Speaker 1: All right, welcome. You are listening to another episode of
Speaker 1: the Mark Mass Show, where we talk about the decentralized Revolution.
Speaker 1: Of course, we're talking about the way the world is changing, politics, finance,
Speaker 1: and of course that's technology driving it. We're talking about
Speaker 1: the decentralized revolution, and we are talking about bitcoin, of course,
Speaker 1: each and every week. I'm coming to you from Miami, Florida,
Speaker 1: where I'm here for the Bitcoin Conference. Two thousand twenty two.
Speaker 1: About forty people expected to be here for the Bitcoin Conference.
Speaker 1: It has really grown into something big. It's been pretty
Speaker 1: amazing to watch it for a while. And I am
Speaker 1: joined in the studio today with Austin Hill. Austin, thanks
Speaker 1: for joining me, my pleasure, Mark, thanks for inviting me.
Speaker 1: So Austin has been around UM two in the bitcoin
Speaker 1: space for a really long time, and so I've been
Speaker 1: around a long time, not as long as him. And
Speaker 1: it's uh boy, it's grown quite a bit, hasn't it.
Speaker 1: It's every day I wake up and I'm just kind
Speaker 1: of living gratitude in the sense that you know, there's
Speaker 1: such an active community, there's so many people lending their
Speaker 1: hand to creating the change in the world that I
Speaker 1: think we all want to see. Yeah, and you know,
Speaker 1: it's one person trying to change the world. You know
Speaker 1: the old adage, Give me a lever long, large enough
Speaker 1: and I can move the world. Yeah. Yeah, I don't
Speaker 1: know anyone who has you know, the weight or the
Speaker 1: kind of density of intensity to do the change that
Speaker 1: the community is actually doing together. Let's let's talk about
Speaker 1: you know, one thing that I get frustrated with people
Speaker 1: a lot is that, um They're like, oh, bitcoin can
Speaker 1: never be the you know, reserve current, you can never
Speaker 1: be the medium exchange, you can never be whatever whatever
Speaker 1: fill in the blank, right, And it's like, um, just
Speaker 1: because it's not that today, it doesn't mean it can't
Speaker 1: grow into that eventually. It's like if I saw like
Speaker 1: a little oak tree that was this big, I would
Speaker 1: never go back. It's like, well, it is an oak tree, right,
Speaker 1: So let's talk about that. I was at a I
Speaker 1: was at a at the at the Trammel Venture Partners
Speaker 1: UM Fund yesterday meeting, and there was a Trammel and
Speaker 1: uh Lop, Jamison Lop. We're talking and they're talking about
Speaker 1: the early days of of the bitcoin message board and
Speaker 1: the and the the faucets turning on and all the
Speaker 1: bitcoin coming out of the faucets. People just thrown around
Speaker 1: thousands of bitcoin at a time. Um, there was really
Speaker 1: no market for them. So is that where you were
Speaker 1: in those early stages or where'd you come in at UM? Well,
Speaker 1: I had a couple of exposures to bitcoin. Um, a
Speaker 1: lot of my work was pre bitcoin. So back I
Speaker 1: created a company called Zero Knowledge Systems, which was a
Speaker 1: cipher punk research lab, and we employed we had two
Speaker 1: eight employees, including a large at that time. Now, you
Speaker 1: said cipher punk, so a lot of listeners may not
Speaker 1: understand what that is. So what what was the cipher punk? Um?
Speaker 1: So the cipher punks was kind of ad hoc group
Speaker 1: that create was created right around the time that the
Speaker 1: FBI rated a bunch of hackers in something called Operations
Speaker 1: Send Devil where Sun Devil where they essentially rated a
Speaker 1: bunch of teenage hackers, and they barged in and treated
Speaker 1: them like essentially isis earists, And a whole bunch of
Speaker 1: teenagers found themselves being essentially jackbooted by secret service FBI
Speaker 1: held without their rights. You know, a bunch of very
Speaker 1: innocent teenagers who were exploring computer networks. This is in
Speaker 1: the mid to late nineties, late eighties, and that's what
Speaker 1: led to the creation of e f F, which is
Speaker 1: Electronic Frontier Foundation. It was created by John Gilmour John
Speaker 1: Perry Barlow and created Lotus one, two three. John Gilmore
Speaker 1: was employee number five at Sun Microsystems and John Perry
Speaker 1: Barlow was the lyricist for the Grateful Dead. Okay, wow
Speaker 1: what what what a group? And they kind of collectively
Speaker 1: were like, we need to write a declaration of independence
Speaker 1: for the Internet and we need to fight for civil rights,
Speaker 1: which was before the Internet was even really a thing,
Speaker 1: because I think that it existed, but WWW went live,
Speaker 1: this is even pre that. Well WW actually was ninety
Speaker 1: three when Timber is really published, when the first like
Speaker 1: NCS mosaic started kind of coming a lot. The HTTP
Speaker 1: protocol had been proposed, but there were no browsers. It
Speaker 1: was all tax based um and so I at the
Speaker 1: time was running one of the largest Internet providers in Canada.
Speaker 1: But previously I had been part of the computer security community,
Speaker 1: so a lot of my friends got arrested in that,
Speaker 1: and I had before I turned eighteen, transitioned into doing
Speaker 1: penetration testing for companies. So it's kind of smart enough
Speaker 1: to realize hacking was not a lifetime career. I wanted
Speaker 1: to stay in and so I really cared about civil liberties.
Speaker 1: I saw what was happening to my friends and so
Speaker 1: in I ended up building the largest Internet provider in
Speaker 1: Canada for dial Up, sold it, and at that time
Speaker 1: Phil Zermanrin was being prosecuted for exporting p GP right
Speaker 1: because they considered the p g P, which is basically
Speaker 1: the encryption the encryption. They considered that munitions like weapons
Speaker 1: because at the time only the military had encryption. Um well,
Speaker 1: it was actually the math was known, but they created
Speaker 1: something called the wasson Ear Agreement which creates created this
Speaker 1: kind of control and treated math as an exportable munition,
Speaker 1: like exporting nuclear technology. So you could be prosecuted in
Speaker 1: the United States if you exported strong encryption. That's where
Speaker 1: later my partner in block Stream out of back created
Speaker 1: the t shirts with encryption algorithms and sold them so
Speaker 1: people could wear munitions on plants. That's right. Um now,
Speaker 1: so we had a thesis. After I sold my I
Speaker 1: s P, I created a company which was, if we
Speaker 1: can make encryption tools as easy as Netscape made browsing
Speaker 1: the web, maybe we can build privacy and the base
Speaker 1: layer of the Internet. We had kind of three maintenance.
Speaker 1: One was an anonymous I P browsing, So we invented
Speaker 1: something called the Freedom Network, which was a precursor to
Speaker 1: tour that the Naval Research Laboratory later came out with.
Speaker 1: So we ran it. We had it running. Then we
Speaker 1: tried to develop and roll out electronic cash, anonymous electronic cash,
Speaker 1: and heading up that development was dr Adam Back, who
Speaker 1: I hired to build our cash. And then on top
Speaker 1: of that, we wanted to have private identity, the idea
Speaker 1: that you could prove your over a team without ever
Speaker 1: revealing your name. And so we said, if we build
Speaker 1: these three kind of pillars, the Internet can actually develop
Speaker 1: with privacy as the base layer, without surveillance capitalism. And
Speaker 1: unfortunately we got way ahead of our skis. We grew
Speaker 1: too fast. The dot com collapse forced us to fire
Speaker 1: all our researchers, pivot the company. We ended up making
Speaker 1: it financially successful, but in terms of the social and
Speaker 1: civic goal us that we had to kind of promote
Speaker 1: privacy in the world, I think we actually failed miserably.
Speaker 1: It seems like it's an uphill battle. Well, starting from
Speaker 1: the eighties when you did, or into the nineties, I
Speaker 1: would imagine it's the uphill battle because even today, in
Speaker 1: today's day and age, which has gotten crazy with the
Speaker 1: dystopian future that we're living in. Um, even today, a
Speaker 1: lot of people still don't understand why they even need privacy.
Speaker 1: And I'm guessing back in the eighties and nineties was
Speaker 1: probably even a much harder sell to try to explain
Speaker 1: to people why they needed privacy beyond the beyond the
Speaker 1: hacker community. Yeah. So it was so funny because all
Speaker 1: of our market data and all the market research we
Speaker 1: tried to do everything gave us these we really bad
Speaker 1: signaling in the sense that we would put a hundred
Speaker 1: people in a room and say how much do you
Speaker 1: care about your privacy? And it would score off the charts.
Speaker 1: People were afraid to put credit card like, no one
Speaker 1: was shopping online because we're afraid to put credit cards
Speaker 1: off at this phase, this was I started. I started
Speaker 1: the e commerce business in two thousand one at the
Speaker 1: bottom of the dot com crash, and so right, I remember,
Speaker 1: even in two thousand one, people were very afraid to
Speaker 1: put their credit in. You remember, we had flus, we
Speaker 1: had cyber cash. We had all these companies trying to
Speaker 1: build alternative digital currencies. They were all centralized. But this
Speaker 1: was the error when we tried to buy digit cash
Speaker 1: out of bankruptcy. So we actually have the cipher punk
Speaker 1: ideals and we're like, if we roll out anonymous show
Speaker 1: like show me in totally, like David chomb private he cash,
Speaker 1: it can actually form the commerce engione for the Internet
Speaker 1: before credit cards were the north. So what you're talking
Speaker 1: about there is is something I want to dig into
Speaker 1: a little bit. UM talking about different versions of early
Speaker 1: versions of cryptocurrency, digital cash, pre bitcoin, etcetera. Um, you're
Speaker 1: listening to the Mark Moas show. I'm sitting down with
Speaker 1: Austin Hill. We're talking from Miami at the bitcoino conference.
Speaker 1: UM talking about the early days of bitcoin. Um and
Speaker 1: so he he was there in the beginnings. We're gonna
Speaker 1: talk about that. I want to talk about. Yeah, I
Speaker 1: mean a lot of people, a lot of people use
Speaker 1: this fake this analogy that you know, Bitcoin is MySpace
Speaker 1: and this Facebook will come along. So so such an
Speaker 1: old argument. But uh, but Bitcoin was not one of
Speaker 1: the first versions. Of a matter of fact, there was
Speaker 1: earlier versions. You worked on so I want to talk
Speaker 1: about that. UM. I want to get into UM, we'll
Speaker 1: talk more about this this privacy piece. UM. I want
Speaker 1: to talk about kind of the the advancements of bitcoin
Speaker 1: and kind of where we're at today with some of
Speaker 1: this new technology development. People think it's like old technology.
Speaker 1: So we've got a lot to dig into. Again, you
Speaker 1: listen to the Markma Show. We're broadcasting from Miami with
Speaker 1: the Bitcoin twit conference. I'll be right back with Austin Hill.
Speaker 1: Don't go away, all right, welcome back. You are listening
Speaker 1: to the Mark Ma Show. We're talking about the decentralized
Speaker 1: revolution that bitcoin is creating right now, and we're broadcasting
Speaker 1: from Miami from South Beach, Miami for the Bitcoin twenty
Speaker 1: two conference. Supposed to be about forty thousand people showing up.
Speaker 1: It's amazing and I'm sitting down UM with Austin Hill
Speaker 1: right now talking about the early days of bitcoin. I mean,
Speaker 1: we have forty thousand people here, and for sure there's
Speaker 1: no way well maybe you could have predicted there could
Speaker 1: have been forty thousand people here at this point. Even
Speaker 1: I was before the break, I was talking how I
Speaker 1: started e commerce? Is this in two thousand one? And
Speaker 1: I there was no Shopify, there was no like WordPress like.
Speaker 1: It wasn't easy. And um, I went to these brands
Speaker 1: and I said, hey, I built this website. I want
Speaker 1: to sell your products on my website. And they laughed
Speaker 1: at me. No one would ever buy anything online. They
Speaker 1: told me. That was in two thousand one. And so
Speaker 1: we're talking here a decade earlier that you were working
Speaker 1: on this stuff. So, um, the bitcoin is my space
Speaker 1: and the Facebook will come out kind of analogy. But
Speaker 1: bitcoin was not the first version of this. So you
Speaker 1: were talking about did you cash and chom what he
Speaker 1: was working on stuff? So give us some of that
Speaker 1: background of versions that you were working on our scene
Speaker 1: that kind of led into this bitcoin. Yeah. I mean
Speaker 1: not only we, but there was a community that actually
Speaker 1: emerged out of the cipher punk mailing list called Koda punks,
Speaker 1: and they created the hind Now was the mailing list
Speaker 1: like a physical male like snail Manili was email at
Speaker 1: that time? Okay, total mail mailing list and use net
Speaker 1: use groups if you remember back in the day, there
Speaker 1: was like those were essentially like the message boards and NTPA.
Speaker 1: So there were why wasn't on them at the time?
Speaker 1: So I don't know. I didn't. I didn't really get
Speaker 1: on the Internet until probably is probably by the time
Speaker 1: I got on the Internet, they were still there. They
Speaker 1: may not have been used as much, but so you
Speaker 1: had used it, which was like a broadcast peer to
Speaker 1: peer kind of medium, not peer to peer so much
Speaker 1: as broadcast medium for newsgroups, which was essentially message boards
Speaker 1: back in the day. And you had mailing list and
Speaker 1: so there was cipher punks, and then offshoot of that
Speaker 1: was Koda punks, and that's where the adage of cipher
Speaker 1: punk's right code. Because the manifesto that Tim May wrote,
Speaker 1: who was one of the co founders of the cipher
Speaker 1: punk movement, was we believe that the tools of cryptography
Speaker 1: are where we'll find our freedom. There's this new world
Speaker 1: we can build in cyberspace where we exist beyond the
Speaker 1: reach of government, beyond the reach of authoritarian companies. You know,
Speaker 1: is that is that what it's always been like the
Speaker 1: you know, the Pilgrims left for America to get away
Speaker 1: from the here any of the government. Like people moved
Speaker 1: west in the United States, they moved to the West
Speaker 1: coast to kind of start this new frontier. People going
Speaker 1: to the sea and now people going to the internet,
Speaker 1: and like we're always trying to get away kind of
Speaker 1: keep our sovereignty or autonomy from the state. Certainly, a
Speaker 1: lot of the underpinnings in the cipher punk movement was
Speaker 1: changing the balance of power exactly, the balance of power.
Speaker 1: That's a key piece. That's where bitcoin does. It wasn't
Speaker 1: so much that we don't need this or that this
Speaker 1: is entirely bad. It was just if all the power
Speaker 1: is concentrated in the hands of the few at the
Speaker 1: expense of the many, then you have this imbalance of
Speaker 1: power where you will always become victim to mass Yeah,
Speaker 1: you know, mass thought, mass programming, um, you know, waves
Speaker 1: of popular opinion. And your rights as a self sovereign individual,
Speaker 1: whether it's property rights, freedom of speech, the rights to
Speaker 1: express yourself should not be dependent on the whim of
Speaker 1: the it's a it's a it's a difference of being
Speaker 1: a customer who's valued and given value back, or a
Speaker 1: surf or a subject who's just treated, or a or
Speaker 1: an asset which spot and sold. You know. Sure, so,
Speaker 1: so it's either like hey, the think of it, like
Speaker 1: going to Disney World, I pay one flat fee and
Speaker 1: I can choose to pay that fee. Now there's cheaper
Speaker 1: amusement parks that go to if I want to pay less.
Speaker 1: But they treat me as a customer, They value me,
Speaker 1: they want my business versus the state that could just
Speaker 1: take whatever they want without asking. So it's it's it's
Speaker 1: it's changing the balance of power shifts them to kind
Speaker 1: of take that more of a relationship. I mean, we
Speaker 1: ran this famous ad when we thought we were flying
Speaker 1: too high, too close to the sun, we had raised
Speaker 1: too much Frenchshire capital. But we ran this national and
Speaker 1: campaign that had children with barcodes on their forehead that
Speaker 1: says I am not a piece of your inventory on
Speaker 1: the Internet. I am in control. My data belongs to me.
Speaker 1: You will not buy me and sell me. And embedded
Speaker 1: in the bar codes we actually had a hidden cryptographic
Speaker 1: message which got a lot of attention. Um, it was
Speaker 1: great conceptual, great ad agency, total waste of money because
Speaker 1: it was just too early. Then, well, you know, we
Speaker 1: expected all these privacy signaling that we got when everyone's so.
Speaker 1: I famously made this quote at a conference that was
Speaker 1: kind of repurposed by a bunch of cryptography people. You
Speaker 1: got a hundred people in a room and you asked
Speaker 1: them if they care about their privacy, will say yes.
Speaker 1: Take the same hundred people two weeks later, stick them
Speaker 1: in a different room and asked them if they wanted
Speaker 1: years free McDonald's in exchange for a DNA sample, and
Speaker 1: will say yes. Because it's so ephemeral that people make
Speaker 1: bad decisions about their privacy every day, because the consequences
Speaker 1: of making a bad decision are so postponed, and it
Speaker 1: requires such a level of technical, nuanced understanding consequences that
Speaker 1: people It's like people who say I care about the Rman,
Speaker 1: but I'm gonna buy an SUV because they offer convenience. Well,
Speaker 1: so the key word that you said there is nuance,
Speaker 1: and today people are not able. The majority of people
Speaker 1: aren't able to and I just did it myself. The
Speaker 1: majority of people aren't able to pick up on that
Speaker 1: nuance and that is what changes everything. So to your point,
Speaker 1: when you say do you care about privacy, They're like, oh,
Speaker 1: I have nothing to hide, I guess right. Then you're like, okay,
Speaker 1: give me your phone, let me let me go through
Speaker 1: your phone. They're like no, So if you kind of
Speaker 1: put in that, like you know, like let me let
Speaker 1: me browse through your history and see what you got,
Speaker 1: and then they wouldn't want that. And then you know
Speaker 1: they kind of have to see that that that example
Speaker 1: there um and then and then even nuance back to
Speaker 1: the SUV in the climate, Like, I love the environment
Speaker 1: more than anybody. I surf, I'm in the water every day.
Speaker 1: I'm in the mountain snowboarding all winter long. I wanted
Speaker 1: to be preserved and clean for my kids. But I
Speaker 1: drive a truck. But I've done the research, and I
Speaker 1: have feelings about certain things. But there is nuance, and
Speaker 1: I understand the consequences. I understand the cost, I understand
Speaker 1: the actual and that effect. I've actually I'm very very
Speaker 1: comfortable saying, Okay, you know where I live. I moved
Speaker 1: to Latin America from Canada, and I'm like, okay, I
Speaker 1: support green grids, I support smart grids. I support all
Speaker 1: these things. But they don't exist. Yeah, you know it
Speaker 1: sounds good if they don't exist. So um, so then
Speaker 1: you're working on you're working on this, Uh, you worked
Speaker 1: on previous versions of bitcoin. And I then went into
Speaker 1: venture capital, where I invested in a bunch of startups
Speaker 1: above and beyond just crypto and security. Um that was
Speaker 1: in Canada created like a Canadian version of y combinator UM,
Speaker 1: which is a very famous startup accelerator in San Francisco.
Speaker 1: And uh, right around two thousand eleven, a bunch of
Speaker 1: friends started messaging me saying, Austin, you've gotta pay attention
Speaker 1: to bitcoin. And at the time, I had been retired
Speaker 1: and I was trying to become a professional poker player,
Speaker 1: very arrogantly playing way above my skill level and having
Speaker 1: to humble myself UM, and I basically messaged them back
Speaker 1: and they were like, Austin, this de cash thing is
Speaker 1: finally real. And I wrote them back saying, basically, go
Speaker 1: after yourself. I was like, I just spent eight million
Speaker 1: dollars and ten years trying to do this. I'm glad
Speaker 1: someone figured it out, but I'm not ready to look
Speaker 1: at it. So so let's let's talk about that. I
Speaker 1: want to UM because to the point that we're making it,
Speaker 1: Bitcoin wasn't the MySpace. Bitcoin was many iterations later, and
Speaker 1: they solved a problem that couldn't be solved. I think
Speaker 1: that was kind of a key piece that differentiated it.
Speaker 1: So I want to I I want to talk about that.
Speaker 1: You're listening to the Mark Moa show. I'm broadcasting from
Speaker 1: South Beach, Miami for the Bitcoin two conference. Um here
Speaker 1: sitting down with Austin Hill, early early early bitcoin, cipherpunk.
Speaker 1: We're talking about some of the early days and and
Speaker 1: we're gonna talk about more and we get back about
Speaker 1: how bitcoin wasn't the first version, what really changed from
Speaker 1: the earlier versions, and then we'll bring it all the
Speaker 1: way back to the forward to here. Forties people in Miami.
Speaker 1: You listen to the Mark mo Show, sitting down with
Speaker 1: Austin Hill. Got a lot more to go over. Do
Speaker 1: not go away, I'll be right back. All right, Welcome back.
Speaker 1: You are listening to the Markma Show. And we're talking
Speaker 1: about bitcoin. We're talking about the decentralized revolution. We're talking
Speaker 1: about why forty people are in South Beach, Miami right
Speaker 1: now for the bitcoino conference. I'm sitting down with Austin Hill.
Speaker 1: He's an early early, early bitcoin adopter, programmer, investor, and
Speaker 1: we were talking about the early day. So before the break, Um,
Speaker 1: you were talking about different versions of digital cash whatever
Speaker 1: it's called cryptocurrency. I don't know what it was called
Speaker 1: at that time, but but that led up to bitcoin.
Speaker 1: But Bitcoin solved a problem that the double spin problem.
Speaker 1: I guess that it was at the big differentiation double
Speaker 1: spend had been solved before was show me an e cash,
Speaker 1: but it depended on a central life server. Oh okay,
Speaker 1: And so there were versions of the diggi cash mint
Speaker 1: and we all played around with diggi cash um David
Speaker 1: Chom and diggi cash went bankrupt and it was actually
Speaker 1: patents that prevented anyone else from innovating. So patents held
Speaker 1: by r s A and patents held by digi cash
Speaker 1: ended up blocking most of the cipher punks who wanted
Speaker 1: to build things open source and free because they were
Speaker 1: worried about patent in frging and getting sued. So the
Speaker 1: cipher punks were incredibly frustrated. There were various forms of
Speaker 1: algorithms that were beginning to develop elliptic curve, uh, you know,
Speaker 1: other mechanisms. There were some startups that actually tried to
Speaker 1: do this. Brame Cohen, who invented bit torrent, tried with
Speaker 1: mojo Nation. Incredible idea. It was a way to pay
Speaker 1: for content and build peer to peer networking, and it
Speaker 1: was built with the eye to replace Napster and ended
Speaker 1: up becoming bit torrent. But They actually had a previous
Speaker 1: startup that had payments, content creators, e commerce, everything called
Speaker 1: mojo Nation. There were other attempts to do this um.
Speaker 1: Adam Back had invented hashcash, which was a way of
Speaker 1: developing digital scarcity in the form postage stamps for spam abuse.
Speaker 1: That's when we hired him to come work for us
Speaker 1: and run our ecash lap um. So there were a
Speaker 1: bunch of was that was a decade before bitcoin um.
Speaker 1: We collaborated a lot with Nick Sabo. We worked with
Speaker 1: all these people. They were our friends, they were our community,
Speaker 1: and we were all trying to figure out how do
Speaker 1: we build the perfect version of the cash um. A
Speaker 1: lot of the cipher punk's missed or miscategorized Bitcoin early
Speaker 1: because it was so far different from the vision that
Speaker 1: we had, which was totally blinded privacy enabled the cash
Speaker 1: by moving to a totally decentralized and solving the problem
Speaker 1: of double spend in a totally different orthogonal way, which
Speaker 1: was we'll give everyone a copy of the ledger and
Speaker 1: we'll solve the Byzantine general's problem, which for listeners, was
Speaker 1: a very famous problem in computer science, which very kind
Speaker 1: of dumb down, which is if you assume that all
Speaker 1: your communication lines are untrustworthy and you want to coordinate
Speaker 1: with multiple parties around the world. How do you end
Speaker 1: up building trust when you can't trust what you send them.
Speaker 1: This was known as the busy team in General's problem,
Speaker 1: which was based off this kind of idea of if
Speaker 1: a bunch of lieutenants are trying to attack a city
Speaker 1: and you want to coordinate them all to attack at
Speaker 1: the same time, but you can't trust your communication method,
Speaker 1: how do you actually coordinate? And it was a famous
Speaker 1: problem in computer science that Satoshi famously solved in a
Speaker 1: very kind of weird way. He said, what if we
Speaker 1: assume everything is public, accept some discordination, but every ten
Speaker 1: minutes we force everyone to get on the same page.
Speaker 1: And part of what prevented that from being working was
Speaker 1: something called inflation control around digital scarcity, so we had hashcash.
Speaker 1: One of the things that Adam Back had not invented
Speaker 1: was a way to deal with inflation control. So essentially,
Speaker 1: people with the most amount of money to spend on
Speaker 1: CPUs could essentially inflate the economy and outperform everyone else.
Speaker 1: Sotoshi invented something called the difficulty adjustment, which forced everyone
Speaker 1: to come back to an even keel. So Bitcoin every
Speaker 1: two weeks says we're going to monitor the health of
Speaker 1: the network and we're going to reset programmatically in an openly,
Speaker 1: in fair way. Yeah, for the for the listeners, the
Speaker 1: difficulty adjustment is one of the very many things that
Speaker 1: are just genius in bitcoin. And so what happens is
Speaker 1: like with gold, for example, um gold has very low
Speaker 1: stock to flow ratio, meaning that inflation, right the amount
Speaker 1: of new gold produced is very low compared to the
Speaker 1: stock of existing gold. But if gold, let's say right now,
Speaker 1: it's an let's say went to ten dollars an ounce,
Speaker 1: a lot of people would go mind gold, and more
Speaker 1: gold would come out of the ground. But with bitcoin,
Speaker 1: if more people go mind bitcoin, it doesn't bring any
Speaker 1: more bitcoin out. They just have to split the bitcoin
Speaker 1: amongst all those new players, and new players can come
Speaker 1: on or like what happened last year with China where
Speaker 1: they knocked off six of the mining power than the
Speaker 1: difficulty adjustment adjusted and then everything got back to normal. Well,
Speaker 1: and that's what makes bitcoin so perfectly at least under
Speaker 1: every examination by true economists, even true gold bugs who
Speaker 1: approach it honestly can say This is the best form
Speaker 1: of sound money, the best form of non sovereign money
Speaker 1: that's ever existed, because even when you start getting into
Speaker 1: like new technology, singularity tech, there are new singularity tech
Speaker 1: stuff I see every day in my venture capital investment.
Speaker 1: Liquid plasma drilling, autonomous drone drilling that can go down
Speaker 1: and it will be able to extract gold at prices
Speaker 1: and a cost basis that no one's ever even imagined,
Speaker 1: like a thousand x cheaper than to ad. And so
Speaker 1: when people are able to extract gold at a thousand
Speaker 1: x cheaper than today, we have no idea actually how
Speaker 1: much gold is actually in the planet, And if they
Speaker 1: start releasing we end up with the de Beers diamond situation,
Speaker 1: where a few cartels can totally control the gold market
Speaker 1: and you end up with a very centralized, essentially you know,
Speaker 1: central bank approach to even gold. Same with asteroid mining.
Speaker 1: So whatever ends up being that trigger, whether it's price increase,
Speaker 1: evolving technologies, space exploration, gold is totally unpredictable, but bitcoin
Speaker 1: just totally transparent. We know about that. Yeah, So let's uh,
Speaker 1: let's let's fast forward a little bit, because we don't
Speaker 1: have all the time in the world as as as
Speaker 1: as fun as it would be to kind of go
Speaker 1: back all the way through the all the way through that.
Speaker 1: Um So, you work on the early versions, um a
Speaker 1: decade before bitcoin came around. Bitcoin to your point, Stosian
Speaker 1: Akamoto solve this general's problem. Um I want to kind
Speaker 1: of move forward to kind of wear we're at today.
Speaker 1: I know you're working on a bunch of new technology
Speaker 1: that's kind of still kind of in that space before
Speaker 1: we do. Um So. I was just interviewed recently two
Speaker 1: weeks ago, I think at the Unconfiscatable conference over there
Speaker 1: as well. Um I was interviewed for a documentary they're
Speaker 1: doing about who is Satoshi Nakamoto? And uh, what's your answer?
Speaker 1: Um So? I have three very firm beliefs on this
Speaker 1: good um A, whoever he, she, or they are, they
Speaker 1: have earned deserve and we should all respect their pseudonymity
Speaker 1: because we have absolutely no idea of the personal risks, consequences,
Speaker 1: and or long term effects that penetrating that pseudonymity by
Speaker 1: speculation and setocia hunting may provide good good answer. Yeah,
Speaker 1: how Fingy's wife was dealing with kidnapped requests, uh, threats
Speaker 1: to her children and bomb threats for our house as
Speaker 1: how Finny was dying where for the listeners heal. Finny
Speaker 1: was one of the known early developers on on bit
Speaker 1: quin and many people suspected he was so she secretly right,
Speaker 1: which is why he was getting the bomb threats. How
Speaker 1: was a friend of ours. We worked with him at
Speaker 1: p GP. He was an known cipher punk. He was
Speaker 1: the first person to publicly received He ended up developing
Speaker 1: a LS so he was in a wheelchair, trying to
Speaker 1: take care of his family and enjoying his last days,
Speaker 1: and he had to deal with people threatening to kidnap
Speaker 1: his kids unless he paid a bitcoin ransom. So just
Speaker 1: based off that second issue early people who were in
Speaker 1: the community. There's a problem that David Schoon posted called
Speaker 1: the dining cryptographer's problem, which is if enough people know
Speaker 1: part of a secret, they can collaborate to hurt the
Speaker 1: secret holder. So we early cipher punks all made a
Speaker 1: pledge to each other that we would never do anything,
Speaker 1: we would not compare and speculate to invade Totoshi's privacy.
Speaker 1: It's good, I I mean, and and you're you're working
Speaker 1: on technology to preserve privacy, so of course why would
Speaker 1: you want to go and work against that privacy. You're
Speaker 1: listening to the markma Show. We're talking about bitcoin. We're
Speaker 1: talking about the early, early, early days of bitcoin, and
Speaker 1: who is Toian Docomoda. I'm joined by Austin Hill. We
Speaker 1: are in Miami for the Bitcoino conference. There's forty thousand
Speaker 1: people here coming to talk about bitcoin fixing the money,
Speaker 1: fixing the world. We're talking about the early days with
Speaker 1: Austin Hill. When we come back, we'll finish talking about
Speaker 1: Tocian Komodo, and then I want to jump forward and
Speaker 1: talk about some of the new technologies that are being
Speaker 1: built on bitcoin. Be right back, all right, welcome back.
Speaker 1: You are listening to the Mark Moa Show. We're talking
Speaker 1: about the the intersection of politics, finance and technology, which
Speaker 1: of course is bitcoin. We're talking about the decentralized revolution
Speaker 1: and how it is changing the world. We're talking from
Speaker 1: Miami Beach where the Bitcoin conference is here with forty
Speaker 1: thou people, and I am sitting down with one of
Speaker 1: the early adopters of bitcoin, Austin Hill. We were talking
Speaker 1: about before the break um, the early days, even a
Speaker 1: decade before bitcoin was invented, in how they were working
Speaker 1: on it. What it's solved. But Austin, before the break,
Speaker 1: you were just kind of finishing up a couple of
Speaker 1: points on situation Alcamotive. One, we should, um, we should
Speaker 1: probably just preserve his privacy whoever it was, not trying
Speaker 1: to hunt him down because it causes harm to other people.
Speaker 1: And I think you had some more points that you
Speaker 1: want to make their. Yeah, I mean the second was, um,
Speaker 1: those of us who were in the early community kind
Speaker 1: of felt an allegiance or an ideal commitment to if
Speaker 1: we really wanted to, maybe we could break this person's privacy.
Speaker 1: But why were we always in this right like, for
Speaker 1: for privacy and for self sovereignty and for the economic
Speaker 1: freedom that comes with non sovereign money. So what are
Speaker 1: we doing trying to compare notes to invade anyone's It
Speaker 1: may be someone in the room, It maybe one of
Speaker 1: our friends. It maybe there are a bunch of cipher
Speaker 1: punks who died and maybe someone who passed away and
Speaker 1: most likely was but there there are there are suspect
Speaker 1: lists that are longer and more well known than's ever
Speaker 1: been discussed. But we agreed amongst ourselves let's not compare,
Speaker 1: Let's not contrast, Let's not add to this idea of
Speaker 1: setoc hunting. And the last one is the most actually
Speaker 1: important one. UM in the idea of decentralization open source.
Speaker 1: Every open source project has faced the idea of how
Speaker 1: do you develop a leaderless hydra head And that's a
Speaker 1: big piece. Uh. Lenox had Linus tor Volt. It had
Speaker 1: a bunch of lieutenants, including people like Rusty Russell, who
Speaker 1: built Lightning for Blockstream. Incredible developer. He spent twenty years
Speaker 1: on the front line of trying to defend Linus and
Speaker 1: uh you know some of his very unique personality and
Speaker 1: strongly held opinions on how to build Lennox. But as
Speaker 1: long as there is a central head, every single one
Speaker 1: of these systems are weaker because there is someone you
Speaker 1: can advocate against, there's someone who can influence of community.
Speaker 1: And so if you think about it in the terms
Speaker 1: of religion, you can be agnosted or whatever. Just historically,
Speaker 1: UM a religion where people can adopt the name of
Speaker 1: the figurehead of the religion Buddha, Mohammed, Jesus, uh you know, Taoists,
Speaker 1: Joseph Smith for Mormons, whatever, when people can interpret them
Speaker 1: after they're dead and say I speak for this person,
Speaker 1: and you have a leader, leader based organization that has
Speaker 1: higher archies of organization. People love hierarchies of organization because
Speaker 1: they love to be told what to do, and any
Speaker 1: single structure like that makes it very very easy to
Speaker 1: find an attack surface where you can weaken the underlying
Speaker 1: organ By Bitcoin remaining flat and saying we are leader lists,
Speaker 1: it comes at a cost. There is no spokesperson for bitcoin.
Speaker 1: There are people who stand up and say I speak
Speaker 1: for Bitcoin, who are horrible for bitcoin and actually promoting coins. Yeah,
Speaker 1: but that cost is worth it because with no leader,
Speaker 1: there is no central point of attack, and every other
Speaker 1: coin who has tried to replace Bitcoin is weaker less
Speaker 1: than and we'll never achieve its goals because it is centralized.
Speaker 1: It has a leader, and it has a group that
Speaker 1: more often than not has stolen from consumers to fund
Speaker 1: their marketing budget to promote their centralized structure. Yeah, that's
Speaker 1: a great point. With bitcoin, we call it your reference religion.
Speaker 1: It's like the Immaculate conception. It was just created. We
Speaker 1: don't know who created it. We don't need to know um,
Speaker 1: and it's better that we don't ever find out. Because
Speaker 1: to your point, I agree with you. We don't want
Speaker 1: a leader. We can see you know ethereum with atalic
Speaker 1: butterin in order Charles Hoskinson and how that works, and
Speaker 1: we definitely don't want somebody like that. And and even
Speaker 1: the attack vectors, like you said, the attack service, you know,
Speaker 1: someone to squeeze the top if if need to be whatever.
Speaker 1: So all the things I agree with you on that.
Speaker 1: Moving forward, let's say we run out of time here. UM.
Speaker 1: So a lot of times we think that bitcoin is
Speaker 1: old tech, UM, and you know, now there's all this
Speaker 1: new tech and they have all this smart stuff built
Speaker 1: into the into the base layer chain, UM. And maybe
Speaker 1: they just they have this misunderstanding how technology works and
Speaker 1: how it works in layers and how it scales. So
Speaker 1: talk to us about some of the stuff that's happening today, UM, bitcoin.
Speaker 1: You know, from being with blockstream and lightning labs and stuff,
Speaker 1: obviously a lot of stuff being built on lightning labs. UM.
Speaker 1: Are we at a point now building technology that you
Speaker 1: maybe didn't think we'd get to and are you encouraged
Speaker 1: by that or what do you think? I am stated
Speaker 1: that today I'm an endless optimist when it comes to technology. UM.
Speaker 1: I always see you know, class half four versus glass
Speaker 1: half empty, right, Um, but I am still surprised at
Speaker 1: how much work has been done by the community and
Speaker 1: actually how fertile a ground that people are now planting season.
Speaker 1: I was just in El Salvador. I was blown away
Speaker 1: by the excitement the changes that are occurring there. Um awesome. Yeah,
Speaker 1: so hard for people in traditionally North America because I
Speaker 1: think we live such a privileged life and we're so
Speaker 1: used to frankly, this kind of like terminal uniqueness. And
Speaker 1: I refer to terminal uniques as as terminal disease, because
Speaker 1: we somehow believe we're so unique in the world, and
Speaker 1: but we were, in fact so privileged when you actually
Speaker 1: look at the countries who are actually suffering from being unbanked,
Speaker 1: suffering from no credit, suffering from you know, the only
Speaker 1: credit market existing to be gangs and like overnight lenders
Speaker 1: and like loan charts. Um, you know, the average loan
Speaker 1: size in some of these countries is five and you
Speaker 1: pay a week interest and that is the only loan
Speaker 1: you'll ever get because banks refused to even open an account.
Speaker 1: And so here we're like, you can be an eighteen
Speaker 1: year old student who just has a name, and you
Speaker 1: get two thousand dollars in credit or two to college exactly,
Speaker 1: like we live such a privileged life that we're actually sheltered.
Speaker 1: I think from how powerful the changes in bitcoin are occurring,
Speaker 1: and so bitcoin, I think through better engineering, has actually
Speaker 1: built a platform that will and is going to change
Speaker 1: the world, and people don't see it because good engineering
Speaker 1: takes time. The best analogy I give to this is
Speaker 1: if you're waiting every day in line trying to get
Speaker 1: to New York City from New Jersey and you're just
Speaker 1: you're tired of traffic, and someone comes to you and says,
Speaker 1: don't wait in traffic anymore. This weekend. We designed a
Speaker 1: three layer bridge and we built it last week. Come
Speaker 1: drive on layer two. I, as a driver, would be
Speaker 1: a little suspicious if they built that in a week.
Speaker 1: Is that really something I really want to trust my
Speaker 1: car weight on? Right? Like? Maybe I really want to
Speaker 1: wait until their safety test civic engineering, safety engineering, stress
Speaker 1: metal tests. Like there's a reason why some of these
Speaker 1: infrastructure projects take time. I'm not going to hop on
Speaker 1: a plane that says we have the cheapest tickets to
Speaker 1: Hawaii while they strapped like fold out chairs to the
Speaker 1: wing right, like, and so many of the ship coins
Speaker 1: and the alt coins have taken that approach, move fast
Speaker 1: and break things. We don't care about safety. We're all
Speaker 1: about innovation, and we're willing to do it at the
Speaker 1: cost of people's money. And that's one of the biggest
Speaker 1: risks that Bitcoin has actually have to suffer, is because
Speaker 1: it deals with the reputational damage of all these other
Speaker 1: experimenters who are taking risk that Bitcoin chose not to take. Like,
Speaker 1: there is a reason we do not give power users
Speaker 1: who buy electricity from a nuclear power station control and
Speaker 1: decision making on how the nuclear power station is made.
Speaker 1: There are nuclear engineers who actually build nuclear power station
Speaker 1: who deserved to actually design the safety protocols. You as
Speaker 1: a customer should have no right or no say in
Speaker 1: how that nuclear I don't know anything about. Yeah, but
Speaker 1: we didn't take that approach with so many of these
Speaker 1: ship cooins. So people create these dows, they create these
Speaker 1: weird crypto they use all these things to invite usually
Speaker 1: people to lose their money. Yeah, yeah, that's a good point.
Speaker 1: That's a good point. Also you think about like, um,
Speaker 1: you know, back to kind of these leader uh not leaderless,
Speaker 1: but having leaders platforms, so like metallic buter and goes
Speaker 1: back and changes the monetary issuance of ethereum. And imagine,
Speaker 1: if you know, they change the t c P i
Speaker 1: P protocol with trillions of websites built on that, applications built,
Speaker 1: and then they just change the protocol and doesn't work,
Speaker 1: or gravity change and all these buildings came falling down.
Speaker 1: It's a great point and that's one of the benefits
Speaker 1: a bitcoin that nobody can control that. Um. You're listening
Speaker 1: to the markma Show. I'm sitting down with Austin Hill
Speaker 1: talking about the history of bitcoin, and it's important to
Speaker 1: talk about it today because we're here in Miami with
Speaker 1: forty people for the Bitcoin call o friends, and that's
Speaker 1: what I got for you today. Thanks so much for listening.