Participants:
ty13r - Host - https://twitter.com/_ty13r
Austin Williams (AW) - Co-host - https://twitter.com/onewayfunction
Charlie Lee (CL) - Creator of Litecoin, Ex-Director of Engineering at Coinbase - https://twitter.com/satoshilite
ty13r: Hello everybody, and welcome to episode 9 of the Decred Assembly. I’m your host Tyler and today we are joined by Austin Williams and Charlie Lee the one and only Satoshi Nakamoto, maybe who knows? Before we start the show, I just want to let everybody know that we had a successful first hard fork of the Decred Network, which happened yesterday. So it’s really awesome that we could get to have Charlie on the show the day after. We hard forked our staking difficulty algorithm and everything went smooth. Everything is going awesome right now on the Decred network, which is really great.
And I want to thank everybody that participated in the survey that we did before the show started, just all the questions. We got so many questions and we try to consolidate everything could into a list of questions that would make sense and flow right for the conversation. So hopefully if we don’t get to everybody’s questions I apologize but it’s just what it is. So yeah, and one last thing. Yeah, I think that’s it, on my intro type stuff. So yeah, welcome to the show! Charlie it’s awesome to have you on the show. [1:36]
CL: Hey.
ty13r: How’s it going?
CL: Good.
ty13r: And then we’re joined by Austin Williams over here, he’s my co-host today. So yeah, I guess let’s get started and maybe you can do a quick introduction for all those that don’t know you Charlie. [1:59]
CL: Yeah so, name is Charlie Lee, I created Litecoin six years ago. And I love Decred also. And recently left Coinbase to work on Litecoin full-time.
ty13r: That’s awesome. Yeah, and we’ll probably dive into some of these topics a little deeper. So I have my list of questions here, going based on what the community said or what I thought would be interesting to talk about. Alright, so first question. Are use to Satoshi Nakamoto? [2:38]
CL: No I’m not, unfortunately.
ty13r: Alright, well sorry guys for anybody wondering out there. I guess Charlie is not Satoshi. We had a lot of people wanting to ask that question.
CL: Yeah.
ty13r: So I guess to get started, what’s your origin story and your involvement behind Bitcoin and like in the beginnings? So how did you first get into Bitcoin and cryptocurrency? [3:09]
CL: Yeah, so in 2011 I found out about Bitcoin through I think a Wired article on Silk Road. And kind of got hooked like everyone else, was breathing, eating, and kind of sleeping, thinking about Bitcoin. Back then the community was so small that you can practically read everything about Bitcoin. You can just track and follow the Bitcoin forum and read everything going on with Bitcoin, if you spend like the whole day on it. So I was doing that, I did everything. I mined some Bitcoins using gpus. I built a couple of mining machines. I bought Bitcoin, I even got into the pirate ponzi scheme, basically everything. Yeah, all the things that they were going on, I kind of got involved in. And then people started creating alt coins and I decided I want to create, I figured I could create an altcoin that was better than all the other ones out there and so I did. And it was a good chance to kind of learn the source code too. [4:23]
ty13r: Yeah, and so what were you doing before, before I guess Bitcoin and Litecoin? [4:29]
CL: I was working at Google. I was working on YouTube mobile, and also Chrome OS, Chromebooks.
ty13r: Awesome.
CL: Yeah.
ty13r: And so you said you decided to create Litecoin because you wanted to create the best altcoin. So what was your motivation behind, I guess the way you you built Litecoin because from my understanding Litecoin is a fork of Bitcoin. Essentially its primary difference is it’s Proof of Work algorithm is significantly different. [5:03]
CL: Yeah so, well a couple of things. One is a few of the- well most of the altcoins before Litecoin were all kind of very scammy, created by people who wanted to strike it rich so they pre-mined a lot of coins and kind of try to pump it and if it gets on an exchange they could sell their stash. So I wanted to create something that’s fair.
And the second thing I want to do was create a coin that complements Bitcoin and be the silver to Bitcoin’s gold. So I understood quite well the relationship between gold and silver, the commodity and currency. I’ve done Gold futures trading previously. So yes the idea was to create a coin that had a bit more upon the faster, easier to use, kind of just like silver versus gold. And one thing I figured out is that I needed to change the proof of work, otherwise it would be competing with Bitcoin for miners, which is really hard for a new coin to kind of survive. So Scrypt was actually already being used by another coin called Tenebrix. And it was at that time mined by a CPU on your computer. So it was a good choice. so I decided to do that. And I guess the rest is history. [6:30]
ty13r: Awesome. So you created Litecoin, you know Litecoin had a big uprising, I think it was 2013?
CL: 2013
ty13r: 2013, I think I went to like 50 bucks. It was pennies earlier that year. And then I guess after that, price pulled back a lot, we went into a Crypto winter. And I mean for a lot of coins, not just not just Litecoin, and then you went to go work for a Coinbase. So maybe you can tell us a little bit about your experience at Coinbase, and what drew you to go work for them. [7:14]
CL: Yeah, I joined Coinbase in June of 2013. The reason why I decided to join Coinbase as opposed to focus on Litecoin, was that I realized in order for- well, I guess I’m a Bitcoiner before I created Litecoin, so I’m a huge fan of Bitcoin also. And I realized that for Bitcoin and Litecoin to succeed, it had to be easy to use and Coinbase was one of the platforms that made Bitcoin easy to use. It was the best one out there that made it possible for people like my mom or dad to actually buy some coins. And not have to worry about how to secure them, ’cause there’s no way they’re gonna run a node or figure out how to secure their own coins. And back then the hardware wallets weren’t really out. So it was just really hard and Coinbase made things easy. So I figured I want to help Coinbase and help make Bitcoin and eventually Litecoin easy to use for the average folks. And that’s why I joined Coinbase. Yeah. [8:19]
ty13r: And I saw the tweet that you sent, I think four years ago to Coinbase, I think probably before you started working there, essentially trying to see if they would add Litecoin.
CL: Yeah
ty13r: So did you joining Coinbase have anything to do with trying to get Litecoin listed on Coinbase?
CL: I guess it was my ulterior motive for joining Coinbase. But I knew that, at that time I knew Coinbase adding Litecoin is a far fetched thing. ‘Cause most companies were focused on Bitcoin. And Litecoin, I mean it’s definitely confusing if you go on onto Coinbase and it was saying buy Bitcoin and/or Litecoin and all these other coins. So yeah, I guess I worked in the background to try and get Coinbase to add Litecoin, and they eventually did this year. But the main reason I joined Coinbase was to actually just help Coinbase succeed and make Bitcoin easy to use. And I know that once Bitcoin is easy to easy to use, everything else will follow. [9:24]
ty13r: I think we’re all lucky to have you know an awesome- I mean Coinbase has been an awesome service for onboarding a lot of new users into Bitcoin. Most of the people that I know that got in later to Bitcoin have bought their first coins definitely from Coinbase. So then Coinbase recently added Litecoin, and then you’ve also recently left Coinbase, so mission accomplished. And now you’ve moved on to supporting Litecoin full-time. So what drew you to this decision in your life, to move on to supporting litecoin full-time, and maybe you could talk a little bit about that. [10:14]
CL: Sure, yeah actually I started spending more time working on Litecoin mid last year. The reason why I decided to do that is I saw the the scaling debate with Bitcoin, kind of … becoming a huge mess. And I figured I could do something to kind of help push things along. Since I created Litecoin and have a lot of influence with it, I can try to help Litecoin activate Segwit to kind of prove to people that Segwit actually works. And there’s no- all this FUD around it is just all lies. So that’s why I did. [11:00]
So we worked hard on porting Segwit to Litecoin. Well it’s actually not hard, the code wasn’t that hard. What was hard is actually convincing all the miners and pools to activate Segwit on Litecoin because the the politics for Bitcoin kind of kind of affected Litecoin also because pools and miners were hesitant to support Segwit on Litecoin because then they would have no reason to not support it for Bitcoin. But yeah, they eventually after a lot of talking, deals and stuff, and just convincing, and trying to get miners and pools to start signaling and kind of break away from from the pack. Eventually they were finally all convinced that adding Segwit to Litecoin was the right thing to do. [11:56]
ty13r: So what was like your primary argument to the miners to getting them on board like “hey, this could be the testbed” for you know is that?
CL: I mean one thing is, pretty much all the Litecoin supporters want Segwit. Litecoin, for the past few years haven’t really done anything different than Bitcoin so doing Segwit would kind of like be something different and show that we can actually kind of be different. And to be a testbed for Bitcoin, to also potentially add lightning networks and other things before Bitcoin does. The argument was that that would help the price right? Miners and pools care about the price of the coin that they’re mining so that they can make more money. And once, one of the pools F2Pool started signaling for Segwit, the price jumped. So it kind of proved that the market actually prefers Segwit on Litecoin. And that helped convince more and more pools and miners to support this and kind of slowly, but surely it got everyone convinced. [13:14]
ty13r: So Austin do you have any questions so far?
AW: I think to follow up on that, so you did it first of all. Congratulations! That’s no small task. I’m curious what your assessment is like. Do you do you feel like it has been impactful in the ongoing block size debate in Bitcoin. As the example that Litecoin has set, is that that is influential as we would hope? [13:42]
CL: It’s hard to say what would happen if Litecoin didn’t get Segwit. So I don’t know how much it has influenced things, it’s definitely done something. So a lot of people use the argument that Segwit was fine on Litecoin. There’s even like a two million dollar bounty on a Segwit address proving that it’s safe. Miners aren’t just stealing these, “anyone can spend coins” because of the way Segwit is activated. Also, I think one of the big things is that with Segwit on Litecoin, like a lot of Bitcoin developers, like lightning network developers, were really frustrated with Bitcoin. Where Segwit is kind of like, in the technical communities adding Segwit is kind of a no-brainer. It’s multiple wins with a soft fork with very little risk. So the devs were getting kind of frustrated that Segwit is not getting activated on Bitcoin and work is getting stalled because of that. [14:54]
So with Segwit on Litecoin a lot of developers, like Lightning developers can actually start testing and work on stuff with lightning on Litecoin. And the nice thing is that when Bitcoin eventually gets Segwit, all the work can easily be ported over to Bitcoin because Litecoin and Bitcoin are so similar. And one other thing is that some of the bitcoin developers started working on Litecoin. For example Johnson Lau is working on adding MAST, and covenants. And some of the new opcodes to Litecoin as a soft fork. The feature is called Smart Crypto-Vault. He is very excited that you can actually start working on that before Bitcoin gets Segwit. [15:37]
AW: That’s cool, that’s good.
CL: So that’s definitely that’s definitely like a plus where developers can get unblocked and just be excited about working on code as opposed to all this political BS.
AW: Yeah, we can keep that forward momentum until the politics catches up. [15:59]
CL: Yeah.
AW: So like a lot of Bitcoin maximalist, they treat all other altcoins as sort of just like test beds for Bitcoin proper? You know there’s some truth to that and in as much as if it’s a close enough fork to Bitcoin, like Litecoin is. Like you’re saying they can put all that work back to Bitcoin. On the other hand if the politics takes too long to catch up, then anyone who wants to take part in the new features like what lightning and stuff like that. I mean if Bitcoin takes too long to catch up then it might be too late to fork, you can lose network effect. I don’t think we’ve lost it too badly yet in the Bitcoin space, but that really could happen if they don’t. [16:49]
CL: Yeah, to certain degree but I think Bitcoin is still going to be king of cryptocurrency. And I always envision Litecoin to compliment Bitcoin, so it’s not about stealing features or users from Bitcoin but more like Litecoin is faster, more nimble and can kind of upgrade more contentious and more risky features sooner. To test it out because it has a smaller market cap.
AW: Yeah, this has been the perfect example of that, implementing Segwit. [17:28]
CL: Yeah.
ty13r: And so and then this kind of segue into a good question, so in your opinion, what do you think the largest unsolved problem in cryptocurrency is right now? [17:44]
CL: The largest unsolved problem. I think it’s still ease of use in terms of securing your coins. So now you have hardware wallets which makes things easier. So it’s all about the trade-off between convenience and security. Alright so using Coinbase is very convenient but then you’re relying on a third party for everything. Putting everything in your- like securing yourself, you’re like running your own node, works, But then if you get hacked, then you can lose all your coins. Or if you put all your savings into a paper wallet, it’s very secure but you can screw up and lose access to your own coins. So that trade-off is hard for anyone to make. Whether how secure you want the coin to be, how convenient you want to access it? I think hardware wallets is close to an optimal solution for most people, but it’s still not that easy to use. So I think we need, to keep working on that until everyone can be able to secure their coins without- with very low chance of losing them. [19:08]
ty13r: And do you have any any ideas on solutions to that problem because it seems like it’s a really I mean tough problem. I mean, I feel like the twelve word or 33 word phrase or whatever is pretty easy but it’s still pretty hard for a lot of people. I don’t know. Do you have any thoughts on, you know after working at Coinbase I feel like you guys probably bash our heads against the wall pretty regularly. Thank you. [19:34]
CL: Yeah, the 24 words is easy, but then you have to write it down and you have to put in a safe place. So you can put it in your bank vault or bank safe-deposit box, but then what happens if you lose access to that. Or if there’s a fire or something like that. Do you want to put in multiple places? But if you put in multiple places, there’s risk of someone getting access to one of the places right? So then you can password protect it with a password. It’s still pretty complicated. [20:11]
Yeah, there’s no optimal solution, yet. And I haven’t, it’s hard to come up with an optimal solution that is both safe and secure and also you have very little to no chance of losing access to things yourself. Yeah, potentially something like where you have- using some sort of Smart contracts like Check Sequence Verify, if you lose access then the coins will be sent sometime in the future like one year later, so you can still get get the coins, but you just have to wait for a timeout. Something like that. So we’re working on adding more smart contract kind of stuff to Litecoin via Smart Crypto-Vault. So with that potential, we have a better solution. [21:06]
ty13r: Gotcha. That’s pretty cool. Yeah so, What is Smart Crypto-Vault? I’m pretty involved in the Decred community so it’s hard to keep up with all the projects.
CL: So Smart Crypto-Vault is basically MAST, which is Merkelized Abstract Syntax Tree, with covenants. And so MAST is the ability to kind of put a lot of scripts Into one merkle tree, so that you save space. And you only kind of expose the script when you use it. So there’s a privacy and kind of space saving feature of that where you can put a lot of smart contract kind of code to control a transaction but then you don’t have to actually put all that into the blockchain until you actually use it. You can probably google MAST with Bitcoin. There’s a quite a few articles on it. It’s very innovative and it’s very cool. And we can only do it because we have Segwit, where the Witness Data is all in it’s own Merkle Tree.
ty13r: And then Smart Crypto-Vault is? [22:41]
CL: So in the other part like covenants where you can create some kind of vault transactions where you can have a kind of like a lock transaction. That’s like a two of two transaction, but if your account gets hacked and someone’s got into it, If someone got access to one key, they can broadcast the transaction to take the coin, but then it’ll be locked for x amount of time. So if you use both keys you can kind of pull the coins back. So it’s a way to secure the coins in a way where there’s a time lock on like a vault. Yeah, google covenants with Bitcoin. You can read more about that. [23:33]
ty13r: Gotcha.
CL: It’s just adding more smart contract features to Bitcoin and Litecoin. It’s not going to be as feature-rich as kind of Ethereum, but it’s enough to do a lot of cool things on Litecoin, like native Litecoin Blockchain. [23:51]
ty13r: Yeah, that sounds really cool. I’m looking forward to reading more about that. So I have a couple questions around the August first date. So I guess I’ll start with the first one: MIT I guess released a page that says something about Litecoin. It’s like litecoin.mit.edu or something is the page. So do you know anything about what’s gonna happen? I think the countdown is on August 1st too. [24:23]
CL: I don’t know what that page is about but I’m not gonna assume that it’s an official MIT release until I hear otherwise because it’s very easy for a student or staff member to actually obtain that domain name litecoin.mit.edu All you have to do is, if your username was x, then your domain is x.mit.edu and your email is [email protected] So it could just be a student deciding to deciding to take the username Litecoin and to create this page to kind of pump litecoin. So I sent an email to them, and I didn’t got reply, so I’m gonna assume it’s a hoax until I get otherwise. [25:04]
ty13r: So it’s smart, those MIT kids are smart. So there’s another thing happening on August 1st and it revolves around Bitcoin primarily and User Activated Soft Forks and BIP 148. So I was wondering what are your opinions on UASF and BIP 148 more and what do you think’s gonna happen on August 1st? [25:32]
CL: So for UASF I think the idea is good that users actually have control over Bitcoin or Litecoin because users give the coin value. So, if all the users for Bitcoin are running UASF code then it’s gonna happen because if It doesn’t, like the exchanges and the miners have to kind of follow that blockchain. Otherwise they won’t have any users on the other chain. So, but what’s most important for UASF is to actually get all the exchanges to be running UASF code, for the exchanges to represent their users. So if the exchanges are running UASF code, then miners have to comply because miners won’t be able sell coins on the different chain. If they don’t follow the UASF chain then their mined coins will be worthless. And the idea is that if there are two chains and let’s say exchange a support multiple chains? If users all want UASF, all want Segwit, then the UASF coin will be worth more. And if it’s worth more than miners will automatically mine that coin because they’ll make more money. So that’s kind of the idea behind it. But it’s definitely risky if the miners are not mining that and not enough users are on the UASF chain and not enough exchanges are on it. So that’s risky, but what’s happening is with Segwit2X. Supposedly the code will be out soon, and if 80% of the miners are signaling you UA- sorry signaling Segwit2x then Segwit will happen and on August 1st there won’t be a split because all the miners and pools will actually signal for Segwit on August 1st and we’ll be ok. At least that’s the idea. [27:49]
ty13r: Yeah
AW: If they signal late, that could be a problem
CL: Yeah.
AW: That’d be a weird problem right, so then you’d have two groups of people who both want to activate Segwit that are threatening to fork from one another to do it, which is really weird. But I think we’ll fall in line before August 1st. I think there’s too much at stake. I think everyone knows it. [28:09]
CL: I think so too. I think the the riskier thing is what happens in November or December when-
AW: Yeah.
CL: Three months after Segwit-
AW: Yeah that’s a whole nother thing.
ty13r: On top of that I mean, so let’s say Segwit2x does get activated. So what’s gonna happen with Bitcoin Core? ‘Cause pretty much all of Bitcoin Core does not approve of Segwit2x and it’s this compromise of Bitcoin Unlimited of you know like “We want a hard fork,” and then bitcoin core and a lot of the group want Segwit which is a soft fork. So Segwit2x is, let’s compromise with hard fork. So…
CL: Yeah I mean, It’s yeah, I’ve written on Twitter about Segwit2x. I think it’s quite crazy that you would run this new code with like a couple weeks of peer review and do a hard fork in three months and kind of try to get rid of all the Bitcoin Core devs, in a way. Or this is something that pretty much like all the core devs are against and the core devs are like the smartest and brightest cryptocurrency people in the space. It’s a meritocracy. You don’t get to work on Bitcoin Core unless you actually know what you’re doing. So it’s crazy. This is a forty billion dollar market cap. And we are just kind of- I don’t know, it’s crazy. [29:51]
ty13r: Yeah, I guess this kind of segues into Decred. It seems like UASF essentially wants this ability to have their holdings of the currency or have some representation of “I’m a holder of bitcoin, I want the Direction of Bitcoin to shift this way.” And obviously that wasn’t built into the original design of Bitcoin and and the miners themselves are actually the ones who have all the control. Essentially, getting all the economic and big nodes online is definitely a way to go about that, but you still have the issue of, you need miners to support it no matter what. So I guess I mean- [30:40]
CL: Yeah, miners don’t have all the control, everybody plays their part. So like miners can’t, they can’t really delete- like for example they can’t just start mining and create more coins for themselves. They can’t change the 21 million Bitcoin limit.
ty13r: Sure.
CL: If they do then no one will support that coin. So they don’t have all the control. So if they if they stop mining the coin, then there’s no security and it loses value. So you need miners, but they don’t have all the control. So everybody has a little bit of say, so now it’s question of, who really gets the final say? [31:23]
ty13r: Absolutely
CL: Part of everybody works together, right?
ty13r: Yeah, yeah, and I think everybody at the end of the day wants what’s best for Bitcoin and people just- this is a very contentious argument on how we how we get to that point, Is Bitcoin gonna be the coin that supports billions of people and handles payments for everything? I think a lot of people want to see that, and some people just want to see it used as a reserve currency that supports a lot of other stuff. So and does the centralization and scaling become an issue? Because like Craig Wright says- do we need to run $20,000 nodes to support this type of Network and not a lot of people agree with that. [32:16]
So I guess what I’m trying to do is segue into the topic of Decred and for all the watchers or listeners out there, viewers that don’t know, Charlie co-wrote a paper called proof of activity. It was actually one of the birthing ideas behind Decred, so you know Charlie, I was wondering if you can talk about your history involved in the creation behind Decred. And for those that don’t know Decred is a currency that essentially has governance built straight into its blockchain. That allows voting of the control of the future of the protocol, to control how we handle decisions like scaling. So I was wondering if you can well to talk about that. [33:-2]
CL: Yeah so, back then in like 2011-2012. I was kind of- I had my hands in a lot of different things and for example, I thought of a more fair way to do mining, pool mining kind of reward. So another thing. I worked on was this Proof of Activity idea. Basically people wanted to explore proof of stake and a way to do that. One thing I thought of was proof of activity where there is people who hold coins sign blocks and the more signatures a block has then the more secure it is because people are online with their coins and they can sign a block if they get randomly chosen to sign that block. So if someone attacks the network then if they fork, kind of in secret, they won’t be able to sign as many blocks because the coins that they own won’t be randomly chosen as often as the whole network. So the winning chain is one that has the longest chain plus more signed blocks. There’s like a simple algorithm to- simple calculations to decide which chain is better. So it’s much harder for someone to attack a chain in secret, because they don’t have enough stake. [34:38]
And Decred loosely kind of uses that idea with a hybrid Proof of Stake/Proof of Work. Where you buy tickets to a lottery, so you have to use your stake to kind of buy tickets where your coins are locked up and then you randomly get chosen to vote and that basically controls, which chain is the winning chain. And the nice thing about this voting is that you can also vote on hard forking rule changes, or just any proposals. And that’s basically what Decred is all about, where users, not only are they protecting the coin with votes, they’re also changing- voting on the direction of the the coin. [35:34]
ty13r: Yeah, and I think that’s one of the biggest selling points to me on Decred and then on top of that I think the developers behind Decred are pretty phenomenal. So we’re lucky to have such a strong development team, and another thing that really kind of spurred my curiosity is, you got involved in the Decred community a few months ago? And I was really surprised when I learned that your Proof of Activity paper was one of the main papers that contributed to the idea behind Decred, so I was wondering you know why why were you not- I mean did you know about Decred earlier on? And why didn’t you I become a supporter sooner rather than than later of the project? [36:26]
CL: Yeah, so when I came out with Proof of Activity. I mean, it’s just it wasn’t really- I wasn’t spending a lot of time on it. It was just kind of something neat idea I came up with and back then Litecoin was already running and people were asking me, “Will I add it to litecoin? Will I switch proof of work on Litecoin to proof of activity?” And I basically said it was too hard to kind of switch that on the fly for Litecoin, too risky. It would be cool if a new coin would try this idea out, so someone did, his username was Tacotime? He decided to work on MC2. I think that’s what it was called, and that’s based on the Proof of Activity work. And then that project merged with Decred, what btcd team was doing and it became Decred. So I wasn’t really following MC2 because it was years before you actually got something working. And then I remember hearing about Decred a bit but I didn’t really have time to follow up on it until recently earlier this year someone on the Decred team pinged me and asked me what my thoughts are on Decred. And then that kind of reminded me “I’ve heard of this project before” so looked into it more and realized it’s actually something that’s working in practice. It’s live production of something based off of Proof of Activity so I guess that got me more excited about it. So I looked into it more and found out how awesome it was. [38:06]
ty13r: Awesome. One of the main reasons you support the Decred project, was I guess your proof of activity? So I mean are there any other reasons, besides taking that original idea and turning it into something that’s working? Are there any other reasons why you’ve become a community member and stakeholder so forth? [38:35]
CL: Yeah, Decred is not just- I mean my original idea was pretty simple, but it added voting which allows users to kind of control the direction of the project. And recently the whole block size debate on Bitcoin, really shows why something like this is needed. Because right now you just don’t know what people want for Bitcoin. You hear on Twitter, or Reddit you see all these people arguing but we don’t really know like, Do the majority of people actually want Bigger blocks, or do the majority want smaller blocks, but more security and decentralization, or do they even care? It’s pretty much impossible to poll or survey the users of Bitcoin in a reliable way, where with Decred it’s actually possible to do that via the voting system. [39:29]
So that’s kind of the innovation that I’m excited about where- and we saw the first vote get passed where people want to fix the staking algorithm to make it better and people also voted to, they want the developers to start researching, adding lightning networks to Decred. And this is something that we know for sure that that’s what the community wants, as opposed to just loosely be able to tell what people want. So I guess that’s why I think Decred, the project Decred has some value. It’s doing something that pretty much no one else in this community is doing, at least it’s one of the first ones to do it. Which is the ability to do on-chain hard fork based off of Stake Voting. [40:22]
ty13r: Yeah, and another thing for the viewers that don’t know. So when a fix like the staking difficulty algorithm fix, which also if for you guys don’t know Charlie actually contributed to that proposal. He’s one of the many community members that contributed to helping fix that. And also, fixing that algorithm, it’s actually pre-coded into the release where we vote. And you lock up your funds for essentially up to 142 days and then when your ticket gets called you get your funds back plus a little reward. But then if that vote passes after a lock-in period of about a month of the fork actually activates on chain automatically, which I think is a really innovative thing for a system like this versus “voting and signaling” and then going and working on it like some of these other systems that have governance built in. [41:24]
CL: Yup.
ty13r: So we also have a proposal system coming online soon and one of our Decred community members had a good question for you. They said Charlie, in the proposal system for those of you that don’t know, in Decred it’s essentially you’ll pay a little bit of Decred, you’ll submit a proposal to the network and what it will allow you to do is vote on our development organization subsidy. Giving you however much funds that you’re asking for to do something for the Decred network or whatever. So somebody had a good question. If you could submit one proposal once the system goes live, what would it be? [42:08]
CL: For Decred?
ty13r: Yeah, yeah, well I mean the funds could be used for anything, so it’s obviously- It’s probably gonna need to be for Decred in some way because you might not get as much adoption.
CL: Yeah well one thing, assuming that lighting network is done on Decred one cool thing would be to do a decentralized exchange via lightning network in cross chain atomic swaps, so that’s what I would propose I guess. Build a decentralized exchange that would swap Decred with any other coin that also has lightning. [42:53]
ty13r: Yes, I think that would be really cool. I totally- yeah, you got my vote for that proposal.
CL: I’m not gonna do it. Someone else can do all the work.
ty13r: Well at least you’ll have the funding behind it so you can give the money to somebody else.
AW: Lightning network on Litecoin yet and Litecoin Network or is that still in development? [43:21]
CL: It works, so lightning, the developers are still working on improving the infrastructure. Right now, they’re not really focused on the UI so it’s mostly a command line. You can create a node, and create payment channels, and start transferring coins. I think it’s going to be slow in terms of building a great UI for lightning network. What I envision in the future is that users don’t really care what technology is used to send payments. They just want to send payments right? So for example when you swipe the credit card you don’t care how many banks it goes through for approval, how the money flow actually works. You just care that you get approved and you get the product that you’re buying. So same for eventually in the future for Bitcoin. You send money to the merchants, you send Bitcoin to a merchant or Litecoin. you don’t care if it’s using on-chain transactions, using lightning, it’s using some other form of payments. All you care is that the money gets there and you get the product. So we make a UI where the recipient is some sort of address that can you can actually send on-chain to or you can send lightning to. So how that is implemented is kind of yet to be seen. [44:18]
AW: Your vision, it sounds like you do but when the lightning network is up and running I always imagined it being used like from business to business with stuff on the backend, but it sounds like you’re seeing it like if you just have two arbitrary users on the network that they ought to be able to pay each other. like one time- [45:10]
CL: Uh-huh
AW: -lightning. Oh good, that’s interesting. I hope that it ends up working out that way. That would a really powerful thing
CL: Yeah, it’s still to be determined how things will work, like how the lightning network will be. Whether it’s a lot of kind of big hubs where you go through or if it’s all more like everybody like all the nodes those are kind of decentralized. And it doesn’t really matter you just have to be able to pay someone, as long as you can find a route to them. [45:46]
AW: Yeah, having a single address to pay either though the lightning network or through directly on chain would be perfect. That’d be great.
CL: Yeah, well that’s, how that is done is still to be determined, but we have smart people working on it.
ty13r: So and we’re gonna dive back into lightning networks soon for all the viewers out there, but I want to pull back to the governance topic. So with Litecoin, do you foresee there arising governance issues as the currency grows and market cap, and you know could potentially be be that silver to Bitcoin. Do you see governance being an issue with Litecoin? [46:33]
CL: So I guess there is advantages and disadvantages of me being around. Where I kind of have a lot of influence, but that’s also- if I started doing stupid shit, or If I get compromised in some way, then the network could be harmed by me. So we’ll see how that works, maybe In a few years, I might have to kind of step away and say that’s it. It’s too much of a liability for me to be around. [47:17]
ty13r: Yeah, we saw Vitalik’s death get faked and the price dropped instantly with Ethereum.
CL: Yeah it needs to be aware If something happens to me, Litecoin doesn’t die because of it. I hope Litecoin price won’t drop because something happened to me but yeah, so it’s definitely a liability, but it’s also good where I can help kind of push Litecoin towards my vision right? I think Segwit passing on Litecoin earlier this year would have been much harder without me kind of pushing or convincing the miners and pools to believe in my vision. And as you see with Bitcoin, no one’s in charge, so it’s hard to get anything done. It’s kind of like a benevolent dictator versus a democracy. In the U.S. things are just inefficient because it’s just hard for us to get stuff done because of the democracy. Whereas if you have a dictator then they can do anything they want, pretty much. [48:39]
A few years ago, I went back to China and I just heard that if the chinese government wanted to kind of improve a certain area of the country they can just tell everyone to move out. And they’re gonna tear everything down and build skyscrapers and after like two years, “come on back in. We just rebuilt your city.” This is not something that we can do in the U.S. You can’t just force people to leave their city and rebuild it for them but hey, when you have a communist government you can do that, and it’s efficient. They just have no right. [49:15]
ty13r: Oh yeah.
CL: It’s a tradeoff. Yeah so, it’s good and bad.
ty13r: Definitely agree with that. I think it’s definitely good having the project creator around. I think if Satoshi was still around we wouldn’t probably be having this scaling debate. So, Craig Wright says otherwise but [Laughter]
CL: We see both groups kind of saying that this is what Satoshi would have done or something like that, it’s like, read the whitepaper this is what Satoshi wanted but just like use one of his forum posts and kind of claim that’s proof that we should do things this way. [50:05]
ty13r: Yeah I think Roger Ver likes to take a lot of stuff out of context sometimes and say this is what Satoshi wanted. There’s really no way to say what he wanted, because then when he was thinking about the network it wasn’t what it is now. I mean, it’s really hard to say what anybody who would want unless you were actually able to talk to him now.
CL: Yeah, even back then even back most people would think that, hey we just like increase the block size when when the time comes. A lot of people have changed their mind over the years and become more conservative and realized that we can’t take these risks and decentralization and security is of the utmost importance. Once you lose decentralization-
ty13r: -then it’s just a bank.
CL: It’s like a little bit more decentralized version of Paypal. [50:54]
ty13r: Yeah.
CL: So do we want that? I mean some people want that, but so that’s the reason why we have such a big debate right now is because in the early years Bitcoin was pretty much perfect. It satisfied both camps. But because things were cheap and the reason why it satisfied both camps is because of the mining rewards. All the miners are getting paid 50 Bitcoin a block. And they don’t care that the fees are low. You can do micro micro payments because there’s very little users and everybody who wants to send Bitcoin can send send it for cents or below a cent. So it’s like both camps are happy and thought that bitcoin is like the perfect thing and over time as we get more and more people and the blog rewards are decreasing you now kind of have choose because there’s now a trade-off. Do you want to keep decentralization and security? Or do you want faster, cheaper payments that support like a billion people on-chain. And you can’t have both anymore. And both sides are saying that their vision of Bitcoin is getting destroyed. [52:16]
ty13r: Yeah, and so it really is a really sensitive topic and I think there are future solutions for this, but I think one of the great things about this whole space is that we have multiple projects going on at all times trying to solve different things. So maybe Bitcoin does retain that thing that is just never going to change. And maybe that’s not a bad thing and we allow other projects like Litecoin or Decred or Monero or some of the other more highly respected projects in the space to continue grow in different ways that bitcoin can’t. [53:04]
CL: Yeah and if Bitcoin is like the the decentralized gold, it’s still very valuable. I mean, even if it costs ten dollars to send a Bitcoin payment, what you’re getting is something incredible where it’s a payment that can’t be that can’t be reversed and its borderless and nothing and nothing else can compete. You can’t send gold like that, you can’t send a wire that way, that’s that efficient and that can’t be reversed. And that’s cheap compared to wire fees. So even then It’s still an amazing thing and you can have other currencies to fill the other niches. [53:50]
ty13r: Yeah, and I guess going back to the topic of Litecoin and Decred, so do you foresee our two projects ever collaborating and working together in a way that you know could benefit each other?
CL: I mean potentially with lighting network. Yeah, like atomic swap could happen between the two. We can work together on that. There will be other things we can work together on.
ty13r: Awesome. Alright, so we answered that question too fast so
CL: Maybe we should just merge the two chains and call it Litecred or something like that. [54:42]
ty13r: There you go. Yeah, I like that, that’s not a bad idea. Well, I think there could be some cool things that could happen. And I’ve been talking with Dave C. and some of the other devs that Decred is, how could we take the governance system that Decred’s built and allow other currencies to benefit off of that technology? And maybe with lightning network and atomic swaps, it might be possible. I don’t- you know this is above my pay grade. But I feel like that is something Decred could offer to other blockchains that could benefit the entire space, which would be cool. And again, I’m not a developer so- or I am a developer, I’m just not a blockchain developer. So are there are there any features that you would want to import from Decred into Litecoin, that you foresee in the future? [55:44]
CL: It’d be cool to have the governance feature in Litecoin, but it would be very hard to do it, very risky to switch the proof-of-work to something different. I mean, that’s why what Ethereum is doing is pretty crazy, trying to switch to proof of stake. Such a big market cap coin to do it is yeah, especially because they used to have this difficulty bomb or they maybe still have it, where they purposely created a kind of a suicide pill where they would have to switch to proof of stake and the other chain, the proof of work chain would just die because of difficulty would get so high. So miners can’t kind of keep the original Chain alive unless they hardfork, but now I think they have to remove that difficulty bomb because they don’t have proof of stake ready yet in time. So if they hard fork remove that difficulty bomb then when they actually hard fork to proof of stake, miners will actually keep the under chain alive. And who knows, it’s gonna be a hard switch. [56:58]
ty13r: We’ll have mEth and pEth and ETC. We’ll have all these varieties of Ethereum, it’s going to be awesome.
CL: Yup, awesome for traders I guess. Actually let me go sell some Decred right now.
ty13r: Oh man. No Charlie, you’re supposed to stake Decred. Keep calm and stake Decred.
CL: One thing with Decred, it’s still hard to kind of do staking. It would be cool to have more user interface for staking or something that’ll let you do staking automatically. [57:39]
ty13r: Yeah, well and talking about that, I think with the sdiff algorithm getting switched. For all the users that don’t know Really you shouldn’t-. like soon enough, you really shouldn’t wait to buy tickets. Before most people don’t know this but the price of a ticket would vary drastically. I mean it would go up like 100 Decred, 150 Decred, back down to 100. And then it would finally become cheap where everybody would purchase them because it made sense again. Hopefully that should be fixed now, so what I think, I’m hoping that there’s not going be as much competition. So you’re not going to have to vary your fees that you’re paying to buy tickets. You should just be able to put your bids in to buy tickets and I think that fixing this algorithm is going to make a huge effect on adopting ticket purchasing in the future. So it should be kind of one-click, in my opinion, going forward. [58:40]
CL: Yeah, I think it’s huge. Should be a lot easier, just buy whenever you have funds. Yeah.
ty13r: So and ticket buyer too. You’re not going to have to do weird crazy configurations like you had to before for it to automatically purchase tickets and not like rape yourself on fees. So I think that’s going to have a big effect on the future of that. So in my last question regarding Decred, before we move into lightning network is, do you think Decred is ever going to get listed on GDAX or Coinbase?And what does it take for a coin to be important enough to get added by them. [59:29]
CL: I would say, trade volume and interest. In the end companies are only interested in making money. Like one of the reasons why Litecoin got added is because it just had huge trading volumes. And also it was easy to add Litecoin because it’s so similar to Bitcoin. And having me work there didn’t hurt either. So yeah, but then in the end It was about trading volume. We had Litecoin added to GDAX but then the reason why we decided to work on adding Litecoin to Coinbase was because it was getting so much traction after the Segwit news and everything and the volumes on GDAX were just incredible and so It made a lot of sense financially to add Litecoin to Coinbase, so we did. [1:00:30]
So in terms of another coin, one thing about Coinbase versus an exchange like Poloniex is that Coinbase is kind of more selective in terms of which coins it adds. It still hasn’t added like ETC. So there would be coins that that Coinbase wouldn’t add, but I don’t think Decred would be on a list of coins Coinbase wouldn’t add. But then it’s more about user interest and volume, so when Decred gets high there in kind of top five coin or top ten then it will be more likely for Coinbase to add it. [1:01:12]
ty13r: So do you think GDAX is gonna be adding more coins coming here in the future? Do you think that’s on their radar? Are they gonna try to be the more prestigious version of Poloniex or?
CL: They’re definitely gonna add more coins, timeframe wise I don’t know.
ty13r: Gotcha. Yeah. Well, that’s cool. Alright, so I know that Austin is anxious to talk more about lightning network. So I’ll let him take this next question then.
AW: Yeah we’ve slipped some lightning network questions in here and there. So as far as ETA, when it’s ready to use, you say it’s already working, not a real nice user interface. In principle is it working well enough that if you had two coins with implementations of lightning that you could start doing cross-chain atomic swaps now? [1:02:11]
CL: Not easily. I don’t think that’s- cross chain atomic swaps isn’t high on the list of todo items for lighting network developers. So I mean obviously they want to make sure the experience for one network is good before they work on that right? I mean, it’s a very cool idea and technology but you kind of really need both networks to be up and running and have good connections. But at least they’re thinking about it and they’re designing the code and everything to support multiple networks at the same time. You can run your Lightning Network daemon and you can specify which networks you want it to be running on. So if you specify Litecoin and Bitcoin and some other coins, then they can run the network on multiple coins and once you have nodes on multiple coins, then they can start advertising like exchange rates. [1:03:14]
AW: Yeah.
CL: They can advertise I will trade Bitcoin for Litecoin at this exchange rate. And then you have a network where you can see different nodes advertising exchange rates, and you can go through them to get to the other network. But routing on one coin, one network is already hard enough. So I don’t think anyone’s thought about how they would do combined routing on multiple coins networks. So, it’s very cool but yeah go ahead. [1:03:46]
AW: Yeah so, I guess one of the questions we wanted to ask for was there are a lot of different applications of lightning network. Yeah, so you can for example, there’s the cross chain atomic swaps, of course you have real quick micropayments, but wondering if you have any sort of applications of the lightning network that you’re really excited to see and if there any that are at the top of your list and just I know you don’t devolve but if you do, approximate ETA’s. [1:04:18]
CL: I think with lightning network the most important thing is just payments, at least initially. So I haven’t thought too much more than that. If we get payments, done well, where you can just go to online or go to a store and actually pay someone via lightning network and it will do the routing correctly and it will find you and it will kind of send the transaction instantly. I think that’s the most important thing. And the reason why I like lightning network, is just such a good kind of feature is because it’s kind of layered on top of Litecoin or Bitcoin, it does instant payments, it’s actually instant. It’s irreversible. It’s based off of Bitcoin crypto. [1:05:16]
Lastly the fees will be lower and the fees will be, another thing is that the fees will be related to the amount you’re sending, so right now bitcoin and Litecoin fees depends on the size of the transaction. And most people don’t understand how that works. You can send 0.01 bitcoin or you can send like- sorry let’s say you send one bitcoin. Sometimes it can be a small transaction that’s only 300 bytes, sometimes it could be a huge transaction because you’re using multiple Inputs and as a user we don’t know how big of a transaction it is. So the fees are hard to calculate, so your wallet has to calculate it for you. And then you’d be surprised that people have posted on Twitter saying that I sent like one Bitcoin it cost me like five bitcoin in fees. It’s because the transaction is huge. It’s trying to like combine a thousand inputs. So fees based on transaction size is just confusing for users. With lightning network the fees will be based on the amount because with Lightning network they’re kind of the underlying limited resource is the amount and not the size and bytes for the transaction. So that will make payments more sane kind of. [1:06:50]
AW: Yeah, that’s exciting. We’re just seeing that come along over the next few years or so.
ty13r: Okay, so do you think, well It’s kind of going back to Litecoin again, and I mean do you think that Litecoin is going to have a struggle scaling as it becomes more and more popular? So Litecoin already has four times the block size compared to Bitcoin and now that we have Segwit and lightning coming. I don’t foresee Litecoin having any scaling issue in the near term. I mean even if Litecoin is as popular as Bitcoin is today, It’s still won’t have issue because we have effectively 4MB block sizes. And if it does become a problem, then it’s a good problem to have, that means Litecoin is like amazingly popular. But I think we are lucky enough to have Segwit and lightning network that we potentially may never need to scale on-chain. And all the scaling off-chain like lightning network and potentially future technologies is enough to keep all Litecoin on-chain transactions within the block size limit. And if we do need to scale on-chain we’ll do that. [1:08:28]
ty13r: So and futurewise of Litecoin specifically, where do you see Litecoin heading directionally? What’s your vision for, I mean, do you want Litecoin to be more of a payment currency? Or do you want it to still be that kind of reserve hold of value or some mixture of both? [1:08:54]
CL: My idea is that Bitcoin is the ultimate store of value currency and Litecoin could be the ultimate payments currency. So in terms of where I want to see Litecoin grow, is I guess two things. One is what we are doing right now with the Smart Crypto-Vault. It’s just adding more more smart contract, more programmability to Litecoin. So that it can be more useful for programmable money, potentially more useful for internet of things payments. The second area I want to see Litecoin grow is privacy. So one thing that I realized early on about Bitcoin is it’s pretty much perfect money, except for one area, which is that it’s not fungible. [1:09:55]
ty13r: Yeah.
CL: So Bitcoins you receive all have a history and potentially that can affect whether not you can spend them in the future. So as an example, working at Coinbase, I’ve heard many stories where we shut down an account because someone sent their Bitcoins to a gambling site or use it to buy drugs. It’s just because we know what they did with it, we can’t service them anymore. And that’s something that’s not really good for money. If you got two 20 dollar bills and you can’t spend one of them not because it’s counterfeit, but because it has a taint of some drugs on it. That’s just that’s just bad currency. So one thing I’ll eventually adding to Litecoin or we’ll work on adding to Litecoin is potentially something like confidential transactions so that you can kind of hide the amount and with something like Coin Join or something similar like Tumblebit. You can also kind of hide the sender and recipient so we can potentially just make it much more private and fungible. But that’s still kind of far in the future. It’s not this year or potentially even next year. [1:11:16]
ty13r: Yeah, I think those are two of the- to me two of the biggest issues are governance obviously with the future being able to make decisions as a network but absolutely second after that is fungibility. Because this is going to become a big issue in the future, in my opinion. So I think Bitcoin is going to need it, other projects as well. [1:11:43]
CL: Yeah, and it’s not just about like doing illegal things. It’s more about not telling people how much money you have. Right now if I got paid in Litecoin, someone paid me like $10,000 in Litecoin and I send that to buy coffee then the coffee shop now knows that I at least hold ten thousand dollars worth Litecoin. Which is kind of silly right? And if I don’t want them to know that, I had to manually do something to kind of hide the amount. Which is just hard for a normal person to use if you have to think about that. [1:12:25]
ty13r: Yeah, like have a hot wallet, like a separate wallet that you probably you know let’s say Decred. You bought some Decred off of an exchange and had it sent, some of it to another wallet, and then some to your main wallet.
CL: Yeah, I mean most of [the] advanced Bitcoin, Litecoin users these days actively think about which coins they want to send where. All right, they have like a wallet that’s- I mean if they buy from the exchange it they might buy a lot or they have savings that has a lot of coins. You don’t want people to know how many coins you have so you have the I don’t we decide how to manage that, which is cumbersome. [1:13:04]
ty13r: Yeah. So you want Litecoin to be more of a merchant coin? So are you guys doing anything right now to handle getting more merchants on board to accept Litecoin?
CL: Not yet. At least right now, what’s more important is to make sure that all the exchanges support Litecoin, so I mean Litecoin is probably one of the most supported exchange coins other than Bitcoin right now. So it’s important to be able to buy and sell Litecoin with your local currency. And once Litecoin is exchangeable everywhere and lightning network works on Litecoin then I think we could start focusing on merchants. Because even though Litecoin right now, fees are low and transactions are faster than Bitcoin. It’s still not a compelling reason to use it as a payment method because people are so used to Visa and Visa just works. People don’t have to worry about it. And right now, the reason why Bitcoin merchants kind of things hasn’t really taken off is because it’s just not better than Visa. it’s a worse user experience. So only people who actually have Bitcoin and want to kind of help make it more successful is using it. Normal everyday person has no reason to use Bitcoin to buy stuff. [1:14:45]
ty13r: It’s just true. Using your your Visa card is much easier, at times can be a lot cheaper.
CL: Yeah. You always regret using Bitcoin to buy stuff.
ty13r: Oh, I know man. I know, like God that computer I bought or whatever at the time. You’re like, God that things worth so much money. Yeah.
CL: Yeah one of the features we added to Coinbase was whenever you spend Bitcoin, you can have an option to buy back your Bitcoin because you don’t want to lose out on it. But then if you think about it, that’s stupid. You’re spending Bitcoin, sending it to someone who converts it automatically to US dollars and then you’re spending the US dollars to buy the Bitcoin back and you’re paying fees on both sides. So why not just send them US dollars? [1:15:40]
ty13r: Yeah. Well, I mean unless unless you’re paying somebody like an individual for work or something I could see the value there.
CL: The reserve currency is still the US dollar, or whatever local currency you’re using. So until, maybe many years in the future where people will be pricing stuff in crypto then that will become mainstream, then we’ll start using it more.
ty13r: Well that’ll be interesting, the day that we’re seeing Bitcoin prices in the stores. I mean, I just don’t know how that would work since it’s deflationary.
CL: I don’t know.
ty13r: They’d need digital price tags everywhere. So one of the future kind of questions about Litecoin, so do you guys plan on ever adding token type operations on top, like the ability, like with Ethereum, like counterparty had on Bitcoin and Mastercoin, but I guess more integrated into the protocol directly. Like the ability to create tokens on top of Litecoin. [1:16:50]
CL: Well like Omni, also known as Mastercoin has ported their stuff over to Litecoin. And Tether is going to start supporting Litecoin. So that’s cool. If you’re that Counterparty or group of people working on deploying Counterparty on Litecoin, also. And one thing we’re doing like the Smart Crypto-Vault project adds more abilities with tokens. So we can start using- it will add the ability to create tokens on Litecoin natively. So we’re exploring that also with Smart Crypto-Vault.
ty13r: Yeah, so this kind of segues into this topic but what are your opinions on the ICO craze and this huge Crypto bubble that seems to be forming around ICO’s and tokens, just specifically on Ethereum? Are there any thoughts? [1:17:55]
CL: Yeah. So I, personally I haven’t bought any ICO tokens, and I don’t plan to. I’m very wary of ICO’s because most of them are money grabs because they see how easy it is to raise money with ICO. And I think the SEC will come down hard on ICO’s because it’s basically like an IPO without going through the normal regulation. So, and I think it’s going to end badly. I think we’re starting to see that with the current crash. It’s just that Ethereum price has been propped up so high with the ICO and with every new ICO people need to buy Ether and spend that to to buy the ICO tokens. So it’s an inflated market and when the ICO companies start to sell the Ethers, it’s going to start crashing and then when Ether starts crashing all the other ICO’s will see that. “Hey we better sell our Ethers right now, or else it might be not worth enough money for us.” So I think we’re starting to see that and that’s why Ethereum is starting to crash. So yeah, I’m not a big fan of ICO’s, most of them are scams. most of them have no reason to create a token. They just want the money. And yeah, most of the teams and ideas are not that good. it’s just people have a lot of money to throw around. So, yup. [1:19:48]
ty13r: I think there are reasons for tokens, but a lot of the reasons that we’re seeing now are just not great reasons.
CL: Yeah.
ty13r: And I think this ICO craze is, you know in some ways, there’s probably some good that’ll come out of this because I think it will attract a lot of new investors into the main Currencies like Bitcoin, Litecoin, Ethereum. Because in order to buy, well, I guess Ethereum you can buy on Coinbase now but in order to buy a lot of these other coins you need Bitcoin or you need Ethereum. You need to be in crypto to do it. So to me that’s one of the the better benefits of this whole sort of thing, but yeah I’m not really a big fan of the scams. [1:20:36]
CL: So they come for the ICO’s but they stay because of Bitcoin.
ty13r: Yeah, there you go. Yeah, I can see that. I mean because at the end of the day everybody’s, I mean, what are they doing? They’re going to trade their ICO coins to get back into Bitcoin, or Ethereum or whatever? So I don’t know. So hopefully they just continue to pull more money in. But I worry about a lot of the projects that are doing ICO’s because I think some people could potentially end up in jail. I don’t know. Outside of- [1:21:13]
CL: Yeah.
ty13r: I hope not and and it seems to be attracting regulation in a bad way, but you know it is what it is.
CL: Yeah, I mean we’re Wild West right?
ty13r: Yeah definitely. So I guess speaking of scams, are there any projects in particular that you you know feel that might be scammy, maybe in the top 10 or top 20? You really worry that people are investing too heavily in there or speaking about too much. I don’t know.
CL: You mean other than Decred?
ty13r: (Laughter) Yeah well, you know Decred is in my opinion a pretty good project, and it’s got good people buying it with good intentions. [1:22:02]
CL: Okay so, I mean other than the ICOs, I think most of the ICO’s are scams. They may not be outright scams, but they potentially have a pretty weak team. They have a weak idea. They don’t need a token. They just realized that they can create a token, create a white paper that’s full of jargons and create a pretty website, a good name and be able to like raise hundreds of millions of dollars. So in some sense most of them are scams, I mean there might be a few good ones, but it’s really hard to tell. I think very few projects actually need the token. I haven’t really looked a lot of them, I know Auger wouldn’t work without the token, so you they would need it. Actually, let me step away for a couple minutes. I have a package to pick up one second, okay? Talk among yourself. [1:23:14]
ty13r: So, Austin, so sorry we lost Charlie guys.
AW: Yeah, he’ll be back.
ty13r: So I guess we can talk a little bit about
AW: Scammy projects?
ty13r: Scammy projects. Yeah so, Austin do you have any opinions on scammy projects?
AW: Yeah, Ripple kind of makes me mad, a lot. Someone just told me, I didn’t check, but I guess they recently went up what like 50 times in price? They shouldn’t even be around. Oh good. You’re back.
CL: Which one?
AW: We were just talking about scammy projects, Ripple in particular, but
CL: Yeah so, Ripple. [1:24:02]
ty13r: Missing it’s like first 35,000 blocks, I think or something.
CL: What about it?
ty13r: Riccardo told me this, but I believe it’s missing it’s first 30,000 blocks for some reason?
CL: I’m not sure if Ripple’s blockchain actually works. So it’s pretty centralized, it’s controlled by nodes that they run themselves. Actually don’t take my word for it. I’m not sure I just hear rumours. I don’t know for sure. And the coin is pre-mined, like a hundred billion coins were pre-mine, and supposedly they use it to- they give investors the coins and stuff. So I don’t really know what the reason is to have the XRP coins is. I wouldn’t call them a scam. [1:24:58]
AW: Yeah, and the market cap is huge.
CL: Yeah it’s huge.
AW: Because you have billions of coins held out of circulation. And you can trade what is left.
ty13r: So you just a few coins go up in value and then voila your whole market cap
AW: is billions. Yeah, I was thinking about putting up a coin where you have a trillion or a hundred trillion coins reserved. And just have one coin on the market.
ty13r: You just distribute that one coin-
AW: On top of all the market cap charts.
CL: Yeah, I mean, I think it’s doing some interesting things, but I wouldn’t, I personally don’t want any Ripple. Actually I did hold some Ripple because they were giving it away for free five years ago.
ty13r: Yeah, when it was closed source.
CL: Yeah, and I got some and I was sitting but in my Ripple account. It was worth like $10 for the longest time and recently it was worth a few thousand dollars, so I’m like okay I better check it again and cash it out. So I cashed it out into Bitcoin. [1:25:59]
ty13r: Speaking of more scammy projects, or not scammy projects but other projects. Dash is similar in a lot of ways to Decred, what are your opinions on Dash?
CL: I think Dash, I don’t really like Dash that much because to me it’s a lot of marketing. The technology is not very strong. I mean the masternodes is a neat idea, but I don’t think it works that well and it’s privacy is overrated. Personally I haven’t really looked too much into its privacy but I’ve read multiple accounts from trusted sources that their privacy is pretty much broken. And I trust the people that talk about it. So personally, I haven’t really looked into it that much. [1:26:58]
ty13r: The library will be closed in 30 mins.
CL: What was that? So I don’t hold any Dash myself, and I see no reason to.
ty13r: Awesome. Yeah, sorry. I’m at the library, they’re closing soon. So this is how hardcore I am for all you Decred Assembly fans. I made sure that I got optimal internet for this interview. Because I live out in the country, and I don’t have formal internet at my house. So I have to use a hotspot, so this is for you guys out there. So I guess we’ve talked about some projects that you think are not necessarily the best or you know good investments or best technology. So what are some of your favorite projects? Obviously Decred, but I know you are also a supporter of Monero and I think Ethereum Classic? I’m not sure maybe you could mentioned some of the ones that you do like? [1:28:03]
CL: Yeah so, so when Ethereum hard forked, I was very against the hardfork. Yeah, because I felt like it went against my principle where, I mean Ethereum was supposed to be kind of like unbreakable code, that code is law, where nobody can kind of overruled the code. But in a sense they did, they decided that the theft was not good and they took it back. That kind of- it’s a bad precedent to set. So right now if a huge ICO, there’s a flaw in the code and, the ICO had like 200-300 million dollars and gets stolen. Do we do another hard fork or if not why not? [1:29:04]
And yeah so I didn’t like the fact that they did that and I think I read about it, but I think that has led to the recent ICO craze because people put money in the DAO and they got their money back. So it’s kind of like- and that money actually went up like 20 fold. So you actually now have 20 times that money to play around with because it’s like money that you expected to have lost but you got it back. Now you can just invest in all these ICO’s. So there’s so much dumb money out there, being thrown around. And it has caused this huge bubble of ICO’s which is bad. So yeah, so I mean I support Ethereum Classic to a certain degree. I still think a Ethereum is going to be, it’s almost impossible for Classic to overtake Ethereum. But I thought Ethereum was kind of in a bubble recently. So the crash was kind of expected from my point of view. [1:30:12]
I like Monero, so I like the development team, I like FluffyPony. And it’s trying to do privacy right. So I like where they’re going with that. And if you withdraw Monero from an exchange. You really feel that it’s private. You can send that transaction to someone else and they couldn’t figure out how much you actually withdrew from the exchange, which is pretty cool.
What else do I like? I like Bitcoin, and I like Litecoin. That’s about it. I haven’t spent too much time on other projects. It’s just hard to kind of tell the difference between what’s good, and what’s not good because there’s just so much out there. And I just don’t have time to investigate. [1:31:06]
ty13r: Yeah, and the other thing I think is there’s only so many really pressing problems at the moment.
CL: Yeah
ty13r: So, I mean a lot of these other coins Bitcoin, Litecoin, Decred, Monero, a lot of them can do a lot of the basic things that what everybody wants them to do. You know Ethereum with its smart contracting systems, Ethereum Classic. But at the same time like with Ethereum, I feel like it’s a solution looking for a problem. There’s really not a lot of need for these applications to run completely decentralized because your main reason for starting a coin on our token, on their network is you want to build it so that one day if the government comes cracking down the company’s door that built the project, the project itself can still run on its own. So I think they have certain use cases for it, but- [1:32:06]
CL: Yeah, I totally agree. I think people don’t realize that decentralization comes at a cost. It’s always more efficient to have a centralized product. So people want Bitcoin to compete with Visa, but it can’t right? A centralized Visa only has to run one server that handles whatever millions of transactions per second. Whereas Bitcoin, if you want it to be decentralizing you have like 10,000+ nodes each having to be the same work, to calculate and make sure the transaction is good, and to store it. So it’s at least 10,000 times more inefficient than Visa. And the same thing with Ethereum, if you have a decentralized app then everything you do with the app needs to be run on however many thousand nodes. So what kind of apps really need that kind of decentralization? Most don’t. I see a future where let’s say Google and Amazon is running a centralized app service, where like financial apps or whatnot, where you can rent it and you just have to trust Google and Amazon and most people trust them, for most of the apps you do. [1:33:23]
And if you really need a decentralized app, for example you can argue that Auger or something like that, you need a decentralized way of doing online betting, so it can’t be shut down by the government and/or places that are illegal. So potentially you need that and then it’s worth paying for that. You have to pay a lot more than a centralized version of it. And because people need a decentralized version, they’re willing to pay more and that’s fine. Just like Bitcoin, you want decentralized money where governments can’t print more and you can’t get censored and you pay more for that. And that’s the same thing with Ether, I think. [1:34:10]
ty13r: Yeah, I totally agree. So well I think we’re getting pretty late into this interview. We’ve got like 40 minutes or an hour and 40 minutes deep. I kind of don’t really have any real big pressing questions. Austin, do you have anything?
AW: No, I answered all of mine. Yeah it’s really great to have you on. Thanks for coming on the show.
CL: Sure. [1:34:40]
ty13r: Is there anything you want to say or before you’re done with the interview or anything you want to tell Litecoin, Decred supporters, Monero people watching, everybody that’s [watching]?
CL: I would say that I wish to see less fighting between the different projects and the different parties. I mean, we’re all in this together. We all want this to change the world. So there’s no reason to have so much animosity against each other. So love and peace. [1:35:23]
ty13r: Yeah, and I totally agree with that. And I’m so happy that you’re a part of the Decred community because I hope that we can bridge a good connection with the Litecoin community and instead, you know I feel like the vision of a Bitcoin was to replace the status quo, the banking, this whole idea of money and we have so much animosity towards the each other’s projects that are all trying to accomplish the same type of goals. And I really hope that our community and other communities like even the Monero community. We had had Riccardo on, in our last episode. We can all work together and not be somewhat like so against each other and even Bitcoin. I think there’s a lot to be said about that. Just moving towards the direction of let’s replace this old dated technology and this control over money in a way that makes sense for the entire world instead of fighting with each other constantly. So I remember your periscope you did about the hugging somebody, a random person that day, I thought that was really awesome. I think we need to have like a crypto community hug day where people say a nice thing about a fellow project and things they appreciate on Twitter. I don’t know. I think that’d be- [1:36:51]
CL: You should see the responses I got on Twitter for that. Some people were saying, “Charlie did you just discover weed today?”
ty13r: (Laughter) That’s awesome.
CL: A final thought, I think that the future is that a lot of these cryptocurrencies will be connected via lightning network or some other way where for the average user, you don’t really care what currency you’re using. You could hold Bitcoin and send to someone who is expecting Litecoin. Get converted on a fly or you can be holding Litecoin and you want to power a decentralized app on the Ethereum network, and you just send Litecoin and the lightning network will convert it to Ether and power that application. So it will all be kind of interconnected, It will be very cool. And the UI will be easy. You wouldn’t have to know what’s going on. [1:38:00]
Similarly like today if you’re watching Netflix or something, you don’t care if the bits come to you via TCP/IP or some other network approach or UDP or something else. You just care that the it’s playing video. Someone else behind the scene is making everything work out well for you. And that’s the same thing that’s happen with cryptocurrencies. Right now we’re just in the early stages where there’s all these protocols, we don’t know how they interact and we’re just figuring it out. [1:38:29]
And similarly, right now if you think of Ether, a lot people compare that to gas or like gasoline. A lot of people hold Ether right now but it’s not really a good store value or even for payments and people don’t hold barrels of gasoline, oil in their house. When your car is out of fuel you just go to a gas station and just refuel your car. I think the same thing would happen if you need Ether in the future you can just easily swap between Ether and whatever currency you’re holding whether it’s Litecoin, Bitcoin, Decred, or anything else. And you don’t need to hold it, if you don’t need it. [1:39:13]
ty13r: Yeah, yeah and I think about what does scalability look like with lightning network and interoperability between all these chains. Because now you have multiple blockchains to close out transactions. It’s like, “hey send it to me in Bitcoin.” It’s like, “well it’d be cheaper if I sent it to you in Decred.” Okay send it to me in Decred, but with the lightning network you could still send it via Bitcoin and then you just have this other store of value. To me that’s where scalability is, is interoperability between blockchains.
CL: Mm-Hmm, the different coins work together to help the whole network scale, to just all the users needs. [1:39:56]
ty13r: Yeah so, all right, well I want to thank all the people out there. We have 318 watching right now. This is definitely our most popular episode. I want to thank Charlie Lee for coming on. I want to thank Austin for being on the episode too. You guys are awesome. Thank you for coming on the show and turning this channel also into a troll box. That’s really cool. So yeah, if you guys liked the episode please like, hit the thumbs up, pound that like button like Adam Meister says. And tweet it, share with all your friends that this is a really great episode of Decred and check out Decred. [1:40:45]
It’s a really cool project. We have governance built into the blockchain. We have some awesome developers. To me that’s the most important part. And we have a DAO coming. Our own development subsidy that everybody is going to be able to participate in and help fund via your voting mechanism. So we have a lot of cool stuff coming. And we’ll be able to see the project evolve and we’re trying to play nice with most of the other projects like LItecoin and Monero. And we want to kind of bring this cryptocurrency community together instead of pulling it apart. So thank you again Charlie for coming on the show. [1:41:25]
CL: Thank you.
ty13r: We’ll see you guys later. Have a good one. [1:41:30]
You are EXACTLY right!!!
Nice one!