Video - The Re-decentralized Web - LA Meetup Sep 2016

Centralized payments are a powerful force for centralization of the web, creating platforms for content and services that are centralized around a payment processor/aggregator. What happens when payments themselves become decentralized? The nexus of centralization dissolves and the content platforms can become decentralized too. In this talk presented at the Los Angeles Bitcoin Meetup, Andreas examines the impact of payments and the re-decentralization of the web.


ANDREAS ANTONOPOULOS: – Bitcoin. What I’d like to talk about today is what I called The Re-decentralized Web. And the concept here is to talk about not what impact Bitcoin will have in general but specifically what impact Bitcoin will have on the internet and the web more specifically and even more focused on content creators – people who create music, art, video content, writers, authors, publishers, people who create content on the internet. How many people in this room are involved in some kind of content creation? Quite a few. Good. Well, it looks like this is a good topic to go on.

Back in the days when I was still young the web was decentralized. If you wanted to put content on the web you install a web server and you ran that web server and you put your content on that web server and then nobody could find your content because search engines didn’t exist yet. And then we have search engines and people could find your content. So the web at the time was very, very decentralized but it was also not a very good place to do publishing. It was very difficult to publish content. So if you are a small artist or musician you don’t have the public eye yet actually getting people to find your content was very difficult.

And gradually we started solving that problem so we had peer-to-peer technology such as Napster and search engines that actually made it easier for people to find the content online. But then there was another really important problem because when people found the content they couldn’t buy it, they couldn’t pay for it and the reason for that is that the independent artists can’t easily become merchants to sell things by credit card, the credit card system was never developed or designed to be used online. So, if you’re a content creator you can put your content online and people can download it and people can now find it online and that’s great but no one can pay you. So you either have to give out your content for free or what we saw happening was the centralization of the web. Companies started building platforms and these platforms grew up around the ability to concentrate payments so, this really pernicious effect of payments. The fact that credit cards are brokered they’re never designed to work on the internet to provide an online mechanism.

If you want to buy a song how much is a song worth to you to play once? Five cents, maybe? One cent, maybe? Half a cent? Great. The minimum purchase you can do is three dollars. Also you have to enter your billing address right, into a forum in order to do that. So you’re not going to go and do that if every time you have to buy something online you have to enter your billing address and give your information out. Then you give a credit card that in itself poses the risk of identity theft and fraudulent charges. You’re not going to do that for something that is worth half a penny to you which is the playing of one song. So the only way to really make the web of content work was to get very large audiences together on a single platform where they would give their billing address and credit card and they could get charged once, three dollars or more in order to buy contents that’s available from a very large library that makes it justifiable to pay that much money. Or instead you take the personal information that your customers gave you and you sell it to advertisers at which point your customers are no longer customers, they are the product, right? We become the product.

I said before that on the internet we already have a micro payment economy. The only problem is that that economy is an economy of advertising that is driven by micro violations, your privacy.

Any time you consume content that is not valuable enough to pay for directly you’re paying for it by giving up your information. You’re paying for it by violating your privacy through a platform and at that point you have become the product. So the web started out decentralized and then it gradually became more and more centralized and the reason it became centralized was because payments act the way a grain of sand works in an oyster and it gradually gathers material around it or the way a small density fluctuation creates gravity that pulls more matter and creates more gravity that pulls more matter in until you have Apple iTunes, right? One of the shittiest pieces of software ever written that can drive billion dollar industry. At this point I’ll ask everyone to please accept the terms and conditions of Apple software because I mentioned them. Three minutes from now I’m going to ask you to accept the terms and conditions again, just for fun. This is the Apple way.

So, the bottom line is we see this enormous concentration around these platforms and the reason is because you have to bring this enormous library of content to this enormous audience of people just to justify the single middleman; Visa, Master Card, the credit card system in order to make their business model work. We have to disrupt the link between creators and their audience and introduce in between a platform that is actually selling the record labor labels to advertisers and the audience their part of the product now. And the artists they make nothing and they’re invisible. You’ve broken the leg introduced behemoth corporations in between and separated the most important thing, the artist from their audience and it doesn’t have to be that way. The reason the web has become centralized is very much related to payments.

If you think about that for a second you might start seeing this pattern pop up everywhere. What exactly does Uber do? I mean they don’t have any cars and they don’t any drivers and they don’t really find passengers. Passengers find them. They’re a peer-to-peer taxi service. Well, they’re peer-to-Goldman Sachs-to-peer taxi service because they’re not peer-to-peer. Uber sits in the middle and Uber is the Goldman Sachs with wheels, right? In fact they recently did a billion dollar deal with Goldman Sachs to sell subprime loans to their own drivers that locked them into driving only for Uber. Yeah, talk that evil vampire squid.

So, you can have this company – what exactly do they do? What have they done with the billions and billions of dollars of funding that they’ve raised. Lawsuits?

How many people here think that they put all of that money into building the best possible ride-sharing application ever? No one? I see you’ve used Uber. The app sucks, the drivers are upset they’re getting fleeced, right? And it’s miraculous. Don’t get me wrong it’s miraculous. And the reason it’s miraculous is because we’re comparing them to the alternative which is the regulated taxi license system which is atrocious, right? So, if you can do atrocious minus a bit you get miraculous and that is the business model of Uber.

What is the purpose of this company in the middle? They are payments intermediary and one thing what they are doing is also providing insurance. But that’s only because the insurance companies are also payments intermediary. You can see this pattern again and again. If it’s becoming obvious to you now start thinking about Airbnd. What does Airbnb do? Somebody’s house, not theirs. Someone staying, not theirs. 20% cut. Wow, brilliant, right? Why can’t I pay the person? Because they can’t take credit cards. Why can’t I pay my driver? Because they can’t take credit cards. Why can’t I pay the driver and the insurance company on the basis of a four-minute ride to insure me for those four minutes while I’m in that car? Because I have to put a credit card in the middle and the credit card pops up again and again and again as this massive centralizing force. The banking system is no longer a system where people pay people. It is a system where people pay corporations that pay corporations that pay people maybe, right?

We have actually accepted this as normal. The only places where people pay people now a days is when they tip with cash and that is the tiny exception and that is gradually disappearing. Under most circumstances you cannot easily pay another person without inviting a corporation into your little (0:10:22), right? They’re the third wheel. It’s like you’re on a date and there’s this dude just sitting there the Visa on his shirt going “Hi, 20%.” It’s like who invited him? And this all has to do with the fact that we cannot make payments from person to person and we cannot make payment below two or three dollars unless we’re making billions of them. And we cannot make payments for small things over small period of time. Otherwise I can pay my Uber driver and insurance company for a four-minute ride. Done. Walk out. Nobody needs to take a 20% cut. I can pay from my hotel room or my rental room directly to the owner without anyone taking a cut. I can pay for the song that I just listened to, a penny and the artist would make ten times more than they make when they pass that through a giant machine of intermediaries. And so I pay Spotify, Spotify (0:11:33) or Spotify serves me at because I have the product, Spotify pays the record label that pays the producers that pays the lawyers that pays the financiers that pay everybody to setup the account in such a way as to show a loss so they don’t have to pay the actual artist. And this repeats in every form of content.

So, as a content creator we’re feeding all of these intermediaries, all of these vampire squids that have found the flow of money, walk up to it, taking (0:12:10) going “I have a business (0:12:12)” and just suck profit out of other people’s work. And the only reason they exist is because credit cards are brokered, because you can’t e-mail cash until 2009 and now we can e-mail cash. And now we can make payments that are tiny and we can make payments for services that are tiny. We can make payments by the millisecond for a video. We can make payments by the thousandth of a penny for services for content. We can give payments to people writing smart comments on Reddit and make it expensive for people to write stupid comments on Reddit. If you have to put down a 25-cent deposit every time you write a comment on Reddit and if it’s great you make a return and if it’s stupid you lose your 25 cents it gets really expensive (0:13:14) because now actually you have to pay for the attention you’re stealing.

Money isn’t just about income; it’s not just about making a livelihood. Money is the most efficient way of discovering the true value of something through a marketplace. Money is the means of exchange the system that lubricates economic activity, social activity, trading and you can use it to express value even if that value doesn’t really buy anything. When you multiply that my ten thousand people or a hundred thousand people and it suddenly starts being important. The network effect of money is gigantic.

We now have the ability through our payment systems to remove that very nugget of centralization, the force that has been centralizing the web for the last 15 years, we can take that back with services that offer the ability for people to sell directly to people, get paid directly from people for their products and services. And we’re beginning to see these things pop up. OpenBazaar is one example I talked about today which I find quite exciting.

There’s a taxi service and my brain has frozen right now I can’t remember what it’s called – Oh, (0:14:46) which is a competitor to Uber that does people-to-people direct access and they use Zerocash or Bitcoin.

A cash society is not a dirty economy, it’s not a bad thing to live in a cash society. It’s a society where people can pay people for products and services and keep it within a community rather than people paying corporations that pay corporations that refuse to pay people and we can get that back. Bitcoin is not just a new currency. It is the seed that allows us to re-decentralize the web by removing the most powerful form of centralization that the web has and enabling content creators to be rewarded and recognized for their work. But more importantly what you do by removing the intermediaries is you allow an audience to reconnect with the artist that they want to connect to and that is huge. If you’re a content creator the most important thing that’s taken away from you by these platforms is your ability to connect to the audience. Using a digital currency allows you to create a loyalty system to create a connection with your audience to have them directly provide feedback to you as to what they want what you should be doing or what they like or what they don’t like. Maybe you don’t care what they think you should be doing you’ll do it anyway and then you’ll just find out how many like this specifically that you’re doing that you reconnect with that audience. Bitcoin and all of the other digital currencies that we’re seeing emerge now and the Blockchains that are supporting them it’s more than just money. It’s about the fact that money is a social activity and by reconnecting audience with creators you can take out the intermediaries and re-engage that social activity. Thank you.

MAN #1: Thank you, Andreas. You will have some questions (0:17:04)


MAN #1: And repeat questions. Anybody? Anbody? Anybody? Here we go.

MAN #2: (0:17:13) Thank you. Thanks for coming (0:17:16) you spoke about infrastructures (0:17:21) where disrupted technologies are forced to, you know, survive on infrastructure that is not designed for it, right?


MAN #2: So, you know, you mentioned Uber and Airbnb and I got it right, the vampire squid suckers. But I think really paving a way for this infrastructure version of peer-to-peer, I mean (0:17:49)


MAN #2: Right, in terms of payment like the payment part but the software that brings people together is it not just the beginning steps towards a more decentralized marketplace –


MAN #2: – where people can share these products free?

ANDREAS ANTONOPOULOS: Absolutely. They are paving the way and I am sure (0:18:10) is grossly unfair because the alternative which is the traditional taxi system completely sucks and (0:18:17) completely suck and I’ve used Uber and Lyft and Cabify and (0:18:23) and all of the taxi services and I used Airbnd as my permanent home effectively and so, yes, absolutely they are paving the way. Could it better if they pave the way without locking their own people into subprime auto loans and exploiting them? Yes. Would it be better if they took a smaller cut and spend less money on the things they spend? Yes. And we can do better. Just because we can do better doesn’t mean that they’re not good, it just means we can do better and recognizing why decentralization tendencies exist is what I’m really up for.

MAN #1: (0:19:12). Won’t you say a lot of money that you (0:19:15) are market making like billions of dollars goes to like (0:19:20) paying two dollar to get from downtown (0:19:22) today, they are just losing money to build the market.


MAN #1: (0:19:27)


MAN #3: Just to follow-up on the Uber, Airbnb example –


MAN #3: Wouldn’t it be in their interest the shareholders of Uber and Airbnb to enable Bitcoin payments because then they will have to pay 3% to their (0:19:50) so, you know, I mean – so (0:19:55) that puzzles me that both Uber and Airbnb and especially Airbnb because they do so many transactions internationally –


MAN #3: – they have to pay so many fees, wiring fees, foreign exchange fees and so Bitcoin would, you know, eliminate a lot of that. What is your thought on this?

ANDREAS ANTONOPOULOS: Honestly – yeah, honestly it’s not a big enough market yet. There aren’t enough people with the ability to have Bitcoin or to earn Bitcoin or to convert into Bitcoin to make it worthwhile for any of these companies. I am looking at this from a much longer perspective. It took 15 years to centralize the web and it will take another 15–20 to re-decentralize it. We have the potential to do that. In the meantime I don’t expect them to start excepting Bitcoin any time soon. For them the risks and the difficulty they would face in adopting something like that probably outweigh any of the benefits. They might do in this (0:21:00) but, you know, it might start raising the question of what exactly we’re paying 20% for.

MAN #4: And also sometimes people finding (0:21:12) by putting the Bitcoin logo into the credit card logos and they’re like “Ahhh” so they just hide it and they only tell Bitcoin users that they take Bitcoin and don’t put it on the main page.

ANDREAS ANTONOPOULOS: Well, I try to persuade drivers to take tips in Bitcoin and my argument is you will ride around with this (0:21:29) on your dash for the next six months and no one will know what it is. But then one day he will (0:21:39) again into your car and he’s going – that (0:21:41) what? You take Bitcoin? And he’s going to give you the biggest tip you’ve ever received because that’s what the community is like, right? (0:21:51) you get into an Uber you see (0:21:53) for Bitcoin. First of all you’re going to be like really excited, you’re going to be discussing that for the rest of your life and when you leave you’re going to give them a bigger tip than you ever gave them. I certainly would. So that’s my – that’s my sales pitch is the one in six months unicorn (0:22:08) Bitcoin user who will make – who will pay back for the one sheet of paper you used to bring that.

MAN #5: Thanks Andreas, great talk as usual. So, and (0:22:23) what will be the incentive or driver for innovation and what will the organization of business models for people who would design those services and thoughts but I don’t think that each (0:22:34) will be able to set up their own (0:22:39) then set up whatever number of services to get – to receive Bitcoins themselves there will always be someone, an intermediary or the service or payment service that will facilitate that.

ANDREAS ANTONOPOULOS: So, they’re not always intermediaries. I mean look at what’s happened to the OpenBazaar. The important thing to realize is that what’s being created on these platforms is new open ecosystems, right? So, first of all as soon as OpenBazaar started immediately you have people advertising hosting services to run the service for you right, marketing services, a couple of search engines popped up within the first couple of months and these search engines used the API to basically index and crawl through the peer-to-peer network all of the stores will give you a web search with interface, no one at OpenBazaar build that. That was third-party services that built it separately. Now they’re building additional services on top of that. All of these APIs opening up means that now you’re not looking a single company or single platform you’re looking at an open system where people can offer layers and layers and layers of additional services and you have a thriving marketplace for these services. So, I think instead what you see is an explosion of innovation. Right now no one has access to the data really at Uber or Airbnb or any of these services and the reason for that is because once again who’s the product? You are. In many cases you’ll see – I think over the next few years we’ll see that a lot of these services they’re going to make more money selling data about where you went and when you went and who you visited and what you typed into the search engine and whether you typed the name of a business and visited that business and how long you were there and the same thing with Airbnb. They’re going to make more money off the data about you than the cost of (0:24:29) and once again you’re the product. So, I don’t see that as innovation. It’s not innovative to turn people into a product. It’s evil but it’s not innovating, I mean (0:24:44).

MAN #6: How do we get away from being the product and being the solution?

ANDREAS ANTONOPOULOS: Take control of your money and actually pay for the services you consume instead of getting free services for which you have to provide information. A good guide is whether a service is really offering you a service or through the product is whether you can use that anonymously. If you can use that anonymously you’re not the product. If you can’t you are the product. And it’s not easy to do at this time, you know, we all have entanglements with various platforms and services we use. And even if you try really, really hard your data is going to get harvested somewhere down the road by several players but we can gradually start to change that. The question is, you know, what kind of web we’re going to give to the next generation. Is it going to be a web like the one we started on or is it going to be something completely different?

MAN #7: Going back to your example of Airbnb and Uber one of the things they do is provide standards, you know, standard experience, (0:25:58) level of experience and also (0:26:00) reputation. So, how can you get, you know, decentralized payments with Bitcoin and you also have this other problem of, you know, identity (0:26:08) consistency of the experience standards (0:26:11) how do you combine those two things together?

ANDREAS ANTONOPOULOS: Well, we’ve already seen some very interesting experiments in that particular area. We’re seeing experiments with using Escrow services and moderators for example, providing Escrow services between seller and buyer and that’s a voluntary involvement of a third-party that you can select. We can see that building to arbitration and mediation systems that are built through smart contracts. And the other thing to realize is that one of the things that they solve through their reputation systems is civil attacks. They solve the issue of someone creating a bunch fake accounts and every time they get bad rating just switching to a different account right, that’s a problem. Well, there’s a system that solve civil attacks it’s called proof-of-work and we used it in Bitcoin. And now we’re seeing the development of proof-of-stakes (0:27:09) solve simple attack where you can stake money against a reputation without it being identified, an anonymous reputation but with money staked behind it that does not allow you to easily just switch out of it so that if you damage a number of reputation it has direct financial cost to you (0:27:28) this is the innovation that is being created out of the – well, how can we do this without using identity? How can we do this while still remaining anonymous? How can we do this without exploiting the data of individuals? And the answers are well, if only we have programmable money. Oh wait, we have programmable money.

MAN #7: Most of us (0:27:50) have programmable money. Some will still need it –

ANDREAS ANTONOPOULOS: Yeah, very few of us have programmable money.

MAN #7: Based on the poll earlier.

MAN #8: (0:28:02)

ANDREAS ANTONOPOULOS: (0:28:04) for the microphone because it’s not going to get caught in the recording. I’ll hear you but nobody else will.

MAN #8: I wanted to see what are your thoughts on government being an intermediary or do you think that the government should be out of the equation (0:28:19).

ANDREAS ANTONOPOULOS: I don’t think governments are going to be out of the equation both from a practical perspective because I don’t think that’s realistic. I am also not a hardcore libertarian that says, you know, no government is appropriate, right? There is a role for government. Government is just us making decisions altogether. The question is what is the government doing? Preventing, you know, outright violence between individuals maybe, building roads not in this country if you’re seeing (0:28:53) the roads, you have to – perhaps we envision what government is, I think we have a model of government today which is an 18th century model of government and it’s now the 21st century. I think it’s time for a refresh. I don’t know what it’s going to turn out to be, I am terrified about the possibilities. But at the same time you know that the existing model is certainly becoming less and less effective at the things the governments (0:29:27).

MAN #9: Thanks, Andreas.


MAN #9: I have a couple of questions. So, first is it was (0:29:44) centralization of mining so in order to (0:29:49) 80% of (0:29:51) and so now we see this centralization for (0:30:00). Second question is about for Bitcoin and other cryptocurrency to evolve in scale so some little changes (0:30:14) both hard and soft force problems as was always (0:30:21) hardfork so how do you see this (0:30:29)

ANDREAS ANTONOPOULOS: Okay, let me try taking those two. The first one mining centralization, I think I’ve talked about this many times before and in my mind I think mining centralization is a result of this very, very rapid acceleration in the hashing power and going from CPU-based mining to ASIC mining and straight up to catch up with Moore’s law, the front end of Moore’s law and I think we’re going to see the equation change a lot now that we’ve reached the front end of Moore’s law and (0:31:02) the increases you can get or maybe 2X, not 1000X in a year, that may change things. But one of the reasons this is happening in China I think we need to be aware this is not some kind of communist conspiracy to take over Bitcoin by the government of China. It’s important to realize that one of the things that’s driving mining centralization in China is that it’s better for mining to be in China and the reason it’s better for mining is because China has experienced this enormous growth in its electricity generation over the past 20 years. At some point I (0:31:42) this statistic vaguely in 2012 they were turning on a new coal-fired plant every 16 hours. Every 16 hours they were turning on a new electricity factory, a big one and it was projected that would not keep up with the demand for electricity because it was going even faster than that. That’s really quite astonishing.

So what happens when you build a lot of generation capacity but no distribution network? You end up with a situation that is very unlike with what we have in the United States. In the United States basically two generation (0:32:25) two distribution networks. There’s a grid that connects the vast majority of the continent of US together whereby electricity can be sent for Connecticut to Pennsylvania if there’s excess capacity in one place and excess demand in another. Then there’s a second distribution network that serves Texas because Texas like you have a distribution network “Oh, fuck you all. We’re going to make our own” and so they have to. And so that was a terrible text message. Half-British (0:33:10) recently Americanized that was terrible and maybe it was a bit Indian maybe (0:33:15).

So, what happens to the US if you have excess capacity for a factory and you have demand somewhere else? You just ship it across the distribution network and it turned out you don’t, you just waste it. You don’t have anything to do with that electricity if it’s generated and it’s not used on the spot by the local area where you can distribute it, it’s wasted. So there’s this very big difference between what’s being generated and what’s being used and what can you do with the excess capacity? What do you do with the electricity that would otherwise get wasted, that would otherwise simply get wasted? Well, one thing you can do is you can turn off the power, right? You turn off the plant. The problem is that some of these plants, you know, it take six hours to turn it off and eight hours to turn it back on. So, if you’re going to have a low (0:34:06) demand for four hours there’s not enough time to turn it off and on again so you just leave it on, wasted energy. Other plants you can’t turn them off at all. I was reading about this mining farm that has located itself in this tiny village in China where there’s nothing except for a hydroelectric plant that was built as part of these development projects and they have hydroelectric plant that generate way too much electricity they don’t actually use it and those getting wasted. So some enterprising person went there and said “Hey, Bitcoin mining” like “What? What’s that?” “Free money from electricity” like “Oh, we’ll take some of that.”

So, now they’re doing 50 or 60 megawatts of Bitcoin mining out of these completely ramshackle warehousing buildings and they put up overnight. And you can think that’s wasteful or it’s concentration of mining in China. What they’re doing is they’re solving a problem. They have electricity that’s being produced, they can’t it off, they don’t want to disinvest in electricity because eventually they’re going to catch up with that level of capacity and they found a creative way to turn that into money. Bitcoin is a battery. It’s a battery that stores energy in the form of Bitcoin and they can then use to buy electricity in the future or to buy oil or to buy other forms of energy. It’s an energy storage mechanism. And I think that’s brilliant. I’m not worried about centralization of mining in China because the incentives are so high to keep it going and the only way you keep it going is by playing by the rules of consensus.

So, the problem is that if a high (0:35:55) official went in there and say we’re going to ban Bitcoin, you know, everybody in that village will be – question there – all of our income comes from that building, what are you going to give us if we turn it off? What are they going to do? We’re going to send a warrant to shut you down, right? Good luck finding a police officer who’s going to do that. They’re all getting paid by the mining in weapon, right? And see, the problem is that there’s a big disparity between political power and electrical power.

So, I’m not worried about centralization of mining in China because centralization in mining in China is representing the best of entrepreneurial capitalism in a very disruptive way in a country that desperately needs the best entrepreneurial capitalism we should be applauding it. And honestly we wouldn’t be having this discussion if it was mining centralization in Sweden. Everybody would be going “Yaaa” (0:36:56) and then a terrible exit. So, I’m not worried about that. I think it’s going to change and I think it’s not a problem while it doesn’t change.

I think hardforks are a bit of a difficult topic it’s very (0:37:14) for most of the audience here so I’m going to take that one offline. But what I do want to say is that in the very first five, six days of the Ethereum hardfork I was wrong, like totally wrong. I said “Oh, this seems to be going very well” and went off (0:37:31) so, lesson learned. Take the more (0:37:40) and technologically Ethereum fork went off without a hitch. Politically it went off with a big hitch and now we have two Ethereums, Ethereum and Ethereum Classic and Classic isn’t going anywhere. It’s simply not going anywhere and the ideal solution would have been perhaps for those who want it for hardfork to be nice and clean the second fork just disappears, done. That didn’t happen. It looked like it was going to happen for the first five days and then things changed very rapidly and I am now revising my opinion based on the presence of new data. And it poses some very interesting questions. I think it becomes a warning to Bitcoin that even if the technology of a hardfork in Bitcoin is easy which is not as much harder than Ethereum. You have to think of things like replay attacks and being able to do a clean break for the pass so that the two chains are not compatible to avoid attacks against the exchanges, replay attacks confusion for users and all of the other things we need a lot of planning because I can guarantee you that if two hardforks in Bitcoin and it pulled off without a hitch technologically, politically the next day we’ll have two Bitcoins. There are plenty of people who will go for the non-hardfork Bitcoin and will pull forever and will probably mine it. So, if that’s what we want maybe we can do it. If not we also need to find other ways to scale. All right, let me take another question. Those were a bit long.

MAN #10: (0:39:19)


MAN #10: (0:39:21) thanks for coming and talking to us (0:39:23) you’ve been around the world talking about Bitcoin, what city most impressed you as far as startups or community go? And one more question, do you think apps like Satoshi Dice that use the Bitcoin Blockchain as like database almost is a good or bad idea, is it spam in the network or is it just – what do you think is apps like Satoshi?

ANDREAS ANTONOPOULOS: So, I have to say that the first question, the Bitcoin communities that have influenced me the most are the Bitcoin communities in the developing world that I visited. Brazil and Argentina are probably foremost in terms of the impact they have in my thinking because they showed me what it means to have a very clear understanding of why government money is a bad idea. It may have something to do with whether your government was throwing people out of airplanes in the last couple of days like reasonably (0:40:25). That encourages people to think more openly about alternative currencies. Being in a society I grew up in Greece, I saw currency shocks three times when I was growing up. I remember bank (0:40:41) long lines, destroyed fortunes so that was an experience that I’ve always had with me but seeing it play again and again recently in Argentina and Brazil to a certain extent, that made me understand why Bitcoin matters everywhere else and I’ve talked about that a lot, this concept that other experience, why it matters much more for the places where – just like in the US there’s no difference between corporation, bank and government, they’re all one thing now. But in this particular case there’re also homicidal maniacs. And so, if that’s the government, corporation, bank you’re stuck with you’re much more motivated to seek a separation of state and money. Those communities (0:41:31) me a lot.

Your second question –

MAN #10: Is Satoshi Dice good or bad?

ANDREAS ANTONOPOULOS: Oh, yes. I’ve talked about this as well before the idea that there’s no such thing as spam transaction, there’s no such thing as a good and bad transaction. That is a normative judgment that no one in Bitcoin is authorized to make. Bitcoin is a system without normative judgment. The question you ask about transaction is simple. One, does it validate according to the current consensus rules? And the answer is clear. It’s either true or false. And two, did it have sufficient fee to be prioritize and included into a block by the miners who are guided by their own self-interest and still validate it according to the consensus rules? If it did, it was a valid transaction. It’s valid to someone. It was valid enough to pay a fee therefore it is valid. The whole point of Bitcoin is we don’t make judgments on transactions other than the intrinsic validity of the transaction according to the consensus rules and we let the market decide if someone is willing to have their transaction carried it is worth something to them. If what is worth to them is a fee that makes it worth to a miner then it is worthy of being included in the Blockchain. It’s a very simple system of decision-making because it removes all of the possibilities for problems.

The problem is the moment you introduce a normative judgment you also introduced a judge. So, if the question is what is a valid Bitcoin transaction according to the normative judgment then the second question is who gets to decide that? And that’s where things get difficult very, very quickly as we’ve seen in the traditional banking industry.


Written by Andreas M. Antonopoulos on September 13, 2016.