As usual, "Magical Crypto Friends" began with the corny My Little Pony-inspired theme song which pretty much describes the epitome of Bitcoin maximalism and promotes the economic thought of the Vienna school. However, this time the show was broadcast live from Consensus 2018.
The bad news is that the four crypto celebrities couldn't secure the main stage of the conference to do their show, and the consequence was felt in the audio and lighting quality. The good news is that I've listened to the entire show with a nice pair of Sennheiser studio-quality headphones, and have managed to distinguish the talks. This article is split in two distinct parts which also establish a boundary between what the usual show looks like and what this special occasion has turned it into. The first few minutes have featured brief discussions between the quartet members in regards to the latest news, while the biggest chunk of the show was dedicated to questions from the audience. Without further ado, here is a complete coverage of the topics discussed by Charlie Lee (Chikun), Riccardo Spagni (Fluffy Pony), Samson Mow, and Whale Panda.
The Discussions Between the Four Members
The four crypto celebrities kick off their seventh episode of the show by complaining about all the scammy ICOs they encountered at this year's Consensus conference. They all seem to agree that the numbers have really skyrocketed, but their view on the phenomenon is nothing new: they traditionally make fun of bad projects and jokingly suggest each other that they should be promoting questionable fund-raising initiatives. So in this regard, we didn't get anything new and felt familiar with the talks.
Then Whale Panda (the informal moderator of the talks) decides to mention how the last month has been filled with big FUD from old, influential, and wealthy people. Bill Gates gets name-called for his ridiculous statements, but the star of the show is Warren Buffet for his cryptic and somewhat nonsensical "rat poison squared" statement. Once again, there's nothing new in this type of conversation and the talks appear to be taken lightly and with a high dose of humor.
Naturally, "rat poison squared" rings a bell about Roger Ver's unusual and equally-nonsensical concern with Bitcoin killing babies. The context is given by a brief question about the Deconomy debate, where Samson Mow faced the Bitcoin.com CEO and BCH advocate. Samson's view on the debate is that the audience wasn't proficient in English, and he had to keep it technical to avoid both misunderstandings and irrelevant arguments that really don't concern scaling problems.
Naturally, Verge's secret partnership with PornHub gets brought up, and the humorous tone gets taken to even greater lengths. Everyone looks at the Fluffy Pony for being the supposed porn expert, but the discussion shifts towards the necessity of cryptocurrencies in a field which already makes use of covered billing (so that you credit card transcript will show something silly like a waffle house instead of a porn site). Riccardo provides surprisingly clear and specific insights on the matter, which confirms everyone's assumption. There is also a discussion about Verge's status as a pseudo-private coin whose privacy component is optional and has been enabled more recently, and this also feels familiar since the Fluffy Pony is the Monero guy in the room.
The last topic of discussion before the questions is far more serious and refers to the XRP lawsuit and how this court action can actually set a precedent for Ripple Lab's currency. The main threat for them is that the court will declare that XRP is a security, and the folks agree that the situation is likely due to the fact that the makers own a large majority of the coins and inflate the market at a steady rate. Then it's suggested that every cryptocurrency except for Bitcoin can be declared a security due to the centralization generated by known founding figures and their influence on the market, but the discussion comes to an end shortly in order to make room for questions from the audience.
Questions from the Audience
1. How do you plan to fix the deflation problem? (for Charlie)
Charlie isn’t sure that deflation is really a problem.
Fluffy Pony mentions that the problem of fiats isn’t inflation in itself, but uncontrolled inflation. A low amount of inflation might be beneficial as long as the rules are settled from the very beginning to make it fair and predictable.
Samson mentions that in the long term the prices will stabilize, just like in the case of gold. Bitcoin over Lightning can still be used as a currency and unit of account.
2. How do you think that the uneven distribution of digital currencies can be fixed in the future?
Whale Panda says that inequalities are natural and a consequence of human decisions.
Charlie suggests that mining is still the best and fairest way to acquire digital currencies.
Samson adds that new technologies are always unequally distributed, as early adopters who believe in the product have greater benefits.
3. Why do the Magical Crypto Friends use the word "scam" so often and what is its real meaning?
They all jokingly agree that everything is a scam. However, Riccardo decides to distinguish between being a scammer in behavior and scamming due to incompetence.
Samson says that scamming is empirical and requires an intention to do harm. If you try to sell bad coins without knowing what they actually do, you can’t be called a scammer.
Riccardo adds that the term is overused, while Whale Panda suggests using a scale for scams, according to their magnitude.
4. What’s the difference between ETH smart contracts and atomic swaps? (this question was the least clear in audio comprehension)
Charlie starts off by saying people compare Ether with gas, as the exchanges are made when there is a necessity. On the long run, users won’t speculate on the price of oil and it will definitely be the same with Ethereum.
Riccardo mentions that people can and should be able to swap cryptocurrencies, as the market is still young and developing.
5. If BCH gains a greater market cap than BTC, is it going to get defined as Bitcoin?
Samson says that there were cases when Bitcoin was briefly overthrown in terms of market capital, but the criterion is not indicative of value.
Riccardo adds that the situation is already confusing for the mainstream audiences, and newcomers can get fooled.
Samson returns with a suggestion there would be a better system to classify cryptos on better criteria, as creating millions of tokens and selling them for a dollar can get you really high in rankings even though you don't technically deserve the spot.
Charlie Lee implies that it’s the community that will ultimately decide which currency gets called Bitcoin. The example is that if tricycles become popular, people can just call them „bike” out of convenience, despite their technical nature.
Samson suggests that it's decentralization that matters, and only BTC can be Bitcoin because it isn't controlled and planned by an almighty authority.
Riccardo presents the case of Monero’s forks which really aren’t XMR, regardless of their claims (as always, Electroneum is the classic example).
6. Which coin is more centralized, Litecoin or Monero?
Samson thinks that Litecoin is more centralized. Whale Panda agrees with the argument because LTC has the Litecoin Foundation, intensive mining operations that are undergone by Bitmain, and therefore a considerable amount of centralization.
Charlie says that his presence makes him a centralizing figure for the coin. However, he plans to make Litecoin last for hundreds of years, and his lifetime is limited.
Whale Panda adds that the coin founders are a single point of failure, and the sudden death of these authoritative figures can cause a collapse. Charlie doesn’t agree that his own death will kill off Litecoin.
Fluffy Pony argues with a nice pun and says that Lightning doesn’t strike twice and Bitcoin is a once in a lifetime opportunity which benefits from the right context and the right people to make it unique in its decentralized and voluntaryist nature.
7. What are the most dangerous aspects of increasing block size as a way of scaling?
Charlie says that constantly increasing the block size centralizes and prevents people from running their own node. If no private individuals possess the hardware means to run their own nodes, then the cryptocurrencies become more exposed to a takeover by governments or other interests which possess the hardware means to hurt the system.
Riccardo suggests that having high costs to run nodes prohibits people from taking action for the purpose of defending their interest in the game. He mentions that increasing block size is a naive way of scaling.
Charlie says that right now it’s almost impossible to run a node for Ethereum and asks if anyone in the audience runs a full node - it's revealed that only one person does it.
8. Is it possible to compare the technical legitimacy of projects?
Riccardo points to a combination of factors: number of contributors and the research that’s being done in the field (cryptographers and academics who published papers on the topic). In his opinion, researchers are a reasonably good oracle in identifying what is interesting and relevant in the field.
Samson suggests that it isn't practical to do a research project for every bad idea, so in the end it comes down to common sense to realize what is feasible and what isn’t.
9. Is Bitcoin going to be a digital currency, or more like digital gold?
Samson says it’s just a matter of time until old-school people understand how Bitcoin works and decide to get in the game. All participants agree that mainstream adoption is coming.
10. How do we stop people from posting propaganda on social media? The question mostly concerns Bitcoin.
Samson suggests that the community is responsible for this kind of behavior, and it’s in everyone’s best interest to point out the facts.
Fluffy Pony addresses the issue of angry bag holders who wouldn’t admit that their coin is performing poorly, and also refers to cheap sockpuppets who post abundently on social media.
Whale Panda says that there is also an ongoing self-censorship which some people in the space resort to, so that they seldom point out to flaws just to be nice with others and avoid arguments.
Samson also implies that propaganda isn’t really working because vigilant people post comments to point out which coins or announcements are actually scams.