatres? Is that it? [4:25]

JM: Yeah, pretty much. I thought it was... seeing all these different coins come out and
then going on Cryptsy and saying Oh my goodness, there are like 50 coins that are trading
and then seeing Dogecoin just pop up on the Bitcoin Talk Forums, it just seemed too perfect.
I had to just get a few. (Laughter) [4:40]

AL: From your perspective, it was better for it to be bad than for it to be boring? [4:43]

JM: Yeah, precisely. (Laughter) [4:45]

AL: Interesting. OK. You mined it for a little while and then you went back to Litecoin and
what happened? How did you wind up creating a tipbot around it? [4:55]

JM: I was on Reddit one night and I noticed that over in the Dogecoin sub-Reddit, they were
asking someone to make a tipbot so I thought Hey, why not. Ill give it a shot. Less than
six hours later, we had the tipbot up and running, I gave away a few tips, had to type in all
the captions by hand and then, I woke up the next morning and it had blown up. It was on
the front page of Reddit. (Laughter) [5:16]

AL: What about this? The two things that youve described for me, so far, have been
something that youve done because it was easy, right? I mean, if you spent six hours
creating the Reddit tipbot, thats clearly not a trivial task but compared to other types of
projects, thats a relatively short term thing. In the mining too, you mined for how many
days... and got a couple of million? [5:35]

JM: I think I mined for about a day. [5:37]

AL: OK. [5:37]

JM: On the first day, yeah. [5:38]

AL: Thats something that Ive noticed before. You talk to people who create new coins and
you talk to people who are really interested in new coins and a lot of times, like you, theyre
miners who have experienced this process of using your computational power to turn it into
crypto-money and are interested in doing more of that, once the opportunity dries up in
whatever theyre working on. Taking a step back from that perspective, what is Dogecoin to
you if it cant be easily mined and if you cant create a service for it that takes a couple of
hours? [6:06]

JM: I think, in those early days, it was very easy. The challenge now is the bot has gotten so
big, maintaining it is almost a full time job. When we first started, I was pretty surprised. I
didnt think wed reach 1,000 users. Were up to about just over 36,000 users that are using
the bot right now on Reddit. [6:23]

AL: Wow! These people are actually using the bot? Theyve actually sent and received
something? [6:27]

JM: Yeah, yeah. We send about the equivalent of maybe 2.5 bitcoins a day, on Reddit, in
just tips alone. [6:35]

AL: Wow! You might not know this do you know how that stacks up against the Bitcoin
tipbot? [6:41]

JM: I believe, I think were actually a little bit more popular right now. Its hard to tell
because they dont release... *6:48+

AL: Yeah, I was going to say, that sounds like pretty high numbers, relatively speaking.
[6:49]

JM: Yeah, they dont release too many metrics. I think the last report that I saw that
Bitcointip had put out, was in October 2013. At that point, I think... I want to say theyre up
into $60,000 US value number of tips with Bitcoin, on Reddit. [7:06]

AL: What do you ascribe to the fact that so much tipping is going on and that, frankly, you
have 36,000 people who have actually used the tipbot for Doge? Do you think its that its
low value? [7:16]

JM: Its hard to say. I think there are just so many factors involved on why its so popular.
Its weird because, to be honest, Altcointip had been around for almost, Id say, a year
before I even came on the scene with this one. My bot was, basically, just a fork out of
Altcointip with one specific currency in mind, which was Dogecoin. Bitcointip had been
around for... they were the big player before, so its weird seeing Dogecoin taking off when
there were perfectly valid ways of tipping others on Reddit before this. [7:49]

AL: Ive been calling Dogecoin, like a meme coin. I think its the first of a new class of
cryptocurrency that focuses on more of like an inclusive community built around an inside
joke as their primary means of marketing, above technical innovations or any sort of initial
redemption. Youre going to see some coins come about in the near future that allow you
to redeem them for certain things. Dogecoin doesnt really offer any of those things and
yet, it has become something of a phenomenon within the cryptocurrency space. Do you
think that its about the meme? What do you think it is about? *8:21+

JM: My favorite description of Dogecoin is its the first (??) of cryptocurrencies. Its kind of
ridiculous, its very easy, its very approachable and the meme just kind of adds that layer of
awesomeness to it. As far as from a technical standpoint goes, yeah youre right, it doesnt
really share anything truly innovative, other than the fact that it seems to have just blown
up over night. [8:41]

AL: Of course, the other side of this is, like you said, it has blown up and one of the ways
that that has manifested is a sub-Reddit that Ive been on a number of times and posted on
a couple of times and thats actually how you and I connected for this interview. Its a very,
very active sub-Reddit. Its probably more active than the Bitcoin sub-Reddit is at times.
Again, Im just trying to... do you have any insight as to whats going on there that is
different than other altcoins out there? If its not the meme... youre saying that the meme
might add something to it... do you have any idea what it is? Did this just happen to be a
perfect storm and it blew up and then, just like Bitcoin, once you get to a certain size, you
get attention just because youre a certain size? *9:23+

JM: I think that has a lot to do with it is because we have so many subscribers and it just
keeps growing. You have that snowball effect. Originally, I noticed that a lot of the folks
that were first coming into the sub-Reddit, they were new to cryptocurrencies. They had
never done anything like this before, so having to explain change addresses, what a
blockchain is, those type of things we were all helping out, basically, from day one. Weve
noticed a lot of the growth comes from people who have never been exposed to crypto
before but happened to get a tip on Reddit and said Hey, this is actually worth something?
[9:54]

AL: Part of the Dogecoin community ethos then is tipping people on Reddit with Dogecoin
that are not inside of the cryptocurrency sphere, right? I mean, is that what youre saying?
This is coming from people who are actually sending tips to other users on Reddit in other
places, besides the Doge forum and (??) Ive seen people attempt to do this with Bitcoin
before but I wasnt sure how effective it was. Youre saying that its been very effective with
Doge? [10:18]

JM: Its been extremely effective. I think in the first week of the bot being up, I actually got
banned from so many sub-Reddits. (Laughter) There are a few of the larger sub-Reddits that
the bots are completely banned from but, for the most part, some of them have turned
around because they see people getting tips in their sub-Reddits and actually enjoying it.
Its a really exciting time. Dogecoins kind of buck the trend of... seeing its value rise was just
absurd. I remember waking up one morning and I looked at my phone and there were like...
my friend was like Dude, it just hit 45 satoshis. Youre kidding me. This meme coin that
was just absurd, just hit 45 satoshis. I was shocked when it hit that. I think now its up to
200 and something satoshis over on Cryptsy. Seeing the rise of this coin, its very fun.
(Laughter) I think were having just a blast over in our Dogecoin and now that were just
getting to this size, its pretty awesome to see the possibilities of this going forward. *11:18+

AL: What do you think the possibilities are for going forward? Where do you see Dogecoin
in three months? Where do you see it in a year? [11:24]

JM: Well hopefully, it continues to grow and the community continues to be so charitable.
The fact that we sponsored the Jamaican bobsled team was probably the most absurd and
awesome thing that Ive seen us do so far. *11:36+

AL: Lets talk about that for a second. You guys did... you sponsored the Jamaican bobsled
team and that wasnt an effort that was led by anyone in any sort of official position, it was
just something that emerged organically. Did you guys fundraise for that? How did that
come into being? [11:50]

JM: One user on the sub-Reddit had noticed that the Jamaican bobsled team needed
money and posted something. Of course, it got up to the front page on our Dogecoin.
Everyone said Hey, this is an absurd idea. Lets take the cool running story of the
Jamaicans going to the Olympics and attach it to a coin that started as a joke and suddenly
has value. It just ballooned after that. I think they raised the $30,000 they needed or the 20
some odd million Dogecoin in about 24 hours. [12:16]

AL: Wow! The hope going forward then is that this isnt just a new currency thing because
ultimately Doge is what... a little over two months old? [12:25]

JM: Yeah, just about. [12:26]

AL: That is another point though, is like a lot of these coins, we see that. Doge blew up
early but there are a lot of coins that really focus on the community and focus on Oh, its
such a great place to be and they give out lots of coins and everyone is very generous at the
beginning because youre still trying to vest stakeholders. Is there a certain point at which
you think that this dynamic just doesnt really grow anymore or do you think that the
specific fundamentals of Doge lend it to a longer tail for this? [12:55]

JM: You know, I think its really too early to tell, especially with the first block halving is
going to happen roughly around Friday of this week. I think after we see the first halving
take effect, were going to see what happens to the network, see what happens to the hash
rate, see if it goes down or if it goes up, see what happens to the price. For a coin thats two
months old that has this amount of growth, its too early to tell really. *13:23+

AL: If somebody wants to learn more about you, find out about your projects, are there any
URLs or domains youd like to give out? *13:28+

JM: Yeah, you can go to Dogetipbot.com or check us out over on Reddit. [13:32]

AL: Give me your top three cryptocurrencies right now. (Laughter) [13:36]

JM: Off the top of my head, its the big three Bitcoin, Litecoin and Dogecoin. [13:41]

AL: Bitcoin, Litecoin and Dogecoin. In that order? [13:44]

JM: Ahh, put Dogecoin up on top. Im a big fan of it. (Laughter) *13:47+

AL: Its Dogecoin then Bitcoin and then Litecoin at number three? [13:51]

JM: Yeah, yeah. Each coin has its merits, each coin has its strengths and Im a big fan of all
three communities. [13:57]

AL: Thats awesome Josh. *13:59+

JM: Great. [13:59]

AL: Thank you very much for your time on this. [14:00]

JM: Thanks for having me on. [14:03]


______________________________________________


ADVERT:

This is Chris Joseph bringing you news on Nxt, the first true second generation
cryptocurrency for March 15
th
2014. A cryptographic audit of Nxt has been completed by
Bitcoin Talk Forums Jesse James. His review of the curve25519 and crypto classes in the
Java code reveals no red flags in Nxts implementation, aside from a sign in bug that the
developers already knew about and are working around. In other news, the newest version
of Nxt 0.8.9, supports clientside transaction signing which means that Nxt clients can now
create transactions without transmitting an accounts private key over the network. For
more general information on Nxt, head to NxtCrypto.org or MyNxt.org and stay tuned for
more news on Nxt on the next Lets Talk Bitcoin broadcast. *15:10+


______________________________________________


Jonathan Mohan interview with David A. Johnston


JM: Im here with David A. Johnston, the co-founder of the BitAngels Network and one of
the principals in the investment that happened on Mastercoin. [15:23]

DJ: Yep. Mastercoin came through the BitAngels process back in August and I ended up as
the due diligence lead and so I kind of nerded out on the protocol, read the White paper
half a dozen times, talked a lot with J. R. Willett about four conversations to wrap my head
around how it all worked and ended up being the largest deal funded by the BitAngels in
2013, what is now a $5m worth of Bitcoin was put into the exodus address during August.
[15:52]

JM: I may be Guyanese but you drank the Kool-Aid thats a history joke. (Laughter) I was
speaking to you earlier and I heard about Mastercoin and then when I heard that you were
getting involved that and the BitAngels Network was getting involved, it kind of peeked my
interest. Hey, this is actually something that I should look into. Its kind of confusing.
Mastercoin is Bitcoin but it isnt Bitcoin? It is an altcoin but it isnt an altcoin? Can you kind
of explain what the heck is going on there because its a little confusing. *16:18+

DJ: The easiest way to think about the Master protocol and the tokens, the Mastercoins,
are its a standard way to record extra information in the blockchain. In fact, Master is
actually an acronym for Metadata Archival Standard Transaction Embedding Records. Its
literally what it does it embeds these records in the blockchain using transactions. Its a
standard for how do you read that metadata. Is that a contract? Is that a stock? Is that a
bond? Is that a token in a distributed application? Its just a standard by which all the
clients that use this protocol specification will interpret that extra data. Specifically, this is
very important for the Bitcoin community, is the core developers, as part of 0.9 are enabling
a new type of provably-prunable outputs. This is really critical because it gives the Master
protocol a way to encode this information without causing any bloat in the blockchain
because these are prunable records, the nodes can choose to prune them out and they
dont end up with millions of additional transactions or metadata attached to those
transactions that they dont have to keep track of. Thats a really important technical
improvement that has made Mastercoin have a good way to operate the Master protocol
and a good way to be a good steward of partnering with Bitcoin and not creating an extra
burden. Theyll, Im sure, evolve a standard by which miners and others that are operating
nodes will be incentivized to run, what Gavin is calling these archive nodes and theyll
essentially get a separate revenue stream for operating and storing this extra data in the
metadata level. Really, thats the basic is we want to do these advanced features. These
are things that would be difficult to include in the core Bitcoin protocol because they create
new risks and new attack vectors and so its better to experiment with them as a separate
protocol that isnt included but is built on top of Bitcoin. Thats really the core proposal. If
you read the White paper written by J. R. Willett, he describes it as TCP/IP is the Bitcoin
layer and were trying to do advanced things on top with HTTP which is the Master protocol.
[18:42]

JM: Pretty much what that example means is with TCP/IP, you could type in a string of
numbers and get a server or you could type in Google.com and have it render Google.
Obviously, one is easier for humans to do than the other and HTTP offered a lot of other
easier things like click on a link and having it magically go there. That made the internet
human-friendly. [19:01]

DJ: Exactly. [19:02]

JM: What youre saying is, right now, youre going to make Bitcoin human-friendly? [19:04]

DJ: Were going to try to make Bitcoin and more advanced features human-friendly.
[19:08]

JM: Tell me about... we were actually talking about something called Contracts for
Difference. Can you explain how all those things fit together and how youre interested in
that three letter acronym? [19:18]

DJ: This is an interest Ive had for about a year in the Bitcoin space is these more advanced
features that we can built on top of the Bitcoin blockchain. One of those things that really
makes a big difference is having a protocol where you can incentivize the development of
these features. I watched other projects that had been working in this space. When
Mastercoin came along, it really offered a platform where we could build, not only
Contracts for Difference, but distributed exchange, user currencies, smart property. To sum
it up, Contracts for Difference is one of the more advanced features of the Master protocol
thats being implemented right now. The first features that are required to be underlining
that is the distributed exchange and the ability to issue tokens and then be able for it to do
bets on top of the blockchain. Once you have those functions, you can use that to do
Contracts for Difference. For the audience that have never heard of Contracts for
Difference, the basic idea is, Im taking a bet on one side and somebody else is taking a bet
on another side. Lets say were betting on the price of soy beans. The price of soy beans is
going to be more than $50 a bushel and the other guy says it will be less than $50 a bushel.
We both put some money, as part of this bet, into a pool and the data source tells us what
the price of soy beans is at the end of our bet. Its controlled by, essentially the blockchain
by that data source, how much money goes to me if I was right or how much money goes to
him if he was right. In this way, you can essentially get financial exposure to, literally, any
asset which you have a reliable data source for. Thats the core of the CFDs. Today its used
in the market for somebody who wants to bet that soy beans are going to go up but they
dont want to buy the physical commodity, you can use this type of setup. *21:09+

JM: If I were to do a Mastercoin contract and trust the API for the Chicago Mercantile
Exchange as a pretty good decider for what the price of a commodity was, we could do this
altcoin or Bitcoinesque transaction where I take one side, you take the other side and then a
month, or three months from now, I would be able to lock in the value of that currency...
that commodity, excuse me, in that contract and then trade it as if it were that commodity?
[21:34]

DJ: Exactly. Thats a good way to describe it. The nice thing is, there is no central party.
[21:38]

JM: Right. [21:39]

DJ: Right. You dont have to have a central party managing this process or holding the
funds. Its essentially held in escrow by the blockchain and is unlocked by one condition or
another and paid out on one condition or another, all of which can be done
programmatically. The only thing you have to trust is the data source and so in the protocol,
what were looking for is ways to 1) both parties have to agree on the data source, obviously
before the CFD is created and were also considering ways where there would be back up
data sources, if for some reason that data source failed, was unavailable, corrupted or
something like that. That will sort of be the next step is how do you manage the risk of the
data source but at least, when it comes to the escrow, the terms of the CFD and knowing
that the funds are sitting there... I mean, you know you can just audit the blockchain, you
can just look at the address and you know the funds are sitting there for that particular
contract. [22:29]

JM: I dont understand what value is there is being able to send a barrel of oil, being able to
send an ounce of silver and know that its going to... I dont get why that has value. Can you
explain just what its used in the real world and why, bringing this into the cryptocurrency
space, is going to be of additional value to us? [22:45]

DJ: The future is uncertain, right? Nobody can predict it and so this is often used as a way
for people to hedge risk. If I wanted to hedge my risk that, lets say, Im producing a product
and one of my main costs is... (lets go back to our soy bean example) If the price of soy
bean shoots through the roof, Im going to be in trouble because, alright now my product
has become much more expensive and so CFD is one of many ways in which you can hedge
this type of risk and say OK, Im going to take a contract of the price. Im betting that its
going to go up and somebody else will bet that its going to go down. Im safe from that
risk, to a certain extent, depending on the length of the contract. The classic example is
Southwest. Southwest did a brilliant thing back in 2002/03 they bought a lot of oil
options, they bought a lot of oil contracts, basically, hedging their risk on the price of gas
and diesel for their planes, going up. While everybody else was struggling with these new
high oil prices back in 2003/04/05, when it was starting to go from $20 a barrel, to $80 a
barrel, to $100 a barrel, airlines were completely decimated, as far as their profit margin,
except Southwest. Southwest had hedged their commodity risk when it came to their fuel.
They had done it for enough years in the future that they had this competitive advantage
over all the other airlines for years in a row. Thats a really good real world example of what
a company did to hedge a risk. I dont know if they used a CFD or one of the other options
contracts but its the same sort of principle. *24:23+

JM: In this space, that would mean that a company would use this in order to hedge and
then have to use BitPay, or something to convert out to be able to then buy that
commodity? How would this work? Could you give me an example of how a company could
use a Contract for Difference using the Mastercoin program and actually like... just from
beginning to end? [24:43]

DJ: Lets just use the Southwest example. Lets say Southwest had used this system and
they hedge and took the contract and they had the additional money that is the difference
between the price that went up and what the price originally was. Thats the bet they took
as part of the CFD and so if they were to use this system, it would be the same thing. They
end up with this pool of Mastercoins or this pool of Bitcoins, whatever theyve used for the
CFD and then they can turn that back into dollars or euros or yen if they need to but, of
course, as the Bitcoin economy continues to grow, theyll probably have a place you can buy
oil or whatever, directly with Bitcoin. Because these currencies are tradable and fungible,
then it doesnt really matter what currency you use to do this type of activity. Youre just
going to trade it back into whatever you need to buy that asset. [25:32]

JM: When were talking about Contracts for Difference, the other side of it is this idea of
Oh, if only we could fix the volatility problem with Bitcoin. When we say Contracts for
Difference for commodities, we really could just apply that to anything that has a spot price
that we can look at. Really, what youre talking about is the ability to peg Bitcoin to the
dollar and then be able to trade dollars over the Bitcoin network, in effect. [25:57]

DJ: Thats definitely one of the most controversial aspects of the Mastercoin protocol,
especially when the protocol was first proposed by J. R., he had written it in a way where it
was using escrow backing, instead of Contract for Difference, in order to accomplish this.
Well see how that flushes out. I definitely dont want to make any claims because there are
a lot more complexity to when youre dealing with that particular use case. [26:25]

JM: Let alone the legal implications. [26:26]

DJ: Let alone the legal implications and maybe this is a good point to stop and say we
encourage everybody... this is just an open source software toolkit and you really have to
know your jurisdiction and you have to know your local laws and you have to implement
this open source in a way that makes sense. Just like with the Bitcoin protocol, its an open
source resource and you have to implement it differently in China, than you do as an
exchange in the US, or as you do in Tokyo. Know your jurisdiction; know your local laws.
We really encourage people to understand that when theyre building things that
implement this. The Foundation is just focused on creating the open source standard and
we want it to be a resource the community can use to build all sorts of projects. [27:09]

JM: Maybe Im being a little dense here but whats the difference between doing a Contract
for Difference on Mastercoin versus a Contract for Difference on the Chicago Mercantile
Exchange? Is it the fees? Is it the ease? What is it thats the differentiating feature because
I just dont even understand how Id do a Contract for Difference? I dont understand how
doing it on Mastercoin is better. [27:28]

DJ: Sure, great questions. Similar to the Bitcoin payment network, youve got a fraction of
the fees that you would pay in a traditional... Chicago Mercantile Exchange. Youve got a
completely decentralized system so you can audit anything thats going on and so youve
complete transparency. You have no central party that youre trusting with the money and
so weve had that issue in the Bitcoin eco-system where trusted third parties, if they failed
then it took forever to get the funds back to the people that rightfully owned them. One,
this gives you a distributed way to store all the records, the Contract for Difference gives
you a way to do it extremely efficiently, extremely cheaply and it gives you a way where you
dont have a trusted third party. Thats a big advantage. It really opens it up to the world of
people that want to build this... and more even important, perhaps, is its programmatic.
You could now build this into additional applications that use this for all sorts of things.
Were not even envisioning today, in this conversation, about commodities and currencies
and things like that. [28:33]

JM: Walk me through this. I have an interest in hedging against something. I want to buy a
commodity and know that six months from now, I can still have that commodity. [28:41]

DJ: At that price. [28:42]

JM: At that price. I go into a contract using Bitcoin on the Mastercoin platform and I say
Hey, I want to buy one barrel of oil. What happens to the other party? Theres always a
second party who is the opposite, who is the counterparty to that bet. Whats in it for
them? What do they do? [29:01]

DJ: Right, exactly. You always have to have the maker of the bet and a taker of the bet.
Ultimately, people will only do things that they think are rational. If youre offering a bet
thats sort of lopsided or ridiculous, people arent likely to take that contract. Lets say you
make the bet that the price of oil is going to be $100 in a month, and its $100 today. Ill
take that bet. Ill take the bet that the price is going to be $100. If the price goes up, then
youve essentially got protection from that price rise and if the price goes down, your
pocketing that money. You can write the contract a number of ways so its not like theres
necessarily a single standard. A lot of times there is a premium or some money set aside if
its for the person thats taking the bet, depending on the conditions or making the bet
depending on the conditions. Yes, you always have to have a counterparty. It has to be an
economic incentive for both people so youre making money if youre betting its going to go
down and Im making money if the bet goes up. Lets say its the $100 bet and it goes to
$110. We both put $100 into that pot. [30:14]

JM: Theres $200 in the pie? *30:15+

DJ: Yeah. Lets say theres $200... but you could do it a few ways. You could each put in
$50; you could each put in $200. It depends on how much swing you wanted to make
available or margin on both sides of the bet. Lets say we each put in $100 and it goes to
$110 and I took the bet that it was going to stay at $100 or go lower and you took the bet it
was going to stay at $100 or go higher, youd end up with $110, so you can now buy your
barrel of oil at, essentially, the $100 price because youve got $10 of my dollars. I ended up
with $90 left in the pot. Youre picking up whatever the difference is. Lets say it went to
$90, Id end up with $110 and youd end up with $90. It doesnt matter to you because you
still spent $100 to make sure you could get your barrel of oil at $100. [30:59]

JM: Lets say some genius wanted to make a six month bet with regard to fixing the Bitcoin
to the price of a dollar because they just didnt care if Bitcoin went up or went down, they
just wanted $1000 to be $1000, Id be more than happy to take the counterparty risk to that
at whether or not Bitcoins going to go up in six months, relative to the dollar. You have
your schmoes who all want no volatility in Bitcoin versus the dollar, to take that very
valuable service and give us the returns for that. [31:27]

DJ: Youd have to find a counterparty, but yes, if you could find a counterparty then, yeah.
Maybe for their particular application, thats useful for them. *31:36+

JM: Right, right. [31:36]

DJ: Maybe theyre in something where they need some sort of standard unit that wont
change, for whatever reason. Youre certainly not in the same position and you would be
happy to collect the difference between it going up over a certain period of time and there
is a lot of fluctuation. I dont try to make price predictions day by day, or week by week, or
even month by month. My strategy is simply to buy and hold over the long period. I dont
try to be a day trader and so for somebody that doesnt want to see that volatility day by
day or week by week, even if its uptrend over a year or two years, that may be valuable to
them for their particular business application. [32:13]

JM: Just to reiterate, you dont ever, in this chain of custody of money, get the actual
commodity. What youre getting is the spot price of the commodity so that you could then
go and purchase that commodity. [32:25]

DJ: Thats exactly right. There is no delivery of the physical product. [32:28]

JM: When people are saying Well, how does it affect the real world? Well, its a financial
instrument that allows you to make sure that you can go out and purchase that thing. Its
not having you get the thing. [32:35]

DJ: Exactly. [32:36]

JM: Right. [32:36]

DJ: Thats correct. Thats a good way of thinking about it. *32:38+

JM: We keep talking about shorting Bitcoin, shorting Bitcoin. Would a Contract for
Difference be something that would allow markets to short the Bitcoin? [32:46]

DJ: I think it could certainly be a tool that is used for that. Some people may have reasons
that they want to do that but I think thats actually a good thing. I think that the market
providing different options to different people. I think what this doesnt provide for is the
type of nonsense that you do see in some of the financial markets where you have people
placing bets in which they have no collateral or they have no money, often called naked
shorts, or naked puts, or naked buys, where they dont even have that asset, theyre just
making the bet and theyre hoping they win and if they dont win, then basically they have
to go find the money or they default on that contract. Thats not really possible in this kind
of system. This is a system where you have to have the money to make the bet, one way or
another. [33:33]

JM: That gives another question which is, are the funds that you send as collateral outside
of your possession and no longer in your wallet during the term of that contract? [33:41]

DJ: Absolutely. Its being held, essentially... *33:44+

JM: In the blockchain. [33:44]

DJ: ...in the blockchain, exactly. [33:45]

JM: OK. [33:46]

DJ: Yeah, youve agreed to that voluntarily based on whatever the terms of the contract are
and it will be for whatever period youve decided. *33:55+

JM: Its a trustless-based contract. [33:57]

DJ: Right. Its not, I will send funds to this address. Its, I have sent funds to this address.
[34:02]

JM: Right. Again, its held in escrow and the blockchain is the thing that executes on that.
[34:06]

DJ: If you will, exactly. [34:07]

JM: How far do you think Mastercoin is from having something like this? [34:11]

DJ: It will be interesting to see how quickly it gets developed. Its definitely on the radar of
the core developer team. First you need the distributed exchange and then you can build all
these type of systems on top of that because thats where you have the recording and the
moving of all these different tokens and such around. Its on the short term roadmap. I
dont want to get into an exact date because I dont want to get into the two weeks, two
weeks..... (laughter) [34:37]

JM: Soon TM. [34:38]

DJ: Exactly. We try to be pretty conservative but its definitely on the radar. I definitely
want to give credit to Vitalik for suggesting originally the Contracts for Difference and he did
some work on the Master protocol to hammer out some of those details. I definitely want
to give him credit for that suggestion and when he did, the core developers were very
excited about this, as an improvement to what had originally been proposed in the original
spec. Now, its in the official Master protocol spec. It is in the spec; its going to get
implemented. [35:06]

JM: When we talk about things that have markets adopt Bitcoin, where do you see
Contracts for Difference taking off because I hear that Europe is really big on this and
Australia, apparently, is really big on this down under. Is this something that will bring those
markets much further into Bitcoin? We keep talking about Well, when are the hedge
funds going to get involved? When are the hedge funds going to get involved? Is this
something that will really wet the beak to the point that they cant ignore it? *35:32+

DJ: I think it will bring in a whole new demographic of people that work in these type of
financial instruments once they realize how efficient they are. Theyll be the ones bringing a
lot of expertise to this system and bringing in a lot of institutional funds into this. The cool
thing with the Master protocol is we can actually build that as use case on top of Bitcoin.
Literally, all the money for this will have to flow through the Bitcoin network in order to get
there, which is a fun side effect of building protocols on top of Bitcoin is it massively
increases use case and utility of Bitcoin itself. [36:06]

JM: You know, Im guaranteeing you that right now there is someone thinking Oh great,
thats exactly what Bitcoin needs, more bankers. You know what? Our boats big enough for
everybody. If they play by our rules, there is very little that they could actually do to us and,
quite frankly, if you see someone on a sinking ship, how could you not send them a life raft,
right? [36:23]

DJ: Right, right. [36:24]

JM: The more the merrier, right? (Laughter) [36:25]

DJ: Yeah, weve got to help these guys out. [36:27]

JM: Weve really got to help them from drowning there. Thank you so much for talking and
I would love to see Mastercoin actually be able to do that. I will be the first person to take
the hedge against the dollar aside of the Bitcoin equation. [36:40]

DJ: Sounds great. [36:41]

JM: Have a great day man. [36:42]

DJ: You too. [36:43]


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_______________________________________________


Stephanie Murphy interview with Marco Peereboom


SM: This is Stephanie Murphy for Lets Talk Bitcoin. Im talking with Marco from Conformal.
Hi Marco, whats your last name? *38:33+

MP: Its Marco Peereboom. Its a Dutch name so Im not even going to attempt to tell you
people what it is. [38:37]

SM: (Laughter) I see. Welcome to Lets Talk Bitcoin. *38:40+

MP: Thank you. [38:40]

SM: Were at the Texas Bitcoin conference. Tell me about Conformal. I know a little bit
about them but what... maybe if our audience is not familiar... what do you do? [38:48]

MP: Well, Conformal started out as a security and privacy company. We did an online
backup solution, Zero Knowledge, an online backup solution. Being a bunch of crypto nerds,
going into Bitcoin was relatively simple for us. We started building a services business
around Bitcoin. We did a full node replacement for BitcoinD, for the people who are
familiar with that. Now we are, basically, building our service on top of that code. [39:18]

SM: A full node replacement. That means you rebuilt the Bitcoin reference client from
scratch, essentially? Is that what youre saying? *39:25+

MP: Not essentially, yes. Thats exactly what we did. We rewrote the entire client in a
different language called Go and we are putting up the last shiny bits and its going to be
ready for production. Its open source and everybody can check it out and play with it.
[39:38]

SM: Wow! OK, thats a huge thing. Why did you want to do that? What motivated you to
create a new Bitcoin reference client in Go? [39:48]

MP: Well, thats a very interesting question and its a very expensive proposition because
its more than a man year. In fact, Im not going to give you the exact numbers but it was...
it took a lot of development time, a lot of folks. Theres not a lot of documentation out
there but the reason was two-fold. If we are going to stake a business on Bitcoin, we need
the infrastructure of Bitcoin to be as sound as it can be. Being money, its doubly important
for it to be right. The success of the internet is not because there was one TCP/IP
implementation, its because there were hundreds of them. For us, it was very important to
have multiple clients so that if there is a fork of sorts, then maybe not all the clients are
affected and then the majority rule would kick in and the faulty clients would then get
forked and the chain would effectively become unaffected of that. Pure selfish reasons for
the resilience in the Bitcoin network and the fact that we can give it away and help some
other folks along the way and strengthen the Bitcoin community. Thats just gravy. *40:53+

SM: Wow! OK, thats really cool and I see the value in it like you compared it to the
internet having multiple implementations of TCP/IP. Do you kind of see Bitcoin as one of
those base layer protocols that other things are going to be built off of, like TCP/IP? [41:08]

MP: I really do. I think that Bitcoin is going to be a payment method of the future and
therefore we need to bring it to the people. Bitcoin is extremely complicated. It has been
boiled down quite a bit and there are a lot of folks that really, truly understand it. However,
once you get into the actual nuts and bolts of it, it requires a very significant amount of man
hours and resources to actually deal with the little bits and pieces. Having more expertise
than just one group of developers, having multiple groups of developers that do this, thats
healthy for the entire community. I would welcome another twenty implementations. Its
just good for us; for all of us. [41:46]

SM: Yeah. Just to clarify. This works with Bitcoin. Is that right? This is not any type of
altcoin or anything like that? [41:53]

MP: This is purely Bitcoin right now. The code is modular enough that adding something
like Litecoin would not be that complicated but currently, it only does Bitcoin. [42:03]

SM: OK. What have you used it for so far? I know this is kind of new just finishing it but
what have the implementations been like so far? [42:12]

MP: We obviously built our entire Coinvoice project on top of it. Coinvoice, for the folks
that dont know, is an invoicing service or we are payment processors so we can take either
payments in BTC and then disperse in USD, or the other way around. We can accept
payments in USD and disperse in BTC. The entire backend is running on BTCD and the other
wallet implementations that we made. When you make a payment on our website, what
happens is that it flows through the Go that we have written and it gets put out immediately
in the (??) You get instant gratification that a payment actually has hit the network and
then you just sit there and wait for your confirmations to show up. The code is in
production today and we use it. Its great. *42:57+

SM: A little more about Coinvoice. This is something where you can invoice somebody in
dollars and get paid in Bitcoin or vice versa, is that right? [43:07]

MP: That is exactly correct. Let me use my favorite example. One of our first customers
was a German journalist and he writes publications for a US company. Once a month, he
writes up an invoice on our website and he invoices the publication company US dollars and
we pay him then in Bitcoin. [43:29]

SM: Thats cool. Thats very useful. Is there a fee for that service or are you processing the
payment? How does that work? [43:36]

MP: Yes, there is a fee involved. There are actually two fees. There is a fee for going from
USD to BTC and there is a different fee going from BTC to USD. The reason for that is that
obviously when we disperse the BTC, we assume a risk because if there is something wrong
with the transaction, or whatever you want to call it, so we have a higher risk. Currently the
number for that is 4%. The other way around is the standard market fee of 1%. [44:01]

SM: OK. Gotcha. 4% - thats almost like a credit card fee, right? Thats kind of similar to
that. That would be if youre going from USD to BTC. OK. Gotcha. Im thinking about it
now and its cheaper than buying bitcoins on an exchange, typically. *44:20+

MP: Thats the idea. Not only that, its also instant, effectively, so we can disperse to
bitcoins very, very quickly. There is no wiring fee involved with that particular transaction.
There are a few benefits that exist there. One of the things that I would like to mention on
this is that normal businesses, they accept credit cards and there is a mark up on the credit
card that the consumer just simply doesnt see. I hear the criticism Oh, but its so
expensive. Its the cost of doing business. Moving money is just simply not free. *44:54+

SM: Youre just making that process transparent instead of building it into the price where
people cant see it, right? *45:01+

MP: Thats right but if you build a business, you should obviously build in your processing
costs into the price of your business. The guy who sells widgets in a store has done that
because they know that you dont show up with a credit card. I hate to say this but there
are not a lot of people doing cash transactions any more. [45:20]

SM: Right, right. [45:21]

MP: There is a cost of moving money around the world. We make it easy, secure and
actually, relatively cheap once you measure it up against banks and some other institutions.
[45:33]

SM: What about the cost of building this BitcoinD implementation and Go? [45:39]

MP: Well, we have a handful of developers that are working on this full time. At this point,
were down to about two guys who are working on it full time because its just wrapping up
things and adding more people, at this point, would just not help... would not make it go
any faster. Im not sure I should say this but the way we call it is a one woman, nine
months not nine women, one month to produce a baby. *46:00+

SM: Right. (Laughter) [46:01]

MP: Were now finishing up and so there is no longer the amount of people on it. Let me
just say a couple of nice things about BTCD which are really cool. [46:14]

SM: Sure. [46:15]

MP: One of the things that we did from the beginning is that everything has to be tested
automatically. You can literally... when you download the code, run the tests in virtually
every line of code in the codebase is tested and validated. We can, pretty quickly, move or
detect if we made a mistake when we put out a new version. In fact, deploying a new
version, usually is a couple of hours worth of time. [46:44]

SM: Wow! Thats pretty good. What are some of the other differences between the... I
dont know what to call it... the conventional Bitcoin client and the one that youve built?
[46:54]

MP: The big one... but actually BitcoinD is starting to do the same thing, so Ill take that as a
compliment that they like what we did, is we made some separation between the different
parts within the code. What we did is we split up the chain from the wallet and, in fact, we
also split the whole wallet portion from the GUI, the one that shows you how much... or
how many bitcoins you have sitting on your computer. We made that in three distinct
layers that can do different things based on what you need. If you need to write an
application that only requires chain questions, you can only, basically, run one portion of the
code that handles all the chain related portions. That gives people, who want to write code,
quite a bit of flexibility to pick and choose the building blocks that they need to implement
whatever it is that they want to do with it. [47:48]

SM: Is there ever a chance that this could become the reference client? If enough people
start running it and miners start using it and so forth? [47:56]

MP: Well, thats a tough question. I dont want to be the only guy out there. *48:01+

SM: Right. [48:01]

MP: I really dont. I mean that. You know what? I hope that... let me say something else
nice about our code because Im pretty proud of it. The BTCD code is very cleanly written
and brand new people that show up, and some folks have shown up and they say Oh, I can
completely read this a couple of hours in. The BitcoinD code is a little bit more... its evolved
over time and therefore, its large and not always clear what the intent is. Im not trying to
say anything ugly. Its a well written code, its just complex; very, very, very complex code.
Since we got to do a from-scratch implementation, we were able to take some of the
complexity out and just simply remove it from the codebase. Im not trying to say anything
ugly, its just our code is slightly more readable because it wasnt evolved. It was a clean
room implementation. [48:55]

SM: Right. Im picturing there are a couple of different ways you could build a three-
bedroom house. You could take a one-bedroom house and put an addition on it and then
put another addition on it or you could build it all at once a three-bedroom house and
they both accomplish the same purpose but theyre just constructed a little bit differently. I
see kind of a comparison there. [49:16]

MP: I think thats a fair comparison, I really do. The thing is that the additional thing to add
there is that the three-bedroom house that was built in one go was also not really designed
at that time. It was a bit more ad hoc. Again, to say something nice about the BitcoinD
client, its an impressive amount of code, its very complex, and it does what it does very
well but lets have more of them. Lets have more diversity so that the network itself
becomes more resilient. [49:48]

SM: Do you know of any other projects ongoing where people are trying to build more of
them? [49:52]

MP: Well, there have been a couple of failed attempts. There was actually one from a
German fellow. Actually, he had a company called Bits of Proof and he had done a full client
implementation, although I think that they have, at this point, dropped off out of the
community which is unfortunate. I really was hoping that they would stick around as well.
The thing is if you start playing in Bitcoin, the reference client seems deceptively easy until
you get to the details. Like I said before, its an extremely complex piece of software and a
lot of people underestimate the amount of time involved in getting it off the ground. We
have a professional development team. Most of us are crypto geeks so we were able to get
into it and we have different people working on different areas of that codebase. [50:49]

SM: Yeah, congratulations. Thats a really cool fete. Is there anything else that you wanted
to talk about for this interview. I mean, we touched on Coinvoice, we touched on,
obviously, the client but what other projects are you working on? [51:02]

MP: We are, obviously, now starting to... we are, at this point, ready to put Coinvoice out
there to the larger community. We are not VC backed so we dont have the crazy schedule
that youve got to deliver the next hundred million dollar project every other day. [51:18]

SM: Yes. (Laughter) [51:19]

MP: That gives us the time to spend a little bit more time and do things right. We really
care about quality quite a bit. When we just started, it wasnt as polished and its getting
more and more polished over time and I think, at this point, we are ready to start on large
volumes of customers. We have all kinds of plans in the future for it and one of the
important ones is we are starting to go and start localizing because, obviously, folks in
Southern America want to be able to just handle the website in Spanish, so were working
on that. We have a couple of translations, so those are going to come up pretty quickly. We
started doing ecommerce type deals so we have now two reference API implementations,
where you can directly integrate it in a cart and then charge Bitcoin and then being paid in
US dollars. [52:13]

SM: Wow! Yeah, thats cool. *52:14+

MP: Right. You can literally just add it to your... right now, we have two implementations,
one for WooCommerce on WordPress. [52:21]

SM: Hey, I use that. [52:23]

MP: Alright. [52:23]

SM: Cool. (Laughter) [52:24]

MP: The other one is Drupal and Ubercart. We have written two references for that.
Actually, there is an underlying library and they both use that same library and the actual
plug-ins literally translate between Coinvoice and whatever line items the invoice consists
of. Were going to add a couple more, so were thinking about OsCommerce, were thinking
about Magento and there are a couple of other really large carts out there that we are going
to integrate with and make available to the general public in the next couple of weeks.
[53:00]

SM: Making it easier for people to facilitate Bitcoin payments or fiat payments all around
the world. [53:08]

MP: Right. The idea is that not everybody can and is capable of running a wallet, right? Its
a complex piece of technology so what were trying to do is make it easier for people to use
Bitcoin and we get something for free. We get liquidity in and out of the Bitcoin network
because people just simply dont have to go to an exchange to do their transactions, so they
can get paid in Bitcoin and then use the Bitcoin to pay for different services and vice versa.
We are hoping that more people can adopt Bitcoin using our service and again, that will just
bump up liquidity, badly needed liquidity into the Bitcoin network so that when something
bad happens, the price swings arent as dramatic. [53:53]

SM: OK, cool. Anything else you want to add? [53:56]

MP: No, thank you so much for interviewing me. [53:59]

SM: Thank you and where can people find you online? [54:00]

MP: Just Coinvoice.com. [54:02]

SM: Just Coinvoice.com and then for Conformal, do you have a different website or is that
at Coinvoice? [54:07]

MP: No, actually thats Conformal.com as well. All our code, all our reference code is out
there and can be found on GitHub under the Conformal site. [54:15]

SM: Excellent Marco. Thank you so much. This has been a real pleasure to talk to you.
[54:19]

MP: Thank you. [54:21]


________________________________________


Jonathan Mohan interview with Sheldon Wisefield


JM: Im here at the Miami conference with Sheldon Wisefield who is one of the chosen few,
one of the distinct the brave who have a RoboCoin coming his way. [55:14]

SW: Absolutely Jonathan. Its very exciting to be able to announce that Coinvault ATM
based out of Houston, Texas will be one of the first ATM terminal operators with a fully
functional, bi-directional, FINCEN compliant, AML, KYC to give the consumer the
opportunity to have a fiat currency in, fiat currency out option, effectively we are going to
be the onramp to the Bitcoin world in Texas, Houston being the fourth largest city in the
nation, representing a global economy in petrochemical finance, engineering and
technology. [55:51]

JM: Thats quite the mouthful. *55:52+

SW: Im telling you. This event here, these last two days, has been absolutely mind-blowing
to meet such dynamic people that are in a space that truly, is the evolution of the next
major paradigm shift that were going to deal with. *56:07+

JM: Youre going to be launching a Bitcoin ATM in Houston. [56:11]

SW: Thats exactly the plan. *56:14+

JM: When is that coming? When is the ETA on that? [56:17]

SW: Were looking at the last week in February, first week in March. The location is going
to be a central business district location. Its going to be in a coffee shop style environment
thats going to give the consumer an opportunity to use the internet because our ideal
clients identified as being, obviously, technically and computer literate, theyre looking for
that experience and its got to be a convenient location to the customer. *56:41+

JM: Why Houston? [56:43]

SW: Houston is the fourth largest city in the nation. We think that with Houstons
demographics and the diversity that Houston represents and we do have a meet-up group, a
Bitcoin meet-up group in Houston and we think that this will be a good proving ground and
gives us an opportunity to build some core data, legitimize what it is were going to do, as
our objective is to launch multiple markets across the United States and then international
strategy to go into some other foreign markets. [57:12]

JM: Its kind of blowing my mind that America is finally getting an ATM. I always felt like
this one would be the last in America and it seems like were kind of... were not trailing
Canada far behind by too much. [57:23]

SW: I think that the challenge has been about the fear. The concept or the acronym of fear,
as I define it clearly is as False Evidence that Appears Real. People arent willing to take
action in the US because of that fear factor. Were of the opinion that, in order to be a
pioneer, in order to make a paradigm shift, you have to be willing to step out of the norm
and thats what Coinvault ATM is positioning itself to do. [57:48]

JM: What I love about your model, specifically, is the way that you look at what an ATM
means. I mean, a lot of the other businesses have their traditional pay for the space sort of
revenue share for being able to be given the privilege to put their ATM at a retail location.
Your view on it is a little different. Can you tell me a little more about that? [58:09]

SW: Jonathan, let me tell the listening audience that what were bringing to the world is a
paradigm shift. Were bringing to the marketplace something that will drive track. We are
the destination. People think that Miami Beach is the destination and it is when theyre
coming to Miami, its South Beach, where were at here today. The reality of it is this
terminal is going to drive thousands and thousands of customers to a destination that those
customers otherwise would not end up in. Therefore, unlike a traditional ATM automated
teller machine, were providing a BTM, a Bitcoin terminal machine, which will create the
destination for these people to go to, to get on and off the Bitcoin highway to have fiat
currency. Youll have international travellers. Houston represents a global marketplace
with two international airports where people will go to our terminal from all over the world,
to convert their Bitcoin to the fiat currency, known as the United States Dollar, they can
then spend and that customer would not come to our retail merchant. As a result of that, a
billboard pays for the numbers of views that how many eyes are going to see that billboard.
A newspaper, you pay advertising costs because of its circulation and a Bitcoin terminal
retail locations will pay us a fee per transaction based on the number of transactions coming
through that door because we know that that customer is going to also spend money in that
retailers location. [59:44]

JM: You also know that that customer wouldnt have been there were it not for the ATM.
[59:47]

SW: Exactly Jonathan. [59:48]

JM: Effectively, what youre doing is youre looking at a retail organization and youre
saying Hey look, use us as a square footage loss leader and what we do is allow you to up
sell the customer on all your margined items. [59:58]

SW: Jonathan, I couldnt have said it better. *59:59+

JM: I just think thats such a novel idea that like all things in Bitcoin, it defies the fiat
equivalent. [1:00:06]

SW: Thats correct. *1:00:06+

JM: Rather than you paying a merchant $1000 a month when, in fact, what theyre doing is
paying you for every Bitcoiner you brought their way because they could sell them coffee or
trinkets or whizzwats or whatever it is that the store has. I just thought it was phenomenal
that youre making the system work for you, my friend. (Laughter) [1:00:23]

SW: Absolutely. The idea here is its got to be built on a win/win relationship and we know
that in a free enterprise environment, its about bringing value and were going to bring
value to a retail merchant in a capacity they really dont understand the model. Were going
to actually pay the retailer a utility reimbursement charge, so the retail merchant doesnt
have the concern its going to cost them to put the terminal in their location. Were going
to have a compensating factor that, based on the total number of transactions, will get a
rebate back per transaction. At the end of the month, we know that the utility cost that we
may have contracted to reimburse them for that space is going to be far less than the
number of transactions, based on the number of customers that we put in that store.
[1:01:08]

JM: Youre in Houston. If theres a business in Houston that would want to get in touch
with you, as it relates to maybe being in their store, how would they go about doing that?
[1:01:15]

SW: Absolutely. They can contact us through the info@CoinvaultATM.com and through our
info@CoinvaultATM.com, one of our representatives will certainly follow up with anybody
that would be interested. If you want to use standard, old time telephone technology, dial
281-236-3625. The Coinvault ATM terminal is a really unique opportunity. We understand
that the consumer needs to have an on and off ramp and were going to be that opportunity
for the consumer. [1:01:50]

JM: I look forward to when you announce exactly where it is in Houston. [1:01:53]

SW: Absolutely. That will, obviously, be a media event and so, at this point, were
withholding the exact location. [1:02:01]

JM: Its gonna happen. *1:02:01+

SW: Its gonna happen. *1:02:02+

JM: Alright man. [1:02:03]

SW: It will happen quicker than later, based on the delivery of our first machine. [1:02:09]

JM: I look forward to seeing it. [1:02:10]

SW: Thank you so much for this opportunity Jonathan. [1:02:12]

JM: Have a great day. [1:02:12]

SW: Thank you too. [1:02:13]


____________________________________________


CREDITS:

Thanks for listening to Episode 92 of Lets Talk Bitcoin.

Content for todays show was provided by Stephanie Murphy, David Johnston,
Jonathan Mohan, Sheldon Wisefield, Marco Peereboom and Adam B. Levine

This episode was produced by Adam B. Levine, with additional production by
Stephanie Murphy and Jonathan Mohan

This episode was edited by Denise Levine, Matthew Zipkin and Adam B. Levine

Music for this episode was provided by Jared Rubens, that Doge song and General
Fuzz


Any questions or comments? Email adam@letstalkbitcoin.com

Have a good one! [1:02:46]