A standing-room only crowd of over 100 attendees filled the space at CoLoft Thursday as Los Angeles bitcoin enthusiasts and the bit-curious gathered. The special guest of the night was famed security researcher and “Let’s Talk Bitcoin” host Andreas M. Antonopoulos. As both an early internet adopter, and bitcoin entrepreneur, he has a unique perspective on crytocurrencies.
The event was promoted via meetup.com by Micah Winkelspecht. He took the stage and introduced Andreas, giving a brief history of other bitcoin gatherings in LA.
The following is largely my notes from the event. There were people videotaping it and I know the footage will be online, but in case you’re like me and hate watching video, I’ll write out what was discussed.
Andreas took the stage, speaking first on his background in computer science and infosec. He told a story about discovering bitcoin, where the concept hit him in the face like a sledgehammer and he got super obsessed. He read the Satoshi paper and was impressed. (click here – you should read it, too). What really hit him was that bitcoin was not a currency. Bitcoin is a network platform.
Money is just the first application on the bitcoin network. He used the example of people in 1997 assuming that the Internet was just a network for email.
He also said that bitcoin isn’t perfect, but that it’s good enough. He spoke of network effect, where the number of people gives value to the concept in question. With bitcoin, the network effect is the strongest the world has ever seen. It accelerates adoption of technology.
The concept of bitcoin as a distributed asset ledger came up, where it’s more effective at a large scale. Heirarchical systems are corrupt by nature. The primary goal with a decentralized system would be to level the playing field. Such a system has predictability and you can trust math.
In the United States, we have the federal reserve. We’re lucky in a way that many other countries aren’t. For those people, bitcoin is a choice that gives them financial independence. Bitcoin is for the other 6 billion people in the world. At least 1 billion of those do not have economic freedom. They don’t have access to credit, the ability to send money overseas, or take out loans for businesses. Until now, each government could control the flow of money. Bitcoin is really the first international currency.
Andreas explained that the ledger is like the IP protocol. He went on to talk about banking structure- that bank fees are largely there for fraud protection and chargebacks. With bitcoin, you don’t have that, so you have to be more careful.
You can’t stop money that is information. Bitcoin can survive even if it’s down to 2 nodes. There is a 10 billion dollar economic incentive to protect bitcoin. A few known failure modes exist- he talked about an algorithmic bug called ECDSA. He said that the worst case scenarious is that bitcoin can just be restarted from scratch. The room laughed at the idea of mining bitcoin on your CPU again.
Bitcoin can handle additional layers. It has a robust transaction scripting language, which really opens the doors to a world of possibility. You could play with multiple signatures required to release the coin, building applications based on trust or escrow. This is the equivalent of TCP on the internet. He gave colorcoin as an example.
2014 will be the year of the next layer, the HTTP of bitcoin. You could reinvent corporate management by using bitcoin’s model as a template. You could make stock certificates that are anonymous. You could run a government as an algorithm. Bitcoin could disrupt nation-states and corporations, removing layers of control. A government could be replaced with 100 lines of python code.
One of the biggest places bitcoin can have an impact is the area of global remittances. Basically migrant workers come to America and send money back to their families. They usually use Western Union, who charges the highest interest rates to send money to the poorest countries in the world. If bitcoin only solved that problem, it would be doing a great deal of good in the world.
He mentioned also where it could be useful in crowdfunding and peer to peer lending (similar to Kiva), in poor nations. He also said that the drug issue that keeps coming up is a deliberate distraction from the real discussion about bitcoin.
There is 50 years of pent up innovation in finance. Bitcoin can reinvent trust mechanisms. It puts the burden of confirming trust with the buyer.
Andreas doesn’t think it’s quite ready for mainstream. One big issue is that humans are great at physical security, but we suck at digital security. One of the Q&A questions went over the best way to keep your bitcoin safe. He said that the best solution is a paper wallet, with the amount broken into several paper wallets. Another solution would be a tamperproof hardware wallet. He also called out that people should use random password generators and turn on 2 factor authentication.
Andreas Antonopoulos was an inspiring speaker, tackling each subject with clarity and passion. I left the room overfilled with love and excitement for bitcoin and the possibilities of the future- I’m sure many others did as well.
A huge number of people then went to the Warsawa patio afterwords to hang out and network.
LA has two upcoming bitcoin events if you want to check them out! Next Wednesday will be a meetup with a talk from the Bitcoin Foundation, and Jan 21 is the return of the Satoshi Square trading event.
note: The meetup had 236 RSVPs. I’m not actually sure how many were in that room.