hi everyone this is Roger beer it's

Saturday August 19th and I want to show

you guys a presentation that originally

I made for the Pantera bitcoin group

back in March of earlier this year but

in light of everything that's going on

with Bitcoin cash and Bitcoin legacy

today I think that this is very relevant

so keep in mind that these slides again

are back from Mark shows about about six

months ago but I think they're still

very relevant here so we'll start off

with a what is Bitcoin right of course

we all think we know what Bitcoin is but

I want to talk about why I think bitcoin

is important so right from the from the

Satoshi Nakamoto white paper or the

title is that it's a peer-to-peer

electronic cash system I think that's

important to keep in mind that's the

original title of the white paper but

what makes up a peer-to-peer electronic

cash system right we need to have good

money cash means good money and here are

the characteristics that make something

good money and we can start that it's

you know easy to store hard to

counterfeit of scarce divisible

homogeneous that's a little bit lacking

a Bitcoin but there's room for

improvement there anyhow durable and

they're not easy to transport and uh

that's the one that I think we need to

focus on a bit more and core and their

roadmaps are intentionally damaging

bitcoins ease of transport by making the

blocks full and the fees high and the

confirmation times long and the double

spins easy that's damaging one of these

incredibly important characteristics of

Bitcoin that make Bitcoin useful as

money and if you damage any of these

characteristics here Bitcoin has been

less useful as money than it otherwise

would have been so it's very very

important not to damage any of these and

unfortunately course roadmap is

intentionally damaging the ease of

transport for for Bitcoin and if you've

been around Bitcoin for a while you'll

know exactly what this chart is and

again this is back from March now we've

been bumping up against a limit for a

while here but you can see for all of

bitcoins history the blocks were never

ever full there was tons of room for for

additional transactions until the

beginning of

this year around marks the blocks became

completely full and that when the blocks

became full that caused the average

conformation time to skyrocket around

the time that I took this screenshot in

March earlier this year the average

conformation time was about two hours

for a Bitcoin transaction that

previously would always be confirmed in

about ten minutes because there was

always plenty of room in the blocks for

every transaction to be included and

around the same time that the blocks

became full everyone had to bid against

each other for room in that block and

the big the fees that people had to pay

to use Bitcoin skyrocketed from being

something very reasonable around the

penny a transaction to where people were

paying a quarter of a million dollars

per day in transaction fees just to use

the Bitcoin network and the fees are

somewhere in that same ballpark today

and right around that exact same time

that the blocks became full and the fees

skyrocketed bitcoins share of the total

market cap plummeted and we can see that

right here back when I took this

screenshot it was still above 60% today

Bitcoin is below 50% and that brings us

back to the economic code of Bitcoin

that I love to say is so incredibly

important and a really basic concept in

economics it's something called

substitute goods and it's important to

understand the definition of what a

substitute good is and substitute goods

are two goods they could be used for the

same purpose if the price of one good

increases then demand for the substitute

is likely to rise so in the

cryptocurrency ecosystem there's a bunch

of substitute goods right we have

Bitcoin litecoin aetherium Manero -

those calling take your pick there's a

thousand and one altcoins out there with

similar characteristics some are

certainly better than others some have

bigger network effects than others but

there's a lot of competition there and

things like shape-shift and the jacks

Taiyo wallet that make it so incredibly

easy to convert from one Bitcoin to

another make it really really easy to

substitute one of these crypto

currencies for another if one's not

working for you

and we saw that happen exactly at the

same time when the blocks became full

and the fee skyrocketed and the

confirmation delays increased in the

huge amount for Bitcoin we saw Bitcoin

share of the market cap plummet at the

exact same time the alt coins rose like

crazy and that's because people are

using alt coins as a substitute good for

Bitcoin because if bitcoins no longer

the easiest fastest and the cheapest and

safest way for them to use their their

money they're going to start using one

of these substitute goods and that's why

we've seen the alt coins just skyrocket

as far as their total market cap goes

and the reason for that is because we

have these people at Bitcoin core and

block stream and they openly and

intentionally advocate for one megabyte

blocks and they intentionally and openly

advocate that they want to create high

fees on the Bitcoin network and they

openly state that they want the blocks

to be full and uh that causes a horrible

user experience for Bitcoin and down

full blocks lead to high fees long waits

and a horrible user experience anybody

that's tried to use Bitcoin recently

knows that the fees are crazy the waits

for confirmation are crazy and just the

overall user experience is horrible

before I decided to make this video this

morning I sent a Bitcoin transaction and

I think it was a like seventy

seventy-five dollars in fees I can pull

it up here well will we do that but it's

just a you know what an incredibly

incredibly frustrating thing for someone

that's been involved in Bitcoin you

realize that for the entire history of

Bitcoin up until the time the blocks

became full you could send and receive

any amount of money with anyone anywhere

in the world and it was basically free

you can't say that anymore now it's

incredibly expensive so it was $59 to

send us some bitcoins there earlier this

morning there's a lot of substitute

goods that are cheaper and easier to and

faster than Bitcoin the only thing

that's lacking for those other ones are

there the giant network effect that

Bitcoin has in that first mover

advantage but if we have you know this

horrible user experience that's going to

result in fewer users fewer

nodes lower adoption and a lower Bitcoin

market cap and I hear so many of these

Bitcoin core and block stream supporters

saying oh look at Bitcoin it's at an

all-time high in price yeah that's true

but we have to stop and think for a

minute if Bitcoin had continued to have

a good user experience what would the

price be today maybe instead of it being

four thousand dollars per Bitcoin today

we would already be at forty thousand

dollars per Bitcoin today but instead

Bitcoin has this horrible user

experience people are starting to use

aetherium and dash and alt coins and

this and that whereas otherwise if

Bitcoin had continued to have a good

user experience they would have just

continued to use Bitcoin and that brings

us back to the economics if you get the

economics wrong it doesn't matter how

good of a programmer you are the

economic code is incredibly important

when it comes to Bitcoin and we have

some quotes here from Bitcoin : and

block stream supporters and here's Greg

Maxwell the CTO block stream openly

saying that he doesn't think that

transaction fees mattering are failing

it's a success and we can see right here

when the transaction fees skyrocketed

bitcoins total share the market cap of

crypto coins plummeted and I provided

the links to all of these quotes right

in the bottom of these slides all of

these slides this whole presentation is

available over at Roger Viacom if you

click on the slideshow link at the

bottom you can download all these and

this the name of this one is Pantera

March 2017 and again we have Greg

Maxwell saying that feed pressure is an

intentional part of the system design

and to the best of the current

understanding essential for the system's

long term survival

so yes it's good and I'd like to point

out once again that as soon as the fees

skyrocketed on Bitcoin bitcoins total

share of market cap plummeted and at the

time I took this screenshot back in

March it was at 60 something percent now

it's below 50% so it's gone down even

more so if you get the economics wrong

it doesn't matter how good of a computer

scientists you are or computer program

or any of the other stuff you have to

have the economics right or the system's

not going to

not going to work and again here we have

a great Maxwell thing there's nothing

wrong with full blocks but we can see

incredibly clearly that there's

something horribly horribly horribly

wrong with full blocks as soon as the

blocks became full bitcoins market share

plummeted absolutely plummeted because

the user experience becomes horrible

with full blocks and again we have greg

maxwell saying full blocks is the

natural state of the system but that's

absolutely ridiculous we can see here in

the picture here we have the you know

eight-year history of Bitcoin the blocks

weren't full until very very recently so

the full blocks certainly is not the

natural state of the system and we

should never ever ever have full blocks

it creates this horrible user experience

for for the users of Bitcoin and forces

them to start using things other than

Bitcoin

again Greg Maxwell I'm not trying to

pick on him any more than anybody else

just there were plenty of quotes from

him because he loves to post all over

the internet and he says there's a can

there's a consistent feedback log which

is the required which is the required

criteria for stability and again that's

nonsense

it wasn't until very recently that the

blocks became full and the fee

skyrocketed and that happened in sync

with the Bitcoin share of the

cryptically market space just plummeting

so uh I'm sure Greg knows a lot of

things about a lot of interesting topics

the economic code of Bitcoin is not one

of them Peter really he says we as a

community should indeed let a fee market

develop and rather sooner than later and

again I'm sure Peters a really smart guy

about a lot of things he has a PhD but

the economic code that has made Bitcoin

a success is not one of the things that

he's knowledgeable about and again we

can see in the charts here that as soon

as the Bitcoin transaction fees

skyrocketed Bitcoin share of the crypto

coin market space plummeted we have

marked freedom balke I'm again I'm sure

he's a smart guy about a lot of things

and very well-informed about a lot of

things the economic code that has made

Bitcoin a success is not one of him and

he says slow confirmation high fees will

be the norm in any state

outcome no if we have slow confirmations

and high fees we're going to see Bitcoin

be replaced by you know the thousand one

substitute goods that are out there

waiting to replace Bitcoin and we can

see that from the charts here that when

the average confirmation time became

really long because the full blocks

Bitcoin share of the overall crypto coin

market space has plummeted and Luke jr.

reasonable block sizes currently range

from five hundred and fifty kilobytes to

one megabyte absolute nonsense I don't

think there's too many same people in

the world that think that that's a good

idea it's going to be the end of Bitcoin

if if we've restrict the block size and

create this horrible user experience for

all the users a Bitcoin and again Luke

jr. says it's no longer possible to keep

fees low that's just absolute nonsense

the reason fees are so high is because

Bitcoin had this giant network effect

there were already a million apps for

smartphones and computers and Bitcoin

exchanges and Merchants that accept

Bitcoin so there's definitely a lot of

stickiness that prevents people to from

wanting to switch from something from

from Bitcoin to something else but if

the fees get too high and the

confirmation times get too long and the

user experience gets too bad people are

going to switch where you've seen that

happen in a major way and that's

specifically because the blocks were

were allowed to become full because

these Bitcoin quorum block stream guys

in their you know ignorant of the

economic code of Bitcoin thought that

that would be a good idea and I wouldn't

be so passionate about this if I didn't

own a bunch of bitcoins I want to see

Bitcoin do well and again we have Luke

jr. saying just pay a $5 fee and it'll

go through every time unless you're

doing something stupid well maybe that

was approximately true back in March

when he said that but just this morning

I paid $59 for my fee and I got included

in the next block but I'll the the fee

for that was 290 satoshis per byte so it

wasn't a miscalculation on the fee

that's about what the fees are it need

to be at the moment so uh and I was

sending those bitcoins that I sent this

morning I was sending them to an

exchange to trade them for something

other

than Bitcoin so thanks thanks Luke

George team and another block stream in

Bitcoin core participant in blocks

employee he says higher fees may be just

what is needed that's absolute nonsense

no higher fees are kryptonite to the

adoption of Bitcoin into the user base

of Bitcoin and we can see that plain as

day from these charts here when the fees

became really high to use Bitcoin

bitcoins percentage of the total market

cap I of cryptocurrencies plummeted so

no George higher fees is exactly what

the system doesn't need Bitcoin is

supposed to be frictionless or as close

to frictionless as we can make it

peer-to-peer electronic cash not some

sort of settlement layer with high fees

and slow confirmation times and again we

have George here saying a confirmation

times are fine for those who pay high

fees know if the fees become high people

are going to switch to using a

cryptocurrency that has fast

confirmation times and it's worth noting

it may be a lot of people that are new

to Bitcoin in the early days of Bitcoin

the policy was first seen first safe

that and that meant that when you

broadcasted your transaction to the

network once it had been broadcasted to

the network you were pretty much good to

go and people commonly accepted Bitcoin

transactions for you know tens of

thousands of dollars without waiting for

a confirmation depending on the exact

circumstances and you can make Bitcoin

zero confirmation transactions very very

very safe certainly not as safe as a

transaction that's already had a

confirmation or more but you can make

them where they're safe enough to where

most of the time people can accept them

for most things in their life and it

becomes good enough for for most things

and that should be the goal whereas

unfortunately Bitcoin core and block

streams have intentionally undermined

the safety of zero confirmation

transactions and that degrades the user

experience and that'll make people want

to go and seek out coins that provide a

better user experience and use those as

a substitute for Bitcoin and that's

exactly what we've seen happening over

the last few months and again we have

George saying Bitcoin needs a

competitive fee market in the long run

to sustain proof-of-work

once the subsidies are gone I'm very

happy that we have it now

and I'm sympathetic to that argument

that some day when there's no more block

reward whatsoever we need some fees to

incentivize the miners to see here the

network but the block reward doesn't run

out for another hundred years we have

more than a hundred years until this

becomes a problem and instead of waiting

for a hundred years to solve this

problem there cause they're causing a

problem right now today they're causing

a giant problem on the Bitcoin network

today that's causing people to use

things other than bitcoins so because of

some problem that might exist more than

a hundred years from now they're

intentionally causing a problem today so

that's a shows a clear lack of

understanding of the economic code

that's made Bitcoin a success today the

Bitcoin economic code that made Bitcoin

is a success is the exact same one that

we had for the first eight years which

was low fees and fast confirmation times

for everybody and they're altering that

economic code to disastrous results here

and again we say that George in

reference to Adam back the CEO block

stirring he says I think Adam and I

agree that hitting the limit wouldn't be

bad but actually good for a young and

immature market like Bitcoin fees this

is absolute nonsense this is kryptonite

to Bitcoin Bitcoin had an amazing growth

rate the first eight years a Bitcoin

when the fees were essentially you know

basically nothing you were talking about

a penny to use Bitcoin and Bitcoin went

from nobody using it to somewhere around

you know ten plus million users around

the world huge amounts of venture

capital coming in a huge adoption for

merchants it was amazing and we have a

eight year track record knowing that

that economic code worked incredibly

well to grow Bitcoin and get the coin

used by more and more people around the

world if you know something works and

works incredibly well don't change it

yet here's George claiming that he and

Adam want to change this economic code

that we already know works to some

economic code that we don't know works

and in fact we have a whole bunch of the

evidence to say that it doesn't work and

it drives people to use something other

than Bitcoin so if something's not

broken don't fix it yet that's exactly

what these people are trying to do

ah and here's a quote from vladimir van

der Laan who would contribute a bitcoin

core and he says a mounting fee pressure

resulting in a true free market where

transactions compete to get into Bloxx

results an urgency to develop

decentralized off chain solutions and we

have these charts here showing that

bitcoin when the fees became high and

the see pressure was there Bitcoin share

of market cap plummeted so yeah it made

some people develop off chain solutions

for Bitcoin meaning using Bitcoin banks

like a you know coin basing Zappo and

and and Bitcoin exchanges that hold the

bitcoins for the users which is exactly

what bitcoin was supposed to avoid we

want everyone to hold their bitcoins

themselves in a wall in which they

control the keys and in addition to

doing that it's pushed all sorts of

people to start using things other than

Bitcoin there's all sorts of companies

that used to be Bitcoin only companies

that have started adopting Bitcoin so

coinbase used to be a Bitcoin only

company and now they've integrated

litecoin in the theorem and they've

announced they're going to integrate

Bitcoin cash we just saw earlier this

week blockchain that info the number one

Bitcoin wallet in the entire world

that's responsible for more Bitcoin

transactions than any other will than

all other wallets combined just

integrated aetherium I I'm the very

first investor in the entire world and

blockchain dot info I'm still the

largest shareholder in the entire world

in blockchain at that info almost more

than all the other shareholders combined

blockchain had no desire to integrate

any other altcoins other than Bitcoin

and the only reason that they integrated

something other than Bitcoin at this

point is because they were forced to

because of the horrible user experience

for for Bitcoin users on the Bitcoin

network because of the full blocks and

the high fees if that wasn't the case we

would have been happy just going on with

Bitcoin forever so we've seen coin based

and grade altcoins bloodshed under info

integrate altcoins

all sorts of what used to be Bitcoin

exchange exchanges have been now become

cryptocurrency exchanges and are busy

integrating altcoins that's because

of the horrible user experience that was

brought about on Bitcoin because of the

full blocks and high fees and slow

confirmation times that they bring its

kryptonite to the future growth of

Bitcoin and again we have vladimir here

saying I'm afraid increasing the block

size will kick this can down the road

and let people and the large Bitcoin

companies relax saying that it's going

to let them relax that's exactly what we

want people to using Bitcoin to be able

to do we want them to be able to relax

and have a wonderful user experience and

have Bitcoin work beautifully for them

that that's the name of the game when it

comes to customer service and user

adoption you want people to have a good

experience and be able to relax and just

be able to use Bitcoin and not worry

about it and instead they're causing

these intentional problems on the

network and we see can see in these

charts again as soon as we hit the one

megabyte limit bitcoins percentage of

the total market cap plummeted so what

can we do about it

so I made these slides six months ago

but the answer is still basically the

same right Bitcoin unlimited at the time

with advocating bigger blocks lower fees

and faster confirmations and it also

enables layer to scaling so we get all

the benefits from the Lightning Network

and all these fancy layer to stuff plus

lower fees and confirmations faster

confirmations that's exactly what we

want and Bitcoin cash has the exact same

thing today we already have bigger

blocks for seeing all the transactions

being concluded right in the decks block

the fees are some very very small

fraction of what it is on the Bitcoin

legacy system system and we can build

all sorts of layer to stuff on top of

this as well and Bitcoin unlimited and

Bitcoin caches plan leads to better

money right hard it has all these things

including the ease to easy to transport

part Bitcoin legacy is not easy to

transport it's incredibly expensive and

super slow to do that and that's not

what good money is and again if we have

better money better money leads to more

users more nodes more adoption and more

censorship resistance with a higher band

all those things will lead to a higher

market cap and a higher price

and we're seeing that happen right

before our eyes with Bitcoin cash today

so many people are son they're slow and

not easy to use and expensive to move

bitcoins and buying Bitcoin cash and the

miners are going to switch and whichever

cryptocurrency has these characteristics

as money is going to be the one that

people use and Bitcoin had this giant

giant just you know light your head

start on all these other

cryptocurrencies but in terms of network

effect and user adoption and that's been

absolutely squandered and destroyed and

smashed by this idiotic full block -

policy of block streaming core I don't

think that they're bad people I think

they just don't understand the economic

code that's made Bitcoin a success and

they've altered that to the detriment of

Bitcoin and that's why you seen Bitcoin

and now Bitcoin cash I'm sorry that's

why we've seen etherium and now Bitcoin

cash just coming up like leaps and

bounds and if Bitcoin legacy continues

to have this bad user experience 100% of

its first mover advantage is going to be

destroyed because of block streams full

block and high few policy and that

brings us to where we are today if

you're wondering what crypto coins you

should hold look at this chart here all

of them are hard to counterfeit right

look for the ones that are scarce and

have a limited supply all of them are

basically divisible on homogeneous is

just another name for for privacy so

Bitcoin in addition to the scaling issue

has a really big problem with the

homogeneous Nikoli needs to have more

privacy built-in so look at crypto coins

that have more privacy built in so you

have a some top contenders there rzz

cash debt - maybe the privacy is a

little bit weaker but still seems to be

better than Bitcoin Manero of course

decline and I'm sure there's a number of

others out there so keep an eye on those

and that's another big problem with the

full block and high a high feed policy

implemented by block streaming core it

makes it too expensive for people to use

privacy tools like Bitcoin mixers and

that damages the homogeneous nosov

Bitcoin if you too expensive to use and

make sure then people aren't going to

use it anymore

that damages bitcoins characteristics as

money if you have you know big blocks

where people can shuffle all their coins

around that improves the privacy of

Bitcoin and that makes Bitcoin better

money again so they damaged this aspect

of a Bitcoin as well with their full

block and high C policy of course the

coins and all these other cryptic lines

are durable but easy to transport

Bitcoin has had that incredibly damaged

with this full block and high feed

policy so uh anyhow if you're shopping

for other crypto coins here's the

characteristics to look for I would like

Bitcoin to have all those in spades

again Bitcoin cash looks like it has a

pretty good chance of doing that again

but it has nowhere near the market

effect of Bitcoin there's no easy-to-use

smartphone apps there's pretty good

adoption from exchanges there's minimal

adoption from merchant service providers

at this point so it's a bit of a chicken

and egg problem but every single Bitcoin

holder is also a Bitcoin cash holder so

a lot of these people are going to be

interested especially when when though

we're seeing the price go crazy for it

we should check this the price again

since I didn't check from the time I

started this little screencast but it's

just been going crazy it was a less than

it was about $300 48 hours ago and now

it's up around $1000 at the moment and

yeah what what an exciting thing so

anyhow I don't need this to go too long

we're almost up to a half an hour but

better money leads to all these things

that we want and it's worth pointing out

the two that the goal is not

decentralization the goal is censorship

resistance and we don't need an infinite

amount of decentralization but we want

as much censorship resistance as we

possibly can have and we just use the

decentralization as the tool to achieve

that censorship resistance so the

decentralization in and of itself is not

the goal it's simply the tool we use to

achieve that censorship resistance and

we just need enough decentralization to

achieve that censorship resistance so

that's me for anybody who is watching

this video who doesn't know who I am I'm

the very first person in the entire

world to start investing in Bitcoin

startups I've been involved in Bitcoin

since February of 2011 I was the first

invest

blocking that info I was in the earliest

problem for 4-bit pay and ripple and

Percy oh and Kraken and shape-shift and

a whole bunch of other companies that

are no longer around as well and I

started investing the decline system

years before a traditional venture

capital started getting involved I got

involved because I want to see Bitcoin

and if it's not Bitcoin I'll be a bit

sad but I'm just fine if it's another

cryptocurrency but I want to see Bitcoin

or cryptocurrencies replace every other

government issued currency in the world

I want to see it replaced a dollar the

euro in the end and put every single

human being on the planet on the same

foothold on the same footing for being

able to send and receive money with

anyone else anywhere in the world

without requiring permission from any

politician or government or anybody for

that matter because that's what it's all

about we're all human beings we all have

the same natural rights we should all be

able to transact and send and receive

money with each other without having to

get the permission of strangers living

in far-off lands that's why I got

involved with Bitcoin that's my goal

today I'm the CEO Bitcoin comm if you

want to learn more about Bitcoin go to

bitcoin calm unlike Bitcoin torger

bitcoin org or our Bitcoin will allow

you to go and say anything you want on

our forums we're not going to delete

your posts or since your your your

position just because of a you might

disagree with somebody on how the clinch

should scale but anyhow that's it thank

you guys for listening I'll probably do

an AMA at some point in the very near

future on our BTC because they support

free speech there so look for my AMA

coming soon - thank you guys all for

supporting this fundamentally

world-changing technology to learn more

Bitcoin comm thank you