About this Episode

TWiST Episode #140 with Gavin Andresen and Amir Taaki

What if–instead of whipping out your VISA card–you could pay just as safely and much more anonymously with bitcoin, a growing open-sourced international currency. Never heard of it? Then it’s a must you watch this episode of TWiST, where Jason talks to Gavin Andresen, the bitcoin technical lead, and Amir Taaki, founder of BitcoinConsultancy.com about exactly what bitcoin is, how you can use it–and why it will be illegal in under a decade.

Support This Week in Startups and independent media by joining our new Producer Program at twistlist.co!

1:00-5:00 Welcome and discussion of Forbes article by TJ Walker on Jason as the host of TWiST.
5:00-7:00 Thank you go GoToMeeting for sponsoring the show.
7:00-7:15 Go to TWiSTList.co and choose a level of support that works for you.
7:15-8:00 Bitcoin: Open-source, peer-to-peer currency.
8:00-9:00 Gavin, tell the audience in simple terms, what is bitcoin? (Watch the clip.)
9:00-10:15 You actually lead the open-source project to make this software? When did it start?
10:15-10:45 Is it as simple as installing the software?
10:45-11:15 So if I throw my computer out, my bitcoins go with it?
11:15-13:00 Where did the money come from and how many bitcoins are out there? Are bitcoins backed by silver or some other asset?
13:00-13:30  So I just set my software to generate bitcoins. What now? (Watch the clip.)
13:30-14:15 How long would it take for me to make a bitcoin?
14:15-15:00 What’s the current value of the bitcoin?
15:00-15:30 How many bitcoins are there in existence and how many will there be in existence?
15:30-16:45 Amir, you have a biz called BitcoinConsultancy.com. What do you do?
16:45-17:45 You built the exchange software piece of this?
17:45-18:30 If I want to create my own exchange, and I want to charge 1%, I can just use your software for free and set it up?
18:30-19:15 How are people buying bitcoins?
19:15-19:45 What’s the largest bitcoin exchange in existence today? Who owns it and how do they make money?
19:45-20:00 Why is it illegitimate?
20:00-23:00 Having an exchange of virtual currencies seems illegal in the US. But how does someone enforce trading laws if bitcoins are invisible?
23:30-24:45 Who is Satoshi, the founder of bitcoin? (Watch the clip.)
24:45-26:30 Gavin’s evaluation of Satoshi’s involvement.
26:30-27:30 Were they eventually put out of business because it was illegal?
27:30-29:00 Is that as inspiring as having a global currency?
29:00-31:00 So there’s a privacy angle here. If I want a consumer product, you don’t get to know everything about me, is that the point?
31:00-32:00 In a way, it’s taking power away from governments who would manipulate currencies and it’s giving consumers protection. Is it impervious to inflation and manipulation?
32:00-33:10 Gavin, are you really the creator of bitcoin?
33:10-35:15 Tyler: Why are you motivated to promote this? How does anyone benefit?
35:15-36:30 Bitcoins are divisible to eight decimal places, so do you see it as a micro-currency?
36:30-37:15 As an investment property, theoretically, bitcoins are going to go up in value and to what pace will that happen? Is this an investment?
37:15-40:15 Ad for Squarespace.
40:15-43:00 Amir, you’re a poker player. What are your thoughts on the poker economy and bitcoins?
43:00-43:45 Are people actually playing poker for bitcoins right now? (Betco.in is one site.)
43:45-45:00 Is it hackable? Have people tried? (Watch the clip.)
45:00-46:00 Is this on the radar of any governments yet? Have you been contacted by the FBI or the CIA?
46:00-47:00 How did the CIA contact you? (Bonus fact: Did you know the CIA has a VC arm? It’s called In-Q-Tel.)
47:00-48:00 Amir: Regarding regulation, in the beginning, we spoke to lawyers and they hadn’t heard anything about bitcoins.
48:00-49:15 Jason’s prediction: This will be illegal in the US within 24 months.
49:15-50:45 Have the anonymous guys embraced this yet? If people mess with bitcoin, will anonymous take them out?
50:45-53:00 If bitcoins are made illegal in the US, how difficult does that make it for everyone else?
53:00-54:00 Disussion of the Humble Indie Bundle.
54:00-55:15 Tyler, do you agree that anonymous has a tremendous amount of power?
55:15-56:15 Thank you to both Gavin and Amir.
56:15-57:00 Thank you to all of the TWiST List members and producers.
57:00-58:15 Tyler: Will bitcoin be able to circumvent government attempts to shut it down after it’s deemed illegal?
58:15-1:00:00 Let’s say the US goes insane and some idiot is in charge and they attempt to block bitcoins. It won’t work, am I right?
1:00:00-1:00:30 Thank you to new TWiST List producers.
1:00:30-1:02:15 This is one of the most interesting thing I’ve seen in my 20 years in the technology business.
1:02:15-1:04:00 Thank you to everyone, guests and sponsors.
1:04:00-1:05:00 Remember to check out Skweal.com.

Multilingual? Translate this episode of TWiST into another language and email the transcript to translate@thisweekin.com

Further Background on Bitcoin, Gavin Andresen and Amir Taaki

About Bitcoin

  • Bitcoin is the first digital currency to be distributed and was created by Satoshi Nakamoto
  • Bitcoin is based on entirely open source software
  • Decentralized to ensure security and freedom of use
  • Encryption provides basic security functions, like ensuring that bitcoins can only be spent by the person who owns them and never more than once
  • No bank is required for bitcoin distribution–anyone can create, buy, sell or accept bitcoins as a payment method for tangible or intangible goods and services
  • Bitcoin creation is called ‘mining’–the network creates and distributes a batch of new bitcoins approximately six times per hour at random to somebody running the software with the “generate coins” option selected
  • Miners offer competitive fees to facilitate bitcoin transactions, ensuring that transaction fees stay low

About Gavin

  • Has been bitcoin Technical Lead for over a year
  • Got involved by submitting patches of code to Satoshi; after establishing his trust, became contact person for the community
  • Part of a group of unpaid contributors who help run bitcoin-based services worldwide
  • First bitcoin project was Bitcoin Faucet, which gave away 5 bitcoins per IP address; now gives away 2 bitpennies per Google account
  • Founded ClearCoin, a bitcoin escrow service
  • In order for bitcoin to grow, Gavin believes we need niche markets (like overseas services) to deal in the currency, where it could provide a clear cost advantage
  • Says one of bitcoin’s key advantages is that it’s an international currency
  • Says he believes bitcoin has the potential to be “world-changing and disruptive”
  • With the large barrier to entry that exists in the financial industry, Gavin says the disaggregation of financial framework could allow bitcoins to become a player
  • Gavin has purchased Red Sox tickets and alpaca-wool socks using bitcoins
  • Previously worked on software for the U of Mass. Amherst, as a developer for Gravity Switch and as game designer at All inPlay

About Amir

  • One of the founders of BitcoinConsultancy.com, a UK company based in the Netherlands
  • His company developed bitcoin-exchange software
  • Working with one of the largest mobile companies in South Africa with goal of providing bitcoin services for mobile phones
  • Also working to develop an enterprise version of bitcoin so businesses can get their money in and out more easily
  • Is a poker player who tried to set up a bitcoin-accepting poker site in the U.S.
  • Sees bitcoin as eventually becoming a viable alternative to Western Union
  • Says that niches bitcoin could focus on to be viable are micro transactions, the black market, and international transactions
  • Believes that the liquidity of bitcoins make them easier for people to donate and spend (no bank or credit card company barriers)
  • Says the fact that the price of the bitcoin has increased doesn’t mean there’s been an increase in their actual value
  • Since speculation drives up the price of bitcoin, Amir’s biz partner is working on a project to determine their intrinsic value
  • Prior to working in bitcoins, programmed video games and has 10+ years of experience with open-source software

FOLLOW ON TWITTER

Jason: @jason
Gavin: @gavinandresen
Bitcoin (unofficial): @bitcoinmedia