Phil Champagne (02:34):

But considering that he left and I could see that eventually it was still early, but I could see 10 years down the line, which happens to be this decade, it’ll be history. It’ll be now. I mean, this will be the only thing that we have of this, because I could foresee that I guess he wasn’t involved at all in 2014 is when the book came out and it didn’t come up. Except for at the moment I was going into the editorial process. I am not Satoshi Dorian Nakamoto. That is the only thing that came up and already it was a controversy. Is it really him or is [inaudible 00:03:17] got… I mean, it was so funny to see. Already, there was some sort of controversy about if it’s was really him after pausing for two years. So imagine if there was just a [inaudible 00:03:28] of a controversy with an email that is existing and then you’ve got this guy Craig Wright, who comes up and he offers nothing at all in terms of proof, but the controversy is at dial at 12 now. Because the more time passes, the more proof someone who’s going to come up and make that claim really is going to have to come up with some strong claim.

Phil Champagne (03:53):

At this point, I mean, I don’t see how this will ever happen. I mean, it’s pretty clear that his intention was to get out-

Preston Pysh (04:01):

Disappear.

Phil Champagne (04:01):

And by making this, he really decentralized ownership of Bitcoin and I could see that the impact from an historical perspective was amazing that eventually, everybody will be interested to learn more about this guy and who created it. And the more this get mainstream, the more interesting and just like we’re interested about knowing about a Ford model T and the Wright brothers and that kind of thing. This is the only thing that we really have about him, so.

Preston Pysh (04:33):

Yeah. And for me, anytime I’m trying to understand how something works, a lot of people know I started off as a value investor. It was like, let me study buffet, let me study everything the guy has said, let me study every book he’s read. And so I guess for me on my Bitcoin journey, this book has been like security analysis for a value investor where you can tap into all of what he had said. And he said a lot. And I think that’s the thing that… A lot of people were familiar with the white paper but they’re not as intimately familiar with all the forum posts. And there was a lot of forum posts. I’m curious, did you include everything that he ever wrote in the book, or did you curate only certain things that you thought were worthwhile?

Phil Champagne (05:17):

In terms of all these posts, almost I skip a few that was just release Bitcoin release zero, one, something. There were too many of them, I mean too many, but I mean a few of them where there’s just that [inaudible 00:05:32]… I could have included those, but I wanted to… It would’ve been a little bit redundant and so I didn’t want to extend. But that’s the only exception for in terms of blog posts. The other thing obviously, is private email exchange. I wish I had been in contact for example, with others that came up and claim that they did had conversation and those things. But at that time there was not that much controversy and it would’ve… There was no Bitcoin cash. Anything where they could push for Bitcoin cash versus the traditional Bitcoin that we know. If there’s any kind of post email exchange, private email exchange with Satoshi regarding this, already is it gets into a controversy where the Israeli real email from Satoshi whatever.

Phil Champagne (06:20):

I mean, it’s not that much as important as people think in the sense that he’s not here anymore. And obviously, all the changes that happen. You think about Lightning Network, you’re looking at what’s coming up with the CoinPool, which was going to be even better to Lightning Network. Those things were not even in the front seat or in the thinking on the whiteboard of anywhere regarding the Bitcoin conversation at the time of Satoshi. So to think about what you would think at that time, without all this notions of major discoveries that we have is some missing the point. Although the book is called The Book of Satoshi, he’s not a God or… I mean, I couldn’t escape naming, calling it this week. Because it’s almost like the [inaudible 00:07:08] equivalent of a religion. He comes and saves us from central bankers and then he goes away and now you have to get that religion that kicks in. So yeah.

Preston Pysh (07:19):

I mean he was obviously, a savant in many different fields of study. But yeah, just being able to go back and kind of read exactly what it was he was saying or not saying is just such a powerful thing. When you talk about… And I hope you don’t mind. I plan on reading a couple things from the book that I just find quite fascinating. And you brought up this idea of Bitcoin cash and in forking, this was things that he wrote about. I mean, I think that’s the other thing I kind of took away was like, there was so much foresight in what was to come in eight years. He talks about mining and how it would turn into-

Phil Champagne (08:04):

You’re talking about the DNS, right?

Preston Pysh (08:05):

Yes, yes.

Phil Champagne (08:07):

Yeah, yeah.

Preston Pysh (08:08):

Explain to folks.

Phil Champagne (08:10):

So basically, I mean, there was already the concept of a starting… Well, there was something eventually that came up, it was called Namecoin. I can’t remember if the DNS was how much traction it was with that, but it’s basically Namecoin was… Or eventually what became of it. Is to record domain name, using the blockchain and you record, you buy, and then it’ll make a record. Basically, it’ll be a special transaction, a recorded domain name with IP address and so on. So therefore completely decentralizing those things. Obviously, you’ve got that with those small contracts on [inaudible 00:08:46] and all that. But at that time you could have that with well, the DNS. You didn’t want to alter Bitcoin for that but you understood that with proof of work, if you had two competing currencies, using proof of work, one will be having… One of the two will be the dominant one and the other will be subject to 51% attack if a few minors just jump on it and then moves things around.

Phil Champagne (09:15):

And so there’ll be more of a danger. I mean, you’ve got this problem with a Bitcoin goal or whatever. It takes two weeks of transaction confirmation during certain places exchange will accept the withdrawal that kind of thing. That’s what I heard anyway. So it shows you the danger of a weak proof of work. And so he understood that what would be best is if there was some sort of a way of combining both of them so that the minors will be able to mine both of together or in some way, there will be some sort of a soft fork or fork. I’m not sure exactly how the details but he talks about that. And so he understood exactly the challenge but it didn’t sound like what we will call a Bitcoin Maximalist. Because Neil is considering this side version of thing with this own blockchain, with its own little tokens for this very specific, but the core saving platform will still be Bitcoin.

Preston Pysh (10:10):

So Phil, I found the spot in here that was talking a little bit about forking and things like that. So Satoshi wrote, “the nature of Bitcoin is that such once version 0.1 was released, the core design was set in stone for the rest of its lifetime.” There’s some more that he writes here, but then he goes to this paragraph. He says, “I don’t believe a second compatible implementation of Bitcoin will ever be a good idea. So much of the design depends on all nodes, getting exactly identical results in lockstep that a second implementation would be a menace to the network.” And he says, the MIT license would be compatible with all other licenses and commercial uses. So there’s no need to rewrite it from a licensing standpoint. And so then at the very end of that post, he says, “I know most developers don’t like their software forked, but I have real technical reasons in this case.” Crazy to be writing this. And I think that post was from 2010, June of 2010.

Phil Champagne (11:12):

Yeah. Just a few months before he left. Yeah. Yeah. It is mostly in the latter in the last six months is where we see a lot of samples of his foresight because it’s things are starting to be much more mature in Bitcoin at that time. It was not like the very first six months of very first year. The conversation mostly about hiccups or conversation about expanding the throughput or what will be the situation one day regarding the throughput and all that. And while in the last six month or couple of things like concept like this that were more starting to be dominant because now we’re talking to, okay, now we’ve resolved all those little hiccups in some way for the conversation about the software, making sure it’s stable and all that they can afford to spend some times into philosophically speaking for how to go from there and what will be eventually the challenge that will need to be avoided or could face with.

Preston Pysh (12:16):

So this was the question I was dying to ask you.

Phil Champagne (12:18):

Oh, okay.

Preston Pysh (12:19):

For a while now, what do you think was the most interesting thing that you uncovered as you were reading all of this in depth and trying to piece it together and organize it for everybody to digest? What was the one thing that you just kind of walked away with from and were like, wow?

Phil Champagne (12:36):

Well, I could see just the value and knowing the mindset of this guy who came up… I mean, simple. He was still around here. He would be getting the Nobel Peace Prize and the Nobel Prize of Mathematics. Obviously, central banking is about war. So if you eliminate central banking, I guess he could have the Nobel Peace Prize as well.

Preston Pysh (12:59):

Anything else that stood out to you other than just his sheer like breadth?

Phil Champagne (13:04):

Well, a couple of blog posts were fascinating. One of them is… I mean the two that I found astonishing about the level of tweaking of his mind is, one is about on the software side when he is talking about the Byzantine challenge, chapter 13, I think. Yeah. The Byzantine Generals Problem.

Preston Pysh (13:26):

Yeah. Yeah.

Phil Champagne (13:27):

Actually, even though I was in networking and all that, it’s more like DG side of things that theoretical things. And I wasn’t much aware of that, but I was fascinated about this aspect of, okay, yeah. Well, a problem that they thought in the seventies, there was no solution to it. And yeah, I mean, in some way you’ve got finally a solution. That was one thing where in the eighties and nineties never one and nobody would’ve believed you, that you would have a decentralized currency that will be satisfying, no double spending and a fixed 21 million Bitcoin. Nobody would’ve believed it in the eighties and here we are. Just like in 2009, 2010, you would come up as, yeah, there’ll be a layer to network where you’re going to have millions of transaction per second, if you want to. And we’ll be able to support over Bitcoin and it will be… That will avoid the problem. Now we’re at this level where Lightning Network is out and people are picking on, okay, well, this is complicated, it’s awkward, it’s not ideal. But again, people are forgetting that this is all constantly being worked on and we’re going to have something even better and better or improving it. So I’m sorry. Your original question was?

Preston Pysh (14:43):

No, no, no, no. You covered it. You covered it.

Phil Champagne (14:44):

Yeah. That’s right. Actually the second part… The second was the economic side of things. And that’s where he makes that comparison to a Gray Metal.

Preston Pysh (14:55):

I think I know which section you’re talking about. He was talking about how to value it, right? Is that what you’re hitting at?

Phil Champagne (15:02):

No, it says, imagine as I thought experiment… Imagine there was a base metal as cars, as gold, but with the following priorities, boring Greek in color, not a good conductor of electricity, not particularly strong, but not ductile or easily malleable leader, not useful for any practical or ornamental purpose, basically a medal light like, all right. Nobody cares about it. But with one special magical property can be transferred over a communication channel. And in sight, it’s exactly the reason why Bitcoin has value. It’s one of the reason why gold bugs don’t get it. And the thing that is funny, because all they see is like, oh is it digital air. They always say things like that. But they’re missing the point because first of all, like Peter Schiff, now they’re referring to this [inaudible 00:15:58] in school of economics. I’m sorry I had those names. I forgot them.

Phil Champagne (16:03):

He was the first one to elaborate in a book why a certain medal or a certain thing will become money eventually naturally. Basically, there’s some sort of utility for it. Eventually, it comes up. That was his claim. There was some utility in the beginning or it’s ornaments or something like in the case of gold is the jewelry. And eventually, leads to, well, I’m going to exchange it because I know somebody’s going to use it for utility purpose. And eventually, it takes into a more medium of money more than actually for its utility. But there was another guy later on in the Austrian school who actually went beyond. He says, no, actually all it is the market has to believe there will be a value in it. If someone see that there was value for it yesterday and today and it’s still maintaining it, then an expectation will be that tomorrow is still going to have some value and this can be transported until the 200-day moving average for the press of Bitcoin, for example.

Phil Champagne (17:06):

Because you see, okay, yeah. It is maintaining, it’s not going back to $10 or $100 or a thousand dollars. Pretty much confidence is high that we’re reaching the bottom at $20,000 or something around there. And eventually, at the most is going to go up and it’s expectation that it’s going to maintain its value. And that is actually the basic of what money is that when a market knows that there’ll be always a demand for it, whatever if it has [inaudible 00:17:39] and utility or not. Well in the case of Bitcoins obviously can be transported over communication. Something that [inaudible 00:17:46] needs a third party, a-

Preston Pysh (17:49):

Trusted agent.

Phil Champagne (17:51):

Derivative in the forms of a third party that you need to trust to be able to do any transaction over the electronically regarding goal. While Bitcoin’s totally the opposite, you would need a third party for physical Bitcoin, a coin or you have to trust, like a check. Someone gives you a paper wallet for example, that while he knows the private key for it and there’s no yet mechanism for maybe it’s going to happen one day. But in terms of on the physical side, Bitcoin right now requires a third party while in the electronic world, it’s natural medium where it swapped it for gold.

Preston Pysh (18:31):

Phil, I get the impression that you were just… Your background in software engineering and networking kind of made this to just be really obvious when you saw it. And I’m assuming you believed in gold in order to store value. And so is that how your Bitcoin story kind of emerged? Is those paths crossing?

Phil Champagne (18:56):

Yes. Yeah. I mean, because I know a lot of software engineers obviously and many are… And definitely Austrian school. They’re more like socialists or oriented and that kind of thing. And so central banking is just great for them. So even though I can explain to them, I told them about Bitcoin, how it works, and all that. It’s just like, okay, mostly in the beginning. No interest was there. Now the interest is there because you see the price moving up, but now it’s more like, okay, should I buy, not? And now it’s more about the known appreciation that it got not for their core belief that, oh wow, this has a purpose beyond just making money is really to challenge and the perception of central banking today and how things are. And I mean, this is the one thing that I found is the most valuable.

Phil Champagne (19:53):

It’s not Bitcoin itself as the… It’s actually the idea because the number of people that converted to Austrian school, learning more about the central banking and through reading more about Bitcoin is much higher than what would’ve happened if Bitcoin was not created. And so to those who think that for example, Bitcoin might have been a deep state job or something like that or Satoshi is behind it, the CIA, whatever. I don’t see how they would shoot themselves in the foot like this by releasing something, a concept like this that will not only wakes up the people about what it is when there’s something that is not controlled by central bank. And the second thing is that actually, now that the ideas out there, even if they destroy Bitcoin, its just in some way, whatever…. Everybody’s attached to the idea and they’re going to push for it to come back. So it’s either through legislation or voting them out or whatever the cat is out of the bag, the-

Preston Pysh (20:57):

The idea. Yeah.

Phil Champagne (21:01):

Yeah. And it’s the most powerful to me.

Preston Pysh (21:03):

Yeah. I think most Bitcoiners would agree with you that it’s kind of not that important to try to understand whether this was an individual person or a group or whatever. But I’m curious what Phil thinks. Just because it’s fun. It’s not because… And I think we actually do a better service of not even talking about it, to be quite honest with you. But it is a little fun to try to speculate.

Phil Champagne (21:32):

Oh, yeah. No, I don’t think it’s a problem.

Preston Pysh (21:33):

I think it’s an individual person.

Phil Champagne (21:35):

It is hilarious to see. I mean I think the peak of… I could see in 2013 to 2016, I think that was a peak of the number of articles and New York times or pick a place, who might be Satoshi Nakamoto. And including the Newsweek article in 2014, that was just released at the same time or just before I released the book. And that was really at a peak time. Now people set up the mainstream media and all that. There is subtle in the idea, okay? Yes, we’re never going to find out who he was. It’s useless to repeat again, who might be it or whatever. I mean, everybody went there and there’s no more clues and I guess it’ll remain like this. And so therefore there’s nothing shaking up in this area for that. But what do I think? I would say that he’s probably human. He’s not from an external… I don’t know if it’s just a single person or more than one. I would suspect it’s just a single person. And I think that it’s some, the kind of people that were involved in the [inaudible 00:22:48] groups kind of thing, that same kind of mentality as those folks. Whether it’s one of them or not, or was silently observing things or… I don’t know. But that’s where I would focus.

Preston Pysh (23:03):

There’s a couple specific questions people had online with respect to… The first one is he, she, they… I have no idea. They wrote in a way that it seemed like they were from the UK and they also wrote in a way that made them seem like they were American.

Phil Champagne (23:22):

Yeah. Yeah. Yeah.

Preston Pysh (23:23):

What’s your take on that?

Phil Champagne (23:25):

And some people have done analysis of… There is a bunch of tidbits, it is funny and some have studied the time zone at the time-

Preston Pysh (23:34):

And I’ve seen that too.

Phil Champagne (23:36):

Yeah. It was dominant and I forgot, I think it might have been dominant in some way leaning to… No. Actually, I don’t remember. But to me… No, it’s just a one clue, but was it they were doing this on purpose or not? And again with VPN on top of that, for whatever access or emails that he was saying privately. There were some clues about VPN issues that might be indicated in those things. So he probably wanted to try to make things more fuzzy. So mixing things with English and American English would make sense.

Preston Pysh (24:17):

How about his coins? So I believe the number is there’s a million that he has still in his address. They’ve never moved. What do you think’s going on? Do you see these coins ever coming back on the market? What do you think he’s doing with that or she’s doing with that?

Phil Champagne (24:34):

It is the one thing that is very curious to is why-

Preston Pysh (24:39):

I have a theory. I want to hear yours.

Phil Champagne (24:40):

Okay. Okay. My first question I’m asking is like, okay, why did he left? And he did all that mining and all that. And by the way, the mining that he’s done, he was on purpose, always mining in the late past 10 minutes. So the first 10 minutes he was allowing others to… Minors to-

Preston Pysh (25:01):

Get them.

Phil Champagne (25:02):

Pick up. To pick them up. So then was only starting his mining to in the late after 10 minutes. Just so that at least it’ll be moving ahead. And so it’s like the opposite of pre-mining. The concept was I want to give as much possibility to the others. So it was cool, but what… Sorry, your question was-

Preston Pysh (25:23):

Well, no. So I guess my theory is a person who already has significant wealth, they don’t need this to be successful. They’re already wealthy. And especially if it’s a person who lives a fairly humble life and they have plenty of means to do whatever it is they want to do. They don’t need to have a billion dollars in buying power as we know it today. So I guess I kind of suspect that this person is well off. They’re extremely, extremely intellectual and smart and have a grasp just on so many different fields of study. They seem to be an academic based on the writing, right?

Phil Champagne (26:03):

Yeah, it is. But the question then is what is interesting? No matter what is, why did he decided not to… For example, when he decided to leave in November of 2010. It’s like, okay, what I’m going to do is I’ll take all Bitcoin that I had then mine. And now I’m going to send that to a invalid-

Preston Pysh (26:28):

Address.

Phil Champagne (26:28):

Bitcoin address. To make it obvious to anyone-

Preston Pysh (26:32):

That I’m gone.

Phil Champagne (26:33):

This is not about to move. And this is obviously a fake address because now I’m going to just write down instead of something hash. You’ve got a long message as hash, your Bitcoin address. So that is also an interesting aspect because now there’s always those conspiracies that oh, eventually he’s going to come up, he’s going to drop the price. Oh, and mostly these stories are coming from critics of Bitcoin. The subject of that is more often used in a negative way. So that’s the only thing I’m wondering why he didn’t kill that story right up front by making that move. If his intention was never to use those.

Preston Pysh (27:14):

So Satoshi’s a master of game theory. I think that that comes out in so much of his writing and just so much of the way he thinks about things. So what about the idea that the initial coins that were mined are maybe a final incentive scheme or a final incentive for maybe putting forth additional lines of code to do something?

Phil Champagne (27:39):

Yeah. Some reward. It might be that.

Preston Pysh (27:43):

Who knows?

Phil Champagne (27:45):

Well, yeah.

Preston Pysh (27:47):

It’s fun though.

Phil Champagne (27:48):

That’s the thing. Yeah. I mean, the one whole thing we wonder is since those things like… Okay, in 10 years from now or 20 years from now, 30 years from now, the question we’re going to be asking ourself is okay, did Satoshi move his Bitcoin in 30 years from now? Will we return to the moon in 30 years from now? These are the kind of questions-

Preston Pysh (28:09):

Oh, I know.

Phil Champagne (28:10):

You put that. So it’s those kind of things that are interesting on the forward aspect. And he says, okay. And it’ll be fun to see the results of that. Obviously, there’s more, but-

Preston Pysh (28:22):

Everyone’s got an opinion.

Phil Champagne (28:24):

Yeah.

Preston Pysh (28:26):

Any good orange pilling stories that you have from using the book or talking to people and being able to use the book and reference them to certain things in the book. Do you have any cool stories like that?

Phil Champagne (28:39):

Of people that I talk to?

Preston Pysh (28:41):

Yeah. That you’ve just talked to at conference or whatever. I mean-

Phil Champagne (28:46):

Yeah. I had a dentist when I was in North Carolina, a very cool guy. I mean, I told him, I wrote the book and I gave him a copy and all that, but it was more interesting for him. And when he had a young daughter first, so we sent a gift and one of those was a paper wallet or at the time was [inaudible 00:29:11] of 20 or $50 in Bitcoin in a paper wallet. And so we sent that by mail. And so recently I think just a year or two ago he call… He just ping me and he wanted to learn more. No, because now at this rate you’ll be able to pay, others going to be able to pay for college. No, I mean, it’s just that you see that, wow. Okay. Now I appreciated that 20 or 50 bucks to a thousand dollars.

Phil Champagne (29:45):

I can’t remember how much time we gave and I would have to try that, but a big amount. So he was asking me, okay, I’m curious to know. So then I told him a little bit more information about how we can do those things and give him. So yeah, that was interesting because the fact that he receive… Well, his daughter receive Bitcoin now it’s more like, okay. Indirectly orange peel basically, because now you realize, wow, okay, this thing is… You’ve gotten direct involvement with it. And sometimes I also gave a five bucks to somebody else at some place. And I wonder today what happened, if he actually kept it and then realized, oh, [inaudible 00:30:33] to that five box is $50 today or no, actually 500 bucks, so.

Preston Pysh (30:39):

It gets everyone’s attention. And I think that’s part of the game theory that I think he knew he was designing is if I can just get it into a few people’s hands up front time and… Because if a person says, “Oh, okay, here’s $20 worth or…” They get it for free. Especially there at the beginning. And people start trading it for a couple pennies. If it goes from 10 cents to 40 cents that starts to create quite the buzz and-

Phil Champagne (31:11):

Right.

Preston Pysh (31:11):

Yeah.

Phil Champagne (31:13):

Yeah. But the thing that is the other side of the coin is a lot of people saw the kind of move it did in the last star five, 10 years, and so on. And there, an expectation is, will be the same kind of multiplication factor in the same time growth, which is not going to mean we’re talking about the curve, a log scale, a curve. And so the growth… Well, yes and no. Because if we measure that in dollars, no we’re going to have a nest curve like this, and then hyperinflation is going to comes back up. But in terms of comparison, for example, if we put the goal Bitcoin ratio at some point, it’s going to be a subject of conversation because now it’s going to be almost irrelevant to talking about the Bitcoin pricing in dollars when the dollar is fluctuating and getting so much beaten up with the bond market, flushing into the toilet and prices of everything going up, that you’re going to be more like looking at the price of goal versus Bitcoin and how much traction Bitcoin is catching to goal. And that kind of… Is going to get the traction. Because we’re talking about what a factor of… Is it a factor of 10? Hey, I forgot the numbers. It’s on my pinned tweet on Twitter. I think I did that there.

Preston Pysh (32:38):

While you’re pulling that up, Phil, I wanted to just highlight one of the things that I personally found fascinating also in your book here, this was back in February of 2010. There was a person and this is just when they started to have market prices for Bitcoin. And this is what Satoshi wrote. He said, “In the absence of a market to establish a price, New Liberty Standard estimates based on production cost is a good guess and a helpful service. The price of any commodity tends to gravitate towards the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty pushing the cost of generating towards the price. In the later years, when new price generation is a small percentage of the existing supply, market price will dictate the cost of production more than the other way around.”

Preston Pysh (33:43):

Which I don’t know if we’re in that latter category or the former category. I kind of think we’re still in the former. And then his final thing that he wrote he said, “At the moment, generating effort is rapidly increasing, suggesting people are estimating the present value to be higher than the current cost of production.” That was back in 2010. So this is basically the labor theory of value that he’s talking about. This is anybody who’s a commodity trader, who’s trying to figure out the price of any commodity would say, this is the model. And I guess for me, I find it crazy that a guy or a girl who wrote all this code and designed all of this game theory is quoting things that… I mean, you’d have to be a commodities trader to be able to, right?

Phil Champagne (34:29):

Yeah. It’s not ordinary background. Yeah, it’s not. It’s definitely…

Preston Pysh (34:37):

You’re dealing with a person’s just covering so many fronts. Right? And what think’s really fascinating about this, that people maybe that aren’t intimately familiar with Bitcoin. So he’s talking about commodities. He’s talking about how, when the price runs, everybody who’s trying to harvest it or trying to capture it or mine it or whatever. They’re highly incentivized to try to capture that profitability. But what’s so fascinating about Bitcoin is because of the difficulty adjustment, no matter how hard they try or how many miners come online, it’s only going to extract a certain rate based on where you’re at in the four year it’s cycle.

Phil Champagne (35:13):

It’s the big extension with goal is that the supply is fixed. Now it’s just the hashing power that all vary, depending on market. It’s the hashing power will fluctuate depending on the market. But the supply is fixed while the goal it’s going to be the supply is going to come up and will adjust the price. And so it is quite of a difference and it is one of the distinction that people are spinning their heads into… Those in the commodity sectors, they have to adjust their mindset when it comes to that.

Preston Pysh (35:51):

Tremendously, because you can’t do this in the physical realm. This is only possible in a quasi-physical slash digital realm.

Phil Champagne (36:00):

Yeah. With set of rules.

Preston Pysh (36:03):

Yeah. Fascinating, fascinating stuff. All right. Let’s see what else I got here for you. What are arguments that never seem to end that Satoshi has already addressed in the writing that just make you roll your eyes when you see the arguments online?

Phil Champagne (36:20):

Actually, yeah. I don’t have any specific that situation. While I will be rolling my eyes is when someone comes up and say that Bitcoin is not scars because it’s [inaudible 00:36:32]. It’s like, okay-

Preston Pysh (36:33):

The pizza argument.

Phil Champagne (36:35):

Yes. I mean, I would say a scale… Yeah. Okay. Bitcoin is scars, but the Satoshi’s are less scars, but-

Preston Pysh (36:48):

And Phil, the crazy part is some of these people making these arguments are academic economists.

Phil Champagne (36:53):

I think it’s the concept that suddenly they have to deal with something else. And this goal that they kept fighting for against, now they have to turn around. And just like what we talk about the supply of Bitcoin is static in terms of the rate of supply is static. Regardless of how many people are mining and all that. And then the traders have to adjust that to this mindset. In their case, they’re actually lose their mind because now it’s something that they have not recognized before in their [inaudible 00:37:29] and something like that. And now it’s showing how crazy the fundamentals they’ve been taught in terms of economics makes it their pillars of thoughts is weak on their structure of central banking and paper money, and all that is based on a weak structure that when they are facing with something else completely different, they’re not able to actually make reasonable adjustment. To make appropriate content discussion, to make this statement about, oh, if you can divide it in billions of Bitcoin, therefore it’s infinity. It is just like the stock split. They don’t get it. It’s like, okay. It’s just like, everybody’s going to have twice as much share, but nothing has changed.

Preston Pysh (38:19):

Yeah. Market cap’s the same. Yeah.

Phil Champagne (38:22):

Yeah. So it is mind boggling that they-

Preston Pysh (38:26):

It’s crazy.

Phil Champagne (38:26):

Are kind of people that fall too in that trap.

Preston Pysh (38:30):

Big difference between adding numbers to the right of the decimal point versus to the left. Yeah.

Phil Champagne (38:35):

Yeah. Yeah. Yeah. Yeah. And I think Peter Schiff, said something like that too. And that’s where I lost my mind. Was like what? No, I mean, they’re so stuck on, I need to find something, some dirt about Bitcoin that they actually lose their mind.

Preston Pysh (38:54):

I love when Adam Back says, Hey, sometimes the best way to expose somebody is just hand them a mic. Hey, you mentioned this earlier about CoinPool and you mentioned it in reference to Lightning Network. Explain what this is and explain what you think this is moving forward.

Phil Champagne (39:13):

Yeah. So the CoinPool, what is cute about it is that okay, so you look at the Lightning Network, white paper, there’s 56 pages for it of the white paper compared to what, 10 pages for Bitcoin? The white paper for coin pool is something like eight or nine pages. So it sounds like, wow, okay. The benefit of that is that suddenly… Okay. So the Lending Network is where you and I, we can create a channel and now we can just make a transaction using a multisig on Bitcoin channel. And this opens up the channel between the two of us. So we put one Bitcoin each. So there’s two Bitcoin in that Bitcoin multisig. Now the output, the rule for how we going to allow withdrawal from this, in the output section of this transaction where we put those two Bitcoins will be set onto a commitment transaction that we establish where…

Phil Champagne (40:13):

So if you go away, I’ll have a transaction that I can publish to close a channel and get my phones back. So it’s all-sufficient in a way that no matter what happens and we’re able to either one of the two goes away, we’re fine. And if we change that balance between the two of us, I send you 1.5, Bitcoin. Now you have 1.5, I have 1.5. Now, the new commitments and there’s ways for you, you should not be able to transmit the old… Actually, I should not be able to transmit the old, where I had one Bitcoin and you had one Bitcoin, it was old commitments as to be tear apart made invalid. Well, now what it is a mechanism for penalizing where you would penalize me by grabbing all of the Bitcoin, the two Bitcoin to you if I ever published the old commitment?

Phil Champagne (41:05):

So it’s a little bit complex, but it’s well, 48 or 55 pages of white paper for… I’m giving you the quick handle, but it allows points of transaction. And if you have a connection with a guy named Charlie, then I can pay Charlie via you, where we exchange and all that. And it’s just fascinating. And now the network is big and all that but it’s always requires channels to be open between two people. Now, the CoinPool is where you, I, 10 people, we’re all going to be joining into a single pool and I can withdraw at any time without closing, or I know I can vanish and get my withdrawal without having to make an on-chain transaction. And those CoinPool also can be used to connect with the Lightning Network or another CoinPool. So the impact is amazing. The benefit that we’ve saw with lightning, this is going to be even better. Just amazing, so.

Preston Pysh (42:08):

Is this the same as [inaudible 00:42:09]? Is that what you’re referring to with the CoinPool?

Phil Champagne (42:13):

No. Actually, white paper is… There’s an article on Bitcoin Magazine, CoinPool.dev.

Preston Pysh (42:22):

Okay. We’ll have a link to that in the show notes for folks to check out.

Phil Champagne (42:26):

And that is where the white paper is located and it shows… And there’s article. I mean, it’s being published in February of this year, so it’s recent and it’s quite amazing. The only thing is just like Lightning Network required a software to introduce the [inaudible 00:42:46]. [inaudible 00:42:46] was required for Lightning Network to function. Now on this, CoinPool requires a three different new features, but up code to be introduced in Bitcoin. And so again, there’s tap food that just got introduced recently. That’s so conservative to feel of Bitcoin that it takes a while before something else will be introduced. So it’s probably going to be maybe another year or two before we see any traction in regards to CoinPool, those features be introduced. I mean, they mention it in the white paper and I [inaudible 00:43:22] the details.

Preston Pysh (43:24):

As the expert on studying Satoshi. What do you think he would think of all of this activity that’s happening and the second layers? From the writings that I’ve read, he seemed well versed on a lot of the traditional protocols and how the internet functioned and was well aware of building in layers on top, as you continued to move out of the base protocols. What do you think he would think of Bitcoin specifically? And then what do you think he would think of all these other protocols that are competing, “competing” against Bitcoin and maybe their culture and whatnot?

Phil Champagne (44:06):

Yeah. You mean other blockchain?

Preston Pysh (44:07):

Yeah. Other, you call it Ethereum or whatever-

Phil Champagne (44:12):

[inaudible 00:44:12], kind of thing. Yeah. I actually don’t know. So the only exist reference we have is bid DNS. And that was very limited in terms of what it was doing. All it did was storing information about in the blockchain as a database of this domain name, this IP address. So very limited in terms of what it was doing. So it was not something that you expect that will be bloated in size. It will not be used as to make transaction of payments to one or another, but strictly to transact domain name. So in terms of requirements for was it will not have been beefed up. So in terms of a transaction perspective and that kind of thing. So what would he think about things like Ethereum? Who’s got a terabytes of size in terms of blockchain size and that kind of thing. I don’t know.

Preston Pysh (45:06):

I mean, he had the calculations in the white paper to keep it so that you could run as many nodes. He talks about that in his writing is about the importance of everybody being able to run nodes.

Phil Champagne (45:15):

Yeah, I know. But again, it’s a matter of perspective. His perspective was 2009 and there’s no Lightning Network. And we do have compared to in 2000, the bandwidth is much higher today. We’re able to do video easily without thinking. And so from that perspective as, okay, I guess in the next 10, 20 years, we could be able to afford more bandwidth. And that will be our ways but obviously, it might be a challenge in terms of how fast the technology will adjust to the Bitcoins transaction or that kind of thing. But I’m thinking it’s like he didn’t had the full perspective that we have today. So it was a different perspective. So how to imagine how he would think based on what the… It’s dangerous in some way.

Preston Pysh (46:08):

I love that response and I love how guarded you are to not try to… Because it’s important. I tell my sons, it’s way more important to define what it is you don’t know than what you do know. And I think that’s you’re on full display demonstrating that right now, Phil-

Phil Champagne (46:24):

Yeah. I don’t know. Yeah.

Preston Pysh (46:25):

I really respect that. No, I do. I really respect that. What do you think when you go through his writings, what do you think Satoshi was most worried about?

Phil Champagne (46:35):

Well, the main part that we know is the part where he talks about WikiLeaks. That is almost his last post. The last post is about Bitcoin release something. And the one before that is about WikiLeaks suggested that being using Bitcoin. And he was a little bit afraid of that. Sometimes we keep forgetting what are the other reason why he was anonymous? For example, I was so surprised to see that there’s that guy. And I think in UK got arrested because he coded… I’m not sure if you’ve saw that. He coded something… I forgot the name of that thing. I think it’s on Ethereum. It’s some sort of a pool thingy on.

Preston Pysh (47:17):

Yeah. That’s like a mixer, yeah. Tornado-

Phil Champagne (47:20):

He just created the thing. So it’s a smart contracts that allow for all of that to happen and they arrested them just for coding this. It’s like-

Preston Pysh (47:30):

That’s crazy.

Phil Champagne (47:31):

So is this the kind of thing in the beginning that was in a mindset of Satoshi to avoid? It’s like if I stay anonymous, at least I’m avoiding any… I mean, today we’re not think… If he was still around today, nobody would think he would get arrested because it’s dominance, it’s decentralized. But at the time, you don’t know the reactions and so on. And so I actually wonder if that was part of the thing that was a bit afraid of and one of the reason why he decided to leave after, okay, WikiLeaks starting to… And we know what happens, WikiLeaks. If I keep staying around, there’s more chances that-

Preston Pysh (48:14):

On the face.

Phil Champagne (48:14):

There powers that shouldn’t eventually detect who I really am or that kind of thing. I don’t know, again, I’m speculating here, but.

Preston Pysh (48:23):

One of the things in the book it’s in there that we’re talking about here with the WikiLeaks is when WikiLeaks, their financing was basically taken offline by the government. There was folks on the forum that were saying, “Hey, this is our huge chance for Bitcoin to basically step up into this void.” And Satoshi had a response that Phil highlights in the book and Satoshi was like, “No, we are nowhere near ready for this. And trust me, you don’t want this type of attention. We have a whole lot more that we’ve got to work on and we’ve got to get right before we step into the limelight like this.” Yeah.

Phil Champagne (48:59):

Yeah. I’m actually curious to know if you would consider this, obviously, eventually, it has been used with a silk road with that kind of thing for project that would be totally against, beyond Wiki leagues. So I wonder what he thinks of the readiness level of Bitcoin today.

Preston Pysh (49:16):

I mean, yeah. Yeah.

Phil Champagne (49:20):

The challenge will still remain in the sense that where they are in control, the governments and banking system is the exit and entry points. Now for those who wants to go back in dollars for whatever reason. So that is still where they have control. And they will always because now that’s… But the protocol itself, they would need to control the entire planet to be able to satisfy a shutdown of Bitcoin, that kind of thing.

Preston Pysh (49:50):

Yeah. For a person who’s just coming into Bitcoin and trying to learn more, it’s overwhelming. And I’m kind of curious where you would have them start.

Phil Champagne (50:04):

Actually, I don’t refer my book as a starting point. I think it depends on that person actually, the background. If it’s a person that is with a software background but doesn’t have any economic background, then The Bitcoin Standard will be a good suggestion. So The Bitcoin Standard is for someone who has an economic background, it doesn’t need to read a Bitcoin standard as much because it covers mostly the economic side of things. So for someone who wants to understand more about the functioning and all that then… Well, obviously when chapter two covers a bit… I give a little bit of insight on that. So at least they have an idea and as well as… well, there are some that are a little bit more technical, so.

Preston Pysh (50:53):

Jimmy Song has a good one and I know Andreas has another good one, that’s pretty technical for people that want to get on that path.

Phil Champagne (51:00):

Yeah. It depends on their level of… Because if it’s someone with an economic background, who doesn’t have much expertise in… I don’t want to throw them into something highly technical because then they’ll help you. So that’s why.

Phil Champagne (51:20):

And that’s where I actually mostly dealt with people that were lacking in the economic side. So that’s why I had this reference book mostly. But when I think about the people that have an economic background, but not a big software background, then it’s little bit more complex. But I will refer them… Well, the white paper-

Preston Pysh (51:42):

Definitely the white paper.

Phil Champagne (51:42):

Maybe my book. And yeah, I think it’s always a good thing because it’s not that complex too much. Obviously, there’s dark terms that they’re not completely familiar with. But at least it’ll give them an idea.

Preston Pysh (51:57):

Well, since you don’t promote your book in those recommendations, I’m going to do it right now. I think for people that have been in the space for a little while and have heard a lot of the different talking points, I think that your book does such a good job because there’s so much breadth in a lot of different topics that I think for a person who’s not familiar with the forum posts and how much Satoshi actually wrote and put out there, they’re going to be blown away at the depth of his writings and how much is out there from him, the guy or her. And I find it to be such a baseline important thing for a person to read and go through to fully understand what it is that they’re participating in.

Phil Champagne (52:47):

Well, thank you.

Preston Pysh (52:50):

I got one more for you here, Phil. Oh, yeah. You have a new book you’re working on. You told me this in passing. I want you to talk about this and tell… And it’s not coming out for a couple months. Is that right?

Phil Champagne (53:01):

Yeah. I still have 80% done. So about 20% left of writing to do.

Preston Pysh (53:07):

Okay. Yeah.

Phil Champagne (53:08):

And about two and a half chapters.

Preston Pysh (53:10):

What is it on?

Phil Champagne (53:12):

Well, it covers Bitcoin and all the other coins as well. And all the technologies are proof of stake, proof of work, and so on. And basically putting them and analyzing them in terms of the decentralized aspect, what their fairness and now… And I try to be as unbiased as possible. But I tend to believe that I’m going to be getting tomatoes from both sides.

Phil Champagne (53:43):

The old pointers will say that I’m a Bitcoin Maximalist in disguise while the Bitcoin Maximalists will say that I’m promoting the shit points in some way. Just by talking about them basically. No, but what I do… I mean, what I did love just because I almost go over a debate with myself. When I write those things, I’m trying to look at it from both angles and so on. But I’m trying to pick the negative side and the positive side of both coin and both sides and to make them obviously as much as possible, all the points I could think of that the arguments that are topics of value so that people can actually can understand. Oh, okay. Now I have a little bit more an understanding of the whole spectrum was actually important to look for. And I shouldn’t be looking at the proof of work coin that is using shot to 56, that just started like this.

Phil Champagne (54:45):

And now I have to be familiar with this impact of the hash power. Or even if it’s not using shot five, six whatever hash it’s using, how many other coins are using the exact same hash? Because now all the miners are going to be competing against with that specific hash power, specialized hardware. They could haul, move around and play with those things and fight each other and destroy one chain that is using this weak… That has weaker hash power on that same. So even if you’re not using shot five, six, you might have a problem anyway. Now, between all those and there’s example of those that are using the same and multiple… They’re not shot to five, six, they wanted to differentiate. But there are many that are using the same anyway. So it’s a problem and that this has to be aware of.

Phil Champagne (55:39):

So anyway, I cover many topics. I talk about also the zero-knowledge proof, how it is. And I hired a guy for making some images. So at least it’ll be cute. Because I find zero-knowledge proof, fascinating too and itself. And I could see, whatever those things that are happening in all coin, there are technology pieces. Technology, eventually they’ll be back in some way in layer to Bitcoin or in some other way through… Even possibly through the Bitcoin new up codes for Bitcoin in the future once because it’s very conservative Bitcoin and that’s the pure thing of it. Once those things [inaudible 00:56:24] established enough, you would have those features. Eventually things are not done for Bitcoin.

Preston Pysh (56:32):

R&D.

Phil Champagne (56:32):

Yeah. Yes. Definitely.

Preston Pysh (56:35):

Phil, what a pleasure having you on. I know we’ve mentioned the name of the book here quite a few times. The book is called The Book of Satoshi. You’ll have another one coming out, but we’ll have a link to the book of Satoshi in the show notes, we’ll have a link to your Twitter feed. Is there anything else that you wanted to highlight to the audience?

Phil Champagne (56:52):

No, that’s pretty much it. I think we covered pretty much. It was great talking to you.

Preston Pysh (56:58):

Awesome talking to you, Phil. I mean this is… I’m kind of blown away. I think I’ve almost done close to like a hundred episodes of this Bitcoin fundamentals and I have no idea how I’ve waited this long to bring you on the show for how often I reference your book.

Phil Champagne (57:15):

It’s pleasure.

Preston Pysh (57:16):

Yeah. It’s a pleasure talking with you. Thank you so much for making time.

Phil Champagne (57:20):

No problem.

Preston Pysh (57:21):

If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use, just search for, We Study Billionaires, the Bitcoin-specific shows come out every Wednesday and I’d love to have you as a regular listener. If you enjoyed the show or you learn something new or you found it valuable, if you can leave a review, we would really appreciate that. And it’s something that helps others find the interview in the search algorithm. So anything you can do to help out with a review, we would just greatly appreciate. And with that, thanks for listening. And I’ll catch you again next week.

Outro (57:53):

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