Roger Ver: Bitcoin, Liberty and the Scalability Roadblock (Episode 163)

Transcript

[Music] this episode of epicenter is brought to you by Jax Jax is a userfriendly wallet that works across all your devices and handles both Bitcoin and ether go to jx. and embrace the future of cryptocurrency wallets and by The Ledger Nano s the hardware wallet which sets the new standard in security and usability get it today at Ledger wallet.com and use the offer code epicenter to get 10% off your order hi welcome to epicenter the show

which talks about the Technologies projects and startups driving decentralization and the global blockchain Revolution my name is Sebastian quo and my name's Brian Fabian crane we're here today with Roger rare I think Roger rare probably needs no introduction for most of you he is known he has he's manag to acquire this wonderful nickname called the Bitcoin Jesus um and he's he's one of the earliest investors in Bitcoin I think around 2011 he got very heavily into Bitcoin and we're going to talk about that as well today uh he managed to acquire think one of the largest Holdings of Bitcoins of anybody uh you know after Satoshi and he's also an investor in a lot of uh Bitcoin projects and companies and has just had a huge

impact on the space so thanks so much for coming on Roger thanks for having me on guys so yeah you were very early on got involved in Bitcoin I mean I guess there were people more sort of from a developer side involved at the time but you were coming more from the business side can you talk a little bit about how you originally heard about Bitcoin and how you got involved in the community back then yeah you actually made an interesting point that I don't think had occurred to me until now but I I guess I was the very first business man to get involved in Bitcoin for the most part and everybody else up to that point were just the developer types and I first heard about it on a a podcast that I

like to listen to called free talk live and they mentioned it in reference to the Silk Road and I wasn't interested in the drugs or that part of it but uh it caught my attention a little bit because if there's a money you can use to buy drugs that's very different than Visa or PayPal or or or these other online payment methods so I I Googled it a little bit and unfortunately like everybody the first time they they look into it they they don't fully gripe it and the price at that time was somewhere between you know 5 and 10 cents each and I kind of thought oh this is kind of interesting but if nobody's using it it's not worth anything and then I heard about it again about a month later and Googled it again and that's when all the light bulbs went off and I thought oh my

God this is going to change absolutely everything and you know I had read Neil Stevenson's Krypton Omicron and you know heard about the ideas of you know online digital cash more than a decade before the invention of Bitcoin but uh I've been kind of waiting for it to come along and then when I saw Bitcoin and put all the pieces together in my mind I realized oh it's here the online digital cash finally is here and uh it was Off to the Races from there and I you know bought a bunch of Bitcoin and became the first person in the world to start investing in in Bitcoin startups and uh here we are it's hard to believe it's uh almost six years since my initial involvement in Bitcoin and uh time goes fast but the ecosystem has developed uh amazingly quickly did do you remember

what that first started was that you invested in or those first startups so the very very first startup that I invested in was a bit instant which I think was a way a lot of people got their first Bitcoins ever and that was with Charlie shrim in New York and uh I was reading the Bitcoin talk forums and Charlie had posted something about hey you know I have this business that's helping people get Bitcoins but we don't have enough capital and nobody I talked to these VC guys in New York and none of them have any idea what Bitcoin is and have no idea what it is so I emailed them and said like I understand what Bitcoin is and I have some capital and uh I think we work out worked out a deal within like uh a couple hours and uh I sent him the Bitcoins for my investment

in bit instant as well uh from Tokyo to New York just like that within within a couple of hours I think it only took us to to strike a deal there nice and and what was it about Bitcoin that you found so captivating was it just a was it just the economic potential you saw or was there something else so my my hobby since I was a you know my early teens had been studying economics and I obsessed I I guess hobby isn't a strong enough of a word I obsessed over learning about economics in a similar way I've obsessed over promoting Bitcoin for the last six years and the more economics I studied the more I realized that you know violent intervention into the free flow of uh of goods and and money is retarding the entire world's

rate of economic growth and preventing the entire world from becoming as well off as it otherwise would have been and the way that that's done is by governments controlling money and controlling the flow of money and then when Bitcoin come came along I saw is oh my God this is a tool that allows every single human being on the planet to interact financially with every single other human being on the planet there's nothing anybody can do to stop it that's going to increase the rate of economic growth for everybody in the entire planet make the entire planet better off and make the entire planet have more money which means we're going to solve cancer sooner we're going to solve AIDS sooner we're going to have international or interplanetary space flights faster we're going to have the human lifespan extension uh faster like the entire world is going to be a better place if

you want to heal the the sick and and help the poor and help all of humankind the way to do it is through economic growth and Bitcoin helps that for the entire world by stripping away government's ability to control the economy and control the flow of money so who what what nerd isn't excited about you know interplanetary space flight and life extension and curing every disease and artificial intelligence coming soon are like how can these not be exciting things and Bitcoin helps bring all of that to to you know makes all those things happen sooner rather than later so it was just like of of course I have to do everything I possibly can to help uh help the whole world realize what an amazing tool we have for the advancement of humankind in the form of Bitcoin now that that was wonderful uh wonderful explanation um now now you

mentioned that you're or you are a very libertarian and and have spent a lot of time thinking about these issues what was the reception of Bitcoin by Libertarians in initially and how has that changed like what does that look like today so I I like to use the word voluntarist which basically means that I think all human interaction should be on a voluntary and consensual basis or not at all and originally the libertarian party kind of stood for that but recently they're not the libertarian party isn't very libertarian anymore and the libertarian word has lost a lot of its meaning um but my initial Outreach was to libertarian types or voluntarist types because they should love this

Bitcoin has the ability to strip away government's ability to control the economy and fund Wars and fund all these horrible things that governments do of course Libertarians or volunteers should be interested in that so my initial Outreach was uh by buying I paid for National radio ads for the first I don't know five years uh on more than 150 radio stations across the United States promoting Bitcoin and it was on uh a Libertarian themed radio show which was called free talk live where I first heard about Bitcoin so I I did that I gave away Bitcoins to all of their listeners I gave away Bitcoins to basically anybody that could get to listen to me and the people that I had the most success and that I focused on getting to listen to me were the libertarian types so specifically people in the state of New Hampshire that were

part of a a thing called the free state project which is a they're trying to get a whole bunch of uh libertarian free market voluntarist types to move to New Hampshire and uh have a big effect on local politics there and before Bitcoin I thought that was one of the best strategies around to prove the amount of freedom in in certainly the United States if not the world and of course Bitcoin is far far better than that but all these people that used to be so interested in the freest state project and libertarian there most of them now are way more interested in Bitcoin because they see Bitcoin has a much much bigger potential than any political activism to does to to bring the world in in a better and Freer and uh direction that has more respective individual rights and individual property I I want to make this you know

a the whole show about uh voluntary ISM libertarianism but I wanted to ask you as as a self-programmed libertarianism Libertarian and someone who travels all around the world lives in Japan um like to to Brian and I like who live in we both live in Europe we're not Americans it's well I mean you were born in the US um so libertarianism is very much I think uh an American uh concept that if you talk to most people in the US um even people sort of on the sorry in Europe it's a little early here I haven't really have my coffee yet if you talk to people in Europe even people on the right um they they sort of dismiss

it as as this oh this is an you know an American type idea that really doesn't work for you know other types of societies uh what what are your what are your thoughts on that I think people always are skeptical of ideas that are new or things that are new I look at everybody when they hear about Bitcoin for the first time they think oh that can't work and a lot of people say that libertarianism or voluntarism is you know kooky and extreme but if you think about it what we have now is kooky and extreme we have one little tiny small group of people bossing everybody else around and telling them what they can or can't do whereas I'm just advocating that everybody deals with each other on a voluntary basis like most people do most of the time and I'm just saying

that we shouldn't make exceptions for people that put on fancy uniforms and work in buildings with flags out in front I think murder is murder whether whether or not you're wearing a a uniform or not or working in a building with a flag in front of it like don't hurt innocent people it doesn't matter if you're doing it under the name of a you know a flag and wearing a uniform while you're doing it don't kill innocent people don't hurt innocent people don't aggress against peaceful people just treat everybody else like you want to be treated yourself and uh I don't I don't think that that's such a wild and crazy and extreme idea I think it's how most people deal with with people in their daily to-day lives but they they have this one giant glaring exception that they don't View is an exception and that's when it comes to

government and they think that when government commits violence against peaceful people for some reason it doesn't count as being violence when if you stop to think about it the the military draft we talked about briefly before the show that's indisputably the moral equivalent of kidnapping and slavery and if kidnapping and slavery are wrong then anybody that claims the moral right to kidnap and enslave others are bad guys and we shouldn't support them and the fact that all these government people around the world claim the right to draft people at any time for any reason means they're bad people and we wouldn't we shouldn't support them so I guess that's the end of my libertarian rant for for this morning so what about this idea then and and we can we can stop it here afterwards uh what about this idea then that uh I mean is kind of blatantly

obvious that like left of their own devices corporations will in fact inhibit this same behavior me we see this all around the world uh with you large companies gaining more and more and more power and enslaving people in effect uh one way or another whether economically um whether um you know enslaving them in terms of uh you know slave labor or you know unequal rights that kind of thing uh what what what are your what are your thoughts on where basically corporate greed will go uh if not controlled by some sort of an you know government instance or some sort of centralized power so I'm I'm talking to

you on an an Apple laptop and I've never once heard about the Apple corporation forcing people to go off to other countries and kill people whereas governments do that all the time they draft people into the military and then tell them to go kill people in far off lands or drop bombs on people that they've never met so to me it's it's not even an issue like if Apple started doing that people would be you know absolutely furious with apple and there'd be protests in the street and they tell people don't ever buy another Apple product again but when the US government drops bombs more countries than I can count on my 10 fingers nobody says much of anything at all so to me it seems really clear the real threat to to humankind and World Peace are governments not not corporations and it should be noted that

corporations are a creation of the state though too if you want to create a new Corporation you go to your local government office and fill out some of their magical paperwork yeah I mean I I think when you hear the term a little bit herin right where people sometimes take a sort of contrary position to is you know let's say in Europe right you have generally a Universal Health Care in some way or another right like people get sick they get treated in some way which this is something that doesn't really exist in the US and then so when one hears the idea okay we need to privatize that and and when we see where this is going in many cases it's not going very uh developing very well although of course

it's still very regulated so maybe it's not equivalent to an actual free market system but then at the same time you know when you look at something like Bitcoin uh and then when you look at how money works today and how fiia money works today then I think you know explaining that to people and just the the kind of frankly Insanity of that system uh you know it doesn't really matter where people what political leaning people are from they will always look at that and say this is you know there's something slightly OD with that H you know to say the least and and I think from that perspective as well you know Bitcoin is just a has very strong appeal of course most people

don't really understand how if your money work this is is so it is very complex uh perhaps intentionally so but I I think especially on the monetary side you know there is such a strong potential appeal for that the fun part about it too is Bitcoin kind of turns everybody in into a Libertarian to some ENT um I have an interesting story about somebody I know here in Tokyo who is not a Libertarian at all he loves governments he loves the War on Drugs he loves everything that they're up to but he saw Bitcoin as a potential investment where he could make some money and uh he asked me how to buy some Bitcoin and I pointed him in the right direction and then I didn't hear

from him for I don't know six months or a year or something like that and the Bitcoin price went up substantially and then he contacts me in a panic right he goes Roger Roger I need your help and I'm so what what what can I help you with what do you need he goes I need you to show me how I can hide my Bitcoins because with his own bitco he was he loves taxes and loves governments but when it came to his own Bitcoins and his own capital gains there he didn't want to pay any of that to the government so uh I wish he would come along on the philosophical side as well but I'm I'm happy to have him along on just the you know pure personal greet side and you know defund the Beast that I think uh you know I think he'll spend his money

on a lot of things that'll make the world a much better place than if he pays it to some government so but I thought it was interesting how uh Bitcoin can even turn non Libertarians into Libertarians when it comes to their actual actions yeah let's take a short break to talk about Jax Jax is a multi-coin wallet created by the people at the central now in the past if you had a whole bunch of cryptocurrencies it was a pain to handle them you either had to leave them on an exchange which is insecure or you had to have all these different wallets which was a hassle fortunately now with Jax those medieval days of darkness misery and suffering are over Jack supports multiple crypto currencies and new ones

are being added but it's not just storing cryptocurrencies you can do with ja but you can also exchange them directly from with inside the wallet thanks to their shape shift integration and since there's only one seat Jax makes it super easy to back up and sync to the other devices Jax works with Windows Macos Linux Android iOS and has browser extensions for Firefox and chrome so go to ja.io that's jx. to download the wallet and get started today we'd like to thank Jax for their support of epicenter we talked briefly about how you got into Bitcoin and you were kind of the first business person to do that or among the first business people what

was the community like back then and how has it changed to you know how would you describe it today and and the kind of biggest changes you have seen it's amazing how far it's come so my my business that I started before Bitcoin was a company called memory dealers.com that was based in Cellcom Valley selling Optical trainers and networking equipment and that sort of thing and when I added the memory dealers to the list of companies that accepting that were now accepting Bitcoin for payment I think that we became the biggest company that was accepting uh Bitcoin for payments I think the biggest up to that point was the alpaca socks guy um so we were definitely a big big big step up in legitimacy as far as businesses accepting Bitcoin and uh I remember I paid to have a billboard put up on one

of the most expensive uh I'm sorry one of the busiest uh expressways in all of Silicon Valley and the billboard wasn't cheap either but it just and we've been advertising my company there previously but I changed the billboard to say we now accept Bitcoin right on the billboard and we got so many people contacting us that were so excited like you accept Bitcoin and like they most people didn't they'd only heard about it because this was the first run up in in bitco one of the earliest run-ups where in the course of a couple weeks the price of Bitcoin went from $2 or $3 to $30 and so it got a real big wave of of media attention and our our little billboard in Silicon Valley even made like the newspaper in Germany like on the other side of the planet made all sorts of newspapers and news reportings

across the us as well but at the time there wasn't there were zero mobile apps for your smartphones there were no desktop wallets other than Bitcoin at the time um there were no Merchant processors there wasn't really much of anything other than this idea but people that understood Bitcoin and understood the idea behind it realized that all these you know processes and merchant services and wallets and all these things they knew that it were going to that they were going to be built but it would take time whereas now today there's more wallets for my iPhone that I can keep track of there's more desktop wallets there's more merchant service providers there's more exchanges around the world there's way more than any one human being

could ever keep up with whereas when I first got involved it took me about a week non-stop with hardly sleeping at all but I read every single post on the bitcointalk.org Forum you could do that back then you could read every single new post that was being posted every day easily because there weren't that many posts whereas now today you you can't even keep up with you know 1% of all the stuff that's being talked about online uh with Bitcoin so uh now we have companies like overstock.com accepting Bitcoin uh there's another wallet I pay .io is integrated directly into Amazon where you can fund directly into your Amazon store credit account from your Bitcoin wallet directly uh that's a pretty darn big step so like we're

seeing all these things and all these businesses and Fortune 100 companies around the world are busy integrating Bitcoin Banks here in Japan are looking into Bitcoin like it went from I remember people that have been around Bitcoin a long long time we'll remember in I think August of 2011 the price of Bitcoin had crashed down from $30 and it was down to about $10 and the media was saying this is the end of Bitcoin bitcoin's stupid Bitcoin this is the death of Bitcoin and I knew that wasn't the case the bit Bitcoin fundamentals were better than ever before more people were paying attention so I made a video saying that I don't think Bitcoin is a fat I don't think bitcoin's stupid I think Bitcoin is going to change the world and I said I was willing to bet uh $10,000 which at

the time was about a th000 Bitcoins that was going to be the case and I made this video public and if you look at what people said to me at that time they said Roger you're an idiot you how could you think this and they made fun of me and mocked me and like from the time I made the video when Bitcoin was $10 it dropped all the way down to about $2 from there as well and the PE the hate just piled on and people called me an idiot and all sorts of far worse names than that but if you look at what Bitcoin is and understand it it's amazing this changes the entire world and changes the entire world for the better so of course more people are going to use it but maybe that's an interesting tie in to to some of our

next topics for for this like Bitcoin isn't guaranteed to be the winning cryptocurrency in the end Bitcoin has to compete against all these other cryptocurrencies as well and network effect is important but it's not nearly as important when it comes to cryptocurrencies as it is with traditional currencies and uh that opens a whole another can of worms for us to talk about but that's one of the things that I'm the most concerned and most active with with in regards to bitcoin at the moment yeah so talking about um Bitcoin not being uh sort of not having won this game yet one of the biggest um issues of contention at this point and problems in Bitcoin is uh the scalability or the lack of scalability

and the inability of the community to come to consensus and and you know sort of agree on a path forward so what is your view on on this issue are you concerned about it and why do you think we got into this situation so we've just opened a whole wide range of worms there but I guess one thing I'd like to start out by pointing out is that consensus through censorship isn't consensus at all and I think we've seen a lot of that unfortunately happening within the Bitcoin Community uh one guy that unfortunately controls a lot of these social media sites like uh named thamos has basically said you're not allowed to have a dissenting opinion and

post it on and if he wants to do that with his own private property like I agree but like on our Bitcoin that's not his property uh it goes against the actual rules of Reddit itself and I think that's doing the whole Community a really really really big disservice since more people from the general periphery area of Bitcoin people that are just mildly interested in Bitcoin more people get their news from our Bitcoin than probably every single other Bitcoin website combined and for the fact that you're not allowed to have a dissenting opinion on there does the entire Bitcoin ecosystem a really big disservice and I think we've seen a bit of an example of just how big of a disservice that is in regards to segregated witness um if you had only looked at our Bitcoin and the Thanos controlled Bitcoin related properties

you would think that segregated witness had you know 99.9% support and everybody's so excited about it and everybody's going to adopt it from day one once it's released and turns out that wasn't the case it wasn't even close to being the case at all and it turns out a lot of people are really unhappy with it and I think we lost months and months and months of what could have been open and productive discussion about that sort of thing due to the censorship and that's a really big problem because we need to move really really quickly with Bitcoin there was a a video that came out in India today by the Indian equivalent of the BBC basically bashing Bitcoin saying bitcoin's only for money launderers and terrorists and bad people and and nobody should use Bitcoin and that's a really really big problem and people that are

knowledgeable about Bitcoin know that that's a pack of lies and that's just a bunch of government propaganda but people who don't know much about Bitcoin or have never used it in their lives they don't know and maybe they're going to believe that sort of thing so so I think it's really really important for people that are supporters of Bitcoin and want to see the improvements that Bitcoin has to to bring to the world if we want to see those improvements come about sooner rather than later we need to get as many people around the world using Bitcoin as quickly as we possibly can so that when those people hear the government propaganda and that there's going to be a lot more anti- Bitcoin propaganda that's coming down the line we want it so that when people hear that propaganda they realize well wait a minute I use Bitcoin I use Bitcoin to

buy my Starbucks coffee this isn't for money launderers and terrorist this is for everybody I use Bitcoin my sister uses Bitcoin my mom uses Bitcoin and if we can get everybody using Bitcoin then the government propaganda won't be effective but if bitcoin's limited to only having you know a few million people around the world using it when the M vast majority of the World Hears this anti- Bitcoin propaganda coming from governments and who knows who else they're a lot more inclined to believe it so that's why I think it's so so important to spread Bitcoin as quickly as we can to as many people around the world said that this anti- Bitcoin propaganda can't be effective yeah absolutely I mean we've talked about this a bunch of times before and I also used to read uh the Bitcoin Reddit and then I just sort of some point was

like this is this is so wrong you know whatever your point of view is uh that I also sort of just okay never use this thing again um and yeah I think that's that's a true a true pity what happened there with with our Bitcoin um but to come back to the to the scalability issue itself where do you think we are at right now is it an emergency situation is there still time it's it's hard to know um it it really is hard to know but it I think it's better this isn't a problem that caught us by surprise we knew for years in advance that the blocks were going to

become full and that we should do something about that and the current bitcoin core team didn't do anything about that and in just about any other job if you're supposed to do something and accomplish a task or solve a goal and you fail to do it you get fired and somebody else comes in to to to do your job and I think it's there's a number of competing teams that are looking to take over cor's position and uh provide alternatives to the core scaling Rob Map and another thing that really concerns me though too is that a lot of the core supporters have resorted to suppressing dissenting opinion or even dare I use the word censorship in some occasions or slandering their opponents with lies in things that just plain aren't true if

Bitcoin is supposed to be an open Financial system that allows everybody in the world to participate on even footing we shouldn't trust people that resort to suppressing dissenting opinions or censorship to maintain Bitcoin is this free and open network we should support people that support free speech and trust people that support free speech and free and open dis uh discussion of Bitcoin to be the ones to maintain Bitcoin as a free and open Financial Network and that's the one of the biggest reasons why I don't support the current core team and because they've deviated entirely from the original Bitcoin white paper and the original plans of Satoshi which is what I signed up for and all these other early adopters signed up for and in satoshi's own words the ultimate solution is to allow the blocks to get as big as they need to be and maybe he's

right maybe he's wrong about that Satoshi isn't infallible but certainly they can get a heck of a lot bigger than the one megabyte we're at today and I feel sad when I used to give my Bitcoin you know introductory pitch to people I used to tell them you can send and receive any amount of money with anyone any in the world basically for free that's what I used to be able to say I used to be able to say that for the first you know five years of my involvement with Bitcoin now I say oh for around you know 20 30 cents 50 cents or if you're doing a complicated transaction it costs tens of dollars which is still for the most part better than banks for international transfers but for domestic transfers it's not really better anymore so like Bitcoin really has lost a lot of its competitive

advantage and if you look at it we know what the formula was that allowed Bitcoin to grow from just a few thousand people using it when I first got involved to now millions of people using it and that was very fast very cheap uh Bitcoin transactions and by allowing the blocks to go from five me 5 kilobytes to 10 kilobytes to 50 kilobytes to 100 kilobytes to half a megabyte to one megabyte I think it seems pretty clear that the right method in the short term to allow Bitcoin to continue to scale for the same way that's worked for the last eight years amazingly well is to let the blocks go from 1 Megabyte to 1.1 megabyte to 1.2 and on and on and on until we have some layer 2 solution or some solution that we're that we're confident does work but things like side chains and lightning

networks you know they're not they're not here yet I'm looking forward to them I'm excited about them but I'm excited about flying cars too but those aren't here yet either so I'm not going to get rid of my regular car today because I'm flying cars are coming tomorrow I'm going to wait until the flying cars are here to get rid of my regular car today's magic word is voluntary that's v o l u n t a r y head over to let sof bon.com to sign in enter the magic word and claim your part of the listener [Music] reward so you mentioned this that you know originally uh it had been intended and this sort of was the uh the

consensus amongst the community in the early days that Ching scaling would happen on chain uh that would be sort of the preferred method of scaling and at some point that seemed to have changed uh especially last year we saw uh the lightning Network um emerge and this idea of side chains and the the the attention sort of shifted from onchain solution solutions to uh these offchain Solutions which as you pointed out are not here yet they they are very promising and I think a lot of people are looking forward to them but they're not here yet um why do you think that changed like where was the shift from these onchain scaling Solutions like growing blocks to the to the sort of rejection uh of those Solutions I think

we've we've seen a similar change within the Bitcoin Community from when I first got involved in Bitcoin pretty much everybody was a hardcore libertarian voluntarist anarcho capitalist crypto Anarchist whatever words you want to use I'm 99% of the people involved were of that mindset and today there's still some of us around but we're a much much much smaller minority because now Bitcoin is you know millions or tens of millions of people around the world so now we're just a very small subset of the user base of Bitcoin and I think a similar thing has happened with the influx of these new users to bitcoin and we saw you know blockstream raised I think it was 76 million doar from a bunch of traditional Banks and and those types of things and they've been the

leading proponents of changing the road map for scaling of Bitcoin $76 million can pay for a lot of employees and a lot of Manpower and a lot lot of things to happen and uh they've been very effective at lobbying for their position and a lot of the early adopters like uh that have been involved in Bitcoin from the early days a lot of them uh maybe aren't as a as vocal and then the censorship was a really really really big problem though too I think like that's I think you know almost makes me want to bring tears to my eyes when like this whole ecosystem that I knew and loved and thought was wonderful was filled with a bunch bunch of people that supported free speech and

a free and open Financial Network now are resorting to censorship and suppression of dissenting opinions like what happened to this community that I love so much how could it change so much into something that I'm opposed to like people should be allowed to talk about the ideas they want and people should be allowed to pay the people they want like those two to me seem like you know almost two sides of the same coin and uh I guess it's just part of this big tent that's happened with Bitcoin now there's so many people involved in Bitcoin that there's a lot more people with different ideas what what do you think changed in terms of support for these Solutions like is it because uh these onchain Solutions are seen as uh perhaps

technologically inferior or economically damaging or uh where do you think basically this what is the polarizing you know factor which splits the community in two or three or whatever you know yeah actions we have now I think the business Community very very clearly um the vast majority of the business Community wants to stick with the original game plan for for Bitcoin which was onchain scaling and certainly they don't want to we don't want to damage the existing Bitcoin in the hopes of creating layer two technologies that might work but they're not here yet so don't don't break the thing that's working now in the hopes of creating something tomorrow that might work um and that's what's happening now whereas I feel like a lot

of the the offchain scaling people or Layer Two proponents or whatever word and I'm not trying to use you know I'm not trying to phrase it negatively but whatever whatever word we want to use to describe those people those mindset I think that those are many many more of the much more technically oriented people that don't have any consideration for the economics that underly Bitcoin or the PE businesses that are trying to use Bitcoin um previously I said that just holding Bitcoin helps develop the ecosystem Bitcoin didn't have any price at all until people decided that they wanted to hold it and that's what gave Bitcoin its very first price it wasn't people who wanted to buy and sell things with Bitcoin it was people that wanted to hoard Bitcoin is what gave Bitcoin its price so just the simple Act of

holding Bitcoin helps promote the entire Bitcoin ecosystem the fact that people are holding Bitcoin is the reason that it has a market cap of$ 14.5 billion today and because it has a market cap of 14.5 billion today lots of Banks and lots of big businesses are interested in it and if it didn't have a market cap that big nobody would be interested in it and when I mentioned this previously a lot of the core roadmap and blockstream supporters mocked me and laughed at me and said you're an idiot you think that just holding Bitcoins promotes the development of Bitcoin what an idiot and those people are wrong absolutely without any doubt the simple Act of Bitcoin holding Bitcoin helps promote the entire Bitcoin ecosystem and that's the reason Bitcoin has any price

at all is because people are willing to hold it and the fact that so many of these people mock somebody for pointing out the the the obvious shows a real lack of understanding on that on their po part or another thing I I mentioned recently it's one of the most basic tenants of Economics when something costs more people will use less of it Bitcoin transactions now cost more than they did previously which means people will use less of it if if Bitcoin transactions are free people are going to make a lot of them if Bitcoin transactions cost 50 cents they'll make less of them if they if Bitcoin transactions cost $50 each they'll make a lot less of them that's one of the most basic rules of Economics when something cost more people use less of it and a bunch of these Bitcoin core blockstream road map supporters and I'm

not using that as a dysphemism I'm just that's the best term I have to describe them but they they mocked me for saying that and said that you're an idiot and Roger how could you think such a stupid thing but of course it's true and and anybody that studies economics will realize that so I think that there's a real divide between the people that are coming from the business and economic side and a bunch of the people who are coming from the technical side and that's not all the people that coming from the technical Seline Satoshi left the project and then he turned over the basically the entire project to Gavin andreon who's very clearly and he mentioned one of his favorite books that got him interested in Bitcoin was economics in one Lesson by Henry Haslett which interestingly enough was one of the books I read when I was a young man

that had a big influence on my worldview as well and Gavin basically got excommunicated from the Bitcoin ecosystem and treated horribly by these you know people that came to bitcoin much more recently with a different road map than Satoshi had so I think it's it's absolutely horrible the way Gavin was treated and absolutely horrible the way Mike hernes was treated and they're even for the most part being a bit disrespectful to the role that Satoshi p played in this whole thing uh as well and I think it's really sad to see that and you know where where do you want to go next on that topic I covered a lot but uh it's really frustrating and a really important part of my life yeah no and and I think there's been um it's it's had a big impact on the community as well and I I started

the a meet up in Berlin uh in 2013 sort of the Fall which just when the price started going up and there was so much enthusiasm around it it was all focused on on bitcoin and you know today that enthusiasm is still is still there but it's it's in a different way and it's not so uh it's much more about the technology and it's much more dispersed around different projects which is also great but it's no longer that idea of this common CA this common disruptive cause that's like going to really revolutionize the world um I I think that has gone away a little bit and and that's that's a bit sad that's certainly the case I mean I would I would agree

with you Brian that you know like for instance between the first time we met in in Berlin in February of 2014 and then whenever that was we went to the next uh inside Bitcoin conference you could in between that like the uh the the the the Amsterdam conference there was was a big difference in you know the enthusiasm of you know everybody that was involved but however to to address your point Roger I mean I haven't looked at the numbers but I mean I think Bitcoin is being used more than ever uh am I am I wrong on that I mean people are using Bitcoin and people you know the number of transactions has gone up I believe uh I I I mean I think we could check to see that that is the case that transaction volumes have you know been

growing skyrocketed yeah no this is all great and and I agree and sorry if I'm interrupting but I guess it's good to take a a step back and and look the the problems and the things we're arguing about like they're like the absolute best problems we could possibly hope to have like so many people are wanting to use Bitcoin that we're having to argue about how to accommodate all the new people that are using Bitcoin so that's a far far far you know cry away from what we were you know in 2011 when I first got involved it was just a pipe dream that we would have so many people using Bitcoin already and I'm sorry to interrupt please please go on no but I was just I was just addressing your comment that you know if if fees are going to go up and less people are going

to use it well I mean fees have gone up and and and more and more I mean there's more and more in transactions I don't know if that's that means that more and more people are using it again I haven't I haven't looked at any any of these numbers but uh it seems to me like Bitcoin use and Bitcoin adoption is growing perhaps not at a scale that uh you know we would have anticipated say in 2013 when people were saying like in 2 years from now the price of Bitcoin will be $10,000 or more uh but I I would I would argue that Bitcoin use is growing uh and and that there's no you know we haven't seen like a reduction of uh the amount of people using Bitcoin because the fees have gone up so we have that that's where maybe we disagree so when

something costs more people will use less of it so let's say today with the current fee structure 10 million people want to use Bitcoin per month if the fees were even lower then maybe it would be 11 million people that would want to use it so some greater number of people would want to make Bitcoin transactions each month if the price per Bitcoin transaction was less so I'm not saying that that less people are using Bitcoin today than in 2011 of course not more people are using Bitcoin today than ever before but it could be an even bigger number if Bitcoin is allowed to scale fast enough to keep up with the demand and keep the fees per transaction low do do you really think that H that has to do with with scaling in fees or that you know perhaps that has to do with some

external factors uh like you know you right rightfully so like you mentioned earlier uh this peace in India uh like so negative uh media uh coverage or simply the fact that in most Western countries I mean it's much easier to most developed countries much easier to use just regular banking infrastructure than to use Bitcoin so I don't think it's only the fees I think the big big problem is from the network being run at 100% capacity so I have I don't know about 17 or 18 years of experience in scaling Enterprise Network before Bitcoin and there's two ways you can scale Enterprise networks you can scale it through better software which is what the Bitcoin core team seems to love and and be really excited about which is fine but you can also scale it through

better hardware and we have much much much better Hardware today than we did back in you know in 2011 where I got involved and and even better than when Bitcoin was originally invented but if you look at all the stuff that's happening here when any network is run at 100% capacity the use user experience is horrible and the or not nearly as good as it would be otherwise and the Bitcoin user experience from just the actual perspective of making a Bitcoin transaction out is much worse than it was a couple of years ago initially you could broadcast your Bitcoin transaction most of them were free uh and it would be included in the very next block 99% of the time and the only time it wouldn't be included in the very next block is if you tried to broadcast your

transaction a second or two before the next block was found it was just because and the only reason your transaction wouldn't be included in the very next block is because it hadn't reached the Mining Node yet and propagated across the network today Bitcoin transactions can take you know hours or even days to confirm the fees are high the double spend Windows is hours and hours long like this is a big big problem compared to where Bitcoin was before and it makes people a lot less likely to want to use Bitcoin for payments and for business we want Bitcoin transactions to be as F fast and safe and cheap and reliable as we possibly can and those things have been uh degraded over the last year as the network became F and began running at 100% capacity right so one of the obvious ways to scale Bitcoin is to increase the

block size and bitco core has so far been unwilling to do that one of the proposals um or or sort of clients at the moment that has gotten some traction is Bitcoin unlimited which also uh your mining pool supports bitcoin.com mining pool which we can maybe talk about a little bit in a second can you run us through what Bitcoin unlimited is and what Unlimited in that context means so that's probably a good topic for a whole another episode with the Bitcoin unlimited developers but the short version is Bitcoin unlimited does not mean unlimited block size um basically it means that the people running a node and the people that are mining the blocks get to decide what the maximum size block they're willing to

produce is and what the maximum size block they're willing to accept into their blockchain is and basically takes the control over the block size away from the the Bitcoin protocol development team and puts it in the hand of of the people and businesses that are actually using Bitcoin and I I wrote an article explaining why I think that Bitcoin block space is the commodity that the that the miners are producing and that the miners need to be the ones to decide how much block space they're willing to produce at what price and I put my thoughts down on that unfortunately it was censored by Thanos from our Bitcoin and wasn't allowed to be discussed on all the platforms he controls which for his private platforms he can do that but I I don't think that's appropriate for our Bitcoin and I think it's sad that someone like myself

who's been so passionate and so heavily involved in Bitcoin for so long I'm I'm genuine in my enthusiasm for Bitcoin I want to do everything I possibly can to help Bitcoin um I think it's sad that my ideas and thoughts wouldn't be allowed on a place like our our Bitcoin in regards to that but uh anyhow you can Google Roger ver on on uh Bitcoin block size or something like that and it'll it'll come up um and basically Bitcoin unlimited implements those ideas the M if the miners are getting paid to produce block space and include trans actions within that block space they should be able to choose how much block space they're going to produce and Bitcoin unlimited allows that and that's why uh Bitcoin unlimited is really gaining traction just earlier today another mining pool uh in China made the switch to bitcoin unlimited and if you

look at the number of mining pools and blocks that are signaling for onchain scaling it's uh actually right about the same or maybe even a little bit more than the number of blocks that are signaling for segregated witness which is very interesting and I I think we're going to see uh more and more of a turning point here as as days go by and I think people are going to realize that if you don't listen to the people who are actually using Bitcoin and all the businesses like the coin and you know coinbase has probably helped more people get their first Bitcoin than any other business in the world and it's really frustrating and sad to see how they literally get mocked by some of the current blockstream and Bitcoin core supporters and same with blockchain.info the wallet that's responsible for more Bitcoin transactions than every single

other wallet combined the people that are in the block Bitcoin core blockstream slack group and that's not to say that that represents everybody who's in that camp but I went and told them I said doesn't this worry you guys that these people are busy trying to integrate altcoins because Bitcoin hasn't been allowed to scale and they mocked these companies and they said they should leave Bitcoin I hope blockchain leaves they suck I hope coinbase leaves they suck this is crazy talk like this is absolutely insane that people with that sort of view or are involved in this sort of thing and I understand that doesn't speak for everybody but then you know there's all all name names like Greg Maxwell one of the Bitcoin core blockstream developers recently he keeps accusing me of

Shilling for altcoins and wanting to hurt Bitcoin I didn't buy any altcoins until very very recently because I was so scared that Bitcoin wasn't going to be allowed to scale to keep up with demand and the other concern I have about Bitcoin is the Privacy isn't nearly as strong as I as we thought uh it was initially so I bought a couple of privacy Centric altcoins that maybe will have as good or better scaling than Bitcoin and at the very least have more room to scale today but 99% of my cryptocoin wealth is in Bitcoin I own bitcoin.com that's not a cheap domain name I want to do everything I possibly can to see Bitcoin be the winner in the end and as we talked about really briefly before the show actually started cryptocurrencies are different than

dollars and euros and Yen it is incredibly easy to switch from one cryptocurrency to another and we have wallets like the Jack's wallet with shape shift built right in if you're sick of Bitcoin and it's high fees boom you can instantly convert your Bitcoin to to whatever other coin you want for a very low fee that makes it really really easy for the whole ecosystem to switch to whatever cryptocurrency has the best properties as money and if we want Bitcoin to be the winner in the end and have the Lion Share of that Bitcoin has to be the fastest cheapest most secure safest most private currency out there and we need to work on all of those things and if we don't bitcoin's not going to be the winner in the end and that's why I'm so concerned about this whole scaling issue a lot of people I

don't think feel any urgency this is really important we need to do this fast because because of that and then we need to do it to counteract the government propaganda that's coming against Bitcoin and cryptocurrencies like the more people that are using them tomorrow the better because then the propaganda is not effective because people say oh I don't believe that I'm using Bitcoin myself yeah and I mean I think also the what's the concerning thing is that you know maybe Bitcoin right now is still maybe almost good enough sort of for what people want to use it the number of people want to use it although you're certainly right that uh user experience has uh got a bit worse but if we imagine let's say another the financial crisis or something big happening and really a

lot of people want to start using Bitcoin like they wouldn't be able to do that right like it is really at capacity so it's it would be even if some fortunate circumstance came external circumstance that could really drive up uh Bitcoin growth dramatically uh you know bitcoin's not wouldn't be able to handle that if I can add one other thing though too I think a lot of people that are just using Bitcoin privately as individuals don't realize just how bad the network congestion is anybody that's running a business using Bitcoin is already routinely paying tens of US dollars for single Bitcoin transactions if you have a let's say a t-shirt store selling T-shirts if you sell uh 100 t-shirts for $20 each right that's uh

what $2,000 and if you want to go and move your $2,000 right to a Bitcoin exchange or something like that it's going to cost you probably $50 in Bitcoin fees to do that uh in for that one single transaction reason why because you have 100 inputs from the different customers that sent you $20 each and you have two outputs the the money you're sending and then the change you're probably going to pay 30 40 50 maybe even 60 $70 in Bitcoin fees for that transaction so that's already way more than a bank wire transfer that's where the network is right now today I'm almost every single day I'm paying I'm doing a transaction where I'll pay in the tens of dollars for a single Bitcoin transaction moving money that's a big problem we want people to use Bitcoin instead of Banks and dollars it

shouldn't cost tens of dollars for a single Bitcoin transaction yeah no absolutely let's take a break to talk about The Ledger Nano s the new flagship Hardware wallet by Ledger I'll let Ledger CEO Eric larc tell you all about how simple the Nan s makes it to securely store all your private Keys The Ledger Nan is our latest generation Hardware wallet this is a multicurrency hardware wallet it has a SC screen and buttons to manage everything on screen you can generate a new seed restore a seed or set up your pin on the device your seed will never be exposed to the host computer on the Nan you have different apps you have the Bitcoin app

you have the ethereum app and you have the pho UF app for strong authentication for instance with Google drawbox or GitHub you can manage your cryptocurrencies with The Ledger wallet Bitcoin Chrome app or the ler wallet ethereum Chrome app with the Nanos all your Bitcoin and ethereum addresses are derive from one unique seed with one seed you can have in the same time Bitcoin ethereum ethereum classic balances and also if you restore your seed you will also recover all the keys Associated to other apps such as ph2f SSH gpg so it's very simple just one seed and multiple applications the Nano

s sets the new standard in Hardware wallet security and usability you can get yours today at Ledger wallet.com and when you do be sure to use the offer code epicenter to get 10% off your first order we'd like to thank Ledger for their support of epicenter now I I think what's concerning here though is that so with segregated witness right we we talked about that I have maybe 25% of the hashing rate signal support uh for segregated witness then Bitcoin unlimited maybe 10 or something 11 then there's some other proposals for bigger blocks 8 megabytes that also has uh you know significant support but all of those have a threshold until they activate right so I think segregated

withness is 95% with Bitcoin unlimited we weren't quite sure but let's say it's 70% or something like that 65% it seems that there may be a big chance that none of these proposals will never reach uh the activation threshold what then that's that's a big problem for Bitcoin and I I share your concern and I guess what then is look look at altcoins that already have the right characteristics in place to scale and be private is maybe my answer but that's really sad and frustrating as as somebody who's put so much of my time and effort in love in into Bitcoin for six years now do you see a h Fork as an option to say like

you know let's say Bitcoin splits and you're going to have uh one camp that supports segregated witness and some other things and one Camp that's going to go with biger blocks and well we'll have two Bitcoins just we had you know Etc and ethereum classic and the regular ethereum do you think that's a potential path so I I don't think it's really fair to compare the ethereum and ethereum classic split because that was basically done as a bailout for a bunch of people who made a bad investment whereas if Bitcoin were to split or have a hard Fork it would be because there's two conflicting Visions as to what the proper characteristics of Bitcoin should be for Bitcoin to be used as money and then eventually the market will choose which which version of Bitcoin is the one that's most useful as money and to

me there's absolutely no doubt in my mind Bitcoin that's fast and cheap and secure with low D risk of double spins is much much much more useful than a Bitcoin that's slow with a high risk of double spins and uh you know High fees like it's not even it's not even a it's not even a close debate in my mind and I think anybody that's using Bitcoin for business will see it the same way and they'll sell their Bitcoin core blockstream coins and buy the useful Bitcoins and I know that's what I'll do and there's a really interesting website over at vote. bitcoin.com previously known as Bitcoin ocracy where people that actually hold Bitcoins vote on these exact topics and if you look at it um close to Hundred Million worth of Bitcoins have voted on that exact topic

and uh 90 plus% of them don't support the current block stream and core vision for the future of Bitcoin and they can't argue that $100 million worth of bitcoin or a bunch of trolls or sock puppets on the internet and the majority of that money in Bitcoins aren't me they're from a whole bunch of people all over the all over the world um these aren't sock puppets right sock puppets don't have a $ hundred million doar worth of bitcoin these are real people and real holders of Bitcoin and the blockstream and cor camp and Greg Maxwell and those guys they used to reference that website all the time saying look the the the economic community supports what we're up to until a whole bunch of people with a bunch of Bitcoins came in there and voted the opposite way and now you never hear them mentioned that website before

and there's a whole bunch of topics it's not just about scaling it's a really really interesting tool and fun thing for people to play with so if I can plug my own website a little bit that's at vote. bitcoin.com and I think it's a really fun thing for people to to play with and see the power of Bitcoin I think we should have probably a proper episode on on bitcoin limited but uh and to talk about so the technical implications and and economic implications of having an unlimited block size but not an unlimited block size is is important sorry as well um having a block size where um the community essentially gets to choose what the block size is uh is is probably the best way to put it um so one question that we had and we

thought of is what makes you think that this is the adequate uh solution have like have you done any is there any risk analysis done been done on this like um what makes you think that this will work and can't fail cuz you know there there seems to be some issues that can arise from having sort of this you know free market approach to um to the block size one of which uh and and this is something that we'd have probably have to discuss with a you know on a more technical level but one one issue that um we thought of was that this idea of centralization I me if if for instance uh you have miners that are centralized in I don't know somewhere like China uh

and they have really fast networks between them um they may be able to sustain very large blocks and and and to uh you know propagate those blocks amongst them leaving out for instance other miners outside of China so this is one one thing that we thought of and there maybe other but have have you done any proper sort of thinking around what could be potential issues around uh Bitcoin unlimited sure i' I've done a lot of thinking about this but it's also worth noting that Bitcoin isn't guaranteed to be safe in fact Bitcoin is very very risky um but one of the points that I think is very important that Jeff garik one of the earliest people involved in Bitcoin who I think was involved quite a bit before I was even

pointed out that if we want to keep Bitcoin the same we have to allow the blocks to become bigger because that's been the path of Bitcoin the entire time but in regards to you know mining becoming centralized or this and that remember all the people that are mining Bitcoin the reason they're mining Bitcoin is because Bitcoin is worth money Bitcoin is money right they want the the most money they possibly can have for mining Bitcoin so they're incentivized not to do things that would undermine the value of the thing that it is that they're mining so if the people in China or people mining Bitcoin thought and the rest of the world thinks that if all the mining winds up being in China and the blocks are so big that they can't propagate against the great fire outside of the great firewall of China and that means that Bitcoin is

more susceptible to being controlled or undermined they're going to trust Bitcoin less they're going to keep less of their wealth in Bitcoin the price of Bitcoin will go down the miners by doing that would undermine and destroy the value of the very thing that it is they're trying to mine therefore they're incentivized not to do that so uh and then there's all s all sorts of really cool technologies that allow blocks to propagate much faster blocks to be validated much faster uh both the hardware and the software for Bitcoin are much much much better than it was just a few years ago and that's in large part thanks to the core team so credit where credit is do they've done a lot there but changing the underlying economic code of Bitcoin is really really dangerous and that's exactly what they're proposing right now and that's

exactly what has me so incredibly concerned as someone is holding such a large percentage of my my net worth in Bitcoin so I would like to just come back for one second to the what we talked about before it seemed like you were actually quite um in favor of the potential of having a fork and then having you know people able to choose you know which they want to go with I mean you know if if you look at I mean didn't like the comparison with ethereum ethereum classic but still right after that fork happened uh you know I had coins on both chains and of course immediately you know very quickly I sold ethereum classic because I felt it was overvalued um and you know so you have that that potential right to to make those choices as Bitcoin holders even

right through today really don't have any say in um you know how big will the blocks be and what kind of uh protocol is going to be uh path is going to be followed so do you think this is actually a feasible path would this for example have similar issues like we saw in ethereum with replay attacks or have have you actually you know have you spent time looking at at how such a fe could really be accomplished on a practical level so my my first choice would be that Bitcoin doesn't split and that it continues on you know one one version of Bitcoin for everybody um but I don't think it's the end of the world if Bitcoin does fork and uh we do have the advantage of

seeing exactly what happened with a fork with ethereum and ethereum classic and we can learn from that and try and solve the problems in advance so that we don't have replay attacks and don't have to deal with the same problems that we had uh with ethereum and ethereum Classics so I guess thanks thank you ethereum for being a testing ground there in that regards um so again I'd prefer that Bitcoin doesn't split but I don't think it's the end of the world if it does so you mentioned earlier that uh you you run bitcoin.com and so bitcoin.com is sort of this website where um sort of the say the landing page of Bitcoin where you can get all kinds of information about Bitcoin uh about Bitcoin clients where you can buy Bitcoin this sort of thing and there's also a podcast uh on there which is uh

which is actually really well produced uh listen to it a few times and um and bitcoin.com uh recently you started a mining pool there uh that supports Bitcoin unlimited uh can you tell us a story behind this yeah thank you thank you for such a good plug I need to hire you to do PR for bitcoin.com now um so the mining pool got started maybe six months ago now and I I've learned a lot in that time that building a mining pool is much harder than I thought initially and that dealing with the great firewall of China is a a really big problem for for everybody and especially for mining pool operators um but I was looking around the ecosystem the vast majority of businesses that were using Bitcoin

supported the original vision of Satoshi and onchain scaling and allowing Bitcoin to scale in time to keep up with customer demand but a lot of the mining pool operators seem to be in different and not willing to change anything at all and so I thought okay the best way to have a bigger voice in effect in this debate is to have my own mining pool so I've been working on that and at the moment we have a little over between two and 3% of the global hash rate and we're in a private beta at the moment and uh hopefully we're going to come out of that soon but we've been having a lot of trouble basically dealing with the great firewall of China and repli the database on both sides of the great firewall of China so that miners inside and outside of China can mine on the same pool um

but hopefully we have that solved maybe soon I hope I've been hoping for a while now but uh eventually we're going to have something solved there and I think that's going to be a a real big debate changer um because we'll have a much bigger voice there and I think I've another thing I've learned because of this is all the mining pool operators for the most part they're just keeping all the Bitcoin Network transaction fees and not paying that to any of the miners that are mining and it used to be almost nothing did used to not count was you know five bucks a block or something and nobody cared about that when the blocks were worth $5,000 but now the transaction fees in each block are you know more than 5% and we're talking about a lot of money we're talking about you know sometimes a

thousand bitco $1,000 dollar um worth of value per block that's mined and the mining pool operators are keeping almost all that now and if suddenly Bitcoin is allowed to scale on chain a lot of that fee pressure will go away in the short term and the mining pool operators will lose that income and it's big money I we're talking about they're earning hundreds of thousands of dollars a month worth worth of Bitcoins thanks to all this fee pressure and so I'm going to pay out most of the the network transaction fees to the people that are mining on the bitcoin.com pool so people will wind up getting paid maybe 5% more than any of these other pools and so it's going to bring more competition to the market which makes markets more efficient and it's going to force all the other pool operators to to treat the

mining the miners on their pools even better and pay them a bigger percentage of the money that they're they're mining so that'll be exciting I think it'll be a bit of a shakeup in the mining pool industry as soon as I'm able to launch publicly so so this is something we we heard of quite a bit on other podcasts you on or read about that that uh that bitcoin.com is not taking any fees uh for the mining uh which obviously is allowing uh bitcoin.com to pay more to the miners um there's also this something I heard of uh and I wasn't quite sure what it related to the the share acceptance rate was higher can you explain what that is yeah so when a a minor receives a share to work on it submits it back to the pool when it's

done and if you if only 90 90% of your Shares are accepted by the pool you're only going to get n paid for 90% of the work that your mining equipment is done whereas our pool for whatever reason and you we you'd have to have the CTO on time on your show sometime to explain the exact details of why but apparently our share acceptance rate is a lot better than a lot of the other pools um which means you get paid for more your work so if you have a 90% share acceptance rate versus a 100% share acceptance rate you're getting paid a heck of a lot more on the the 100% share acceptance rate pool than the 90% share acceptance uh pool so a lot of the people that are mining on our pool have reported you know some as high as eight or nine or even 10% more gross revenue

for mining on our pool than the pool that they were mining on previously and that's a combination of the higher share acceptance rate and our you know zero fee policy okay and so then one can assume that the zero fee policy means that uh bitcoin.com is is covering all of the um all the you know the the the the costs associated to running the pool running whatever servers you need um it so I I assume then that you're not trying to make any money with this you're just the idea is to promote uh Bitcoin unlimited so while we've been testing we've been having a 0% fee on all the coinbase and then we've tried various configurations with the coin transaction part of the reward for each

block um and we've been charging via thing that's called pay per share which is where the miners get paid no matter how many blocks we find so if our pool is unlucky in the number of blocks we find that comes right out of my pocket and that's money we lose but for whatever reason you know maybe satoshi's been smiling down on us from above but we've been really lucky and been finding a lot more blocks than we should for the amount of hash rate we have so for example in November we actually wound up with a profit of like 80 Bitcoins because mainly because we found more blocks than we should have for the amount of hash rate that we had so it's a that's a nice problem to have but the luck might go the other way uh in the future as well but uh so then is is this

something that is is you think is sustainable like once you do go public because uh it should be it should be said that the mining pool is not public yet I think it's still under Invitation Only um is this something that you think you'll keep doing in the future or will you instate some sort of a uh a fee at point if I get to 51 or close to anywhere near 50% of the network I'll I'll start charging some fees pretty quickly because I don't want to have more than 50% of the network on my pool um but and we're still trying to decide what our final fee policy will be um and we don't really have to worry about that until we actually do launch and we need to have the Rock Solid back into the pool before we before we do that but uh

one one example potential scenario would be let let's say the transaction fees on average are 5% of the reward maybe we'll pay out you know an additional 4% and we'll keep 1% for us or something like that whereas right now pretty much all the pools are keeping all the transaction fees and charging a fee for the coinbase reward as well so like the a lot of the pools are charging you know 78% fee even though they claim it's a you know one or two% fee it's because those transaction fees have become so high now but for somebody like you who has uh you know a lot of capital and is very heavily invested in Bitcoin and is also very concerned about where Bitcoin is going wouldn't it make sense to maybe say I'm going to pay out you know I'm

going to pay a negative fees I'm actually going to give miners you know the entire coinbase the transaction fees and another 3% on top so that they mine you know once once you launch so that that they M if bitcoin.com pool and so that the you know the hash rate that's supporting Bitcoin unlimited you know correspondingly increases law is that something you'd consider I could if I needed to although I don't think I'll need to because I can all without paying any money out of my own pocket I can probably already pay out about 10% more than most of the other pools and that's 10% more of the gross right that's 10% more of the gross right so the miners if their profit margin is just you know 10% or something like that which to be

honest a lot of the minor their profit margin is a lot more than that but if you pay out 10% more of the gross you're talking about maybe you know 30 40 50% more profit for a lot of these miners so like I don't think I'll have to pay any money out of pro out of my own pocket to convince them to come on board and even if I did um a lot of people might scream and howl about that as being an attack vector or an attack on bitcoin but the fact that anybody can do that means that that's already an attack Vector on bitcoin and that's not something that I've C I haven't caused that attack Vector to be created uh maybe people are just noticing that potential attack vector and that is an attack Vector that we should worry about in the future

maybe somebody who really hates Bitcoin could come in and start a mining pool where he pays everybody you know double the block reward for however long funded by the central banks around the world to make the blocks only 10 kilobytes so that there's no room for anybody's transactions ever that's already a potential attack Vector for Bitcoin yeah absolutely well uh Roger thanks so much for coming on uh it's been a pleasure to talk with you and it will be very exciting for us to see where pon.com goes what's going to happen with the mining pool once it launches and how this whole um this whole controversy about the future of Bitcoin how that's going to play out so thanks so much thank you guys so much for having me on and for making more than 100 fantastic episodes as well that I've watched many of myself so thank you

guys cool well and that's of course the best compliment we could have when Bitcoin Jesus himself is the regular Watcher of the show yeah my my entire day all day every day revolves around Bitcoin so of course I've watched lots of your episodes thanks so much um so we are part of the leton network you can this show and other shows on let's talk bitcoin.com and of course you can watch the videos of this as well on youtube.com/ Center Bitcoin or subscribe to the show in any of the podcast application and if you would like um to support the show you can leave us an iTunes review that helps uh new people find the show thanks so much and we look forward to be back next week n

[Music]