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Dr. Craig Wright explains the origins of Bitcoin – Full interview

Craig Wright discusses who allegedly helped him create bitcoin, how he will prove his Satoshi claims and takes aim at John McAfee and Binance's CZ.

Full transcript below.

Timestamps. Note: These link out to the YouTube version of the video, but can be used to find the appropriate section on the embedded video above.

0:40 Background

2:41 Ending the manipulation of the financial system

4:35 Bucketshops (aka Exchanges)

6:40 Illegal Market Manipulation
8:20 McAfee Conman

8:35 ICOs

10:30 Why did Craig create bitcoin?

14:05 Wikileaks

14:49 Patent discussion

17:35 3m Tx/second

19:45 Block orphans

23:20 How to join as a miner?

26:33 A misnomer about bitcoins double hash and mining specialization

29:50 Thoughts behind designing bitcoin

34:50 More thoughts behind designing bitcoin

40:49 David Rees (mathematician)

44:30 How Hal Finney & Ray Dillinger helped

51:35 Was Satoshi Nakamoto a group?

52:48 Craig “driven into the limelight”

54:25 Con Man John

58:32 Andrew O’Hagan (“The Satoshi Affair”)

1:01:30 Julian Assange

1:02:17 Silk Road

1:04:20 The Singularity

1:05:30 Dread Pirate Roberts (Key Ownership)

1:08:55 Lawsuits (binance etc and money laundering)

1:13:33 Craigs involvement in Churches and being a Pastor

1:16:20 Bitcoin Whitepaper creation

1:17:56 Phil Wilson

1:20:28 “How do you stay so grounded?” and Craigs advice on money

1:25:10 Private law agreements and what blockchain is

1:29:15 “What does bitcoin need to do to become a medium of exchange?”

1:33:49 “What’s the one thing you wish people understood differently about you?”

1:35:40 Craig on the value of bitcoin

Fred: Welcome to The Daily Exchange. We’re here with Craig Wright, and we’re talking about everything to do with nChain, and BSV, and Bitcoin and everything, really. Welcome.

Craig: Well, maybe not everything, but enough.


Fred: Now, I just want to give everyone a bit of background because, you know, Craig is the chief scientist of nChain, and we’re here in the nChains wonderful office, thank you for inviting us.

Craig: It actually exists. It’s not like the movie “Sneakers,” where a week later you’re going to find that it’s all empty.

Fred: Now, nChain obviously specializes in blockchain technology research, which is incredible. And there are over 700 patents related to blockchain. Obviously, there’s been a recent…you guys have started hitting 128 megabyte blocks, which is incredible. And also, I think you are a tireless blogger, obviously, you are educated, you help people as well. And I would say one of the most historical Bitcoin developers of all time, if that might be fair.

Craig: Well, thank you.

Fred: So welcome. And I just wanted to just, obviously…we interviewed and worked with, had a chat with Jimmy Nguyen and if you guys want to check that video out, you can check it out, as well. And he talked about the new 128 megabyte blocks with Bitcoin SV, as well. And I just wanted to start, Craig, by talking a little bit about, you know, Bitcoin SVs goals for 2019, and just to, you know, recap that to help everyone out.

Craig: Oh, my goals are very simple. Global plumbing, that’s about it. So we want to be the financial system plumbing, the economic plumbing, the communications plumbing for the world. It’s a nice simple system, it scales. While the next couple years will be up in the terabyte range for blocks, we’ll be doing millions of transactions a second. As everyone else is arguing about their pump and dump scams, which is basically just a Usenet, Penny and Pink Sheet scam revisited, and the SEC starts tracking them back, we’ll just be there scaling. That’s it.

Fred: Awesome. Let’s talk about the, you know, in your most recent posts, you talked about ending the manipulation of the financial system, and you talked about a lot of really important things, like anti-money laundering and things like that. So how can Bitcoin be used for that?

Craig: So imagine a single blockchain. Not this idea, like people like CZ, or Roger Vera, or whatever else, or anyone out there trying to scam people out of their money want. It’s the idea of a single ledger. If anyone can have two books, then there’s no single ledger, by definition. So as soon as you have the ability to have someone register a single key, and then under that key, synonymously create a set of accounts and records that government or authorities, that regulators, that auditors and shareholders can all view independently, then you have a way of actually recognizing any fraud as it’s happening. Anyone can start doing that. And that’s what people don’t get. Shareholders have a right to view all those records. So, imagine if Bernie Madoff couldn’t have multiple sets of records, this is with Sarbanes-Oxley, 302, 404, etc., where you are actually required to have WORM media, which is write only, read many. And now, what they did would be having DVDs and CDRs that would actually have write only…so, write media that can’t be changed or anything like this, except that have multiple copies. And so, you have your version to give to the auditors, and your version to give to this shareholder, and your version to give that shareholder, this investor, to the SEC, and everyone had their own copies. But every month, you make sure that the figures tell each other the same amount by using foreign companies, and things like this.

And that’s what we’re seeing now with exchanges. Sorry, we shouldn’t call them exchanges, bucket shops. Bucket shops is a term that goes back a long way for these backroom gambling houses, because that’s all they are. They’re not regulated, they’re not actually selling and buying Bitcoin or any other cryptocurrency or whatever token, bucket shops. Now, people think this is new, that tokens are new. In law, there’s a term called dematerialization. This has been around…I think India and Pakistan are the last to really fully do that, which was only last year. But in America and the UK, between the ’60s and the ’70s, all these paper records, all the shares, all the bonds and everything like that were put on to tokenized databases. Now, so that’s nothing new. I was actually involved with the Australian Stock Exchange as they moved, and I actually worked, when I was in high school, in the Brisbane stock exchange for a little while. I did a stint where I was a chalk boy and did a whole lot of backroom stuff with paper and all the rest, so I’ve seen both sides of it. Now, the interesting thing that people don’t realize is with dematerialization, you’re tokenizing shares anyway. So this is nothing new. And in the ’90s, there were things like [inaudible 00:06:00] which was sued by the SEC because there were a decentralized offering. Basically, a group of web developers around the world and got together and said we aren’t going to form a company, were decentralized. And the SEC basically pulled them over the coals and said we don’t care, you’re still people, and they took them to task. And there was Webipo, and Free IPO, and and all these other things in the ’90s, and people would sign up and even get shares just by giving their username. And you had Penny Share scams, and dumps and all the rest. And like we’re seeing right now, with CZ and others, you saw a pump of Bitcoin SBB, SV just before the delisting. That’s called illegal market manipulation. And they think because they’re not registered they can get away with it, because they can move around the world.

One thing I’ve mentioned is things like Liberty Reserve, and everyone goes “it’s centralized.” No, the people are centralized. Like CZ is a person, he’s centralized. So Arthur Budovsky, at Liberty Reserve, was the centralized entity. There’s no such thing as a DEX, as a decentralized exchange. That’s a fraud and a con, to try and get stupid people to give you money. They don’t exist. Exchanges require regulations and liquidity to work. Bitcoin does not democratize finance, that is the liar and con man view of it. They say give me your money because I can get around the law, and take it from you. You’re too stupid. I own that bridge, I own Brooklyn Bridge, I’m gonna sell you Brooklyn Bridge. This is an old thing. They want to paint me this way because they don’t want law, they want their cons. This is the big fight at the end, trying to grasp and hold, and hold on to their con-men status. They want to keep going with this. People like John McAfee, who built a career out of being a conman. Yes, I’m saying that. Please, sue me, Mr. McAfee. I’ve actually got some evidence on you. I want you in court, Mr. McAfee, who charges for conning people and making token scams.

And that’s what they are, these are tokens scams. You know how much has been developed out of any ICO? Nothing. Nothing, ever. There’s not a single thing. You know what you do to raise money? You create a business. You sell, you buy, you make. You don’t create a token and do things. Like at TOKEN2049, I got annoyed because there was a guy before me, and he’s standing up there going, I raised this ICO, and I made $50 million. And I wouldn’t be able to do that in the normal world. The idea didn’t work. But hey, it’s okay. Because now I can try something else when I get a new idea. And he didn’t give any money back. You know what that is? Theft. That is theft. It doesn’t matter what system you’re under, he is a thief. Very simply. If you fail, if you pivot, and if you pull down your industry, you give back the money. That’s what shareholder rights are about. This is not about protecting the loser ICO scam dumper, it’s about protecting the investor. And that’s what Bitcoin does. It has an immutable ledger, every ICO will be tracked. The problem in the ’90s was people deleted all these records. All these guys got away with this scam stuff, and very few, maybe 1% or 2% of them went to jail. Now, and it’s a 20-year thing here, 20 years later, someone can dig this up and put you in jail because you are a scammer. That’s what Bitcoin’s about.

Fred: That’s awesome. And I guess, you know, with that, Craig, is that why you created Bitcoin?

Craig: Yes. That, and a few other things. So, some people look at the sort of global distribution of banks, finance and whatever else, and they don’t understand that if I started Bitcoin in 2007, it happened before all the global financial crisis and everything like that really kicked in. There were a few people warning of it, but there’s always people warning of these things. And that was never the issue, anyway. What was happening in 2007 is the RBN, the Russian Business Network, a bunch of FSB sponsored state hackers who ran spam and everything like that, helped things like RX Limited and other scammers around the world, were taken apart because of SWIFT. And then the Russian government and others were looking at ways of using the SWIFT network and bypassing, and then building their own so that they could get outside of all those money laundering controls, so that they could sink money into Iran to piss the Americans off, so that others could do these sort of things. So really, there’s a lot of all this problem there about the banking system being used for nefarious reasons. All of that goes away when you have an immutable evidence trail, where you can follow things, where you can pull people up and they can’t hide it.

So course with Zcash and Monero, that’s what people are really trying to make. They’re trying to make anonymous, they want to make something that helps governments get money in and out of Iran, helps money to go into places like North Korea, helps people like Kim Jong-il, get money out and hide it, helps leaders of African nations who maybe earn $40,000 as a general every year and yet have $3 million bank accounts. And if you look up those particular amounts, you’ll find that’s a particular leader in Africa. And then if you own…came from nothing, and you’ve got $40,000 a year salary, and suddenly when you become leader, you start spending $3 million a year…something’s a bit funky. Yeah. So really, it’s about those sort of areas.

So I had people I knew, I won’t go into names and whatever else, but because I was involved, I used to go to things like DEF CON and all those sort of conferences, I used to be heavily involved with SANS and other hacker conferences. I used to have friends who actually worked with GCHQ and other areas, mathematicians, etc., whose job was, effectively, to infiltrate DEF CON conferences and be, like, a hacker, and get to know the hacker groups and other fun things. And it was always funny, because I’d be there, and I was always an outcast, anyway, because I have different views on security than most of these people. But it was funny, looking at this and understanding global geopolitics really comes down to banking and movement of goods, finance, and all the rest. And having people think, oh, big, bad banks and the Wall Street Occupy movement and everything else that, really, I was against, start taking it over. And I mean, WikiLeaks, who I say basically [inaudible 00:14:00] as myself at the time, saying how bad they are. And yes, everyone loves to say Wikileaks, except has anyone noticed that they never report anything about Russia? They never report anything about certain aspects of Syria? Effectively, they’re a very anti-growth, anti-West, leak things to…have a particular false point of view. And what people don’t get is, if you have too much information, it becomes data rather than information. So they bury things in releasing truth, but in a…well, a way that allows you to lie with the truth. Because if you get part of the story, and you dig parts out, and you only release certain things, you create lies.

Fred: Hmm, makes sense. And I guess you’re…going back to talking a bit about nChain and some of the recent patents and where it’s going, I want to talk about…because Jimmy alluded to a Bitcoin transaction to…sorry, Bitcoin transactions patent, and just quoting what he said, to compress and decompress data, which could become a website. Can you talk a little about that more as well, Craig?

Craig: Okay. So, some of what we’re looking at doing will be actually embedding data such as websites and script into transactions. So what people have started seeing as the Metanetis really nothing. It’s Gopher. I mean, that’s what I’d say, it’s going back to, say, 1991, and the Gopher days of the internet, where pages really slowly load. What we’re going to actually see is the ability, when we get all the sort of script limitations, etc., out, where we get it all fixed back to where it was in 2009 and 2010, before people started fixing Bitcoin, we’ll have it at the point where people can now start to create paid scripted websites. There’ll be some free, there’ll be some information that will be there permanently, there’ll be other things that can be taken down and accessed only as you’re solving a puzzle, or a point in time, or things like this. Now, most websites are actually small. And if you look at really what happens is they link other data and information. So we could load images, and have access paid to images, like stock pages, etc., and link those back as references. And then the, say, 4K that is the sort of Declaration of Independence in the U.S. could be compressed down into an eighth of that size, and included with hyperlinks and fonts and everything like that, and then with CSS type pages. So it’s really going to be new browsers, new applications, new wallets, effectively, that are going to start developing. So first, we need to get the backend so that we can really scale, which in the next year or two will be that. And then over the years following this, we’re going to start building the rest of the infrastructure.

Fred: Brilliant. And a lot of the changes right now, and obviously, to get up to this size, you recently gave a talk at Brunel University in London, talking about 3 million transactions a second. Because I could imagine that would be, you know, that’s a huge speed, and needed to create this Metanet and things like that. Can you talk a bit about, you know, how that’s possible, and…yeah, just your ideas around that?

Craig: How is it not possible? I mean, this is where everyone seems to go wrong. They think Bitcoin’s about some democratized BitGold system, where everyone runs a node. Okay, when, I think it was back in 2010, I mentioned everything ends up on data centers, that’s the point. Corporations. It’s never been about some individual thing. If we go back to a society of individuals, this communist Marxist idea where we all live in our little huts and go out there and forage and whatever else, then we have nothing. You can’t create chips and chip factories individually. The end. You cannot create digital companies to do the global routing without companies. All of these things where people take for granted because it’s so easy to get them, they forget how they come about. They forget the global interconnectivity that makes mining work, that enables shipping to work, that allows logistics to take all this stuff we take for granted and bring it to us.

Fred: Yes. And there’s massive data centers right now, and that’s…you know, I guess, you know, BSV is very much focused on that, and that big enterprise.

Craig: And people don’t realize we’re having massive data centers right now so that we can send cat photos really fast. Cat photos everywhere, Twitter, Facebook, grumpy cat, happy cat, we don’t really care, but cat photos everywhere.

Fred: I confess, I do like a cat photo from time to time. And I think, you know, we talked with Jimmy last time as well about increasing the block size even further. And then there’s this recent discussion about block, the block reorganization. And I was just wondering if you could just clear up that, and explain, you know…

Craig: Meaning that stuff in the white paper? So, orphans are a miner function. Miners compete. Now, as a user, you don’t give a rat’s rectum because what happens is, if it splits, well, one miner wins, one miner loses, the end. Your transaction is grabbed by both. The argument is a false one, it’s a straw man used by people in CoreCoin, or SegueCoin, or anarchist, loser coin, you can use any of those names, they’re all equal. But anarchist, loser coin, with their 1Mg cap, that’s the one that trades as BTC falsely…so, what they do is if you get that 1Mg cap full, your transaction may not get in. That’s it. So Bitcoin wasn’t originally designed with a cap, it was put there because there were no economic limits on Bitcoin, so that was a problem at the time. It’s an economic security model, and if you don’t have any sales, no market, no economics.

But what happened is, say you’ve got your three and a half whole transactions a second in anonymous loser coin, then five transactions a second come. Which is nothing, that’s like a school tuck shop level, a single one. So it’s a busy period at the school tuck shop, and there’s, say, 10 transactions a second. Then only three can get in, and the rest end up timing out. Now, the difference is, in Bitcoin, which is BSV, you end up with as many transactions as miners can take. So if we have 1,000 transactions, and another one with 1,000 transactions, and they split because they’ve got different ordering, then what happens is this miner takes all the transactions, and the mempool is emptied. And this miner takes all the transactions, and the mempool is emptied. So, as a user, as someone buying something, you see two miners have your transaction, but you don’t know which one will follow from there. After a period of time, what happens is one miner comes out several blocks ahead, and wins and takes the money. And eventually, people will take sides, and go one or the other.

Now, it’s a competitive system. I’m presenting in a few weeks in Cambridge, I’ve got a paper on economics of Bitcoin. It’s basically what is known in game theory as a multileader, multiplayer stackable game.

Fred: Brilliant.

Craig: Not one that many people seem to understand, outside of game theoretic circles, but I’m explaining it as that. So with a multileader system, different parties sort of take the lead or lose it over time. But really, the idea here is every transaction gets into a block anyway, so nothing gets lost. So from a purchaser, a merchant’s point of view, you don’t care. You see, haha, I got my transaction in, and haha, I got my transaction in. Which one does it go with? I don’t care, the end.

Fred: Yes. And I think, you know, the continuation of that has been seen in… I think there’s some aspiring miners out there, Craig, as well, that want to join. And I think some people who want to, you know, make some investments into mining BSV, as well. And I was just wondering if you could share some advice for them of how to best join.

Craig: Well, if you have a large enough industry or whatever else, then you can do like we did here. But that takes a lot of money now. So, there’s two options. One, you can become part of a pool. And two, is you can mine, yourself. Mining yourself we do with BMG. I didn’t name it, so don’t blame me. I wanted to call it BFM, and then Jimmy and things niceified it. You can figure out what BFM is…it’s big…yeah. Sorry. I’m Australian, what can I say?

Fred: Yeah.

Craig: Anyway, so…

Fred: But Jimmy’s a nice guy. Jimmy’s a cool guy, I like Jimmy.

Gina: Yeah, Jimmy is. So that aspect costs a lot of money. If you want to be a large corporate miner, then you have to have a lot of investment, and have to be able to do things better than other people. You have to have some edge. On the other hand, we have a pool, and other people have pools as well. And it’s good to have competing pools. And pools are something that allows people to run up a small system, maybe something that’s local or time-based. Say you have a local area that has subsidized power or something like this, or gives you government kickbacks for wind or solar or something stupid, then you can put all that money in there for a period of time and turn it off and on, which you can then do with a pool, allowing you to earn a bit of money, help the network and add to hash power. But where people go wrong is they think mining is only just the ASIG parts. So, it’s not. Mining is the verification, saving, and dissemination of blocks. Only miners do all of that. If you read the network section of the white paper, it has a little list there of what miners do. If you don’t do all of those things, you’re not a miner, but you can be part of a mining group. So that’s like a partnership, is what I’d call it. So when you’re actually a pool miner, you’re still effectively a corporation, but your a partnership type of corporation, where you can come, decide to be part of that group for a time contract a range to help the pool-formed blocks and get them out there, the pool then has the task of disseminating blocks. And eventually what we’re going to see is the dissemination and the sort of hash power will separate.

So something that’s actually wrong on the what they call Bitcoin Wiki, but I’ll say the anonymous loser coin Wiki, is this bit about security and a double hash that everyone gets wrong. Let me just tell you, Bitcoin does not have a double hash to make it more secure, it makes it one bit less secure. Every time you add a new hash, you actually remove one bit of security from the hash function. In a 256 bit hash that drops down 1 to 255 bits, which is really 254 bits, blah, blah, blah…but that’s a different issue. Now, the real function there is it’s a type of hash puzzle. That means what you can actually do…and I didn’t foresee mine sort of pools the way that they are. But what I did see is that you could actually find a solution and sell it. So people could actually then prove, using a hash puzzle, transactions, and they could prove blocks, etc. So with a double hash, I can give a dissemination company proof that I have a solution. They send me a transaction, I send them the proof of the solution. That’s what a double hash allows you to do. If we start thinking non-socialist and business, the way Bitcoin was designed, we can see that mining, now, can be split into parts. Why a double hash? Because, well, I can sell this dissemination part of the mining company my solution, and I can specialize. I can verify a transaction and prove that I’ve verified a transaction. And I can do that in parallel, and different parts of that can now be split out. So we can solve a Merkel tree, and I can sell you the solutions to send.

Fred: Yes. It’s like a specialization of mining.

Craig: Exactly. And eventually, this is going to happen. So people will specialize in solving the Merkel tree, people will specialize in disseminating, people will specialize in archiving, people will specialize… It’s Adam Smith talking about the baker, the candlestick maker, the guy over there fishing. Everyone else doing their little thing, right down to the pinheads and the straightening of the wire and whatever else, everything gets pulled out into a hyper-capitalist world, where all of the mining can now be disseminated to the best area. So even if we solve everything, we can now send that out to different dissemination companies around the world globally. And we can only do that because we have a double hash. That’s the secret.

Fred: That’s brilliant. That’s really smart.

Craig: And no, that’s not on the Bitcoin Wiki. And if you think through it, you’ll find out it actually does make sense.

Fred: Brilliant. Let’s talk about…I think last time we were talking about, I guess, the creation of Bitcoin, Craig. And last time, in November, we had a chat, and I asked you, you know, if you are Satoshi, and you gave me a cheeky grin back then. And yeah, I was wondering if you’d be okay to talk a bit about that, and sort of what’s changed? And you know, what you’re okay to, sort, I guess, claim?

Craig: Well, I’m not claiming anything, I’m going to get a court, and that’s what proof is about.

Fred: Proving it.

Craig: So, yes, I created Bitcoin. Yes, I had help. In the ’90s I had a company, and I had people work for me, some good coders, some good other people. And we tried a whole lot of things that were a complete…the only word to say is fuck up. And then in 2005 I had another company, and I actually tried what is the wet dream of things like Ethereum. And I’m going…I’m actually publishing and saying about this, it was a completely decentralized distributed system. This was after I’d been doing some work, helping [inaudible 00:30:57] and others on taking down peer-to-peer networks, which is…no one seems to understand the reason I know them so well is I worked for the law enforcement side, doing raids and taking down networks and all that sort of stuff. So my work was sort of the opposite. I know how resilient they are because I had to try and take down some of the things, and…yeah.

Fred: Best experience you can get.

Craig: Yeah, how to break it. So anyway, thinking about that, took all that and figured out that if everyone solves everything all the time, there’s no incentives for anyone to build a network that scales, okay? So imagine we have a completely distributed system, and everyone on Earth can mine, and it’s random. I can…actually, we’re going to patent it, and then release it. Just because I’m going to be a total bastard, you have to use my patent if you want to do it. But we have a way that goes back a long way, of completely non-parallelizing this, making it an utterly serial thing. So if I run two independent systems at once, I will be just as fast if I had one. If I run ten, just as fast if I had one. So, perfect for proof of stake model and all the rest, I can make a perfectly secure mining function that actually works in that sort of democratized way. There’s one problem. Imagine if 100 million people are doing this. What incentive do they now have to put the network infrastructure in place and pay for all the machines needed to do this, globally? They don’t. That’s the problem. If you do this, there’s no incentive for people to build anything. Why would a business do something if they’re not going to earn profit?

Fred: There’s no reason.

Craig: Exactly. Profit’s not a bad word, profit means we have things go where people want them the most. Profit is not immoral, it is amoral, it is outside morality. If we listen to the people in the Federalist Papers, and Jefferson and whatever else, we read their works, what we discover is it comes down to the same values that the Romans had, virtue. We need to instill virtue. Look at people like Benjamin Franklin, read his works. We create our own virtue, and that differentiates what is immoral vs. amoral vs. moral? We create a system, and the profit can go anywhere people want. But the way that we make that moral is we change the hearts and minds of the people using it. Porn, drugs, etc., will be where it goes if that’s what people want. You don’t stop that by any of these silly things we’re doing by making it illegal or anything like that, you do it by educating people and training them, and making them understand why something is better, having a society that wants to build and create and work. That’s the important part. That was the importance of the Protestant Revolution, the Reformation, all of this stuff where people actually came out there and started working.

Fred: That’s brilliant. And you talked a lot about… Sorry, there’s a lot of gold there, I just wanted to pause on that for a sec. But…

Craig: I can keep going if you want. I only got up to 2005.

Fred: Yeah. I just thought…you know, you talked about, you know, being part of the…creating this group, you know, the Satoshi Nakamoto group, and…

Craig: Well, I don’t know if there was really a Satoshi Nakamoto group. That’s a wrong way to put it.

Fred: Okay.

Craig: I mean, I had a goal that I’ve been working on and focused on for decades now. And I’ve employed other people, used other people, had help by other people, etc., over that time. So there are people who helped Bitcoin, was a better way of putting it. So it really was about 2007 when this really clicked. And probably, some of that was because of a couple people I had. One was Iggy, who I worked with, who I poached from the Hart Foundation, he was a protein modeler. So his PhD, etc., was on the folding of protein into a network science, who worked with me at BDO. We did a whole lot of things to do with modeling, social networks, and other such things, like finding child grooming and pedophiles and everything like that over social networks, and linking people and tying them together. And some of that helped me understand networks a lot better. At the same time when I was doing that, I was working, auditing financial accounts of listed companies and other such things, and a partner at BDO, Ellen Granger, sort of put me on to the nature of a triple entry ledger and the whole distributed system. And having worked as an auditor and seeing what happens in companies, and material vs. non-material accounts, and how a fraud can be made through many small non-material transactions that don’t get brought up and seen, and how you can then create accounts that have CAATs, computer-aided audit techniques, or DATs, digital audit techniques to monitor everything. I started looking at something, if we have a single set of ledgers, maybe we can actually start tracking this in real time, not find it two years later when it’s too late. But actually, bring up and discourage fraud, because as soon as it occurs you’re going to know about it. It’s outside our range, it’s outside our bound. Statistically, you then investigate those things that are unusual.

And yes, you’ll investigate a whole lot of things that are basically false positives, but you still actually do less work than fixing after the fact. So all you need to do is on a false positive, you just go can you show me where that invoice actually went, and check with a few people, generally enough to scare people into honesty, even if it was possibly not a false positive. But whatever else, it doesn’t escalate. It’s like the old policing bit, where the best constable is a streetlight. So you have the area lit, and that discourages crime. So if people know they’re being watched in a company, then they’re not going to take the stationary, then take something else, and build and escalate. And that’s what really happens for fraud and crime, it escalates. It grows. So, looking at all that in the 2007 period, after being with BDO for a couple years, I’d sort of…that was enough to get what I thought might be a workable system for Bitcoin. And the importance here is it had to be really different to everything, like E-gold and DigiCash and all the anonymous systems. Every one of these falls to crime and abuse. That’s what all these other people are seeking at the moment, they think this is about crime and abuse. They can make a lot of money themselves by crime and abuse. Bitcoin’s designed to kill that, dead. That’s the whole point of it. You have an immutable, undeletable, unalterable evidence trail. It’s private, not anonymous. That’s important.

So, that took me to the point where 2007, 2008, Dave sort of started helping. Dave and I worked on quite a number of papers and books and everything like that. Dave edited. I can be a bit lazy when it comes to editing things, and my document management is shit, as the team out there will know. I start working on a document, make a new version of it, go back to the first one, make a third version. I’ve got some of these things where there ends up, like, 17 different versions that are all partly correct, spread across things. I’m not the most organized when it comes to those sort of bits and pieces, and I need…that’s why I have companies, so I need people to crack the whip and tell me where I’m doing wrong, and go, “Bad Craig.” at times. But that’s life.

Fred: Yeah. You find that partnership, you know, with Dave, and you need someone that, you know, complements you.

Craig: Yeah. So I had some other friends at the time who were working on some other problems with SWIFT Network Rx, and distribution of funds that are being abused through the SWIFT Network. They helped, they gave information. So…

Fred: Brilliant. And then you had… Calvin, of recent, has sort of put a tweet out, talking about Dave Kleiman, you guys working together, and Dave Reese, which I have not heard of before. Maybe if you can talk a bit about…

Craig: David Reese was a professor. So he was at Exeter. I actually had gotten to know him early on because my grandfather, who died a decade or so ago now, as well, David was a mathematician. And some of the areas he studied were commutative groups, which now goes into some of the research we’re doing out there for our patents, and things like this. David wasn’t really involved with what was Bitcoin, David was involved with some of the early ideas. He gave me pointers to some of the math and things like that he had done. So, David had a horrible system called Coco, which I don’t think anyone in their right mind has heard about. But it was an early mathematical programming system. And I’m an old bugger, so you’ll notice that Forth and Coco and whatever else reflect in Bitcoin, and smart contracts and scripts and…

Fred: All [inaudible 00:42:18] And then just, he talked a little bit about Hal Finney and Ray Dillinger, and how they helped, I guess, from the outside as well. Can you talk about how they were involved?

Craig: Yep. I’ll just do one little bit more. I mean, the way that my grandfather actually got to know David was they were both up in Bletchley Park for a time. My grandfather was the first Australian graduate of the Marconi School of Wireless, and he got his master’s degree in communications and whatever else studying under Marconi. And so he actually studied under Marconi himself. And that was valuable, and he worked for MacArthur. He worked, basically, doing communications and signals work, where he did a whole lot of training in, well, covert communications, etc., worked with David for a time, then was sent off to the Philippines before MacArthur actually invaded because my grandfather spoke perfect Italian with a Tuscan accent. So they dressed him up as an Italian officer, and he helped the guys who were sort of still in the Philippines, like the Americans who were doing radio communications and whatever else. And the Japanese at the time thought that he was, basically, on the German side. And he was even there before the Germans came into the Pacific side of the war, and all that sort of fell apart, with the Americans and the Japanese invading and all that stuff. So that’s the history of that part.

Fred: That’s incredible. Wow. I’ve been to the Philippines quite a few times, and they have a very, almost, I guess, American accents of law, and the American laws as well, which is incredible. I guess I was just coming back from Calvin, he was saying, talking a bit about Hal Finney and Ray Dillinger, and how they helped afterwards.

Craig: Yeah, so there were lots of code problems with Bitcoin, lots of problems with many things. I mean, I mentioned, you’ve seen in my blog, Patch Tuesday was horrible. Microsoft making all machines turn off at once, horrible, horrible invention. I mean…yeah. Anyway. If you’re running so many machines, and you don’t think about it, and suddenly one night, you find they’d all turned off…yeah. And Bitcoin couldn’t have that, so before the 10th of January, I had to build a domain. Because the way you get around that in Windows is you have to have the main infrastructure so you can have a WSUS server to say when you’re patching policy is, and you can then roll patches out and say which ones you don’t want to do and all this other stuff that Microsoft doesn’t let [inaudible 00:45:30] users take care of. Anyway…

Fred: Ahh. Because that would really hurt, in terms of if you’re running, and then…

Craig: If you have a network that has to stay up, and then suddenly, all of it turns off at once, Bitcoin stops.

Fred: Yeah, not too cool. Yeah.

Craig: Yes. So the first version of Bitcoin actually suffered from that, and then came back.

Fred: That’s brutal.

Craig: It was brutal. A learning lesson, and better learned then than later. But Hal had a whole lot of knowledge about coding and whatever else. I used to teach programming, and yes, I taught it on Windows. I know, I did evil Windows programming stuff. And if you look at my stuff in IT Masters, I taught .NET, and C++, and Visual Studio. I know. And we had a Window stream in our master’s of development, and…yeah, no, terrible isn’t it?

Fred: Old school, but you, you get it done.

Craig: One of the problems is Windows XP, from service pack 2 to 3, etc., changed radically. And I didn’t want to make…I mean, this is basically 10 years ago. So you didn’t want to have big programs, not like we do now, that you’re downloading from the internet. If you’re putting them on a CD or something like that, you don’t care. If you’re downloading from the internet, you want a 60Mg executable or something. And with the symbol table, Bitcoin was actually over 60Mg. So to get it down to 5Mg to 6Mg to make it so people, when they had the full package, would actually download it and not give up, we had to drop the symbols but then found out that when you went to service pack 3 in XP, it broke and crashed.

Fred: Ohh, that’s brutal.

Craig: Mm-hmm. Then, I was trying to do this on a budget, too. So this is before the days of Visual Studio being free, and I didn’t want everyone having to have Visual Studio, although I had a copy because I taught it with the uni. I wanted normal people to be able to take and download and compile this as well. And so we used Boost, and other things that were all free software, and that just made it worse.

Fred: That’s brutal. And so I guess, yeah, Hal, and…you said he helped a bit with the coding parts, and…

Craig: Yeah. So I read a biography a little while ago from I think it was employee number 57. I’m probably wrong, 50-something, anyway, of Google, who was a marketing guy. And they were talking, you know…I’d say, like the founders of Google, I’m probably the same sort of coder. I’ve done a bit in uni, and I’ve reviewed code and done coding competitions, and this sort of stuff. But I haven’t actually been a formal developer in a real organization. That’s why I get shit from these guys out there, who pull my code apart and say that I suck. Because there’s a big difference from writing code on your own to actually working in an organization where you need to make something that other people can understand, develop, and whatever else. I always thought my comments made sense to me, but no one else in the world does.

Fred: And your declaration of variables, they’re, like, perfectly fine to call them whatever you want to call them.

Craig: That makes sense to me.

Fred: Yeah.

Craig: They still make sense to me.

Fred: I did the same thing. And I was a coder originally, and I used to code websites. And I totally understand, you need…to get scale, you need architects and engineers with that special mindset. But the core, kernel idea, and coding that, that’s really, I guess… Is that where you really started that idea, and that genesis?

Craig: Yeah. So…

Fred: And then you get the other help.

Craig: Yeah. And then some bits probably should have been rewritten, but they’re now set in Bitcoin. I mean, [inaudible 00:49:53] and others did…I mean, I took their cryptographic libraries and integrated that into what became Bitcoin. But that’s part of the problem, if you have big Indian and little indian in different parts of the code, what you really should do is rewrite it, rather than mash it together and flip it. So at the time, I have some blog posts that are probably still out there in the Wayback Machine about when I was talking about flipping bits and silly things like that, and doing it in RegEx, and…what do you call it, then using different functions of GCC when compiling, and using DD and things like that to…just playing with flipping bits and everything like that. Because at the time, well, as everyone knows, Bitcoin’s a mishmash of big and little indian code, but anyway…

Fred: Yeah, it happens. And so I guess, you know, you had, I guess… Would you say, like, you know, obviously with Dave, you’re good mates, I assume, and…yeah, I guess, you know, are you…I guess I just, I don’t know how to say this, but in the BBC, they had, like the, you know…they talked about, you know…are you cool saying that, you know, Satoshi Nakamoto, I guess, is a group? Or, you know…I guess it’s hard to tell, like, you know, I mean, because you’re saying…I only know it myself, when you code stuff, like, you make the genesis, and then you involve other people, well then that’s a bit unclear, really, right?

Craig: So, I was the one who used the pseudonym, I was the one who drove the project. Where do you say someone was part of it or not, I don’t really care. I mean, at the end of the day, it was a project that I want to still create and keep going. It’s not anywhere near done yet. It’s got a long way to go. This idea of democratizing finance that came about is stupid. I mean, it’s not democratizing finance, what they’re talking about. What it’s talking about is making stupid people with no idea get fooled into buying the Brooklyn Bridge, and fractionalizing them and giving their money over, and then being able to run away. The reality of Bitcoin is to stop all that, and that’s what we need to get people to understand.

Fred: Yeah, and I guess I was going to say, you know, in 2015, 2016, I feel, you know, you were, I guess, pressured to talk about things, and, you know…

Craig: Well, 2015, I was driven into the limelight. I actually tried to get out of it, which was the stupidest thing I probably, you know, could have done. I should have actually addressed it back then, but I had family and other people I didn’t want to…

Fred: Yeah, to protect.

Craig: Yeah. People don’t realize…I mean, this whole staged thing in December, 2015, I mean, I moved to the UK in October, 2015. All our deals were done six months before that. All the things had been shut down, all the things had been moved over, all the rest. And then this empty house, literally, that’s what it was, it was an empty house. We’d been out of there for sort of six weeks, there was a group of journalists with full camera crew standing there. And we’re not talking one or two, we’re talking a whole sort of…like, multiple film cameras, we’re talking all the photographic teams, everything else is right up, standing there just as a group of federal police are called in to do something. Sounds like a perfect SWAT to me.

Fred: Yeah. The media…

Craig: So, big story. I mean, Satoshi Nakamoto wanted by police. Police don’t give a shit about Satoshi Nakamoto. All this stuff by John-total-scammer-McAfee, please, John, sue me. Please. I want to see you in court. I’ll find a way of getting you in court if I can drag you into this country, because you are a British citizen. But what you have is 40 years of conmanship. So, I have to throw that in there because I want to see Conman John in court. And Conman John who lies and says, “I will release the identity of Satoshi,” to do his cons and build his fake idiot army wants this because he wants to take your money. Conman John worked, helping promote every big scam there was. You know why Conman John doesn’t have $100 million anymore? Any idea? He wasn’t ever a billionaire, by the way. Conman John in 2008, and whatever else, had his $100 million dollars in paper with Bernie Madoff.

Fred: Ohh.

Craig: So Conman John helps promote. Conman John doesn’t write software, Conman John doesn’t create cryptocurrencies, Conman John doesn’t create security products. He’s a promoter. He took other people’s security products, moved them out of their own companies, fucked them over, and pumped and dumped, and pumped and dumped, and that’s what he does right now. And everyone is too shit-scared because of him. I’m not. See, Conman John, you weren’t ever a billionaire.

Fred: That’s great.

Craig: Guess what? I’m not afraid of you. I want to see you in court, Conman John. And I will keep calling you Conman John, and I’m going to go into court, where it matters. And then, not because of a media circus but because of law, that thing that shit-scares you, law equals proof and identity. Not this crypto-anarchist bullshit, not your conman stuff about… So, you know, the first version of McAfee…John likes to walk around saying how he doesn’t believe in intellectual property, unless it’s his. What he would say is he sold McAfee for free, and he put a little thing saying “please steal this product.”

Fred: Really?

Craig: Yeah, that was on the first version. What he doesn’t point out is there were two points, you had to pay to uninstall it. The first version of Conman John’s product would run your system up to 100% computer usage if you didn’t pay him money. It’s called malware. That was John’s little boost, that’s his cobit. And then they locked you in so you had to keep paying them. That was John’s little invention. So Conman John is the worst thing for the security industry, the worst things for the crypto industry, and the biggest scammer this fucking decade.

Fred: [inaudible 00:57:50] And I think…well, I guess the… Yeah, I guess that…

Craig: Oh, and one little thing. For all those people who are afraid of Conman John, don’t be. We’ll help you. Conman John wants to take you on. If you’re not a complete scammer yourself, which is probably .1% of the token guys out there, and Conman John wants to go over you and cause you a whole lot of problems, let’s take down Conman John. Don’t be afraid, Conman John should be.

Fred: It’s a calling out for help. And I think, you know, I guess that intense time, you had an intense…what was his name? Andrew O’Hagan…

Craig: Oh, yes.

Fred: He wrote, called “The Satoshi Affair,” I guess, just…

Craig: Yes, a lovely little piece of fiction, designed to promote his stupid ideas and whatever else. So, what actually happened there was back in the middle of 2015, before all of this stuff, someone in the organization had approached the totally wrong sort of PR firm. The idea wasn’t to come out as Satoshi or anything like that, that’s purported. It was actually to document what we’re doing here. Not now, it was supposed to be over the next 10 to 20 years, and he was going to be paid for doing that. And there was a contract there, and what happened was he handed back the contract, then he never signed it. And we had an admin fuck up, and no one checked until too late.

Fred: Damn.

Craig: And we’d already gone through a few things and all the rest. So, he got to see the office being built, and a few other bits and pieces, and us hiring. And the concept that someone wanted to document was I didn’t want to come out, and didn’t want to do the whole Satoshi bit, so therefore, what’s going to happen is we’ll just document over the building. So as all these patents start coming out, probably around now, people would have started noticing, hey, these guys are releasing more patents than IBM, and China, and all that sort of stuff. Because we actually have a suppression process, so you don’t need to actually publish straightaway. We use a whole lot of tricks that our lawyers have taught us to hide, as far as we can, publication of our patents, which gives us a little bit of time to build other things on top of them, but still get the priority dates. Now, so the idea there was to build and have everything in place, and work in secret. Which, working in secret’s much nicer, trust me. And unfortunately, around March, April of that year, I’d been talking…I got this, you know, don’t talk to this guy anymore. What? Yeah. He didn’t sign the thing. And there was a whole lot of back and forth because he didn’t want to sign it and whatever else, because Mr. O’Hagan basically wanted to include me in what he had as a stupid other book, where he made me up to be some sort of cypherpunk thing, like Julian Assange and all the rest. I’m not like Julian Assange, I’m his opposite. Julian Assange is an evil little toad, who promotes false truth, not reality. He loves to sit there in the media spotlight and say how he’s saving the world, when what he’s really doing is he’s the asshole who stirs up trouble, then leaves. He’s always been that. And I’ll say that right now. He’s a stalker, he was then, he’s an asshole, he treats women and other people like assholes. And he can sue me, too.

You know, see, the difference here is when these people…when I’m suing for defamation, there’s an answer. It’s called truth. So, I’m happy to go over all these old emails.

Fred: And you wanted to talk a little bit about, I think, you know, telegram groups, and I guess, Silk Road as well. And I wondered, your thoughts on that and how they sort of…

Craig: So, this is part of why people want the whole cryptographic proof, because that’s not proof. Proof is something simple, like a credit card statement saying that you actually bought the…sorry, domain, but not, and paid for the Satoshi email account. Because back then, you couldn’t pay with Bitcoin. I mean, it’s a really simple journalistic faux pas that no one actually thought, because they’d been taught, you know, taught this whole cypherpunk, you’ve got to do it this way thing, that no one thought how did you actually buy a domain in 2008?

Fred: Credit card.

Craig: [crosstalk 01:03:13] credit card, yeah. So, how do you find these things out? How do you track them? So no one actually thought maybe a better way of doing this would be good old fashioned stuff. See, this is why I say shit about the NSA, because they believe in the whole analyzing metadata. I’m still old fashioned, I believe in this thing called HUMINT, human intelligence. Actually, you know, good old fashioned stuff. That’s why private, but with an audit trail, matters. Because then, people have to economically decide on what to go after. Like putting together a case the good, old fashioned way, not just oh, look, the IP addresses match up. Then they can look at normal things, and think with their brains. Like, hey, this guy’s learning how to fly a plane, but he’s explicitly said he doesn’t care about landing. Maybe I should report that.

Fred: That’s an issue, yeah.

Craig: Yeah. I mean, that would have stopped 911, if people had thought that way rather than thinking IT and technology will solve everything. It doesn’t, people do. That’s the whole problem, we love to have this religion, and that’s what it is, of the singularity in IT. It’s a religion, and it’s a false religion because there is no singularity. You know, we’re as close now to the singularity as Julius Caesar was.

Fred: Really? Why is that?

Craig: Because we have no consciousness in machines. Kurzweil and his constant rewriting of reality…whoops…doesn’t change the fact that we aren’t actually creating real intelligence at all. We are creating systems that give the appearance and the illusion of intelligence, but there’s no machine that actually takes over any of this. So the thing that we want to talk about there is, going into that, this is really about if I can show that a key is evidence, I can show it’s a key as evidence in a different way. I mean, this is Dread Pirate Roberts. Remember? If I can hand over the key to another person, I’m safe. That was part of the name, that’s part of what people don’t realize, that’s part of what some of the BTC crew think that they can do. They want to see keys, the evidence. They want to fool litigators and other people to think that evidence is the ability to hold the key and hand it over. Not to register a key and have things that proveably link from that in a single link, what they want to do is to have Ross, basically, have like, oh, no, the keys that Ross was captured with are actually held over here as well. So therefore, Ross is innocent.

Fred: Yes. Like, you mean the Silk Road, Ross Ulbricht, and…

Craig: Yeah. So, this is really what it’s about. This is what the WikiLeaks guys want. You can manipulate things by doing that. They don’t want a single evidence trail. See, what you need to do for a key is before the event, register it, and then prove afterwards. You can’t take a digital key and prove back in time, because you can give it to anyone. That’s the fallacy. That’s what they want me to do because then that opens the door for them.

Fred: Ahh, makes sense.

Craig: But see, I’m an evil little prick. I’ve got bank statements and credit card statements, and all of this stuff. And you know, the bank has to keep those for 25 years. So I can’t fraudulently change them. The bank issues a statement, the court checks. That’s it. Unless, of course, you have the whole conspiracy theory that the government and the banks are conspiring to make me Satoshi. But, no.

Fred: That’s another level.

Craig: You never know. That’ll come out next. It’s a CIA plot. I mean, there’s maybe a SAD group, which SAD is Special Activities Directive, a SAD group just on Satoshi.

Fred: Yeah. Wow, that would be… And so I guess, well, I guess that’s interesting because, you know…yeah, when you have these statements, that’s the ultimate proof. That’s like, you know, who bought the domain name, right? That’s…

Craig: Yeah, well, maybe it’s still not me because I only bought it, I was just the patsy. But then, wouldn’t they know all the people? Who knows? Maybe I found it on one of those little things where you pull off the phone number. “Register this domain name, and we’ll pay you $1,000.”

Fred: For free.

Craig: And just send it to anonymous… I mean, you see those ones where “work from home,” and…maybe that was it. Maybe my whole security career was leading up to finding and ripping off a little phone number, and registering Satoshi for money.

Fred: Serendipitously. Yeah.

Craig: I’m sure they’ll come up with something like that.

Fred: Yeah. Well, you never…things change all the time. I guess, you know, I talk about this just gingerly, I guess. You know, you’ve got these, I guess, lawsuits right now, and I just wondered if you wanted just to talk a little bit about that, and…

Craig: Well, we’ve got a whole lot of conmen out there who want to keep the industry being conman industry. So you have things like CZ there, and Binance, which is super bucket shop, which are basically money laundering organizations. They do wash trades and money laundering. That’s how they make money. Now, they want thousands of coins. Because if you can get coin to coin to coin to coin to coin, and then some of them just disappear, then you get this whole money laundering industry. And that’s what it is. That’s why the FBIs, FBI guys, want to get rid of Monero, because it’s there as a drug trade. That’s why these other things are there. So the reality is, there are two things that companies like my Binance do. One, market manipulation and wash trades, so that they do a whole lot of pumps and illegal dumping and all the rest, illegal stock manipulation. So they do, basically, the pre-announcement stuff, some of which Mr. Conman John McAfee there helps with. He will scam something out, pump up the price, get people to put their savings and investment into, and they will short the crap out of it.

Fred: Oh, goodness.

Craig: And they can make 100 times the sort of money that they’ve stolen because they’re thieves. They steal all this money. This is why they don’t want me talking, they want to shut me up, because this is a criminal organization. What these guys do is they take money from around the world and they pump it through their system and back out through Tether, which is also a criminal money laundering system, so that it gets lost in the banking industry, so that people in Russian groups, in Cyprus, in Africa, in a whole lot of these areas where they can buy guns, they can buy weapons, they can sell people. And they can do it because they’ve got a whole wash trade here, outside of Bitcoin, without any audit trail. So, that’s what things like Binance are really about. Then they can link them into others, like Kraken, and get them into a pseudo-legitimate one, or others like ShapeShift. And you can take the Binance coins and wash them through the semi-legitimate things. So you can take something where there’s not really any any checks, like SimpleFX and Binance, flush them through, totally cover up the fact that they’ve been coming from all these illegal trades, get a few people who pull those little tags off and do the Bitcoin mule industry, Zcoin, Monero, whatever else, and that’s the modern mules. So, it’s money laundering mules, once again, people who now make a little bit of money pumping, dumping, and actually getting paid for this. They get paid to sit on Twitter and act as trolls, they get paid to take money in and out of their bank accounts. And you have these people who are basically not earning anything, that are unemployed, sit there and earn a few hundred dollars a day to pass and wash money for companies like Binance.

In the past…well, basically, as they’re growing, this is what companies like Liberty Reserve came into being. They’re called criminal organizations. They help all of the naughty things in the world actually happen. You wouldn’t have drugs without any of this, you wouldn’t have all of the money laundering, the people smuggling, all that stuff. That’s why they’re protecting their little industry, because people like CZ support illegal drug industries.

Fred: Right. So, yeah, I guess… Sorry, Craig, I’m just…there’s a lot of topics here, and I think it’s important… Yeah, I wanted to, you know…we were talking about the Bitcoin origin, I think, before, and the launch of it. And you were involved with churches, as well. You are a pastor, I believe.

Craig: Yes, I was.

Fred: That’s a…and so, and you have that…I think that’s where your work ethic also comes from, as well.

Craig: Yes, I’m Wesleyan. So was Andrew Carnegie, actually. It’s this horrible, in some people’s sort of…not really Calvinist, but belief that work hard, create lots, and then you can direct where your money goes. So…which is an interesting sort of dichotomy between myself and Calvin, although we get on really well as friends. I mean, I’m married, have a family and whatever else, and no one really knows about any of that side of my life. I keep it out of the media. But I’ve been on things, and drunken sprees with Calvin before, and it’s a totally different life.

Fred: He’s a fun guy.

Craig: He is.

Fred: And I guess, you know, you talked, I think, about running, you know, some of the early mining rigs in churches and things like that.

Craig: Yes.

Fred: What were some of the challenges there?

Craig: It wasn’t as bad as people think. I mean, actually donated the machine, so…and paid for the TBG bills at the time, internet bills and all the rest. So people can sit there and complain that I didn’t…I was using church equipment and whatever else, but the reality was I donated the machines, I donated the internet, and I paid for the electricity. So given that, my company and myself maintained the email for them. So I had, in the company I had at the time, information defense. They were a charity client, and I had a number of different clients in both churches and other charity groups, including a couple of disease type charities that helped people with things like Huntington’s, and all the rest. But in installing the machines, it wasn’t like I was putting malware and spying on people, I just also ran Bitcoin as well as email for them, so…

Fred: Yes. Makes sense. And when, in the origin, you talked a bit about this in some of your posts as well, which is incredible. And I’ve wondered if this is just from a high-level, when you… Did you sort of create an MVP first of, like, the Bitcoin system, and then write the white paper? Or did you sort of write it, and then… Like, it’s almost like, did you document first, or did you IDA it, or…? You know, like, it’s…

Craig: No, I document after the fact. I’m terrible that way. I’m basically put it together, get something that works, make a proof of concept, and then under explain it, and then go off and do something else.

Fred: Yep. On to the next thing.

Craig: That’s why we got white paper 1276, I think, today I put in. And then I hand it off to everyone else to flesh out and finish.

Fred: Brilliant. And you know, with your MVPs, did you, like, did you call them something? Did you have a funny name, or something? Or…you like when you’re building something, you call it, oh, it’s that thing?

Craig: No, not really. I didn’t really think of it that way. I wasn’t socially engaged enough, and I was sort of isolated fairly much when I was doing all of this. So most of my friends had no idea, and just thought I was crazy. So apart from Dave, occasional bits of Hal, a few other people early on…yeah.

Fred: No, that’s cool. I wanted to touch on this, we interviewed of recent, Phil Wilson, and I just wondered if you could quickly sort of, you know, comment on, you know, was he involved in the creation of Bitcoin?

Craig: No. He got involved when…after I had been sort of put into the media, he started sending me emails, basically saying if you don’t send me money, I’m going to release extra stuff, and I’m going to do this… And it was a whole extortion conman job. So that’s really what Phil’s job in all of this is. It’s interesting how Phil had amnesia, and it came back to him. Where were you, Phil? Give me some dates, match up things. Matchup where I was, before I put them out there. That’s part of the problem, I post something, then suddenly he remembers, oh, yes, I was there, too. Really? I mean, it’s funny how people don’t seem to understand…like, people argue that at this point, Satoshi must have been in America because this post was there. Like, in October 2008, I actually had vacations and I went to America. And I was there for a while, and spent some time in San Diego and other places. And my old blog has pictures of these big sea lion things, and really, really crazy surfers…all surfers are crazy. I used to have friends down at Bondi who were surfers, and trust me, they’re all crazy.

Fred: Bondi’s an intense…it can be an intense beach. And the surfers, particularly, can be very intense.

Craig: Yeah. I used to…I mean, I used to go there, what was it, the Bondi Icebergs.

Fred: Yep. That’s a nice spot.

Craig: Yes. Got kicked out of there one time, too. They said I was too drunk.

Fred: Well, it’s, you know…maybe it’s the Aussie way.

Craig: Well, I didn’t think I was that drunk. I still had another three hours in me. Ah, well. I think they just wanted to close up early.

Fred: Yeah. Well, you know… I wanted to ask, you know, with this…you know, from a personal perspective, Craig, how do you stay so grounded in all of this?

Craig: I’m not.

Fred: I just think a lot of people were, you know…it’s just incredible, the way you are so prolific, you write so much, you’re creating and building. You know, how do you stay so grounded, and there’s a lot of stuff going on…

Craig: But I do this because I want to work. I mean, that’s what people don’t get. It’s not about getting the next billion, or any of the shit like people talk about, it’s about the work. You have the money because of the work. Everyone sits there going when I make this money, I’m going to retire. That’s because…that’s why you’re not going to make the money. If you have the idea I’m going to make this money, then retire, you probably won’t make any money. The people who make money…money has this sort of, not…I don’t really know how to put it, but anthropomorphic type bent that it wants to be with money. It’s really a human drive. But the whole idea of capitalism forces capital to where it’s going to be spent. So it’s not money wanting it, its people. But we can anthropomorphize that aspect of society, that little part. And people with capital want to move their money to people with capital. So people talk about, like, you can found a company, and that will lock you in in the next 15 years of your life for making money for other people. It’s not. You’re making your own creation, and you’re getting paid by those other people, their capital. That’s the partnership. You have taken their money to build something. Not to retire, to build something. And that’s why their capital goes there. People don’t want to give you money to retire on, they want to give you money to grow it, to build something better.

So the vision there, or the goal is to have someone who wants to keep working. I mean, Tesla didn’t ever want to build anything. Edison did. That’s the difference. So, Edison kept working and creating, and he ended up with, now, a company that is still around. On the other hand, we have people who are billionaires today, we have Warren Buffett, who had to be bailed out, and Gates, and all these others, and you can sit there going, they’re billionaires, they could retire. They don’t want to retire. I mean, I don’t want to retire, I want to work until I fall, dead. I’ll proudly know that I’ve succeeded, if I know anything after death, when I fall over, dead. There was a guy, I’ve said many times, is a hero of mine. He was a professor at Wollongong University who was in his 80s and still teaching. He was up there on the podium, and managed to give the students a sort of free pass on their exams by falling over and having a stroke at the podium, and dying. And people go, oh, no, that’s terrible and shocking. I think it’s actually wonderful. This man, until he was about 87, or something like that, was up there teaching right until his last moment, the thing he loved most until he fell over, dead. There’s nothing better. I mean, if you think about it, find something you want to do, that you love to do, and just do it. And because you make money doesn’t mean you go I’m going to retire now. If that’s your attitude, you’re doing the wrong thing. Utterly. Find something that will drive you, that you will risk everything for, that…like my wife and I, you have mince and beans and rice every night because you can’t afford anything else because you’re driving everything you own into building something. And then when you finally made it, work harder.

Fred: Yeah. So do you think that’s the secret to getting money, is just really hard, persistent work?

Craig: Yeah. It’s not aiming to get money. That’s what Conman John does. Conman John does this $105,000 USD per tweet to illegally pump. And I don’t care what he says, saying this is new…blockchain is the settlement engine, okay? So right now, if you look at any share, any derivative, anything else, all of the settlement is done in clearing houses that are not covered by law. They’re actually private law. People don’t realize that. So there are no laws covering the clearing houses at all. They’re all private law agreements. So, the Chicago Board of exchange, all these other guys, have their own private agreements. It’s actually purely libertarian.

Fred: And they settle them at the end of the day, right, they just come together, and…

Craig: Yeah. They put all that in place so that no one needed to regulate them. Now, blockchain is a settlement engine. The exchanges, on the other hand, want to say that they’re different. They’re not the settlement side. All the stuff that covers all these guys, that is above the settlement side. So they’re like the banks and the stock exchanges and whatever else. And instead of aiming to be the New York Stock Exchange, or the NASDAQ, or the London Exchange here, the LSE, what they’re aiming to be is the Las Vegas exchange, or the Bendigo exchange, in Australia, the little one that no one knows about, that sells penny shares. Because what happens with a penny share? If you can get it from one cent, to three cents, back to half a cent…money. And you can make a move on rumors. If you buy at one cent, like John does, and then pump it up and have a fake volume going it’s increased 10,000% because their own wash trades, no one’s heard about this stupid thing that they’re internally doing on Binance, and then sell it, you can make millions. And how do you do that? You get your average working people who think that they’re going to have a way of getting out, and taking their retirement, or paying off their house, people who’ve worked hard, blue collar workers, factory workers, whatever else, who don’t really understand finance, and you steal their money. And you do that across millions of people, and you make a lot of money. That’s what all this is about. This is what the original thing, like a Ponzi was about, what the original Madoff type scams were about. So, Madoff did the same thing, and all these other guys do. And that’s what CZ and Conman John are doing now. That’s why they don’t want me.

Imagine if we have a system where there’s threshold signatures, and no exchange can take your assets. Imagine where you register with the government, and now the government can actually monitor all the wash trades and see who’s in there and which ones are insider trading. That’s what we’re building. Imagine a system where all of the CZs and Conmen Johns, in seconds get grabbed and put for 20 years in jail every time they try and steal 10 cents worth of your money. Instead, what we have is this Conman John situation, where he makes millions stealing from innocent people, from taking from people in poor countries who have no idea, without their regulations. Who basically cons all around the world and then moves from country to country. Like Binance, who get kicked out of one country, then start up in another, and startup in another, and startup in another. That’s what we’re going to fix and get rid of. That’s why they’re so afraid of me.

Fred: Makes sense. The last two questions, Craig, is what does Bitcoin need to do, I guess, to become a medium of exchange?

Craig: Okay, so medium of exchange is use. Now, that just means that you’re going to use it on a day-to-day basis, you’re going to buy coffee with it, you’re going to do things. So that’s going to start over time because people will buy space. It’s a commodity ledger. So, back when I was working in Australia with sort of like some of the banks and credit unions, some of those would work with backend systems that would do the banking for them. So the core banking function would be outsourced. Now, that can happen on Bitcoin. And the ability to have your records stored immutably is worth money. Now, we’re not talking in day one, the internet and Twitter and whatever else will all end up on Bitcoin. That comes as it becomes more and more profitable to do so, as the cost goes down. But the first thing is we actually have immutable record storage. WP, white paper 0001 was a general ledger using the blockchain. So that was my first patent that I actually did on this area. That enables you to map charts of accounts, and start creating accounts in an immutable way. That means if you need to change something, you can, but the way you change things on an immutable ledger is you don’t delete them. You put a reversal entry in. You go oh, bugger, that is a mistake, this is a mistake because John, over there in accounting, filled out this field wrong. Here’s why it’s a mistake, I’m going to now reverse that entry and put in the correct data. And you actually put it in there.

So, interestingly enough, one of the things people pull me up over is there was something in the tax office where they noted that I’d changed a record. That’s how you’re meant to do it. I wasn’t pulled up because the tax office found something nefarious. What they found was we put the invoice in at the wrong time, and the wrong amount, and then we put a reversal in and we explained it with three pages worth of text saying this is what it should have been, this is where we’ve done, this is the person who did it, this is the internal process that we went through, and here’s the new invoice. That’s how things are meant to work. That’s how honest companies do it, they actually leave a record of their mistakes. And under Sarbanes-Oxley, that’s required by law, by the way. If you’re a public company, you have to do it that way. And in Australia, we were a public company, so…

Fred: Makes sense.

Craig: And I’m much smarter over here, we’re not a public company anymore, which makes my life a lot easier.

Fred: So becoming a medium of exchange it needs that ledger, and it needs…

Craig: Use. So as I said, if you use it that way, if people are paying to store information so that they can use it for tax, for invoices, whatever else, then they have to buy Bitcoin. Now then, as they’re buying and selling Bitcoin, the price of storage is driven down. And as they use it more, the price of Bitcoin gets driven up. Not because of speculation, because of use. Now, over the coming years, what happens there is people start storing data and buying and selling Bitcoin for that. Then they start realizing I’ve got extra Bitcoin, this other store needs some, can I buy and sell whatever on coffee? Can I use Bitcoin, tokenized to [inaudible 01:33:16] to pay you? Can I buy and sell shares using it? All these other things start to appear in Bitcoin, and then the underlying value starts to improve…

Fred: It’s an ecosystem. Yep.

Craig: It’s an ecosystem. And then, people go why don’t I just give you Bitcoin? Rather than giving you pounds, actually, on Bitcoin, how about I give you some Bitcoin? And then the guy’ll go, well, I need to buy Bitcoin anyway, yeah, I’ll take the coffee for Bitcoin. And it starts to evolve into that system.

Fred: Yes. Makes sense. Last question, Craig, is you know, this one’s…what’s, I guess, the one thing you wish people understood differently about you?

Craig: Oh…I have no idea. I don’t really care. I wish they understood some of the things about Bitcoin and the economy, and why sort of fraud checks and auditors are important, and all that sort of stuff, why having regulated exchanges matters. And by the way, people choose to be on regulated exchanges. So when you do an IPO, you can do it in a cheap location right now. People don’t. I mean, I can go out to the Iberian exchange, or I can go to the New York Stock Exchange. And the New York Stock Exchange gathers lots more people wanting to list there because it gains more money, because investors trust it. They trust it because of the regulations. These unregulated ones don’t get investors because all sorts of scams happen. So, people put their money into the regulated exchanges because the shareholders know that they won’t be conned, like we see in crypto. So this whole crypto market is a way of saying we should get around regulation so that we can steal your money better.

Fred: Makes sense. Craig, thank you so much for joining us on The Daily Exchange. That was extremely insightful and visionary. And again, I think everyone really appreciates and admires what you’re doing for …

Craig: Thank you. I just find it strange how everyone has this tomorrow, we’re going to be 100 times the value crap. I mean, everyone must have forgotten what the ’90s sort of dot com boom really was like, and the ’80s, and dot, dot, dot, going back in history. I mean, obviously, I’m old enough to remember some of this, but read Wikipedia. Find out what happened in the past. I mean, this is nothing new, these bubbles happen because speculative exuberance happens, and people jump into these stupid things, believing that they’ll get part of the next big thing, without checking any of it. The next big thing doesn’t happen overnight. Google didn’t happen overnight. Amazon didn’t happen overnight. These things happen over the years. And at the same time, they’re so much of a boom because so many went away.

So I remember, what was it, Inktomi. I had to deal with them when I was with a company called Aussiemail. They were the incumbent search engine kind of thing at the time, before Google. They were a freaking annoying company is the only way to say it. And basically, they…who knows Inktomi anymore, apart from old buggers like me, thinking back 20 years? Half of these kids have never heard of them anymore. Interop, all the companies there that are no longer in existence. I mean, I went and I saw the launch of AltaVista, I was a member of [inaudible 01:37:21] And because I owned a Digital Rainbow, and programmed on VAX, at the time, I was invited and I got to see that big, exciting Silicon Valley thing, where we unveiled this web browser and a search engine. I guess it was important at the time, there was lots of booze. But I mean, that’s the thing, all these industries go through phases where they compete and some get flushed out. For every one that survives, a hundred don’t. So the one that is building, that is scaling, that’s the one that will be around. Not the one that is going, “I’m going to be the next big thing. Give me money.”

Fred: Yes. Makes sense. Craig, thank you so much. Absolutely brilliant…

Craig: Thank you, Fred.

Fred: All right, guys, that’s The Daily Exchange, and you heard it straight from Craig, himself. We’ll see you guys later. Yeah.


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Disclaimer: At the time of writing, the author holds BTC, ETH, XLM, XRP, NEU, VET, LINK, BSV, ICX, LRC, ETC, WAN, BNB, QASH, XMR, GRIN, NEO, BEAM, NXS

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