CoinTalk #83: 👨‍🍳 Interview With a Libra Nodeholder

We talk to Bison Trails’ Joe Lallouz about being one of the 27 launch partner’s for Facebook’s Libra project.

Coin Talk
Coin Talk
Jul 1 · 50 min read

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CoinTalk™️ is produced in partnership with Medium and hosted by Aaron Lammer and Jay Caspian Kang. Press “Listen to the story” above to play the episode. (You can also subscribe on Apple Podcasts, Google Play, download the MP3, or email us at hi@cointalk.show)

Transcript

Aaron Lammer: Well, okay. Libra launched today. Did it launch today? What happened in Libra, today?

Joe Lallouz: Today was what I would call a soft-launch. It was an announcement. They open-sourced the code, they released the white paper and all materials about what the blockchain group at Facebook has been working on for the last couple of years, and then also they announced the Libra Association, which is an independently governed association that's going to support the Libra blockchain going forward, so it's external from Facebook.

Joe Lallouz: All those things, quote on quote, "launched".

Aaron Lammer: I woke up this morning and I thought I had a non-packed day in which I had to tape one podcast that I wasn't really sure what to talk about. I was like, "Oh, crap. This is going to suck. I'm going to have to be like, 'Bitcoin, will it cross 10 thousand?'"

Aaron Lammer: And not ... forgetting that today was going to be the Libra news day, and the news hit for people. I assume ... You're ... You make a living in crypto. I assume that crypto Twitter and crypto media penetrates to your brain.

Aaron Lammer: It was pretty instantaneously the biggest story in recent memory in Bitcoin other than priced. Not in Bitcoin, in crypto as a whole. It really ... it was everywhere. People were texting me, "Hey, what's going on with Libra?"

Joe Lallouz: Definitely.

Aaron Lammer: What was your day like?

Joe Lallouz: Well, I think that I ...

Aaron Lammer: Let me actually ... Let me tee up. I did not really say who you were.

Joe Lallouz: Oh, okay.

Aaron Lammer: Okay, so I'll actually go through my own first-person experience here, which is I woke up, and I was like, "Oh, it's Libra day."

Aaron Lammer: And there was one graphic that was associating a lot with Libra, which was who the partners were, and it's a big circle, and it has the 27 launch partners, is that what they're called?

Joe Lallouz: Yeah. Launch partners. They're association members.

Aaron Lammer: And some of these had already been announced. I think Visa, and MasterCard, and Uber had already been announced, and so it was a lot of the usual suspects if I gave you a, "What businesses would partner Facebook ... would partner with Facebook on likes of a cryptocurrency?"

Aaron Lammer: The top 15 you would be able to name, and then I think there was a couple venture capital firms mixed on, but still all kind of usual suspects, and then right there sort of just as the circle comes to the snake eating it's own tail was Bison Trails, which is your company.

Joe Lallouz: Yeah.

Aaron Lammer: You are the co-founder of Bison Trails?

Joe Lallouz: Yeah. I'm the CEO and co-founder of Bison Trails.

Aaron Lammer: Also, and I'm going to toot my own horn a little bit, I'm a very, very tiny investor in, not the Bison Trails venture which is on this logo, but a separate mining venture than Bison Trails, which is how we met.

Joe Lallouz: Yeah. Yeah, I mean that's how we met.

Aaron Lammer: And I've been wanting to talk about it on the show, but I wasn't sure. I didn't want to blow up your spot at all. I knew you were a little crypto secretive about it, so I thought I would wait until you were here so you could tell me to shut up if I say anything I'm not supposed to say.

Joe Lallouz: Unlikely.

Aaron Lammer: But I'll say that when I think about the scales of the other companies in that circle, it's a little bit of your local pickup soccer team got a champion's league birth, or something.

Aaron Lammer: Am I safe in saying that you're the smallest company representative of those 27?

Joe Lallouz: Well, for one, I'm flattered that you think we're as good as a local pickup soccer team. Yeah, we are ... I'm just ... Honestly, I'm trying to picture off the top of my head all the partners.

Aaron Lammer: Everything in this show has a giant asterisk in it. We give completely incorrect information.

Joe Lallouz: Great.

Aaron Lammer: So there may be another company I don't know about there, but if you look at the top 25, it's big companies, and we were basically primed to expect this because news had already broken that it was going to cost 10 million dollars to run a node of Libra.

Aaron Lammer: My first question to you, I believe, this morning, was, "Whoa, did you buy one of those 10 million dollar nodes bro?"

Joe Lallouz: What did I say to you, though, when you asked?

Aaron Lammer: You were like ... I think you said, "Not yet."

Joe Lallouz: That is what I said.

Aaron Lammer: Yeah. Take me through. When I met you, you were a guy who was trying to set up a mine.

Joe Lallouz: Yep.

Aaron Lammer: Do you ... Is it public where the mine is?

Joe Lallouz: It's not.

Aaron Lammer: Okay. Not even what state it's in?

Joe Lallouz: Yeah, it's not ... I mean ...

Aaron Lammer: It's somewhere in America?

Joe Lallouz: Yeah. It's not public. It's also not really a secret.

Aaron Lammer: Well, it's kind of ... Honestly, the way you represent it to me, it doesn't really matter. It's somewhere where there's really cheap electricity.

Joe Lallouz: Yep.

Aaron Lammer: And so then when I met you, you were in the midst of negotiating local electric contracts and kind of dealing with the nuts and bolts carpentry engineering level concerns of starting a mine.

Joe Lallouz: Yeah.

Aaron Lammer: And how long ago was that? How long has the mining project been going?

Joe Lallouz: We started working on the mining project ... I mean, we actually met a little bit later into the mining project.

Aaron Lammer: Right.

Joe Lallouz: We started working on it a few years ago, and when I say started working on it, I mean kind of exploring, setting up, and also when we're talking about mine, we're talking about a proof of work mine, specifically.

Joe Lallouz: Really, we started setting up ... working on setting up a proof of work mine, and we, being me and my co-founder, as mostly an experiment, a deep-dive into infrastructure in the blockchain space.

Joe Lallouz: Most infrastructure in the blockchain space represented proof of work mining, and these proof of work networks like Bitcoin, and the sort of drive or incentive to kind of look into proof of work mining was to get a better understanding of how infrastructure works. How are these networks secured? Who's controlling them? How decentralized are they? What do mining pools actually look like?

Joe Lallouz: But then also thinking of mining as a potential venture, and do people make money? How do miners control this? And all of this came out of this deep curiosity about the blockchain space, and then deep curiosity about a super important piece of the blockchain space which is infrastructure that honestly, in our experience, no one was talking about.

Aaron Lammer: I mean, I feel like I'm motivated by a similar approach with this show, which is that I actually want to experience as much of this crypto stuff first hand as I can.

Joe Lallouz: Totally.

Aaron Lammer: And so I was happy when I met you because I was already losing money trading shit-coins, and my next thing was, "Maybe I should buy a miner?"

Aaron Lammer: That would be a good way to lose some money or start a fire, and mining is one of those things, I do think if people who are listening are interested in Bitcoin, try going and buying a little Bitcoin, try transferring it, try The Lightening Network. You don't need to have a million dollars in it to experience it, it's actually kind of works the same way when you have $20 in there as $200,000.

Joe Lallouz: Yep.

Aaron Lammer: Mining isn't exactly like that, or at least it's not like that in the last few years. It may originally have been a hobbyist venture. It's actually something that has a pretty high barrier to entry at this point, and as you described, it requires a lot of different skills from airflow in a warehouse space to mining firmware and things like that.

Joe Lallouz: Yeah. You kind of have to understand the software. You have to understand the sort of key pieces that go into building a mine.

Joe Lallouz: I will say this; anyone can mine.

Aaron Lammer: Sure.

Joe Lallouz: One of the cool things about it is anyone can mine because you can basically buy off the shelf miners.

Aaron Lammer: Mm-hmm (affirmative).

Joe Lallouz: The question is, can you mine profitably? Can you ... If you want to be a hobbyist miner and lose 50 bucks ...

Aaron Lammer: If you're living in a Stanford dorm, and you want to burn Stanford's power, you can make a hundred bucks.

Joe Lallouz: Exactly.

Aaron Lammer: If you rent your own apartment and pay your own electric bill, it's going to be very hard to profit mining.

Joe Lallouz: Yeah, exactly. There's been a sort of professionalization in the industry over the last, I'd say five years, ballpark, four or five years. Some really early players early on, and then some newer players in the space.

Joe Lallouz: But yeah, it does require sort of a deep understanding of ... I've never known so much about industrial electricity in my entire life, and full disclosure, I went to engineering school for electrical engineering, and honestly, go talk to small town power companies in the Midwest, in the United States, and you'll be like, "Whoa, I just learned so much."

Aaron Lammer: Well, in your background, part of the reason why I trusted that you might actually succeed, I didn't think you would definitely succeed, but I thought you had a shot to succeed with the mine, is that you had done this, you and your partner had done this startup, Grand St., and to be honest, I don't know. My recollection was that Grand St. kind of helped people who wanted to build hardware products, pair up with Chinese manufacturers, or manufacturers around the world to actually execute these ideas they had at whatever scale they were trying to execute that at.

Aaron Lammer: Sort of some of the kind of stuff that was coming out around ... This is kind of the Kickstarter era.

Joe Lallouz: Yep.

Aaron Lammer: I feel like Kickstarter hardware projects are almost a preview of crypto, and that almost everyone's going to fail. You know what I mean?

Aaron Lammer: My friend Gideon Lewis-Kraus who's been on this show, he's written two articles that were kind of similar, and one was about this extremely well-funded espresso machine that was total vaporware, it ruined a bunch of people's lives, and one was about Tezos, and the story is kind of similar.

Aaron Lammer: It's like, people with good intentions try to do something that's enormously difficult with kind of limited first-hand physical experience in the case of the espresso machine, in the case of the blockchain, kind of limited experience in securing, setting up, incorporating all these things.

Aaron Lammer: It's these two weirdly diverse skillsets, and I was like, "Eh, Joe kind of seems to have the right Venn diagram to maybe succeed in mining.

Joe Lallouz: This is super cool to hear from you because, I mean we know each other, but we don't know each other super well.

Aaron Lammer: Sure.

Joe Lallouz: Right? We've gotten to know each other over the last ...

Aaron Lammer: This is your first time in the crypto cave?

Joe Lallouz: It's my first time in the crypto cave. It's really cool to hear that from you because I actually think one of the things that my co-founder and I don't talk about, I mean we never talked about publicly, we maybe talk about between us and with some friends, is that every single time we've gone after a venture, it's actually to try and solve that kind of problem, which is there is an esoteric means to an end that really good people with good intentions are trying to get to, but it's extremely difficult to achieve that goal.

Joe Lallouz: And in the case with Grand St., it was about building consumer electronic devices, manufacturing in general, including Chinese manufacturing for electronics devices is extremely esoteric. You have to know people.

Joe Lallouz: It's these weird walled gardens, and we were trying to break down those barriers and build APIs into the manufacturing process. Full disclosure, we didn't actually get that done. We got parts of that done. It's a really hard problem to solve.

Aaron Lammer: And the company was ultimately acquired?

Joe Lallouz: Yeah. We ultimately sold the company. We joined Etsy, so we sold the company to Etsy in 2014 and we joined the leadership team at Etsy which was an awesome experience.

Joe Lallouz: Etsy had some interest in the manufacturing space, and they wanted to help Etsy sellers scale, and so we had a bunch of tacit knowledge and built a bunch of software around that.

Aaron Lammer: Yeah.

Joe Lallouz: But very similarly to what we're doing today, and the proof of work mine that we built, that you and I first met along the lines of was a manual version of Aaron and I applying a skillset that we have.

Aaron Lammer: His business partner is also named Aaron, confusingly.

Joe Lallouz: Correct. My ... Aaron, my business partner, my co-founder and I manually applying a weird Venn diagram of a skillset to sort of connect these two dots, which is people that are really interested in this infrastructure, but ... and maybe understand crypto really well, or maybe just want exposure to it, but don't really understand, "Hey, how do we setup ... How do we negotiate a great power contract? How do we build a warehouse that has amazing airflow, and has high-density power connectivity?"

Joe Lallouz: And then from the mine into Bison Trails, the infrastructure company that we've been building, super similar concept. It's like, how do we take something that's really, really hard to do, that you need to have a weird nuanced skillset, which is deep understand of protocols and blockchains to run infrastructure on them, and make it extremely accessible?

Joe Lallouz: And that's ... Not to shill the company, but that's what we're trying to do, and that's what we've been working on with the software company for the last little while.

Joe Lallouz: And it's funny, I'm only saying it's cool to hear from you, because I've said this to Aaron, my business partner, a few times. I'm like, "Man, why do we keep getting ourselves in these positions where we're really trying to help people do something that feels impossible?"

Joe Lallouz: I still don't know the answer to it, I think it's just cool.

Aaron Lammer: Well, it's interesting because it's ... you're helping people do something that feels impossible, and what I've heard from a lot of people who have maybe toe-dipped in mining, or fantasized about mining, is a person who's really knowledgeable about mining will tell you, "Don't get involved in mining."

Joe Lallouz: Totally.

Aaron Lammer: That it's a really hard business with extremely weird counterparty risks associated with it, ranging from Chinese politics to flooding in various American cities.

Joe Lallouz: Tariff reform.

Aaron Lammer: Tariff reform. I mean, it's ... in the same way that it requires a bunch of disciplines, it has exposure to more stuff than HODLing Bitcoin.

Joe Lallouz: Totally.

Aaron Lammer: A person who has your best interest in mind might say, "However much money you were going to put into this mine, just go and cost-average your way into Bitcoin. It's ... I rarely say it's about Bitcoin, it's safer. It's the safer way.

Joe Lallouz: There's not a lot of things it's safer than.

Aaron Lammer: What ... Give me the two years in 30 seconds, what it was actually like starting that mine, and where the mine is now.

Joe Lallouz: It was exactly what you just described, a laundry list of idiosyncrasies trying to figure out all the different pieces that go into both operational efficiency of building a mine, from finding a space to negotiating with tiny municipalities, all the through to negotiating with the world ... some of the world's largest Chinese manufacturers.

Joe Lallouz: It's very weird, so it doesn't surprise me that people say, "Don't go into mining." And quite honestly, I say that all the time to people, too.

Aaron Lammer: "Get off my corner for your own benefit."

Joe Lallouz: Yeah. Yeah. No, I mean we're super open about how hard it is.

Aaron Lammer: You don't want none of this drug.

Joe Lallouz: Exactly. Exactly. The 30 ... The two years in 30 seconds; we found a spot, we spent six months traveling the country on Southwest flights, driving all over to these tiny little towns in Wyoming and Utah, and then ... in Washington State, and Oregon State, and negotiating power contracts, and trying to find the best location that had the best outside temperature for the majority of the year, and really good airflow, and extremely good power prices.

Aaron Lammer: This sounds like a libertarian Alexander Payne movie. You guys ride a little car together, go driving around the country chatting.

Joe Lallouz: It kind of felt like that, kind of, but better. What's that movie with the two British comedians that travel?

Aaron Lammer: Oh, The Trip?

Joe Lallouz: Yeah, The Trip. It was kind of like that. We're just kind of chuckling and giggling to ourselves. I mean, we weren't stopping and eating at Michelin Star restaurants, but ...

Aaron Lammer: Yeah, you were more like stopping and being like, "Know about any cheap good power around here? Any power tips?"

Joe Lallouz: Yeah, exactly. Yeah. No, totally. And then someone would get wise and be like, "You're not building a data-center. I've heard of this Bitcoin thing."

Joe Lallouz: Because we weren't sure how these municipalities sort of react to us wanting to do this, so until we got a little bit further along, we were a little bit cagey about what we wanted to do there. We were sort of just like, "We're looking for space that has access to power."

Joe Lallouz: Eventually, we obviously would tell people what we were doing, and the funniest thing about this is that when you start to dig into the areas where people are doing Bitcoin mining in the United States, you realize that all your neighbors are pot farmers.

Aaron Lammer: Well, I've ... I host three podcasts, but one ... two of them are this podcast and a podcast about people's relationship with marijuana, it's called Stoner.

Joe Lallouz: I didn't know that.

Aaron Lammer: And I occasionally have had weed farmers on, and I grew up in a weed farming part of the country. The demands are almost exactly the same.

Joe Lallouz: Identical.

Aaron Lammer: You need a bunch of electricity, you kind of can't have any ... too many people around. People can't really understand what you're doing. One bad break can ruin all your profits on a whole big venture. The margins. You can make some money, but you can also lose some money.

Joe Lallouz: Yep. And here's the part I didn't tell you as an investor in that mine. We were always looking at pot farming as a hedge in-case we couldn't get it done.

Joe Lallouz: We were like, "If this doesn't work, we'll just sell it to a pot farmer."

Aaron Lammer: Okay. I thought you were going to say you were going to grow weed if the mine didn't work.

Joe Lallouz: Maybe.

Aaron Lammer: And I was like, that's actually, from what I've heard, an even harder business to turn a profit in now than cryptocurrency mining. At least the price of crypto, which crashed around the time you were setting this up, has recovered. The price of a pound of weed is not going to ever recover.

Aaron Lammer: Too many people are growing weed, there is the level of perfection required of commercial weed. It's just that it's going to be a really hard business to turn a profit in. The people who are going to profit in weed are going to be the people who package it into Jewel oil and addict teenagers to it.

Joe Lallouz: Oh, totally. But I think we were thinking of it more along the lines of, it's the same infrastructure, so we can find one of those companies that's doing that, that is making money.

Aaron Lammer: 100%. Yep.

Joe Lallouz: And making Jewel oil weed pods and sell them at the store.

Aaron Lammer: I know that there are companies actually in the Emerald Triangle in Humboldt County that don't actually grow weed, they just do the infrastructure setup for grow houses.

Joe Lallouz: Right.

Aaron Lammer: They basically come and setup a mine in a house, and they're like, "This is the part we make our money on. You can sit around here in the fluorescent lights losing your mind worrying about bacteria for six months."

Aaron Lammer: What our expertise is, is the airflow engineering necessary to turn a normal house into a viable grow house.

Joe Lallouz: Exactly. Which, I wish had known some of those people earlier on.

Aaron Lammer: I was going to say, I could've hooked you up, but I feel like both parties would've been suspicious of each other. It would've been like, "Who is he, the data-center guy?"

Aaron Lammer: And you'd be like, "Who are these guys? They have a flower business?"

Joe Lallouz: That would've been so amazing. I feel like that's a missed opportunity.

Aaron Lammer: Yeah. Well, I mean look, these things are weird boom and bust industries where people do have to find new ways to use the infrastructure they've built. So you didn't end up actually having to sell it to a weed mine, you actually are mining cryptocurrencies now?

Joe Lallouz: That's right.

Aaron Lammer: So when you say it's a proof of work mine, that means you can mine any cryptocurrency that has a proof of work algorithm associated with mining it?

Joe Lallouz: That's right.

Aaron Lammer: What are your big five right now in terms of what you're mining?

Joe Lallouz: Yeah. You're going to be disappointed because there's less than five.

Aaron Lammer: Really?

Joe Lallouz: Yeah. The ...

Aaron Lammer: RIP altcoins. We declared Libra Day the death of the altcoin era, because now there's actually something else to talk about other than Bitcoin.

Joe Lallouz: Are we declaring today, "Libra Day", officially?

Aaron Lammer: Today is Libra Day. It's Libra Day.

Joe Lallouz: Okay. Okay, I get behind that.

Aaron Lammer: Yeah. In 500 years when no one remembers what Facebook is, we will still celebrate Libra Day.

Joe Lallouz: We will still celebrate it no matter one. The day we were Libra-rated. Liberated from altcoins.

Aaron Lammer: Yeah.

Joe Lallouz: We do mine. We mine into three categories. The first category is what we call more mature or stable networks, and really, that's mostly Bitcoin. We also mine into a category called privacy coins, which I'm sure your listeners are all familiar with these categories. But ...

Aaron Lammer: There's a Monero hat somewhere up there.

Joe Lallouz: Yeah, exactly. Monero and Zcash for the most part, although ... And we mine into ... I'll get to this. We mine into a third category which is a really small percentage of the mine, and it's what we consider speculative mining, sort of new coins, new networks that we think are interesting. Most of that is GPU-based and not ASIC-based. Everything is really more ASIC focused.

Joe Lallouz: And Grin, in particular, is one that is ...

Aaron Lammer: Good ... You've had a really good week, just in general.

Joe Lallouz: Honestly, have the prices been good? I haven't been looking.

Aaron Lammer: Grin has went up 200% this week.

Joe Lallouz: You're kidding?

Aaron Lammer: Grin's trading for $6 now.

Joe Lallouz: You're ... That's a joke.

Aaron Lammer: I am not joking. Wow, you really have been busy.

Joe Lallouz: Oh, my god.

Aaron Lammer: I thought ... I assumed that you were all over the price of Grin, because when I first heard about Grin, I was like, "Yo, how can I get some Grin?" And you were like, "Yo, I can hook you up. Come talk to me in a couple of months. I'm about to mine some."

Joe Lallouz: We ... But this is really great. The reason why we consider it speculative mining is because we actually don't pay attention to the price.

Aaron Lammer: Interesting.

Joe Lallouz: It's ... We use some of the profits that we make from mining some of the more stable coins to offset the electricity cost, because we think that the value of that network or that asset is going to appreciate significantly, and so we don't pay attention to the price.

Joe Lallouz: The fact that I actually don't know the price of Grin ... I ... The last time I looked at it, I swear it was at three bucks.

Aaron Lammer: Well, I mean ...

Joe Lallouz: And I was like, "All right, whatever."

Aaron Lammer: It's also been at 11 bucks at some point in time, so it seems like your approach to mining, by not paying attention to price, is basically the cost average version of mining, which is, "If the price goes up, we mine it. If the price goes down, we mine it. Therefore, we get some sort of mining average of how valuable it was to mine over however long I'm got the miner running."

Joe Lallouz: Yeah, exactly. Exactly, and then that combined with the sort of operational pieces of making sure you get really good power and really good cooling, and sorry, passive cooling, you can't ... you have to pay as little as possible for cooling, really good prices on mining equipment itself because you have to turn around the ROI on those.

Joe Lallouz: All those things combined with that kind of operation that you just described is pretty much what we've been doing. It's really those three categories for the most part, so there's not that many assets.

Joe Lallouz: On the speculative side, we've kind of swapped in and out of some. We've also done some Ethereum mining at some point.

Aaron Lammer: How often does it change what it's doing, the mine?

Joe Lallouz: Not that much, because the majority of the mine is in ASICs, and ASICs are a pretty high CapEx situation, so you have to deploy a bunch of capital, and they're hard to sell, and switch, and change. Also, setting up a mine, once you get things setup, you're way better. You're almost better never touching anything, ever, than fiddling with it.

Aaron Lammer: I think this is probably some sort of a universal human law. It's like you can not trade at all, you can also trade almost randomly, but you can't slightly put your finger and start nudging and adjusting things. That is ... That doesn't really work in anything, actually.

Joe Lallouz: No. No. And it ... But also, in some way, it's like the human draw is to nudge and try to adjust things.

Aaron Lammer: Oh, well in ...

Joe Lallouz: Everybody tries, and it just doesn't work.

Aaron Lammer: In games, I don't know if you're a person who's interested in strategy games and that kind of stuff.

Joe Lallouz: I am, very much so.

Aaron Lammer: But one of the ways you can most easily exploit a less experienced player across a variety of games is to basically do nothing and wait until they start adjusting and worsening their position.

Joe Lallouz: What's your favorite strategy game?

Aaron Lammer: I would say Catan ... [crosstalk 00:24:31]

Joe Lallouz: Chess, cards? Ooh, Catan.

Aaron Lammer: Is probably the one I've spent the most actual time thinking about as an adult. I played a lot of Chess when I was a kid, so I probably ... I'm probably more knowledgeable about Chess, ultimately, than Catan.

Joe Lallouz: Yeah, just out of curiosity.

Aaron Lammer: What are your games of choice?

Joe Lallouz: I'm a huge nerd. I play ... I've been playing this real-time strategy game for 20 years called StarCraft, it's an online strategy game.

Aaron Lammer: It's really a shame Jay isn't here, because he's also lost 20 years of his life to StarCraft.

Joe Lallouz: I played StarCraft as a kid growing up, endless nights, through into mornings. I played it all the way through my young adulthood into my adulthood, and I still play StarCraft.

Aaron Lammer: I think there is some sort of a StarCraft crypto brain connection, because another person we have on the show a lot is our good friend Doug Kim, who is a professional poker player, and I think kids get radicalized by StarCraft, move on to online poker, play more hands than anyone could play in a lifetime, 20 years ago.

Aaron Lammer: People just really grind through a whole lifetime of poker playing in three years. Get ... Realize they're actually as good as someone who's been playing their whole life, and take it pretty seriously, because StarCraft players take it pretty seriously, and then make a bunch of money in poker, and then they're like, "Oh, god. I can't tell my wife all this poker I've been playing."

Aaron Lammer: Or, "I know, I'll put it in Bitcoin." And that's basically ... They basically end up at the same point you're at now, which is, "Ooh, I'm pretty deep in Bitcoin here."

Joe Lallouz: That's so funny. I've never ... I mean, I definitely have met some folks in crypto that played StarCraft, but all it is to say, huge fan of strategy games, and like you said, kind of getting back to the original point, in most strategy games, if you just do nothing and wait for someone who's not as good as you to try to adjust, you'll probably win.

Aaron Lammer: Okay. I'm going to leave the mining topic behind briefly, although I want to come back to it and sort of talk about how you do multiple things, and the renaissance man lives that we're leaving here as podcaster speculators, but thinking about game theory, I remember when I heard about what was still called Facebook Coin a year ago, and I think I said this on the show, someone will probably play it and be like, "You didn't say that, you said the opposite of that."

Aaron Lammer: But I said, "I wonder how much they're going to be able to attract talented people to work on a blockchain project with Facebook, because when you look at these Venn diagrams, decentralization enthusiasts, people who want to work with Facebook, it's ... there's not a lot of crossover."

Aaron Lammer: And I was like, "This is going to sort of succeed or fail on the quality of the work that people put into it." People are going to be critical of it no matter what, but it actually could be a joke, or it could be something that's pretty serious, and I would say, "We're 24 hours in."

Aaron Lammer: But so far, it's been taken pretty seriously. Even the tech press, I actually feel like has been like, "No, Libra's a real thing. You actually have to learn about it, you can't just make fun of it."

Aaron Lammer: How did you get involved in this? And tell me when you first heard about Facebook and the blockchain, what went through your mind?

Joe Lallouz: Yeah. I think that in all fairness to ... in all fairness to the truth, in all fairness to the Facebook blockchain team, and those folks that are now the Libra Association, I definitely heard about it, I want to probably say at least a year ago, around a year ago, and I feel like rumors started circulating maybe 18 months ago, a little bit longer than that.

Joe Lallouz: And I didn't hear about it really, really early, or really, really quick. But I'll say about a year ago I heard about it, and it was mostly like, "Facebook is making a cryptocurrency."

Joe Lallouz: And I was ... In my head, I was kind of like, "Cool."

Aaron Lammer: You're not the only person I know, actually, who worked on this project in some capacity, and I expected people I knew would be like, "Oh, they hired a designer or something like that, or a product person."

Aaron Lammer: I didn't expect you would be involved, because I think at the time, I wouldn't have thought that there would be a mining component to it. I was kind of picturing this as a, "We don't have to mine, it's all in the data-centers." Kind of thing.

Aaron Lammer: And at the time, mining was really your focus.

Joe Lallouz: Yeah. To summarize the journey from ... And, I mean, I know we talked a lot about proof of work mining already ...

Aaron Lammer: We ... There's an infinite amount to say about proof of work mining.

Joe Lallouz: We can talk about it in length, I'm happy to more and more. But to summarize the journey about proof of work mining is that we learned a tremendous amount about infrastructure for blockchains, and securing blockchains, and got super interested in these new blockchains and platforms that were coming out, that were not using proof of work as a consensus algorithm. They were looking at alternative consensus algorithms.

Joe Lallouz: A lot of those are proof of stake. There are other consensus algorithms as well, but they generally are kind of in the POS or DPOS areas. And the reason why we got interested in it, is because one; we had a passion for the infrastructure already, we had been spending a ton of time ...

Aaron Lammer: That's what you got to put on the back of the T-Shirt, "We have a passion for the infrastructure. Bison Trails."

Joe Lallouz: Passion for the infrastructure. Man, I should've brought you a shirt.

Aaron Lammer: I need a shirt.

Joe Lallouz: I'm a jerk.

Aaron Lammer: Because I'm all about passion on shirts. I also want to make the shirt that just says, "Ripple, I'm so passionate about international bank transfers."

Joe Lallouz: I love it. They must be ... The Ripple team must be a little worried about this right now.

Aaron Lammer: That ... We ... So this is ...

Joe Lallouz: We talked about it already?

Aaron Lammer: I'm going to admit, this is the second show I taped today, and we do a sports style winners and losers of ... Ripple was judged the loser of today.

Joe Lallouz: Yeah.

Aaron Lammer: Although, there is a weird validation of ... You know what I mean? It's like, "Yeah, you have a competitor, but I guess it's sort of a value spot on the board if Facebook wants to be there."

Joe Lallouz: Yep. Yep. It's like when you're a startup founder, and someone's like, "Amazon's getting into this." And you're like, "Well, shit. Am I going to lose?"

Joe Lallouz: But also, they're getting into it, that means what I'm doing is useful.

Aaron Lammer: Right, and it kind of depends on sort of how fair the playing field is. How you evaluate that, it's like, is it a ... Well, we both have apps situation, or is it one of those Apple WWDC situations where someone's like, "This is now included on every iPhone."

Aaron Lammer: And the person's like, "No!"

Joe Lallouz: Right. Right. No, that's totally right. That's so funny.

Aaron Lammer: Yeah. So you're real deep in firmware associated with this stuff. I literally, even after spending a couple years in crypto, I barely can even follow the acronyms of a lot of this stuff.

Joe Lallouz: You're not alone. We're ... There's a lot of people like that, and I was actually on ... I was on a podcast, a really great other crypto podcast called Zero Knowledge Podcast.

Aaron Lammer: Good stuff, show them.

Joe Lallouz: Yeah, I'm not allowed ... I don't know if I'm allowed to show them, but ...

Aaron Lammer: No, I feel like I'm actually ... Crypto is one of those things where I'm like, "No, you should listen to more podcasts."

Aaron Lammer: All of them are Austrian school economics except this one, so I know that I'm on a unique quarter here.

Joe Lallouz: Hell yeah. No, I think it's great. In any case, I was on that podcast and talked a lot. We talked a lot about sort of how we ended up doing what we're doing and why, and I think that I was kind of saying before, we've been really passionate about the infrastructure, but most importantly, a lot of these new networks aligned a lot better with our skillset as well.

Joe Lallouz: Like you said, deep in the firmware, seeing what's going on, really understanding this, but Aaron and I are both software engineers, we've been software engineers our whole lives, and working in a space where you can actually create outsized value by writing better code, is a really interesting thing to us, which is why it became so interesting to look at these networks that were not using proof work, that was mostly focused on, "Okay, how many ... How can you most efficiently deploy this dollars into a mining situation?"

Joe Lallouz: And instead, write really great code to help secure these networks, and stand them up, and make them enterprise grade networks.

Aaron Lammer: This was sort of one of my bull cases for altcoins, was developer boredom, which is, if you have a bunch of ideas and passions, there's not that much you can do in Bitcoin.

Joe Lallouz: Totally.

Aaron Lammer: People will write me angry emails, people say, "Well, you can make ... The Lightening Network can do that." And I agree, I acknowledge that, but if you really want to do some out shit, if you want to play some free jazz, Bitcoin is pretty much like playing a single melody on a loop, and it's been playing it for over 10 years, which is incredible.

Joe Lallouz: But that's the beauty of Bitcoin.

Aaron Lammer: And it will keep playing it long after your free jazz proof of blank is extinct-ified by something else, but I generally, the people I know who are developers, and are creative software enthusiasts like yourself, are like, "Yo, I want to do some crazy new shit."

Aaron Lammer: "I want to do some shit that is wild west feeling."

Joe Lallouz: Exactly. Imagine a world where you're this developer, and you're like, "I really want to build something really cool." And you're feeling that same feeling like, "Okay, Bitcoin is amazing."

Joe Lallouz: And also, just a caveat, I hate when people are like, "Is it either Bitcoin or anything else?" I actually think there's room for Bitcoin and a lot of other platforms and networks, and we've always felt that way.

Aaron Lammer: You're deciding, "What should I spend these hours of my life on?"

Joe Lallouz: Totally.

Aaron Lammer: You're not deciding, "Where should I invest my retirement savings?"

Joe Lallouz: Yeah.

Aaron Lammer: You're like, "Where should I put my soul into?"

Joe Lallouz: Exactly, and so we find ourselves trying to build into the crypto space and realizing, actually, some of the most conducive areas to do this is in some of these new networks.

Joe Lallouz: I mean, Ethereum was pretty good, but also mostly proof of work, but also hinting and switching to proof of stake, and then a whole bunch of other networks like Cosmos, and Polkadot, and Tezos, and I'm not going to name them all. Holba, Grin, a ton of ...

Aaron Lammer: Grin's a good example, so where it's like, you could say, "There's actually multiple new ideas in this. This is like a test of a bunch of ideas that aren't in something else, or at least not in this way, except Beam."

Joe Lallouz: Yeah, so we started ... Except Beam. Oh, man. Don't ... I'm not even ... We started building. Honestly, the really short version of this, we just started building on a bunch of these networks and trying to build a few different types of applications, and realized we were repeating the same thing over and over again trying to stand up really great infrastructure.

Joe Lallouz: And we were like, "If we want to build a great experience for people to use XYZ app on XYZ protocol, we need to have really reliable interfaces into the chain itself, into the ledger."

Joe Lallouz: I mean, if you really think about it, if you have a database that is serving your customers data, and you have a super shitty server that is unreliable, it goes down all the time, gets out of sync, that can't read from the database, you're going to have a really bad experience for the people using it, and they just won't use it.

Joe Lallouz: That's how software and product development works, and so we found ourselves continuously, every network, we'd be like, "Okay, let's make this a little bit more robust, create some redundancy, make sure that we have a couple nodes running."

Joe Lallouz: Then we started spending some time talking to app developers and people that were interested in staking, and voting, and governance, and we're like, "Cool, so how are you guys doing this?"

Joe Lallouz: And they were like, "Well, we have no idea how."

Aaron Lammer: "We rolled our own."

Joe Lallouz: Yeah, or "We roll our own." And they're like, "We have a team of three infrastructure engineers, and two DevOps people."

Joe Lallouz: And we're like, "Whoa, this feels crazy."

Aaron Lammer: This is basically the world of computing before AWS.

Joe Lallouz: Exactly.

Aaron Lammer: That was ... Actually, I was thinking about that. When do you think you first used AWS? What year? I'm trying to think of, when did AWS be like, "Nope, you basically can't build a software product without touching the server in some way."

Joe Lallouz: It was ... Before AWS, I mean, I'm going to definitely date myself, but I already did because I told you I played StarCraft, the original StarCraft.

Joe Lallouz: Before AWS, you had to rack servers in a data-center somewhere, and if you were really good at it, you'd have two data-centers, and it sucked, and there'd be people there.

Aaron Lammer: And they'd be weirdly local. Do you remember data-centers used to be like, "Well, I want to get one near my mom's house, of course, so I don't have to go down there."

Joe Lallouz: Yeah, so I can stop by. Yeah, exactly. Because when you stop by, you can stop by for lunch, it'd be great.

Joe Lallouz: No, totally. And honestly, what you just said, I'm glad that you got there, because what you just said is exactly what Aaron and I, Aaron my co-founder and I said to each other, we were like, "Holy shit, there's this trend happening in the blockchain space, and it looks a lot like what computing in startups and sort of web 2.0 did before AWS was pervasive and Netflix was built on top of AWS, and still is."

Aaron Lammer: Yeah. Well, and that metaphor is rich in that AWS is actually so ubiquitous that it carries competitors data.

Joe Lallouz: Yeah.

Aaron Lammer: Netflix and Amazon are literally both trying to sell you the same movies, and AWS is like, "Eh, I'm weirdly neutral enough. I'm just basically pure software enough that short of being no Netflix.com email addresses registered, we're not really going to stop anyone from sending anything down these pipes. It's almost internet-level pipework."

Joe Lallouz: Exactly. Exactly, and so that's how we were thinking about this space, and we were looking at the space and saying, if the crypto space is going to be successful outside of just a store of value that kind of is working quite well in the form of Bitcoin. There needs to be this really unsexy infrastructure layer to support it.

Joe Lallouz: There needs to be, in between the protocol and the applications on top of them, whether they're financial applications, or they're other DApps, or Web 3 style DApps. There needs to be this infrastructure in between for them, and the expectation up until recently, at least in our view, has been that developers are going to build the entire internet stack.

Joe Lallouz: And that's like me telling you, "Here's SMTP, go build Gmail."

Aaron Lammer: Right.

Joe Lallouz: I think this makes sense.

Aaron Lammer: And this is basically where you start seeing altcoin projects where it's like, "They've got 200 million dollars, why can't they build something?"

Aaron Lammer: I'm like, "You try and build AWS with 200 million dollars."

Joe Lallouz: Totally.

Aaron Lammer: Not only do you not have enough time, there aren't even enough people to hire. These systems are literally too complex for one company to build, in addition to doing whatever else they're doing.

Joe Lallouz: This is ... That's how Bison Trail started getting traction, honestly. That's how we started to see some growth in what we were doing, and some real excitement, is Aaron and I were building on a bunch of these protocols, we were meeting a bunch of protocol founders, and they had their heads down rightfully so trying to make their protocol work, and then they're ...

Joe Lallouz: They're then thinking, "Okay, how far up the stack do we have to go? How do we get developers to use this? How do we get people to engage with it? How do we get people to validate? How do we get people to run nodes?"

Joe Lallouz: And we were saying, cool, so let's, instead of building a protocol or focusing on one protocol, build a platform that supports that kind of activity that's protocol and blockchain agnostic, so that people can come to us and say, "I really want to run validating nodes on Cosmos, and I really want to run a baker on Tezos, and I really want to run a Libra node."

Joe Lallouz: For instance.

Aaron Lammer: Right.

Joe Lallouz: And I don't need to develop a 20 person team in-house to be able to do that.

Aaron Lammer: That roll, I'm trying to think of when I've used a service like that. I think the closest is, blanking on the name, but if you sign onto Augur and you want to connect to the Ethereum chain, Infura. That's right, it's like, "Hey, I don't really want to run an entire Ethereum node here, could you just get it going for me real quick-like now in the background?"

Aaron Lammer: And I know that those things are criticized because they're kind of a form of centralization. If no one actually runs the Ethereum chain, what is the Ethereum chain?

Aaron Lammer: But for a developer, that makes a lot of sense. There's some guy who built a pretty good Auger client. I don't really understand how it works, but you can just log on and use it.

Joe Lallouz: Yep. A tool like that is really helpful. Let's say you're at a hackathon and you want to build something really quick, but you don't want to engage with having to build a ton of infrastructure, those tools can be really, really great. If you start to see any kind of scale, it becomes imperative that you need your own.

Joe Lallouz: That combined with, and I don't want to throw anybody under the bus here, but Infura's had some trouble before where apps that got success and started to see some traction took it down.

Aaron Lammer: Well, I mean probably the worst moment in Ethereum history was when CryptoKitties became popular for 48 hours and it did not work, and it's like, "That's just a card trading game."

Aaron Lammer: And then you start thinking about something like StarCraft and how many events are in something like StarCraft, and it's like, "Wow, so basically the Ethereum network is not advanced enough to power a StarCraft game at this point?"

Joe Lallouz: No, definitely not. Definitely, definitely not.

Aaron Lammer: You're building this stuff. I'm starting to see how these Venn diagrams are getting slightly closer to each other, and I have to admit, when you just said, "Run a Libra node." I have to admit that I imagined not only that it was 10 million dollars for a node, but it was like, "And don't share this node with anyone else. This isn't an HBO password."

Joe Lallouz: Right.

Aaron Lammer: This is just for you.

Joe Lallouz: Yes.

Aaron Lammer: Is that correct? I guess, would be my first question.

Joe Lallouz: Yes, that is correct. Over the last couple of months, we've been using our own platform to run Bison Trails nodes on every platform ... on every protocol we support, and for us, it's a way of, A; dogfooding our own product. We're building this super advanced decentralized orchestration platform.

Joe Lallouz: And B; it's a way for us to market ourselves as being really quite good at this and showing folks, showcasing to potential customers that want to use our product, how well we do at this.

Joe Lallouz: And so it is for one node, to answer your question more pointedly. And the idea for us, and how we kind of got involved with Libra, which is if we really dig back, this is kind of how this conversation even started, was we have become, very quickly, a really great and trusted infrastructure provider in the space, just in the crypto space.

Joe Lallouz: Founders would introduce us to other founders, and then they would introduce us to their token holders, and to the application developers, and we were building this product that a lot of people were excited about that, honestly, was just not that sexy.

Joe Lallouz: We don't talk about it, we're pretty quiet about it, but ...

Aaron Lammer: To be fair, nothing in crypto is sexy.

Joe Lallouz: Fine. If you're in crypto, it's the least sexy of all the crypto things. It's kind of like you're a plumber.

Aaron Lammer: What is crypto sexy? Brock Pierce's hat?

Joe Lallouz: Oh, god. Oh, man. That is so funny.

Aaron Lammer: Yeah. The sexy thing is getting away, getting out of crypto and leaving crypto behind forever.

Joe Lallouz: Yeah. I mean, maybe.

Aaron Lammer: Yeah. But yeah, I mean, I see where all that stuff is coming together, and I can understand why, particularly because Libra is framed, not as a Facebook product, but as a separate, I believe there's a Swiss Foundation that controls it, the Calibra Foundation?

Joe Lallouz: Calibra is actually the wallet that Facebook is ...

Aaron Lammer: Oh, okay.

Joe Lallouz: The proprietary wallet that Facebook is building for themselves to be the wallet for Libra, for the Libra blockchain. The Libra Association is the Swiss Foundation that you're talking about it.

Aaron Lammer: Got it, okay.

Joe Lallouz: It's a completely autonomous entity.

Aaron Lammer: I already taped an entire podcast where I made that mistake this morning. Guess what? Guess what people? If you go to Switzerland and start trying to show up there.

Aaron Lammer: Now, I did have a question, actually, but have you been to where the foundation is in Switzerland?

Joe Lallouz: I have not.

Aaron Lammer: Okay. Is it in the same valley where the Tezos scandal happened?

Joe Lallouz: Oh, god.

Aaron Lammer: The valley?

Joe Lallouz: I have no idea.

Aaron Lammer: I feel like there's high, Curb Your Enthusiasm, two people who've perpetrated blockchain frauds on each other end up neighbors in that valley, because Switzerland's not that big of country to ...

Joe Lallouz: It's tiny.

Aaron Lammer: To put all this crypto dirt in all at once.

Joe Lallouz: That's so funny.

Aaron Lammer: They're building it as this independent project?

Joe Lallouz: Yep. Yep.

Aaron Lammer: And I understand the basic user experience for me, the layman, as a potential Libra user, which is either through the Calibra app, or somehow through my Facebook account, I purchase some Libra, it lives in a wallet.

Joe Lallouz: Yep.

Aaron Lammer: You can think of that experience as similar to Venmo, or you can think of it similar to Bitcoin depending on what your orientation point is. It has similarities to both, I think, fundamentally. But you're not really expected to understand how it works under the hood.

Aaron Lammer: This is not, "Hold your own private keys, man. You need to educate yourself." Kind of situation. This is basically just supposed to work out of the gate.

Aaron Lammer: On the flip side, what are things other than that, that people are thinking about with regards to Libra, particularly that this infrastructure is preparing us for?

Joe Lallouz: Yeah. I think that, rightly so, you're thinking about it from a quote on quote, "North American viewpoint", and I think that that makes a ton of sense, and I think you're right.

Joe Lallouz: When you think of it as, "Okay, so I can send Libra to my friends the same way as I would Venmo."

Aaron Lammer: Yeah.

Joe Lallouz: You're sort of like, "Okay, great. That's crypto, that's fantastic." But there's a world where the fact that it's crypto is obfuscated away from the user anyways. You may never even realize that that is a cryptocurrency built on a public ledger that can be audited, et-cetera, et-cetera.

Aaron Lammer: In a certain part of the world, I would have said it's like Western Union, and in a certain part of the world, I would have said it's like cellphone minutes. Right?

Joe Lallouz: Yeah. Yeah.

Aaron Lammer: It's a currency that lives on my phone that I could send to someone else's phone.

Joe Lallouz: Totally. What's really quite cool, is when you start to look at it from outside of the lens of a North American, and you say, "Wow, Western Union and MoneyGram are actually pretty expensive and predatory businesses sending remittances from ... "

Joe Lallouz: Let's say you're ... Look, I'm totally pulling this example out of a hat right now, but let's say you're an Uber driver in the United States, and you would like to send money home to your family who lives in another country, that's an extremely hard and expensive process for you, that now, if they have a Libra wallet, and let's say it's not even the Calibra wallet, it's an open-source Libra wallet where it is a self-sovereign financial holding instrument, you can then send that to them, and there's off-ramps for that currency in your country.

Aaron Lammer: Well, that whole process of transferring money in that way is, I believe it's referred to as the Hawala system, and it's actually an early trust-based protocol, which is basically, you walk into a convenience store in say, Oakland, where I grew up, you give them money, they call a convenience store in say, Afghanistan, and they say, "Hey, you just gave me 20 bucks. You give him however much in local currency."

Aaron Lammer: And then those two Bodega operators in Afghanistan and Oakland basically reconcile their own ledger, and they trust each other, like, "Hey, we have a Hawala business."

Joe Lallouz: How have I never heard of this?

Aaron Lammer: Well, it's a ... You probably ...

Joe Lallouz: Is this an esoteric thing?

Aaron Lammer: No, it's basically how all the world used to move money, and still does in parts of the world.

Joe Lallouz: I believe. I feel so dumb for not knowing that.

Aaron Lammer: And ... But I'll tell you, if you Google it and you do hear about it, you're going to hear that most of it's been shut down because it has been an alleged source of terror fronting.

Aaron Lammer: The place isn't ...

Joe Lallouz: Just 20 bucks at the Bodega is funding terrorism?

Aaron Lammer: Well, no. Actually, the Hawala network has actually gotten ... It's like, this first guy it's 20 bucks for my family, and then it's, hey, it's the 10,000 bucks I got paid for this job, and then more and more money starts pouring through, and it, like anything, becomes a potential place for money laundering, and for Monero style anonymous transactions.

Aaron Lammer: And when a anonymous transaction protocol becomes advanced enough that people can actually trust it to say, move a million dollars, which I don't think is at the Bodega, but there is some sort of private, "Hey, I got him. He's got me a million bucks, you have a million bucks."

Joe Lallouz: Right.

Aaron Lammer: The things that are being funded anonymously for over a million dollars are quite different than for $20.

Joe Lallouz: Totally.

Aaron Lammer: And so there was a bunch of terror cases of Hawala operators, and I think that they were politically motivated and most of them were innocent people, or people who, at worst, unwittingly transmitted money.

Joe Lallouz: Right.

Aaron Lammer: But Charlie Shrem says the same thing, you know what I mean?

Joe Lallouz: Yeah. Yeah.

Aaron Lammer: This is ... We're basically talking about the early systems that were supplanted by Bitcoin, in the same way that these early, I don't know if you're familiar at all with the history of Liberty Reserve and eGold, which were these centralized cyber cryptocurrencies, and it's the same thing where it's just like, "Hey, I got all the money. You just ... "

Aaron Lammer: I mean, it's basically Tether, honestly, actually. It's like Tether without ... It's like Tether with no blockchain, basically, is how a lot of this stuff works.

Aaron Lammer: I'm curious, to bring it back to Libra, how does Libra work? What secures the blockchain? What is the difference between a Libra and the sort of previous attempts at, "Hey, I'm issuing money. Here it is."

Joe Lallouz: Yeah. Libra is secured by the association members, and so by joining the association, you're making a commitment to run a block signing and validating node for that network. You're also making a commitment to the governance of the network, and you're making, also, a commitment to being an honest and good actor, which the cool thing about blockchains is they're designed, generally speaking, to discourage bad behavior.

Aaron Lammer: Yeah. Or, almost to assume that everyone is going to act badly, and thus protect against everyone being ... I always feel like it's ... it's a good actor. Or, expect everyone's a bad actor, let's force people to all be good actors, pretty much.

Joe Lallouz: Exactly, and we don't have to get into the depths of game theory, but it's one of my favorite things about the crypto space, and I think what drew me in is how you design systems around rational actors, and whatever.

Aaron Lammer: Well, it's certainly ... In the DNA of the Satoshi white paper, the Satoshi white paper is basically mostly about how to defend against a 51% attack.

Joe Lallouz: Yes, exactly.

Aaron Lammer: It's not mostly about libertarian economics, it's mostly about the assumption that someone's going to try and mess with your network.

Joe Lallouz: Exactly.

Aaron Lammer: In the case of Libra, that doesn't actually mean mining. Right?

Joe Lallouz: No.

Aaron Lammer: There's not going to be ... You're not going to put a bunch of Libra miners into your facility?

Joe Lallouz: No. No. Running a validator on the Libra network is going to be pretty similar to the way you run a validator on other proof of stake networks. What's ...

Aaron Lammer: Tezos would be an example?

Joe Lallouz: Yeah, like a Tezos, or Cosmos, or a Polkadot, or even Ethereum 2 when vegan chain, if when ...

Aaron Lammer: "Coming soon."

Joe Lallouz: If when vegan chain comes out. "Coming soon to a blockchain near you."

Joe Lallouz: I should say we're actually pretty excited about it, I hope it does happen.

Aaron Lammer: Yeah. No, I hope it does happen, too.

Joe Lallouz: But ...

Aaron Lammer: I'm sorry it's so incredibly hot here at the crypto cave. It just got very hot in here.

Joe Lallouz: Oh, it's fine. Yeah, it's because it was ... it's been raining, and the humidity then creeps right in.

Aaron Lammer: Yeah, we're in a pressure cooker here, but it feels right. It's a big day here, it's Libra Day.

Joe Lallouz: Yeah, it's Libra Day.

Aaron Lammer: It's not mined, everyone's just securing it. That means that MasterCard, Visa, but also Spotify is also running a validator?

Joe Lallouz: Yep. They wanted to get, as members of the association, they wanted to get a really diverse crew. They wanted to get folks that were sort of in industry, but in different parts of industry. Some folks in payments, some folks in retail, some folks that are merchants, some folks that are service providers, some non-profits, some academics.

Joe Lallouz: And so they're trying to really create this diverse crew of folks that would ... The more diverse you can make that, ideally, the better governance you can create for something that has global reach, like Libra potentially has.

Aaron Lammer: Right.

Joe Lallouz: And so this is the thing that I've talked about on another podcast before, was it's important to separate out the ability to understand and know how to govern say, a currency or a blockchain, and the technical capability to be able to do that, and I think that's where Bison Trails comes in really handy, and kind of how we've gotten involved, and why we've become valuable to a lot of these protocols, is that we say, "Okay, Aaron, you might know really great stuff about networks that transfer value between here and Afghanistan, but you have no idea how to run a highly available, geographically distributed node for the Libra network that can't get hacked, that is super secure."

Joe Lallouz: I mean, can't get hacked, nothing can't get hacked, but is very hard to hack, that is super redundant, that isn't dependent on a MacBook in your house, and you might be able to do that, but there's not that many people that know how to do that, and so we are ...

Aaron Lammer: This is my overall believe that SysAdmin is actually the most in-demand job in the world. I just assume that, because it's impossible to find.

Joe Lallouz: Yeah, because it's hard to do. It's hard to do.

Aaron Lammer: Yeah, it's no fun.

Joe Lallouz: It's hard to do super well, it's generally no fun.

Aaron Lammer: It's also not ... It's not sexy.

Joe Lallouz: It's also not sexy. It's like that is what we do.

Aaron Lammer: Yeah, Bison Trails, it's not sexy.

Joe Lallouz: I'm going to make a T-Shirt that says that, "Bison Trails, it's not sexy."

Aaron Lammer: "It's not the sexy part of crypto."

Joe Lallouz: "It's not ... It's not Brock Pierce's hat."

Aaron Lammer: Okay, I think I'm getting more of a full picture, and it's amazing how much I've said about Libra without even understanding whether it's mined or not.

Joe Lallouz: How far off have you been?

Aaron Lammer: I think I've actually been pretty right on about what the ambitions are. I've been pretty confused as to what the blockchain is, because it's like, okay, you talk about governance. We do a bit where I don't have the sound effect now, but it's usually Ali G saying, "What is governance?"

Aaron Lammer: Because governance was said 10,000 times before anyone even explained to me what it meant, and when I look at governance in the crypto space, there's basically two times I ever hear about governance actually meaning something, which is people are arguing about whether or not to include to some push, or some pull in a thing.

Joe Lallouz: Yep.

Aaron Lammer: It's like, okay, I get that, that's the unsexy side.

Joe Lallouz: Mm-hmm (affirmative).

Aaron Lammer: And then, generally, it's, "Oh, shit. We fucked up. Someone stole, froze, in some ways, impaired the blockchain, and there's a faction of people who want to wheel it back, and there's a faction of people who want to keep it secure."

Aaron Lammer: And this is basically where we can see actual differentiation between different consensus mechanisms and governance mechanisms. We've seen them really happen, so for people listening, Ethereum's probably the easiest one. Parity hack, bunch of Ethereum gone, some people are like, "It would be so easy if we just wheeled this guy back."

Aaron Lammer: And some people are like, "Absolutely not. I'm leaving the party if anything like that happens."

Aaron Lammer: A few year later, we have Ethereum Classic and Ethereum, and actually, you could argue that different times that's happened, different sides have won. The wheel it back people win someones, the don't wheel it back people have won sometimes, but this is sort of what I think Satoshi was addressing in the white paper when ...

Aaron Lammer: My longstanding belief is that Satoshi got burnt in some sort of a eBay deal that PayPal reversed the transactions, and it's all just a giant spite match with him, but this is why Bitcoin is different than PayPal, is Bitcoin can be like, "Oh, god. Here's $8,000 in your PayPal account. Oh, no. We don't ... It's not yours anymore, we froze it. We found it's suspicious. Your wallet transfer was flagged for terrorism watch, and it's not your money anymore."

Aaron Lammer: You can't do that with Bitcoin. Now, once you involve a consortium that includes Visa and MasterCard, Visa and MasterCard on the PayPal side of that equation, that's how credit cards work.

Aaron Lammer: I personally like that credit cards work that way, it helps me sleep better at night, but I recognize that they are not in any way decentralized, and I would never be like, "You know who should get on the blockchain? Visa."

Aaron Lammer: Right? They're not on the blockchain because they don't want to obey the rules of the blockchain.

Joe Lallouz: Right.

Aaron Lammer: In thinking about this, particularly because you're building governance mechanisms, how does governance in that manner work in Libra? When Libra first experiences it's, "Oh, shit." Moment, and I think as a software developer, you would acknowledge that, even without happening, almost everyone experiences and, "Oh, shit." Moment eventually.

Aaron Lammer: How are they going to deal with the first, "Oh, shit."? Especially if it's going to cost someone in that consortium a lot of money if it goes one way.

Joe Lallouz: I will come out and say it's a experiment that I'm extremely excited to be a part of. I don't know the answer. I think that what has been cool in the way the association is set up, is that each one of the members essentially gets one vote.

Aaron Lammer: So you're as powerful as MasterCard?

Joe Lallouz: We're as powerful as MasterCard when it comes to the Libra Association.

Aaron Lammer: Holy shit, let's go party. Let's go get bottle service. Let's go get bottle service, and then just wheel back the blockchain.

Joe Lallouz: It's ... Well, the idea is that we probably wouldn't have any power, and neither would MasterCard independently, right?

Aaron Lammer: Right. Right. Yeah, another way to frame that is, "MasterCard is only as powerful as Bison Trails."

Joe Lallouz: Exactly. And I think that that is really, really important, because ... and also key to why it's important to have a diverse set of folks that are involved, why it's not just like, "Okay, we're only doing this blockchain. It's just Visa, MasterCard, Amex, and Facebook."

Joe Lallouz: I think it's important to have a diverse set of folks because you get those diverse opinions into how you should govern problems like that, so I don't know that answer.

Joe Lallouz: I think all governance in every protocol is still an experience. I'm going to attribute that to Zaki from Cosmos, because he actually said it on a panel.

Aaron Lammer: I think even off the blockchain, all governance is probably an ongoing experience.

Joe Lallouz: Probably. Yeah, totally.

Aaron Lammer: And everyone not murdering each other is an ongoing human experience.

Joe Lallouz: Yeah. "We did it! We're not killing each other, yay!"

Aaron Lammer: Yeah.

Joe Lallouz: I don't know. I don't know how this is going to go, honestly.

Aaron Lammer: Yeah, but you'll be part of ... I mean, when that saga occurs, you will be a player in it. You'll have one vote.

Joe Lallouz: When Facebook came to us and said, "Hey, we've heard you been doing really great infrastructure work for a bunch of these protocols. We're doing this thing, and we're involving a bunch of people that really don't have a tremendous amount of protocol and blockchain expertise, we think you could be super helpful in helping us build up this network."

Joe Lallouz: Naturally, we said yes, but also we were really excited about this idea of, "We can provide a mission and values-driven opinion to this governance concept." Right? To this experiment, and say, "We're not MasterCard. We're not Visa."

Joe Lallouz: I'm not trying to protect a existing business model that is predicated on these intricate networks of players that I've built over the last few years. I'm actually way more interested in self-sovereign finance and actually making some of these remittances seamless, and making it easy for people to do these things.

Joe Lallouz: And so maybe that's internal, maybe that's our own sort of ...

Aaron Lammer: "I'm lying to myself, I'm not passionate about international bank transfer."

Joe Lallouz: No, but it's just that ... I was super excited about that. I was like, "Hell, yeah. We could be a part of that. We should be a part of that, and that sounds amazing."

Aaron Lammer: Well, I get being excited about that. There was a funny Paul Ford Tweet today about his reaction to everything in crypto is, "That's horrible."

Aaron Lammer: Are there any jobs available? That does sound pretty fun. I think ... I mean, I believe, you don't have to respond to this, but I believe that Facebook is large enough that if Libra succeeds, and I take Libra seriously, which just means it could succeed, not that it will succeed, if it succeeds, the amount of money that is moving around Libra will make it an economy unto itself.

Aaron Lammer: It's going to be ... You're going to look at the ... It's not going to be like Bitcoin where you're going to be like, "What's the biggest cryptocurrency?" You're going to be like, "Oh, this is the number 27 economy in the world."

Aaron Lammer: And that's where you actually start having real governance issues. Right? That's how economies are managed. I predict, personally, that it could reach that scale where actually some of these crypto ideas of governance matter, but, giant asterisk, all of these other people you work with, all of these blockchains that you're developing on, I don't know all of them personally, I don't know the Polkadot or Cosmos team, but I get the vibe that most people are not particularly optimistic about a centralized permissioned blockchain.

Aaron Lammer: If you're like, "What things would be not cool to do at this party?" It's like, "Those are the two things that are very uncool." Even at the most unsexy party, at least there's this kind of overriding ethos of decentralization, and that's where the ideas that are even cooked inside of Libra come from.

Aaron Lammer: From that sort of social interpersonal level, what does this mean for you and the company that you're kind of driving into oncoming traffic?

Joe Lallouz: Yeah. There's two things. One; I want to challenge kind of what you're saying about that, which I think is true, but I kind of want to just put a little spin on it. And the other ... Well, I'll start with the first thing.

Joe Lallouz: The first thing is, I actually think over the last few years, we've started to realize that mining pools end up being really serious centralization factors in networks that we've outwardly said, "Oh, they're super decentralized."

Joe Lallouz: When at the end of the day, they're actually not that decentralized, and the whole Bitcoin Cash thing ...

Aaron Lammer: If you want to cause a panic, just pick one of the top 10 coins and analyze how much actually independent mining outside of the biggest pool there is, there's just not much.

Joe Lallouz: Yeah, exactly. There's not. So there's that. I think that over the last few years, we've actually seen some really interesting super smart people that are really committed to the ethos of crypto. Develop, deploy, and move into test nets, and then into main nets and federated networks, which means that they're not centralized, and this is a thing I wanted to challenge specifically about Libra, it's not centralized, and it is federated.

Aaron Lammer: Right. Yes.

Joe Lallouz: There's an association that's deciding who can be these validators to start, and there's actually been a trend towards that, and people are still like, "Maybe this is the best way to get something super scalable off the ground."

Aaron Lammer: Give me an example of a federated network, or I don't think I ... I haven't really heard that much about it.

Joe Lallouz: A good one is Algorand. Algorand, which launched a week ago, or two weeks ago, super smart team, really, really technical, really great folks, they decided who were going to be validators, and this is obviously with the intent that they would open up the validator set long-term to move from a permissioned to a permissionless system.

Joe Lallouz: I still think that that's a huge challenge, and it's going to be one of the biggest challenges for Libra, as well, making that switch, and I can get back to that.

Joe Lallouz: But I do think that there actually has been a trend to people being a little bit more open to this idea of, "You know what? Maybe it doesn't have ... "

Joe Lallouz: Is a certain amount of decentralization a good enough starting point to get to some scale, to then ... with the intent of opening that up?

Aaron Lammer: Yes.

Joe Lallouz: That would be one example. There's some other ones that are entirely based off the financial incentives, or Cosmos 100 validators. If you do not have enough stake on your node to be in the top 100, you cannot validate blocks.

Joe Lallouz: There's different mechanisms at play that people are trying to create these sets of federated, quote on quote, "federated networks", and Cosmos isn't federated, so it's kind of a missed number, but whatever.

Aaron Lammer: Yeah, I understand. I mean ... And ... But this is naissant stuff, really.

Joe Lallouz: Totally naissant stuff.

Aaron Lammer: This is pre-pre-pre kind of stuff.

Joe Lallouz: Yeah. Yeah.

Aaron Lammer: And then Libra kind of runs into the room and it's like, there's no way you can really look at Libra and be like, "Just an experiment, guys." Because it's like, "We're deploying on the world."

Joe Lallouz: Yes. Yes. It's an experiment with the kind of scale that makes heads turn.

Aaron Lammer: The scale is, I think, going to probably dwarf Bitcoin from the day it launches, I would think. I don't know how many active users Bitcoin has at a given time, but if you look at people that are actually doing unique Bitcoin transactions, it's very easy to believe that, from day one, Libra is going to be, whether you consider it a cryptocurrency or not, whatever this thing is that's secured ... a node secured something or other, it's going to be the biggest one.

Joe Lallouz: I think that that is not a stretch. I think ...

Aaron Lammer: I mean, and it has to be, honestly. It's ... Facebook is not going to run a shitcoin.

Coin Talk

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Coin Talk

The official podcast of Bitcoin crashes. Hosted by @aaronlammer and @jaycaspiankang. Mailbag/contact: hi@cointalk.show

CoinTalk
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About this PODCAST

CoinTalk

Come ride the crypto rollercoaster with hosts Aaron Lammer and Jay Kang (and guests) as they laugh their way through the week in Bitcoin and beyond.

Come ride the crypto rollercoaster with hosts Aaron Lammer and Jay Kang (and guests) as they laugh their way through the week in Bitcoin and beyond.

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