WikiTribune:WikiProject Oslo Freedom Forum/Transcripts/Leo Weese
Fiona Apps: So thank you very much for agreeing to talk to me.
Leo Weese: I'm looking forward to sharing my knowledge.
Fiona Apps: Yes, I have two questions I'm asking everybody which is what do you think of Craig White's latest move?
Leo Weese: I don't think of him very highly, but I also don't try to give him attention.
Fiona Apps: That's fair.
Leo Weese: I have been trying to ignore it as much as I can.
Fiona Apps: Well, er so I guess the main move[crosstalk 00:00:33]
Leo Weese: His biggest move, you mean, [crosstalk 00:00:36] the claim copyright. He is doing us the invaluable service of teaching us how copyright works to the point where the copyright office, or copyright office somebody's concerning has to make out statements explaining it to us. For that purpose, please continue educating us about the world Craig White.
Fiona Apps: Sorry transcription. Okay, there we go. And then my second question was Bitcoin's announcement that it's going to start its own cryptocurrency, what is your reaction to that?
Leo Weese: What's that?
Fiona Apps: Sorry, Facebook wants to release a stable [crosstalk 00:01:16]
Leo Weese: Yeah, so what's that global client? So, if they have very good lawyers, and if they are a little bit rebellious and willing to push the limits of the law, I think this can be actually interesting, and actually useful. I just have absolutely no confidence that they would be able to do so. And so, it will not be in anyways better than the previous attempts to do payments inside of Facebook.
Fiona Apps: When you say skirt the law, what particular aspect of... because there's lots of aspects where crypto, sort of, bump against the law. So which specific...
Leo Weese: Making it very easy for people to on board people, making these transfers very reliable, making them really, like some kind of electronic cash. The on and off ramps are going to be incredibly important. I think the really good example of electronic money that we've seen happen over the last maybe decade or two are mobile phone providers using SIM cards to hold value. And this works only by having a very distributed network of people who take your cash and put money onto your account. For that to work, the company in charge needs to be willing to deal with cash. I have my doubts that Facebook will be willing to do this.
Leo Weese: But also, these transactions have to be fraud resistant to the point that they just have to be very reliable. Transactions can't be charged back for example. As soon as you can charge back, these fiats on and off, on ramps start to be attacked by fraud services. I don't think Facebook is going to be able to do that. But I mean it's not much of a cryptocurrency by the way, but it might be useful and it might be a meaningful Bitcoin competitor if it functions like cash.
Fiona Apps: Okay, so more specific here, if you could just give everybody a brief introduction to your project of what you've been doing?
Leo Weese: I'm Leo Weese. I have been organizing the meet ups, the Bitcoin meet ups in Hong Kong since 2012. I've been very enthusiastic about Bitcoin and building a Bitcoin community, meaning, especially from the last year and a half we've set ourselves the focus of, we want to create a productive Bitcoin developer community. Because we think it's the most valuable, but we don't have it in Hong Kong. And the second part we want to create a strong Bitcoin industry representation because I believe we do have a strong industry, but we have little corporation, we have little awareness of our own issues even. We are sometimes poorly connected internationally, and yeah, it doesn't have to be like that.
Fiona Apps: So what would you say were the biggest issues that you're facing?
Leo Weese: The biggest issue I am facing with the Bitcoin association, with the community, is useless distractions. Lots of projects, lots of ideas that I consider an absolute waste of time, that are not revolutionary, that are not excelling more...
Fiona Apps: Example?
Leo Weese: Probably Blockchain is a pretty good example. They are barely innovations on top for databases. They are barely innovations for settlement systems, and they aren't even Blockchains most of the time. They are just using the word "Blockchain" because it buys some kind of political capital, because it buys media attention, because it buys investor attention. I'm kind of satisfied with seeing those slowly becoming irrelevant in Hong Kong. Disappearing from the public discords, but it took about three years. And it's still three years of, yeah just being grinded up by having to... It's very frustrating to having to explain to somebody why something does not work, right?
Leo Weese: And people seem to be... If somebody's interested in Bitcoin, it's very satisfying and easy for my to explain why Bitcoin works, and how it works, and why I believe it has future. But if somebody, for some reason, is incredibly excited about Blockchain, about private Blockchains, they might be going around Hong Kong [inaudible 00:06:14], look for answers. And I sometimes felt that we would be the only ones willing to give those answers, we will be the only ones taking the time to explain how these things don't work, but that's not very satisfying.
Fiona Apps: So one of the things you said yesterday that I found most interesting, was that you said you used Bitcoin everyday. Could you explain how you use it everyday?
Leo Weese: Today I reimbursed somebody who was buying a... When we have a member's meet up, and at member's meet up we arrange for, a like plate with little snacks for our members, and everybody gets a drink. I reimbursed the organizer for the meet up who paid out of his own pocket with the Bitcoins from the funds from the association.
Leo Weese: Yesterday, I had to top up my server. I pay from these things, I make a payment every second month for so. I topped up my, like I use Viber for server IP calling. And it's incredibly cheap that last week I had to top it up with just one U.S. dollar, and I could use Lightning Payment on Bit refill.
Leo Weese: For me, there is a enthusiasm using Bitcoin. Very simply just makings me feel good about everything. There's of course the idealism of "I want to succeed and therefore I feel like we should be using it". But also, this constant assurance that it's still there, it still works. It's still serving me. It's probably what really gave me to confidence in saying "Bitcoin works and serves", especially around 2015, 2016 when it was very difficult to spend Bitcoin cause there were far fewer opportunities. It was not always very easy to say, "Bitcoin is well and alive" because there were no opportunities to pay really. Nothing to buy.
Fiona Apps: Yes, but what do you think are the chances of... So you've given use cases of where you use it everyday, that tends to be P2P or for specialist service. Given how slow transfers can be, also given that the price volatility, do you actually see a future for mainstream... Like Boots is a chemist for... Do you actually see a potential to use it as opposed to Visa, given the difference in fees and type?
Leo Weese: Depending on who their customers are, depending on who their suppliers are, they might find it useful. Direct payments are relatively sensitive, they might be under more scrutiny. Some of their suppliers might, depending on where they are, have... Cause I'm really an expert on the chemist industry...
Fiona Apps: Okay, I'll change it to a different one then. W.H. Smith, they sell notepads and Coca Cola, so if we change it to something like that.
Leo Weese: Every time cash is also an alternative, it's probably easier to use cash. In some cases, cash is not a very good alternative because you have to pay. Lucky we don't have to pay 500 Euros for Asprin, or 500 Euros for [crosstalk 00:10:16]. But for very large payments, for example, if you're buying a full box of notepads, to bring them back to wherever I'm from. I might not have the ability to take a credit card with me, or might be rejected. I might not have, I might not feel comfortable to carry that much cash with me and Bitcoin very much is an alternative.
Leo Weese: The people who are going to use Bitcoin for this, are people who otherwise have big trouble with payment systems. These are people who aren't banked. These are people who are in, have a difficult legal situation. They might be... They might not legally in the country or might not be legally recognized where they are. They might suffer from structural discrimination, or they might suffer from... [inaudible 00:11:13]
Fiona Apps: So in your, in your future, let's say future utopia, where Bitcoin is...
Leo Weese: Dystopia.
Fiona Apps: I mean if it's a dystopia then I have questions about why you're aiming for. But...
Leo Weese: That's actually it a very interesting conversation, how... Because I do believe and I do fear that talking of Bitcoin often comes across as preparing for. It's bit of like a financial prepping culture of saying the world is going to hell, and things are going to collapse, and regimes are going to become a lot more authoritarian. And, then arguing that Bitcoin is going to strive in that environment. It sounds very problematic, right? It even begs the question whether that meanings we are working for a world where all of that is going to happen because we want Bitcoin to be use.
Leo Weese: But, the point that we are trying to make is that even in these very adverse conditions, Bitcoin will still work, and Bitcoin will still allow people to make commerce with each other. That Bitcoin will still allow people to interaction with each other, peer to peer. Even in those situation where society or finance has significantly broken down, and that's more of a way for us to illustrate how much potential this technology really has. It's much more easy for us to say, "if banks shut down, Bitcoin is still going to work and allow us to trade" than to explain to us the kind of trades that are currently not being possible, but then are being enabled through the use of Bitcoin. I believe that when it comes to sensors, data, when it comes to micro-services. We currently don't have a market for these things, and it might be hard for us to imagine how such markets work, but...
Fiona Apps: When you say micro services, are you talking about cheap one off payments?
Leo Weese: I mean making a single cent payment to a parking garage in exchange for the knowledge of which parking lot is available. Or buying, pinging your antenna at home to find out what the air pressure is in a certain area.
Fiona Apps: But given how high fees are, and depending on market fluctuations, but that doesn't seem like something that would be feasible at any point.
Leo Weese: With something like the Lightning Network, I believe it's very much possible. And even with the fluctuations of Bitcoin will be quite attractive from an early point on. If you run a API service today, you will have big difficulties just, you either have to charge hundreds or thousands of U.S. dollars of monthly subscriptions, which your service might not be worth, or you will have trouble giving that data away for free because you need to cover the cost of your service or cover the cost of your hardware. So these kind of networks, where we do see data being, yeah, generated and shared on a large scale, it is usually by enthusiasts. The shipping industry and the airplane spotting community, train spotting too, they have this idealism, they have this enthusiasm for gathering data about where which plane is, and who saw which train.
Fiona Apps: But that's exchanging data, not exchanging one cent.
Leo Weese: They're exchanging data for free because the motivation for them is to provide the data. And I believe there are lots of other kinds of data that don't have this enthusiastic community and that do need to charge a single cent for an API call for example. Or that do need to charge a single cent per minute to use the service, and these kind of markets can only exist with something like the Lightning Network, which can only exist on top of something like Bitcoin. I have a hard time imagining that WhatsApp is going to be able to build this global coin service in a way that's really, can make service and payments essentially between machines. Where I can just spin up a little sensor that measures how much traffic there is outside of my home, and sell that data to someone like city member, who wants to know their traffic condition or something.
Fiona Apps: Okay, just to finish my earlier question. In your future utopia, preferably, what... Let's say that Bitcoin is adopted in everyway you hoped it would be now, what would that look like?
Leo Weese: The world would probably look very similar to it does today. We would no longer have central banks. We would no longer have, we might still have like some reminiscence of paper money. We would conduct, we would have a lot more online trading platforms. Instead of just having a single Amazon, I think we would have a lot more smaller markets on where people truly trade peer to peer rather than just going to another market. I believe we're going to have a massive network of machines that are generating data that are providing little services rather than having these massive data centers, rather than hacking these massive [crosstalk 00:17:27].
Fiona Apps: Decentralization of Bitcoin that's kind of already have...
Leo Weese: I hope for the decentralization of Google and for the decentralization of Facebook and the decentralization of Amazon. We cannot attribute the central monopolies purely to their payment infrastructure, but Google is a very good example of how each of these services that Google provides are relatively small in cost, and small in value, and small in revenue. Which is why they cannot independently function. If you just had to pay a single dollar per month for Google calendar to be spun out of Google, it would no longer work because you can't make that single dollar payment. Even if you pay, like two year at a time, that would still be a thirty dollar payment with a sixty cent transaction fee.
Fiona Apps: Sorry, I just, I have one more question that's slightly philosophical, I don't know if they could...
Fiona Apps: So this is something that everybody was talking about yesterday, but you made a special mention of it. Which because obviously Bitcoin and Blockchain comes out of narco capitalism and you made a big emphasis on money not being held under so many laws, not so much red tape. I guess my main question was, it's just what would you do if we strip away the financial red tape? Then "A" how do you protect consumers because I see those especially turn to target the financially clueless, and then "B" how can you possibly know if you're supporting, if it's interchangeable with cash especially, how do you know you're not helping finance crime?
Leo Weese: Yeah, so maybe let's start with the first question of like consumer protection. In the current financial system, consumer protection is built-in, so if you have a credit card, you automatically have the ability to charge something back. And that makes credit cards very expensive to use, and there is no way to un-bundle these services, and in many instances, the transaction has a difficult time functioning with either because of the big fee in between or it cannot function because it's non-reversible. And so, it's much easier to build something like the credit card system, on top of an irreversible payment system. For example, through Escrow or through Custodial, so I am able to, if such a service is needed if people are willing... If merchants maybe willing to pay 3% transaction fee, so that they can signal to their clients, "if you shop with me and you're unhappy, this intermediary, Visa, guarantees that you will not be out of your money" and I can build such a service on top of Bitcoin. So in the world of Bitcoin, these consumer protection aren't necessarily lost, they just have to be provided as an extra service on top...
Fiona Apps: Are you talking about using Escrow, or are you talking about...
Leo Weese: For example, Escrow would be a good example of me going to an online shop that says, "we accept Bitcoin through Escrow pay." And then I know my payment is going to be protected by this Escrow company, and I will only, and so I will have a recourse mechanism either because of insurance or either because of the money held in Escrow. And that's possible on top of Bitcoin, and I believe it would be far far more beneficial to the consumers and far more cheaper if it's a competitive market built on top of a reliable protocol. Rather than today where we have this monopoly of a single network that kind of mandates its use.
Fiona Apps: I do have one question going off of that. Because if it is something like Escrow, or middle man, again if it's not held to finance laws, let's say it's trust based. I mean because if we go to Silk Road, we found that, through various core transactions, we found out that even on a reputation based system, somebody still managed to run off with half a million. We've had a lot of exchanges where people have run off, tether exists, so...
Leo Weese: Yeah, but these, it's certainly possible to build regulated and... It's possible to build these centralized systems on top of a decentralized system. It's not possible the other way around. So if we see something that Visa cannot give us, then we cannot build it on top of Visa. But if we see something that Bitcoin cannot give us, it is very likely that we can build on top of Bitcoin.
Fiona Apps: So would you philosophically be okay with there being some sort of government oversight or regulation on an Escrow service for example?
Leo Weese: I think it would be pretty inevitable to have any centralize service will be regulated. Whether...[crosstalk 00:22:55]
Fiona Apps: But are you okay with it?
Leo Weese: Yeah, it's opt-in. You can choose to use the Escrow service. You might prefer, maybe you even added one at checkout right? Maybe some customers are not going to be able to add it at check out because they have an Iranian passport. And they might be, the Escrow provider may not be able to sanction them. You had another question about money laundering, and about the sanctions...
Fiona Apps: Criminality.
Leo Weese: ... and criminality.
Leo Weese: I do think we've become very lazy in our efforts to police crime by... sorry, standing in the way, but the door is still open...[inaudible 00:23:38]
Leo Weese: I do believe we've become very very lazy at not policing crime, but rather policing the money flows. And that might have worked in some cases, but I'm also convinced this had a massive collateral damage. And that collateral damage is that people got dejected from the financial system who are not criminals. Because they were suspected of being criminals, they were not being given the benefit of the doubt, and so either they were being kicked out, or today they're being denied access because my transactions might look suspicious or I have relatives in the wrong countries. And so I'm absolutely fine with Bitcoin not being able to do that because I don't believe that this means that crime can go unpunished. For a crime...
Fiona Apps: Okay, there we go.
Leo Weese: So I am not upset about Bitcoin not being able to censor transactions or seize funds because I very much see that crime happens in physical space because people are being physically hurt. It happens because people are physically being stolen or being trafficked or being wronged. It doesn't necessarily happen because information is exchanged online. And we as police or investigators will have to police that actual crime more, which is good, old, honest, police work. Which is still, in my opinion, the most effective way of going after crime, and maybe in the future we will look less at credit card history, and we will look more at like the postal service. And we would look at drug trafficking, let's use the argument of drug trafficking, less like policing monetary flows, but more of trying to find the actual drugs. And I do think this is all possible, and I do think this is a lot fairer. It's a lot easier to give somebody, it a lot easier to prove somebody as a criminal when you catch the drugs and when you catch them harming somebody rather than making these payments[inaudible 00:26:09]. Hey!
Fiona Apps: Okay, I think that's it from me!
Leo Weese: Cool...[crosstalk 00:26:15]
Fiona Apps: Thank you very much!