Hello and welcome to episode a Bitcoin episode 52. My name is Brian David Crane and today's August 10th 2014, Sebastian is still on vacation, he's about to come back I think tomorrow. So from next week on we will be back in the server original constellation. But this time again I'm sort of a sort of rose and I'm joined today by two people and their ear are Miller and fair Stevens.
Here is the CEO of coin support and report this wallet provider Merchant solution that he found it together with Erik Voorhees in 2012. So of course, Erik Voorhees is very well known in the community, I think, primarily for Satoshi dice. But but he's also been involved in other projects. Instant kind of a spokesperson for a long time and then prayers a marketing specialist for calling apple. And this is also the founder of
the Bitcoin UK podcast. So I still haven't actually gotten around listening to another episode, but she has great views of It's one of my goals as to see that as soon as possible. So today we will be talking about Corner pulled and especially by the new feature, they launched was called locks and the locks features kind of addressing a really key criticism that's often heaped on bitcoin which is the volatility. And it's often seen as soon as a roadblock in the way of mainstream adoption.
So they're trying to address this with this, the locks feature, and it's a really cool now. Interesting. And they're also talking about a project called, Let It Drop. And the basic project, the basic idea of the project is to bring Bitcoin to Caribbean island. So sounds of course we we cool. So, here are a, thanks so much for joining me today. Hi, yes, you're welcome. Thanks Brian. By the way, it's IRA. Oh, a poultice Tyra. Yeah, no worries.
So I owe you down in Panama at the moment I am. Yeah, it's a nice sunny day so let's just perhaps a dive in. Can you tell us a bit about how do you get started with pineapples? So Eric and I started Corner Pole to in January of 2012 and it was designed just to be a very, very simple wallet to allow people to introduce new users, to bitcoin, by sending it to Email or cell phone. And it was really designed as the simplest possible way to do
this. So at, you know, the original Quantum pulp.com just had a form that said, email address message and then it would allow you to to deposit some Bitcoins to an address for the recipient. We've taken that concept and turn it into a much more sophisticated wallet service. Now, with accounts and some Advanced hedging features like you mentioned. So So what made you in 2012, decide on starting a wallet service. Did you feel that was a kind of a big gap at the time?
It was at the time actually we were the first I believe the first Bitcoin over email service and also the first SMS only
wallet. So you know, there a lot of people that have wallets where you can send somebody an SMS and then it redirects them to a web page where they log in and start using, but They didn't have the internet then they wouldn't be able to use it. Our system is different in that it allows people to use Bitcoin using only SMS messages, but you still have to set up a wallet online. Then, no, you don't. You can simply receive a text message. It says, you know, welcome to
Kona pulled. You've got some Bitcoin when you want to send it to someone else, you just text back to us, you say, send it to this number, and we sent a similar message to them. Wow, that's really interesting. So I guess that's slightly off topic. Just as beginning but let's get into that. Then you are you familiar with 37 points and how does this compare to the 37 coins service? I am familiar with 37 coins, they've got a great model and it's very similar.
I said we were the first such wallet but now there are others popping up and they're very welcome. This is very hard to do because you need tell Cam Partners in various places and 37 points is picked a Innovative way of getting around that by allowing their users in various countries to kind of become nodes for their, their Network. Now, how cool. So, did you guys see any traction with this SMS service? We saw some traction. There have been, some people using it for in the last two
years. Since it came out, unfortunately, due to our Telecom providers, we were only able to launch it in the US and Canada over the last two years. And it really just isn't a very good fit for those markets. You know, most people in those markets have the internet and have smartphones and can use more advanced Bitcoin wallets. But we think that SMS is a great fit.
It for Bitcoin overall. Because most of the unbanked people in the world, well, maybe not most, a lot of the unbanked people in the world don't have internet access and they do have feature phones. So it can you talk a little bit about how coin apples develop? So you originally there was this idea of having a really usable where wallet and the SMS thing and I guess this was super early for Bitcoin company know, it's like more than two two and a half years ago.
Which is sort of dinosaur age in the Bitcoin world. So what has happened since then and how has your division for coin Apple changed over time? Say, we initially launched, these consumer wallet Services, the to allow people to send over email and SMS, we offered these services for free. So basically, we didn't make any money off of it. To kind of help fun things and pay the bills feed us. We started doing big business to business services so people
could sign up with our API. II and send to their users over SMS. And so on, after some time, we'd also developed some very sophisticated Market making software, that would allow us to buy and sell Bitcoin to basically act as a broker. We did that for quite some time, maybe the last year and a half. We've been doing that sort of business, for instance, you may have purchased, if you're in Europe, Bitcoins from say fellow. We help them acquire and clear all of their Bitcoins.
Basically, this Market making software that we used for liquidity. Providing turned into our locks technology that we're now, allowing all of our consumer wallets to access. So is that market-making service are you doing with Arbitrage? So over you, were you using different exchanges to Yo trade. And basically, you are charged on them or is that the software service you're providing to exchanges or Guest Services likes, a fellow that directly sell Bitcoins to Consumers. Yeah.
We provide services to companies, like so fellow that need to buy and sell Bitcoins for their own business to work. And we do do Arbitrage and trade on all the, the major exchanges in this way. We feel that we can get to a To a very well-informed price, we can have a price that is more average and more stable on a global scale than any single
given exchange. And when you, when you looked at kind of forward and to kind of poked and I guess two years down the line now, where would you like to see the company? I like to see our SMS Services taking off and among the unbanked. I think that Is the most important thing for Bitcoin as a whole is to bring new consumers in and to grow access to bitcoin.
I think that so far Bitcoin has mainly gain traction, among very, sophisticated educated, people who have very good internet access who are not just able to access the internet but are typically the most Savvy people on the internet.
And I think that if we really want Bitcoins to succeed if we want the price to go up and and more People to use it, we need to expand our community beyond the most Savvy, early adopter types, and we need to reach out to people who just want a simple services and aren't necessarily trying to to jump on the coolest new technology. Okay, cool.
So the focus is really kind of on especially adoption a facilitating adoption and I guess, especially among on Bank people or people that Are kind of outside of the privileged first world educated computerized groups.
Exactly. I might just jump in here and one of the reasons I got involved with coin a pulse is, it's because, as you say, they've been in the Bitcoin seen for a while since the early days, when there was perhaps more focus on the The promise of Bitcoin is as the great equalizer and yeah, just the, the Grand Vision for quino, poult to my mind. And one reason I got involved with it is is this expanding access to people who haven't
been in the financial system? Haven't had bank accounts and just yeah, getting more people involved. Sofia is how long have you been kind of involved with Bitcoin projects? So I got involved at Christmas last year. So yeah, I'm a relative new be, but one of the things that attracted me to it was was the the ability for Bitcoin to, you know, introduce more democratic ways for people to get muddy. Does it seem Like a more democratic system to me than the sort of?
Well I most people know the story he listened to your podcast, you know the bank's centralization of of wealth and to you know privileged few. Yeah. Okay. So you were attracted to that side which I'm you know I'm sure a lot of us are and then you saw that kind of encounter poke the company that's pursuing that kind of vision and trying to realize that potential of Bitcoin. Yeah.
You know they really are involved in the in the Go game, you know, they're looking at ways to improve the Bitcoin ecosystem, you know, in the long run, you know, not just a short-term profit making, you know, which I don't know about increasingly. I see companies coming into Bitcoin space, that you know, are seeing a short-term money making opportunities and you know, it's nice to be involved with a company that have that, you know, see, see the bigger picture. Yeah absolutely.
Well let's kind of dive in a bit more into how kind of holds exactly works. So there's the locks thing which I want to talk about in a little bit and then this obviously the web wallet. Are you guys also working on mobile wallets? We're not actually working on a mobile application. At the moment I our main goal is to kind of grow access the Bitcoin ecosystem overall and they're already a lot of really good. Mobile apps out there in addition we've mobile optimized
our website. So any any mobile user can still use our wallet in a? We think a pretty good interface, this kind of protects them and us from say apple changes their mind again and decides to kick all Bitcoin apps out of the store. Our users can still access their their wallets in their funds and so on. But I'm curious. So is there a QR code scanner when you use it? On the web there's not that's one. That's one thing that's definitely missing and we will work on that.
Yeah, that seems like that should be. Also, I guess something if especially if you Target and consumer know that will be important in the future. Absolutely. Okay. So there is that and also I've also seen on your website that you guys are offering some kind of merchant services is that similar to let's say bitpay it is very similar to Sure.
To repay you. We will help your company receive Bitcoin and then immediately convert it if you wish or lock it to to gold so you can spend it later as Bitcoin again. We also do the opposite so if you're a company that wants to net purchase Bitcoin, you can sign up with us, send us some wires and we'll help you purchase when you're ready. So you guys are also providing the service of. I'm a merchant, I get Bitcoin and then you guys can take those Bitcoins, sell them.
And basically give me, let's say US dollars in the bank account or you guys exactly? Okay. So you can, I guess, choose either as a merchant, I do receive the receive the u.s. dollars or like the fiat currency or sort of get rid of the volatility, through the locks ping, or just keep the Bitcoins. Is that correct? Exactly, that's cool. I guess that's a good segue into into that locks feature.
That we should have mentioned a few times that I haven't really gotten into it. Can you tell us what the locks feature is? It's a lox is a volatility reduction tool. Basically, it allows anyone any kind of pulled user to deposit Bitcoins, into their account and then tie the value of those Bitcoins to stable asset of
their choice. So let's say that you really like gold and you think that Bitcoin is very volatile and you wish that you could store some of your value in gold and and have it fluctuate with the piranhanano. Price of gold rather than with the price of Bitcoin. You would then go to your flocks page, unquote apple.com. You would select block to Gold, say how much, how many ounces of gold you want to lock? And you can out, lock down to a hundredth of an ounce of gold or roughly $10 or $12.
When you click submit, it'll deducts, the Bitcoins or you can send it in from different wallet if you want. And then from so pardon me from that point on it's like, you have say, one gram of gold at spendable on the Bitcoin Network, anytime you want and as the Bitcoin and gold prices fluctuate, we will make sure that you always have exactly one
gram of gold to spend. So for example, if the Bitcoin price Falls in half and gold, stays roughly the same when you unlock your one ounce of gold, you should get twice as much Bitcoin back. Now, the downside of that is Is if the price of Bitcoin doubles then you unlock your old, you would get half as much Bitcoin back. Yeah, so essentially, it's similar to, let's say, I get some Bitcoins and I say I want to don't want to have the
volatility. I put it on bitstamp, I sell it for US dollar and just hold the u.s. dollars there. Of course in your case it's more convenient because it's integrated in the wallet but it's essentially a similar thing, right? It is very similar thing. Yes. I We think that we've basically made this tool just easier and more accessible, you know, you can take weeks to sign up and get approved for an account with
an exchange. And then you have to know how to use an exchange, what our limit orders, what our Market orders, you know, what does it mean to say that? You know, there's this much volume at this price. Most people don't want to have to learn all these things and they're not traitors. So we really build blocks as a tool for everyday users. So when you talk about, let's say, I want to lock it to Gold because you guys. Of course, I have to charge a fee.
No. Because essentially, on the back end, you are, you selling the Bitcoins? No. And, for example, for US dollars or for gold? Yes, we are. We are, when you block to an ounce of gold, we sell an equivalent amount of Bitcoin as you gave to us to create the lock and buy 1, ounce of gold. And in this way, this is how we can guarantee the that will always have the right. Right amount to give you in the future is because we hold a hundred percent of the collateral as far as the the fee
we charge. It's just a spread. So there are no fees in the traditional sense, but there is a difference in the bid and ask prices, typically, the difference between the bid and ask prices is 2%. So if you've locked and unlocked immediately, you would have roughly two percent less than you less Bitcoin than you started with. Over clearly the service isn't designed to be you know immediate lock and unlock that doesn't serve you any any good it's for a limited eliminating
volatility over time. So we think that over the course of maybe a week or two this one or two percent is basically wiped out by the natural volatility of Bitcoin. Yeah. I mean I guess it last week and it worked exactly the way the way advertised. I just like a one dollar. Or to lock it to or one Bitcoin $1 worth of bitcoin to lock it to dollar and then lock it back and it costs exactly to sent in the end to do that.
So I also read afterwards, I went to the blockchain and I checked, you know, what happened to my coins and they never moved from at once I paid them in. So how does that exactly work? You hold an amount of Bitcoin sort of on Nerve with exchanges or it? Can you talk a bit about the kind of what goes on behind the scenes when that happens? Absolutely. So as I mentioned here, when you create a lock, we sell an equivalent amount of Bitcoins and by the amount that you lock to.
So if you're locking an ounce of gold to continue with our example, and it's costing you to point to Bitcoins today, which is just a very rough estimate. We We'll sell 2.2 Bitcoins and buy 1 ounce of gold upon locking. And when you want to unlock, we will sell the one ounce of gold and by however many Bitcoins. It is that that market price and
make those available to you. We do have accounts on numerous exchanges and other liquidity Bitcoin, liquidity providers to be able to facilitate this and we do keep Bitcoins on reserved for these our own Bitcoins for. Exactly for facilitating this sort of liquidity. So Bitcoin that you sent us initially goes into our shared wallet and it's not necessarily that exact Bitcoin that we're promising. You back were promising an equivalent amount of Bitcoin
back and yeah, absolutely. So if you talk about the the silver thing I think that's interesting, right? So because you offer gold and silver. Now it makes sense to me that like the dollar is really easy because there's a very liquid Market there.
But when you talk about Buy gold and silver does that mean you're going to have to trade dollar for at the Bitcoin for dollar and then the dollar for silver and does that mean the fees are going to be much higher or you have some other ways of making that work, you hit the nail on the head. We do because of liquidity problem with between Bitcoin and
silver. For instance, we do purchase the silver using dollars or euros and somewhere with gold but for us Is this is not a significant cost, you know, once we've got the infrastructure set up to do this and to do the accounting for it, then it's very easy. It's not significantly harder than locking. Two dollars or Euros or British pounds for us. So we don't charge any more for it. You get the same 2% spread within your blocking silver or gold as you do with your locking
dollars or euros. No, that's cool. II will be expected that this would be more expensive. No, because you have more liquid markets, Etc, but that's really cool that you able to do this for the same be thanks. Yeah, I mean we're letting our liquidity just to provide the best possible user experience So there's one topic I kind of want to touch on, I guess before that one, one more point on this. This is that what about counterparty risk? In this case? So it obviously you guys are web
wallet. So, you know, anybody who sort of understands how Bitcoin Works, they realize that well there's a kind of party risk there. I just the same as with coin based on cetera you know if somebody hacked Sony pulled and well there's a risk but essentially we Doubling the kind of party with, no, because there's a risk on your side. I guess, in one hand and there's also the risk on the side of the parties that you guys hold those values with is that correct? That's one way to look at it.
I think that that can be we do a lot to greatly reduce that and in a lot of cases, the parties that we are holding for instance, Euros with those accounts are actually insured to some degree and we're looking at getting more advanced insurance for them. So it's not necessarily doubling the risk in some ways, we hope to actually be able to greatly reduce the risk. But yes, you know, anytime you are using a service like this. There is some counterparty risk.
We don't want to mislead people into believing that, you know, more somehow getting rid of that. And frankly, we just want to prove ourselves as a party.
That's worthy of that through good stewardship and following through on our promises, he's also got to weigh it up against the risk that people perceive in entering the Bitcoin space in the first place, which is is What we're really trying to tackle the people that aren't in Bitcoin at the moment, because they see it as such a great risk. So you know, if we can mitigate that risk, To some extent. So I mean, that's I think that's doing a service to the Bitcoin
ecosystem. Yeah, absolutely prayer. That's a good point. And of course, another point is that, you know, even if you hold in your own computer, it takes a considerable expertise to do that in a way, that's actually saved. So, in, in many cases, people may be better off to keep their Bitcoins with a company like Corner Pole to point base, or web wallet like that. Yeah, absolutely. And As somebody who definitely didn't come into Bitcoin with technical knowledge of how it
works. I'm a good time a good sort of tester for their system. You know, if it makes sense to me and and I find it easy and enjoy using the service. That's always a two thumbs up that, you know, the general public will will also think the same. Yeah, absolutely. Now I'm really curious about stomping so, And then I'm sure you guys have looked into that because one on one of the promises says that has been in you know in the air for a long time by projects like Master
coin. A lot of these other Bitcoin 2.0 projects is to create cryptic currencies that are essentially tracking or Peg to fiat currency. So let's say the US dollar and I think I get one way of doing that is having some sort of contract for differences, or I honestly haven't never looked deeply into how exactly, and they were thinking of doing that and I guess I'm not sure if something like that exists, but have you looked into that? Do you think that is it's possible?
Do you think that maybe something where you could go to in the future? Yeah, we've looked into this pretty extensively, and we think that most of these systems are still very early and they're not actually addressing the counterparty risk, which is kind of their main claim is that they're going to somehow reduce the counterparty risk.
But no matter what sort of contract you try to do, if the other party is betting on, for instance, gold, and they don't actually have the gold then Not going to be able to keep good on their end of the contract. So for instance, you mentioned the contract for differences cfd if the if you are making contract for difference between Bitcoin and gold and you're on the Bitcoin side and the other party doesn't actually have the gold. I have an equivalent amount of
gold. They may not be able to make good on their side of the contract and then a much simpler case than a A cfd, for instance, on Ripple. Now, there are people issuing, you know, gold-backed Ripple tokens and and similar. But in these cases, it's even more clear where the counterparty risk is its with who the token issuer is who actually is holding gold and and issuing gold, Ripple tokens. And, you know, these transact around the Ripple Network and yet they all everyone holding.
One of those are accepting. One of those is implicitly, trusting the issuer and the continuer holder continual holder of the underlying collateral the gold. So really, we see locks as no different from these. You know, we could easily issue a, you know, a gold Ripple or Master coin, a colored coin, something like that. But we wouldn't actually be solving any problems. There would still be the exact same counterparty risk.
You the users would still be trusting Kona Pope and what's more our users then wouldn't be able to use the Bitcoin Network. They would be stuck on one of these smaller less well-connected less supported cryptocurrency networks. So an example is with with coin upholds and a gold lock. You could go to overstock.com and purchase a laptop directly deducting from your goal block. So it's almost As far as you're concerned, like you're purchasing a laptop for gold.
Whereas if you know you were using Ripple or real coin which is a dollar back Master coin, that is announced. You would have to first convert your master coins, or your Ripple tokens to something that Overstock would accept Bitcoins and then you would be able to go and purchase your goods using Bitcoin. There are some some retailers that accept People and hopefully soon there will be some that except master coins but it's just a much smaller community.
And therefore, we think less valuable to our customers. Yeah, absolutely. No nothing. That makes total sense SOI. I mean, I've just always been curious about this, you know, is that actually possible and how will this work? Of course, if it just sort of shifts the counterparty risk somewhere else, you know, then that's not necessarily, and that's not necessary. We benefit at all. That's that's basically how we
feel. Now, I'm have you looked into whether there is a way of decentralizing this. Somehow when you say decentralize this, there are few, there are few different risks, a few different steps along the way, some of them can be decentralized. Some of them, can I think the the biggest question that people have is for counterparty risk, like we've just been discussing and I think that a lot of these Bitcoin 2.0 systems claim to be
reducing the counterparty risk. And we think that's pretty misleading, because there's always another party to transactions like this. And to say that you're not trusting them is simply incorrect. There are some things that can be decentralized about about blocks or a similar sort of service. In locks case. We are basically just plugging into the Bitcoin protocol. Call which as you know is
already decentralized. So we're we're admitting that, you know, we are the counterparty risk for when you want to use to store your value in a centralized asset as there is no other, there is no other way. Aside from trusting, some counterparty, our goal isn't to be a trusted counterparty to allow you to do this when you want to. But when you don't want to, to give you immediate access to the decentralized network, where you
then take full control again. It's a really the Bitcoin protocol is our mechanism for allowing our customers to decentralize their their assets whenever they choose to. And the way that we've tried to connect, the two is to make it as easy as possible to go from Bitcoin into a lock and out of the lock, maybe even without signing up for an account. You can fund a lock directly from the network. You don't have to first deposit it into your clinic. V account and then block it after.
And similarly you can withdraw it directly from a lock to any other address on the network. Yeah, I'm cool know that. I think that makes that makes sense and it's, I mean, I think, you know the way I guess I look at something like logs. I think it's just a really, really nice and useful service that deals with you know, deals with an obvious problem in Bitcoin and you know it. Yeah. I mean, I think so. I think that's something is something Positive and are something I like a lot.
And I like a lot that you can essentially stay 100% in Bitcoin but get rid of some of the volatility, right? So if you had say a merchant and you accept Bitcoin and you don't like them all till the, but you still want to be 100% in Bitcoin, you know, then that's something you can basically do if this at, you know, pretty reasonable cost.
You 2% obviously, no cheap, but it has a big advantages because if you know, with the high voltage lie, that Bitcoin has, and I I don't personally, don't think it's going to go away anytime soon then, you know, that's it real benefit. Absolutely. You know, you mentioned businesses, we think that this could be very interesting for businesses as they start to complete their supply chain. So for instance, there's been some speculation recently as Overstock, accepts Bitcoin already.
And recently, Dell started accepting Bitcoin and Overstock cells Dell products. So, one, one possibility now, That Overstock can start to integrate their Bitcoin into their supply chain. We called vertical integration and purchasing their stock from Dell using Bitcoin. This is just a I don't think either company has talked about this but it's just a clear possibility at this point that people in the community are talking about.
If that happens then Overstock may wish to use something like locks in that case because they know that they're going to need. Some Bitcoin in the future for purchasing their their stock to refill after purchases and rather than converting to Dollars, which is what they do with most of the Bitcoins that
receive today. They would almost certainly prefer to keep as much of it and Bitcoin is the could to facilitate this future transaction at that point, though, they're exposing themselves to risk for, let's say the one month in between, you know, when they Sell the last laptop and when they need to pay for the next one that they're buying to replace it in their stock. They would, they could use a lock for that period to protect
the profits that they have. And at the time, when the bill is due, they would simply unlock pay over the Bitcoin Network, and we would have hopefully a new level of integration in the Bitcoin economy. It's an additional tool. So we that's one use for it, but we expect that the community will find new uses for it that we perhaps haven't thought of yet, you know, for business as an idea where they want to use the Bitcoin network. But you know, obviously, the
price volatility is an issue. They can partner with us and provide locks to their users. I've noticed when I signed up there was a limit, it set of three thousand dollars that I was able to lock, why is that you require some kind of a kyc to go higher or how does that work? Yeah we will be raising this in the future. Three thousand dollars is actually per transaction so you can lock I think up to 25,000 dollars okay now but you can only do three thousand at a time.
Okay. No, no that changes a bit. The poor. 25,000 is a lot more than 3,000 that's actually per asset. So there are five assets, gold silver dollars, euros, and pounds. So you can do 25 thousand dollars worth of each. Yeah, too, right, yeah, of course, if you're targeting businesses, then I guess in ten pence a lot, but I'm sure you have been sort of individual conversations with those businesses to have. Yes, absolutely.
Yeah. For businesses that are willing to go through our kyc process, we can lift all these limits. So a cave, I see process. He's talking interesting, is there, does this have any kind of regulatory implications? Do you guys have to is this financial services locks thing? I mean, you guys are in Panama. I have, you know, I have no idea how this works down there, but it can you talk a little bit about that? Sure. Absolutely. We think that lux is basically a
new service. It's a new type of tool. We don't necessarily believe that that bit A coin is money or currency in a lot of places in the world, it's not legally defined that way. There the landscape around Bitcoin, legally is very diverse though and so we look at it on a country-by-country basis and in areas where it looks like these Services would be more regulated, we've taken a wait-and-see approach and have blocked those markets.
So, indeed in the u.s. we have actually blocked, the US market for the moment. As things like the bitlicense are kind of flushed out and we see really, what the rules of the road are going to be going forward. So you do this by blocking the IP address. Exactly. I guess out of that brings up the topic that I wanted to touch on as well.
And I, since the bitlicense proposals come out, I think every one who's been on that sometimes startup, I've asked about the bitlicense thing because they are ready to have a lot of attention. And I think it's a really, it has in Crazy implications if one thinks through all them, at least if it goes through the way, it's been drafted. So I guess I'm sure you guys don't want to get a bit license.
So is your strategy to essentially a block American users that for the moment is our strategy and I'll say we definitely do not want to get a bit licenses. It's currently proposed. The current bitlicense is basically a free giveaway of the economy to the bank's. You know they there's nothing in it that's that's really reasonable for a Bitcoin business.
Certainly not a Bitcoin startup you know and as this is a very new space we hope that there are many more startups and and much more Innovation, that will continue to go on. It shouldn't just stop at this point. And if you don't have ten million dollars to spend on licensing and compliance then, An Affleck get out of the business. So yeah.
I mean we should think that the bitlicense is absolutely the wrong direction to be going in. This technology is so new, no one even knows what it's going to be used for in two years or five years. So how can we make rules like this for it? That are so incredibly restrictive. You know, the use of blockchain technology for messaging for contracts for completely non monetary things is just starting to really take off.
And in this way New York is, is basically trying to just crush it. That's the only reasonable explanation I Can See For why they would propose something like this. They have no real interest in facilitating this technology and every interest in finding ways to make it and unfeasible and unattractive. The users. But do you guys think blocking IP addresses enough? Because from my my understanding it probably is not know what you mean.
Enough is enough legally. Yeah. Because in the end if let's say a New York user mentioned was using the Lock Service while they're not in u.s. so with different IP address. So let's say the user some kind of proxy. See a Pian. Yeah, we've he and I think that probably wouldn't necessarily protect you guys. That's that's not what we've
read and frankly. There's there's no, there's no technologically feasible way to to make sure that somebody isn't you know, trying to fool us and using a VPN or something like that, all we can do is kind of our best efforts and that's that's what we've done with this IP blocking and Similar stuff. Now, this is just the general problem, this isn't a question for us. It's a question for for been loss key and those who would wish to regulate Bitcoin is.
Okay, you've got these rules now how are you going to enforce them? You know how are you actually going to? Well they're not going to force them at all there. How are you going to ask companies to enforce this to do all this? What I considered dirty work on their own customers.
The Bitcoin network doesn't even provide a mechanism In most cases, you know, for instance, someone sends you Bitcoin to pay for some Goods at a retail store under the bit like this proposal, you would be required to gather, you know, kyc information on this user but the Bitcoin protocol doesn't provide a mechanism for doing that. So it's really just the unenforceable silly rule to quote, Steven pair the CTO of bitpay. Why? Don't they just put up a great firewall like China did.
If it's on them to enforce this, it's also worth saying that our goal is to is to maximize access to our services and and, you know, we are looking for ways to help the u.s. into our, you know, help them access our product. So it's hopefully this is just a temporary situation and then we've got legal teams who are, you know, helping us navigate sort of the tricky situation that The Regulators have put us in really? Yeah and I completely agree with
with both of you guys. I mean so in my view and in my understanding of the bill license film you know one of the terms in there is that any company underbid? License means to have a sort of a complete record of all the parties of all the transactions but of course that is just insane. Right? Because the only way in my view to be truly Compliant with this.
If it goes through the way it's proposed is it is a if everybody does kyc, even if you don't want to get a bit license, just to exclude the people and just to exclude the New Yorker. So you can say, I, you know, I don't have to get one and then you'd also have to sort of It's prevent transactions from unknown addresses because of course, if it's not known address, that's let's say paying money into your wallet.
How do you know? It's not someone from New York and then that's completely absurd, right. It's literally impossible. But yeah. Hopefully hopefully, they will sort of come around to something at least a little bit more reasonable that. Then would at least not put as much of a burden on the companies that don't want to get a bit of license, but not to
mention the other customers. I mean, I'm surprised that there hasn't been more International backlash against this, because if you're a customer from Europe, for instance, that uses a service that also does business in New York, all of a sudden, it's your privacy. It's when you want to do a transaction, the future, they're going to be asking for your information. And so, you know, businesses are
really being faced with this. Tough choice to either start treating all of their consumers everywhere in the world, all their customers. Everywhere in the world like just like a bank or even stricter than a bank would or block New York and for us it's a very easy decision. We don't want to treat our customers like that.
Yeah, absolutely. I mean I think if you look at it but it license thing, the implications kind of our that any company that's going to comply with the bitlicense thing, you're going to have to make their product a lot more. Attractive. So I mean, in my case, I seems very likely that if this go to coinbase left, a starts doing the license. Well, I probably will stop using
Conway's, right. So, it seems to me that even the companies that would have to get one, should like a Lobby really hard, not to you, not to do that. And I think that even is true for companies that are like really well funded and have lots of money and For Whom the legal costs are not such an issue. I think that you're an alcoholic. Alice is very logical, Brian, but I don't have faith that all of these. These companies are actually lobbying against it.
Unfortunately, I think some of them see the opportunity to cut out competition by raising the barrier to entry. Yeah. Unfortunately, I'm afraid you may be right, you know? We certainly haven't seen a lot of backlash from any of the big companies. So actually let me repay. Let's briefly go into a topic that you know, you've been dealing on Is kind of a in your work for coin, a pole, which is the marketing of Bitcoin products. Can you tell us a bit about that? Yeah, sure, yeah, it's
interesting. It's, um, it's still an emerging market. So there's a lot of audience Discovery to do and, and coming from a previously working in London for an advertising company in very well trodden. Areas of marketing, the contrast is massive, you know, so it's
quite exciting. This is about finding where people are who might be potential Bitcoin users and reaching out to those who already are and you know, we've come up against some hurdles as in, where is there to advertise them in the Bitcoin Community still quite small and the number of places to actually put advert suppan and yeah I mean it's it's exciting stuff for me as I'm walking. So what are some of those core differences between advertising
in an area? That's I guess, well-established, versus something on bitcoin. I mean, you mentioned, I guess lack of outlets media Outlets, but what else is there? Well, I guess one of the big differences is that you're not fighting a million companies to for visibility as well, which is pretty nice. So, you know, there's There's the potential to, you know get seen by the people that matter very quickly and that's nice
too. Yeah I mean it's a lot of it is I think social media marketing based because of the lack of media outlets and you know I mean you must know with your show your there's there's your podcast and a handful of other podcasts that are sort of Lee facing and you know, it's kind of like that across the board really in the different areas so that the sort of the less plate, there's less places to be seen,
is a big challenge. Must also be to just figure out how to communicate, you know, like how do you explain something like locks because it's you know, it's noon. Oh yeah absolutely. Yeah and we've you know, we've had talks about how How to reach out about our products in and get people to kind of understand what we're doing. And yeah we're hoping to do a series of webinars so people can people are interested but they perhaps don't quite understand
you know how it works. Then we can we're hoping to have some one-to-one sessions with people and you know and get people to kind of come along to a webinar and We can explain a bit more. Yeah, that sounds great. Although that being said, I think you guys actually have done a really good job and I think it's really intuitive and easy to use and you know, I didn't have a lot of difficulties figuring out, you know, how to use the corner bolt wallet and then including the locks thing.
So I think I think you've done a good job there. Yeah, great, thank you. I mean we we did do a lot of work before putting before going to launch to get the product being really simple to use. Use it, you know, and Visually really easy to navigate through, you know?
And and I definitely had some things to say about that coming coming into the space as a non techie, you know, it was I think it's quite helpful to have that perspective on things and say you know this needs to be and we need really big clear buttons. That was so one of my my favorite things and I go to website and need to see big buttons but yeah I mean it's
it's all those things. You know, we didn't, we didn't go to lunch until we were happy that our product was gonna, you know, it was going to be usable for, for the general public cool. Well, I think it was really cool talking about the coin up old stuff and I really urge people
to check it out. So quintuple.com, and I think it can be especially interesting, especially interesting if you hold a lot of money in Bitcoin, know if you receive your salary in Bitcoin, if you get paid in Bitcoin, if you sell things for big, Coin then I think things like the locks been can be super relevant so you know, urge anyone to check it out and you
know, give it a try. So before we kind of wrap up, let's you guys have mentioned a really exciting project and and I am super excited to talk about it, so it's called elected bit drop. Can you give us a bit of background on it? Yes. Sweeping working on the bit drop for over a year. Now, the basic idea is that we are going to send every single person in an island nation, some Bitcoin all at once. So when we're done there, Tens of thousands.
At the end of that day, there will be tens of thousands of new Bitcoin users and it will instantly become the largest highest density population of bitcoiners in the world. We are going to do this in Q4. We are hoping in the next week or maybe two weeks to announce the the specific date and the
name of the islands. We are we're going to throw a party at the same time on the islands, where we'll have educational materials Bitcoin ATMs, we're talking to local vendors, to get them, to come out, and sell drinks and snacks, and things like that. And we're just hoping that it'll be a big Smash. And that these people that are mostly unbanked will find some use for it and what kind of what amount will be given to the people. We are just starting to fundraise.
So really, it depends on how much the community is willing to send to us. If you go to let the beat drop.com, there's a donation address.
And if you donate more than like one Bitcoins then we'll enter you into a raffle and you can actually win tickets to come down and enjoy the party on our beautiful Caribbean islands that the because it's been so so long in the making, we haven't really set a final budget yet, you know, we kind of figured that whatever the community is willing to give will will distribute that to the Islanders, with some some amount set aside for making the For the educational materials for
getting that ATMs and all that stuff down there, and just kind of operations for the party. I think one interesting scenario for should be right side, like you giving out this money to the Islanders. And let's say it ends up being, you know, three dollars per person. You know then the question is what's going to happen with
that, right? Is this, that mean people are going to start using it. And then they have to use Use it as a sort of to give it a value for it actually to be using transactions, you know, is that something you guys have thought about? Whether you may have like totally different exchange rate in that Locale? And I guess that, I guess I would only happen unless you have a liquid Market or if the local currency to bitcoin, that's very fascinating, you're weird.
Just curious, I guess as to how people are going to use this. You know, most of these people don't have any access to financial services right now. So it may be so for and that it takes a while to really spread the knowledge of how to use it and what the potential is to spread amongst the people, but we do think they're going to be a core of people who do get it.
Maybe some of the business owners that were reaching out to. Now, we'll continue to support it. You know, we're leaving ATMs on the island so it will be A relatively liquid Market, it can't trade too far outside of the global range or else. The ATM operators will pull pull the islands Market back towards the kind of international standard. But really, yeah, we don't, we don't know no one, I don't think anybody knows because there hasn't been there hadn't.
Been this kind of Outreach to the unbanked communities, yet, with Bitcoin. And so far, we've what we've seen with Bitcoin is technically Savvy. Wealthy people and how they use it and they may think, oh, do I want to pay with Visa today, or do I want to pay with Bitcoin? But that simply isn't isn't even an option for for these people? So we're just looking forward to watching and observing and you the drop is plan to happen this the end of towards the end of
this year, right? Or yes, in q 4 q for cool. I mean, I think this would be super fascinating to see what comes out of that. Like, I really, I can't wait. I think it's like an amazing experiment. I think that the MIT thing is a bit similar, right? Of course, it's totally different audience. So it's great that, you know, to similar so kind of like Drop projects are happening at a similar time. Everyone is your targeting, some of the best educated.
Well off, most technologically savvy intelligent people. And then you have another project that targeting really like, low-tech, poor and unbanked people the bassoon.
So cool to see, you know, how we're kind of different uses will see you a Bitcoin. I'm excited to see what how this will be different from that in terms of because the government have got behind it. The local governments, you know, whether the fact that they will be sending out educational materials to the pop the people whether that will have an impact at you know the impact differently on how the public
kind of take to bitcoin. That for me is to come out a fascinating thing to to wait and watch. Yeah, absolutely. Yeah, it's cool that you guys managed to kind of get the government behind that. That's I think of course that makes it easier. Also the like the smaller the place it go right. The more effusive I think you will have less of a kind of influence of Banks and the paranoia that perhaps makes this difficult in other places. Absolutely.
And the government's been very very nice to us. You know, I think in addition The smaller, the government's and the smaller the place, the more open, they are to Innovation and trying new things. And that's kind of what we're seeing here. You know, this is a relatively poor country and they are willing to try new things, to improve the economic conditions that they have. And and frankly, I think that they're going to succeed. Cool.
Well, I'm super. So if people want to check this out and if they want to participate, It what are the best ways they can do that? At the moment? We're still working out some of the finer details. So the best way to participate is to go to let the bit drop.com you can there donate and watch for more details. You can follow us on Twitter. Our Twitter handle is the bit
drop. And, as I mentioned earlier, in the next couple of weeks will be coming out with much more details, about the Project's, the name of the islands, the date, Hopefully some of our musical guests and things like that, that are going to be attending the party. So yeah, just follow us on Twitter, check out our website, let the bit drop.com and we'll keep you up to date. Cool. Well, thanks so much for joining
us today guys. Perhaps before we wrap up, Freya, do you want to talk a little bit about tell us a bit more about the podcast you've been doing? Yeah, I can't do so. Yeah, I've just been running a podcast for about four months now and I was, I got into Bitcoin listening to podcasts that we're coming out of the USA and and and they really got me fired fired up and excited about Bitcoin. And so, you know, I just I thought perhaps would be good to have different voices in the
mix. So yeah. So I thought doing my podcast, which is a Bitcoin UK podcast and would be a good idea to kind of, yeah. Just to expand, you know, the number of places where people can go to get information and, and that, you know, focus on what's happening in the UK as well. It's a lot of good stuff going down, you know. Absolutely. And I think those are very huge podcast in Europe and And there's, you know, mean assembly both in Europe and this year's. I don't know if there are any
other. Well, notice there's some Moore's. This one nostril and there's another one in Germany. I know, at least but they say, yeah, this definitely not as much as in u.s. So I think it's great to see another European focused podcast as well. Absolutely. And then there's room for even still. Yeah, absolutely. Well, and thanks so much for joining us today, guys. You know, we speak great to talk about the corner pole talk about regulations, and let the beat
drop a project. So yeah, thanks so much for joining. Thanks for having us, Brian. Yeah, and of course, what's the thanks for listening to the show. If you want to support us, you can do so by donating and you can either the Epson a Bitcoin.com tips. And also follow us on Twitter at Epsom Derby. He see. And if you what's also very helpful, This leaving us in iTunes for you so people that I can find the show and also let us know what we do. You know what you like about the
show and what we can do better. So thanks so much for listening and we'll be back next week. This leaving us in iTunes for you so people that I can find the show and also let us know what we do. You know what you like about the show and what we can do better. So thanks so much for listening and we'll be back next week.