Doug All right, cryptocomicon, what's going on, man? cryptocomicon Well, I just instant messaged you on Twitter and it just seemed like it was a good time to get back in touch. We talked about 18 months ago and a lot is going on in the cryptocurrency space over the last few months. Doug Yeah, I went back and started to listen to our conversation a little bit to refresh my memory of who exactly you were because you know, we had only spoken once in the past, and I went back and it was, it was a great conversation. Doug It was it was a really, really solid convo. And yeah, I think part of that conversation was around, why aren't we seeing governments do more to stop Monero? Right. And I think that's why we, you know, now might be a good time to, to retouch that subject. cryptocomicon Yeah, that's a big part of what I want to talk about here. And another big part is how I think Monero is actually, and thank goodness it is, very close to a point where it can provide a true alternate decentralized private fungible rail for people to use and what's going to be a really bad situation going forward. cryptocomicon So yeah, to start it off, I think we need to understand a little bit about what's happened to Bitcoin. So I wanted to get into that a little bit. Doug Yeah, let's let's let's let's go back to the basics. Okay. Give us give us your take cryptocomicon So, in the White Paper, one of the first statements is that it coined, well, the title is, it's a peer -to -peer electronic cash system. And then Satoshi talks about, you know, commerce on the internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. cryptocomicon That's a direct quote from the beginning of the Satoshi viewed Bitcoin as a way to compete with things like credit cards and PayPal, both of which existed at that time, and to be able to avoid the problems associated with that. cryptocomicon What are the problems associated with these? High fees. And then he says a little bit later, make non -reversible payments. Okay, making non -reversible payments is the thing that really makes sense there because at seven transactions per second, Bitcoin, at least in the form it had then and still has now, it's not going to solve any problems that credit cards and PayPal can solve at scale. cryptocomicon But what we didn't have before, and what Bitcoin does solve is it can make non -reversible payments without a third party intermediary. That has huge implications for people that need to settle large amounts of money and not have to trust one another. cryptocomicon And that's like banks, sovereigns, currency crises that we've had, they result from situations where there's a lack of trust between banks. And you'll hear things like, oh, the inter -day bank exchange, interest rate spiked up. cryptocomicon And that's a sign of what that really means is that the banks don't trust one another. And why would they? They've invested in so much garbage, like commercial real estate that's blowing up behind the scenes. cryptocomicon And we've already seen a few months ago, things like Silicon Valley Bank, First Republic blow up. And we're going to see a lot more of that kind of stuff. So I think the banks would like to have a kind of reserve currency that they could use between one another that they could trust one another with. cryptocomicon That's just not a bunch of IOUs that Doug I mean, the point Satoshi was making there though, wasn't really about that. I mean, when he's talking about non -reversible transactions, he then goes on to say how that will reduce mediation costs and basically saying it would create a way to send micropayments is what he's really getting at. Doug Oh, yeah. I totally. Yeah. cryptocomicon Yeah, it's interesting because the point is, I think this is all just wrong, actually. I think that it was a brilliant solution, Bitcoin was, for eliminating the need for trusted third parties. But it's not well thought out in the white paper how you scale this. cryptocomicon And we'll get into that a little bit later. I mean, the things like Lightning Network are sort of the beginnings of what are described there, and it's failed. But that's kind of one of the places I want to go next. Doug Yeah. Yeah. And I'm sure you would agree, right? I mean, Satoshi, in terms of what was written in the white paper, was really talking about a digital cash system where people can send value to each other peer to peer with some level of privacy, right? Doug And can even send micropayments on chain peer to peer. I mean, that's really what he was going for and invented an electronic peer to peer digital cash system. He wasn't talking about it in terms of it being gold at the time. Doug I wasn't talking about in terms of being digital property. He was interested in the value proposition of people being able to use it as a medium of exchange on the base layer. cryptocomicon Absolutely. And it's really sad where we are now, based on those ideas at that time. But I think we should go over what's actually happened, where we're at, and what the future might be like. So I want to talk about a couple of what I call Bitcoin scaling failures. cryptocomicon And the first one is Bitcoin Cash. Bitcoin Cash was a hard fork that came away from the Bitcoin code base. In about 2018, it went live. I think it was 2018. And the only change that it had was to remove the block size cap from Bitcoin. cryptocomicon It was supported by miners. I think that they saw this as an opportunity to maybe make more fees or to corral the market for mining. Roger Veer strongly supported this. And it was really just a simple -minded way to remove the seven transaction per second cap that you had inherently built into Bitcoin. cryptocomicon And in theory, then you could start competing against credit cards and PayPal and make Bitcoin more cash -like. Doug Mm -hmm. cryptocomicon and this was a big part of the block size war or the Bitcoin civil war that you'll hear about occasionally. And it was an attempt, okay, so why do I say Bitcoin cash failed? It failed because we see its market cap is very, very small now compared to Bitcoin, and that also means that its hash rate is very small. cryptocomicon So maybe it did succeed in facilitating a lot of transactions, but from the perspective of people that were holding Bitcoin, that was a failure. And how it happened is that if you're holding Bitcoin at the time, after the hard fork, you got Bitcoin cash and you got Bitcoin side by side. cryptocomicon And a lot of people who were holding a lot of Bitcoin decided that they were going to dump their Bitcoin cash and buy more Bitcoin with it. Now, I think that the reason that that happened is because people that were savvy had a lot of concerns about just doing something really simple -minded like removing the transaction cap on Bitcoin. cryptocomicon I thought that there could be significant problems with that and it didn't really make Bitcoin more money -like because it wasn't private and fungible anyway. So I think there was also some hope that the form that Bitcoin took on at the same time was support for something called SegWit, which provided a means to do Lightning Network. Doug Mm -hmm. cryptocomicon And so I think that it was kind of a vote in favor of Lightning Network. It was kind of a vote against very simple minded brute force techniques for changing Bitcoin that were seen to go away from what Satoshi's vision was. cryptocomicon Lightning Network was actually something if not spoken about directly in the white paper, it was something that people, well, the white paper alluded to it as we've talked about already here. So talk about Lightning Network a little bit. Doug But for me, that was a very significant moment when that happened, when the fork happened. That's actually when I really for the first time started to doubt Bitcoin, the project. I was already interested in Monero at that point for the fact that it was trying to solve fungibility and privacy. Doug But then it was during the war that I was like, something's wrong here. And that's when I actually really became most attracted to Monero. cryptocomicon What was it specifically that made you think that there was something wrong with Bitcoin at that time? Doug Well, like I said, I was concerned about the fungibility issues, but in terms of the block size war, it did feel like something was happening political behind the scenes where it was being redirected into something else. Doug It felt like the beginning of that. I didn't know what was actually going on, I didn't know enough, but it felt like there was manipulation happening. That's really all I can say about it, I didn't really know the details of what was going on at that time, nobody really did unless you were kind of an insider. Doug But it felt like things were getting manipulated. cryptocomicon time when I think it was, um, this was a bit main, they had the ant miners and I don't remember, there was one guy that was like the face of this, like a guy from China or Taiwan, and they'd been doing really sketch things. cryptocomicon They'd been, you know, building these systems and then using them for months and months and just getting all the good juice out of them and then dumping them on the market and, you know, they were, they were doing a lot of sketchy things. cryptocomicon And the fact that they were behind one of the main supporters of this was like a really bad sign and, um, it felt like the people that were taking a more conservative approach and we're going to try and do this with something that was lightning network related, uh, that felt more appropriate. cryptocomicon And I think a lot of people felt that way. I'm not sure if that's, I'm just asked you about it because that was my impression at the time and I'm just wondering if that was your impression. Doug Yeah, another another thought, too, is when Gavin left the project, that was kind of an eye opener for me, where I was like, you know, what's what's what's happening here? cryptocomicon Well, Gavin, he went off and did something called Bitcoin ultimate. I believe that's what it's called. And he wanted to, um, Hey, do things like redefine the, the UX TOs for Satoshi's, uh, basically his, his, um, uh, Bitcoin and profit, you know, use that to fund development or something like that, which seems like super. cryptocomicon Super sketch to me. And Gavin was the one that took over right after Satoshi left, right after the CIA knocked on his door and Satoshi's like, I'm out of here. Um, I'm in a non and I've been working with you, Gavin. cryptocomicon Now, now that, you know, you want to work with the CIA. Okay, fine. Bye. Doug Yeah, that was the last message from Satoshi, right? cryptocomicon Yeah. So, I mean, there are people that just wanted like change this for their own personal benefit. And Satoshi is like completely the opposite of that. Yeah. So anyway, just getting back to lightning, that became possible with SegWit at about the same time that Bitcoin Cash was born. Doug Mm -hmm. cryptocomicon And for me, I could see that it wasn't gonna work. And I even wrote an article about it. It's not 100% accurate in how it didn't work, but it has kind of the gist of it. Lighting Network is where you take a piece of data, which is basically a Bitcoin transaction, and you pass it around. cryptocomicon And you modify it off chain, you hand it around to different entities, and they all just kind of route it. And you get from where you are through this mesh node, basically, to whoever wants that. Well, that was always gonna be hard to route without centralized nodes in that mesh. cryptocomicon That turned out to be an almost intractable problem. And so not only that, but these transactions, they're going around on this secondary network, and they're completely transparent. So all of your history is in them. cryptocomicon So if these nodes become aggregated, centralized, controlling the flow, they also become potentially honeypots. And I don't think people that wanted to use cryptocurrency, really that appealed to them very much. cryptocomicon And I also, one of the things that I said in this article that I wrote way back in 2017 was, you know, you'd have like Walmart and you'd have Amazon that have their own nodes, which could have happened. cryptocomicon They didn't do it because 2017 wasn't now. Now we got all these ETFs and all of this stuff, and all of that's gone not to the merchants, it's gone straight up to the banks. So hell, the banks are these centralized nodes. cryptocomicon So it's a really interesting situation that's happened. Now, Lightning died because just people didn't use it. It was hard to use, it wasn't private. But then we can talk about how Bitcoin's actually scaling, which is what I was talking about. Doug Well, so are you declaring lightning dead? cryptocomicon I'm not in any position to declare it dead, from my perspective, it never really had a chance of working and not being either, it was never gonna be private. It was probably going to be subverted. It was definitely one of those vectors where you could subvert it for the interests of large commercial entities and or the government. cryptocomicon And there was a lot of incentive to do that if it ever became successful. So it was never gonna be successful as a way of actually turning Bitcoin into peer to peer cash that you could use freely without consequences. Doug Now, so like you kind of mentioned before, when the fork was happening, you saw you saw at that time, you were cognizant of the fact that the fork was like, was really over that like that, you know, this one direction is going to be pro building second layer. Doug And that's really what this is all about. They want to figure out cryptocomicon Mostly, you had this sort of unlimited transaction block size that was the coin cash, and then you had SegWit, which was like a 3x on the block size, and it seemed more conservative. And then also, you would hear that SegWit would support Lightning Network, which we were all who'd read and studied the white paper were somewhat familiar with the concept of it. cryptocomicon And so I started studying that. And as soon as I started studying that, I'm like, this won't work. And here we are. It didn't work for basically the reasons you could see at that time. Did that factor into me thinking that SegWit was a better way to go at the time? cryptocomicon Not really, because I hadn't put the thought into that at that time. Doug So I mean, do we is it do we think it's part, you know, not to get into like conspiracy theories, but was it just like market dynamics, where there there's those that would kind of benefit from this version of Bitcoin where they control the layer two? Doug So or was it perhaps even more nefarious than that? And not just about, you know, making money off of a layer two, but gaining, you know, control over the network by way of a layer two, so a way for for governments to effectively, you know, an attack vector on Bitcoin. cryptocomicon Yeah, this was before Bitcoin was too big of a market cap. I just, I think there was definitely by Bitmain, there was a desire to have control over the network. And I think Roger, who is another big proponent of this, he was idealistically driven and just wanted to take the cap off so that there could be more transactions and basically was in bed with the devil. cryptocomicon And there were other people like Craig Wright that came out of this garbage too. Craig Wright, he wanted to create his own little regulatory kingdom with the BSV. And it just staggers me that anybody ever, I mean, there were people that devoted years of their life to being involved in that. cryptocomicon And it's just, holy crap, how has this happened? Doug I don't know man, I don't get it cryptocomicon Just so. It's scary, right? Easily sucked into a cult, you know? Doug Right, right. I mean, crypto has taught us that, right? That the cult mentality of people is terrifying. Yeah. cryptocomicon You know, so yeah. Doug Yeah, back on track, right? So we have lightning is what was being proposed as the way things would scale, but now you're saying you're gonna describe how things are actually scaling up. Well, yeah. cryptocomicon Well, they're scaling because we have large custodians like Coinbase. We have exchange traded funds connected to brokerage accounts, and there's KYC everywhere. So, you know, the banks are getting their cut. cryptocomicon The government is getting their much bigger cut, and everybody's happy with that except for, you know, the general public is not getting any kind of freedom money or unrestricted access to moving funds around, and that's becoming more and more the case. cryptocomicon It will be possible for a while to hold your own Bitcoin and certainly to dump it into that system. I'm sure there'll be markets for money laundering dirty Bitcoin into that because banks love to make profits money laundering dirty cash into the system. cryptocomicon So that's going to all happen, but it's not spending money. It's just like investing money. It does have utility if it's not completely rehypothecated because, you know, they're spending so much money right now issuing so much debt, but in the end, they'll be either windfall profit taxes or direct confiscation of some fraction like haircuts on that. cryptocomicon Once it's in the banking system and it's part of the regulatory structure, you really lose your inflation protection. I think we're going to see encouragement of people to put money into the ETFs to get a lot more capital in there so that there's a much bigger pot of wealth that can be skimmed off of by the government. Doug You're saying it becomes it becomes fiatize cryptocomicon Yeah, it's going to become theorized. It's well underway. I mean, it's certainly valuable to let it for a while be seen as a good place to put your wealth, because that just brings more money in that could be going into other things that could be going. cryptocomicon I mean, it's a problem, all the money going into real estate, right? It's problem when people bid up the price of, you know, commodities, or food, or whatever, that's that creates a lot more problems. cryptocomicon Now, if they, if they have a speculative mania in Bitcoin or other cryptocurrencies that are in this within this regulated system, it's a ton of capital gains taxes that are coming in. That's one of the main ways that governments make money now. cryptocomicon And ultimately, when the crisis really hits, they can just give you a CBDC IOU for whatever you've got there and take it. And it's valuable. The Bitcoin itself is a valuable way to settle value between banks. cryptocomicon And the CBDCs are just a control mechanism to keep everything in line. But I don't think, I mean, I think the most privileged players are not going to be subject to the whims of a CBDC. Either that or they're going to be controlling it. cryptocomicon That's such a big, big mess. I don't know how it will roll out. Doug You don't you don't think Bitcoin becomes kind of the the CBDC? cryptocomicon Um, maybe it depends on, on how big it gets, but the problem is you look at what you have in China, you have these, these scores that people have and they, you know, they're, they can do things or not do things with the money in their account, depending on their social credit score. cryptocomicon That's a really high level of control that I think that the people in charge would love to be able to impose on people and. Right. Doug but maybe we get there through the Bitcoin route, right? Where everybody's KYC'd using Bitcoin. cryptocomicon Well, if you have a ton of money that's theoretically in this account, but then you can't spend it any way other than what they want you to do, that's a win, right? So to that extent, sure, it could happen. Doug It's also, like you said, it's also great for taxes. It's great for capital gains taxes. You can, you know, government can perfectly assess how much value a person holds at any time and how much their turn is acting. Doug Yes, I've always said it. I mean, you know, it's kind of like the, it's a surveillance coin. I think at times I've gotten pushback, obviously not in the Monero community, but in the, you know, most Bitcoiners do not want to swallow that. Doug Do you think we get to a point where that kind of just becomes the meme and the obvious thing that Bitcoin is a surveillance coin and people kind of actually accept it? I mean, Saylor basically accepts it. Doug He doesn't call it a surveillance coin, but when he talks about what he sees as the virtues of Bitcoin, he's talking about in terms of being a surveillance coin, a piece of digital property, and you know who the owner is at any given point in time, and you can watch that piece of property get passed back and forth on the blockchain, and it's a way to store your value in that digital property. Doug But in a way where it's perfectly surveilable, I don't think he would mind that outcome. He seems to be pushing people towards that, and that is kind of the, you know, where the most energy is in Bitcoin in terms of mainstream adoption. Doug It's like the Saylor method. cryptocomicon Oh, absolutely. I mean, look at who's getting arrested. I mean, you have the developers of Tornado Cash. Actually, the developer Roman Storm is his name, and his crime was allowing Ethereum users to support the banking systems control over Ethereum. cryptocomicon You have the developers of Samurai Wallet. And what was their crime? It was allowing Bitcoin users to support the banking systems control on Bitcoin. So yeah, I mean, those are two examples of legal persecution. cryptocomicon And the only crime that these people had really was to support the idea that Bitcoin and Ethereum would be surveilable, would be controllable. Samurai is an interesting case, because apparently, there's this, I don't know all of the technical details, but there's a significant proportion of the transactions that were conducted there, where people didn't have their own wallet, and they were they were reliant on the service itself to do something for them. cryptocomicon And all of that can be directly de -anonymized now. And so it was sitting there as a honeypot. I never really understood all along why people would use this. Even if it did a good job of anonymizing, it made no sense to do a half ass job of trying to obscure Bitcoin or anything that could be centralized and the basic registration information that identifies people, not necessarily by name, but by their UTXOs. cryptocomicon And that's part of what's happening there. And there are extremely serious civil rights issues there too, because the rulings that have come out of the tornado cash situation recently indicate that the Department of Justice thinks that they can hold accountable somebody that developed software for the anticipated uses of that software rather than for anything that they did. Doug Right. That's insane. It's almost, I don't know if people are talking about in these terms too, but it's changing how devs are going to have to think about open source too in general, right? Because now they're being pushed towards not creating something as being open source because they risk their open source software being misused or being used in a way that's illegal, right? Doug So they're going to, you know, it's forcing developers to be responsible for how their software is eventually used, even some different implementation of it. You're going to want to keep it closed source because you don't want it out there in the wild. Doug Somebody goes and rebuilds a version of it where it's all criminals using it. You're now responsible for that software that was, you know, kind of relaunched a recruit by somebody else. That's insane. cryptocomicon And I don't know how long it's gonna take until that kind of thing is overturned. People have suggested that software development could become sort of a licensed profession, where, you know, for instance, if you're not a doctor, you can't give a prescription out. cryptocomicon If you're not a pharmacist, you can't deliver the drugs on a prescription. Everything else is illegal. And, you know, we have these black markets around this. Software could go the same route and you would have black markets in subversive, so -called subversive software that you could actually have something like GitHub, but it's in a dark net market and people go there. cryptocomicon I wouldn't be a bit surprised if we see that in the next few years. Doug That's insane. I mean, maybe, maybe this is where it stops, right? So this, this, this didn't happen in the US yet. We don't know how the, you know, how the courts are going to come down in the US. cryptocomicon Yeah, I don't know. I mean, you sent me that clip where Trump is claiming to defend people's rights vis -a -vis this kind of thing. And I just have a hard time believing anyone. I don't think that there's necessarily a big conspiracy. cryptocomicon I certainly think that the Biden administration is kind of trying to clamp down on things that would perhaps make it more difficult for them to get elected or could contribute to a currency crisis or maybe just appeal to certain interests that will provide support for them. cryptocomicon It's just so opaque. It's hard to know that. And it's hard to trust what any politicians or individuals in a position of power say they will do and know what influences are working on them. So all I can say is this is why I'm anonymous and have been. cryptocomicon This has been something that's why I never used anything like tornado cash or a samurai wallet. You have to deeply segregate the assets that you have into things that are truly in the KYC AML realm and that are truly not in it. cryptocomicon And there's going to be very little distinction. I mean, there's going to be very little gray area in that going forward. It's going to get worse, in my opinion, until we basically have a bankrupting of the fiat system that we have right now. Doug What do you think of Monero being listed on centralized exchanges? Do you are you are you okay with people obtaining Monero through centralized exchanges? cryptocomicon If you obtain your Monero on a centralized exchange and it's made illegal, they're just going to knock on your door and say, hey, where's your Monero? Give it to us at some point. So I mean, that's assuming kind of the worst case, but I think you have to assume that when you do it. cryptocomicon So. Doug Cause I don't know if you heard Francisco talking about it. I mean, he's, he's telling people that, you know, it's, it's, you may want to purchase your Monero on a centralized exchange so that when you want to come back into the Fiat world, you have kind of proof, proof of funds, right? Doug I think that that makes sense for. cryptocomicon certain fraction of what you own in Monero, but not all of what you own in Monero. My position on that until fairly recently was just own Bitcoin for that. That's your conduit in and out of the system. cryptocomicon And I think that's still not a bad approach. Doug Yeah, I don't know. I mean, I see, obviously, I think the best way to obtain Monero is peer to peer. You're selling a good service for it. That's the most ideal way to do it. Like mining. Yeah, I don't think that's as practical. Doug But I think obtaining Monero on a central exchange is, I mean, compared to any other crypto, it's the best way to go in my mind, because it's like taking cash out of a bank. Yes, the government knows how much you took out. Doug They know you have it in your hand. But now you're free to go use it like cash, as you will. Yeah. Well, for instance, if you- There's no stopping that. Unless they go ahead and ban it and then come to your door and say, where is it? Doug Well, I lost the private key. I lost the seed. Yeah, it's a lot- cryptocomicon easier to deal with the consequences of that than of Bitcoin. And if you buy Bitcoin and then they know you have it, they know what the addresses are that you own, and then you transact it for Monero on decentralized exchange, they may well be able to figure out Doug Right. cryptocomicon that you did that and that you did that in a way that's considered illegal. So that's a, that's a solid argument. And I think that's becoming more solid. Um, and it's probably hard to acquire very much Monero outside of using centralized exchanges right now, if you mostly have income in fiat currency. cryptocomicon So I wouldn't, I wouldn't totally discourage anyone from doing that. Um, but I would also want to try and acquire some that was not, that had no connection to the fiat system as well. Doug Okay, I want to talk. Yeah, go ahead. I was gonna say, and you take a large risk, you know, when you're, when you're swapping from Monero to Bitcoin, if you're the person swapping the Monero for the Bitcoin, you're taking a large risk and not knowing what the history of that Bitcoin is, right? Doug Oh, yeah, you keep getting Bitcoin that was literally just coming directly from, you know, in a legal use that's, that's being tracked by the government, right? Yeah, that's cryptocomicon If that's Bitcoin, then you have to segregate and use in whatever markets exist outside of the fiat system. So that's a very, very good point, and definitely wouldn't want to do that. This also means that a lot of times when people buy Monero, I think there will be a tendency for that value to stay within the Monero ecosystem or to stay within at least the privacy -centric ecosystem, because when you go out of it, then you run into this problem. Doug Before you move on with your next point, so do you think Bitcoin privacy is essentially dead because of what we're seeing? The shutdown of Samurai, the effective shutdown of Wasabi, they left the U .S. cryptocomicon You have to do, if you want Bitcoin privacy, you have to do coin control and you have to know the history of everything that you're transacting. That's just way beyond your average user's ability or willingness to do things. cryptocomicon Yes, you can have it, but you have to be technically savvy and aware of how privacy is lost. And in order to do anything in the real world, it's getting harder and harder because it's going to be very suspicious for people to, I mean, you don't know what's going to happen to that Bitcoin once you hand it off to somebody else. cryptocomicon Right. So but you do know that they can do something bad. The IRS can come knocking on their door. They can ask them, where did you get this book coin? And they can tell, you know, so unless the person that you give it to has no idea who you are, which further complicates things, it's kind of difficult. cryptocomicon And it's just like, why not? Yeah, I mean, it's just going to get a lot harder to do that. And I think that every all the forces that we have now are tending to separate these two realms and not have them. cryptocomicon And to the extent that the privacy realm and the fiat realm come together, it's going to be a flow of funds from the fiat realm into the privacy realm, driven by all kinds of stress and currency controls and fear. cryptocomicon So we'll get into that a little bit more. Go for it. All right. Well, I'm going to say a couple more things here. And here I'm going to send you in the chat a tweet that I'm going to be discussing a little bit here. cryptocomicon OK. I think this is a really important concept for people to understand. Mm hmm. You have I'm talking about here what the foundational power structure is basically of the U .S. empire. And yeah, that's a chart. cryptocomicon So I don't think people understood that Bitcoin was a lot like other things that were in this power structure until fairly recently. People started to understand this. So look at private banks. Now, the first of all, to say that the green circle is the U .S. cryptocomicon Fed. U .S. Fed's the center of all this. They they're basically the foundational idea. They control the foundational idea of what's a dollar, what's a legitimate dollar, what isn't. OK. And private banks, they they create dollars in their own sort of universe and they they loan it to you. cryptocomicon But ultimately, that money has to to as those loans have to be extinguished. They they have a license from the the Federal Reserve, basically. And if they are not able to extinguish their loans, the Fed has to bail them out. cryptocomicon So they're beholden to the Fed in their activities. And then you have this whole thing called the euro dollar. You hear about these, you know, for instance, Chinese, the Chinese government went around the world over the last 10 years doing something called the Belt and Road Initiative. cryptocomicon And they they lent a ton of money that they got from trade with the U .S. and from their treasuries to African countries, Asian countries to build things. And that's all part of the euro dollar system. cryptocomicon So this this came out after Benton Woods. But there's this whole these are like private banks that originate loans and everything. And it's as a virtual dollar system, you can think of it as a stable coin and but it ultimately has to link up and the Fed ultimately decides whether that's those are true dollars or not. cryptocomicon And now we have Bitcoin and Bitcoin is becoming more and more enmeshed with the fiat system. So this is this is actually kind of the nature of an empire. And if I go down here, you can you can add foreign central banks, Tether, Ethereum, Department of Justice, IRS and many other entities to the above chart. cryptocomicon They're all they're all interlinked with this dollar system. They're either serving to collect funds for it or crack down on people that don't support it or, you know, Tether is extending its reach just like the euro dollar did. cryptocomicon This is typical empire kind of stuff. All empire, OK, all empires, this is point three work like this and they tend to grow until the entities which they are entangled with are absorbed and consumed by the wealthy and powerful in the empire. cryptocomicon So. What happens is it's a somewhat parasitical relationship and the people that have the most political power in the society ultimately siphon off value this way and eventually it gets so bad that the entities that are all entangled with this have to either decide to cut their losses and get out of it or in many cases that's just not even possible. cryptocomicon And then you have a complete loss of systems, value, whatnot and a lot of poverty and that's happened throughout history many times. Doug You need to redo this diagram with Monero on there, off to the side, on its own, attached. That's right, yeah. cryptocomicon Let's see. I need to get back to my document. Okay. Doug But where does that lead you in terms of, you know, compare that now to Monero, right? So we see that Bitcoin, like any other kind of asset we've seen in the past, ultimately gets co -opted by those that control the fiat dollar. cryptocomicon Yeah. Well, Monero, anything that's truly private is going to have the ability to stay outside of that system. And things that can be, I mean, you could say that the Eurodollar system is private. There's a lot of private contracts in there that we don't know about directly. cryptocomicon You could say private banks are private and a lot of the transactions that happened there, the Fed may not know about. But ultimately, these are entities that have to deal with one another and they deal with one another through the US Fed and the definition of what's a dollar. cryptocomicon And what does that have to do with Monero? Well, Monero is really outside of that. You could say Bitcoin was outside of that, and at least in terms of what a Bitcoin is. But when you transact Bitcoins, you do know that you're getting the value that's in the Bitcoin UTXOs. cryptocomicon And that's, I think, for banks doing settlement layers and holding reserves, that's very valuable. But the entanglement there is how you get in and out of the system. With Monero, it's outside of that because they have no control over that. cryptocomicon They have no control. They can get people to do KYC AML, but if you buy your Monero outside of that system, they have no idea where it went. And we've already talked a little bit about that. I think that's incredibly important. Doug And even if you buy it within the system, it's still detached from the system when you pull that Monero off the exchange. cryptocomicon Yes. Well, you could say that Bitcoin is in a sense too, but you pull the Bitcoin off the system if they let you. And what are you going to do with it if everybody's afraid to transact with you except through the banks? cryptocomicon Right. That's what I was going to say. Doug you never effectively can opt out because you're KYC, you may feel like you've opted out, but you're still tethered to the system. cryptocomicon definitely still tethered. And it's so much like all of these other things now. And I mean, I think Sailor would agree with this, but most people are going around beating their chest and they don't understand this at all. cryptocomicon So now we've talked about how Monero is different. I want to talk a little bit about something that I think is somewhat optimistic. And it has to do with where Monero is really at, because I hear a lot of people lamenting the fact that Monero is not scalable. cryptocomicon So this thread talks a little bit about that. And my assertion is that Monero can scale to any effective transaction rate if we have adequate decentralized exchanges. So if you have the right tools, the market will solve the scaling problem. cryptocomicon Now, I'm going to go a little bit off the script on this thread. Just think about what Doug What do you see as being those right tools? cryptocomicon Um, that's why I want to go off script to just, uh, make it a little bit simpler to understand first. Okay. Let's in, in Roman times, there were gold coins and silver coins and bronze coins, and they were used for different things. cryptocomicon The gold coins. If you, if you see old Roman gold coins, a lot of times they're in perfect condition. They were not passed around. They were, they were stored well for wealthy people. Uh, the silver coin, and they were also never debased. cryptocomicon They weren't clipped and they weren't debased. Um, the silver coins were what they paid the army with. And, um, basically professionals were paid with, um, silver coins. Those were debased, uh, as Rome needed to pay armies that they didn't have the money to do, they, they started mixing copper and tin in with the silver. cryptocomicon So it was almost totally debased over time. And, um, the bronze coins, they never bothered to debase those very much. They were used all the time to buy things and it just wasn't worth the effort. Okay. cryptocomicon So these are, this is an example of a naturally evolving market monetary system. And so how does, what does this have to do with Monero? Well, I just see that, um, if you have multiple privacy coins, Monero can be, if it has some limited, I mean, they're all going to have limitations on their transactions, but if you have decentralized exchanges to go between them, there's very little risk associated with, um, doing a decentralized exchange from a Monero, you know, other things that will arise naturally that will carry, uh, the role of just, um, facilitating transactions that can be immediately then back exchanged into Monero if that's the way you want to hold it. cryptocomicon So if you try and do that with Bitcoin, since it's traceable, you're going to start to get into trouble with the law and, uh, the IRS and stuff like that. So that's why you can't scale that way with Bitcoin. cryptocomicon That's why it doesn't actually have a scaling problem that the natural market forces will not be interfered with. And you'll be able to do these things. And what we need are enough decentralized exchanges that really can't be shut down, that can't be honey potted once we have that. cryptocomicon And as long as privacy is maintained, there's, there's really no way to stop this other than, you know, extremely draconian processes and you can scale Monero that way, scale the use of, of value with Monero as somewhat of a base layer and other things being used for smaller transactions. Doug Do you see Monero itself being used for small transactions as well? Sure, you know, it's been very successful at that thus far. cryptocomicon I mean, it can handle probably a couple thousand transactions a second, but that's going to limit the nodes a little bit because the CPU requirements to validate new nodes is going to get very, very prohibitive. cryptocomicon And I actually think that... Doug I think Francisco really says that the limiting factor is the upload bandwidth, right? cryptocomicon That could be a problem too. I tend to think it's gonna be the CPU problem. It just depends on your particular situation. But I don't think that the fees are high enough right now to discourage that. cryptocomicon And that may be something that Monero needs to deal with later on, they may need to have a little more punitive way of discouraging people from congesting the nodes too much as there are alternatives to use to do exchanges. cryptocomicon And what would that look like? It would look like taking some Monero off, like take 2%, 5% of your Monero, stick it in some other chain that you can use that's supported by whatever merchant you wanna interact with. cryptocomicon And do a bunch of interactions back and forth between that merchant and other merchants with that offloaded. And then settle it back into Monero at some point. That's, we can scale pretty much infinitely using that methodology. cryptocomicon And since everything's private and fungible, as long as people are willing to do that, then it should work. I don't think that the value proposition for these is going to be that big a deal. It's really the privacy issues that have created the problems with Bitcoin scaling. cryptocomicon And merchant acceptance. This also assumes that you're gonna have spreading black markets, and they are gonna be black markets where this happens. And I just, I think that we're gonna see a dramatic proliferation of black markets in the future as a reaction to all kinds of financial tyranny that's being attempted now and that will be attempted in the not too distant future. Doug We'll be launching XMR Bazaar soon, not intended to be a black market by any means, but a peer -to -peer marketplace for the clear net. cryptocomicon Yeah, you have a lot of guts and I totally respect that. And I hope that it's all just gonna come down to where they start noticing things and feeling threatened by them. One thing we talked about last time is how entities like the CIA may want to use Monero and wanna keep it around. cryptocomicon I think that's a perfectly reasonable expectation at some point and there are competing interests behind the scenes. I mean, the banks wanna skim off of everything. They wanna keep people basically dependent on the system so that the corporations can suck in all of the sort of captured labor from that system. cryptocomicon And then the banks and the government can skim off of it. Having true open markets solves a lot of those problems and makes people more wealthy. A lot of the wealth that's been generated with increasing technology has really just been skimmed off and concentrated through the system that we have right now. Doug Yeah, it's really what we need to do to win, right? We need to use this peer to peer for political reasons too, because ultimately, this is going to come down to politics, where they're going to, don't get me wrong, Monero will survive either way, right? Doug It's built to survive even if it were, quote unquote, banned. But the argument of whether or not something like Monero should be banned is going to be politics. And we, you know, the people need to see that there's more reasons to want to want society to have and use Monero than to ban it. Doug And so we do ourselves a disservice by saying, well, you know, maybe maybe we shouldn't be using it out there in the open, because at the end of the day, it's perfectly legal to use and it perfectly aligns with the value of the values of the US and the Constitution. Doug And by not being out there and using it and letting everybody know that it's legal, and it can be used in important ways, that its utility of censorship resistance can be used in vital ways to protect people's liberty. Doug If we don't take those actions and do that, we lose that ground. We lose that political ground. And the argument becomes much easier for them to make. Well, it's just used for crime, right? So I think it's not just about being brave. Doug I think it's necessary. I think it's the route we need to take in Monero. cryptocomicon I hope that pays off. I really, really do. And I'll be using that as well. But I am a little more cynical than that, unfortunately. And this last week is a reaction to a Monero talk that you had recently, and talking about how I think this might play out. cryptocomicon So what's that? You had a guy on that was talking about how boomers will not use Monero or cryptocurrency. And I don't remember all the details. But the point was, that's the one I just texted you. Yeah, let's put it up there. cryptocomicon We already have cash. And depending on what neighborhood I'm in, if I go into a place where I go to a store, I see a lot of cash being used still. Not so much where I live, but in other neighborhoods, I've seen tons of people using cash. cryptocomicon OK. And so we already have sort of a thriving black market. And talk about some of the things in this thread that I don't want to go back over, because we've already talked about them. But what I see, ultimately, in reaction to this financial tyranny, is expanding black markets. cryptocomicon And I see that for the reasons you just mentioned, I think it's very important for there to be a public awareness that this is not a crime. Or if it is considered a crime, it goes against what our Bill of Rights says are rights to privacy and our ability to transact and stuff like that. cryptocomicon And people need to be aware of that. And but to me, the way that will play out is people will use a black market. And just like people use cash right now. So and I don't think that. Yeah, but. Doug but people use cash out in the open, not just in black markets. People are using cash when they go out to eat, when they give somebody a tip, when somebody comes over, when somebody cleans their car, they give them cash. Doug It's not all black market transactions. The vast majority isn't black market. I think there's an effort. cryptocomicon make people think that that's wrong or that there certainly will be more of an effort. In Europe, in certain places, people don't use cash anymore. And there will be an effort to tell people that using cash is, if not illegal, you shouldn't be doing it. Doug They're trying to kill it. They're trying to kill cash, right? So the best way to fight against that is to just start using it, right? More and more out in the open. cryptocomicon As much as we may not like it, I think that a lot of the problem with Monero, I mean, first of all, cash supports the dollar system, right? It's a reflection of the dollar system. It has the same inflation problem as the dollar system. cryptocomicon And the thing is, wealth is so concentrated in our society that it's really when wealthy people start to put money into Monero that that's going to make a difference in the market cap. And there's this part of the thing saying Monero is okay, you should be able to use this kind of money. cryptocomicon And that's really important. But the thing that's going to really motivate people is when they see that the price of the token, the market cap is going up. And the way that I see this actually playing out is that there will be, this is my point four, there'll be a capital flight into Monero that matters when they're smart money. cryptocomicon The first smart money in will be people that already have cryptocurrency and can use a decentralized exchange to get the value into Monero. But Monero will really take off when you see big stores of liquidity, which are looking for a way out of the system. cryptocomicon Okay, I know this sounds crazy, but a time will come when taking any private fungible way out of the system will make more sense than staying in it. So there's these people that have acquired incredible amounts of wealth, some of it through cryptocurrency holding and understanding what to buy some up through speculation, some of it through being close to the money spigot. cryptocomicon And as the government and the banking system becomes more insolvent and more desperate, people will be looking for ways to preserve their wealth and be able to move it and be safe with it. And I think that you're going to be able to watch this phenomenon by watching the token price for Monero. cryptocomicon I think it's going to play out there. It'll happen incrementally and the availability of decentralized exchanges will facilitate it. Well, we know based on what we talked about here, that scaling isn't inherently a problem as long as we have DEXs and as long as privacy is maintained. cryptocomicon I think this is near on inevitable. It will be a less sort of violent revolution, if you want to call it that, if people understand that what they're doing isn't wrong. And therefore, the impetus to crack down and beat up on people and imprison people and kill people that are doing this is seen as completely degenerate because these people are doing something that is fundamentally a right that they have and part of being a free person in a free society. cryptocomicon So that's incredibly important work to make that understood. But I don't think people really understand this, but there are very few conduits where people are going to be able to protect their wealth in what's coming. cryptocomicon And we're seeing the extent to which the government and the banks are willing to crack down on people, take away their civil rights in order to protect their cartel, essentially. So, and Doug All roads, all roads lead to Manera, I believe is the phrase. cryptocomicon I felt this way. Honestly, I felt this way in 2015 when I first saw it and everything that's happened has made me feel more and more certain that this is the case. And it'll be a much, much better future than what we have right now, if we can get there. cryptocomicon And it also mean that a lot of the wealth that's going to be generated has been generated will flow to people that are doing productive things rather than to people that just control the political and monetary systems. Doug Any thoughts on what it might start to look like when we see people move into Monero? Like what might some of the early events be that take place that start to wake people up and push them into Monero? cryptocomicon I just, I think you're going to see it and I, an increase in the market cap of Monero, to the point where it starts to capture public attention and people start to ask themselves why. And Dr. Kim said that when he was going around talking to home offices and wealthy individuals about investing in Monero, which he made his business, at least for a while, people were afraid of looking foolish. cryptocomicon They were afraid of buying into something that would make them look like, why did you buy that? That's ridiculous. You should have known better. This isn't what everyone else is buying, et cetera, et cetera. cryptocomicon So as the price goes up and everyone sees how degenerate the financial system is and how tyrannical the people controlling it are, hopefully those people will become more and more detached from the public sense of what's right, which we see all over the place with these campus protests and a lot of other things where I think the public is a lot more grounded, a lot more tied to the idea of the personal freedoms that we're supposed to have in this country. cryptocomicon So all of these things will start to gel and people will see Monero as supporting that. And we will have some kind of revolution. And if the forces on the ground are in support of that, the government will have to go back to ground zero on deciding how to tax people and stuff like that. cryptocomicon I mean, this is something I talked about before. It will, everything is so controlled and locked down right now with the way people, most people get paid in salaried positions and you know, you got money coming out for the taxes before you ever see it and stuff like that. cryptocomicon That's not the world. That's not the world we're headed into with this kind of stuff. And it gets a lot harder to basically steal all the wealth in a world like that. So I'm actually pretty optimistic about all of this. cryptocomicon And I'm just trying to provide some context for actually why a lot of the stuff that you're doing is important and how to protect yourself and view the importance of what we're doing. It's one of the most important things that's happening right now and probably in the last hundred years, this movement, people say, you know, AI is so important. cryptocomicon My concern about AI is that the same group of people will take control of it and just use it to siphon whatever value comes out of that as some kind of racket. I mean, here's something you can think about. cryptocomicon Let's say we have these robots that can do things like, for instance, take care of old people, which we desperately need because the demographics all over the world really suck. So you have these robots that can do what a nurse aide does or a worker in an old person's home. cryptocomicon That would be great if the actual cost of that robot was what you paid for it. But it wouldn't be so great if the cost of that robot was just low enough so that it could outcompete any human being, but that you had to own that robot's services through a subscription service to Microsoft or OpenAI or whatever, and it was just high enough that it could skim enough value through Medicaid to keep everyone paying their taxes and keep everyone poor. cryptocomicon That's the world we're going to have if everything is left on autopilot here and we don't have a significant disruption. So we need to be able to facilitate a system where individuals can sort of hack these robots or whatever, make their own derivative version, and sell it to somebody through a true free market that's not regulated and where these things aren't registered and controlled. cryptocomicon I think having free money is a good way to do that, and then those people will be competing against one another, and they'll give you the robot with all the software configured, and you'll just pay for whatever the true maintenance cost and the energy to run it is. cryptocomicon That's what a really wealthy, prosperous, wonderful future could be like, and getting out from under the chains that we've been put in that turn everything into an extortion racket is really, really central to that. Doug I agree with everything you're saying there, I mean, nothing more exciting than Monero right now and at this time too. I know a lot of people are worried, right, because they see what's happening with Samurai, they see the attacks that are happening, they're worried that the governments might try to ban it. Doug But anybody who really understood what Monero was trying to be knows that this is part of what we need to go through. They would not be trying to ban it if it wasn't fulfilling its disruptive utility. Doug And so we're seeing it's exciting that Monero is working so well that they're actively trying to stop it. cryptocomicon And it's exciting that this problem that's happening now is motivating people around Monero to hurry up and do things like full membership proofs. And it's picking, have Monero and probably other decentralized exchanges into more rapid action. cryptocomicon That's all wonderful. Doug And the more excitement we have in the space, and the more energy we have in it, and the more developers, like Luke, they get attracted to it, the more white swan events we're going to see, things we can't even imagine that are going to come out of that, scaling solutions, whatever it may be, the more eyes that are on Monero and the more IQ power going into it, also the quicker this happens. Doug Totally agree. Crypto Comic Con, thank you so much, man. This was great. Loved your thoughts and your flow. You're always welcome to jump on. You let me know. You can always jump on a Monero topia as well. cryptocomicon Well, I'll let you know. I just felt like I had some stuff to say and hope it's helpful. Doug Yeah, and I think you did a fantastic job getting the word out. Great job. Very well spoken. Anything you want to put out there, any information you want to put out there or things that you want people to look up and see or follow you? cryptocomicon Well, I'm on Twitter, my handle, CryptoComicon, and I have some other projects that I've worked on for a number of years that have to do with unhackable code. I just think one of the things that comes out of AI is brilliant bots that will be able to hack into code and that they will invade networks and be very, very hard to stop. cryptocomicon And we're going to have to harden our source code against that kind of threat because it will be almost impossible to keep those bots out of our networks. Everything in the network security methodology has been about building moats around very, very vulnerable software. cryptocomicon And I think that we're going to have to fix that problem. So I've been working on that on my own for a number of years. I've put out a couple of challenges, a few number of challenges. My latest challenge actually embeds a Bitcoin private key in an app where you can take the app, you can debug it, try to reverse it, engineer it, whatever you want. cryptocomicon But there's a private key in there and you can sign any message you want with it. So that basically proves the private keys in there, but you can't hack it. Nobody's hacked it yet. Nobody's gotten the private key out. cryptocomicon You're not supposed to be able to do that, but I've done it. Now, convincing people that this has utility, it's not so easy right now, but I think there will come a time when people will understand this. Doug So a device, a device that could store a private key and the, I mean, so not, not like a hardware wallet, no more like, like an open dime type thing or almost think of. cryptocomicon bit like just a pure software, like vending machine that you could stick out in the open. Even if someone stole the vending machine and tried to hack the private keys that were in it, they wouldn't be able to do it no matter what tools they use. cryptocomicon I mean, it sounds crazy. It sounds like it's impossible. I think on some level, it's impossible. There's probably a way to do this, but the effort required would be so great. I've been working on development tools that let you develop software that will do just that, and you can make it arbitrarily difficult to extract the value. cryptocomicon They run a lot slower than other software, maybe a few thousand times slower, but the ways of obscuring this and running this code is pretty solid, and I will be working on that more and releasing new challenges. Doug Cool. What's it called? Where can people, uh, follow you? cryptocomicon Let me see, well algomachines .com Doug Hmm. And the first implementation you're working on is with Bitcoin? Well, there's cryptocomicon So let me send you the link. Thank you. Yeah, I don't think I ever actually put out a challenge for what I described to you. I did send it out on Reddit This is the link to the site itself There's a there's a several year long history where I sort of learned By putting these challenges out and having them hack them having people hack them just what it takes to hack a program And anyway, I spent a fair bit of time trying to understand how to do this, and I've spent a fair bit of time trying to understand why it's important. cryptocomicon I just kind of give you my elevator pitch there about why it's important. It's a work in progress. I have other paid work that I do. I obviously pay attention to the markets a lot. I've been holding cryptocurrency for a long time. cryptocomicon So that's just something I do. I'm not really ready to release it on the world yet, but I think it's a very interesting idea. And if people want to contact me on Twitter and talk about it, if they have any interest in this, I'm very, very happy to talk about it. Doug Awesome. Any chance we get you down at Monerotopia or I guess we wouldn't know, right? cryptocomicon It's going to be in South America, right? In Mexico City. We're going to have it in Mexico City. Oh, in Mexico City again? Okay. Doug Yeah, Mexico City again. cryptocomicon I'll try. I'll try. Doug I can do every grade. Awesome. All right, man. Thank you so much. Well, we'll end it here and hope to talk to you again soon. Thank you very much. Bye bye. Ciao. All right, hold on one second.