WEBVTT 00:04.440 --> 00:10.220 All right, welcome to day two of Monero Village at DevCon Safe Mode 2020. 00:10.220 --> 00:14.840 I'm Daniel Kin, and welcome to another day of Monero Village. 00:14.960 --> 00:22.920 We have a lineup of interesting talks for you, and also tutorials and so on. 00:23.020 --> 00:36.180 So this talk that I'm going to give is called Sound Money Safe Mode, and it is a kind of a broad, big-picture introduction to cryptocurrency and Monero. 00:36.400 --> 00:44.000 I will do my best to get this all transmitted in a timely manner. 00:44.000 --> 00:58.120 There's a lot of material, because I'm assuming that the viewer here is a bright person, knows their way around a computer, but has not necessarily spent a lot of time thinking about Bitcoin or Blockchain or Monero. 00:59.560 --> 01:01.240 A little bit about myself. 01:01.360 --> 01:03.160 I studied physics at Harvard. 01:03.160 --> 01:05.720 I did a bachelor's, master's, and PhD there. 01:06.120 --> 01:11.000 There I kind of had a habit ingrained in me to always look at data. 01:11.000 --> 01:13.740 So there's going to be a lot of data shown in this talk. 01:14.320 --> 01:16.980 Most of my career was spent in the non-profit sector. 01:16.980 --> 01:23.020 So my first job out of grad school was with a symphony orchestra, where I ended up doing about 700 concerts professionally. 01:23.040 --> 01:26.160 First as a violinist, and then later as a keyboardist. 01:26.260 --> 01:46.300 And then concurrently with that, I jumped through the hoops to become board certified in radiation oncology physics, where then as a medical school professor in medical physics, I helped about a couple thousand patients with their fights against cancer by helping with the technical aspects of delivering high intensity radiation to cancer. 01:46.460 --> 01:58.260 So it was there that I signed up for the executive MBA program at Yale, because I thought that I wanted to show an interest in the way that the world works in a different way than in physics. 01:58.260 --> 02:03.900 Of course, in physics, you're, you're studying how the world works at the smallest levels, which is what I did as a particle physicist. 02:04.560 --> 02:12.060 But then to think broadly about real world human problems from a variety of perspectives, the MBA is good for that. 02:12.060 --> 02:14.940 So I ended up signing up for that. 02:14.940 --> 02:29.540 And while doing that, I made a switch to the for profit sector, I joined a small hedge fund on the hedge fund world, meaning like about a billion dollars under management management, and I become director of research there. 02:30.220 --> 02:43.940 I was a co author of a paper that won the top research award of the CFA Institute, which is the basically the premier credentialing Institute for equity analysts. 02:44.220 --> 02:48.420 So that paper was about the effect of liquidity on asset prices. 02:48.640 --> 02:56.480 So it was there that kind of in my spare time, I was getting more and more interested into cryptocurrency, and blockchain. 02:56.480 --> 03:03.140 And then I made a decision that I thought that this was a genuine innovation, of which there are not that many that happened in one's lifetime. 03:03.140 --> 03:09.200 So I jumped to my own small business, which is what I do now as an independent consultant. 03:09.520 --> 03:17.220 So right now I help bridge two very separate worlds as the founder and CEO of Sweetwater Digital Asset Consulting. 03:17.220 --> 03:28.220 As you can see on the bottom, there's the world that Defcon kind of represents, which is a non-commercial, open source, cypherpunk, grassroots cryptocurrency culture. 03:28.600 --> 03:39.780 And on the right side is the very parallel universe of traditional asset protection, trusts and family office, portfolio management, estate and tax planning. 03:40.120 --> 03:44.680 These two separate worlds know very little about each other in practice. 03:44.680 --> 03:55.020 They often make assumptions about each other that are kind of, you know, maybe based in fear and not necessarily information. 03:55.400 --> 04:07.760 And so as one who has significant experience on both sides of this divide, I help people who are in one side or the other to gain the benefits of genuine engagement of the other. 04:08.840 --> 04:15.280 So in my non-profit efforts these days, I am also a community volunteer for the Monero Project. 04:15.440 --> 04:19.400 My talking here is on a voluntary basis. 04:19.440 --> 04:24.060 I do not receive any support from the Monero Project. 04:24.060 --> 04:47.420 I've never asked for support from the Monero Project because actually I want to maintain my independence as my primary loyalty duty is to my consulting clients, to whom I owe the duty of doing the research and examination of the entire cryptocurrency space and making recommendations on what I think are the most compelling projects out there. 04:47.580 --> 04:56.820 And within cryptocurrency, I also specialize in tokens that do what I think is the killer app of Nakamoto Consensus, which is store of value. 04:57.140 --> 05:02.220 Basically, cryptocurrencies that act like money, as a private form of money. 05:02.220 --> 05:08.800 And within that space, I think that there are only really two projects worth considering and they are Bitcoin and Monero. 05:08.800 --> 05:21.060 So that's what I do for my non-profit in my non-profit time is that I help out with the community and that's about me. 05:23.660 --> 05:28.640 All right, so this talk is called Sound Money Safe Mode and it's got four parts. 05:28.700 --> 05:35.300 First, I'm going to talk about the pandemic and the economic fallout so far from the pandemic. 05:35.440 --> 05:50.600 Second is that the management of fiat scarcity in the world leads to a strong suggestion that it might be a good time in history to be looking at independent sources of scarcity. 05:50.600 --> 05:53.140 So that will be the second part of the talk. 05:53.200 --> 06:02.330 Third, I'll talk about fungibility, what that means and why it's important as the world moves increasingly towards a mass surveillance society. 06:02.330 --> 06:07.650 And the fourth part will be how one can get involved with the Monero project. 06:07.710 --> 06:15.530 So before starting, I wanted to say thanks to a few people in the Monero community who I had consulted with while preparing this talk. 06:15.530 --> 06:17.090 So they are Howard H.Y.C. 06:17.090 --> 06:18.150 Chu, Dr. 06:18.150 --> 06:21.090 Sarang Nether of the Monero Research Lab and Dr. 06:21.090 --> 06:24.150 Francisco Cabanas of the Monero Core Team. 06:29.700 --> 06:36.120 All right, so very much has been said about the pandemic, so I'm not going to go into that too much. 06:36.540 --> 06:48.400 But I wanted to show basically, from a social engineering point of view, how one can see this entire pandemic that we're in the midst of. 06:48.400 --> 07:04.760 Really what this is, is an example of a microbe that did a very good job of social engineering humanity, basically taking advantage of a weakness in evolved humanity's ability to diagnose their disease state. 07:05.020 --> 07:07.680 So here I'm showing this in the form of a flow chart. 07:07.700 --> 07:18.060 And if you start here in this upper left corner, this is basically what people would go through as their decision process before the pandemic hit. 07:18.060 --> 07:22.920 So they would be sitting at home, and you ask yourself, well, do I feel like going out? 07:22.920 --> 07:24.960 Well, if you don't feel like going out, you stay at home. 07:24.960 --> 07:31.840 But if you do feel like going out, then you diagnose yourself as being healthy, because of course you're healthy, because you feel like going out. 07:31.840 --> 07:36.620 If you weren't healthy, you wouldn't feel like going out. 07:36.620 --> 07:39.400 Therefore, since you feel like going out, you must be healthy. 07:39.600 --> 07:42.000 So there's a self-diagnosis that gets made there. 07:42.340 --> 07:49.480 And now that we're in the midst of the pandemic, we can look back at this pattern of thought and think, wow, that was kind of naive. 07:50.900 --> 07:56.160 There's like this bygone era when you could assume that you were healthy, just because you felt like you were healthy. 07:57.040 --> 08:04.220 All right, so going on, again, in the pre-pandemic thought process, because you diagnose yourself as being healthy, now you go out. 08:04.280 --> 08:10.100 And so now you're dealing with other people, and their disease state is not known to you. 08:10.120 --> 08:12.120 But you use basically a heuristic. 08:12.120 --> 08:16.460 That is, you ask yourself, do you see anybody who's coughing? 08:16.680 --> 08:19.420 Well, if you don't see anyone who's coughing, then you just carry on. 08:20.620 --> 08:26.960 If you do see someone who's coughing, then you diagnose them as being a sick person, and you want to avoid them. 08:27.000 --> 08:31.740 And then you carry on, because you don't make a big deal out of it. 08:31.740 --> 08:35.000 You just make a mental note that, oh, gee, that person might be sick. 08:35.000 --> 08:36.180 Maybe I'll keep my distance. 08:37.040 --> 08:38.900 And then do you feel like going home? 08:39.100 --> 08:41.520 No, then you stay out in public. 08:41.520 --> 08:43.960 And yes, if you do feel like going home, you go home. 08:44.020 --> 08:51.420 And nowhere in this loop does the possibility of actually getting sick really come up that much. 08:51.720 --> 09:10.020 And so now we can look back at this and see how basically this pattern of thought, which has, I would say, probably evolutionarily developed in humanity, after all, it's gotten us to survive for this many thousands of years as it is. 09:10.020 --> 09:15.200 And now all of a sudden, we're confronted with this microbe that challenges that. 09:15.200 --> 09:20.640 And of course, it's not fun for anybody to be told, hey, your instincts are totally wrong. 09:20.640 --> 09:30.100 You need to not trust your instincts, and you need to stay at home even if you feel healthy, or put on a mask even if you feel healthy, and so on. 09:30.100 --> 09:39.300 So people generally don't take too well to being told that their very natural instincts are leading them astray. 09:39.300 --> 09:45.280 But nevertheless, if you look at the objective reality, that is the fact. 09:46.820 --> 10:01.780 All right, so in addition to having our notions challenged of who is sick and who is not sick, what the current pandemic has also done is challenge our notions of what can you get sick from. 10:02.460 --> 10:10.420 And in the right side of the chart is a published study that was published in The Lancet, which is the UK's premier medical journal. 10:10.420 --> 10:22.820 And what this is showing is an experiment that some researchers did in which they took SARS-CoV-2 and they put it on money, like cash. 10:22.820 --> 10:24.340 They put it on banknotes. 10:24.340 --> 10:29.520 So what this chart is showing is how much of that virus remained on the money over time. 10:29.520 --> 10:33.540 So here at time zero, they put a drop of the virus on. 10:33.720 --> 10:35.820 This is how much virus they measured. 10:35.820 --> 10:46.340 And then as time goes on, you can see that the amount of the virus remaining on the money goes down, but it goes down less quickly than one would hope. 10:46.340 --> 10:53.560 So for example, here at the 24-hour mark, there is still a significant amount of virus detected. 10:53.620 --> 11:01.440 And you have to go to three days out before these researchers found that undetectable amount of virus on the money. 11:02.880 --> 11:08.220 So what would happen in a real-world scenario when something like this gets unleashed? 11:08.220 --> 11:14.480 And here I'm showing basically the macroeconomic effects of what's happened in the pandemic. 11:14.760 --> 11:16.520 So there's a lot going on in this chart. 11:16.520 --> 11:17.940 So I'll start with the blue line here. 11:17.940 --> 11:20.980 The blue line is showing U6 unemployment. 11:21.300 --> 11:37.580 So this is the fraction of people who are either looking for work, or underemployed, or working part-time when they want to be working full-time, or are so discouraged with their state of trying to find a job that they've given up. 11:37.760 --> 11:44.520 So all these people are measured, are counted as unemployed in the U6 measure of the U.S. 11:44.600 --> 11:47.300 government's unemployment number. 11:47.300 --> 11:54.320 This is contrasting with U3, which is only counting those people who are actively looking for work and can't find it. 11:54.320 --> 11:58.200 So U6 is a broader measure, and so it's widely considered to be more accurate. 11:58.220 --> 12:00.340 And here in this plot, I'm showing a U.S. 12:00.340 --> 12:03.560 government data going back, all the way back to 1980. 12:04.120 --> 12:19.240 So we're looking at 40 years of history here, and you can see here that the unemployment line in the year 2020 spiked up to the highest level that ever in recorded history, at least of the U6 unemployment rate. 12:19.920 --> 12:26.380 It spiked up to about 22-23 percent, so one-fourth of Americans out of work. 12:26.600 --> 12:33.220 And fortunately, that's gone down a bit since then, but it's still definitely not a pretty number. 12:33.220 --> 12:45.280 So what happens when something like this happens, like the demand for services, like in travel, in dining, entertainment, all fell through the floor. 12:45.380 --> 12:51.300 And so the federal government's reaction to that was to be concerned about deflation. 12:51.300 --> 12:57.940 So deflation happens when people stop spending their money and the economy drops to a halt. 12:58.040 --> 13:01.100 So to fight that, they expanded the money supply. 13:01.100 --> 13:08.500 So they basically printed money, which is what you do to try to get people to spend again, because by printing money, that reduces the interest rate. 13:08.680 --> 13:14.320 The interest rate goes down, then it becomes less attractive to save your money and get a tiny, tiny bit of interest. 13:14.320 --> 13:17.100 It becomes more attractive to spend your money. 13:17.260 --> 13:20.580 So here in green, I'm showing the MZM money supply. 13:20.580 --> 13:23.640 MZM stands for money zero maturity. 13:23.640 --> 13:30.520 And what that consists of is the M1 money supply, which is coins, currency, and checking accounts. 13:30.520 --> 13:39.720 And it combines that with savings accounts and also money market accounts, which many people use as sort of an alternate form of a savings account these days. 13:39.940 --> 13:58.720 It differs from M2 money supply in that it does not include certificates of deposit, which as you know, you go to a bank and you lock in your money for 12 months and they pay you slightly higher interest for the time that your money is locked up, be it 12 months or six months or whatever the time term is that you agreed to. 13:58.720 --> 14:07.000 But because that money gets locked up for that time, that is not counted in money zero maturity, the MZM metric. 14:07.080 --> 14:13.220 So basically, the green line is showing all of the liquid money in the US. 14:14.220 --> 14:17.740 Now, it's a huge number. 14:17.740 --> 14:19.540 It's roughly $20 trillion. 14:20.040 --> 14:26.180 So because that's hard to get your head around, I've normalized that number to the gross domestic product. 14:26.180 --> 14:30.340 That is the value of all goods and services produced in the US in one year. 14:30.540 --> 14:38.620 So you can see that the money supply as a fraction of the productive output of the US has been going up for the last four years. 14:38.620 --> 14:45.700 And you can see here at 2020, the line spikes up from about 70% to over 100%. 14:45.700 --> 14:51.380 So, you know, the word unprecedented gets thrown around a lot for this crisis. 14:51.380 --> 15:04.880 But truly, if you look at long term plots like this, and you see that the size and the slope of this money printing that's been happening in the last several months is truly breathtaking. 15:06.020 --> 15:09.240 All right, so that's the money supply. 15:09.240 --> 15:20.260 So of course, the government can print as much or as little money as it wants with nothing stopping them from doing whatever they want. 15:20.260 --> 15:27.600 This has been true since Nixon in the 70s abolished the linkage of the US dollar to gold. 15:27.880 --> 15:36.240 So before the 1970s, the US dollar could be traded in for some quantity of gold. 15:36.280 --> 15:49.200 And that meant that the US government was constrained in how much money it could print because if it printed more money, it needed to have more gold in order to accommodate those people who wanted to trade in their US dollars for gold. 15:49.460 --> 15:58.660 But Nixon in the 70s did away with that kind of inconvenience from the part of the federal government. 15:59.440 --> 16:13.260 And so since then, the US government has been free to create however much money it wants, just like any other country, all the countries of the world are free to use their own judgment and discretion in controlling their own money supply. 16:14.540 --> 16:25.640 All right, so that has nothing to do with, for example, the ins and outs, the income and the expenses of the government, which would be taxes and government spending. 16:25.900 --> 16:41.440 So looking at the bottom line here, the bottom line, which is, you know, wiggling all over the place, what this is showing is on a monthly basis, how much money is the US government taking in, minus how much money is the US government spending. 16:41.440 --> 16:45.920 So it's basically taxes minus spending on a monthly basis going back to 1980. 16:46.020 --> 16:49.620 You can see that the line goes up and down quite a bit. 16:49.620 --> 16:54.020 It basically spikes four times a year because that's when estimated taxes are due. 16:54.400 --> 16:57.940 And so there's that seasonal structure to it. 16:57.940 --> 17:10.380 Also, if you integrate this over time, then you get the black line that's on top, which is the total federal debt and normalized to GDP again. 17:10.600 --> 17:22.140 So basically you can see, for example, in the aftermath of the 2008-2009 financial crisis, the government was spending quite a bit more money than it was collecting. 17:22.140 --> 17:23.940 That's this area here. 17:23.940 --> 17:38.040 And as a result, when you time integrate that, you get the black line up here in which the rate of increase of the federal debt to GDP went much faster in the aftermath of the 2008-2009 crisis. 17:38.480 --> 17:56.720 Unfortunately, in the years that followed the last financial crisis in 2008-2009, which could have been an opportunity to reduce our federal debt, much as what happened in the late 1990s over here, you can see the went down a little bit with the government surplus. 17:57.040 --> 18:01.600 No such thing happened in the 2010s. 18:01.620 --> 18:04.520 And so the federal debt kept creeping up. 18:04.520 --> 18:12.100 And now we're at this point here, in which at the beginning of the year, the debt to GDP ratio was about 110%. 18:12.100 --> 18:14.740 And that is before the pandemic. 18:14.740 --> 18:20.500 And so this federal debt to GDP number is actually lagged about four months. 18:20.580 --> 18:22.160 You know, all these numbers come from the government. 18:22.160 --> 18:24.500 So there's like a significant bureaucracy behind it. 18:24.500 --> 18:33.100 So it's far from the situation in a digital form of money like Monero, where you can see everything instantly. 18:33.100 --> 18:34.580 So there's a four-month lag. 18:34.580 --> 18:41.960 And so the debt to GDP number is only showing the first quarter of this year. 18:42.600 --> 18:46.980 But it's rather troubling to see all this. 18:48.380 --> 18:50.020 Oh, yeah, back down here. 18:50.020 --> 19:00.780 So this line here with the monthly taxes minus government spending, as you can see, it really tanked in especially quarter two of 2020. 19:00.920 --> 19:05.060 Now, some of this might bounce back, it might not be as alarming as it looks. 19:05.060 --> 19:15.660 Because if you're in the US, you probably know that April 15, which is the normal deadline for taxes to be due got pushed back to July 15 due to the pandemic. 19:15.760 --> 19:21.530 And so basically, the government was collecting zero tax between April through July. 19:22.320 --> 19:33.340 And so that's why you'll see this precipitous drop here is that there was no tax revenue coming in, yet the government was continuing to spend money as it was before. 19:33.340 --> 19:36.460 The spending didn't stop, just the income stopped. 19:36.520 --> 19:55.120 And so this might reverse itself now that July 15 has come and gone, with a correspondingly high spike in taxes that is assuming that this July 15 was a kind of a bonanza from from the point of view of the IRS with a whole lot of tax money coming in, we'll see if that was actually the case. 19:58.810 --> 20:01.310 Zooming into other countries as well. 20:01.310 --> 20:11.970 So in the G20, there are eight countries that have been reporting statistics on the amount of money that's in circulation in their particular currency. 20:11.970 --> 20:14.550 And that's going back to 2018 here. 20:14.670 --> 20:23.230 So of these eight countries, you can see there's basically this hockey stick shape to this curve of how much money of each of these countries is circulating. 20:23.230 --> 20:29.870 Here, I've normalized the amount of money in every country to be equal to one on January of 2020. 20:29.870 --> 20:39.070 So you can see prior to the pandemic, the money creation was at this rate, and post pandemic, it's happening at this much more fast rate. 20:39.650 --> 20:56.930 In the United States, which is the biggest line here, as you can see, post 2020, the M1 expansion has been to the tune of about $1.33 trillion, which amounts to increase in the money supply of about $300 million per hour. 20:57.590 --> 21:06.650 Now, if you compare this to, for example, the market cap of Monero, the value of all the Monero in existence, it's something on the order of like about $1.5 billion. 21:06.650 --> 21:09.970 So this is saying that the money supply of the U.S. 21:10.150 --> 21:18.190 expanded by the size of Monero's market cap roughly five times every day for the last six months. 21:19.430 --> 21:26.790 And if you look at MZM money, so this metric is M1 money supply, which is only coins, currency, and checking accounts. 21:26.790 --> 21:36.650 If you add to that the other forms of liquidity that are included to MZM, then this figure jumps up, it's to more like half a billion dollars per hour. 21:38.310 --> 21:47.970 All right, let's broaden our focus to not just the eight countries in the G20 that have reported results recently, but let's look at all the G20 fiat currencies. 21:48.050 --> 21:53.550 And let's also expand the time frame in which we're looking to back to 2009. 21:53.590 --> 21:56.950 2009 is the date that I chose here for the left hand scale here. 21:57.010 --> 22:08.130 That is because that is the year in which the Bitcoin white paper came out and introduced a way to introduce digital scarcity without needing a central authority to maintain that scarcity. 22:08.130 --> 22:21.990 But since 2009, and I again, I've normalized this so that every country's money is equal to one at the beginning of 2009, you can see that there's been steady growth in all of the currencies. 22:21.990 --> 22:30.430 There is not one of the G20 currencies that has been flat or has actually decreased their money supply over time, it's all increased. 22:30.650 --> 22:44.910 And you can see that the average, if you pick the middle line of this distribution, it looks like it took about seven or eight years, eight years for the average G20 cryptocurrency, average G20 currency to double. 22:44.990 --> 22:59.630 So as a former med school professor who worked in oncology, the exponential math of uncontrolled growth, which is something we see in cancerous tumors, is something that I think about when I see a plot like this. 22:59.630 --> 23:02.350 So here we're looking at a doubling time of eight years. 23:02.350 --> 23:04.830 It took eight years for the money supplied to double. 23:04.830 --> 23:11.730 So it's kind of like a certain cancer tumor that takes eight months time to double in size. 23:11.730 --> 23:14.990 There's similar metrics that get used in the oncology literature. 23:14.990 --> 23:24.610 So, but if you look at the money supply here, it's, and this is a pre-pandemic, pre-pandemic, we're looking at a doubling time of about eight years per doubling. 23:24.910 --> 23:34.350 So if you think about how long does, you know, average human survive, let's say 80 years, that is 10 doubling times. 23:34.350 --> 23:47.610 So eight times 10, that's 10 doubling times, which means at this rate, the amount of money expansion in a average human's lifetime is going to go through 10 doublings, which is two to the 10th power, which is 1,024. 23:47.610 --> 23:50.890 It's about a thousand times increase in the money supply. 23:50.890 --> 23:54.430 And that is before the pandemic. 23:54.430 --> 23:59.390 And so now after the pandemic, we're looking at a doubling time that's closer to like two years. 24:01.670 --> 24:13.270 There's an interesting scholarly book called Monetary Regimes and Inflation, which did a study of 29 historical cases of hyperinflation. 24:13.410 --> 24:27.150 So this is, for example, what happened in the Weimar Republic of Germany in the 1910s, and other countries throughout history in which, you know, the people are taking wheelbarrows of money out to buy a, you know, one loaf of bread, that kind of thing. 24:27.190 --> 24:33.350 That's because the money supply grows at such a large rate that the prices go up too. 24:33.470 --> 24:36.710 And so people basically find that their savings are destroyed. 24:36.850 --> 24:49.650 So if you have, you know, $100 in savings, and then in a month from now, you find that the $100 used to buy you, you know, say a week's worth of groceries, but now the $100 buys you a candy bar. 24:49.650 --> 24:52.290 That's what hyperinflation looks like. 24:52.450 --> 24:59.630 And I would say, you know, at least for Americans, none of us have ever had to, you know, live through that. 24:59.630 --> 25:04.670 But all accounts of what it is like to survive through something like that, it's no fun at all. 25:04.670 --> 25:06.570 It wipes out people's savings. 25:06.570 --> 25:11.470 It promotes, you know, social unrest, social violence. 25:11.470 --> 25:12.950 It's just not pretty. 25:13.690 --> 25:29.010 But this book that studied the underlying economic causes of hyperinflation came to the conclusion that in 25 out of 29 of these historical cases of hyperinflation, the trigger was that there was money creation that financed government deficit. 25:29.490 --> 25:39.910 So these charts from the G20 money supply, this should be convincing evidence that the money creation, which is half of this equation, is indeed happening. 25:40.250 --> 25:42.390 The second half is the government deficits. 25:42.390 --> 25:57.510 So unless governments are able to make extremely difficult decisions and are able to their budgets, now we're going to have two out of two of these criteria met for conditions to be favorable for the development of hyperinflation. 25:58.010 --> 26:16.450 And this is not really like a, this is sort of a phase transition kind of thing in which it's hard to predict when, because the conclusion of people that the money is no longer trustable and must be spent immediately, otherwise it lose value, that that decision, 26:16.450 --> 26:25.030 which needs to take place among an entire population in order for hyperinflation to take place, that's, it's a social thing, right? 26:25.030 --> 26:30.630 So it's like, it's the herd that decides, you know, that they don't have confidence in the money anymore. 26:30.630 --> 26:31.690 It's hard to predict. 26:31.690 --> 26:47.850 So it's not an, it's not a 100% foregone conclusion that money creation plus government deficits means hyperinflation or increased inflation, even, but it certainly doesn't help the prospects. 26:48.050 --> 27:07.910 And so in this backdrop, I think the takeaway for anyone with assets to save is that, you know, it might be wise to consider the possibility that the future might hold higher inflation than what you are used to and what indeed, what you might be comfortable with. 27:10.250 --> 27:11.010 All right. 27:11.010 --> 27:12.910 So moving on to the second part of the talk. 27:12.910 --> 27:17.150 So what does this mean in terms of independent scarcity? 27:17.470 --> 27:34.190 So if the unit of account that is being used in your society is, is going under hyperinflation, what people often do is they look for a different sort of unit of account that is not subject to hyperinflation. 27:34.190 --> 27:38.970 It's a rather natural thing to want to do is to preserve the value of your savings. 27:39.430 --> 27:48.090 And so historically, at least in a hyperinflation sort of scenario, there have been independent sources of scarcity that have been looked at to store wealth. 27:48.090 --> 27:51.370 So that would be physical commodities, for example, gold and silver. 27:51.370 --> 27:52.910 These are the classic ones. 27:53.270 --> 28:08.250 And since 2009, there is a new option for humanity that is in the form of digital commodities, which became possible to consider after the development of the Satoshi Nakamoto Bitcoin white paper. 28:08.830 --> 28:20.690 And as one who studies this stuff, thinks about it a lot, I've come to the conclusion that there are really only two projects out of the many that are worth considering. 28:20.690 --> 28:21.850 It's Bitcoin Monero. 28:24.740 --> 28:27.560 Let's think about digital scarcity networks for a bit. 28:27.560 --> 28:35.220 So let's contrast digital fiat versus decentralized digital scarcity like Bitcoin and Monero. 28:35.220 --> 28:45.260 After all, our US dollars, our euros or yen, or all of our fiat central bank monies are in fact digital these days. 28:45.980 --> 28:50.960 There is such a thing as online banking, your banks are using computers. 28:51.260 --> 28:55.200 So the fiat money is a source of digital scarcity. 28:55.200 --> 29:00.280 It's just that that scarcity is controlled by a centralized entity. 29:00.440 --> 29:05.900 So the access to the database of who owns what is protected. 29:06.780 --> 29:10.060 There's a moat of firewalls around that. 29:10.060 --> 29:13.200 And there's really just one authoritative version of the ledger. 29:13.200 --> 29:16.940 There might be backups and stuff, but really there's basically you have a moat. 29:16.940 --> 29:23.880 And then inside the moat, you have the copy of who owns what, the ledger that says who owns what. 29:24.240 --> 29:31.340 And once you have access to that, you have quite a bit of ability to change things. 29:31.340 --> 29:35.900 At the lower level, like at a bank teller level, of course, you can't just create money out of thin air. 29:36.020 --> 29:39.900 But you have the power to manipulate money between accounts. 29:39.900 --> 29:43.220 For example, you can transfer money from one customer's account to another. 29:43.380 --> 29:49.440 As you go up in the system, the amount of power that you have over that database becomes higher. 29:49.440 --> 30:05.500 So that now that you get to the level of the Federal Reserve Bank, when this committee of men sitting around a table, I guess there's some women on the FOMC now, I'm not totally sure. 30:05.500 --> 30:11.720 But traditionally, it's been just a group of men making this decision that okay, it's time to print more money. 30:11.720 --> 30:25.580 And then when that decision gets made, some employee in the federal government goes to their computer and they click a button, and they get a $1 billion money supply by another billion dollars. 30:26.380 --> 30:32.320 Yeah, I guess that's probably a very hardworking federal employee right now, whose job it is to click create money. 30:32.320 --> 30:37.760 They're kind of sitting there working overtime, clicking this button over and over. 30:37.760 --> 30:47.780 But at the highest levels of government, it becomes literally just arbitrary right access to this ledger. 30:47.960 --> 30:50.660 And of course, the software that controls this is closed source. 30:50.660 --> 30:53.180 It's closed source, because why would they open source it? 30:53.180 --> 30:58.680 Because then that would facilitate bad actors learning how the system works. 30:59.360 --> 31:01.240 And there are downsides to this. 31:01.460 --> 31:03.500 Mismanagement is probably the chief one. 31:03.500 --> 31:09.480 So all these plots that I was showing of the money supply could be interpreted as signs of mismanagement. 31:10.260 --> 31:17.800 That the Federal Reserve is supposed to be imposing discipline, it's supposed to be independent of the political process. 31:17.800 --> 31:26.500 The Federal Reserve is supposed to be the entity that says, no, I'm sorry, we're not going to print tons and tons of money. 31:27.040 --> 31:32.180 Government, you're just going to have to learn to come up with a budget that you can balance. 31:32.240 --> 31:38.240 And please don't look to us to be just manufacturing money out of thin air, because that's not sustainable. 31:38.240 --> 31:40.470 That's what the Federal Reserve is supposed to do. 31:40.850 --> 31:47.990 Arguably, and these charts before are evidence showing that it's not really doing that. 31:48.850 --> 31:53.830 There's also insider abuse that is a problem with these sort of centralized security models. 31:53.830 --> 32:04.010 And that is, there are plenty of examples of large banks that do egregious things to abuse the trust of their customers and get away with it with just a slap on the wrist. 32:04.090 --> 32:20.290 For example, there is a case where Bank of America took its customers' personal data and created fake checking and savings accounts under the names of the, you know, using the names and social security numbers of their customers, they made fake accounts, 32:20.290 --> 32:25.590 and then they proceeded to charge fees on those accounts, which the customers didn't even know existed. 32:25.910 --> 32:33.410 And, you know, this caused some scandal, and then they got a fine, which was, you know, maybe, you know, a day's worth of profits. 32:33.430 --> 32:35.310 And, and that was that. 32:35.550 --> 32:52.250 So, you know, the potential for insider abuse is, unfortunately, there for a centralized network where, basically, you have middlemen between the people and the database, you have the these middlemen who are in a position of power, and so they unfortunately abuse that. 32:52.970 --> 33:01.450 Another feature, or, you know, I would say benefit from the point of view of the middleman of being a middleman is that there's little incentive to improve. 33:01.690 --> 33:17.550 So if there's a database that holds your bank account balance, right, and, and, for example, you want to do a wire transfer, you need to wait for the middleman to be good and ready to process your wire transfer before you can get it done. 33:17.550 --> 33:32.850 So the very fact that we have bank hours, Monday to Friday, nine to five, in an era in which everyone has been used to shopping at 2.30 in the morning from their bed, on their phone, you know, shopping on Amazon to get whatever they want, yet we're still in a, 33:32.850 --> 33:41.070 in a situation where fiat money oftentimes requires the services of another human to, to help you do what you need to do. 33:42.610 --> 33:46.790 So the decentralized security model of Bitcoin and also Monero is totally different. 33:46.790 --> 33:51.790 So in, in these decentralized networks, anyone can join the peer-to-peer network. 33:51.790 --> 34:02.030 Anyone can download the Monero code, run it on their computer, and then basically become part of this network, which does the functions of what a bank does. 34:02.110 --> 34:09.170 It processes transactions, it keeps track of who owns what, it, it, it keeps track of all this. 34:09.330 --> 34:12.150 Each node maintains its own version of the ledger. 34:12.150 --> 34:27.810 So in contrast to the centralized security model, where you have a, you know, a master database sitting in the middle with all sorts of firewalls and protections around it to try and defend it from misuse, here each node has its own copy of the ledger. 34:27.810 --> 34:35.770 Every node in the Bitcoin network, every node in the Monero network has a database file that contains a record of who sent what to who. 34:37.650 --> 34:40.970 In the decentralized security model, it's open source. 34:40.970 --> 34:42.170 It would have to be. 34:42.170 --> 34:49.770 If, you know, if anyone is able to join the peer-to-peer network, you'd better make your code open source, because otherwise how do you know what you're running? 34:49.770 --> 34:57.250 How do you, how do you get people to, you know, put their trust basically into this network unless you publish the code as open source? 34:57.530 --> 35:16.170 And so like the Cathedral and the Bazaar, the, the classic open source software development book that contrasts the building of a cathedral, which is a centralized sort of process a la Microsoft, versus the Bazaar, which is just a, you know, farmer's market where everyone is free to come show up and just build something, 35:16.170 --> 35:19.170 which would be like the Linux model. 35:19.210 --> 35:23.550 This is basically the version, the Linux of money. 35:23.550 --> 35:29.790 So really these two situations, fiat versus decentralized money, it's really like Microsoft versus Linux. 35:29.950 --> 35:39.990 So the fiat monies would be like Microsoft of money and the decentralized solutions like Bitcoin and Monero are like the Linux of money. 35:41.070 --> 35:48.730 Of course, there are downsides to this, just like there are downsides of Linux over Windows, and that's new, but fewer people have heard of it. 35:48.930 --> 36:01.510 It's relatively inefficient, at least not the operating system now, but the, the use of FOSS in money is going to be inefficient because you have this decentralized network keeping track of who owns what. 36:01.510 --> 36:16.610 So if there's no boss computer, if there's no, you know, like super privileges computer within this peer-to-peer network, then how are you going to decide what the true version is of the database that keeps track of who owns what? 36:18.210 --> 36:33.310 So to explain that, currently cryptocurrencies are able to be traded for US dollars and all sorts of fiat currencies, but this used to not be the case. 36:33.390 --> 36:38.990 So back in 2009, when the Bitcoin white paper first came out, Bitcoin had zero dollar value. 36:38.990 --> 36:41.290 It was just a geek project. 36:41.290 --> 36:51.850 It was this, you know, kind of interesting curiosity of a system that purported to make a new form of scarcity that kind of acted like money. 36:51.850 --> 36:56.350 But back in 2009, nobody knew that that was actually the case. 36:56.350 --> 36:59.930 Nobody knew if this thing would actually work like it said it would work. 37:00.170 --> 37:17.430 And so I think it's a good idea if you're new to cryptocurrency to, before you get caught up in the hoopla of, you know, the prices of everything and, you know, God forbid, you start searching cryptocurrency on YouTube and are confronted with, you know, 37:17.550 --> 37:28.590 a hundred different channels of people making sensational, you know, hay out of like the latest price movement of this and that currency, and you get caught up in the horse race aspect of all that. 37:28.690 --> 37:44.290 Before you get into all that, I would suggest pretending that all of cryptocurrency has zero value, because it'll end up being good for you in the long run, because you'll have a more solid understanding of what's actually going on with this stuff that you're buying and selling. 37:46.790 --> 37:56.870 One, Halloween of the year 2008, that is when the Nakamoto white paper was just dropped into existence on a bulletin board, like a discussion board. 37:57.690 --> 38:09.970 2009, January 9, is when the Genesis block, which is the very first block, which is the very first record of who sent what to who in the Bitcoin network, that is when that happened, was in 2009. 38:09.970 --> 38:15.210 And since then the network's been going, it's been running 24 hours, 7, 365 ever since. 38:15.590 --> 38:27.830 So in the calendar year 2009, Bitcoin was operational, but Bitcoin itself, like each Bitcoin unit itself had zero monetary value, because again, it was just a geek project. 38:28.210 --> 38:35.790 So I'd like to kind of turn the clock back and summarize how Bitcoin works from that standpoint. 38:36.090 --> 38:43.510 Now there are three aspects that you need to get working to create a private form of money. 38:43.510 --> 38:48.650 First, you have to have some sense of what is the analogy of a bank account. 38:48.810 --> 38:53.490 Second, is you need to have some analogy to what it is to write a check. 38:53.490 --> 39:00.970 And third, you need to have some sort of process for that written check, once it's shown to be legitimate, to be processed through the system. 39:02.910 --> 39:07.650 So Bitcoin is based on the Secp256k1 elliptic curve, and that's written out here. 39:07.650 --> 39:12.610 It's public knowledge what this elliptic curve is, there's nothing secret about it, it's a public standard. 39:13.170 --> 39:18.170 It's y squared is congruent to x cubed plus 7 mod this very large prime number. 39:18.330 --> 39:33.350 And x and y, usually you think of as being real numbers, like if you think of like high school algebra, and you want to plot this curve, you will make a nice kind of curvy shape out of this if you let n y be real numbers. 39:33.410 --> 39:37.270 But in this case, we're restricting x and y to be integers, right? 39:37.270 --> 39:43.610 And furthermore, these integers are modulus this prime number, which is basically clock arithmetic. 39:43.610 --> 39:51.990 This is saying that 1 o'clock, 13 o'clock, 25 o'clock are all the same, because the number on the clock dial is pointing to the one. 39:51.990 --> 39:56.910 So basically, every 12, your counting goes back to zero. 39:56.910 --> 40:11.170 So that's the case here, except instead of 12 numbers, you have like this 70 some digit prime number that so you have a clock with just an unfathomable number of numbers on its dial. 40:11.330 --> 40:26.670 Alright, so the way to think of this, this x and y is basically you have this, you know, universe sized sheet of grid paper, and on grid paper, you can have x y coordinates that are each integers. 40:26.670 --> 40:35.210 And some of the points on this huge, gigantic sheet of grid paper are solutions to this particular elliptic curve. 40:35.490 --> 40:51.670 And if one was to try to guess just random combinations of x and y to, to come up with a solution to this, your chances of coming up with a solution to this elliptic curve would be one in that prime numbers probability. 40:51.670 --> 40:57.650 So one in 10 to the 70th, I forget the exact number, it's like 10 to the 70th, something on that order. 40:57.770 --> 41:03.610 So basically you to come up with a solution on your own is it's basically impossible. 41:04.050 --> 41:10.410 But so fortunately, part of the elliptic curve definition is to provide you with a solution called the base point. 41:10.410 --> 41:16.370 The base point is a solution x sub b, y sub b, which is known to solve this equation. 41:16.510 --> 41:27.630 And furthermore, because of the mathematics of elliptic curves, it's possible if somebody gives you an integer n, it's possible to come up with another point, another solution. 41:27.630 --> 41:35.990 So basically, if somebody gives you this base point solution, it's possible to compute another solution to this, which would be another point on this grid paper. 41:36.050 --> 41:39.870 And this other point on the grid paper would be n times the base point. 41:40.150 --> 41:43.870 And that would be p sub n, which is equal to x sub n, y sub n. 41:43.870 --> 41:45.550 Now it's much more complicated. 41:45.550 --> 41:50.410 It's not just that you take the base point and you multiply both the x and y coordinates by the number n. 41:50.410 --> 41:52.270 It's much, it's more sophisticated than that. 41:52.270 --> 42:00.410 But the idea is that if somebody tells you n, you can compute the nth point that is a solution to the elliptic curve. 42:00.410 --> 42:02.410 The thing is that it's a one-way function. 42:02.410 --> 42:04.910 So if someone tells you n, you can get p sub n. 42:04.910 --> 42:07.350 But if someone tells you p sub n, you can't get n. 42:07.350 --> 42:09.290 You have to brute force that. 42:09.370 --> 42:16.630 And again, to brute force this is a 10 to the 70th chance of getting it right, which means, you know, might as well just not try. 42:17.390 --> 42:28.510 And so that's the key to this, is that the public key, which is the location of that base point, is itself the Bitcoin address. 42:28.510 --> 42:32.310 Now it's not a number like I'm kind of implying it is here. 42:32.310 --> 42:40.010 The number gets translated to a string of letters and numbers in Bitcoin, which is a Bitcoin address. 42:40.010 --> 42:47.450 But at the heart of it, that Bitcoin address is representing an x, y coordinate on the secp256k1 elliptic curve. 42:47.450 --> 42:50.090 The private key is n. 42:50.090 --> 42:56.730 n is the which solution to this elliptic curve is your point. 42:56.970 --> 42:59.350 And again, it's a one-way function. 42:59.350 --> 43:16.910 So if you give your Bitcoin software the number n, which is basically the seed to generate a public address, then you can get the public address from your private key, but you can't go backwards. 43:16.910 --> 43:22.330 So the private key is like basically it functions as an authorized signature to spend. 43:22.330 --> 43:26.470 So getting a new Bitcoin account is tantamount to picking a number. 43:27.230 --> 43:30.490 What can you do with this elliptic curve point? 43:30.490 --> 43:36.690 So big deal, like why make such a big deal out of having a, you know, an x, y point that satisfies this equation? 43:36.690 --> 43:40.530 You can do something very useful with it, which is secure message signing. 43:40.530 --> 43:56.610 So if you are in possession of a public-private key pair, and you have a message that you want to send to the world, and you want to make sure that everyone in the world knows that that message came from you and only you, this is the way you would do this using elliptic curve cryptography. 43:56.610 --> 44:00.470 You would take your message and you would combine it with your private key. 44:00.510 --> 44:04.870 So you would have to manipulate those in a routine. 44:04.870 --> 44:15.530 So the combination of the message and your private key scrambled up together will produce a signature, which is just a block of bytes that is unique to the combination of the message and the private key. 44:15.690 --> 44:27.570 Then as the sender, you would send your message in plain text and you would include with your plain text message the signature, which is this byte block that you generated by processing your message along with the private key. 44:27.830 --> 44:36.070 As a recipient now, you get this message and you got the signature from the sender, but now you're not sure if this actually came from the sender or not. 44:36.070 --> 44:43.610 So what you do is you take this stuff that you came from the purported sender, and you combine this with a public key, which you know to be from the sender. 44:44.110 --> 44:51.330 When you combine all three of those, you get a binary verification result that says, yes, this was a legitimate message from the sender or no, it was not. 44:52.370 --> 44:55.930 This type of cryptography gets used all over the internet. 44:55.930 --> 44:59.210 For example, it gets used in the HTTPS protocol. 44:59.770 --> 45:05.190 In Bitcoin, this was used in a novel way. 45:05.190 --> 45:14.410 That is, the sender's public key was used in a further interpretation to be an analogy to a bank account address. 45:14.650 --> 45:24.730 So the public key then becomes your Bitcoin address, and the private key becomes the signature that's needed to spend the money that's associated with the public key. 45:25.050 --> 45:28.510 So sending Bitcoin means sending a signed message to the Bitcoin network. 45:29.070 --> 45:32.050 And it's analogous to a check, as I'm showing here. 45:32.050 --> 45:36.810 So knowledge of the private key is tantamount to speech, which is tantamount to money. 45:38.550 --> 45:44.330 So finally, once a valid check gets written and signed and sent to the Bitcoin network, how does it get processed? 45:44.330 --> 45:48.890 Well, in Bitcoin, the network is controlled by a group of gossipy accountants. 45:49.030 --> 45:55.130 So these are computers, again, anyone can join the Bitcoin network simply by downloading the software and putting your computer on this. 45:55.130 --> 46:02.250 When you do that, your computer is going to start to download the entire transaction history of everything that's happened in Bitcoin since 2009. 46:02.250 --> 46:08.230 It's going to get that from being gossipy with the other Bitcoin computers that it's connected to on the network. 46:08.230 --> 46:12.430 And those other computers will willfully share little pieces of the database. 46:12.590 --> 46:19.050 And there's redundancy because you want to make sure that a database that you're getting in from your neighbors is correct. 46:19.050 --> 46:24.490 So there's checks and balances for that, namely the hash value of the blocks. 46:24.490 --> 46:29.910 So that is what is used to guarantee kind of authenticity of the database through the system. 46:29.910 --> 46:33.710 So again, miners are peer to peer Bitcoin accountants. 46:33.710 --> 46:35.730 What they do is they process blocks. 46:35.730 --> 46:38.570 Blocks are lists of valid signed spend messages. 46:38.570 --> 46:43.010 It's basically the list, the current list of pending checks to be processed. 46:43.390 --> 46:49.950 They get packaged into a collection called the block, and then the block gets added to the chain. 46:50.210 --> 46:57.430 And therefore, it's basically one page worth of transactions showing who sent what to who. 46:57.430 --> 46:58.630 That's what a block is. 46:58.630 --> 47:00.930 Part of what the block has is a nonce. 47:00.930 --> 47:07.590 And the nonce is just a little data field within the block, which is free for the miner to choose whatever they want it to be . 47:07.590 --> 47:12.210 So the miner can just guess a number and put that in the nonce. 47:12.210 --> 47:13.710 Why do they have to do that? 47:13.710 --> 47:22.930 Well, one requirement for a block to be considered valid is that the hash of the block, and of course, being DEF CON, I don't have to explain too much. 47:22.930 --> 47:26.910 Hash is just a one-way cryptographic hash function with fixed output length. 47:26.910 --> 47:39.710 So you take as input a file of any size, and you get as output a block of bytes that is basically a signature that is extremely sensitive to even bit level changes in the input. 47:40.130 --> 47:45.690 All right, so the thing is that a block has to be have a hash value that is lower than a difficulty number. 47:45.690 --> 47:55.670 The difficulty number is dynamically adjusted so that the number of valid blocks that happened in a 10-minute interval is one on average. 47:55.750 --> 48:05.070 So there's a maximum acceptable value for the block hash, which the accountants in this network are busy trying to satisfy for a given block. 48:05.350 --> 48:09.270 The computer in the network that does that gets what's called the block reward. 48:09.270 --> 48:12.490 That is a Bitcoin payout to the non-solver. 48:12.490 --> 48:33.490 And it's important to know that in Bitcoin, and also this is true in Monero, and it's actually quite rare for cryptocurrencies to have this property, is that all of the accounting money, all of the money in existence, came into existence as a payout to a random computer in the network that was helping to secure the accounting and the bookkeeping for that network. 48:33.870 --> 48:49.450 None of the block reward in Bitcoin was shunted off and a cut went to a group of people, or to a foundation, or you didn't have a portion of that money got set aside and then used to do marketing or whatever. 48:49.450 --> 48:56.410 All of the money went directly to the computers that were actually doing the accounting work for that network. 48:56.410 --> 49:12.450 And this is relevant from a regulatory point of view because FinCEN, which is one of the financial regulators in the US, defines a decentralized cryptocurrency as a currency in which the block rewards all go directly to the decentralized network that's doing the accounting. 49:12.530 --> 49:22.470 That's important because if you have a chunk of money that's going to a group of people, then that group of people could be considered as being basically the masterminds of the operation. 49:22.630 --> 49:31.730 And so they have to be subject to increased regulation in terms of compliance with AML KYC rules. 49:31.730 --> 49:48.770 So it's important that the block reward, both from sort of a philosophical and a fairness point of view and also a regulatory point of view, that all of the unit of currency in existence went as a reward to the decentralized network of miners. 49:49.250 --> 49:50.370 Conflict resolution . 49:50.370 --> 49:56.570 So again, there's no one boss computer that is in charge of having, you know, the correct version of the ledger. 49:56.570 --> 50:01.350 So how do we know if you have a conflict in the network, who wins? 50:01.350 --> 50:08.630 Well, the answer is that the chain with the more hash power is going to be the one that is deemed to be the authoritative version of the blockchain. 50:08.810 --> 50:12.330 So this basically functions as a self-healing mechanism. 50:12.330 --> 50:28.730 If there's a discrepancy in the state of the network in two geographically distant parts of the network, basically the tie break will be resolved at the next block that comes, because then that will have, that chain will have more hash power. 50:28.730 --> 50:37.630 So at least relative to the state of the blockchain at the time when the chain fork happened. 50:37.630 --> 50:40.790 All right, anyway, I'm getting a bit too technical here. 50:40.910 --> 50:48.170 So back to the blockchain, it's a, the definition is it's a distributed append-only linked list of blocks with low value hash. 50:50.070 --> 50:56.310 And sorry if I've gone too fast here, but there's lots of big concepts here to understand. 50:56.310 --> 51:02.690 And if this is all new to you, I would suggest taking the time to, you know, think about it until it makes sense. 51:02.690 --> 51:11.690 Because especially before, you know, getting into this circus, which is kind of the cryptocurrency, you know, world of today. 51:13.090 --> 51:17.570 So to summarize the Bitcoin white paper, Nakamoto consensus synthesizes digital scarcity. 51:17.570 --> 51:20.470 There's a few different kinds of scarcity that we're talking about. 51:20.470 --> 51:24.530 One is account level scarcity, that is property rights, the establishment of property rights. 51:24.530 --> 51:28.970 How do you know that who owns what in this system of accounting? 51:29.030 --> 51:36.610 So that is enforced in Bitcoin by the users, the individual's selection and subsequent protection of an elliptic curve private key. 51:37.210 --> 51:40.250 How do we know in aggregate how many Bitcoin there are? 51:40.250 --> 52:00.350 How do we know that we're not going to have a situation like we have in fiat banking, where we have a money supply whose quantity is unpredictable over time and is subject to the hopefully wise, but in practice, not always 100% wise decisions of a central group with arbitrary control of that money supply? 52:00.350 --> 52:09.590 Well, that is enforced by an open network of peer-to-peer accountants in Bitcoin who are rewarded for behaving consistently with the consensus rule set. 52:10.150 --> 52:24.670 What that means is that the majority of nodes in Bitcoin have decided in advance, it's been coded in advance, that the Bitcoins that are given to a miner as a reward is going to decrease over time. 52:24.670 --> 52:34.190 And therefore, the total number of Bitcoins that are going to be rewarded to miners in the network is going to be a total sum of 21 million Bitcoin forever. 52:34.570 --> 52:55.310 So any new computer that comes onto the network and has a different idea of what the money supply should be, let's say there's a computer that Joe Noob Hacker comes up with their own version of the Bitcoin client in which they program that the block reward is going to go to their personal Bitcoin address, 52:55.310 --> 52:56.790 and then they put that on the network. 52:56.790 --> 53:06.290 What's going to happen is that it's just going to get ignored because you need majority decisions on this network to be considered correct. 53:06.330 --> 53:09.850 That's how you get around the fact that there's no boss computer. 53:09.850 --> 53:12.910 Basically, the majority rules becomes the boss, right? 53:12.910 --> 53:23.530 And so a rogue computer that's introduced to the network is going to have zero effect on it unless it can manage to get 51% of the hash power, which is expensive and difficult to do. 53:25.310 --> 53:31.350 Finally, you have database modification scarcity, which is record permanence. 53:31.430 --> 53:40.190 The number of opportunities that the Bitcoin network has to modify what's in the Bitcoin database is severely limited. 53:40.190 --> 53:45.210 And it's severely limited by this proof of work mechanism, like the nonce stuff that I was talking about. 53:45.210 --> 53:58.170 Basically, when a Bitcoin computer comes up with a nonce that satisfies difficulty, it's coming up with a block of data, that block, which is extremely rare, because its hash value is arbitrarily low. 53:58.170 --> 54:06.210 It's got a whole bunch of zeros in front of it, and then numbers after that, which does not really happen if you just have randomly generated blocks. 54:06.210 --> 54:10.830 If you have randomly generated blocks, then you would have random numbers for the hash function. 54:10.850 --> 54:21.290 But every single block in the Bitcoin blockchain, and also this is true in Monero, has a low hash rate, has a low hash number associated with each block. 54:21.310 --> 54:26.370 And so that makes each little piece of data that gets added to the blockchain a rare piece of data. 54:26.390 --> 54:29.170 It took a lot of trial and error effort. 54:29.170 --> 54:34.130 In other words, it took a lot of proof of work to get that piece of data added to the blockchain. 54:34.150 --> 54:45.130 And so, as a result, it's extraordinarily difficult to make modifications to that database, especially as time goes on, and more proof of work gets piled on top of the older transactions. 54:45.130 --> 54:50.110 It becomes near impossible to modify older transactions. 54:51.790 --> 54:55.110 Okay, so how is Monero's features of scarcity? 54:55.110 --> 54:57.990 How do they differ from Bitcoin's? 54:58.470 --> 55:12.450 Probably the most important, I would say, from a assessment point of view when assessing, you know, is Monero something worth considering, given that Bitcoin was there first, and it has the largest network. 55:12.470 --> 55:19.150 Currently, it has the largest, you know, market share, the largest mind share, the largest network value. 55:19.610 --> 55:26.290 But if you look at Monero, it is not a code fork of Bitcoin. 55:26.290 --> 55:34.830 So most all of the cryptocurrencies in existence today simply did a copy-paste of Bitcoin's code, and then changed a few little things. 55:35.210 --> 55:45.550 And that, you know, they said, oh, I like this about Bitcoin, I don't like that about Bitcoin, made a few oftentimes trivial changes to the code, and then published that and call it your own cryptocurrency. 55:46.190 --> 56:00.970 And because we're in a time in which the, I would say, the, I guess, the sophistication level on a dollar-weighted basis in the crypto market is rat low. 56:00.970 --> 56:06.810 It's basically like the early days of the dot-com bubble, in which the internet was new. 56:06.810 --> 56:15.270 And because the internet was new, it was like, you know, there's all sorts of technological utopia talk going on about how the internet was going to revolutionize everything. 56:15.510 --> 56:26.670 And as a result, because you had basically, you know, a bunch of geeks who understood how the internet worked, and a bunch of normies who had really no idea what even email was. 56:26.670 --> 56:32.310 So you had the situation where you had, you know, stupid idea plus internet equals sexy company. 56:32.310 --> 56:41.350 So you'd have things like pets.com, which, in which the business model was to, you know, FedEx 50-pound bags of dog food to people. 56:41.570 --> 56:47.070 But they were using the internet to get the orders in for these dog food orders. 56:47.130 --> 56:51.590 And so therefore, this was just like a hot company back in the early days of the internet. 56:51.590 --> 56:54.530 It's funny for us to look back at that and kind of laugh at that. 56:54.530 --> 57:04.970 But we are in exactly the same situation now with cryptocurrencies, in which stupid idea plus a little bit of blockchain buzzwords equals hot new cryptocurrency. 57:05.330 --> 57:16.590 And that's enough to get a bunch of people who have basically profits in mind above any sort of technological benefit to get in on a bandwagon. 57:17.030 --> 57:26.570 So anyway, one criteria that one can use to whittle down the subset of cryptocurrencies that are worth considering are this. 57:26.570 --> 57:28.390 Is it simply a Bitcoin fork? 57:28.390 --> 57:33.410 How much original intellectual effort went into the creation of this other cryptocurrency? 57:33.410 --> 57:35.870 In Monero, it was started from scratch. 57:35.870 --> 57:38.350 It has its own separate code base. 57:38.350 --> 57:41.290 In fact, it uses a completely different elliptic curve than Bitcoin. 57:41.290 --> 57:43.890 So Monero uses ED25519. 57:43.890 --> 57:52.790 That is the very XY points on this gigantic sheet of grid paper, which is fundamental to how the cryptocurrency works. 57:52.790 --> 57:56.570 That very equation is different in Monero than it is in Bitcoin. 57:56.650 --> 58:05.430 So this is a form of technical hedging to the extent that the elliptic curve used in Bitcoin may or may not have weaknesses associated with it. 58:05.590 --> 58:10.010 This is a form of technical hedging in which Monero has chosen deliberately a different elliptic curve. 58:10.350 --> 58:13.030 In Monero, there are two forms of private keys. 58:13.030 --> 58:14.550 There's a spend key and a view key. 58:14.550 --> 58:17.350 The spend key works like the Bitcoin private key. 58:17.450 --> 58:23.210 So if you know the spend key, you are in complete control of your account and you can see everything that goes on with it. 58:23.230 --> 58:26.170 In contrast to Bitcoin, there's also a view key in Monero. 58:26.170 --> 58:32.190 In Monero, the view key is used to basically see details of your account. 58:32.570 --> 58:45.150 So by default in Monero, lots of the details of transactions are encrypted because by default, the details of transactions are nobody's business except for the people who were involved in the transaction. 58:45.150 --> 58:46.370 It's their business. 58:46.390 --> 58:59.990 So in Monero, there is a public blockchain, which everyone in the Monero ecosystem gets if they run the Monero software, but many details of this blockchain are encrypted. 59:00.410 --> 59:08.990 Because by default, a random person downloading the Monero blockchain, it's not their business who sent what to who, like all the details. 59:08.990 --> 59:17.990 They can know very high level details about what's going on, but why is it their business to know exactly who sent what to whom and how much they spent? 59:18.890 --> 59:24.130 So in Monero, this necessitates the use of two different keys. 59:24.130 --> 59:25.350 There's a spend key and a view key. 59:25.350 --> 59:26.710 Those are both private keys. 59:26.950 --> 59:29.450 All right, in Monero, the address space is larger. 59:29.450 --> 59:37.510 So we're talking about 10 to the 76 different addresses to choose from in Monero versus 10 to the 60th in Bitcoin. 59:38.130 --> 59:42.890 This means that there is more security in terms of the birthday problem. 59:42.890 --> 59:49.750 So when one is choosing a cryptocurrency account, one is simply picking a point on this grid paper and calling it your own. 59:49.750 --> 59:58.250 When you do that, you have to consider what is the risk that somebody else in the world is going through this same process and picking a random point on this grid paper. 59:58.410 --> 01:00:01.550 And what's the chance that they pick the point that I picked? 01:00:01.550 --> 01:00:07.430 If they pick the point that I picked, then they will know the private and public keys for that elliptic curve point. 01:00:07.430 --> 01:00:11.750 Therefore, I'm going to be basically sharing my money with a stranger somewhere else in the world. 01:00:12.550 --> 01:00:14.630 That is a possibility. 01:00:14.630 --> 01:00:23.690 So in that sense, there is security by obscurity in cryptocurrencies, but that is mitigated by the fact by the vast number of addresses that are possible. 01:00:23.710 --> 01:00:33.810 And there is an even more vast number of addresses in Monero than there are in Bitcoin by 10 to the 16th, that many times more addresses in Monero. 01:00:34.090 --> 01:00:43.050 The drawback of this is that you have a less user-friendly experience because the address lengths in Monero are long. 01:00:43.050 --> 01:00:45.650 They're very long strings of numbers and letters. 01:00:47.330 --> 01:00:51.150 The emission schedule is different in Monero relative to Bitcoin. 01:00:51.150 --> 01:00:53.510 So in Monero, it's continually decreasing. 01:00:53.510 --> 01:00:55.090 There's not a four-year halvening. 01:00:55.510 --> 01:01:06.050 So in Bitcoin, every 210,000 blocks, the miner reward that goes out to each miner who successfully adds a block to the network gets cut in half. 01:01:06.050 --> 01:01:18.990 That means every four years, if you're a Bitcoin miner, there is a date circled in red that's coming up sometime in the next four years in which your income from helping contribute to the Bitcoin ecosystem gets cut in half. 01:01:19.070 --> 01:01:23.950 And so from a business point of view, if you're doing mining for a business, it's a rather disruptive thing. 01:01:24.630 --> 01:01:39.590 And this is something in which Monero has basically looked at the granddaddy cryptocurrency and kind of thought about what they're doing and maybe trying something a little different that might help matters a bit. 01:01:39.590 --> 01:01:42.830 And so in Monero, the emission is continually decreasing. 01:01:42.830 --> 01:01:53.690 So we are spared from this drama in Bitcoin of having every four year, a large disruption thrown into the mining ecosystem. 01:01:56.450 --> 01:02:01.430 There's another form of unwanted scarcity, and that is future miner rewards. 01:02:01.450 --> 01:02:15.790 So as I mentioned before, all the computers in the Bitcoin network and also in the Monero network are programmed with a understanding of how big is the reward going to be to each computer over time. 01:02:15.790 --> 01:02:19.770 So now and into the future, how big is that reward going to be? 01:02:19.770 --> 01:02:26.690 In Bitcoin, this reward is predefined to get cut in half every four years, as I just explained. 01:02:27.250 --> 01:02:36.910 What that means is that in, say, 40 years from now, the Bitcoin reward is going to be, it's going to have halved four times. 01:02:37.090 --> 01:02:40.470 So one half to the 10th power, that's about a factor of a thousand. 01:02:40.470 --> 01:02:46.770 So the Bitcoin reward to miners in 40 years time is going to be one one thousandth of what it is now. 01:02:46.970 --> 01:02:58.070 So this brings up a concern, like are miners in the Bitcoin network in that length of time from now, are they going to be able, are they going to find that to be enough incentive to keep working for the network? 01:02:58.110 --> 01:03:20.670 There's some academic research that shows that the solution that Bitcoin has come up with, which is to institute a fee market in which the people who transact end up chipping in and basically engaging in a auction-like process to bid up the fee that they offer with the transaction in an effort to get their transaction into the next block. 01:03:20.670 --> 01:03:25.310 But that idea may not be enough to incentivize miners in the future. 01:03:25.310 --> 01:03:28.430 So in Monero, what we have is what we call the tail emission. 01:03:28.430 --> 01:03:33.870 That is that the block reward in Monero is never going to be less than 0.3 Monero per minute. 01:03:34.150 --> 01:03:41.690 And what this means is that over time, the number of Monero in existence is going to linearly increase forever. 01:03:41.970 --> 01:03:54.330 And so this gets kind of portrayed as quote-unquote infinite emission by people who are not thinking about it very, I would say, fairly. 01:03:54.450 --> 01:04:02.770 But the reason is that the absolute value of emission is not relevant in any macroeconomic theory. 01:04:02.770 --> 01:04:13.690 Any macroeconomic theory that takes into account what the money supply is and the effects of changes in that money supply in the macroeconomy will look at the percentage increase of that money supply. 01:04:13.690 --> 01:04:15.890 So it's not the absolute value of U.S. 01:04:15.890 --> 01:04:20.090 dollars increasing that's relevant, it's the percentage increase in U.S. 01:04:20.090 --> 01:04:21.890 dollars that's relevant. 01:04:21.890 --> 01:04:34.690 And if you have a money supply like Monero that is increasing linearly over time, what that means is that if you look at the percentage increase of the money supply, every year it's going to get smaller and smaller. 01:04:34.790 --> 01:04:43.330 Because every year the money supply is going to expand by a fixed constant amount, which is what linear expansion just means. 01:04:43.330 --> 01:04:52.010 Every year is a constant amount of Monero is going to be added, but that's going to be added to a pre -existing base of Monero that is going to be growing. 01:04:52.110 --> 01:04:58.470 Therefore the inflation rate on percentage terms is going to be decreasing and asymptotically going to zero. 01:04:58.950 --> 01:05:05.770 Which means that that is the relevant input to any macroeconomic theory that uses the expansion of the money supply. 01:05:05.770 --> 01:05:08.850 An asymptotically zero inflation rate. 01:05:08.850 --> 01:05:15.250 And so to claim that identically zero inflation rate is significantly different. 01:05:15.250 --> 01:05:20.370 It's a totally different situation that an asymptotically zero inflation rate is is silly. 01:05:21.310 --> 01:05:23.450 It's just not factual. 01:05:23.450 --> 01:05:42.430 It is easy for normies to understand that 21 million bitcoiners is the only amount that's ever going to be created, but it leads to a bit of a laziness of thinking in which one comes to this false conclusion that one must have a identically zero inflation rate in order to be macroeconomically negligible. 01:05:43.570 --> 01:05:47.290 What do we gain in Monero for having this tail emission? 01:05:47.290 --> 01:05:51.410 We know in Monero that minor incentives are going to be there in perpetuity. 01:05:51.410 --> 01:05:59.130 In Monero we do not have a civil war over who is going to be paying for minor rewards in the future. 01:05:59.130 --> 01:06:03.630 Now this sounds like it might be kind of a trivial and academic thing but this actually happened in bitcoin. 01:06:03.630 --> 01:06:11.210 There is a civil war that was partly caused by a disagreement over who is going to pay for the network's operation in the future. 01:06:11.690 --> 01:06:27.170 So this whole position in bitcoin that we are going to get the users of bitcoin, the transactors of bitcoin, to engage in this competition in a fee market to get the transactions processed in the next block. 01:06:27.230 --> 01:06:35.270 The viability of that was debated within bitcoin and was one of the factors leading to the divorce of bitcoin versus bitcoin cash. 01:06:36.410 --> 01:06:44.150 Now if you think about it, who wants to go to ebay to try and get a financial transaction going? 01:06:44.150 --> 01:06:52.270 Who wants to engage in a bidding process to try and just send ten dollars to your buddy for lunch? 01:06:52.270 --> 01:06:57.270 But anyway, we avoid all that again in Monero by having this tail emission. 01:06:57.330 --> 01:07:00.570 So here's some charts that show what I'm talking about. 01:07:00.570 --> 01:07:03.130 This is actually empirical data on the left. 01:07:03.130 --> 01:07:13.550 So to the left of the present, and I'm looking at a timescale of 2009 which is when the bitcoin white paper started, and I'm going out 15 years into the future to the year 2035. 01:07:13.750 --> 01:07:18.510 This is the amount of the number of coins that will be in circulation. 01:07:18.650 --> 01:07:27.710 So in bitcoin there have been about roughly 18 million bitcoin created and there are going to be three million more created for the rest of time. 01:07:27.710 --> 01:07:44.310 So you can see to the left this is what the money supply has looked like in bitcoin, and to the right of this in gray we can reliably predict in the future what the future money supply is going to be, because again the miners in the network are kind of programmed with that information in advance. 01:07:45.210 --> 01:07:47.390 The same is in Monero. 01:07:47.390 --> 01:07:53.170 So in Monero we also have a predefined schedule for what the coin emission is going to be over time. 01:07:53.170 --> 01:07:58.390 And so on to the left of August 2020 you see what has actually happened in Monero. 01:07:58.670 --> 01:08:06.050 And this curve here, it looks so smooth and perfect it looks like it's a theoretical line, but this is actually empirical data that I'm showing on the left. 01:08:06.050 --> 01:08:11.410 This is what actually happened in terms of emission in the Monero blockchain up to now. 01:08:11.410 --> 01:08:22.630 And then in the future you can see the tail emission in Monero shows up as this very slight curve, a straight line that's that's slightly tilted up to the right. 01:08:22.690 --> 01:08:30.910 That's the tail emission which there's a going to be a fixed number of Monero dedicated to be given out to miners every year in perpetuity. 01:08:31.030 --> 01:08:35.590 This differs from bitcoin in which the 21 million limit is a hard limit. 01:08:35.610 --> 01:08:40.270 Once the number of bitcoins emitted gets close to the 21 million that's going to go to zero. 01:08:40.270 --> 01:08:52.230 And again they have a problem to deal with, which is how do they guarantee that the miners in the far future are going to be incentivized to keep using their electricity and their silicon to keep supporting their network. 01:08:53.150 --> 01:08:58.810 If we take the time derivative of this last chart, you get year-over-year supplied inflation. 01:08:58.810 --> 01:09:07.850 So what I'm doing is I'm taking what is the supply of a currency today versus what is the supply of that currency one year ago on the same day. 01:09:07.850 --> 01:09:11.430 And I'm showing what you get for Monero, bitcoin, and also gold. 01:09:11.430 --> 01:09:19.090 So the World Gold Council keeps track of its estimate of how much above ground gold there is in the world every year. 01:09:19.250 --> 01:09:35.650 And you can see here that the amount of gold in above ground that's known to exist and has been processed and refined into bullion in jewelry, that has been increasing at a pretty constant rate of about 1.8% per year. 01:09:36.230 --> 01:09:52.070 So if you think of sound money as being something that is gold-like in that there is no entity that can artificially create gold out of nothing, like you have to do the work of mining it yourself, then even gold inflates at a rate of 1.8% per year. 01:09:52.070 --> 01:09:56.910 So if you use that as kind of your litmus test for defining something called sound money. 01:09:56.910 --> 01:10:08.570 So sound money, a working definition of sound money would be something, a source of scarcity that inflates by a level of about 1.8% per year or less. 01:10:08.630 --> 01:10:11.970 So that would be kind of a working definition of what sound money is. 01:10:12.250 --> 01:10:18.070 So as you can see, Bitcoin and Monero both are coming up on a new area of scarcity. 01:10:18.070 --> 01:10:26.010 Starting now, here in 2020, going into the future, the inflation rates of both Bitcoin and Monero are going to be lower than gold. 01:10:26.090 --> 01:10:30.530 And so these will satisfy that definition of sound money. 01:10:30.530 --> 01:10:32.750 It's like a digital form of sound money. 01:10:33.550 --> 01:10:39.230 In contrast to this, we have a kind of scary situation with the money supply of the U.S. 01:10:39.230 --> 01:10:40.390 dollar, for example. 01:10:40.450 --> 01:10:47.190 This is again, money zero maturity, which is the broadest measure of liquid money in the U.S. 01:10:47.310 --> 01:10:51.030 And this is looking at year-over-year supply inflation, how much U.S. 01:10:51.030 --> 01:10:53.550 dollars have there been versus how much U.S. 01:10:53.550 --> 01:10:56.610 dollars have there been a year ago at the same date. 01:10:56.610 --> 01:11:02.470 You can see as a result of the pandemic, this has spiked up recently to about 30%. 01:11:07.880 --> 01:11:18.040 Now, I showed a version of this chart just six months ago at a keynote talk that I gave at the Critical Decentralization Cluster at 36C3 in Leipzig, Germany. 01:11:18.200 --> 01:11:24.620 You might have seen the Monero Means Money documentary film that was made out of that. 01:11:24.940 --> 01:11:33.920 And relative to that, which was just six months ago, and just before the pandemic hit, I had to adjust the vertical axis here. 01:11:33.920 --> 01:11:38.560 It used to go to 20% now because I had to adjust it to 30% to fit fiat. 01:11:41.020 --> 01:11:42.900 Again, it's a scary situation. 01:11:42.900 --> 01:11:49.320 Hopefully it works out for the best, because if it doesn't, there's going to be a lot of suffering by humanity. 01:11:49.320 --> 01:11:52.660 But the situation is what it is. 01:11:52.900 --> 01:12:01.080 And for those people looking for a source of scarcity that is gold or gold-like, this is what you're looking at. 01:12:01.080 --> 01:12:05.480 You have gold and you have new digital alternatives in the form of Bitcoin and Monero. 01:12:07.140 --> 01:12:10.940 There's another form of unwanted scarcity I want to talk about, and that's mining hardware. 01:12:10.940 --> 01:12:15.100 So in the Bitcoin white paper, Satoshi used the phrase one CPU, one vote. 01:12:15.100 --> 01:12:20.520 What that means is that this is the idea that the miner reward should scale with miner expense. 01:12:20.540 --> 01:12:25.580 So you want the probability that a miner computer gets the Bitcoin reward. 01:12:25.580 --> 01:12:34.200 You want that to be proportional to basically how much money and effort that they spent into buying the computer and paying for the electricity to run the computer and so on. 01:12:34.360 --> 01:12:44.120 You don't want a situation in which somebody with a whole bunch of wealth can come up with a way to do mining much more efficiently than a little guy who doesn't have much wealth. 01:12:44.200 --> 01:12:52.380 And yet that's exactly the situation that has come to pass in Bitcoin, and that is because of the economics of silicon manufacture. 01:12:52.680 --> 01:13:05.060 Silicon economies of scale destroy the linearity between miner expense and miner reward, and that is because you have different pieces of silicon with different capabilities and different specializations. 01:13:05.360 --> 01:13:15.140 CPUs, like the things that run your computer or your cell phone, those are general purpose computing devices and they're made to be pretty fast at doing everything. 01:13:15.140 --> 01:13:23.000 Whereas ASICs are custom pieces of silicon that are custom designed to do one thing and do that one thing extremely efficiently. 01:13:23.260 --> 01:13:35.220 So it turned out that in Bitcoin, the proof of work algorithm that's used is simple enough to encode on a piece of silicon and have a dedicated piece of silicon that does nothing but the proof of work in Bitcoin. 01:13:35.560 --> 01:13:43.620 So basically, if you have $50 million, you can make a silicon fabrication lab and you hire a bunch of PhD electrical engineers to make this thing happen. 01:13:43.900 --> 01:13:54.480 And then you can basically print out chips that do nothing but the Bitcoin algorithm and do that more efficiently than anybody else in the world. 01:13:54.620 --> 01:14:02.340 And so currently, that capability exists really on an economically competitive basis, really only in China. 01:14:02.520 --> 01:14:07.500 And so at the current date, Bitcoin mining is a Chinese-dominated oligopoly. 01:14:07.500 --> 01:14:11.720 If you're in Shenzhen and you've got about $50 million, 01:14:15.680 --> 01:14:18.560 you mine Bitcoin the fastest. 01:14:19.220 --> 01:14:20.940 Otherwise, you're out of the game. 01:14:20.940 --> 01:14:37.560 If you are just a regular guy with a CPU, just a gaming computer at home, and you want to join that to the Bitcoin network and try to see if you can maybe hit a block, maybe you can get a reward, you have a higher chance of winning the lotto than getting a Bitcoin block reward. 01:14:37.560 --> 01:14:39.780 It's just not worth your time. 01:14:39.780 --> 01:14:40.740 It's not worth your time. 01:14:40.740 --> 01:14:49.640 It's not worth the extra electricity that your computer is going to eat while it's trying to come up with blocks to satisfy the Bitcoin network. 01:14:50.240 --> 01:14:55.280 This has the unfortunate effect of centralization. 01:14:55.280 --> 01:14:59.160 So now, Bitcoin mining is effectively a Chinese oligopoly. 01:14:59.160 --> 01:15:12.960 You need to be one of these chip fab makers, or you need to be buddies with one of the chip fab manufacturers to get a realistic shot of amassing enough Bitcoin hash power to make a difference, to have a realistic shot of getting a block. 01:15:13.240 --> 01:15:24.400 So in Monero, again, we've looked at the situation in Bitcoin and asked what can we do, what is going maybe not so great over there, and try to come up with solutions to mitigate that. 01:15:24.500 --> 01:15:31.240 So in Monero, what we've done is we have evolved the proof-of-work algorithm to keep small independent miners viable. 01:15:31.640 --> 01:15:38.740 So this is quite remarkable for any cryptocurrency, but if you look at Monero's proof-of-work since 2018, it has changed four times. 01:15:38.760 --> 01:15:41.460 And each of these four times has required a hard fork. 01:15:41.460 --> 01:15:45.800 So there's been an enormous level of effort that's gone into this. 01:15:45.880 --> 01:16:01.000 First, you need to come up with these algorithms, you need to notice that they're ASICs, you have to have a community consensus that this is a problem, you have to have a community that's willing to all upgrade their Monero clients to keep up with the latest changes, 01:16:01.000 --> 01:16:03.220 because these changes were all hard forks. 01:16:03.220 --> 01:16:05.420 That is, they were not backwards compatible. 01:16:05.540 --> 01:16:27.600 So it's a testament to kind of the persistence and really the unanimity of the Monero community in having this goal of keeping a situation of decentralization really viable in the real world, not just a theoretical thing, but something that's actually decentralized in practice, 01:16:27.600 --> 01:16:32.360 with small independent miners having a shot at getting a block reward in Monero. 01:16:33.080 --> 01:16:36.560 This chart is showing data to support that narrative. 01:16:36.560 --> 01:16:43.500 So here I'm looking at 2014 to the present, and this is a chart of the Monero network difficulty. 01:16:43.580 --> 01:16:55.980 So again, previously I talked about how Bitcoin works, there's a number called the difficulty, which is a number under which blocks have to have a hash that's under in order to be considered a viable block. 01:16:56.080 --> 01:17:04.720 So as more computers get onto the network, you can see that difficulty will increase. 01:17:04.760 --> 01:17:12.840 So through version 0.11 of Monero, the proof of work was Kryptonite. 01:17:12.920 --> 01:17:21.380 And so you can see that the difficulty was proceeding along for several years, and then now there's a spike upwards in the difficulty. 01:17:21.380 --> 01:17:25.240 And this is basically interpreted as ASICs coming onto the system. 01:17:25.240 --> 01:17:43.320 So basically, there were chip manufacturers who looked at the Monero proof of work, figured out how to program the Monero proof of work into a custom piece of silicon, make that piece of silicon, plug it into the network, and then start getting a disproportionate share of block rewards from Monero. 01:17:43.480 --> 01:17:46.800 So once that happened, there was some alarm in the Monero community. 01:17:47.720 --> 01:17:58.220 There were signs that, you know, ASICs were going to dominate the network and have a situation in which you have to have connections with a bunch of buddies in Shenzhen in order to be able to have a realistic shot at mining. 01:17:58.320 --> 01:18:03.400 And so work commenced on a variant of the Kryptonite proof of work. 01:18:03.400 --> 01:18:10.080 So Kryptonite v2 was developed and tested and then deployed on the network in early 2018. 01:18:10.240 --> 01:18:13.320 When that happened, you can see the difficulty took a nosedive. 01:18:13.400 --> 01:18:23.420 And that is because all these ASICs that were previously viable in collecting a lot of the block reward were now shut out because the proof of work changed on them. 01:18:23.500 --> 01:18:26.580 So that proceeded for several months. 01:18:26.580 --> 01:18:37.980 And that's the lead time in silicon design, is that you need, there's like a several month lead time from the time that you design an ASICs to the time that you actually fabricate it in enough quantity to make a big dent on the network. 01:18:38.200 --> 01:18:41.420 So several months later, there was another upward spike in the difficulty. 01:18:41.540 --> 01:18:44.100 So that was ASICs coming back online. 01:18:44.100 --> 01:18:51.600 So Kryptonite was patched again, to again, preserve the network viability of getting block rewards for the little guy. 01:18:51.620 --> 01:18:55.860 So again, there was another hard fork in late 2018 to change to Kryptonite v3. 01:18:55.940 --> 01:18:57.820 That worked for another few months. 01:18:57.820 --> 01:18:59.920 Then the difficulty spiked up again. 01:19:00.120 --> 01:19:05.860 And then finally, there was Kryptonite R, well, not finally, almost finally, there was Kryptonite R introduced in early 29. 01:19:06.200 --> 01:19:15.080 Then kind of mercifully, there was this, there's this silence from the ASICs manufacturer, which was a nice sign to see in the Monero community. 01:19:15.160 --> 01:19:29.420 And then finally, there was a kind of a revolutionary change in the proof of work algorithm to RandomX, which uses a randomly generated computer algorithm that must be executed in order to do the proof of work. 01:19:29.420 --> 01:19:33.340 It uses not only integer operations, but even floating point operations. 01:19:33.340 --> 01:19:51.780 And so it's a very interesting example of a proof of work algorithm, for which the customized piece of silicon that will do RandomX the best happens to be, for example, an AMD Ryzen Threadripper, which is something that you can buy on Amazon. 01:19:51.980 --> 01:19:57.980 So it's basically commodity hardware is the most efficient at doing the Monero proof of work. 01:19:57.980 --> 01:20:11.480 It's not something that you have to, you know, go on Alibaba to try and get for yourself, and then suffer through like the very many shenanigans that are associated with having a centralized mining operator. 01:20:11.520 --> 01:20:20.800 So for example, these ASIC manufacturers do not have the most honest reputation, shall we say, of immediately shipping their product out once a customer buys an ASIC. 01:20:20.800 --> 01:20:31.160 There tends to be a several month lag due to, you know, testing and other very unexplainable reasons that their shipped product gets delayed. 01:20:31.160 --> 01:20:35.760 And why would a ASIC manufacturer want to delay shipment of product that's been paid for? 01:20:35.760 --> 01:20:45.480 Well, they want to test the thing by running, by basically collecting Bitcoin block rewards with their customer's hardware before they send it out, right? 01:20:45.480 --> 01:20:54.640 So that's basically the shenanigans that one has to deal with when one does not have a commodity piece of computer hardware to do proof of work with. 01:20:54.660 --> 01:21:01.460 And so since RandomX has gone into effect, CPUs have once again been dominating the network. 01:21:01.460 --> 01:21:09.320 Arguably, that was also the case with Kryptonite R, but we see that there is basically a regime change in the proof of work. 01:21:09.780 --> 01:21:15.600 The metric of difficulty became apples and oranges once RandomX came in. 01:21:15.600 --> 01:21:20.760 So this increase in difficulty is not to be interpreted as meaningful. 01:21:20.760 --> 01:21:28.260 It's just what is meant by a hash now is different in RandomX versus Kryptonite. 01:21:28.260 --> 01:21:32.260 So there's a one-time jump in the difficulty, which is meaningless. 01:21:32.260 --> 01:21:38.020 But since RandomX went in, it's been all signs have been that there have been only CPUs on the network. 01:21:39.440 --> 01:21:42.440 Another form of unwanted scarcity is access to layer one. 01:21:42.440 --> 01:21:46.120 So Bitcoin's one megabyte block limit caused a project fork. 01:21:46.120 --> 01:22:05.400 So there is a controversy as to whether this hard-coded line of code, which Satoshi had put into the Bitcoin client , saying that blocks have to be no larger than one megabyte in size, which is something that Satoshi did as a kludgy way of preventing the network from getting spammed. 01:22:05.400 --> 01:22:07.680 That has remained in there. 01:22:08.200 --> 01:22:30.020 The decision has been made, at least in the dominant implementation of Bitcoin, post-divorce of Bitcoin, the most dominant one has preserved this one megabyte block limit, subject to very marginal level changes like Segwit, which actually made it like 1.3, 01:22:30.020 --> 01:22:30.680 whatever. 01:22:31.300 --> 01:22:36.940 The idea that there's going to be a hard block limit that doesn't change has survived in Bitcoin. 01:22:36.940 --> 01:22:40.280 And so you can see the transactions per day here. 01:22:40.620 --> 01:22:42.920 And I'm showing an exponential scale. 01:22:42.920 --> 01:22:47.040 So this is 10 transactions a day on the bottom to a million transactions a day on the top. 01:22:47.040 --> 01:22:58.060 In Bitcoin, you can see that just like the mining reward asymptotically hits a ceiling , the transactions per day in Bitcoin have also asymptotically hit a ceiling. 01:22:58.060 --> 01:23:00.300 And that is due to this one megabyte block limit. 01:23:00.980 --> 01:23:10.100 Again, in Monero, we look at what's happening in the dominant granddaddy cryptocurrency and give it all due respect as being the pioneer and the first to exist. 01:23:10.100 --> 01:23:19.760 But we're on a case-by-case basis looking at what could be done as an alternative solution to some of these issues. 01:23:19.960 --> 01:23:23.340 And so in Monero, we use what is called an adaptive block weight. 01:23:23.400 --> 01:23:27.560 It used to be called the adaptive block size, but now there were modifications to the algorithm. 01:23:27.560 --> 01:23:29.440 So now it's called the adaptive block weight. 01:23:29.440 --> 01:23:35.700 But the basic idea is that there is no hard-coded limit on the size of the Monero block. 01:23:35.700 --> 01:23:54.560 It dynamically adjusts along with the network so that it can dynamically expand if there is organic growth in the demand for Monero transactions, which as you can see from this past history of transactions per day, you can make a pretty good argument that the trend line of this transaction per day is on the way up. 01:23:54.580 --> 01:23:56.940 It's unlikely to be spam related. 01:23:56.940 --> 01:24:08.380 It's unlikely to be like spammers are just kind of carefully spamming the network by just a little bit and then increasing the amount of spam that they send over time. 01:24:08.420 --> 01:24:14.100 You know, this by all indications seems to be organic growth in the demand for Monero transactions. 01:24:15.100 --> 01:24:25.080 It looks... so from here to here, from like this time in 2016 to this time today, that's a 10x increase in the transactions per day. 01:24:25.080 --> 01:24:30.900 So 10x in four years is what we're looking at in terms of transaction per day growth. 01:24:30.900 --> 01:24:35.340 It doesn't look like much on this chart, but if you think about it, that is quite significant. 01:24:35.340 --> 01:24:40.300 In four years from now at this pace, we're going to be looking at 100,000 transactions per day. 01:24:40.500 --> 01:24:45.840 And then in the year 2028, maybe in DEF CON we'll be showing a million transactions a day, who knows. 01:24:46.280 --> 01:24:52.140 But in the adaptive block size, there is a minor disincentive that kicks in when blocks get too big. 01:24:52.140 --> 01:24:58.220 So that disincentivizes miners from including a whole bunch of transactions into a block. 01:24:58.860 --> 01:25:03.600 And if that happens, there are user fees that also increase if the blocks get too big. 01:25:03.600 --> 01:25:14.960 So miners will continue to be... they won't be so disincentivized that they stop making blocks, because their reward is not going to go down to zero, because user fees are going to kick in. 01:25:14.960 --> 01:25:22.660 Yet there's a disincentive for miners to just blindly process like spam. 01:25:25.280 --> 01:25:36.160 All right, so moving on to the third part of the talk, which... so up to now there have been kind of, I would say, technical under the hood differences between Monero and Bitcoin. 01:25:36.520 --> 01:25:40.020 At this point of the talk, I want to talk about fungibility and transparency. 01:25:40.020 --> 01:25:47.200 And this is where the two kind of mission statements of these two cryptocurrency projects start to diverge quite strongly. 01:25:47.200 --> 01:25:48.680 Bitcoin is transparent. 01:25:49.060 --> 01:25:56.040 Etched forever, for everyone to see forever, is for every transaction you can see the sender, the receiver, and the amount. 01:25:56.060 --> 01:25:59.280 For every address, you can see a complete live balance history. 01:25:59.560 --> 01:26:16.340 And so this is contrary to what you might have heard from the popular press, if you're kind of new to getting into the real details of cryptocurrency, because the news reports always make Bitcoin out to be this anonymous currency that nobody knows anything about. 01:26:16.340 --> 01:26:17.920 Nothing could be further from the truth. 01:26:17.920 --> 01:26:19.520 It's actually completely transparent. 01:26:19.520 --> 01:26:21.140 It shows every single detail. 01:26:21.280 --> 01:26:30.260 So for example, for the high net worth clients that I work with in my consulting practice, this tends to be a showstopper once they know about it. 01:26:30.260 --> 01:26:42.240 Once they become aware of this fact that, hey, did you know that if you put, say, a million dollars into Bitcoin and you have a Bitcoin address that has a million worth of Bitcoin in it, everyone can see that. 01:26:42.240 --> 01:26:53.320 As soon as they know your Bitcoin address, anyone in the world can go to their blockchain explorer, type in that address and see, oh, hey, there's like 100 Bitcoin in there that's worth a lot of money. 01:26:53.900 --> 01:26:57.620 This is a showstopper for really anyone with wealth. 01:26:57.620 --> 01:27:00.820 No one with wealth wants to broadcast that to the world. 01:27:03.600 --> 01:27:07.740 It's indiscreet and it's unsafe to do that. 01:27:08.400 --> 01:27:24.620 So the fact that there's this transparency in Bitcoin, it puts innocent people and businesses at risk and also businesses, because businesses have as part of their secret sauce as to how they are able to serve humanity, make a profit at the same time, 01:27:24.620 --> 01:27:28.260 is that they have suppliers and customers. 01:27:28.280 --> 01:27:32.680 They have a certain pattern of suppliers they get their inputs from. 01:27:32.740 --> 01:27:37.900 They have certain vendors that they deal with and they buy products from their vendors at a certain time. 01:27:37.900 --> 01:27:39.940 Then they sell their products to their customers. 01:27:40.300 --> 01:27:46.440 So oftentimes the prices of those products might not be public knowledge if it's a business-to-business sort of transaction. 01:27:46.900 --> 01:28:00.280 And so there are lots of trade secrets that businesses have and there's no shame in that, whereas for some reason, for some people, any sort of desire for privacy gets portrayed as being something nefarious. 01:28:00.480 --> 01:28:11.540 For businesses, they routinely need privacy in order to survive as businesses, in order for their intellectual property, their trade secrets, to not be copied by competitors. 01:28:12.260 --> 01:28:17.920 Another problem in Bitcoin that goes beyond privacy is fungibility. 01:28:17.920 --> 01:28:22.460 That is that reputation transfers in the Bitcoin network as well as value. 01:28:22.460 --> 01:28:26.300 So for every coin in the Bitcoin network, it's traceable back to the miner. 01:28:26.300 --> 01:28:39.180 So it's as if you have a $10 bill and on the back of the $10 bill, there's a neat chart that shows for the entire history of the existence of that $10 bill, basically your address, your bank address. 01:28:39.180 --> 01:28:45.420 It might not be your name in picture, but it's your bank address, let's say, your bank account numbers. 01:28:45.800 --> 01:28:55.540 And then the account numbers of everyone before you who had that $10 bill going all the way back to the US Mint that fabricated the $10 bill. 01:28:55.540 --> 01:28:59.080 And you have a nice neat chart for all to see. 01:28:59.080 --> 01:29:10.940 It's even worse than that, because it's not that the $10 bill has that transparent list on it, because if it were actually on a physical piece of paper, then the holder of the piece of paper would be the only one who could see it. 01:29:10.940 --> 01:29:18.600 In Bitcoin, everyone in the world can see that nice transaction list for every piece of currency that's in the entire system. 01:29:18.620 --> 01:29:20.260 Every coin is traceable. 01:29:20.380 --> 01:29:24.700 Who owned it is traceable all the way back to the miner who first mined it. 01:29:24.720 --> 01:29:28.020 And what that does, first it invites voyeurism. 01:29:28.120 --> 01:29:38.520 So if you know a Bitcoin address, it's just natural to go to a Bitcoin explorer and type in the address and see how much money is there and see how many transactions they do. 01:29:38.800 --> 01:29:43.940 It's a part of the culture of Bitcoin to basically... it's normalized being nosy. 01:29:44.960 --> 01:29:50.060 I think it's a pernicious social effect of this feature of the protocol. 01:29:50.280 --> 01:29:52.020 There's also guilt by association. 01:29:52.020 --> 01:29:53.620 And this is far more serious. 01:29:54.080 --> 01:30:02.340 There are now many companies in existence whose job it is to try and associate names and faces with every account in Bitcoin, every address in Bitcoin. 01:30:02.340 --> 01:30:05.480 They're trying to dox everyone on the Bitcoin network. 01:30:05.520 --> 01:30:07.220 And what do they do with that information? 01:30:07.220 --> 01:30:10.960 They basically come up with the equivalent of a social credit score. 01:30:11.240 --> 01:30:22.620 Because every Bitcoin in existence can be traced as to who owned it, they can make a graph showing people transacting money with each other. 01:30:22.620 --> 01:30:34.860 And if any of these people happen to be a, quote, bad person, then those people who happen to have exchanged money with that bad person are now flagged as potentially being bad themselves. 01:30:35.060 --> 01:30:42.440 Now, the problem with this is that it's based on imperfect information that is often easy to misinterpret. 01:30:42.540 --> 01:30:47.840 So, for example, let's say somebody buys a car, right? 01:30:47.840 --> 01:30:52.680 Somebody buys a car and they pay for their purchase with Bitcoin. 01:30:52.680 --> 01:30:54.960 Or let's say the opposite, for example. 01:30:54.960 --> 01:30:58.620 You're selling your used car and you want to get Bitcoin for it. 01:30:58.620 --> 01:31:01.960 And so the person who you sell your car to gives you Bitcoin. 01:31:02.280 --> 01:31:15.400 And now, unbeknownst to you, the person who sold your Bitcoin... the person who bought your car and gave you Bitcoin for it, the way that they got their Bitcoin was that they were, for example, selling drugs on the dark web, right? 01:31:15.400 --> 01:31:20.220 And that's how they came up with that Bitcoin, which now you own because you sold your car to this person. 01:31:20.520 --> 01:31:34.500 And you also failed to do, like everyone else who sells their car to a stranger by posting an ad on Craigslist, you didn't do a thorough background check on this person who bought your car, you know, because they just had some Bitcoin. 01:31:34.500 --> 01:31:37.780 They had Bitcoin, you had a car , you did an exchange, you went on your way. 01:31:38.160 --> 01:31:41.160 Unbeknownst to you that they were a quote-unquote bad person. 01:31:41.160 --> 01:31:56.960 And now, because they were a bad person and the companies that are doing blockchain analysis know that, now they are looking at you and thinking, oh, this person just got, you know, $10,000 worth of Bitcoin from a known drug dealer. 01:31:57.580 --> 01:32:03.240 Maybe this person is supplying, you know, drug paraphernalia to that dealer. 01:32:03.240 --> 01:32:05.980 So now you are under suspicion for that. 01:32:05.980 --> 01:32:07.960 And it had nothing to do with you, right? 01:32:07.960 --> 01:32:13.100 But it had to do with the fact that this money is completely transparent and has this history behind it. 01:32:13.580 --> 01:32:30.460 What this means is that there is a social level of censorship, because now when this person who sells their, who sold their car and got this tainted Bitcoin, now this person tries to put their tainted Bitcoin into a crypto exchange to get USD out of it. 01:32:30.460 --> 01:32:36.040 Once they send their tainted Bitcoin to their exchange, it gets frozen, because now it's under suspicion. 01:32:36.040 --> 01:32:42.320 And now the customer who's done this has to go through all sorts of extra hoops to kind of prove their innocence. 01:32:42.580 --> 01:32:48.980 And to do that, they're trying to prove their innocence to somebody who really doesn't care to know the truth. 01:32:48.980 --> 01:32:51.780 They're just, they just want to cover liability on their side. 01:32:51.780 --> 01:32:54.080 They just want to make sure that they don't get in trouble. 01:32:54.380 --> 01:33:06.260 So, you know, probably the most, the easiest thing to do is just to, you know, quarantine that money, not give it back to the customer and wait for the authorities to give them permission to give it back, something like that. 01:33:06.560 --> 01:33:10.720 And none of this was, anything to do with the innocent person involved. 01:33:10.720 --> 01:33:32.820 So this is why the transparency of Bitcoin is a problem , even for innocent, squeaky people who have nothing to hide, is that because the system is transparent, false accusations can be made against them due to false assertions, incomplete misunderstandings that other third parties are making based on that transaction data. 01:33:33.600 --> 01:33:40.760 In contrast, Monero is fungible, which means that every Monero is indistinguishable from every other Monero. 01:33:40.800 --> 01:33:43.980 There are three technologies that promote this indistinguishability. 01:33:43.980 --> 01:33:45.200 One is ring signatures. 01:33:45.200 --> 01:33:48.100 So those keep transacting senders private. 01:33:48.100 --> 01:33:50.860 Stealth addresses keep transacting receivers private. 01:33:50.860 --> 01:33:53.800 And ring CT keeps transaction amount sent private. 01:33:53.800 --> 01:33:57.880 So all three of these are present on the Monero blockchain. 01:33:57.960 --> 01:34:16.120 But when a person joins the Monero network with, by downloading the Monero software at getmonero.org, and running that on their computer and downloading a copy of the blockchain from the, from their peer miners, then they are getting a complete history of who sent what to who in Monero. 01:34:16.120 --> 01:34:22.560 The difference is in Monero, it's all encrypted, because by default, it's none of your business, like what the details of those. 01:34:22.560 --> 01:34:25.120 You can, you will know that transactions happened. 01:34:25.120 --> 01:34:26.980 You will know when they happened. 01:34:27.080 --> 01:34:31.920 And you will know that they happened, but you won't see the details of what happened. 01:34:31.960 --> 01:34:36.880 You won't see the details of who's, who was the sender, who is the receiver and or what the amount was. 01:34:38.080 --> 01:34:47.500 Two of these three technologies were included in the original white paper that defined Monero, which is the crypto note white paper, ring signatures and stealth addresses, but ring CT was not. 01:34:47.500 --> 01:34:49.180 Ring CT was a innovation. 01:34:49.320 --> 01:34:56.500 And the history of how this got into the network is an example of the dedication of this group of people to put it in. 01:34:56.500 --> 01:34:59.620 Ring CT required several ingredients to come to fruition. 01:34:59.620 --> 01:35:02.520 It first required original cryptographic research. 01:35:02.520 --> 01:35:11.220 We're talking postdoc PhD mathematician level cryptographic research that goes through audit and peer review. 01:35:11.220 --> 01:35:15.520 Second, you need development of code to implement this new math. 01:35:15.700 --> 01:35:28.880 And, you know, on the sharp end of the bell curve to be doing this because like the math is not trivial and then to write code that faithfully implements that new math is also not trivial. 01:35:28.880 --> 01:35:35.020 To write clean code that does not screw up somehow in implementing that is even harder. 01:35:35.320 --> 01:35:40.060 And so that was another ingredient in getting ring CT implemented. 01:35:40.300 --> 01:35:46.480 Also, just in case there were problems in the code that got written, it got subject to external audit. 01:35:46.480 --> 01:36:01.560 So basically the community was solicited for donations to pay for external auditors to examine the code of ring CT and make sure that there were no subtle errors of memory overwrites or stuff, you know, or such. 01:36:02.100 --> 01:36:04.240 So and that got approved. 01:36:04.240 --> 01:36:08.700 Then finally, it doesn't matter if code gets written if nobody actually runs it. 01:36:08.700 --> 01:36:19.460 So the community of Monero node owners needed to get on board and download this and agree and update their computers once the new code came out. 01:36:19.460 --> 01:36:32.460 And because this was a hard fork that that ring CT was again, a hard fork being that it's not backwards compatible, which means if if a node owner fails to update their computer, they're going to be left out, they're going to be kicked off the coin. 01:36:34.890 --> 01:36:38.170 So all these ingredients had to happen for ring CT to go in. 01:36:39.230 --> 01:36:43.770 Here are some charts that show the evolution of how this went down. 01:36:44.110 --> 01:36:47.450 On the top, I'm showing daily average bytes per transaction. 01:36:47.450 --> 01:36:54.830 This is how many bytes, like how much disk space is taken up by a transaction on both the Bitcoin network and the Monero network. 01:36:54.910 --> 01:36:57.230 Bitcoin is the chart you see in black. 01:36:57.290 --> 01:36:59.130 And it's been pretty constant over time. 01:36:59.490 --> 01:37:14.210 So that's one of their, I guess, that's part of their community ethos over at Bitcoin is that they want a stable protocol, they don't want to rock the boat, they don't want to make too many changes, because they feel that they have an enormous amount of money in custody, 01:37:14.210 --> 01:37:20.750 under their control, they don't want to do anything that might jeopardize safety in their view. 01:37:21.890 --> 01:37:29.330 Of course, if you take a broader view, the amount of money in Bitcoin is just like a trivial amount in terms of global finance. 01:37:29.430 --> 01:37:43.730 So it's arguable as to whether that sort of high horse view of the importance of the intrinsic goodness of what's already been done is maybe subject to question. 01:37:43.730 --> 01:37:45.390 That's something that's different in Monero. 01:37:45.390 --> 01:37:55.950 In Monero, we are used to acknowledging that this is all experimental, acknowledging that they're going to be new research, new innovations that make fungibility even better. 01:37:56.030 --> 01:38:01.870 And we go through the time and the trouble and the effort to actually make that happen. 01:38:01.930 --> 01:38:10.670 So in Monero, you can see that the bytes per transaction started out as being pretty high, they're much bigger than in Bitcoin. 01:38:10.670 --> 01:38:13.130 And this was in the early days of denominated outputs. 01:38:13.130 --> 01:38:23.570 So in the early days of Monero, you had, for example, little nuggets of Monero, you can think of 1, 2, 3, 4, 5 Monero, like little dollar bills, but they're like Monero bills. 01:38:24.950 --> 01:38:38.490 So doing a Monero transaction in the old days meant that if you were going to send 123 Monero to somebody, you would need to scrounge around and find a 100 Monero chunk, a 20 Monero chunk, and a three Monero chunk, and then you would send those out. 01:38:38.510 --> 01:38:45.190 And then those like little dollar bills would have to get broken up and then sent to whoever you were sending your money to. 01:38:45.710 --> 01:38:50.250 And so as a result, there were a large number of inputs, large number of outputs on every transaction. 01:38:50.390 --> 01:38:54.350 And there were the transactions rather large. 01:38:54.350 --> 01:39:02.110 But this had the drawback of if you can see the denominations that are being sent around, that's harmful to fungibility. 01:39:02.110 --> 01:39:16.290 Because you can see that this, you know, certain accounts on the Monero network seem to have been identified with certain denominations of Monero chunks. 01:39:16.290 --> 01:39:21.350 And so you can make some assertions about that break fungibility in that case. 01:39:21.350 --> 01:39:29.590 There were some papers that were published that made the case that fungibility in Monero was potentially breakable under certain circumstances. 01:39:29.650 --> 01:39:32.370 But these papers were written before 2017. 01:39:32.370 --> 01:39:45.450 And yet they continue to be kind of parroted about to this day as and shown as examples of weaknesses in Monero, whereas this got fixed in 2017, kind of an eternity ago in cryptocurrency standards. 01:39:46.010 --> 01:39:52.290 So RingCT was enabled in 2017, at which point the bytes per transaction went up by quite a bit. 01:39:52.290 --> 01:39:54.370 Then RingCT became mandatory. 01:39:54.510 --> 01:40:01.770 And now you can see that transactions were about, you know, 1000 times larger than Bitcoin transactions in throughout 2017, 2018. 01:40:01.770 --> 01:40:03.550 This was until bullet proofs came around. 01:40:03.550 --> 01:40:17.210 So this was another independent research effort, in which it was found that the higher level math that RingCT used in order to ensure that the value of outputs was the same as the value of the inputs, i.e. 01:40:17.210 --> 01:40:25.670 ensure that no money was being created out of thin air, that cryptographic proof could be done in much smaller byte space than could have been done earlier. 01:40:25.670 --> 01:40:32.710 And so as you can see, overnight, basically, the transaction size dropped back down with RingCT and bullet proofs. 01:40:32.890 --> 01:40:36.150 Now, recently, there's been CLSAGs. 01:40:36.150 --> 01:40:44.310 This is a new research initiative that was developed by the Monero Research Lab, and it's gone through audit, and the audit came back good. 01:40:44.310 --> 01:40:57.450 And so in October, we are projecting to go with another hard fork to implement CLSAGs, and that is going to decrease the transaction sizes in Monero by about 20%, which this dotted line is kind of showing you the magnitude of that. 01:40:57.510 --> 01:41:05.730 So basically, there is ongoing active research in Monero to improve the way the engine works under the hood. 01:41:06.090 --> 01:41:10.070 This is the kind of thing that is actually rare to see in other cryptocurrencies. 01:41:10.070 --> 01:41:18.550 Other cryptocurrencies tend to make big announcements, use lots of buzzwords, and not actually improve anything. 01:41:18.550 --> 01:41:20.790 And it's actually the opposite in Monero. 01:41:20.790 --> 01:41:24.630 There's not a lot of big splashy announcements. 01:41:24.690 --> 01:41:32.130 People work generally quietly without fanfare, and from time to time introduce something that improves the actual product. 01:41:33.230 --> 01:41:36.370 All right, and the bottom here, you can see the daily average transaction fee. 01:41:36.370 --> 01:41:40.550 And so over history, and the scale here is, again, quite large. 01:41:40.550 --> 01:41:43.250 So it's one penny to $100 per transaction. 01:41:43.350 --> 01:41:52.550 So at times of peak demand, like for example, in the last bull market in the end of 2017, you can see that transaction fees were, in both Bitcoin and Monero, were quite high. 01:41:52.550 --> 01:41:54.430 They were in like the $50 range. 01:41:55.430 --> 01:41:59.410 But then now, since then, bulletproofs have gone in. 01:41:59.450 --> 01:42:07.670 When bulletproofs went in, not only did the transaction size drop, but also the fee to send a transaction dropped by that order of magnitude sort of level. 01:42:07.670 --> 01:42:11.950 So that now, transaction fees in Monero are on the order of a penny. 01:42:11.950 --> 01:42:23.990 Whereas in Bitcoin, now that there's what is potentially a new bull run starting, you see transactions in Bitcoin creeping up again to now the $5-$10 range . 01:42:24.050 --> 01:42:36.650 And if there's another burst of interest in cryptocurrencies that is driven by the price, expect to see, again, another spike in the transaction cost for sending Bitcoin. 01:42:37.190 --> 01:42:42.430 It might spike again in Monero too, who knows, but we're already at a sub-penny level already. 01:42:42.430 --> 01:42:45.950 So we're looking good on the fee front. 01:42:47.190 --> 01:42:49.990 So Monero benefits people with nothing to hide. 01:42:49.990 --> 01:42:56.990 And primarily it does that by eliminating the risk of receiving coins that are tainted due to no fault of the receiver. 01:42:57.010 --> 01:42:58.190 It's even worse than that. 01:42:58.190 --> 01:43:03.310 So for example, let's say you're an owner of Bitcoin and you get hacked. 01:43:03.310 --> 01:43:05.390 Somebody steals your Bitcoin, right? 01:43:05.390 --> 01:43:11.390 And let's say that the person who stole your Bitcoin now goes on the dark web and spends it. 01:43:11.390 --> 01:43:14.350 Whereas let's say you are a squeaky clean person. 01:43:14.350 --> 01:43:21.490 You don't even know what the dark web is, or you do absolutely nothing that could get you in trouble. 01:43:21.910 --> 01:43:28.010 You're totally 100% squeaky clean, but you have Bitcoin and this Bitcoin is on a transparent ledger, which is completely traceable. 01:43:28.010 --> 01:43:30.090 So now you get hacked, you've lost your money. 01:43:30.090 --> 01:43:37.750 So in addition to suffering the loss of your money, now it turns out that the person who stole your money is now using it to buy drugs, right? 01:43:37.750 --> 01:43:43.050 So now your address, your identity is associated with drug buying, right? 01:43:43.050 --> 01:43:45.250 Let's say something really bad happens. 01:43:45.250 --> 01:43:48.870 The person who stole your money does something extremely bad with it. 01:43:48.870 --> 01:43:51.630 Now your identity is caught up with that. 01:43:51.650 --> 01:44:00.470 And so now you might be even investigated for crimes that were committed with your formerly your Bitcoin that got stolen. 01:44:00.570 --> 01:44:11.830 And so now, not only are you suffering the loss of your money, you're having to now explain to people that, no, no, no, it's not the case that I paid this guy to buy drugs for me. 01:44:11.830 --> 01:44:14.130 I actually had my money stolen from me. 01:44:14.130 --> 01:44:17.790 You know, you have to... all sorts of headache can happen. 01:44:19.970 --> 01:44:20.690 All right. 01:44:20.690 --> 01:44:23.130 One way to look at this is in the Akerlof framework. 01:44:23.130 --> 01:44:25.610 So this was a Nobel prize winning paper in economics. 01:44:25.610 --> 01:44:27.610 It has to do with used cars. 01:44:27.610 --> 01:44:28.890 And so I relate this. 01:44:28.890 --> 01:44:39.790 So first I'll explain the paper and then I'll apply it because that has applicants to both safe mode Defcon, like our virtual meeting that we're doing, and also a surveillance state with transparent coins. 01:44:40.010 --> 01:44:41.470 So there are two used cars types. 01:44:41.470 --> 01:44:42.990 There are lemons and there are peaches. 01:44:43.210 --> 01:44:45.370 Lemons are the cars that are going to break right away. 01:44:45.370 --> 01:44:48.810 And peaches are the well-maintained used cars. 01:44:48.810 --> 01:44:51.350 So sellers know which type of car they have. 01:44:51.350 --> 01:45:01.930 If you own a lemon, you know it because you were there in the hurricane that the, you know, when the, when your car was under, you know, five feet of water and flooded your car, it was yours. 01:45:01.930 --> 01:45:02.950 And you know that that happened. 01:45:03.070 --> 01:45:05.250 And now you're trying to sell your car because it's damaged. 01:45:05.250 --> 01:45:05.850 That's a lemon. 01:45:05.970 --> 01:45:13.790 A peach is a car that, you know, this is the type of owner who goes and changes the oil and does all the maintenance that you have to do on a car to keep it in good condition. 01:45:14.070 --> 01:45:22.670 So the sellers know what kind of car they have, but the buyers don't because both lemon sellers and peach sellers make sure that the paint job on their car is extra shiny. 01:45:22.950 --> 01:45:27.470 So as on a superficial level, both lemons and peaches look identical to buyers. 01:45:27.470 --> 01:45:32.350 So the buyers can't tell lemons apart from peaches, but they know that they are ignorant in this situation. 01:45:32.350 --> 01:45:34.550 They know that they could end up with a lemon. 01:45:34.610 --> 01:45:45.210 So the Akerlof paper brilliantly explains this race to the bottom that happens in this asymmetric information market in which buyers are armed with less information than the sellers are. 01:45:45.910 --> 01:45:57.350 If you look at what is the offer price that a buyer is going to offer for a car, the offer price is going to be equal to the lemon price because that's the minimum possible price that a car could be, right? 01:45:57.350 --> 01:46:02.450 Lemons are worth less than peaches, so at the minimum you're going to be offering the lemon price. 01:46:02.630 --> 01:46:10.610 And then you're going to offer more than the lemon price, but that's going to be contingent on what you think the probability is that you're going to get a peach versus a lemon. 01:46:10.710 --> 01:46:15.310 So if you think there's a zero percent chance you're going to get a peach, well you're just going to offer the lemon price. 01:46:15.310 --> 01:46:23.990 If you think there's a hundred percent chance that you're going to get a peach, then you're going to offer the lemon price plus the difference between the peach and the lemon price. 01:46:23.990 --> 01:46:25.890 In other words, you'll offer the peach price. 01:46:26.110 --> 01:46:31.190 If you think the probability is somewhere in between, then you're going to adjust your offer price to be somewhere in between. 01:46:31.710 --> 01:46:41.170 So that's the offer price that a rational buyer is going to offer for a car in this market in which they are ignorant, but they know that they're ignorant and they can price their uncertainty. 01:46:41.610 --> 01:46:45.890 They can adjust their offer price to account for this uncertainty. 01:46:46.390 --> 01:46:49.250 So what do the lemon sellers do when they see this price? 01:46:49.250 --> 01:46:59.730 Well, they see a great offer because they're selling a lemon and the sucker here, the sucker, the buyer, is offering quite a bit higher price than the lemon price. 01:46:59.730 --> 01:47:01.270 So the lemon seller is delighted. 01:47:01.270 --> 01:47:05.990 They're going to say, okay, I thought about it and yeah, I guess I'll accept your offer, right? 01:47:05.990 --> 01:47:07.470 So that's what the lemon seller says. 01:47:09.010 --> 01:47:15.710 The they know that the value of their car is worth what a peach is, but the buyers are ignorant. 01:47:15.710 --> 01:47:22.550 Like you can tell them all day that you've done a great job of maintaining your car, but the buyers at the end of the day, they're going to be skeptical. 01:47:22.550 --> 01:47:24.110 They don't know if you're really telling them the truth. 01:47:24.110 --> 01:47:26.050 They don't know if you're telling them the partial truth. 01:47:26.350 --> 01:47:30.910 So the price that the buyer is going to offer is less than that of the peach price. 01:47:30.990 --> 01:47:32.190 And so what's going to happen then? 01:47:32.190 --> 01:47:34.790 The peach sellers are going to become discouraged. 01:47:34.830 --> 01:47:47.570 They're going to be basically kind of disappointed by the fact that the market is not taking to account their goodness, their moral goodness, and taking care of their car is not going to be reflected in a high marketplace price. 01:47:47.570 --> 01:47:49.070 So they will leave the market. 01:47:49.070 --> 01:47:51.130 They will delete their Craigslist ad. 01:47:51.130 --> 01:47:52.690 They will stop selling their car. 01:47:52.690 --> 01:47:55.810 They will just keep their car until it runs into the ground. 01:47:55.830 --> 01:47:57.090 What happens then? 01:47:57.090 --> 01:48:06.550 Because the peach sellers leave, like a few of them leave, now the proportion of cars in the market that are lemons have gone up. 01:48:06.690 --> 01:48:11.110 A greater fraction of the cars that are available for sale are now lemons. 01:48:11.110 --> 01:48:14.610 And eventually, buyers are going to get wise to that fact. 01:48:14.610 --> 01:48:18.750 When they get wise to that fact, they're going to lower further their offer price. 01:48:18.750 --> 01:48:23.670 And thus the negative feedback loop is born because the offer price keeps going down. 01:48:23.670 --> 01:48:31.870 Every time the offer price goes down, lemon sellers still accept it because they're getting an offer that is still higher than the lemon price. 01:48:31.870 --> 01:48:33.110 They're making a profit. 01:48:33.110 --> 01:48:36.450 And more peach sellers are going to get more and more discouraged and leave the market. 01:48:36.450 --> 01:48:41.470 You have a situation at the end where only lemons exist in this car market. 01:48:41.470 --> 01:48:44.290 So this was the Ekeloft paper that got the Nobel Prize. 01:48:44.630 --> 01:48:47.190 Let's think about this in terms of the pandemic. 01:48:47.330 --> 01:48:53.290 So in health terms, peaches are people who are healthy, right? 01:48:53.290 --> 01:49:07.970 So healthy people are the peaches and they are now faced with the decision of do I engage in this super thing called DEF CON, in which a whole bunch of smart people get together and talk about cool, geeky stuff. 01:49:08.050 --> 01:49:13.450 And you make new geeky friends and you're out in Vegas and have fun. 01:49:13.770 --> 01:49:22.010 So that decision is basically, are you going to engage in this social marketplace in which you are dealing with other people? 01:49:22.150 --> 01:49:29.130 So you could be with all peaches when you get to the live in person DEF CON. 01:49:29.190 --> 01:49:30.750 That is, everyone could be healthy. 01:49:31.490 --> 01:49:34.450 But you are aware that that's not the case. 01:49:34.450 --> 01:49:35.330 There are going to be some lemons. 01:49:35.330 --> 01:49:39.790 There are going to be some people who are sick and don't know it because of the nature of the virus. 01:49:40.110 --> 01:49:49.230 So basically, you have to gauge your overall social utility of going to the conference by the probability that you're going to end up with a lemon, i.e. 01:49:49.230 --> 01:49:50.090 get sick. 01:49:50.090 --> 01:50:04.150 And so the rational decision, if the penalty function of getting a lemon is large enough and the probability of it is getting large enough, then the rational thing to do is to withdraw from that marketplace and decide to do DEF CON in safe mode. 01:50:04.150 --> 01:50:05.930 And that's exactly what we've done this year. 01:50:06.970 --> 01:50:09.710 Let's apply this to the marketplace for transparent coins. 01:50:09.710 --> 01:50:17.090 In transparent coins, or surveillance coins as I like to call them, the complete history of every coin is traceable going back. 01:50:17.090 --> 01:50:24.210 That means if you're a squeaky clean person, the analogy is that you are a healthy person. 01:50:24.210 --> 01:50:25.370 You are a peach seller. 01:50:25.370 --> 01:50:28.630 You are a squeaky clean person with a good reputation. 01:50:28.790 --> 01:50:33.470 And so your social status is healthy. 01:50:33.950 --> 01:50:45.830 The thing is, if you deal with Bitcoin with other people, are you going to unknowingly be dealing, are you going to by mistake do a transaction with somebody who is not healthy in terms of a legal status? 01:50:45.970 --> 01:50:47.830 You don't know that. 01:50:48.830 --> 01:51:05.010 Just like the lemon buyer and just like the person who's thinking about going to a con, you could suffer a lemon consequence just by dealing with other people in this network because this network has this undesirable feature that the coins are not fungible. 01:51:05.310 --> 01:51:08.030 So what is a squeaky clean person going to do? 01:51:08.030 --> 01:51:18.610 They're going to tend to want to go to a coin that rewards them and does not put them in jeopardy due to the actions that they can't control of other people on the network. 01:51:18.610 --> 01:51:31.490 So you're going to see the squeaky clean people going to something like Monero, which is counterintuitive, certainly according to the biased and misleading portrayal that often gets put on Monero. 01:51:31.490 --> 01:51:34.330 It's the squeaky clean people who need Monero the most. 01:51:35.090 --> 01:51:37.910 So Monero is what Bitcoin noobs think they bought. 01:51:37.910 --> 01:51:40.210 It's sound money in safe mode. 01:51:42.840 --> 01:51:44.080 All right. 01:51:44.740 --> 01:51:50.360 I have limited time, so I'm going to just go to talking about how to get involved. 01:51:50.480 --> 01:51:54.380 One way you could get involved is to purchase some Monero. 01:51:54.380 --> 01:52:05.360 Because again, I started this talk talking about the kind of out of control extension of the fiat money supply around the world that is currently happening as a result of the pandemic. 01:52:05.360 --> 01:52:13.140 And that led to the idea that one should maybe spend some time looking into alternate forms of scarcity that are not controlled by governments. 01:52:13.140 --> 01:52:14.580 That would be precious metals. 01:52:14.580 --> 01:52:18.460 And also, now that there's Nakamoto consensus, Bitcoin and Monero. 01:52:18.600 --> 01:52:24.680 How does one kind of process the relative expensiveness or cheapness of these assets? 01:52:24.700 --> 01:52:34.780 So here is, I think, probably the only price chart that should be looked at by anyone who's looking to think of cryptocurrency as an investment. 01:52:34.780 --> 01:52:37.020 And that is, I'm doing a long term timescale. 01:52:37.020 --> 01:52:39.120 So this is from 2009 to the present. 01:52:39.120 --> 01:52:41.940 2009 being, of course, when the Bitcoin white paper came into being. 01:52:42.040 --> 01:52:45.980 And what I'm doing here is I'm showing the value of all the world's Bitcoin. 01:52:46.060 --> 01:52:49.320 And I'm dividing that by the value of all the world's gold. 01:52:49.520 --> 01:52:51.240 All the world's above ground gold. 01:52:51.240 --> 01:52:53.940 So there are several variables that go into this chart. 01:52:53.940 --> 01:52:57.140 First, there's the number of Bitcoin in existence at any given time. 01:52:57.180 --> 01:52:58.500 There's the price of the Bitcoin. 01:52:58.500 --> 01:53:02.400 There's the amount of gold in existence at any given time and the price of gold. 01:53:02.640 --> 01:53:07.060 You need all four of those ingredients to come up with this ratio chart, which I'm showing a log scale again. 01:53:07.340 --> 01:53:09.240 And then I've done that again for Monero. 01:53:09.240 --> 01:53:13.220 This is the value of all the world's Monero divided by the value of all the world's gold. 01:53:13.320 --> 01:53:19.880 And what you see here is that currently, all the world's Bitcoin is worth something like 2% that of all the world's gold. 01:53:19.880 --> 01:53:25.460 And all the Monero in the world is worth about one one hundredth of one percent of all the world's gold. 01:53:25.720 --> 01:53:30.860 You might be aware that there's been a recent kind of spike of interest in cryptocurrency prices. 01:53:30.900 --> 01:53:34.800 Bitcoin is back over $10,000 for the first time in a few years. 01:53:35.000 --> 01:53:40.900 So there's been a lot of hype, but you don't see that here because there's also been a spike in the price of gold. 01:53:41.060 --> 01:53:48.840 So basically, the relative valuation of crypto to gold has been flat in the post-pandemic time period. 01:53:49.960 --> 01:54:09.420 Now, given that gold is a physical good, which is subject to all of the surface contamination issues that any physical object has the disadvantage of suffering in the COVID era, is this rational that that crypto to gold cap ratios have been flat during the pandemic? 01:54:09.420 --> 01:54:11.300 I'll leave that to you to decide. 01:54:11.320 --> 01:54:17.380 Second, of these two cryptocurrencies, there is one that actually acts like gold because it's fungible. 01:54:17.680 --> 01:54:24.600 Gold does not have on the back of every gold bar a list of everyone who owned that gold bar before you did. 01:54:24.660 --> 01:54:30.440 And so it's actually a more apt comparison to compare the value of Monero versus gold. 01:54:30.440 --> 01:54:41.140 So is it rational that the amount, the valuation of Monero is one ten thousandth of that of gold, whereas the valuation of Bitcoin is one, basically, one fiftieth that of gold? 01:54:41.140 --> 01:54:43.760 So that's another question to think about. 01:54:44.580 --> 01:54:55.620 One thing I also wanted to show was a chart that I think counters this still and very stale narrative that there's infinite inflation in Monero. 01:54:55.620 --> 01:54:59.360 So what I've done is I've, I'm answering this question. 01:54:59.360 --> 01:55:11.880 Let's say you have an investor who today decides that they want to buy one millionth, so one out of every one million of one of these alternative forms of scarcity. 01:55:12.000 --> 01:55:18.900 And to protect themselves against inflation, they are not going to buy one millionth of today's supply. 01:55:18.900 --> 01:55:23.800 They are going to buy one millionth of the supply in 100 years time. 01:55:23.800 --> 01:55:30.200 So they're going to look at what is the supply of this scarce asset going to be in the year 2120. 01:55:30.280 --> 01:55:33.540 And I would like to buy one millionth of that today. 01:55:33.540 --> 01:55:35.700 So that's the question I'm answering. 01:55:35.700 --> 01:55:36.900 First, let's look at gold. 01:55:36.900 --> 01:55:44.880 So currently there are about 200,000 metric tons of above ground gold, and gold has been expanding at about 1.8% per year. 01:55:44.920 --> 01:55:48.560 When you compound that over 100 years, that ends up being pretty significant. 01:55:48.560 --> 01:56:02.820 So in 2120, at that rate, there's going to be over a million metric tons of gold, which means to buy one one millionth of all the gold in the world, you're going to have to end up buying more than a metric ton of it, which at the current price is going to be $76 million worth of gold. 01:56:02.900 --> 01:56:08.360 That buys you one one millionth of the projected gold supply in the year 2120. 01:56:08.360 --> 01:56:09.760 So let's do that with Bitcoin. 01:56:09.760 --> 01:56:17.380 So with Bitcoin, they're going to, you know, be very proud that 100 years from today, there's going to be only 21 million Bitcoin in existence. 01:56:17.380 --> 01:56:20.900 And that's an easy number for even normies to remember and understand. 01:56:21.200 --> 01:56:23.900 So today, there are about 18 million Bitcoin. 01:56:23.900 --> 01:56:25.540 In the future, there'll be 21 million. 01:56:25.540 --> 01:56:26.720 How much does it cost? 01:56:27.020 --> 01:56:28.360 $244,000. 01:56:28.700 --> 01:56:29.980 How about in Monero? 01:56:29.980 --> 01:56:31.880 Well, here's today's emission. 01:56:32.060 --> 01:56:33.620 Now we have the tail emission, right? 01:56:33.620 --> 01:56:36.700 So that commonly gets thrown about as being infinite inflation. 01:56:36.700 --> 01:56:38.580 Well, actually, we know what it's going to be. 01:56:38.580 --> 01:56:41.260 And in 100 years from now, it's not that bad. 01:56:41.280 --> 01:56:46.480 The coin supply in 100 years from now in Monero will be less than double what it is today. 01:56:46.480 --> 01:56:48.560 That's not too bad for a century. 01:56:48.880 --> 01:56:56.400 So to buy one one millionth of all the Monero that will be in the world in the year 2120 will cost you a total of $3,000. 01:56:56.720 --> 01:57:04.980 So some more framework for people's consideration when assessing the relative valuation of these assets. 01:57:06.540 --> 01:57:07.680 Okay. 01:57:07.780 --> 01:57:09.520 Thank you for listening. 01:57:09.520 --> 01:57:17.160 If you want to learn more about Monero, there's monerovillage.org for the rest of the festivities happening this week. 01:57:17.160 --> 01:57:21.000 Also, the official website is getmonero.org. 01:57:21.000 --> 01:57:22.040 That's important to know. 01:57:22.040 --> 01:57:25.740 It's getmonero.org, not .com, not other variants. 01:57:25.740 --> 01:57:30.220 If you want to get in touch with me here at DEF CON on the discourse, I'm intj440. 01:57:30.320 --> 01:57:33.880 Or if you want to get in touch with me over email, it's Daniel at Sweetwater Consulting. 01:57:33.980 --> 01:57:34.900 Thanks for your attention.