EB33 – Edmund Edgar: Reality Keys - a certificate authority for facts

Transcript

[Music] hello and welcome to EP Center Bitcoin the show which talks about the Technologies projects and startups driving decentralization and the global cryptocurrency Revolution my name is seban and I'm Brian P CR today is August 17th 2014 and thanks very much for joining us for our 33rd episode So today we're happy to be kind of back in our original formation after Sebastian's travel so Sebastian it's good to have you back thanks it's great to be back I'm happy to be back after uh guess two and a half weeks of holiday through the Balkans so through Albania and uh Montenegro and Croatia so it's it was a great time but it's good to be

back and uh by the way I just wanted to say that you did a really really good job on those on those uh episodes uh I listened to them uh as they were coming out and uh although I had very very limited access to Internet I managed to download them and listen to them on on on some bus rides in between towns so I hope it didn't ruin you no actually I I really like the rodco AL albre one um I thought it was a really good introduction to uh uh to um peer to peer Landing peer toer Landing yeah very interesting how this is such a strangely unique fit I wasn't aware of it before the interview but it was very interesting

yeah so um just as a reminder this week uh our coin Summit episode is with Oliver janson's and Andrew Turner Oliver Johansson of course who did the $100,000 bounty to replace the Bitcoin foundation so they talk about uh about that Bounty and how they issued 40% of that bounty to Mike Hearn for his lithop project and also 90% actually 90% I thought I thought it was $40,000 uh and also a very interesting interview with Michael Jackson Who is a partner at Mangrove Ventures he's a venture capitalist and he's the former Chief Operating Officer of Skype and so in the interview he talks about how uh uh how how basically go regulate

disruptive Technologies I mean so how you should or not regulate them and talks about his experiences with Skype and and how there are a lot of parallels with uh with Bitcoin so I thought it was super interesting if you you should definitely check that out it's on our SoundCloud page yeah and today's episode we're going to talk about uh reality key so guest today's Edmund Edgar um he is the founder of the company I met him um I actually I saw that he signed up for our Bitcoin startups event uh last this Tuesday and I remember seeing reality Keys before mentioned at the Amsterdam conference because they won an award there or they want a startup challenge there so

afterwards you know I I contact him like hey you should give a talk so he's going to give talk at the next Meetup and after this meetup on Tuesday we talked with him it was super interesting so I thought you know it be great to have him on uh today so uh reality keys I mean he's going to talk a lot more about it and go in depth about it but they're providing a cryptographic data feeds uh or real life events and uh of course this is really crucial if you want to build uh services on top derivatives on top uh insurance contracts so when we often talk about ethereum about these kind of Bitcoin 2.0 protocols um they depend on this kind of uh absolutely crucial it's like an

infrastructure component of that I would say the future of um cryptocurrency and uh and those applications have dwell on top of it and he was previously the director of Information Technology at Princeton Review in Japan and he's been uh he's been out there for a long time and he's also graduate of Oxford seems some how there's a few Bitcoin people there I know came from there so yeah thanks so much for joining us today thanks for having me on um so I would like let's um or perhaps we can get started before we dive into reality keys can you tell us about how you got involved in Bitcoin um I I guess it was the the same I I've heard of a lot of people got involved in

the in the same way which was after we heard about the Wikileaks banking blockade we thought what what I thought was well why is it that if I want to send money to somebody I have to go through somebody like you know PayPal or some some Bank in the middle we have we know how to do you know crypto graic we know how to do key Pairs and things why do I have to um to to depend on these guys isn't there a way I could send money directly to these people so that I could trade my my effort for something else that Wikileaks wanted and um so I went looking for peer-to-peer currency um and then found Bitcoin which you know discussed a whole bunch of other problems hadn't thought of but luckily that's all she had solved um so that's how I got into it oh that's

interesting so like following wikileak we was like oh what we would need is a peer-to-peer currency that's right so you put it into Google and there it exists yeah that's um that's super interesting um and I guess then let's get started with uh so so then how did you then end up starting reality keys where the other projects through before reality Keys um well I mean we I worked on a a couple of things to do with um Virtual Worlds which is another thing that I've been working in with um things like second life and open SIM um and I did some work on a um on a payment

module for that which we ended up um not releasing because there was just not very much interest in um in the open SIM world right now um so so I did some spent some time working on that um and then started looking at this problem and kind kind of all kinds of areas and how how you would you would build a prediction exchange um sorry a prediction market and how you would solve these problems and it turned and looking at it it just seemed like there was this big gap that nobody was filling where everybody was saying okay we're going to need somebody who's going to be getting real world data and effectively connecting that data to the blockchain somebody who's going to be getting real world data and translating it into a form that a Bitcoin L can understand and everyone was kind of assuming that

organization away but nobody was actually doing it so so I thought we'd better go ahead and uh and build it that's what we did and so you built reality Keys uh when did you launch uh let's think we launched in I think it was beginning of February or the end of uh of January um this year so we started building it about uh October kind of time last year okay so can you tell us about your so the the parent company is called social Minds you're based in Japan and tell us about some of the other things that you do that's right so um so a lot of our um Revenue comes from um sort of Consulting and web development work um then we've

be we we built a um uh an open a 3D virtual worlds um platform um for connecting with open SIM um and that allowed you to connect open source Learning Management Systems like Moodle um in into the the virtual world so that you could manage things like study data um you could teach inside a 3D virtual world and all your study data and stuff would then be um be stored back in mood you can manage all that um in your learning management system um so so that's the the other project that we've been working on up till now um that that's still going but a lot of our effort right now is going into um reality Keys huh I'm I'm always I'm always fascinated by the the amount of

people that I find that were involved with 3D vers ual worlds and things like second life before they got into Bitcoin right I mean it was this area that that before we had Bitcoin we where we had this um you know sort of open Digital currency um and this sort of open scriptable world where anybody can create things and then they can actually you know anybody can program those things and they'll work together so um in in in some ways there are kind of kind of a lot of um a lot of parallels um obviously the the second life currency is managed by um by linden labs this this one Central company um but you know as a user it's something that you can use for for micro payments and

something you can automate in very interesting ways um so I think it's attracted a lot of the the same people who have then you know found Bitcoin that can kind of kind of take the idea of a of an open um uh currency that can do micro payments and that we can very easily um build apis on very easily script takes that you know Bitcoin takes that to a whole new level so so if if you had to kind of summarize reality keys in in like a few sentences for somebody who has no idea and uh you know maybe I can give you a try you can improve on my try so so the basic idea is that you provide uh a data feed know on on facts that's right so I like to

describe it as a certificate Authority for facts like verisign uh for facts um so what those guys do something like verisign will take information about identity so if you've got a computer that wants to know is the other computer that is talking to really Amazon then the it'll use some cryptographic data from verisign and your computer can look at that cryptographic data it your computer may not know about identity but your computer knows about cryptography so it can check if a key matches um and it can check if that's really um Amazon now the fact that you know verine can do that is based on having some people who are kind of in contact with the normal human real

world right so they can check documents they can make phone calls um they can do all these sort of normal things that a computer would be able to do and then provide some cryptographic data that then the computer can use so um well how does that work can you run us through um the kind of technical side of how where do you get the data from right and then how do you make those facts available right so so let's imagine that that you want to know about a particular event say is the exchange rate of the is one Euro going to be worth more than $1 at the end of next month so you go to our website and you put in that um that information or you can do it with our

our API um and we give you two public keys at that point okay so we give you one public key representing yes it will be greater than a dollar and one public key representing no it won't be than a dollar then we um we wait for that date that you specified to come around and when that date comes around we pull from some data source to find out whether that thing happened or not okay so in this case we would pull from the European Central Bank who have a data feed um so then if if it there's a there's a kind of a dispute process that maybe we'll get into in a second but basically if it happened we're going to release the private key for the yes

public key that we gave you earlier and if it didn't happen we'll give you the private key for the no public key that we gave you earlier so that's what we do now in the Bitcoin context what you could have done with those is when you got the public key you could have made a special transaction um a single transaction that you and some other counterparty that you have um would share and that transaction says that the yes key plus your key or the no key plus the other guy key can unlock this money so you'd say either of those combinations can unlock this money so then when we get when you get the private key whoever's actually supposed

to have won that whoever's supposed to get paid as a result of that contract can then spend the money so what I find is very interesting about this and I absolutely wasn't aware that this is even possible U because it's it's it's kind of a multi it's a multi signature transaction no but it's a different kind because you specifically specify it's it's those two keys together or those other two keys together but it's not like any two of three keys that's right so so um so that's something that at least doing it kind of directly as described without a clever trick which I I'll mention in a second but doing it without a clever trick um is something that right now is a nonstandard transaction in Bitcoin so

for people aren't familiar with that that means that um by default most of the uh the nodes most of the computers on the Bitcoin Network aren't going to send that aren't going to relay that transaction to other nodes and most of the miners aren't going to mine it but there are some miners that will reliably mine those transactions so you just have to directly send them to to that M app so that's been something that because it's been non-standard it's a little bit of a pain to use so that's probably why you haven't really heard of patterns like these um that most of the software that you would use even with with multisig is has been relying on the things that you can do as as standard transactions um now having said that would um the was a little there is a little trick that you can use right now

which is that um it's actually possible to kind of to kind of combine these um these keys so you you can stickely stick two public Keys together and the and and turn that into one public key and then when you get the private key you can stick the two private Keys together and turn that into one private key so if you do that little bit of um of of trickery then you can actually structure this thing as a traditional multi- signature um transaction which says either this one key so or this other other one key will be enough to money interesting having said that um so so we um as I said right now these are non-standard transactions on the um on onit the Bitcoin Network

and you have to send them to um usually to igus the pool that will M these things um um but Gavin Anderson the chief scientist of the Bitcoin Foundation came up with a has written a um a pull request that's been accepted in the main Bitcoin um source code right now that is going to make uh these transactions and all kinds of other uh transactions using the scripting language in existing ways is going to make those standard um and that's been merged into um Bitcoin master um and it should all be in um in the next Bitcoin release so I'm probably in Bitcoins 0.10 okay so these types of transactions will eventually become standard what what other types of transactions are we

talking about here are there any other types of transactions that would be included in this polar Quest that would affect would would affect the type of things we can do with reality Keys um well as far as reality Keys goes I think there were quite quite a lot of use cases but that's the one that we're really thinking about that'll affect us um there'll be a lot of other things that'll affect other people for example um things like some some really interesting in use cases that aren't reality Keys use cases like um like doing cross chain um Atomic uh trading so that if you want to you know trade your litecoins for my uh my Bitcoins C can you also do things such as like you know either those three keys or uh those two keys are valid you know those kind

of things will be possible that's right that's all going to be possible so um the the only limitation here really is that you're limited to a maximum of of 15 signature checking operations um which in practice there usually as many keys as you can actually stuff into the transaction because there's a there's a limit to the the size of that um but that still gives you quite a lot of leeway um so the I think the the kind of the canonical standard transaction that's going to use reality Keys is going to be um if this person wins and yes wins or if the other person wins and no wins or if the yes person person and the no peak person both agree um those so those those three options you'd all want to run independently um and to be

able to unlock your funds um you're also probably going to want to um add some extra maybe this is something we we we talk about later in the in the discussion but you may also want to add some extra authorities so if you don't want to trust reality Keys 100% because you never know if something's going to happen to us um you may want to add a competitor to us um I don't there's anyone directly doing what we do but you you may for example want to add a standard kind of um escrow arbitration guy um or you know really anyone else you you want to add to to that as an Arbiter um you could also add in different combinations so so you could have like reality and some other reality competitor for example uh three of them

and then you'd say it has to be a majority of them exactly that's right um or you know whatever pattern you want to you want to set on there um to that what's the use case so you said one option would also be if the two parties agree yeah uh even if so that they can essentially I guess do whatever with the money what's the idea behind that why is that necessary yeah there well there are two reasons you might want it um one is that um it it gives you kind of a way out if um reality Keys turn out to be unreliable which of course we won't but you you know you certainly want to have that one covered um so if you um and and there I mean there there are some um ways of of

setting up these deals that don't even have an Arbiter at all and just rely on that you know the two parties both having the money stuck there um and having an incentive to move it so um so so that's one thing you certainly want to do is you certainly be able to want to both be able to to move that money if or if you guys will never relas the private key because you disappear or something that's right yeah that's right um and another reason you might want to do it is you might decide that you want to end that um that transaction early um so you might not want to wait for that event one one of you might want to you know just pay other want to um to get out of that contract at a a different rate um so uh you know so so there I

think there are quite a few reasons why you might end up wanting you know to both agree um and the and apart from the the slightly increased sort of transaction size there's almost there's pretty much no downside to having that option right yeah yeah so I'd like to discuss uh data a little bit so there are a few data sources that you use uh could you go over the different data sources that are used by reties yeah so right now we pull from the European Central Bank for uh traditional fiat currency exchange rates we then have altcoin exchange rates which I I think um sorry altcoin transaction information and Bitcoin transaction information that we're

getting from blockchain info and blocker iio so that allows you to do things like well the the I me the the exchange rate thing allows you to um to do kind of kind of bets on future uh rates and currency hedging the transaction thing allows you to do things like say Okay release this key if this um amount of money is paid um so that gives you quite quite a lot of interesting use cases um then we have Freebase which is pretty much everything in in the known universe so this is this monster Community curated database um operated by Google it was originally a separate project that I think um Google acquired um which

has um all kinds of data that it pulls in from all kinds of different data sources a lot of it from Wikipedia um and that will allow you to really and and it's very well structured kind of semantic data so you can really create kind of arbitrary propositions right um will Barack Obama you know marry moona you can you can say really what whatever you like um you can formulate really whatever kind of questions that you want you want to to formulate if it's about factual stuff um and we can express that in this Freebase language um and hopefully Freebase will also have the correct answer if they don't we'll have a solution that we can talk about so I'm interest I had never heard of free before and so I just kind of realized that it's probably what powers a lot of the Google open graph

stuff right yeah I think so that's my understanding is that um the the lot of that information it will be powering sort of Google suggest and all that stuff um and uh yeah so who who curates this this data um as I understand it it's a lot of volunteers are contributing and then they have their own kind kind of um full-time staff at free base um that's how I understand they doing it um so it's it's quite similar to the Wikipedia model except that it's um it's semantic it's structured data uh designed for machines rather than uh um rather than kind of text Data design for humans okay and and so yeah perhaps we can go into because obviously there's going to be errors

there and uh there may also be ways for people to intentionally yes uh fake the data that's right um so can you talk a bit about how reality Keys is going to address this problem yeah so the way we work is um we we effectively give give you information in two stages the first thing that we do is we pull from the API so we get you an automated result um so if that's you know in in the freebased case it'll information that may have been tinkered with by somebody or you know it may just be inaccurate um we then publish that information on our website and you have a certain amount of time which you can uh you can set when you uh create the contract or when you

when you edit when you register the fact with us um during which you can pay us an objection fee and if you pay if you pay us that fee then we will have a human um just check it out and you know Google the result and get to the bottom of it um so what that does is in the vast majority of cases you we don't need to do anything right in the vast majority of cases the um the API will settle the thing correctly um and we only need to get a human involved in the thing if somebody pays the fee and they'll usually only bother paying the fee if the API is wrong um so what that gives us is in the average case we get a very very low cost of settlement we only really need the human when they're absolutely required um but because

there's this human um kind of format mechanism we can get you can get be very very confident that um that we're going to get to the right right result so sort of jumping in here this is like slightly uh well related but off topic so that also means that in the sort of default case you guys don't make any money right that's right that's that's how it's reacted at at the moment I I think in the future we may end up um doing some kind of different levels of service so um especially if people end up you know put putting a lot of money behind these contracts then I think people will be be willing to pay for a faster service or a better secured service or you know so so I I think in

you know in the end we will um end up charging for um for some things apart from this kind of human um action but um but but it I mean we we'll see how it goes if it ends up that we do end up needing a lot of human interaction then that might be maybe suff sufficient to um to fund the whole thing um but I I don't think it's a problem I think once we've we've got a lot of money spinning around these contracts there will be you know some kind of extra service that people will be willing to pay for so with regards to this this human intervention yeah can you go into detail about how that works like I can I can see some some cases where perhaps even humans would not correctly interpret the data I mean say for instance that you're

dealing with information that is specific to one country or which is in another language and translate huh I'm sorry ambiguous or ambiguous right there's a whole bunch of use cases where perhaps the data different to interpret that's right and and that's true actually of of settling any of these these contracts and it's also you know it's also true of things like um betting contracts right now that they're often not ambiguous you know Corner cases um and in that case we'll you know we'll just do what we can um so you know that that's kind of the service that we offer um so I would you know caution against people create as as I said with free base you can put in pretty much any kind of proposition but obviously you don't

want to go go putting in propositions that there's no way we could actually settle you know and and we do want to be able to settle these things based on publicly available information as well so um so you know not just um information that we're able to get at but information that anybody is able to verify so that everybody can tell that those um responses that we publish are actually correct but so if somebody puts um a fact in that isn't actually you can't make it decision on yeah uh how do you guys deal with that I mean I yeah we we'll we'll we'll just do what we can with it I mean I mean you know we we we've got some stuff in there where people manage to structure free based

propositions in a way that don't actually mean anything yeah um and and I I think there is messing around with it it's probably okay but I mean we'll you know we or you can just not publish any private key yeah I meaness well would we wouldn't um we wouldn't publish neither or both ultimately if somebody pays the fee I think we're going to end up publishing one of the keys or the other key yeah um but and well no no that's not something that we can do um because that would shoot our reputation to hell but what we what what we can do is you know we we can at least let them put their case um you know see what the arguments for it are um but but like I say um the the the best way to use the thing is not to write ambiguous stuff

that's going to be hard for us to um to settle and and that also applies for things that free base may actually have an opinion about but it's kind of tricky um I would strongly advise people not to write kind of tricky contracts and then hope that they're going to you know the counterpart is going to think it means something else than what it really means you know um that's also something where the you know there may be a legitimate API answer but then a human answer may be may be different so um so you know just don't get clever just just stick to what you know reasonably unambiguous factual contracts so uh I mean I think this whole idea especially a prediction Market is is very interesting and um you know we haven't seen it yet but that could have huge uh implications in the

future yeah but of course it also is a can be very controversial right and it can lead to cases that are morally right tricky yeah so you know specifically you know I could put up like a fact you know bar Obama will be killed in 2015 right and then uh some parties could create a contract based on that and then essentially uh you know you could fund uh the killing of somebody in a sort of decentralized way which is a crazy idea know so um I'm sure you don't want to be your platform to used for that kind of thing want to be used for

that kind of thing so are you going to be censoring facts well right now we actually have have a couple of those name spaces um blocked for for free basee but um ultimately my view is that we are telling you the truth about what's happening in the world we don't know what you're doing with that stuff and the the the problem here I mean in the in the Barco you know in in a lot of these cases is that um there are all kinds of legitimate things that you could be doing with that data and we can't tell which it is you're doing right so we can't tell the difference between we don't even see the contract at all right so we can't tell the difference between what could be a a will will or what could be a you know an

a life insurance contract or an insurance contract or or a better what right we we just um don't see any of that stuff um having said that what I would say about these illegal contracts is that our service is very very public um and bit I mean Bitcoin is also very very public I know there are ways to be anonymous but Bitcoin is also you know public and leaks a lot of information in ways that you you may not may not have thought of um we also I mean I mean if you read our policy you know our um privacy policy we you know we do uh record IP addresses which we would you know we would cooperate with law enforcement if there was a reason to think somebody was committing a crime um so I I think that to be honest if I was

trying to if if I was a criminal trying to assassinate somebody then I would probably not use a public legal service like um you know like reality Keys um I I think ultimately we will probably the world will probably end up with I mean I mean I mean I heard there was somebody who was doing kind of es was offering to do escrow for assassination contracts of of politicians um which they thought was kind of a good thing in itself you know regardless of the politician um I I you know so I I suspect that people who are interested in doing that kind of thing will use a service run by somebody who's a bit more into actually doing that you know and also probably probably you know an ambiguous uh sorry kind of a darket thing on on tour or something yeah um the the other thing I'd say about it is

that you know if you wanted to do a if you wanted to to make contracts where you would profit if Barack Obama was assassinated um you don't need Bitcoin or reality keys to do that right now I mean I remember after 911 there was a lot of speculation that the that a bunch of stock trades would been made by somebody who knew in advance that 9911 was going to happen right and I mean there there were a bunch of stock trades that you could make you know followed by some kind of destruction of property you know that that would actually alter you know change the so there's there's nothing particularly new about this um well a lot more direct of course if he well there certainly some some new patterns that you could imagine that

would have been difficult before um but and and but the the other thing I'd say is I mean I mean even if you wanted to bet on the assassination of Barack Obama effectively you can do that right now right I mean I I I don't know if anyone if any bookmaker will offer you odds on um the death of Barack Obama but you can you can certainly get odds on Joe Biden becoming president I mean that's the same thing pretty much um so so um you know it's it's something that in a way has always been with us and um and it will certainly have some some new forms as these contracts you know take take place in um uh in in the Bitcoin World um like I said you generally probably wouldn't be sensible to use reality keys for for these kind of contracts um maybe

someone will try yeah but like like you said you're just reporting the facts you're not dealing with the contracts and uh so that's right and and yeah and and the fact of the fact right right but that's I I guess that's sort of also ties into the question is like why did you choose to do it this way with using two uh Bitcoin addresses in public publishing the private key instead of I guess being involved directly in the contracts would be one way or maybe signing a cryptographic message or I don't know what other options that's right so so what a lot of people doing in in in this area certainly for um uh for these kind of arbitration type of of

use cases is that you're making a um a transaction with that needs a certain number of signatures and then you have an Arbiter who is one of the um parties to that who's one of those signatures or maybe multiple aors who um who give you multiple signatures um and we um we were a little bit reluctant to do that um firstly because we really don't want to know about your contract right I mean you know it seems like people have a reasonable you know expectation of of privacy in this kind of area um and and it and it would actually kind of broaden our our regulatory service in a way if we're actually involved in these contracts there's always the possibility that you're going to get involved in

court cases where somebody says well you know we we think may maybe the the kind of the machine readable text of this contract says this but um but by I just want to point out that it it doesn't have to be a contract I it could just be some sort of an animation well that's that's right so I mean yeah we've we actually the things I was about to say is that we've been talking about this completely in the Bitcoin context um but like I say I don't think of us as a Bitcoin arbitrator um I don't think of us even as limited to cryptocurrency um we're a certificate Authority for facts so you might you know it might be a question of okay you know we we we' you know we've got it well certainly it could be a will um

that's that's a case that I'd love to do um like I said at the moment we've got this space block but I'd love to be able to help people with Wills you know to to get um quick results so so you would need to have a for that to happen you need to have a data feed on people's deaths that's right need a DAT feed on people's deaths um but yeah I'd love to do that one um but but also there are a lot of kind of non- cryptocurrency potential use cases that I have I think really haven't been explored yet because we've just never been able to do this um I mean the one I was thinking about on the on the tram on the way over was um um you know if if if you want to know who who's won a football match and you

want the trophy to deliver itself right um you know just just who who's who's supposed to be able to control the Drone whether you want the winner of the football match to be able to bring the trophy over by by the Drone you know um I mean that's kind maybe kind of farfetched but but you know all you might want to do you know how how are the doors going to open on the stadium we want the losers out first because they're always in a bad mood you know um so so you know who who knows what kind of um things people can are going to want to do with this um and and I mean slightly more trivially you can make messages with these things right so it's not just for signing these keys can also be used for encrypting messages so you can write a

message you can write I mean well we're still still on the on the death use case um you know you might want to write a message to somebody that says you know I'm I'm your real father I didn't want to say I'm still alive because it would kind of weird you know well I'm not I'm not your real father whatever it is you know and then it could only be encrypted decrypted once the person's Dead with the private that's then published yeah yeah that's a yeah that wasy one but I'm sure people out there can come up you know come come up with some some other examples where um I I think we really haven't really begun to explore this kind of space um and and also I mean you know with the example of the Drone and the trophy as more and more things in the world are um

sort of are networked and automated um I think we'll see more and more use cases where you say Okay has you know the the the one that that Mike home was was discussing was um was something like has the um does does has this car had it debt paid off yeah yeah yeah with the the lease payments and the operation of the car and he had it kind of looking at the blockchain but you don't necessar have to look at look at the blockchain you don't even necessarily need a you know an internet connection to do this you can just come in and um once you've got the key you can bring that over offline some you can communicating it communicate how you like you know so you could build a car in the beginning yeah that would uh would be unlocked every month with a different private key

set each month of lease payments you get the corresponding priy yeah so so you know I think there there's a huge amount of kind of stuff a lot of it very sci-fi but the world is getting very sci-fi I think this is probably one of the single most like interesting aspects of of Bitcoin 2.0 and really like we need is like reality keys to make that all happen right in a in essence so can you tell us about some like some other promising applications that could be built on top of reality Keys like given that you have the proper data sources what are some other types of things that like really far-fetched like uh super futuristic stuff well actually actually I should tell you oh there's a data source I forgot to

mention which isn't that futuristic but I should just tell you about it since I've I've nearly finished it um which is that we pull from runke keeper um so so actually somebody somebody said to us that they wanted us to do the Withings API um which is I have one of those you have one of those see I don't which is why we didn't build in the W AP um but the so so these are these if I tell me if I've got this wrong these are these kind of um Internet connected gadgets right a Wi-Fi scale Wi-Fi scales and they have like heartbeat things and and all these other things um so so so they said that they wanted to be able to to do basically contracts with their future selves so rather than no contracts with some other person so um so and I love

this idea actually I love it kind of opportunistically shortterm because it's so easy to bootstrap right you don't need to find the counterparty you just you know if you know how to use it your future self also knows how to use it um so so we went ahead and built that we've integrated with the RunKeeper API um and so so we can pull from there and say I can say if I run you know 10 kilm by next Thursday then I'm going to get this money back if I don't do that run then it's going to go to charity how how would you do that so so how would the the so it makes sense to me how you could like pay it back to yourself yeah but could you automate it being paid to

charity well we need the in at least the the the way I've thought of doing it maybe something clever that I'm thought of but we need to get the charity to claim it effectively yeah because they need to know how to kind of cash in this this um special transaction um there may be something cunning you can do involving you know um uh time transactions and stuff where you you can probably do that um but yeah so so um so so we we've actually been building that as kind of an example for for people to play with um so that that's actually there's a kind of a still broken version there but that's functional now and and you can do some nice like Bing thing right so me I and Sebastian we could bet together like who going to run more in the next 30 days

and yeah that's right I'm not sure if you could do that on RP right now but we probably fix it so you could do that um and you and you can and you can also do the backwards version of that one which would be um kind of a sponsored the the back version of the thing that I suggested which would be like a sponsored walk right which is that your money to go goes to charity if you complete the the run and if you don't complete the run it goes back to the person who um who funded it yeah yeah so it seems to me like the opportunities are pretty much Limitless um do you intend on adding other apis or perhaps even opening up the platform so that other people can build in these apis into reality Keys like if you look at just like if this then that for

instance like they've got dozens and perhaps even hundreds of different apis like there's apis for everything now yeah if if you would somehow open up the platform so that people can code in npis to be able to create These reality keys I think that would just kind of really open up to a lot of opportunity yeah so so um so I guess two questions there the first one the first one is about adding apis which we we certainly will um and you know if you look at this thing and there's something that you need and um and we don't have it then you know let us know we're you know going to be adding apis all the time um as far as opening it up goes um it's certainly something I'm interested in doing um I'm a little bit worried about whether you're whether I'm a little bit worried

about kind of the terms of service or some of this data that people could um could set us up to pull from um so I'm I'm a little bit nerv nervous of allowing you to register things that we would then not be allowed to pull from um I mean that that that may may turn out to be okay but that's that's a concern um the the other way we might do this is to use somebody else in the middle um so there services like um Yahoo pipes I think is is still running which is yeah which is kind of this um kind of toolkit for kind of slicing and dicing information from different sources um so what we might do is is just do a kind of a generic um API tahoo pipes and then um and then pull from

that and then you can make whatever pipe you want um and I and I think there is also an open source implementation of Yahoo pipes out there somewhere so that if um if they stop providing that service we can still um confirm those facts um the the other way this might be going I don't um is that some some people are working on platforms that are really much more that will do really kind of much more generic computation um and that's something we're also interested in doing I'm a little bit nervous about some of the kind of the the the legal implications but um but it's something I'm looking into can you tell bit more about that yeah so the the recent announcement was um codius which I don't know if you heard of that's by

the Ripple team so this is kind of their answer to ethereum and that what so what ethereum does is it allows you to to make um kind of arbitrary logic that all of the nodes I guess I guess in the um in the ethereum network are going to be able to run and validate um so that you can run effectively arbitrary Logic on um under these conditions you know these um the These funds or these assets should go here and under these conditions they should go to to this other person so that's what e ethereum do but then the um if you want to do that without actually forcing all the nodes in the network or or even forcing the miners to all execute for these

arbitary contract arbitrary contracts that may have loops in all kind you know other difficulties um the other way to do it is if the if the parties to this thing just agree on some um what well what are called oracles on some authorities who are going to run that contract for them and say what the result is so um this is something that um G Gavin Anderson was was talking about um he's he's written a post where he calls it um bit ethereum um which is this concept that you're going to do um sort of key ke key all the key based stuff and the kind of the property tracking on the Bitcoin network but when it comes to actually running

some arbitary code and you know slicing and dicing a bunch of of different data sources um you could have a bunch of trusted Arbiters Arbiters to do that um and they don't have to be that trusted because you can combine a whole bunch of different ones and um take a majority vote um so he call it bit ethereum and then the there's this implementation called codius um and what codius do is they use the Google what's it called Google native engine is it called gole no it's not the app engine it's um it's kind of this um kind of sandboxed um programming I guess it's a runtime anyway if you Google naacl that'll show up um and their project is called codius

um so I I think they've they've come up with an implementation that is right now is just a JavaScript sand boox I think rather than using NL they say they're going to use um but the idea is that they're going to write um you're going to have this sandbox that a lot a lot of different people can run and the you'll be able to write in various different programming languages and you'll be able to pull from you know what whatever um whatever data sources you want and then run whatever code you want to so would the idea be that um you allow so that either I guess there would be two ways if I'm correct that this could be interface with reality Keys either that uh some of this Cod code could use um fact from reality Keys as as an input in

the computations or you could have an output of the codus the Oracle result as an input right that's right so so the the um yeah the the input thing I yeah maybe you want to do that that's an interesting thought um and and I yeah I've been just kind of kind of tinkering with the idea of um setting up a codus node and you and doing that the way we do it where we just release Keys um again you know I'm a little bit worried okay the situations where if I'm running arbitary Financial code that people are going do naughty things and that's my responsibility you know I'm not quite sure still kind of need to talk to my lawyer about that one but um I don't know the the codus team seem to think it's an okay thing to be doing um so so so that's that's

certainly that's something that we may do with reality Keys um alternatively it may be that reality Keys end up carrying on doing we're doing for things where you need facts and then a bunch of other people are going to end up running these codus nodes um you know and um and and signing right now they they sign transactions rather than releasing keys I think in their implementation so so I think there there's definitely a lot more to talk about the application stuff and I think we should definitely do that but I just very briefly want to ask uh about one more topic that sort of relates to the the technical side to this and so obviously you're using Bitcoin so actually well sorry just ask

a question I I think the answer is no we're not using Bitcoin well using Bitcoin addresses and uh yeah kind of okay that's right probably right so so my question is cu you starting like ethereum other projects like that um so if an ethereum application wants to use reality Keys y uh would they then you know use the the Bitcoin public B private Etc and essentially um tie that into an ethereum contract which is probably possible right yes uh or would you have maybe additional ways of releasing facts that they're more tied to a ethereum platform yeah so so um so yeah we the

public keys that um that we the the keypads that we use are they they are actually created by a Bitcoin D um but you know the the keys that Bitcoin uses are just you know ECC key pairs um so they're not at all limited to the Bitcoin Network um so without us doing anything you can use those keys on all kinds of other systems um anything that's you know capable of doing of of checking those um signatures you know using the same um crypto that um the Bitcoin does can use our keys as they are so it would be possible I guess once ethereum is running it would certainly be possible to just use our keys in in contract um and also I think on you know Ripple and um and really anything else

so that that's certainly possible however ethereum has quite a nice way of handling this which is that they allow you to literally publish a sign feed um if it's to publish data to the um ethereum blockchain um and you can then also charge for it to be read in it it seems if I understand that right I'm try this um so so um so it can be used right now but there are probably some things that we could do to optimize to for ethereum um I I'd certainly like to publish kind of ethereum native uh data feeds certainly something I'm thinking hard about so that of course would also be an interesting different monetization well right way right if you

can charge for charge for for yeah for seeing those things um well then I guess let's let's sort of dive a little bit more into the application side so um I did an interview with g wood two weeks ago I think it's just kind of as The Ether sale was ending its two we Mark and uh and then I was talking to him one area that he emphasized and that I hadn't thought so much beforehand was insurance so uh you know cuz I asked him like you know what do you think could be like one of these big Industries first big industries that would really be

disruptive is insurance right so I think it's of course very interesting use case also very closely related to prediction markets no yeah um at least technically it's all the same moves right technically it's like kind of the same thing no so but U I was wondering what are your thoughts on that yeah I I I certainly think it's a plausible use case um there are there are some situations where I think you might actually want to know your counterparty to do a lot of insurance um stuff you know where whereas in a you know in a prediction Market case it doesn't it doesn't really matter who the counterparty is as long as you get paid um but in an insurance case um you often probably want to know about the

motivations of the person you're dealing with as well as you know the the final um Financial bottom line so you know if if you're you know making a contract where they're going to get paid if light Lighthouse gets burnt down then you you would probably want to know the identi of that person you know but that kind of I guess depends how fireproof your Lighthouse is right I there might be situations where um where that's going to work so so um so I certainly think there are some insurance use cases um I I think in a in a way yeah a lot of them are just a little bit tricky in terms of getting the right sort of incentive structure um but it can certainly be done yeah okay so Insurance yeah I think it's definitely an interesting use case

I I guess also a big challenge will be I think to just build the user interfaces on top of it to build like ways of price finding I think that's going to be huge challenge that's right there's a there's a lot to do you know we we we've kind of consciously taken very one very small slice of this problem um we haven't tried to build you know a prediction Market or um any of other things that that we could build with the exception of this runke keeper one which which nobody else was going to do um and because we we really just wanted to to make something that people could take a look at and learn from um but yeah that's that's right we're we're not interested in building any of those things um we're you know we're hoping that other people will but you know the

the great thing about the about working in Bitcoin right now is that there is just so much you know Innovative uh talent and so many people building any damn things that you you can pretty much say that if if it should be built you know somebody's going to build it um so so I think there's a there's there's a there's a lot of work to do to get especially to get kind of Beyond techy stuff to get to get you know to the for normal users to be able to um to use this stuff uh there's a lot of work to do but there a lot of very smart people who seem to be doing it yeah I think that's the case with a lot of the I mean a lot of this Bitcoin stuff is just building the user experience to to a level of at which people can can

actually use it um yeah I mean we had a talk on Multi uh so it wasn't the last one it was one U at the meet previous Meetup and I thought um one thing the guy said was was really interesting and he was like that the biggest challenge with multis is going to be uh usability absolutely and like user interfaces and all like otherwise it's pretty simple understanding is pretty simple but actually making it usable and that is a big challenge that's right and and I suspect that we're going to end up with effectively sort of custom clients for or or at least C custom kind of user interaction um elements for all these different kinds of things you know so so to us

technically you know we've been talking you know insurance is just the same as um you know a betet and that's just the same pretty much as a run keeper you know Challenge on whether I'm going to finish this run you know and to to to bitcoin they all look kind of similar um but to the to the user look like very different things and they're going to need very different um different interfaces no absolutely I think I yeah I totally agree sorry yeah sorry I was just going to say I think there's an opportunity in pretty much every single space that's what follows from that you know is that we're not going to have one person who's going to build the you know the contract interface we're going to there's a you know there's an opportunity for somebody to do uh a really interesting project on weather

Futures and somebody else to do a prediction Market you what what so yeah so what are some other uh sectors that you think can be U completely disrupted by um the the one that kind of the one that I've kind of kind of learned more about since I've been doing this is is actually is kind of um sort of financial Futures where um actually been you know talking to some people from um from the industry so what I hadn't realized was I mean even things like weather Futures you know if you if you Google okay I want to do as a sort of a retail customer or small business customer if you say I want to just sort of hedge against um rain tomorrow because I'm doing an outdoor event or

something there's actually not much there in terms of good options um and talking to people in the in the industry it really seems like we've got all of the dysfunctionality that we're used to in the payment space that's the same and worse in the kind kind of in the in the future space um so I think there's a huge opportunity there um and and there's also a complete lack of transparency when it comes to pricing yeah yeah and by and by the way this is one of the interesting things about about uh reality Keys is that you can be very transparent or very obscure as you like um so if you use our keys as they are they're published on the website anybody can look at the blockchain at least once those have been settled anybody can look at the blockchain and

see that um this was a contract about this particular fact oh that's true but it's also possible if you prefer to do it this way it's also possible to combine our key using a similar trick to the the ones we just discussed earlier you can combine our key you can kind of blind it and combine it with another key that's only known for participants um and if you do that then nobody's going to know we won't know um we won't be able to look at the blockchain and know that you know this um this transaction this that's fascinating so so yeah we we kind of tried to go with the I what I think is is nice about this we doing is that it kind of goes with the grain of Bitcoin that it gives the users a lot of control if you want to be transparent

you can be very very transparent in the way that didn't used to be possible and if you want privacy you can have a lot of privacy um you're you know we we've been we've been used to this kind of very kind of um slightly nasty kind of half measure where you can never really get as transparent as you want or as priv it as you want so what kind of timeline do you expect do you think we're going to see um working applications that actually end users are going to use in um what do you expect is it going to be two years it's going to one year or longer than that um well well we should have the runke keeper one out in a week or two yeah um the um and the things that I've heard people are building you know it

sounds to me like well stuff out this year um from what people have told me they're building um and I I mean I just you know turned up at a meet up in in Berlin um you know last week and found some people were building on reality keys so you know it does sound like there is there is stuff happening and there's going to be um stuff that's out unusable um that said we're in it for the long run you know we um when I went into this um it was very clear that we we really have have no idea how long it's going to take for this stuff to get traction um I'm perfectly prepared to wait 10 years and just carry on running the service with I you know even if hardly anybody uses it I I you know we can we can just keep on um providing the

service you know until it takes rout and you know we're we're in for the Long Haul here and speaking of the long run like do you think that there's any way one one of the criticisms that you may get is that you know it is centralized and there's no transparency going on in the background do you think that this is a way perhaps to decentralize reality keys in the future and perhaps have some premium services built on top of that yeah so the there really I guess there are a couple of angles to this one is that there are some um there are some systems that are being built kind of from the ground up that are supposed to get you um world sort of external information around the world um through mechanisms that don't actually require any kind of trusted Arbiter um and these

are really interesting projects so so one is called shelling coin another is called Truth coin um I I haven't looked much at at shelling coin but if if you read TR truth coin has some um quite quite an extensive white paper and I think there's quite a lot of work going on in it um I'd really encourage people to look at those you know those projects if you're interested in this area um having said that you know these things so they rely on things like you know shelling points where there's this idea that it's easier to get to the truth than to say something untrue so you can just like we get miners to um to all validate these transactions and they were kind of incentivized to to tell the truth to stay in line with the consensus the idea is that you can do something

similar with um facts about the world um so this is you know it's very interesting project and it may work but it'll be a long time even if they finish it soon it'll be a long time before we know whether it works because it really needs to be tested under real world conditions yeah and when when real money is at stake that's right so that's it's I mean the same is true of Bitcoin and a lot of these um you know the new technologies in altcoins but yeah we don't really know whether they work until we've actually put some serious money behind them and given people incen you know to to try to break them um so that's one possible angle is that it may be possible to completely decentralize the whole thing um but we don't know yet the other angle is okay what um what can

we do in in the reality Keys end um I mean one thing I would say is although you've got to choose your orbiters you can choose as many Arbiters as you like right as long as people actually sh to do that so even I mean we're a centralized you you can think of us as a as a if if we're a node in the total system if you're making a um a contract you might have you know seven different people um and you're taking a majority um verdict from them that's not really such a centralized system right um you know it's um it's a it's it's you know you've got you've got a majority of it's a kind of a decentralized system but where the PE the nodes in the system

are known okay so so um so that's where you know I think this thing should be going is that we have kind of these kind of known nodes um we may end up kind of internally I'd um if certainly if we end up with a lot of money writing on this thing I'd like more kind of internal checks and balances so as well as in your contract you will be able to um pull to get stuff from a bunch of different Arbiters our keys would also depend on some some kind of semi-independent organizations um agree um but even there I I think the right way to do this at least for a lot of HED cases is to have identified trusted people um so in that

sense you know it's not going to be a a system like Bitcoin where anybody can can become a um a node without needing to gain trust um to do that I think you need some kind of a system like you know truth coin or or shelling coin um there are some some some guys there a project called um something like Ori which talking about themselves as a as a decentralized um or call um but in a way they they end up with the same thing I mean you you you get a bunch of people all running loads and you trust and you figure out how much you should trust each of them and um and you combine a bunch of them you know so so so I think that's probably going to be the model um I I suspect that as I said when we were

talking about kind of the very illegal uh use cases earlier um I suspect that the market will end up producing some kind of sort of a a bunch of sort of dark net nodes who you know people who are kind of doing this fairly anonymously um but they're still going to be a l more reputation I think yeah absolutely and and I guess that's also going to be a way to deal with increasing money at stake is to increase the number of um that's right like services like you because of course if a if a million doll that's right contract or $10 million contract depends on uh which private key you're going to release is also going to put um you at risk in a sense because of course

somebody can come put a gun to your head and that might be economically yeah you know real risk right that's right so so if you're putting if you were putting serious money in this you know you you should be really combining multiple authorities you shouldn't be putting huge sums of money on on just our service um but but at the same time we we can also do the the same kind of thing internally and that we can structure our organization such that if somebody put a gun to my head I still wouldn't be able to you know just by myself give them the key maybe they need to you know find three guys in three different cities and put guns to all their heads and they could do that might be a good person as long as I can actually persuade them that you know that's

what's happening yeah um so so so I think we you know we probably end up going that direction but like I say you know for for for big money you want multiple authorities um and that that makes everybody safer well I would say before we wrap up so we're sort of um coming towards the end but do you want to go into very briefly um your views on uh Bitcoin 2.0 protocols whether it's like ethereum or Protocols are more based on bitcoin but trying to do the same thing yeah I can I can try I um I'm maybe going to be a bit out of my depth here so so people who know a lot about these Protocols are going to be kind of screaming into the um into the computers how I am um so

yeah so um I mean I mean yes what I mean what we were talking about earlier a little bit was the way um there now these kind of two competing um schools have thought about how you can do complex contract logic um on a decentralized um platform right so so there there's kind of Gavin's and bitt theorum concept which is also what the the Ripple people seem to have taken up um and then there's the the ethereum idea that you can actually um you know run all kinds of contract logic um on the blockchain and have all of the nodes and I I if at least if I've got this right about ethereum I hope I've got this right that you know then then that if you've got a a transaction then all of the nodes in the network have to you

know validate that trans or at least all the you participating full nodes have to to validate that transaction um and to run the contract code I guess to run the contract code I suppose that's how it works of course you could do the same thing as the bit Theory you do that's right you can you can certainly do the same on on um on ethereum but but the idea behind Ripple seems to be kind of that you can do this arbitary contract logic um and I mean the the arbitary contract the idea of doing arbitrary contract logic is a new thing right it's an innovation um and we haven't seen it tried yet and I don't think anyone knows if it's going to work um and we we all hope it's G to work and you know we're kind of waiting to see but I I mean I

was I think I was saying this the other night but I'm not even absolutely certain that the Bitcoin incentive system is going to work I mean you know we know we have issues with decentralization um we don't really know you know it seems like the the miners Al kind of run from a Prof for a profit motive but we haven't really seen a majority of really nasty miners at the moment you know we and we haven't had a majority of really dysfunctional organizations running mining um you know I mean the time the time we had you know we had that fork and everybody got into IRC and said okay well I'll give out my blocks you know it was all kind of run by these kind of gentleman anarchists um and then we've kind of progressed to this time we've got kind of guys like

gash who um well we don't know much about them but you know at least they they seem to be running with um a strong profit motive but you know even then what happens when we get to the next stage of any business where it's run by kind of psychopaths with mbas right and you know in in a big organization you can get really strange dysfunctional Behavior where e even if you might think well this doesn't seem to be in the interests of your company because you're doing something harmful to bitcoin and your company is relying on bitcoin you know if you've got some weird organizational setup and you've given people funny bonuses right you know people can do very strange things you know it probably wasn't in the interest of Leman Brothers for the guys at Leman Brothers to do what they did and to run

up the debts they did but um you know they still did it so so so I so I think even Bitcoin which has had had you know relatively a lot of kind of real world testing and a lot of um serious stress testing with a lot of serious money at stake even there we don't quite know whether the incentives work um and ethereum it's going to you know is everybody really going to validate things properly and people going to do weird things we don't we don't really know any of that yet um so so you know ethereum it's a in a way you know it's a more it's a very ambitious project um so it seems like the um kind of the the bit ethereum concept the the idea of handing this thing off to trusted oracles is seem seems like we can be a

bit more confident that that's going to work than we can be confident that ethereum is going to work um but obviously if ethereum works that's much better yeah I think I think it would be uh extremely fascinating to see how this turns out um so we're at the end of our episode if people want to try out reality keys right so uh the website is reality keys.com that's right um with the run keeper thing I guess uh you're going to have some user interface on the web that people can actually use it's it's there right now but it's a mess you see it if you're interested in it's it's at um buyy coins.com as in I swear buy my coins okay um but but I'll

uh we'll we'll do a proper announcement once that's actually ready to um to use okay is there some other way people can contact you or get u in touch with you um yep so so if you look at our um our website on the about page we've got a um an email address well support reality keys.com um there's also our uh Twitter handle on the on the bottom of that um and we also monitor the the relevant thread that's linked on the on our site at um Bitcoin talk if you want to uh to talk about things there um so please don't hesitate to get to um get in touch you know I mean I met some guys in Berlin who've been kind of puzzling over some things that I could probably have helped them with you know please please don't hesitate if you're not sure Howell works

or you're not sure how to do something um then please do reach out um and I hope you can make something interesting cool well thanks so much for joining us today yeah thank you very much super interesting um so just very briefly uh as we kind of wrap up uh we have one announcement to make so so far the way we've been uh calling our episode so we've had the regular episodes that we release on Mondays and we had generally uh extra conference content on Thursdays so that the Monday episodes have the regular episode numbers and the the Thursday episodes we generally gave other names uh and so we are kind of breaking away from that so we also going to have some

more flexibility about when to release what content so for now and we can uh number all the episodes as sort of regular episodes and um yeah so there may be some changes there but it's mainly as far as the naming goes and and perhaps some of the release schedule but not much um so thanks so much for listening if you want to support us you can uh donate to us which which is very much appreciated you can do that EP bitcoin.com tips and thank you to those who have donated yes thank you very much we we received a few donations recently and we we don't know who you are $50 like recently so that was nice um and uh you can also follow

us on Twitter at enter BTC and uh if you want to subscribe to our Weekly Newsletter which goes out every Friday uh and you can do that at ENT bitcoin.com newletter thanks so much and we'll see you next week h [Music]