welcome to the kaiser report i'm max kaiser robots are increasingly able to do menial labor from flipping hamburgers putting what is making cars to mating with the consequently vascular dementia but there is a media or of technology heading our way right now that will finally make extinct are corrupt too big to fail banks and finance dinosaurs yes the bitcoin media your is going to smash the fire sector finance insurance real estate all these middlemen gone like the dodo the t.-rex extinct by you know stacy kaiser we're in twenty fourteen and twenty fourteen is going to show the true power of the block sheen that is where all of the energy of this meteor called big is bitcoin two point zero explained colored coins versus massaquoi in versus open transactions versus proto shares these are just some of the many things that could ride on top of the blotching kind of like that guy writing on the missile go to take out you know you

know in the dr strangelove that famous saying at the end the bomb down think that was sam's or somebody like that because it's phil simms he runs a suit store. it was it was it was mom's maybelline no that wasn't her either well this is from kyle topi and he is writing on yahoo and he's looking at some of the things in twenty fourteen that are going to be more than just the currency app that is big question and a lot of people focus on the currency app application of bitcoin because many people only heard about bitcoin in two thousand and thirteen so he says at its core between is a new technology that allows everyone of them around the world to come to a consensus on who owns what without the use of a centralized third party there are many different applications that could be built on top of this technology in between is only the first of many apps to come when you forget about big point and just look at the. technology there are

a large number of new possibilities that jump out at you for example if you can have a decentralized ledger that explains who owns which asset then why do we need centralized stock exchange's why do we need domain name registries why do we need e.-bay all of this could be on the decentralized that's the technology aspect of it he's looking at in particular that first section right absolutely it's decentralized trust anything that requires trust lawyers bankers domain name registration stockbrokers that can all be put onto the block chain and get rid of all the middleman and the price plunge toward zero the ace of pot a core curve to zero and this of course is amazing because most pundits in america like the paul krugman as of the new york times they can barely wrap their mind around big coin one point. joey's adult business insider is still struggling i'm not sure what big point is yet meanwhile bitcoin two point zero is no ready to go ready to launch and set another stage another chapter in this incredible

incursion technology tsunami that is just blasting away all these high priced middlemen scoundrels banks so you could say hello to. all of what. so then he goes in to look at some of the application is already being applied using bitcoin the technology on the block chain colored coins for example the main idea behind the colored coins project is that you'll be able to apply secondary values to certain big coins on the bitcoin block chain those secondary values can then be used to create completely new digital currencies that are backed by real world assets for example let's say you own some gold at your house you could hypothetically take five such toshi s. and say that each one of those to toe shoes is equal to one gram of the gold that you hold in your home you could then exchange those five toshi is backed by one gram of gold each on the decentralized exchange in the chroma wallet which is what color coins use this means that can you. instantly exchange gold two bitcoins

dollars euros or any other currency that is created in the chroma wallet and you can create stocks in your company in the same exact way doesn't have to be gold does not to be silver could be whatever you want but you can take a company like google or facebook or that's. that flex and take it public on the block chain and for a fraction of the cost nearly zero cost to get rid of all the wall street people in the middle and it's totally transparent and of course people who own these currencies can participate in these offerings in ways that they couldn't before because maybe they didn't get in on the i.p.o. because the i.p.o. was given to buddies and solve very. it's all very you know crony capitalist on the distribution of these things but with this in place you have egalitarianism ism and you have the ability for a distributed opportunity to take place in ways that the current capitalist model has failed because it got overtaken by kleptocrats this is also capitalism two point zero i should point out just as the as it's going to point out because bitcoin one point zero is monetary is

a two point zero and bitcoin two point zero is capitalism two point zero and yeah you remember that t c c the depositary trust corporation down and water street in in manhattan member it was flooded during the recent floods and it cost millions and millions billions of dollars to replace the stock certificate or let me just jump in if i can because you know you won't be able to do any illegal short selling you won't be able to engage in naked short selling you know patrick byrne who's now taking big point over overstock dot com his company had to fight off an attack by naked short sellers and he went to battle with the f.c.c. and what's called reg show when we've been following this for years while i'm on the show soon but you wouldn't have that ability because the way that you can do illegal naked short selling is by saying that somebody sold stock and we don't have the accounting ability to reconcile that trade with our accounting ledger and they do that on purpose because they're crooks but if you use colored coins you cannot do naked short selling so goldman sachs goes out of business j.p. morgan has got through. billion ounces short of solar that would be blown to

smithereens they will be able to gauge that whole cell fraud anymore the actually there's another function being deployed right now a company called open transactions and they started working with gold and gold digital gold but here they now turn to bitcoin and open transactions will no company whether it's pay pal or j.p. morgan of goldman sachs for example will be able to go in and change the the number of shares and the amount of money they have on deposit so we'll get rid of the accounting and they count in fraud as well because it won't you won't be able to cook the books using open transactions on the block chain won't take another example basil three accord which is supposed to be the master agreement for little minimum capital requirements for banks they just came out and said that we're going to make it easier you don't keep so much capital on your books because that's the collateral you use all your books that go in through the fractional reserve banking mile and create these concatenations of multi lever pyar pyramid pirated pyramid ponzi schemes all that gets blown by having true transparent counting totally

accountable and distributed the total accounting is distributed to everybody on the network so. everyone will know exactly what the banks own as collateral collateral values will be all aaa because bitcoin is a aaa credit big point is aaa credit there's only two or three countries in the world now the aaa credit america is not aaa anymore most of your zone is fricken junk big point is aaa credit think about that with open transparent security creation and the ability to wipe out wall street with actual securities distributed matter to give capitalism two point zero this is fantastic so while all the shriekers out there are concentrating only on this the price the exchange rate with the dollar the euro there yonder at the u.n. so here are people deploying services that are needed and this interim radiating out of existence the entire over compensated banking sector so we'll. one other

issue that always arises people say well if you send your bitcoin to somebody on the other side of the world in exchange for goods and services you can't there's no charge back so somebody has come up with a solution for that and that's with master coins which they're very similar to color coin a little bit different some of the other exciting features being developed by massive coin include as decentralized betting exchange and using contracts for differences to create currencies that don't need to rely on a third party for physical backing one thing that needs to be pointed out about the master coin protocol is the master coins on that layer also have their own value separate from big queens this means that master coin is also an old coin there are some interesting features that are being added to the master coin protocol such as the ability to mark certain massa queens in a savings account where payments can be reversed if they are made without the address holders permission let me jump in there for a second because people will say oh you know those sounds like derivatives and it sounds like you don't like to remember those but now you're saying well but going

to ribbons are ok let me make a very important point here the derivatives that exist today the ones that say j.p. morgan are involved ninety trillion dollars worth of off balance sheet derivatives they're collateralized by derivatives collateralized by mark to fantasy accounting they're collateralized by whatever some big four accounting firm says the collateral is worth and we know that they're all corrupt and commit massive fraud they're all engaged in a daisy chain of fraud there is no collateral. what you just described are derivatives and the derivatives are derived from b. triple a credit that is big coin that is a solid as gold that is digital gold and therefore it's a aaa credit and therefore these derivatives are permissible in the sense that they derive their value from something that has a stated known unequivocal value not like any of the derivatives today they have no value because they're not tied to anything that's already been read i profited a thousand times going back to nine hundred seventy one when the world went off

gold and went into this fantastical experiment of having no currency collateralized by anything that anyone had any basis for and that one of the other bitcoin two point zero things that are coming up with there are decentralized autonomous corporations so you can see in the name what is out there this is just the twenty fourteen between two point zero there's also becoming three point zero four point zero to emerge after that now another thing that is using the block chain as a completely sort of innovative new way not even financial related this is information related out in the open and i say prove twitter built with code from bitcoin and bit torrent so following the mass protests in brazil this guy miguel freights us went to twitter to find free information because he knew that the brazilian press was you know in the pockets of the politicians and they were all friends of the willing to report what they wanted to report so he went to twitter and he found his news there but then the n.s.a.

revelations came out and he got it afraid that well this is going to be compromised by the n.s.a. in the u.s. security state so he's come up with his alternative is called twister it's a decentralized social network that in theory can't be shut down by any one entity what's more twister is designed to prevent other users from knowing whether your online what your ip address is or who you follow you can still post public messages on twitter but when you send directives. private messages to others they're protected with the same encryption scheme used by lava bit the email provider used by edward snowden so of course he's using a bit coin blah chain and he's also using bit torrent technology he's in brazil so he doesn't have this problem of being patriotic to the n.s.a. fear of committing treason he's being patriotic and giving all the information like lava bit was forced to do they say this to us today is the mother of invention and we're not talking about frank zappa. clearly their pursuit of happiness which is

codified in the founding documents of the united states of america has been sworn to by the n.s.a. and their corporate handlers who are looking to bankrupt anyone they can and bring slavery back after it was outlawed many years ago. invention using bitcoin is now bringing happiness back what is happiness is to freedom from feeling or being afraid it's the freedom from fear that's what happiness is all about that's a big point is giving us a aaa credit that you can do derivatives knowing that you're driving value from something that we know what it's worth that's freedom from fear that's the pursuit of happiness that's the ability to kick the n.s.a. that is to get out of my life you scumbag all right we got to go. stay right there plenty more coming your way.

to the playing. field a big spirit travels with the flame from its place you can grease. join james brown for an elemental and become. around russia and beyond. where i. play. millions around the globe struggle with hunger each good.

what if someone offers a lifetime food supply no charge. against g.m.o. and we think that's. the genetic anymore the. priest. there is no. evidence to this any problem with genetic engineering what do you make a deal. or is free cheese always in the most trap i don't believe. that a free. enterprise is profit that. this golden rice. as a new physician i swear to abide by the hippocratic oath. to the best of my ability and judgment. i will prescribe for the good of

my patients. i will not give deadly doses to anybody. or advise of those to do so. i will never do harm to any. doctors of the docs on october. welcome back to the kaiser report by max kaiser time now to go to new york speak with reggie middleton of the boom bust blog dot com reggie welcome back to the kaiser report thank you as usual very good to be back with a view show all right reggie middleton you are building what you call a virtual goldman sachs on top of big coin tell us about it a virtual goldman sachs on top of that because protocol and network and the

extreme conflicts of interest and the excess of bonus compensation sort of so basically building a more efficient financial system. right so in other words you represent what some are calling bitcoin two point zero first we had bitcoin introduced to the world a few years ago it is now become a mechanism for payment on the internet with overstock dot com for example accepting it as a payment method and as a currency now you're is taking it to the next level which is to say that individual bitcoins themselves can be used to launch what are effectively derivatives correct right derivatives in the purest sense to them about derivative is simply an instrument that derives its value for something else not necessarily. you know some frankenstein monster but it can be if conflicts of interest causes two parties to. spread away from each other in terms of actual interest what i'm

doing with big quine initially is i'm creating mechanisms to smooth out the volatility and allow people to take positions on it for it's over start. the c.e.o. made a very interesting and apparently very good decision to accept because he got one hundred thirty thousand dollars worth of orders over a hundred orders almost all new orders new customers and this isn't the first day that's actually very good business decision but when he gets that in excess pick corn because it is still very volatile so either he has to try and exchange all that for us dollars or he has to write the volatility up even if it ends up going higher volatility is very. very dangerous you know makes you know as big as the c.e.o. so what products do is allows him to take that exposure and hedge it so he can lock into a u.s. dollar value with his big corns or euro value japanese yen chinese renminbi any of

over a dozen currencies you know that's one of the things we can also make virtual letters of credit we can actually exchange real estate through the pick or network the sky's the limit and the reason you could do all of this is by. because the currency like corn or intelligent crises are programmable i can tell you to do something i can make a contract. off the currencies that basically enforce an agreement between two or three more parties and once i give them once i give you my big corn you can spend it and so we mutually agree upon something and that mutual agreement is then executed unlike the or the don't feel. currency where if i take a dollar bill i'll give it to you that's it you know and they want to get it back up to ask for it back off the fight over it right some have referred to bitcoin as distributed trust and what that means is when you apply it to the banking model of

the broker the stock broker model is that people go to banks and brokers to be the intermediary to be the fiduciary to be the trust to do things like take a company public through an i.p.o. work to create a letter of credit or to create a derivative as you speak about because they have a reputation they have some trust in this equation but what we've seen over the years is that they've abused that trust and in into this abusive vacuum big point is emerged and by having distributed trust you don't need these bankers anymore because all of the transactions all of the records of the transaction are in the ledger that is part and parcel with every single transaction and it becomes what you call a smart currency but i want to just talk a little bit about something you just said you mentioned that these are derivatives but they are real derivatives real derivatives that are derived their value from something of true value and we talked about this in the first half of the show in

other words in the case of the current derivative market the value it derives from other derivatives so you have an enormous ponzi scheme there is no more gold in the equation anymore derivatives are. furring to other derivatives but this generation of the rhythms that you're talking about with what you're introducing would be deriving their value from big coin and big point as an impeachable intrinsic value correct correct you know. there's a lot of discussion because i know whether it has any value a lot of people say it's just bits and bytes you know there's a lot of misunderstanding i approached because and actually it's a big game but i did it as a true student no preconceived notions biases prejudices i simply looked at it and i really liked what i saw what because it does number one primary value is the fact that it allows you to me is that it allows you to totally circumvent the money center banks and the central banks you know that's very valuable. a lot of people

look at the actual bitcoins as a currency and ignore the transmission network an analogy that often uses a car you have the dollar which is say a chevrolet and it's you know thirty thousand dollars then you have the big corn which was two since last year and now it's one hundred thousand dollars now and people look at the big corn and say but it's a bubble it's overpriced it's a ponzi scheme etc etc but that car that because a car comes with his own roads and those roads have no tolls no bridges so you don't have to pay any fees to travel the roads in the roads could go anywhere in the world over seas and over countries through rivers anywhere there's an internet connection and that car could go faster than all the other cause in the world and there's no in the way that was to be impeded by any government whatsoever or any military or any corporation so taking that a consideration which is more valuable chevrolet or their car coming from two cents to one hundred thousand dollars so you have to look at it because as it is and not

as it's pro-trade in the mediocre as detractors of proponents etc yeah i mean people must do their own homework and check it out more thoroughly but i think the point is when people talk about big. coin being the equivalent of gold i think they are making a great point and here in london we now have lloyds of london offering cold storage of bitcoin and short cold storage gold money dot com is now offering a cold storage service for bitcoin making the equivalency to gold as something with inherent intrinsic value but i want to talk a little bit more about the tech space in general because the last time you were you were on the show reggie you were very excited about google glass now since you came on the show when we asked you about at the time the n.s.a. revelations through the snowden reveals have been quite damning for products like google glass and others people are saying i don't want to wear google glass because i'm effectively spying for the n.s.a.

so i'm wondering what your current position is on that technology it seems as though you've pivoted into bitcoin from google glass is that a correct characterization or am i missing something your thoughts just on why don't you i'm writing a technology of a vetted as a developer so still very bullish for google glass anybody who feels that they're spying for the n.s.a. program google grass a probably never will google grass and b should take this cell phone and destroy it for sure down the toilet and should never walk by a bank or a liquor store or a department store stead of macy's don't go into corners in the city you know the n.s.a. is a spy agency for the most powerful nation in the world they spy that's what they do any devices connected to the network is potentially vulnerable from an effect any devices not connected to a network that has to be physically taken is wonderful you know keep that in mind well google grass does it enables you to actually spy back you know and if you read graphs you realize you have significantly enhanced observational powers and

recording powers and transmission powers now whether those powers could be intercepted by spy agency possibly but no more than anybody with i phones so if you had said google glass is understandable but you know be aware you also answer i phone an anti-spam so good. four anti-flu phone etc so you know google has that is connected to a network security and they open it and they say his job is to have security that's what they do all right let's let's stick on this idea for a second because the the n.s.a. revelations pertaining to i'm sorry the snowden revelations pertaining to the end n.s.a. have then led to companies like i.b.m. and cisco sales in around the world have crashed in china they've tumbled boeing lost out on a fighter jet deal with brazil a multi-billion dollar deal so in other words the economics of spying and i'm talking to you as a businessman here not as somebody who might have an insight into the politics but

just as a businessman the politics of spying is biting america in the because these big tech companies are now losing huge deals as a result of this invasive spying how can the companies justify the fall of market share in america with technology that nobody wants it's proven to be completely ineffective and it's killing sales overseas as a businessman reggie what are your thoughts well if it's completely ineffective and nobody wants it because the post and for that you finance and economics that's the natural course of things. the n.s.a. spying has been a constant i think since the birth of jennifer genesis and i say the only difference only delta is that it's been made public you know snowden and stones revelations and you know his revelations weren't much of a revelation you know the specific things that he you know were educational to me but it's not as if i was surprised again the n.s.a.

is a spy agency they spy you know and they don't spy if you know if you like them or if they like you you know they strong organizations so i doubt very seriously and i don't have insider trackball musings common sense here not you i doubt very seriously. just pushing on google or just pushing on microsoft any large corporate entity that has access to a large amount of data and they say has compromised voluntarily with the company's permission or by force let's let me let me kind of circle back to the big point for a second because as you pointed out with google glass the n.s.a. spying on you but in turn your spying on them so you're hinting at this idea of a pushback and big point certainly gives people who are not happy with the current way the banking system is being organized gives them a way to push back and they are doing so with initiatives like your initiative do you think it's some point there's going to be more of a pointed response from let's say the central bankers the janet yellen is now the

federal reserve bank not only does bitcoin into this intermediate goldman sachs but it also does that to mediate the federal reserve bank of america are these bankers these big bankers are they going to push back against bitcoin do you see that happening we've got about thirty seconds yes they have allegedly j.p. morgan has created their own derivative a bit corny one or two feet for calling but it's a centralized system as opposed to a decentralized system which because it's peer to peer so j.p. morgan has a server that tries to do everything a pic or does of course they own the server the problem is the attempt at the patent and it's up to depend to one hundred seventy five times one hundred fifty five of those times it was rejected. with prejudice in other words they couldn't come back from not mistaken the last twenty times that was rejected without prejudice which meant i think it can be filed but the problem is it should never be issued and i would be given

a patent because yeah it would appear running for these four years all right fair enough reggie thanks so much for being back on the kaiser report very welcome and that's going to do it for this edition of the kaiser report with me max kaiser stacy herbert i'd like to thank my guests reggie middleton of boom bah. blog dot com if you'd like to get in touch tweet us a kaiser report into lifetime bio. so that on june sixteenth one thousand forty one we had a graduation party at school and the war broke out.

the shops were always full of goods. in september leningrad was blocked. one day mom went to europe saw that all the shelves were empty. in november they bombed the warehouses with this it was the main storage place for all the food in the city people eating the earth because it had small traces of sugar in it i tried to eat it as well but i couldn't. the third night it was incredibly heavy bombing. it was a direct hit on that very shelter and everyone was buried underneath. all of the wood to.

this point is a triple a credit big point is aaa credit there's only two or three countries the wrong the other aaa credit americas not aaa anymore a mostly euro zone is fricken junk big oil has aaa credit think about that with open transparent security creation and the ability to wipe out wall street with actual security figure to take algerian man to get capitalism to point out this is fantastic. dramas that can't be ignored. stories others refuse to know. faces changing the world. picture of today's. politicians from around the globe.

these rockets could have never been fired from government controlled territory. to question america's claims that syria's government was part of chemical weapons of tide near the capital damascus last august. officials. seeking to negotiate the release of a russian national he's been for years without charge just like the majority of other detainees. yes and continue with sweeping surveillance president obama's anticipated plans to reform the n.s.a.'s activities are dismissed as a limited p.r. stunt.