Welcome to the coininsider.com podcast Coindive. I'm your host Nick Haranambis and in this show I dive into the minds, opinions and technologies that dictate the pace of the rapidly evolving cryptocurrency industry. So hello loyal Coindive listeners and welcome to today's episode. If it's your first time tuning in then hopefully you're in for a ride. Coindive digs into the cryptocurrency and blockchain space as we interview some of the industry's most interesting and influential personalities and with me today is Jameson Lopp and to be very honest I have no idea how to introduce you so I'm going to let you do that for yourself today. So why don't you tell our audience who you are? Sure I've been in the bitcoin space for a number of years, full-time for about three and a half of them and I've really just been focusing on security aspects of it. So I spent three years working at Bitgo doing backend infrastructure engineering for their enterprise multi-signature wallet which gets used by a number of exchanges and other large payment processors and about four months ago I pivoted and am now at a startup called Casa doing similar type of stuff but with a different focus where I'm now focused on trying to use multi-sig to help individuals have better security and really try to bring the promise of being your own bank to less techy people. That's really interesting. We're going to definitely dive deeper into the everyday people approach of things but I'm going to kick off with a really easy question that we ask all of our guests when they first join us. What did you do before bitcoin became your focus? Well I was a computer science major so I was doing software engineering though I spent the first 10 years of my career working for an email marketing company and basically doing cloud scale analytics. So by the time that I left that company it was sending a hundred million emails a day and we were just having to process petabytes and petabytes of raw statistics in order to provide better analytics for the marketers that were using our platform. Okay and I'm curious how did that prepare you for getting into the cryptocurrency space and working on bitcoin? Well I was doing backend infrastructure there and so from the standpoint that you know I was learning a lot about how web applications work. The only real difference from a like job perspective of what I've been doing is that now there's kind of an even lower layer to all of the infrastructure that I'm building which is of course the nodes that are operating these blockchain networks. So I'm still building the same type of backend services they're just talking to different types of databases. In previous interviews you've talked about that one friend of yours that introduced you to bitcoin and I don't really need you to go into the whole story because I'm sure you've told it a hundred times that this friend introduced you and then he was reluctant to move full-time into cryptocurrency or bitcoin specifically. So I'm curious how's that guy doing? Did he finally commit to going into this industry full-time and did you drag him along or is he still half in half out? No no he's still just an enthusiast and I'm still working on that but suffice to say he's got golden handcuffs in his current company that are keeping him locked in with you know stock options and whatnot. I've started to ask people this question because it's becoming quite a fascination for me. Can you remember the exact moment that specific time that you realized that cryptocurrencies were going to be as massive as they're going to be? Oh that's tricky. It's been such a long gradual process and you know boom and bust cycles that there have been you know moments when I thought that and then of course moments when I thought oh I must have been completely wrong. I've made a terrible mistake but I think that it really first hit me right around the the first thousand dollar run-up you know which resulted in Mount Gox crashing and everything falling apart and the main reason I say that is because after that crash and I had been through a few other crashes but after that crash I felt like this thing is going to keep going regardless of how volatile it is and that that was the point in time at which I decided to go all in and started looking for full-time jobs and basically converted all my retirement account money into bitcoin and that's when I was fully committed because I felt like there's no way that this thing is going to die. And you're still unwavering on that that's how you feel now. I mean we're deep in the bear market in fairness we're up a significant amount from 12 to 18 months ago but still you're still committed and you still think moving your retirements in was a good move? Absolutely of course in hindsight you know everyone told me how crazy I was at the time and you know they were correct it was a high risk high reward type of decision but you know every cycle that we go through you can say you know this time it's different and it is because you have a completely new set of people and entities that are now interested in the ecosystem and they're building it out and you only really need I think like a small fraction of those people to be committed. It's kind of like you may have seen this reference to like the the hodlers of last resort kind of thing it's that even if the majority of people that get in during one of these cycles end up losing faith and quitting then the small people group of people that remain committed keep pushing forward builds enough momentum for another one of these waves of adoption to happen. So a little bit more of an ideological question you have called yourself an anarcho-capitalist so you can correct me if I'm wrong on that one but my question is you've vocally been against aggression against yourself and others I'm curious how this ties into your involvement in the crypto space like is there a direct correlation between that world view and what cryptocurrencies and bitcoin is trying to do? I think so at least within the public permissionless blockchains and that has really manifested itself I believe in some of the scalability debates where the the real I guess strife that is caused is between the the people who are anti-aggression and do not want have they don't want to see changes forced upon people in the ecosystem against their wishes whereas other folks are getting frustrated enough with various aspects of the system that they they think need to be changed and they're willing to try to force changes on other people because they think it would be for you know for the good of the system. On our show we've had a lot of our guests talk about the lack of decentralization in basically every cryptocurrency with the exception of bitcoin. Do you feel that there are any altcoins or projects that show promise in true decentralization or is bitcoin still the only one? It's kind of a loaded question because I mean what is true decentralization and I've talked about this before I don't know that I've gone in depth into trying to describe it but the the problem is there are so many different facets to each of these systems that you know you can be quote unquote decentralized in a lot of facets and centralized in one facet and then just from that make an argument that the system itself is centralized and also it's you know decentralization is not a binary thing it's this spectrum and so then you see a lot of people get into the weeds of of arguing about well is it decentralized enough and so it it's almost not even really worth I think arguing about and because really the the vast majority of people that are using this systems probably don't really care about a lot of those aspects. The reason of course that that they are important is because over the long run I think that they're going to affect how the system reacts to certain stress events and and so that's why I think that you can see even in you know some of the top 10 and 20 quote unquote market cap crypto assets a number of them are highly centralized along various factors and yet they still seem to be working pretty well and that's because I think that you you can have a system that works well that's centralized and it works well until it doesn't and so I'm more interested in these things in the long term rather than the short term so my thesis is that you know kind of naturally over the long term the ones that are centralized are going to fail in a number of different ways. And you think that that application of logic applies to bitcoin too that they that it's going to work until it doesn't? Then it comes down to you know how does the community react in response to to something like that and so you know one of the biggest problems with bitcoin of course is the minor centralization which pretty much everybody agrees could be a lot better and bitcoin of course could have some sort of minor attack happen especially if we saw nation states like China step in try to like nationalize all of the miners in their country. Thankfully that's still a theoretical thing but if it did happen then I think it would be interesting to see how the community reacted and that would perhaps shed some light on just how decentralized and robust the system is since of course the miners are only one facet of bitcoin. So I've been following you on twitter for ages as have nearly 200 000 other people. I noticed that you've taken quite a sharp turn towards physical and personal safety and security in crypto and obviously I'm not talking about your private keys and protecting your tokens and coins I'm talking about actual personal and physical safety. I'm curious what brought this on. Well there was this rather life-changing event that happened to me last October when I had my entire neighborhood locked down and SWAT team come to my house and that really showed me how easy it is for for someone to deploy violence against me and I've been working on a number of you know aspects with both like physical real world privacy and physical security here and and then what you may have seen recently is that I've been saying for a while that I felt like the level of physical attacks had been accelerating in this space but of course just feeling like it is not really good enough. So I went and created a new repository to try to catalog all of the physical attacks at least the ones that have been publicly documented to see if we can actually see a trend that's happening and it really does seem to be accelerating where I think I'm up to about 30 attacks that I've cataloged over the entire history of bitcoin and over half of them have occurred in the past six months in 2018. So just you know the the general rise in mainstream understanding of crypto assets enables criminals to start to understand that these are highly liquid bearer assets and and if they can find a target who has been in the space for a long time and has likely accumulated a lot of those then they can potentially find a much higher you know reward to the level of risk that they would be taking when when doing a physical attack. So you know compared to trying to to rob an actual bank where you're probably only going to get away with whatever is in the till like a few thousand dollars if you find a high net worth individual in this space who doesn't have very good security that is commensurate with their level of wealth then you can easily get away with millions of dollars in just a matter of hours. And I suppose there is this misplaced false sense of security that oh we're in cryptocurrency and this is bitcoin so by default it's safe but actually gun to your head and your family's life on the line is your cryptocurrency as safe as you think it is and that just comes back to old school theft. There is very little in the way of defense against violence when it's face to face. Yeah so this once again goes back to the you know the be your own bank concept is that people aren't familiar with how to be their own bank and even the ones that put some effort into it are probably only looking at the digital risks and not the physical risks and you know there is a reason why we have banks. It's because over the course of human history we improve the efficiency of our economic systems by having specialists that you know only do certain things and one of the things that has become a specialty is security of high value assets and people are generally much more comfortable with giving their assets to a specialist who is thinking about all of these different attack and loss vectors and then when they try to do it themselves they're not actually putting in the level of resources that are required to understand that entire problem set. Well I suppose even once they have and you are your own bank you can't assume that the people trying to take the money from you physically understand that your currency is locked away in a ledger in a vault somewhere far away from you and you can't give it to them so even then I suppose there is this level of risk that the default should be don't tell anyone that you own anything and I think that's kind of what you're trying to say on twitter is people need to be less flashy about the things that they're working with and buying and selling. Yeah but it's a paradox and I know I've tweeted this as well that you know the the safest way to operate in these systems is to not talk about them with anyone because as soon as you start talking about them and showing interest then you become a target but the paradox being that if you don't talk about them then how do we build the system how do we have a viral network effect that helps the system to grow so I have I've been saying for a while that you know I undertake risks because I want to help grow the system and I've been driving around I've been driving around for the past four or five years in a fairly flashy sports car with the bitcoin license plate because it's a great form of marketing it starts up a lot of conversations now I've never had anybody be aggressive towards me or stick a gun in my face or anything but it's probably only a matter of time if I keep doing that that someone will eventually say oh you're a juicy target let's see what I can get out of you. I want to move off of the personal safety and more towards the concept of money and you've said in the past that on a high level money is a concept that belongs to humanity at large so humanity at large should have input into the definition of their money. My question is do you think that this is actually the case right now with cryptocurrencies or is it just a bunch of rich dudes defining the rules right now that everyone gets to play in? Well it's a little bit tricky because it's only the people who bother to contribute who are going to you know be able to have any influence on the system and so a lot of the people who are contributing now have been doing so for many years and the result of their contributions is that they have become quite wealthy. Now if you actually look at the open source repositories like bitcoin core and whatnot we've actually seen an influx of new contributors happen and I think that a lot of that is due to the various workshops and hackathons and developer education efforts that have been happening so I'm fairly optimistic that this is not you know turning into a new type of technocracy or whatever where there's only a few folks that you know have say over what is happening with the system. Even if that was the case at the developer level there's a lot of checks and balances in the system of course where the developers can write whatever code they want to but they can't force anybody else to run it so you know the rest of us in the ecosystem who are participating and deciding what software to run have a say there. Sure and I think I'm going to prod a little bit here because the part that interests me around who gets to influence and who gets to use is the end consumer who should have control of their money isn't the end consumer who has the resources to buy a computer to run their own node to influence the core code to understand what github is so again it's kind of it is decentralized in that no one person or organization controls it but there is a kind of class battle happening that the the person who this type of money should be helping doesn't get a say in how this type of money works really. Well from the aspect of actually building the system definitely I would agree there. Now there's also the fact that these are open markets and bitcoin is not the only option by any means so if for some reason someone doesn't like you know what's happening with aspects of bitcoin there are a thousand other types of monies to choose from. That's a good segue into my next question around altcoins and I'm curious if you think that there's going to be a time for the altcoins to break out and move away from kind of being pegged to the movement of bitcoin and do you think that there is a tipping point coming where bitcoin can go up or down and altcoins will do their own things or do you think that it's a pretty much an indefinite relationship? Well I think a lot of it is speculative and because at least from the trading perspective I think that bitcoin and fiat has the most trading pairs and then a lot of these other altcoins don't have common trading pairs with fiat that bitcoin basically becomes the gateway for that. Now will that change? That's almost a better question I think for traders but at least from the monetary perspective you know you see this very long tail it's a you know a fast drop off of like the value and adoption of the different crypto assets and I think that at least part of it is just the fact that you know a human mind can only keep track of so many different things and I am definitely against the idea of this like many many multi coin asset type of system because I just don't think that the average human is going to want to keep track of dozens or hundreds of different assets. The result being of course that people end up only using a handful of them and due to the network effects and the fact that the value and utility of these systems are directly proportional to the level of adoption and people that are using them I think that you you find this convergence on just a few of the systems. So I would expect that most of it you know the markets in general are going to go up and down together and you know there will be a few outliers here and there you know maybe one system manages to do something completely innovative and break out from the rest of them but that there's just there's so much similarity between a lot of these crypto assets that they're going to end up trading you know along the same general lines because it's more of a general sentiment of crypto assets in general that is moving the markets as opposed to innovation in one specific coin. Yeah and I think part of the problem at the moment is that people rightly or wrongly kind of mesh together the idea of a trading crypto assets a currency and a project in the blockchain space that happens to have a token and I kind of get the feeling from what you're saying that it's going to end up in a while like an amazon facebook google where there are competitors fighting for attention but there is one massive player in the space that everyone's trying to take down and it might take decades to do so but that's the kind of fight that we're moving towards. Yeah there's uh I mean it's such a complex system that a lot of of what we're doing is trying to observe what's happened and just speculate on it but it's it's really anybody's game in the long term. Hey there yes I'm actually talking to you dear listener. For previous episodes and more riveting cryptocurrency experiences from Coindive visit coininsider.com forward slash coindive right now. You can also subscribe to our podcast on iTunes, Stitcher, Pocketcast and all of your favorite podcast apps and services. So now I want to talk twitter. What I'm going to do is read some of your tweets from the past to the audience listening and what I'd like you to do is explain these tweets to me in the most simple way possible. Treat me like I'm five. So the very first one is from this year nice and recent. There is no such thing as value rather there are only closed loop behavioral systems. It's inputs and outputs all the way down. So break that out for me in English like I'm five. Uh yeah so this was actually from a guy that I respect a lot who he's he's a PhD in neuroscience and you know it's very hard to distill uh what he was talking to me about on that day but suffice to say he has a thesis that the the valuation of these systems is is really more of an organic almost neurological type of of effect and I I definitely I agree with him from the perspective of that you know I've been trying to over the past couple years understand these systems more from a human like social consensus standpoint rather than a technical standpoint and the the question of like what is human consensus of these systems is that we're trying to figure out like what the target is uh you know what what what is bitcoin trying to be and of course the it it sounds like a weird way to describe this because what bitcoin is is kind of this culmination of what all of the individual humans that are participating in it are trying to get it to be and we we're not you know taking a vote on that it's it's a much more organic and you know anarchic type of system so the the result though is that there's this target out there for the functionality of what bitcoin should be and we're we're getting there slowly but surely through all of the inputs of the individual participants and it's a very messy organic process but this is what some people have referred to as the sort of emergent consensus properties of the network and and and so this is this is a very hand wavy type of thing and uh and the tweet probably did not do a very good job capturing it because it's such a complex idea but um but that's it's also at a high level like why I think the I think the you know the the price is not necessarily a good indication of like how well the system is doing um but it's it's the the closest metric that I guess that we have in terms of sentiment of like how well bitcoin is doing uh with regard to how all of its participants believe it is doing the next tweet comes all the way back from february 2014 um while weasels will always be afoot cryptocurrency is based upon consensus mechanisms that work because there are more good actors than bad and my question around this tweet is do you still feel like that is the case more good actors than bad yeah um and and actually that's how a lot of of these uh these systems are functioning um it can be very difficult to believe that I guess most people are good if you are paying attention to mainstream media you know various news sources that they only report on the the most outrageous crazy things that are happening which are usually fairly negative but um I believe that society in general would not work if uh if the vast majority of people were like evil and underhanded um there's a there's a lot of people who probably believe that society is only held together because we have governments and and law enforcement and whatnot but when you actually you know look into the statistics of like the the people who commit violent crimes and whatnot it's pretty small and and I don't believe that you know that is that the rest of us don't commit uh terrible acts simply because we're afraid of being put in prison or whatever it's um we don't do it because we we think it's bad it's it's not something that we think that we should be doing um and this is really like what crypto you know in a decentralized system is is banking upon is that if we can find ways to get the masses to coordinate with each other then we can easily and automatically uh block and and prune out the the small number of bad actors I mean a relatively um similar tweets from the following year in august august seems to be a good month for you at twitter um august august 2015 um you tweeted governance need not necessitate governments could you explain that one to us right so you know governance just means a general way of coordinating uh changes within a system and most people think of governance from the term of a government which is you know a centralized institution that is dictating changes uh that should happen and and of course the governments can operate in a variety of different ways but that point was actually getting more back towards this sort of organic emergent consensus where you know we can create other ways to signal to each other in the system the the way that we would like for the system to go and then um you know if if we believe the signaling is strong enough then we we change it and we go in that direction and I mean I'm curious to dig into that do you think that after many many many many millennia of centralized governance whether it be religious or governmental or border restricted I mean do you think really think that the average person is going to want to participate in firstly and secondly um recognize the value of a decentralized governance platform oh I mean the average person isn't going to want to participate in a lot of things and that's okay if they don't want to participate then no one should be coercing them into doing so um will will they see value in decentralization I mean it's kind of there's a lot of things that I think people don't see value in um especially like around uh security and privacy for example and so that's why I think it's important for the the small set of people who do see value in it to continue building it into systems and and make it the default so you know if if we manage to be successful with this new type of ungovernance as it were or or even crypto anarchy um then the average person still probably isn't going to participate at least not at a low level but they will probably end up using and benefiting from these systems much like how um a lot of people that are using the internet today are benefiting from a number of security and privacy technologies that were invented by small groups of people years ago and they became um you know very prolific cool got it um and the final tweet from 2017 uh folks who don't understand that it's possible to buy a fraction of a bitcoin shouldn't be buying any in the first place so I wanted to give you um a thought on that do you do you possibly want to take that one back do you think that that's a bit harsh towards the general public and the um usage usage and uptake of bitcoin no because my my main point with that was that if you don't even understand I guess that most basic aspect of bitcoin then there's no way that you have sufficient understanding to properly secure it and so the people that are getting into it and buying these things without understanding them are more likely to to get hurt as a result and that maybe they get hacked maybe they get attacked in some other ways or most likely they're just going to lose it and that's something that I talked about last week in Lisbon is that or historically we see a lot more people just losing their private keys than getting them taken away by malicious actors I mean I would I would argue that isn't adoption the key goal here even if there is the potential to lose your your key it's the equivalent of right now saying that if someone doesn't know how to insert a card into an ATM they don't have the right to have money you can still lose your ATM card and someone can steal it from you or someone can sketch your pin per chance but you still then you know you should be buying you should have an ATM card in the first place though with a lot of those systems you have means of recourse and you're not actually going to be completely out in the wind now part of the problem here is that at least anecdotally I think that a number of people who are against the the concepts of of of bitcoin and other public permissionless systems actually were participating in it back in the day and have have either lost or or gotten rid of or you know lost faith in the system and now are trying to you know justify their loss they're trying to rationalize it of why you know they should stay out of it and and everyone else should as well you can definitely you know take it from multiple perspectives but I I don't want people's initial experience with these systems to be one of of loss and you know something that creates a terrible memory of the system that might prevent them from wanting to get back into it great solid explanation so moving into the final segment of the podcast all quickfire questions some might put you on the spot to kick off if you could have dinner with one person in the industry who would it be and why that's a good question actually I'd probably go with Nick Szabo we we have not really had much time to interact with each other and you know I've I've gotten to meet with Adam back a number of times and a few other the really early folks but Nick Szabo is one of those more elusive people who I have not really had a chance to pick his brain or maybe we he will be listening and we'll get in touch then if you could remove a single person from the industry forever who would it be and why oh I try not to be you know too negative in this space but really I think that like one of the the biggest problems that we have that especially reared up like during the segwit 2x debate is you know large consortiums of enterprises coming together and so you know while while people like like Barry Silbert have done I think a lot of good building up the ecosystem he also caused a lot of harm when he thought that he was trying to help the the system back in the other year and so I don't know that I would say I would want to remove him right now because it seems like he's taken a step back you know he's back on the back burner and doing his own thing but it's it's that type of it's just another form of centralization of you know getting getting his his hands and his money and his investments you know spread out like tendrils through the entire ecosystem that you know that can cause large disruptions when there are contentious issues that have to be resolved if you had to dump your entire portfolio right now which one cryptocurrency would you repurchase and why I would probably go with Monero you know it it is one of the strongest privacy cryptocurrencies out there at the moment though I'm also keeping a close eye on the grin project though it doesn't actually exist yet on a production network cool and why specifically a privacy token why would you pick Monero because all of these open ledger systems are so heavily surveilled that if you're dealing with any entity that is doing AML KYC then they are likely also having having various deals with analysis companies that are helping to to de-anonymize the transactions on the network and you know I've I've gotten questioned by exchanges before several times asking me for you know source of funds and stuff like this and it's just not a good feeling when you feel like you're being surveilled if you could pick a favorite project in the space right now to talk about one that's really getting it right um who would it be not Carter and and I don't know if this is what you mean in general but like I'm I'm very interested in everything that's happening on the lightning network now that's kind of a lot of different projects at least that are being built on top of it but uh like at the actual lightning protocol level you know we've got three or four different teams that have have built out their implementations and they have gotten to the point now that we're actually seeing an explosion of growth in applications that are being built on this new layer and so I think that you know their hard work that they've put in over the past few years is really starting to pay off now and that we're we're going to see all kinds of new apps and use cases that are going to come out over the next year or so as a result of that can you give me an example of an app on the lightning network that you think is interesting yeah so so actually um it's a it's a knock off of yours but uh the y'alls platform where you you can uh you can create your media posts and and and pay people you know micro payments for these posts um anything like that where you're enabling a new class of of small transactions or or even using micro transactions as like a anti-spam mechanism to to help with social networks it's that's something that I think is taking us a step in the right direction of building more of a crypto anarchic world and I would really like to see something like that happen with twitter for example and I would hope that that would help get rid of a lot of the issues of the like spam bots that we're seeing on twitter I actually saw the y'alls network and I thought it was an interesting step in the right direction I think it's got a hell of a lot of more iterations to go before it becomes mainstream but there's a really smart use of of the lightning network and showing off what it can do so my final question is do you have any theories on who satoshi is I've heard a lot of theories some of them are plausible um but it seems to me like it was most likely someone or some group of of early cypher punks um but that's not to say that it's necessarily someone who uh was you know uh publicly like using their real name uh on the cypher punks uh forums back in the day so I I really don't spend too much time thinking about it because I don't think that it's really a question that matters uh unfortunately you know we have various people who try to make it a big issue or try to claim that they were part of the group and that just creates a lot of drama but the the nice thing is that we we have you know so much insight into the system now and actually pretty much all of the code that was written by satoshi has been rewritten and I like to to use the the same uh term or concept that gets thrown around a lot is that you know we are all satoshi and it kind of goes back to what I was saying is like anyone who is interested enough in contributing to this system and and it doesn't have to mean you know contributing via writing code there are a million different ways to contribute but anyone who is participating and contributing and building out these systems is effectively a a tiny part of satoshi because we are all driving the system forward in our own way. This is a really elegant way of phrasing that I'll say it um cool so why don't you tell our listeners where they can find you what you're up to right now um it's your 20 seconds to guide them where you'd like to guide them. Well uh the easiest place to to find me and my resources is my website which is lop.net l-o-p-p dot net and then I spend most of my uh my time conversing with people you on the twitter platform where my handle is also just lop. My name is Nick Harrel-Ammerson I'm the CEO of coininsider.com and today we've been talking to Jameson Lopp in this episode if you like what you heard please share this podcast subscribe at soundcloud and tell your friends about coin dive. I'm your host Nick Harrel-Ammerson you've been listening to coin dive the coininsider.com podcast you can listen to the previous coin dive episodes at coininsider.com forward slash coin dive our show's editor is Brian Smith and the coin dive podcast is brought to you by coininsider.com you can find us on itunes stitcher pocket cast and all of your favorite podcast apps and services don't forget to tell a friend about the coin dive podcast so that you have something to talk about at your next dinner party visit coininsider.com for the latest industry insights and in-depth cryptocurrency analysis.