WBD186 Audio Transcription

Beginner’s Guide #5: The History of Bitcoin with Marty Bent

Interview date: Wednesday 15th January 2020

Note: the following is a transcription of my interview with Marty Bent from Tales from the Crypt & Rabbit Hole Recap. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.

In Part 5 of The Beginner’s Guide to Bitcoin, I talk to Marty Bent the host of Tales from the Crypt & Rabbit Hole Recap. We discuss the key events in Bitcoin’s history from the launch of the protocol to the Silk Road and the Scaling Wars.

“The fork wars also proved that no one person or entity of people or businesses has control over the development of the protocol.”

— Marty Bent

Interview Transcription 

Peter McCormack: Marty Bent, how are you doing man?

Marty Bent: Doing well, Mr. McCormack. How are you?

Peter McCormack: Doing very well. It's a bit late here, I'm guessing it's just after lunch for you.

Marty Bent: Just after lunch and just got a haircut.

Peter McCormack: Yeah man, looking sharp!

Marty Bent: Very happy to be sitting down speaking with you.

Peter McCormack: And you always! So listen, I'm doing this Bitcoin beginners guide. I've got friends, I've got people who talk to me and they always want to get into Bitcoin. I just wanted to put together 10-15 interviews, go through all the key things to help them understand, so that can be kind of a starting point for them. Put it all together, I've covered why we need Bitcoin, I've covered what money is, I've done the prehistory of Bitcoin and I've just recorded a show with Stephan talking about what Bitcoin is.

Now I'm thinking the next step is, if people really go down the rabbit hole, they're going to hear all these different stories or people or events, things like the Silk Road or SegWit2X. So I think it'll be great to go through the history, explain what happened, explain why it's important that the lessons are learned. But I am also aware you've done a history, which I wasn't aware of because I didn't start listening on episode one. So I'm going to share out your history as well and let people listen to that because that goes to even more detail in some areas. But you ready to go?

Marty Bent: Let's rip it!

Peter McCormack: All right, so October 31st 2008, this is when it all kicks off. Funnily enough, I'm in Vegas, it's my birthday, I don't know anything of Bitcoin. I don't hear about it for quite a long time afterwards, but the white paper dropping was a big deal. So let's talk about the white paper.

Marty Bent: Yeah, so the white paper came out of nowhere on October 31st 2008. You were in Vegas, I was in Philadelphia. I was a senior in high school and the Phillies had just won the world series. I was dressed as Lieutenant Dangle from Reno 911 because it was Halloween and we were allowed to dress up as seniors, and we were celebrating the Phillies world series.

I was dressed like an idiot and Satoshi was dropping one of the most important technologies, or at least the idea behind the technology, on an obscure mailing list on the internet, the Cypherpunk mailing list, which was run and operated by people who were building technologies that revolve around Cypherpunk ideals, which revolve around using cryptography to enhance privacy, security and freedom in the digital age.

Peter McCormack: This wasn't the first attempt. I covered this with Aaron. There had been a bunch of attempts previous of digital money and nobody knew at the time whether this would be successful and we're here 11 years later, so I think we can all agree it's been the most successful attempt so far! But the white paper itself kind of outlined a whole bunch of things about how the protocol will work. One of the things that will keep coming up and people might hear reference to is that Bitcoin was a peer to peer electronic cash system. That could be something that misleads people and drives them some sort of altcoin dark alley.

Marty Bent: Yes, people get hung up on the word "cash" and the definition of "cash". A lot of people basically allocate their understanding of cash as they use it in society today when you go to a bodega and you buy a bag of chips, you give them a few dollars. It's a pretty quick transaction. You're not charged any fees for using that, it's pretty anonymous, so people hear "cash" and they think of those particular properties.

But really "cash", what it really means in the original definition in a monetary perspective, "cash" just means a bare asset, an asset that you own at the end of the day, that you have complete ownership over. So a lot of people and a lot of the marketing that went on in Bitcoin's early years, was that it was taking the digital cash meme and running with it saying that it was fast, anonymous and very cheap to use, which when you actually understand the perimeters and the limitations of the distributed system, which Bitcoin is the network, those properties really probably aren't that marketable and they probably won't come to fruition, at least at the protocol level.

But it is definitely digital cash at the end of the day, in the sense that it is a bare asset that you own and you hold. So that's what people get hung up on, myself included when I was first jumping into this stuff as well.

Peter McCormack: So if someone new is coming in, one of the things we want to say is, look, if you're new to Bitcoin and you read the white paper and then you see somebody talking about an alt coin, say a Bitcoin cash or so called Bcash, and they're saying that Bitcoin has changed and it's no longer a peer to peer cash, you want to avoid that fad. Don't get distracted by it, just stay into Bitcoin. That's the lesson from the white paper from me.

Then we're going to jump forward, not far, just a couple of months to January 3rd, which is a very important day. It's when the protocol launches. It has an interesting message linked to it in the Genesis block, which has a British reference, to The Times, 3rd January 2009, "Chancellor on the brink of second bail out for the banks." So that's not just the protocol dropping, but that's the protocol dropping with a message for all of us.

Marty Bent: Yes, so it's twofold there. It is a way to timestamp and prove that Satoshi did something after a certain point in time. Then number two, a lot of people will debate this, but I think it's hard to debate, how can it not be? That is a political statement to sort of embed the ethos of Bitcoin into the Genesis block and to let everybody know why this network was created. The fun fact about the Genesis block was I believe it took seven days to mine. So it was initiated on January 3rd and it was officially mined on January 10th.

Peter McCormack: Oh interesting, I didn't know that. The two banks it refers to as well are Lloyds Bank and the Royal Bank of Scotland. So they were the two main banks that were bailed out by the UK Government. I don't know if they still own them now, but they held onto the shares for a long time and both of those banks would have failed without the UK Government stepping in.

A bit like how the Lehman brothers failed. So this was kind of like a warning to all of us, and I guess a warning and a gift. A warning that the way that governments are currently treating money and the way they're running their monetary policies is kind of poor, it's kind of shit and here is an opportunity, here's a new way of thinking about money.

Marty Bent: Yeah, it's a new way of thinking about money, but also, I don't want to say reversion, because reversion almost connotes a step back, but a taking back of the control of money away from the government back to the freewill of the market and Fredrick Hayek who said, "you will never have a true and free open market for money until we arrest it from the control of the government." That's basically Bitcoin in my mind, which represents the first time that we've actually done that successfully, at least to an extent.

Peter McCormack: Then we move forward, January the 12th, another important name in this, is Hal Finney, rest in peace Hal. He put out the very important tweet that we all love to retweet, shared out "running Bitcoin." But on the 12th of January, Satoshi sent him the first Bitcoin transaction.

Marty Bent: Yeah, so this was the first transaction outside of the block reward. So anytime a block is mined, the coinbase of that block comes with one transaction which is the coinbase transaction, which includes the reward that the miner gets for mining the block. Those miners don't get access to that reward until 100 blocks have been mined on top of it.

So up until January 12th, the only transactions that had happened on the network were coinbase transactions, basically the creation of new blocks and distribution of new Bitcoin to miners. So yes, Hal was the first person that Satoshi sent Bitcoin to outside of the coinbase transactions, so in actual, Hal setting up a private/public key pair, giving Satoshi a public key and Satoshi sending it that way. Or they might have done it with IP addresses at that point, I'm not exactly sure how they did it.

Peter McCormack: All right, I'm going to jump forward nearly a year from here. I know a lot would have been happening, a lot of conversions on the Bitcointalk forums, but the next key event for me was the launch of the first exchange for buying and selling Bitcoin, which was Bitcoin Market, which I heard about on your podcast and I didn't realize. I thought Mt Gox was the first.

Marty Bent: Yeah Bitcoin Market was a smaller one. I forget how long it stayed around, but it was in February 2010, it was one of the first exchanges. I think PayPal might have been involved or something like that. Yeah, another event a few months before this, I think this market was created because Liberty Reserve, which was a libertarian leaning radio show out of New Hampshire I believe, they were into Bitcoin in the early days and they tried to put a price on it.

In the end of 2009, beginning of... Was it? No, because the price would have been determined before an exchange was created. So yeah, this happened before then. Liberty Reserve priced Bitcoin based on the hash rate, and they tried to calculate how much energy was being expended. I believe the first price before this exchange went up was like 8/10 of a penny or something.

Peter McCormack: Wish I'd bought some back then, hey Marty?

Marty Bent: If only we were on Bitcoin Market! I wonder how many customers Bitcoin Market ever got.

Peter McCormack: It be interesting to look into that. Okay, so we're going to jump forward into May 2010. Very, very important day, May 22nd, we celebrate every year, it's Bitcoin pizza day! Laszlo agreed to pay 10,000 Bitcoin for two Papa Johns pizzas and people kind of laugh and make jokes about this because what could have been the value of those pizzas, but we have to get a reality check here of the time, this was a new network. The coins had no real value, someone had to start doing things with it.

Marty Bent: Exactly! Laszlo gets some heat from outsiders, but if you talk to him, he's still around actually and still contributing. So yes, number one, we stand on the shoulders of giants. Laszlo is one of those giants who took the leap of, "hey I'm going to give you some of my Bitcoin, I'm going to part ways with some of my Satoshis for goods in the real world to prove that this thing works." So he ordered two Papa Johns pizzas and I believe the man from Europe purchased them, it's called The Pizza Spot in his local neighbourhood, had them sent to his address.

Not great for opsec, but whatever, we had to prove the use case here. Another little known fact about Laszlo, which speaking about standing on the shoulders of giants, he actually created the first Mac OS implementation of Bitcoin Core, before it was Bitcoin Core I believe. It's when Satoshi was still around, so he made the first Mac OS compatible Bitcoin implementation, which goes underscored!

Peter McCormack: Did he do the first Lighting pizza?

Marty Bent: I think he might have! Yeah, he was definitely buying pizza on the Lighting network very early on as well.

Peter McCormack: All right, well salute to Laszlo. Nobody knows if he would have managed to have held onto those Bitcoin and have them evaluated now, I don't think many people would. A lot of people talk about this, about "oh if you would have held on for this long, this is how much you would have had." But people buy and sell at different times and we can accept that, no one deserves shaming for any of that. Okay, so we're going to go forward, and this is one you highlighted to me. I didn't have this in my original list, but November 27th 2010, Slush Pool launches which is the first Bitcoin mining pool. So why was this so important?

Marty Bent: Yeah, so Slush Pool, before it was Slush Pool, was known as Bitcoin CZ mining. It was started by Slush who started Satoshi Labs, which is responsible for Trezor, which is a popular hardware wallet and it's something you guys may know. On top of that, he started Slush Pool, which he's no longer a part of now, but it's run by Yan and Pavel, and they're doing an incredible job with it. It's still one of the strongest pools today and I think it's been the longest lasting, longest standing pool in Bitcoin's history.

So Slush identified a need for individual home miners, whom I guess mining was getting more competitive and it was getting harder for individual miners at home to get a pay-out variance that was acceptable for their energy cost. So Slush noticing this sort of pain point, decided to create the first mining pool, and mining pools are very important for Bitcoin because they allow smaller miners to contribute hash power and to allocate disparate hash power together, and sort of mine together and distribute the block reward accordingly, so it allows pay-out variance for smaller miners to be sort of steady and allow them to keep their operations going.

So the emergence of a mining pool is very important for the infrastructure of Bitcoin security. Seeing it develop this early on is very promising.

Peter McCormack: Okay, then we're going to jump forward to February 2011 and this is a really important story for me. This is I would say one of the biggest stories in the history of Bitcoin, which is the Silk Road marketplace and Ross Ulbricht. Coincidentally, I just received a letter from Ross today, the second one I've had from him, which is very cool.

Marty Bent: Congrats, that's awesome!

Peter McCormack: Yeah and I've obviously covered the story three times, I've interviewed Lynn and it's something that's very important to me, as it's how I discovered Bitcoin. I discovered Bitcoin in 2013 because of the Silk Road. But for those that won't know, tell us what the Silk Road was.

Marty Bent: Yeah, so if you guys are just getting into "crypto" in recent years, I'm sure you've heard the word dApp a lot; distributed application. Actually, if you talk to a lot of Bitcoiners, Silk Road is probably the first dApp, a combination of distributed applications, mainly Tor and Bitcoin that allowed people to come together in a marketplace, a truly free marketplace with a sovereign currency and an anonymous browsing tool.

The only way you could browse it was anonymously, it's completely made up of pseudonyms, no KYC/AML and it was a marketplace where people would sell drugs and other things. One top of that, it was a forum where people would discuss liberty and libertarian values and anarcho-capitalist values. It was very open and thriving community at one point and became obviously the first killer use case of Bitcoin, which was the ability to buy and sell drugs outside the preview of the traditional financial system.

Obviously it became very popular when you have an anonymous dApp that allows you to buy drugs with a currency that can't be... Or where people thought couldn't be tracked at the time. Bitcoin can be tracked, we know it's possible to make it so it's hard to track, but even so, those transactions would never have had the ability to be censored.

So money was able to be facilitated outside of the traditional financial system. So then it got too big and Ross Ulbricht, the founder who you were just describing, he wound up getting arrested, taken down by the Feds. He's serving two back to back life sentences right now for creating a website that allowed people to meet, talk about liberty, and others decided to conduct P2P commerce on that site as well.

Peter McCormack: Yeah, he got a double life sentence, plus 40 years, no chance of parole. He got a heavier sentence than El Chapo, he was hit with the "King Pin" charge. Now a lot of people coming in new might hear about the Silk Roads and think, "well he's created a drug marketplace, that's illegal, he got what he deserves." But really there is a real alignment between Bitcoin and the Silk Road, between the kind of ethos of what they stand for and help and the kind of political alignness that people have, who are involved in kind of Bitcoin and the Silk Road, because they're all about freedom and freedom of choice and liberty.

So sometimes I find that we have to try and help people understand this wasn't just some criminal mastermind, he was actually somebody who was focused on freedom rather than personal gain.

Marty Bent: Yes, totally. That's what a lot of the people... I've actually had the pleasure of interviewing a person who at one point, was a pretty considerable mover and shaker on the Silk Road, and he described the vibe of the website of more than just a marketplace. It was a place to express ideas, to discuss ideas more importantly, and freedom most importantly. From what I understand, I was never on Silk Road, I just never ended up on it, but from what I hear, the vibe on the Silk Road was very positive and intellectually stimulating. It was all in the effort and in the spirit of exploring ideas at their core.

Peter McCormack: Yeah, I was a user. At the time I was an addict as well. One of the great things for me on the website is they actually had two things. They had a review system, so you could actually see the reviews of buyers and sellers, which created a better buying experience and a better selling experience. You could create trust in the people who you were buying from, and you could trust the product and see the reviews, something which comes with a lot of risk, buying on the street in a world of failed prohibition of drugs, where you have no idea what the drugs are going to become.

But secondly, it also had these forums which could support you. So at the point where I realized I was having an addiction problem and I was worried, I was able to go on the forum, discuss the problems I was having and actually get help. It was from that that I ended up going to seek professional help and recovering. So, that was also very interesting.

But another interesting point was the Drug Policy Alliance said the Silk Road actually led to harm reduction and less violence and sexual abuse on the streets, which I think are very interesting points, where we're talking about a world which is that we have these state rules and we have state control of money. As I said previously, there is this alignment between the ethos of Bitcoin and the Silk Road.

Marty Bent: Yeah and it's all about removing violence. Bitcoin is an asymmetric tool in the fight against the state's violence. The Silk Road, in the same way, it led people... The combination of Tor and Bitcoin allowed people to skirt around the state and draconian drug laws and interact directly and decrease the amount of physical interactions they have with strangers to acquire the goods that they want to acquire. So just from a probability perspective, yeah that's going to decrease harm and violence.

It's a shame what happened to it, but it's an idea that's not dead. The drug markets are hydras! There was a Silk Road 2, and then we had the Dream Market and there's a bunch of markets out there, but they are constantly getting shut down. But as is always the case with technology and human ingenuity, people are iterating on the idea and people are getting really creative with it. It'd be ideal if we didn't have to have an illegal drug market, but that's just the case.

Peter McCormack: So the stats are pretty interesting. So this would give people the idea of the scale and how important this was for Bitcoin in terms of driving a real use case. I'm pretty sure if this was a legal company, they would have had no problem raising any funds from Silicon Valley VCs. Between February 6th 2011 and July 23rd 2013, interesting side note that's the day I got married, there were approximately 1.2 million transactions completed on the site and the total revenue generated from these transactions was 9.5 million Bitcoins.

Commissions collected by the Silk Road for the sales amounted to 614,000 Bitcoins. So these figures are equivalent of $1.2 billion in revenue and have just short of $80 million in commissions. That was from 147,000 buyers and 3,877 vendors. So what that really says is, look, it solved a problem. There are buyers and sellers, they exist already and these people just want a safer and better way to buy drugs, and Bitcoin enabled this.

Marty Bent: Yeah, it's insane what humans will do when given these tools. Again, going back to the tools, a lot of people talk about dApps, like Tor was an essential tool to make the Silk Road work, but it really could not work at all. It had a missing ingredient which was a value transfer system outside of the traditional financial system that was Bitcoin.

That's the beauty of these systems. Silk Road came and was built on top of Tor and Bitcoin two years after Bitcoin launched, which is crazy to think now looking back. Again, you talked about Laszlo buying the pizzas, just as he was an example of somebody putting their neck out there and proving a use case, Silk Road really cemented that yeah, this works! People are using this and getting things delivered to their house.

Peter McCormack: So free Ross, big shout out Ross. I'm going to finish with a quote from Megan Rausden. She was a former harm reduction manager for the Drug Policy Alliance, but she was quoted in saying that the Silk Road was a peaceful alternative to the often deadly violence so commonly associated with the global drug war and street drug transactions in particular. I think that's a good way to kind of finish that off. People should look into the Silk Road more, I've got a bunch of shows about that, they can check that out.

Marty Bent: Yeah, fuck the drug war! It's terrible

Peter McCormack: Fuck the drug war! All right, so I'm going to jump back a bit because that Silk Road story spanned a couple years. April 26th 2011, Satoshi leaves Bitcoin. Satoshi Nakamoto, the creator of Bitcoin leaves a message saying, "I've moved onto other things, it's in good hands with Gavin and everyone." So why was it important that Satoshi left?

Marty Bent: It was important because it was the sort of selfless self-sacrifice needed to ensure that there was no figurehead that could be a central point of failure for the system. So now Satoshi up to that point was the person or people, depending on whether or not it was a person or group of people, we don't know yet, maybe we'll probably never know. But up to that point, Satoshi was sort of running the show, merging everything and he was slowly handing those duties off.

After April 2011, he left and he has not been heard from. People have hacked some of his old email accounts and potentially some foreign accounts as well, but for all we know, the last we actually heard from Satoshi was April 26th 2011. This is important for Bitcoin's long-term survivability as a distributed system, because there's no one central person to point to say, "hey you stop this, you shut this down."

Peter McCormack: To add to that, one of the things that might have been a problem if Satoshi had stayed is that, if there had been contentious issues, he might have been the person everyone had looked to make a decision, and nobody wants a benevolent dictator.

Marty Bent: Yes, that as well. His leaving started a snowball effect that would lead to us learning the lesson the hard way. which I'm sure we're going to talk about.

Peter McCormack: Yes, we are going to jump now to June 14th 2011 and WikiLeaks. This is important story because this was another key use case for Bitcoin, and it proved a couple of things. It proved that censorship resistance is important. So WikiLeaks under the threat of the US government were essentially censored, right?

Marty Bent: Yes, they were censored and they were sanctioned basically. The company was sanctioned. Payment processes were told they were not to do business with WikiLeaks.

Peter McCormack: PayPal froze their account, Visa, MasterCard refused to do anymore business with them. So Julian Assange, a Cypherpunk himself, changed WikiLeaks to accept donations in Bitcoin which proved to be a master stroke for them.

Marty Bent: Yes, Julian actually wanted to do it a year earlier. I don't know if it was Julian or Bitcoiners on bitcointalk.org, who were discussing whether or not they should reach out to WikiLeaks to begin accepting Bitcoin at some point in early 2011 or mid 2010, I forget exactly when. Satoshi said something about, we don't want to kick the hornets’ nest and let's not get WikiLeaks involved. But eventually they did get involved and that was huge. It proves... I forget, the war cables...

Peter McCormack: The war cables yeah, with the footage of the helicopter shooting the journalist.

Marty Bent: Yes, it was that leak. So he basically ripped the curtains off and showed what the US was doing behind the doors in Iraq and the Middle East, and the US did not like that, so they ordered that all the payment processors stop allowing people to send money to WikiLeaks. Then WikiLeaks wasn't allowed to move the money that they did have, so they started accepting Bitcoin and donations started flooding in obviously at this point.

I believe Bitcoin was pumping a little bit too at this point, so I think there was a little bit of attention to it and people, Bitcoiners as you know, especially really early on, were evangelizing of Bitcoin and giving it out. In the early days, people were just giving it out, so I think WikiLeaks came out big with a lot of fat Bitcoin donations.

Peter McCormack: Yeah, Julian Assange claimed that he made a 50,000% return on Bitcoin as a direct result of the US government imposed financial blockage of WikiLeaks, which obviously gave them a long runway. So, that was kind of cool. Having been a Cypherpunk himself, I think there's a really nice alignment between what WikiLeaks was trying to do, they were trying to avoid a censorship of content, they were trying to make information free and at the same time, people were trying to censor them both in terms of their hosting support and finances. But they were able to get around that again with tools like Bitcoin.

Marty Bent: Yeah it's crazy! That's one thing that WikiLeaks proves., is that Bitcoin does have a use case and it is useful. They also in more recent years, in the last 12 months, the arrest and extradition of Julian Assange to the US should be a shot across the bows of Bitcoiners and people interested in it, that the state does not like when you come at their power. So if you're into Bitcoin, just know that it isn't a front to the state, at least to some level and at least in some people's eyes.

Peter McCormack: All right, so we're going to jump to 2012, April 24th. Erik Voorhees has announced Satoshi Dice, gambling with Bitcoin. It was highly successful, ended up becoming, was it 70% of the transactions?

Marty Bent: Yeah, it blew up! I don't know the exact percentage, but it was a vast majority of the transactions. At one point Satoshi Dice was basically a site that automated, I forget exactly what the game was, the gambling game, but it was automated gambling. You put Bitcoin at risk and you roll the dice and you get paid out depending on your roll. So I forget what he used, I think it was Op_Return but that was the first emergence of a Bitcoin and significant increase in Bitcoin fees.

So this service built directly on top of Bitcoin at the protocol level, I believe he used Op_Return, I forget exactly what he used, but it used a function that took up a lot of space on the blockchain. So as more people used it, the fees started to go up in Satoshi Dice, some people, myself included, was the first sort of use case that proved that block space is precious and you can certainly build a game on top of Bitcoin, but it could get priced out by other use cases mainly moving money around the world.

Peter McCormack: Yeah, not everybody loved Satoshi Dice, some people considered that it was spam in the network?

Marty Bent: Yes, because there's arguably ways to put Bitcoin in escrow and run a gambling application and still ensure privacy and peer to peer nature without spamming block space with Op_Return data.

Peter McCormack: All right, so we're now going to talk about the launch of Coinbase in June 2012, when it was founded. Now Coinbase is an interesting one because as someone new coming in, it's probably going to be the first place they'll go to, that's most likely. Most people are going to Google and they're going to end up at Coinbase, it's a lot of people's first place.

Back when I was using the Silk Road, I used LocalBitcoins, but then I kind of went and fell out of love with Bitcoin, came back in 2016, then I went to Coinbase. I think you might agree with it, that if we partition what we think of some of the people who work there and some of the decisions we made, it's very difficult to not give credit to Coinbase for some of the growth of Bitcoin.

Marty Bent: No, I've got to get credit where credit is due. That's where I bought my first Bitcoin was Coinbase. They created an impeccable UX and at the time, a great experience and very easy way to buy Bitcoin.

We're working on ways for people to spend Bitcoin, Brian Armstrong in the early days was a great advocate. He had a great referral program where if you were signing up friends, you were going to get, I believe at one point it was like $50 worth of Bitcoin per person. So people are highly incentivized to spread it. Yeah, the emergence of Coinbase being VC backed, Silicone Valley backed, is a huge signalling to the rest of the market that, "hey whoa!"

The VC start up where it was peaking or on its way to peaking at that time too, so Silicone Valley had a lot of clout that people were looking out for and had a lot of respect for. So getting that stamp of approval via Coinbase getting funded was pretty huge.

Peter McCormack: Yeah, and in their lifetime, they've raised over $500 million. I think at their peak, they were valued $8 billion. I'm not sure what they're valued at now, whether it's more or less, but it's a real signal, as you say, not only to the tech world, but to the rest of the world, that cryptocurrency is serious and this is serious business! This isn't just a toy anymore.

Marty Bent: Yeah, even though I may not agree with what they're doing today, they still have services that other competitors don't have set up yet that are actually very beneficial for Bitcoin, mainly auto-buy function. I think I met somebody for dinner a few weeks ago who explained that they set up their Coinbase auto-buy function a couple years ago, completely forgot about the account and checked it, and had passively accumulated a little bit over a Bitcoin.

Even now, they're experimenting with shit coins and all that right now, that auto-buy function has a lot of passive buying demand that people and users forget about. It's something like that, it seems small but actually goes along way.

Peter McCormack: All right, so next up we're going to talk about Charlie Shrem, Bitcoin's first felon. Look, I know we talked about Ross Ulbricht, but the actual sentence of Ross Ulbricht came after Charlie's sentence. Charlie is a good guy, I've met him, I've hung out with him, but he became Bitcoin's first felon.

Marty Bent: Yes, Charlie had the Feds meet him at LaGuardia I believe. LaGuardia or JFK, I forget exactly where. He ran BitInstant, which was a processor and he was basically a conduit for getting money from US users to Mt Gox at the time. I think that was his main gig was getting dollars to Mt Gox or facilitating dollar to Bitcoin deals.

Again, in 2012 there were no regulations around the space and Charlie... It was truly wild west, especially in New York state. He was definitely doing some risky stuff, but he did that in an effort to prove that Bitcoin worked and people wanted it, and he was trying to fulfill a demand. But yes, money transmitting in the state of New York without a license probably wasn't the wisest of ideas.

Peter McCormack: I've also interviewed Charlie about this and I've got a show about this if people want to hear it, but he served his time. He's proud of serving his time, but he's still here doing his work, serving the Bitcoin community. He's a good guy. He's just on his 50th episode of his podcast as well, Untold Stories, which is worth checking out. All right, so now we're going to move on to which is I think arguably the biggest story in Bitcoin, the collapse of Mt Gox. Many people have PTSD about this. Did you use Mt Gox?

Marty Bent: I didn't. Coinbase luckily had been built by the time I decided to purchase Bitcoin for the first time, but Mt Gox, obviously I'd been following it and following the story pretty intently. I was big on Twitter back in those days. I actually wasn't big on Twitter, I was a lurker on Twitter and I was big on following Twitter and trying to stay with the conversation there.

I stayed away from Mt Gox because I saw people tweeting that it was pretty sketchy. So step back, Mt Gox was the biggest exchange obviously, most of your listeners probably know it because it got hacked and I believe 800,000 Bitcoin were stolen, which at the time were valued at $400 million or something like that. I forget exactly.

Peter McCormack: So it's 800,000 Bitcoin valued at $450 million, but then approximately 200,000 Bitcoin was found just hanging out in an old wallet.

Marty Bent: Yeah, so close to a million or over a million. So basically the history of Mt Gox, it started as a Magic the Gathering trading card platform and forum. That site was sold to Jed McCaleb who then turned it into the Bitcoin exchange that it eventually became. So yes, he took a shitty PHP/CMS and tried to make it into a Bitcoin exchange, Jed McCaleb did. Jed took it to a certain point and then sold it to Mark Karpeles, who is a French man living in Japan.

So whether or not Jed knew that Mt Gox was doomed to fail, a lot of people went to... It's an unknown. Personally, I think it would have been hard to not know that it was a shitty infrastructure for a global Bitcoin exchange, but that's a conversation for another day. So Jed sells to Mark Karpeles, then over the course of a few years, there's a bunch of tremors that go on every once in a while, it's hard to withdraw your Bitcoin, people's wallets are getting hacked and slowly over the course of 18 months, it just became harder for some people to withdraw their Bitcoin.

There were rumours of insolvency and at one point, you had Roger Ver come out on YouTube and try to calm everybody's nerves saying that he's seen balance sheets that prove that they're solvent and that turned out not to be true. Apparently they were losing everybody's Bitcoin. Again, in January 2014, they officially got shut down by the Feds and that was the end of that bullish bubble.

Peter McCormack: Yeah, so I've met all the key players and interviewed them all. I've interviewed Jed, I've interviewed Mark, went out to Japan and interviewed Mark actually, all worth checking out. I did a Mt Gox series which is worth listening to. I believe that Jed knew he was handing over something that had problems and whether he did it or not because it has the problems or whether he just wanted to move onto other things, only he will know, but there were certainly some issues around lost funds and problems with the code.

I think Mark Karpeles was just somebody who was massively out of his depth. But him being massively out of his depth led to significant amount of Bitcoin being lost. What happened was, over the years as the price of Bitcoin went up and people hadn't recovered their Bitcoin, the amount of money they felt they had lots had risen. I think this is one of the key drivers of things that people will hear now. They'll hear "not your keys, not your Bitcoin." Securely store your Bitcoin. I think the PTSD leads people to driving this message home to anyone new coming into Bitcoin.

Marty Bent: Yeah, it's one of Bitcoiners favourite adage. You have to burn your hand on the stove! It wasn't Mt Gox, but I've gotten exchange hack back in the day, and it's not fun. Yes, going back to the very beginning of this conversation talking about digital cash, a bare asset, you do not hold the Bitcoin until you hold your keys.

The definition of a bare asset is that you possess it, you hold it and you truly only own an IOU on Bitcoin, unless you have it in your possession, if you possess the private keys. Yes, it does take hard lessons like trusting Mark Karpeles to protect his keys that you have a claim to. Then once that goes bust and you realize your claim means dick, that's a very hard lesson learned pretty quickly.

Peter McCormack: Yeah, but some people haven't learned their lesson. So we had QuadrigaCX recently, Binance has been hacked, we had Cryptopia. these exchange hacks keep happening. So if you are new, one of the things you've got to do is you're going to end up buying some Bitcoin. You've really got to go and understand now about private key management, about your own security. It's one of the most important of things because these exchange hacks will happen again.

Marty Bent: Yes, and if you are just getting to this space and you are putting money into it, before you move it, do the research practice, learn best practices, practice by yourself with small amounts, get comfortable, but do aim to take possession of your keys, at least in a multisig setup with a provider that can walk you through that. At the very least, at the end of the day, that's what you should strive for. At the most, you should strive to have full control of your stuff and only know how to access it. But yeah, it's a lesson that needs to be learned. Again, going back, Bitcoin demands extreme ownership, so you have to put the time in to figure out how to possess it.

Peter McCormack: All right, next up we're going to talk about GHash and the potential that they would have exceeded 51% of threshold for mining pool, which becomes risky in the world of Bitcoin. So I've been prepping for my next show and my next show is going to be with Shinobi. We're going to go into the detail of the tech of Bitcoin. One of the things we're going to talk about is the blockchain and we're going to talk about what the risk is of a 51% attack. But this came in because you told me about this. When we started prepping the show, you texted me and said, "look, you need to include GHash as part of the history." So tell me about it.

Marty Bent: Yeah, so GHash was a mining pool similar to Slush and it was a competitor to Slush. At one point in 2014, I remember this vividly because I remember Peter Todd freaking out about it. I don't know if he did or if he was threatening to or if he did sell some of his stash because of this, but yeah it was... Just naturally, I believe it was something similar to what NiceHash is now, where people are just able to contribute in the pool, just drifted over 51% of the total hash rate of the network.

Granted, that's made up of individual miners contributing to that pool, but that pool still to this day has the decision to decide how blocks are constructed and how transactions are constructed. That's changing with [Inaudible] and things like BetterHash, still not there yet, but this pool hypothetically could have rewritten a blockchain pretty trivially if it wanted to. If the pool operators were dipherious, they turned out not to be dipherious and they said, "hey we do not want 51% of the network, we notice this is a problem", and they agreed to go below 40%.

But naturally individual miners within the pool just started leaving the pool because they didn't want Bitcoin to get 51%. So individual miners within the pool were going to others to distribute gash rate as well. But no, it was the first great example of something to watch and how that just happened sort of naturally. Nobody was paying attention, it drifted towards that way and at least early on, we're lucky that GHash was a benevolent actor and decided not to 51% attack the network.

Peter McCormack: Well I think I talked to Jimmy Song about this, the game theory isn't always there anyway. Ultimately to attack the network, it is risky because they end up destroying the value, but it was a wake up call to people that look, this is possible. The 51% attack is a huge threat to Bitcoin.

Marty Bent: Well I wouldn't say a huge threat. It is a threat and something to pay attention to. Again, like you just mentioned there, the 51% attack, it may be profitable in the short term, but is it more profitable than just being a benevolent actor in the long-term? I think the incentives are such that, like we saw with Ghash, Ghash sort of proved that they didn't attack the network. So I think it makes sense, but definitely something to pay attention to.

Peter McCormack: All right, so still in July 2014, New York gets the Bitlicense. So we're going to give a shout out to Ben Lawsky, fuck you Ben Lawsky! Let's talk about the Bitlicense.

Marty Bent: Fuck Ben Lawsky! Ben Lawsky, that slimy... I don't know Ben, I've never met Ben, I don't like speaking poorly about people I've never met, but he's one of the few people I feel okay because Ben Lawsky ... So for you listeners who don't know who Ben Lawsky is, he was at one point an assistant Attorney General, I believe here in New York state, and part of the New York Department of Financial Services, and tasked with creating regulation for cryptocurrency companies in the state of New York.

He came in with the Bitlicense, which is an overly draconian hurdle for companies wanting to start Bitcoin and cryptocurrency companies in New York state, to get over heavy sunk cost and legal and compliance, it's very burdensome. So this guy threw all this compliance on the industry and then left in typical state to corporate revolving door fashion. He's now on the board of Ripple as their legal advisor. So he basically created legislation that he could then go help other people work around. Dirt bag!

Peter McCormack: So the lesson here is, fuck you Ben Lawsky and fuck the Bitlicense. All right, so talked about Mt Gox being the biggest story in the history of Bitcoin. Others were flat out denying that saying, "Pete you've got that totally wrong, the biggest story in the history of Bitcoin is the scaling war!" This is a really important one because this is where people can go down the wrong path, when they start diving into the world of scaling.

I remember when I first got back into Bitcoin in 2017, I was hearing both arguments about the importance of small blocks and block space and then hearing "well, if you want cheap or fast transactions, then you need bigger blocks." Somebody who's new in, a small increase if the block size didn't seem too scary. I also know there's key people in Bitcoin at one point who did support a bigger block size.

In hindsight, I get it now, but this is a place where people could easily get lost and kind of diverge away from Bitcoin. So we've got to be careful here. But one of the difficult things here sometimes is the chronology of events. I wanted to talk about SegWit2x and the New York Agreement, but you rightly raised there's the Hong Kong Agreement, we have Bitcoin XT, Bitcoin Classic, Bitcoin Unlimited, so talk to me about the scaling war Marty.

Marty Bent: Okay, so I've been thinking about how to approach this. The scaling war was a war disguised as a scaling war, which really was a control war. So like we said, the importance of Satoshi leaving was that he gave up control of direction for the project. Obviously when he left, there was a vacuum, a void that does not need to be filled and should never be filled, but some felt needed to be filled, mainly Gavin Andreasen, Mike Hearn, another developer, and then people like Brian Armstrong and other CEOs of companies that were leveraging Bitcoin as well.

Another thing about the fork wars too, was it was also an ego battle I think between the stakeholders in the system. It was really the first time that the network discovered how the stakeholders really interact with each other and who really has ultimate say at the end of the day, at least in my eyes. This is very debatable. A lot of people have other opinions on this, but I think the fork wars, when they were all said and done, proved that full node operators have the most control at the end of the day.

Most control being just the signed consensus, but the end of the fork war also proved that no one person or entity of people or businesses has control over the development of the protocol. So if we want to go back to the beginning, the Hong Kong Agreement in my opinion, you mentioned is where it first started. So I believe December 2015 or February 2016, a bunch of developers and miners met in Hong Kong on a "scaling agreement." The developers were keen on getting SegWit in and the miners were keen on getting the block size up.

So that's really where the conversation started and it was probably misguided for these people to even meet in the first place, who were they to decide what's going on? So that right there set terrible precedent for the conversation around these protocol updates. So from there, you had a bunch of people basically creating and trying to get people to download other implementations of Bitcoin, mainly Bitcoin Classic, Bitcoin Unlimited and Bitcoin XT.

Peter McCormack: Yeah, people are coming in new to this, what they're going to see is that the primary argument was about raising the block size. The block size itself is 1mb. What that means is there's a limited amount of transactions that can get into it. The debate was, "well we want to raise it to 2mb or maybe 4mb and 8mb in the future." Whereas a bunch of other people have said, "no, because it's important to keep the block size small so we have enough nodes to keep things decentralized."There is so much to this. Not only could you do a whole show on this alone. I'm going to do a whole series on this because there is so much to it. If you had to kind of simplify it down, it was an argument about block size, but also as you've rightly said and I agree with you, it was also about control. What it felt like and a lot of people have called it this, which I kind of agree, when we got to the New York Agreement, it felt like an attempt at a corporate takeover of Bitcoin.

Marty Bent:Yes, the New York Agreement was the crescendo of the propaganda that was being spewed online. So Brian Armstrong most famously is one of the leaders of the cabal of corporations that wanted to raise the block size. He has famously backed Bitcoin. He was trying, before the New York Agreement, just trying to throw his weight around to get people to download these implementations that would have forked to higher block size.

So let's just talk about the mechanics of why this doesn't make sense and why, at least in my opinion, raising or just arbitrarily doubling or quadrupling or octupling the block size to increase throughput and reduce fees doesn't make any sense. Again, like you said, you need everybody to be able to download a node in the future. If you start raising the amount of data that can be held in each block right now and the burden that you put on future node operators is such that it would destroy the network.

Then two, the fast transactions doesn't make any sense. Just the mechanics of Bitcoin and proof of work and how it works, you need to wait 10 minutes for a confirmation. If you really want to ensure that your transaction went through and is not going to be overwritten, you should wait six confirmations or more.

So the thought that you would ever have transaction finality, even if blocks are eight times what they are now, that doesn't make any sense. So just the framing... Again, that's why I really believe that it was more of a control war than a technical war, because the arguments they were making don't make any sense, they're not logical in the long-term.

Peter McCormack: I'll put it in the show notes, but one of the most important interviews I think people should go ahead and take a look at if they want to understand more about this, is there's an interview between John Carvalho, Shinobi and Vinny Lingham. Vinny Lingham very much was on the side of the signers of the New York Agreement and John and Shinobi were very much on the side of let's say the developers, because what people should know, the New York Agreement was essentially a closed-door meeting between the miners, the companies and the developers, but the developers chose not to come.

So therefore the developers weren't even represented. But that interview really reflects what a lot of people who wanted to protect Bitcoin were thinking, that this is a corporate takeover. Something really stood out in that for me, and you might want to comment on this, but John Carvalho said, "look, there is a process by which you can submit a request to change Bitcoin. There is the BIP process. If you want 2mb, then you make the submission.

Then if you achieve consensus, it will happen. If it's been rejected and you're still trying to force it through, then let's call it what it is, it's a contentious fork." That I guess goes back to your point that this is like a hostile takeover. Even Vinny in that said that people wanted to remove Core!

Marty Bent: Yeah! If you're looking at it from the perspective of the business owners, at the time it probably made sense. Fees are going up, a lot of their expenses for their companies were based around fees, but tough shit. Just because your company is not going as good of a job as it should be at working within the limitations of Bitcoin, doesn't mean we change Bitcoin, you need to adapt to it. It's not going to adapt to you. If we set that precedent in the first decade of its existence, what's going to happen in the future?

What else are we willing to change? What other values are we willing to conceded? Again, and this all goes back to precedent, that's why I like the Bitcoin Core approach to developing the conservative approach, make sure everything is backward compatible, don't ever hard fork unless you absolutely need to and do everything you possibly can before doing something like arbitrarily raise the block size.

Peter McCormack: What ended up happening, correct me if I'm wrong, but there ended up being a compromise, because there were two things that people wanted to get into Bitcoin. One was SegWit, which was a way of increasing the block weight so you could get more capacity from the blocks without increasing the black size, but the compromise was to double the block size to 2mb.

So that got to a point where it felt like it was going to happen, the miners were signalling for it, but then something very interesting happened which was led primarily, as I remember, by Luke Dashjr and that was BIP148.

Marty Bent: Yes, so BIP148 was the user activated soft fork. So there's so many BIPs to remember during these soft fork wars, BIP91 was the beginning of SegWit2X I believe. So yes, I believe to get SegWit in some developers, to agree to write a BIP, BIP91 that would activate SegWit after a certain threshold, and then three months later double the block size, but I could be getting that BIP wrong. But that was one of them.

Peter McCormack: No, you're correct.

Marty Bent: One of them was out there. Then the other one, BIP148, was a node that I ran, the software that I ran when this was going on. I said fuck that, we just want SegWit, there's no reason to double the block size. So BIP148 was written by an anonymous dev, Luke Dashjr was certainly an advocate of it I believe, but he did not write it. Shaolin Fry did, just some anon dev, but we still don't know who that is today.

But yes, that was a way basically for users who wanted to download, it wasn't a Bitcoin Core implementation technically I don't believe, it was a fork of it. You could run that, and that would simple just soft fork in SegWit. I forget if it was a flag day or... No, it was a percentage of nodes running BIP148. I forget what the threshold was, but it met that threshold and people debate on whether it was 91 or 148 that led to SegWit getting adopted, but yeah, that eventual doubling of the block size never happened, that was software BitcoinABC I believe was the repository that Jeff Garzik and crew, which was the cabal corporation that went to change Bitcoin, that was their repository.

If you ran that code, you actually never would have hard forked because they had a one off bug. So the code that they wanted to run wouldn't even have worked if we put it ... It would actually have made nodes crash, so it would have destroyed Bitcoin. Thank God we did not run it!

Peter McCormack: Oh yeah and it was a very tense time. I remember it all, I remember a lot of hostility, the Twitter wars, the Reddit wars, all the fighting that was going on but eventually got canceled. Six people signed the cancellation, but one of the important points that led up to that was actually the pricing of the Bitcoin futures because what some people need to realize is that, if it were to happen, then there would have been a chain split, which essentially creates two coins. So a futures market was created to price in the new chain, and the futures price actually started crashing quite low, right?

Marty Bent: Yes, I forget. I forget what fork, was that for Bitcoin cash?

Peter McCormack: No, that was a B2X future.

Marty Bent: Yeah, see there's so much! So that 4 month period from May or 7 month period from May to November was the most dense, intense time that I've ever experienced as long as I've been at Bitcoin. There was so much going on, so many BIPs, so many storylines. But yes, Bitfinex I believe did the futures and then it died. As soon as SegWit was passed, I think people were like, "all right we're running it, we don't want it", it's obvious because the BitcoinABC repository, BTCABC repository, there was like three people reviewing the code.

Jeff Garzik was the only one making changes and I don't think anybody downloaded it around the implementation, so it wouldn't have forked anyway. But I think the next month when Roger Ver, Jihan Wu and crew forked off Bitcoin Cash, that was also a very pivotal moment, but scary at the time as well, extremely scary. But again, in the first decade of Bitcoin's life, proved to us how this network works and what the limitations are and where the [Inaudible] are and where the network effects will accrue at the end of the day.

While it was scary, don't hard fork. If you hard fork off, you're going to ruin Bitcoin. A lot of people were afraid of that and it proved that it will just fork off and whither and die eventually. It's not dead, but it's basically a zombie chain now.

Peter McCormack: Yeah and as stressful as it was for everyone, like you say, in hindsight, perhaps it was a good thing for Bitcoin to go through. It may be an important early lesson and is something that may exist for decades or centuries, a very important early lesson. One thing though that did come out during the process is that Roger Ver launched Bitcoin Cash on August 1 2017. He forked Bitcoin, created Bitcoin Cash and he decided, "fuck it, I've had enough, I want to have my own chain, I want my own Bitcoin, I want it to do exactly what I want to do!" So we go the launch of Bitcoin Cash, but it also created a divide in the community which still exists today.

Marty Bent: Yeah a divide in the community of people that talk about the stuff on the internet. Out of all Bitcoin users, I bet most Bitcoin users don't even know what Bitcoin Cash is, if they're not paying attention to what's going on online. But yeah, it kind of created a dealienation between the users that think you can scale on chain and those that think that's not advantageous.

Again, yes there's still a lot of butt hurt, Bitcoin cashers and Bitcoin SVers out there that want to say they're the true Bitcoin or whatever, but again, those are just noise online. At the end of the day, just look at what the market is saying, look at where Hash rate is, look at where price is. The market has decided Bitcoin in its current form is... I don't even want to say it, I'm not even going to say it, the true Bitcoin! I just said it, fuck!

Peter McCormack: The only Bitcoin. But look, it's easier for people coming in to get distracted. I've talked about this before, but I've had people say to me, "I've been to Coinbase, there's this other thing called Bitcoin Cash. Should I buy it?" It's just a real warning to people, do not get sucked into the messaging, look at the key measures. You can be easily distracted, but you can easily lose money here. Stay with Bitcoin, go down the Bitcoin rabbit hole, avoid these shit coins.

All right, someone I'm going to talk about but I don't have time to, people are going to hear about this guy, and they should know a bit about him. This guy called Craig Wright, full transparency, he's suing me right now in the UK for calling him fraud. In December 2015, there were two investigations in parallel by Wired and Gizmodo that suggested that Wright may be Satoshi. Then Craig Wright himself, 2nd May 2016, there were articles published by both the BBC and The Economist claiming that Wright had digitally signed messages using cryptographic keys created during the early days of Bitcoin's development.

This was debunked, security researcher Dan Kaminsky, who said in his blog that Wright's claim was a scam. Jeff Garzik, who we talked about previously with regards to the scaling wars and the fork wars, agreed that the evidence publicly provided by Wright does not prove anything. But we have this guy, he exists, he's claiming to be Satoshi, he's doubled down recently. What do we think about this guy?

Marty Bent: I don't think much of him at all. You certainly probably have more to say then I do about him given your personal history. Yeah, he's trying to con himself off as Satoshi. He seems to be a conman from everything I... At least my intuition and experience on earth has taught me, this man is an obvious conman. I looked at evidence you referenced earlier, which was a fake signature that he showed to Gavin. Gavin, who was one of the early Bitcoiners who wound up turning out to be one of the heroes that we had to kill, if you will, as Matt Odell likes to say.

But yeah, he duped Gavin and he used Gavin's "social clout" to try to get legitimacy for his claim, which again turned out to be false, but people are still hanging onto the idea that he might be Satoshi right now. This week, the last two days, the price of BSV has skyrocketed hundreds of percent and a lot of the BSVers are hopping on and parading on Twitter, but what they're not mentioning is that the miners aren't mining transactions that are going to exchanges that would allow people to dump their BSVs.

So there might be some inside dumping going on. All the people that own BSV miners, I believe Calvin and Craig control an overwhelming majority, so they actually may be exit dumping on everybody right now and only sending their own transactions to exchanges while not letting other people go. That's hearsay. What we can say is that if he is Satoshi, all he has to do is use the private keys to sign a message with the keys and he hasn't done that.

He claims that the bonded carrier showed up with a list of addresses and a key that will allow him to sign, he hasn't done it yet. He's way behind schedule. There's rumours that BSVs will have a protocol upgrade in the coming weeks that will allow him to move the Satoshi's coins on that chain to make it look like he has control, but I wouldn't. So look out for that. That may be a thing that they use going forward. But yeah, I just think he's a quack. All you have to do is listen and watch what he says and it doesn't make any sense. It's all babble, obvious conman.

Peter McCormack: Yeah, so if you are coming in, you've heard about this Craig Wright, you've been told that he's Satoshi, be very careful. There's an overwhelming amount of evidence that he isn't, that he's a liar, that he's got a track record of bullshit. Just keep away from this guy and keep away from his shitcoin chain.

Marty Bent: Yeah, this is what you have personal experience with him. This is what I think based off the evidence I've gone over. Don't take our word for it, do your own research. I have confidence that, if you are a person with a level head on your shoulders, you will come to the same conclusion.

Peter McCormack: And every one of his actions feels like the opposite of what Satoshi would have done based on Satoshi's writings, based on Satoshi leaving and why he left. So yeah, basically fuck that guy. All right, a couple more things to go through, another big event was just 2017 as a year. It wasn't just an explosion in the price of Bitcoin, but it was also an explosion in the price of alt coins or shit coins. You should probably say why they call them shit coins, but Bitcoin exploded to $20,000, but that also meant outside the price, is that this was the first real mainstream explosion.

We had one back in 2013 when the price hit $1,200 and there were some press interest, but this was kind of global mainstream news interest and it ended up leading to a lot of other things like the growth in derivatives and growth in institutional grade products. So 2017 was a big year for Bitcoin and crypto generally. How do you feel about that year?

Marty Bent: It was surreal. It was my second, I had just come the first mainly before the Mt Gox explosion. I was around, paying attention, not as ingrained as I was in 2017. But after going through the bear market of 2015, 2016, to see how quickly everything happened in 2017, it was shocking. I had the pleasure of working at Barstool Sports, which is a huge media brand, comedy brand, sports comedy brand here in the States.

I think their publication and their audience is a very good sample size of your average American, your average Joe, your blue collar worker, even your white collar worker as well, just your average American in the northeast at least. That's all they could talk about, especially in December, all day, every day. Dave Portnoy had set himself up with a Trezor, he went made a video of it on Twitter and the mania was insane.

I felt like specifically at Barstool, I was standing in the middle of the room saying, "everybody calm down, this is only temporary. Do not go buy Wanchain, do not go buy Tron", to no avail though. But that was again, in the main stream, obviously today the biggest top and it really I think drives home the nature of the open speculation that can happen in these markets. I think 2017, when we're going to look back, it's going to be looked back as a year of extreme and lewd greed, where people sort of saw that you could take this open source software and pawn off tokens on people to make a quick buck.

I don't know how much of that will be seen going forward, but the mania was just that, a mania that was very short lived. Most people I know, aren't even considering ICOs as legitimate going forward. I don't know anybody thinking of launching one. IEOs is the new thing, but they'll die out eventually too.

Peter McCormack: The SEC just announced they're looking at IEOs. It was a very strange time, it was new to me and I joined late, December 2016, so I got sucked into the whole alt coin thing, got sucked back out, made and lost money, went through the whole process, but came out of it in 2018 very hardened around Bitcoin. We were hearing this line that people were putting out that it was "blockchain, not Bitcoin." That blockchain was a real innovation, but going through a bear market, going through 2018 and then 2019, we're now in 2020, and I think we all now understand that it's Bitcoin, not blockchain.

Marty Bent: Yeah, the amount of marketing, until you experience it in an area that you are at least sufficiently competent in, you really don't realize how many snake wheel salesmen there are. The "blockchain, not Bitcoin" movement is one of the dumbest things ever. That was and still survives today to some extent at the enterprise level, but they're just taking the word blockchain and just trying to ride its coattails at the end of the day.

At the end of the day, none of these private blockchain are using proof of work or allowing anybody to plug in miners to contribute to consensus and contribute to the mining and security of the network. So yeah, it's something we went through. We had to go through it, but one thing we should know too is that the price run above $6,000 was less than three or four a week. So even though we went all the way out to $20,000, it was really a flash in the pan.

If you're just getting into Bitcoin now, price volatility is crazy and it'll hit these highs and fall very quickly, but it has been a pretty steady rise up and to the right over time. Even though it does have these crazy booms and busts, you have to take into consideration the amount of time that these booms and busts happen within, and 2017 was a span of like six to eight weeks I believe.

Peter McCormack: Yeah, so if you are new, don't get sucked into blockchain marketing. Don't get sucked into alt coins or shit coins. If you do, you're going to have to become some very, very shrewd trader who perhaps relies on a bit of luck. Bitcoin is king, Bitcoin is long-term, that's why we love it, just focus on Bitcoin. Okay, so last one I'm going to throw in.

You might have something else you want to add at the end, but the last one I'm going to throw in is March 15th 2018, Lightning Labs CEO, Elizabeth Stark announced the initial release of LND 0.4 beta for developers with the intent of making it available for testing purposes. Lighting has now been out for a couple of years. We're all starting to play with it, starting to use it, but why is this so important for Bitcoin?

Marty Bent: I think again, March 15, 2018, there was still a lot of high hopes of the ICO boom and I think Elizabeth announcing initial launch of LND is something, yes, that was celebrated by Bitcoiners, but again, the people looking in the space from the outside, this is something they didn't see or notice. This was the signal through the noise throughout this whole mania. A lot of these tokens are ways to scale, were marketed as ways to scale Bitcoin and leverage Bitcoin to make it more... Or leverage technologies like Bitcoin to make them more functional, where Lightning network actually does that.

So having that launch in 2018 again, is a signal throughout all that mania. Lightning network is a second layer network built on top of Bitcoin that allows users to lock Bitcoin in time lock contracts and then that locked up Bitcoin that they have, they can use on the Lightning network, send pretty instantly with very low fees, and it is truly fast and almost instant transactions for very low fees. So it is what Bitcoin was being marketed as originally by people like Roger Ver, Lightning network enables that.

So to see that nine years in to Bitcoin is... Again, where we're thinking about this very long-term, is extremely encouraging because it means that there's value at the protocol level and people are deciding to spend their time and energy building on top of this. So building it out and fortifying it. Since March 2018, I think Lighting as a network has far exceeded people's expectations at that point than where it is today. It's way further ahead than I think anybody expected.

Peter McCormack: All right man, well listen, we've managed to wrap up the entire key history moments of Bitcoin in an hour and 20 minutes. Anything I missed out you think we should throw in there?

Marty Bent: Definitely missed some stuff, but I think we hit most of the most important stuff.

Peter McCormack: I can send them to your show!

Marty Bent: Yeah, definitely go check that out. It's important, not only in Bitcoin, but it's important to know your history, know your monetary history and do your research before buying into this stuff. Know what you're buying, understand why you're buying it, why you would buy it and knowing the history is very helpful in understanding the why behind all this.

Peter McCormack: Look, Google is your friend. If any of these topics you want to find out more, if you want to learn more about the fork wars or what happened with the Silk Road, Google is your friend. You'll probably find out a lot more than on my show or Marty's show. I will say I'm going to give a shout out to Marty's show. So firstly, thanks Marty for coming on. His show Tales from the Crypt and his weekly recap with Matt Odell, "Rabbit Hole Recaps", that's my go to.

I can actually admit, I can actually tell you this now, there's two occasions in the US where I've hired a car rather than fly so I can go back to back on your shows. Last time I was in New York, I decided to drive from Ohio, so I hired a car and I listened to back to back Tales from the Crypt for about eight hours just as a chance to catch up. But not just that, also Marty's got his emails. He's got his two emails now actually. You've got "Marty's Bent", where I'm reading stuff and sometimes I've got no idea what the fuck you're on about, but I'm learning from it. But also you've got your... What's the Saturday edition called?

Marty Bent: "The Sat Standard."

Peter McCormack: That's it, "The Sat Standard." So there's two emails, there's two shows, it's the best content in Bitcoin and it's in the show notes, check it out! Marty, how to people stay in touch with you?

Marty Bent: Best way is on Twitter @martybent. DMs are open if you guys have any questions. Peter, thank you for doing what you do. Just keep learning, it's important, and I'm happy I could have helped your boring ride to Ohio because I know you basically make a left and you stay on the same road for like eight hours!

Peter McCormack: Yeah, do you know what the funny thing is? I do a lot of driving in the US and some of the drives are amazing. This was quite possibly the worst drive ever, there's nothing to see, it was in autumn, so all the leaves are off the trees and it was just a shitty drive! But I had your lovely dulcet tones to take me the whole way there. Anyway, listen man, thanks! You've become a friend, I love your work, appreciate you always helping me out, appreciate all your content and I wish you all the best man.

Marty Bent: You as well man! Thank you for having me, I really appreciate it!