Block Digest #2: Cryptocurrency in North Korea and the ‘Original Vision’ of PayPal

[Chris Ellis] Hello everyone today is Wednesday the
16th of August of 2017, it is Block Height 480,805 and today we’re
talking about the early history of Paypal following an article by [Eric Jackson with] the
former [Paypal] COO David Sacks in CNBC today who says that PayPal was basically trying to
build the original vision of cryptocurrency. So I want to bring
Shinobi and a few guys into this because before we came on air today we were
trying to figure out the early history of PayPal. We’ve kind of heard
rumors of … they tried to kind of do this thing, try to create a stateless
currency but then they were prevented by the regulators and they had to become a
custodian of those and actually on Twitter Janine [@J9Roem] was tweeting about this and she she observed that … in this
article on the 100 most influential libertarians Peter Thiels name came up
and he was quoted as … PayPal creating a non-state currency Facebook
developing a non-state community and then she kind of points out that
actually he was … he was also linked to a surveillance company as well. PayPal actually did respond to Janine [and they said] she did say here at PayPal we transact in regulated state currencies
like USD CAD Euros GBP etc, so they clearly failed in their attempt to
become a stateless currency. And instead you can see in this early picture
of the Peter Thiel and Elon Musk here, you still have a little visa logo; and it
kind of shows you … how little things changed until Bitcoin came along.
Because essentially what PayPal is is a centralized database of
transactions. Whereas back then… …the holy grail academically
speaking was this decentralized system right … So guys come
in come in on this because we want to like break out the discussion we were
having an earlier … [Shinobi] I mean I think
one of the things it goes to show is like at the heart of what they were trying to do I think was
bring access to these kinds of financial services to more people and less so
actually trying to change the fundamental nature of what those
services are built on. So I mean in a way I could see that as a kind of a noble
goal but I don’t really think they set out in the beginning to do exactly what
Bitcoin did. Create a whole currency that is completely non state run and
uncensorable. It was just more they wanted to provide wider access to those
conventional state currencies or monetary systems [Chris Ellis] Alright. It’d be good to check out this quote here from David Sacks “After PayPal I never thought
I would get interested in payments again but Bitcoin is fulfilling PayPal’s
original vision to create a new world currency. We actually we had t-shirts
printed in 1999 with that mission statement” so I think may… are they trying
to like revise history a little bit and try to claim like this was our idea you
know and then bandwagoning off of Bitcoin success right now [Shinobi] Yeah I mean I
definitely would consider it that and to go a little further I’m just, this
potentially might indicate some internal thought processes about integrating
these kinds of systems now that they’re getting so big and to the point where
most people here are confident there is nothing you can do to shut them down
[Chris] Right and Sacks also goes on to say ‘it feels like we’re witnessing the birth of
the new kind of web some people have called it the decentralized web or the
Internet of money” and this he goes into these tokens the crypto currencies he
says that he thinks it’s still you know you know in a bubble and eventually
they’ll have a crash and he talks about how he basically hopes you know the
technology is probably 1995 and the pricing is either 1999 or getting close
as a combination of something real with a lot of speculation and so he’s saying
there’ll be a correction and he’s saying that the price will come down and he
hopes that it won’t be as bad as the dot-com bubble you know was previously a
softer landing is what is what Sacks is hope
for but I don’t know I’m trying to work out you see these kinds of articles when
they hit the media particularly on a quiet news day [particulary] in the summer
say this is often called the silly season in journalism around August
time what will often happen is that these online magazines now will be
looking at the engagement metrics that they’re getting on their website and what
they’ll be doing is the SEO guy or the head of marketing will come in and say
here are the keywords that are trending right now here are the memes and the memitic vectors as they’re known and we need to do an article with these keywords in it
so you know you’re not writing an article based on real events happening
in the world you’re now writing articles based on
what’s going to get you traffic to your site. I’m putting the word cryptocurrency
in the title and putting Bitcoin and PayPal and putting it all together is
is often the way to get the traffic when there isn’t a lot of a whole lot of
other news to go around so this article is by Eric Jackson I don’t know
I imagine you put in a call and said hey David can you give me a quote here I’m
looking to build an article around this and then kind of that’s how I feel in my
opinion this is how this article was constructed [Shinobi] I mean yeah I can totally
get that sense from it I mean when you really look at it the only real a thing
of substance to the comparison of cryptocurrency and PayPal is really that
that notion of money is a database and that’s really the only commonality
there. The big difference is that PayPal, obviously as a custodian,
would manage and control and have the final say over that database; whereas
with crypto currencies it’s mostly proof-of-work but you have these other
mechanisms to widely distribute that database and not leave any single entity
in control of it. So there is that like one sort of commonality there but aside
from that like it’s nothing but differences [Chris] Right and also linked in the
description below for anyone who wants to check out whether this is revisionist
history, an actual timeline of PayPals development so you’ll be able to go back
in time. It’s on Wikipedia and from there I guess you can do your own research to
see how much of this article is really just filler to
fill up the space in the CNBC website or whether it’s
actually kind of real news. But it’s certainly got a lot of traction,
surfacing on alot of the reddit channels. I got it straight away on my Twitter feed
I think there is some kind of piggybacking going on here so I I want to now kind of segue into a follow up from yesterday’s story where we talked about
Blockstream commissioning some satellites for some data feeds in order
to be able to broadcast the blockchain, the Bitcoin blockchain that is, all over
the world. In particular targeting areas that have intermittant and or non-existent
internet access so that everyone can get get.. I’ve said before that I sort of feel
like bitcoin is, that the blockchain is, a global dialogue. It’s somewhere
where people, who for the first time, we have the whole world, is able to speak
without permission There is no entry requirements to
the Bitcoin blockchain anyone can have a say. You need a little bit of money but
as I think many people online have demonstrated as I have in the past with
Thomas hunt and so forth you can earn Bitcoin pretty easily just by having
basic access to the Internet. You can work for it, as well as buying it.
You can receive donations simply by putting a Bitcoin address on your
website. And so, it’s the permissionless aspect that I think I’m most
interested in. So one of the things that I think Shinobi you want to talk about
is how we gonna actually here in the bitcoin mumble are we actually gonna
try and build one of these satellite dishes and if so how are we going to do
it let me just show everyone the link to the article and then you can talk [Shinobi] I am definitely the second I get my hands on a satellite dish I’m being a little bit
of a cheapskate with that part gonna be putting one of these together and i
mean–if really like one thing i would like to point out for everybody who
wants to put this system together and actually take advantage of this downlink
is. These parts are cumulatively about a hundred dollars but the biggest cost is
mostly the interface between the coaxial cable and your
actual computer so that software can take the radio signals and digitize it
and actually get packet based information out of it. And the dish, and
at least in America, I don’t know the rest of the world, but back in the early
2000s late 90s there was a a big initial push for DSL service, and in the interim
a lot of people were getting satellite internet services before the DSL
coverage got to their areas. And a lot of these people just pretty much switched
right to DSL after it came to the area. A lot of these people, they still
have dishes on the house like they kept them or their service provider never
came to collect them so with that specific piece of hardware I think there
is really a lot of room if you go out and look and network with people you
know to get the most expensive piece for free or a lot cheaper than you would pay
for a new one. But I am definitely intending on putting this together and
obviously a little skeptical about showing my face but I think we can get
some video set up but Chris or somebody can narrate and actually I show the
process of it being put together [Aknix] You can actually kind of hack together your own
thing I think from DVRs depending on how technically adept you are so I think
some of the old dish transceivers you can use that satellite dish and that SDR
system in there not sure if it works on the same bands I actually haven’t done enough research into that but the
cards are cheap enough anyway [Chris] I’d be really interested to see what the speed is like
that’s kind of like for me I’m gonna have to bootstrap you know my own node I
mean I’ve got a copy of the blockchain on my work computer and I would
presumably you know if I duplicated that and actually set up a dedicated
workstation I’m not gonna be able to download from like block you know from the
coinbase sorry from the Genesis block am I. Like that is just gonna take forever
[Shinobi] For right now pretty much what the feed is is it’s just a
live feed of the current blocks and I believe right now there is a slight
lagging delay cycle that rebroadcast old blocks in case you lose connection or
miss a little bit but um that that’s just for right now because essentially I
believe the the downlink rate is sixty to a hundred and twenty something
kilobits a second and with the max case with seg wit 2.3
megabyte blocks I think that I would push about thirty kilobits a second of
the potential feed in order to get it into safe enough time that you’re not
going to have block stacking up faster than you can get. So one of the more
interesting things I wanted to talk about yesterday but we kind of
just glossed over it is this is right now just a free live feed of the main
Bitcoin blockchain that this will stay free forever anybody can access this but
obviously as I just said at the max it’s only thirty kilobits a second out of a
potential 120 something being used to broadcast that chain so Blockstream
could actually do a lot of interesting things with the rest of this downlink
capability for instance, liquid which I believe is rolling out next year
it’s in beta right now they could have a subscription-based broadcast that
businesses could pay for to receive the sidechain updates through this link
other developers could essentially use this in like a pay for data plan with
the Lightning Network and actually send other information that people are
paying for. Businesses could use like the same kind of micro payments mechanisms
to actually pay for more of the downlink capacity and actually get things faster
so aside from just the basic like free access to the main chain that will stay
free and open there’s actually a lot of interesting things you can do with other
services and ways that block stream could actually monetize this while still
offering the feed to the main chain for free to everybody [Chris] but you’re saying that at what point do they stop relaying blocks. So if were at block 480,000 they’re going to broadcast blocks as they come
in, but are they going to continue broadcasting blocks from previously and
if so what’s the cutoff point how many is it like ten blocks wide what’s the
what’s the bandwidth I’m not sure about the exact block length right now from
what I’ve learned talking to people it’s not that big right now it’s just kind of
a minimal like if you lose connection maybe like a day’s worth of blocks are
kind of cycling at like three different alternations so that you would
have chances to catch things that you missed but ideally I think longer term
the plan is to try to expand that a little more to give a nice safe margin
of error and then I believe in the longer term
they actually have plans to look at the viability of just having a constant
cycling of the entire historical chain so that like over a period of a few
weeks it would just reset and you would have the entire chain broadcasting and
the potential to bootstrap will over a longer timeframe off of a feed like
those. [Chris] Yeah great anyone else.. Steven, you’re sitting there kind of omimiously. You’re just here to spy on us [Steven] A little bit. Yeah I hear I hear the blockchain the satellite arguments, I think that there’s some good things there, some
revolutionary things, you know to be able to relay the blocks.
I am not without fear though with it Gavin mentioned
yesterday, “Blockstreams satellite thingy is highly centralized. I’m okay
with that, you could start your own satellite thing if you like” and that’s
true yeah I guess you can start these and hopefully we’ll
see more people start {launch} them. You know private {sovereign} investors start it so
that way he can guarantee he know if if if bitcoin is worth enough I want to
have a way that I can always use it I mean if I could afford my own satellite,
as they become cheap enough that you know they’re accessible why not be
utilized [Aknix] But that’s a serious risk right I
mean like if it’s super centralized and we get a lot of momentum behind a
network like right what if the bulk of the weight of financial transactions
happen on that network you know like what are the what are the economic incentives
like how does that change the incentives in Bitcoin naturally [Shinobi] Well I think that’s an interesting kind of angle to bring up and I think that gets in to
kind of the subtle nature of what exactly the peer-to-peer network is
because I mean in the most basic sense it’s just the network connections
between nodes but if you really want to break down the functionality of what it
does I mean you can look at the relay network as how you get your blocks so
that your node can stay at the tip of the chain and be assured they’re
validating everything but it’s also just a way to get your transactions to the
miners and so depending on like which way you’re looking at this like you
might want something totally different out of the network but being a
peer-to-peer network being ad hoc where you don’t really have any total control
over the topology of the network it’s gonna be kind of messy trying to
optimize both of those things because you’re gonna eventually in my opinion
you need to see kind of more specialization to suit each need and I
think what this does it’s a very nice starting point for that because now the
the biggest cost in terms of moving data around on the network is the actual
block data and all of the unrelayed transactions I mean unconfirmed
transactions I’m sorry so now we have like this downlink that is free for
anybody receiving it to get all of that block data and I believe some of the
unconfirmed transactions and eventually a good enough chunk of that to be
relatively certain of what general group of transactions is likely
going to be in the next block and so what this does is like I said yesterday
I believe you’re getting this from a centralized feed from Blockstream but
when you get that complete block data all you need to do is get a header from
somewhere else [Chris] Yeah exactly. [Shinobi] It’s actually verified technically and so like this kind of
is a nice initial step towards trying to specialize different aspects of the
network towards getting the data to you for validation and like allowing users
to have kind of more streamlined ways to get their transaction directly to the
miner because when you’re transacting you you don’t really care about everybody
else getting it you want it to get to that miner so that it gets into a block
[Chris] Yeah this is not two-way though is it you can’t transmit from the satellite to
the satellite from your station can you and the dish [Shinobi] Um no not now although I’ve
seen some people talking about potentially using GPS as a way to do
that but I’m not really sure about the legality of using those frequencies and networks [Chris] What about AM radio what about that whole trip because a little while ago I asked
why can’t we get Bitcoin into North Korea right like if you can get I’m
totally serious man like right now DVD players and electronics and memory
sticks and you know a VHS cassette tapes are smuggled into North Korea into the
general population and it’s something like for a long time it’s like a pet
love of mine I’ve never even been to Korea before but I still love watching
videos about it because it’s just I don’t know it just I find it very the
story the narrative quite captivating so I like I’ve until recently a lot of
people in South Korea that the protesters were sending up weather
balloons and letting them flow into the North Korean territory and people who
tried this nowadays the police in South Korea tried to stop that because they
don’t want to raise tensions and this is kind of something that’s kind of been in
the news recently and what I always sort of dreamed of that someone would build
something that well maybe we can that can allow for AM radio frequency to get
in and out of the North because you can’t stop that right you can’t jam it
it bounces off the atmosphere and it comes down is there enough bandwidth
to allow for a basic you know TX message to be broadcast that way come on Ack
you must know the answer [Aknix] I yeah I think we can sky skip already you know
using bands that are available right now so potentially there’s already the
ability to do this you can skip right over using the ionosphere and stuff
right now so we can get these mesh networks set up and working
absolutely [Chris] I mean we don’t know we don’t have to pick North Korea we can pick a
country I mean I think right now those satellites don’t even cover East Asia so
I don’t even think it’s an option to get the satellite link and everything like
that but you know cyberpunks you know like I fit a cypher punk I’m sorry
like I want to go back to that like I want to go back to that hacker mentality
of just picking something up and building it and right now I feel like
everyone’s trying to raise money and they’re not really thinking about why there’s
like we’ve got to grow this is this thing is taking off and it’s a bandwagon
we’ve got to get on the gravy train and it reminds me of that Pink Floyd song
you know tell you the name of the game boy they call it riding the gravy train
and it’s all about when talented gifted people meet a salesperson and
that frustration that they feel that the salesperson is only really interested in
the superficiality of it but that the artist is interested in the you know the
raw integrity of the work that they’re trying to do and the vision that they
try to have so instead of trying to like just raise money for these ICOs I’m
thinking like what about just building things and shipping it and delivering it
and saying look I tried this and it works and maybe the first step is to get
the satellite working but if anybody watching or anyone on the mumble knows
how to to build these kind of AM radio frequency or anything off like the
ionosphere I think that’s fascinating to me I really want to see that happen [Aknix] Well I plan on reaching out to this whole community of ham operators I happen to know…
[Chris] Hey [Aknix] …they shoot skip all the time that’s what it’s called a shooting skip like you
bounce it and like you’re getting to the other country like it works you know
it’s amazing stuff so I think the satellite launch is like
the first kind of foray back into this stuff and we need this like this is this is
awesome and we’re gonna have what three more of these or more of these who knows how
many more we’re gonna get up there and we’re gonna get better and better
coverage and then the next part is meshing that all together and getting
sat up links and down lines right [Chris] Right exactly i think like a layered approach will be best like if you do
have the satellite dish and you can like download blocks and then you’ve got like
the am frequency in order to broadcast it you really only need a
receiving node to be able to help propagate that on to the network
yes you would because you’re obviously someone needs to have an internet
connection receiving that TX data and then broadcasting it from from the am
frequency so you need a receiver need someone on the other end that’s going to
pick up that and then broadcast it for you and maybe some of the viewers that
are quite new to the cryptocurrencies face don’t understand this principle
that when you transact in a cryptocurrency that there’s based on
bitcoins code base you’re using something called public private key
cryptography which means that you can retain a private key but without ever
exposing that to the rest of the world you can do things called signing
actually the fun fact about cryptocurrency there is actually no
encryption in it it’s just basically you’re taking a public/private key pair
and you’re just signing something and what that means is that you can just
keep that private key to yourself it never has to touch an internet
connection whatsoever you can sign a transaction that proves that you’ve
received some coins on a certain day and you can give that signed transaction to
anyone and they can’t steal your funds all they can do is publish it or not
publish it they can either broadcast onto the blockchain or they can’t, but
they can’t tamper with it in any way and that gives you a lot of freedom that
means that even people without internet connections can still sign transactions
but give them to somebody else in a trustless way and have those people
broadcast it on their behalf and there’s really nothing that that broadcaster can
do to to interfere with you or your message or censor it in any way and I find
that very exciting so guys we’ve been on like 25 minutes well what are our
closing thoughts shinobi back with us [Shinobi] yep that is a infamous via er VPN
trouble anybody out there get a service provider anybody besides Nord VPN
literally anybody [Chris] But not one… [Aknix] Why not call them out [Chris] …not one run by the CIA though, not one that’s a honeypot. Basically VPNs are an ISP it’s just that you’re just having
to trust this ISP over here rather than your local one [Shinobi] Pretty much [Chris] Yeah I think a lot
of people have a… [Aknix] What happened to Tor everyone givin up on Tor. [Chris] I think that it’s now considered kind of old tech and also
because the old Jacob Appelbaum thing and he left I don’t know I don’t hear as
much about Tor anymore I remember when they were trying and do that big push for
the exit nodes and trying to get everyone running them haven’t heard too
much about that recently so I think you know combination of them having like
internal kind of you know problems and plus I think it’s largely viewed now as
like you know legacy technology and there are ways the surveillance state
can get inside of it by just running a lot of exit notes themselves and just
listening for that data and they can eventually over time build a temporal
graph and try to extract identifiable information of users we remember that
Silk Road was taken down and that was on tor right like they were able to locate
those servers so it’s not as if you know with enough will that the state can’t
penetrate that so you guys [Shinobi] yeah, I think anybody that’s sane should be questioning why
one of the most well connected nodes on the network is in Langley Virginia [Chris] Exactly exactly let me quickly take a
look at the troll box I was in there a little bit just now chatting to everyone
let’s see what’s been saying so Mr.Hodl Mr.Hodl we’ve had TX by radio waves in the
past so yeah will be good to to do that and I love here AboveasBelow says #BTCSaveDPRK hashtag that’s a great hashtag man that’s a good
one let me see if I can just get this get on the screen for you guys so you
can actually see it but um here we go and so I love this hashtag I think we
could get this trending with enough participation from everyone at home and
yeah this out okay so apparently the satellites do support two-way so maybe
that’s something we can do but once you get the equipment shinobi you can tell
us [Shinobi] I think that the two-way issue it’s it’s mostly that I’m one obviously if
you have everybody broadcasting at the satellite it’s only one receiving point
so that’s gonna be a lot of stuff to sift through and then also like I was
saying yesterday that with the difference between the the CubeSat
versus the communication satellite like there’s that inverse relationship when
you’re dealing with radio waves, if you put more power into the transmission
source you need a smaller dish to receive it and vice versa so whoever’s
transmitting it is really going to need a lot of energy if they want to get that
signal moving a distance [Steven] Can i ask a question real quick [Chris] Yeah [Steven] Can this lead to less
fungibility say in that because if these transactions could be
received and broadcast from everywhere then it wipes out that choke
point so the way to create the next choke point then is having you know
centralized places that where the coins have to be you know if the coins that
moved through them are are approved right like you said I see this [Chris] How do you mean
like the choke point is the fact that it’s just run by one company at the
moment and so when they’re going to broadcasting they have to accept either
choose your transaction or not [Steven]Essentially yeah I mean you know we are
we already see these these net neutrality laws coming in right could
could we could we somehow take that to the next level because we’re talking
about money transmission here right and could a law be made to restrict
essentially the transmission mechanism [Chris] Yeah but that’s Shinobi’s got an answer to this right you know see [Shinobi] That feeds back into kind of little bit of about
what I was touching on earlier with like looking at what you’re trying to get out
of the network like get the shit to validate the thing or to relay your
transaction and as far as like trying to broadcast transactions directly to the
satellite that’s something I would really recommend like people don’t like
dive right into trying because like the the reason that this is such a huge
privacy boom is that the as a node receiving things you’re passively
receiving that signal from the feed so everybody can see where it’s coming from
but nobody sees like who is listening whereas if you were trying to broadcast
a transaction or everybody was like that it would be the exact you know the same
thing in reverse like everybody could see where those transactions were coming
from and have no idea who’s listening so if you had everybody trying to
independently broadcast their own transactions that would be
geographically tie-able to you so I think as far as getting things up to the
satlink it would be much better to try to have like kind of more centralized
but in a more distributed way where those transmission points aren’t just
for one person they’re broadcasting things for lots of people so that you
have that one source that everybody is using and it’s not as easily tie-able to
an individual [Chris] Right in order to be anonymous you need other people right
you can’t be anonymous on your own and so yeah so there will come with time and
people in the chat just going to wrap up here have said you know radio SMS fax
Telegraph like yeah I would love to send a Bitcoin transaction by fax that’d be
quite a lot of fun I guess you just do a QR K right okay guys [Shinobi] There could be a lot
of ways like if you could get a transaction anywhere you want in as
inventive a way as you can think to move data [Chris] Great well listen everyone it’s been 30
minutes I guess we’ll wrap it up here but you
can expect more things we’re still working on the technology side and in
the background and I just want to thank my guests today and we had Shinobi had
Aknix had Steven had an in-line in-line producer Mr.Hodl who’s really the
brains behind this you know and and yeah I guess we’ll see you guys tomorrow if
you like what you see here you can subscribe and you can like we’re not
taking donations right now but I guess we will do in the future but really
we’re just grateful for all the views we got yesterday we got 700 views it was
like our first proper video 800 now I’m being told by my producer Janine so 800
views and we only had like 70 subscribers so that’s incredible I have
no idea you know that the magic of the Internet and we got you so we really
appreciate and we also really appreciate the guys that watch this all the way
through to the end we know who you are because you often come to us with topics
that we were discussing at the end of the video so really you’re the heroes
you are the resistance and I thank you i’m Chris Ellis and this has been a Block
Digest I’ll see you tomorrow bye

3 thoughts on “Block Digest #2: Cryptocurrency in North Korea and the ‘Original Vision’ of PayPal”

    I find it funny, that SEO seems so strong I can google your exact title but dont find the video :S but this article is picked up and spammed in all the outlets that circulated it, lol and North Korea must trigger a link to Dennis Rodman

  2. Paypal, a multicurrency database, with all the worst aspects of banking/escrow and lording over users who have little or no alternative.

  3. Chris… there is a system that allows you to transmit "packet data" over armature radio from country to country however, encrypted data is not permitted. If caught you can be prosecuted by the Department of Trade and Industry (DTI). The sentence carries a maximum of 7 years in prison. Before the internet we used to link our ZX80s via CB radio to create Bulletin Boards via Packet Radio. The GPO at the time (General Post Office) would raid our homes and confiscate equipment.

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