EB99 – Manuel Aráoz & Esteban Ordano: Streamium, Pay-Per-Second Video Streaming For Indie Producers

Transcript

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hi welcome to epicenter bitcoin the show which talks about the technologies projects and startups driving decentralization and the global cryptocurrency revolution my name is sebastienguccio and i'm maher roy today we are joined by two a pair of talented developers from argentina they have worked on many projects some of them are quite well known in the bitcoin industry these projects are proof of existence streamium faradam and decentraland we are going to talk about uh their projects and the prospects of bitcoin and argentina uh to introduce our guests they are manuel arouts and uh esteban ordano we are we are very happy to have you on the show manuel and

esteban hey mark thanks for having us we're glad to be here hi hi thanks a lot for having us here okay so so perhaps we could start with uh bitcoin in argentina uh because uh there's this impression in the in the bitcoin media that argentina is the one country which could adopt bitcoin and and jumpstart uh jumpstart bitcoin and leave frog ahead of all the other nations in in this technology what's your opinion on that yeah it's actually pretty funny to us to read all those articles claiming argentina is like the center for bitcoin

and where bitcoin is growing faster than it's actually not quite true and as i as i always tell everyone argentina is kind of a good a good spot in many ways for bitcoin because our local currency is really really bad and there are big capital controls and it's hard to get foreign currencies but actually adoption is is pretty slow and i would say bitcoin is growing much faster and adoption is much wider in other countries so i wouldn't say argentina is the the best place for bitcoin right now it's and it's actually i read many things in news articles that are totally not true about

argentina and bitcoin so be careful about that but at the same time the development scene in argentina is quite good there are many companies and cool projects that are springing from argentina so that kind of counterbalances the low usage of bitcoin in general and how i mean i think one thing that has been pretty consistent is the argentinian government's attempts to sort of stop bitcoin from proliferating in argentina regardless of whether or not it's being used how are those startups uh coping with that yeah actually the the

argentinian government is not is not actively working against bitcoin i wouldn't say that there was uh the the only official uh communication or action about bitcoin was uh um a posting by the central bank warning the the population about bitcoin not being minted by the by the government like saying okay be careful with this because we don't regulate bitcoin we don't regulate its emission so be careful and that's about it as far as i know i'm not a legal expert but uh it's it's actually a more or less friendly environment for bitcoin companies in argentina

so we've been duped by all those corn desk articles telling us that there's like so much stuff happening in argentina that is like the the you know the next the next place where bitcoin was going to be developed when in fact is just like anywhere else um well as yeah as the town was saying i think there are some really good developers working on on the technology side and there are some interesting companies down there too but as far as what we read at least about adoption and how it's the perfect ecosystem and that we will get millions of users i think that's not going to happen i mean it's it's not going to happen in argentina first at least

okay well let's uh let's talk about you guys background a little bit it seems like you've both been working together for so long uh and and you've been together on on many different projects uh tell us a bit about how you both got into bitcoin so we've been working on bitcoin since since like two or three years ago uh manuel started on on this we actually have a chat conversation back in that time trying to manage organize a bitcoin development meetup then manuel went out to create proof of existence i was doing i was working at google at some point

around that there and we when manuel joined bitbay i joined it a few months later and that's when we started working together in this space we already met each other from college we're actually pretty good friends from many years ago from college um i as a town said we we were at first interested in bitcoin like from from the side we were not working with it but we chat about it then i i did proof existence as a small experiment it turned out to be pretty well received in the community so after that i was unemployed so i started doing freelance work

for bitcoin companies mainly trying to work with bitcoin given that i had a small experience with that and it was really interesting in the technical side and after working for a year and a half in as with consulting in bitcoin i met tony from bitbay and uh i joined there and a few months later i convinced esteban and a couple of other friends to join and we've been working there on all the all these projects and you mentioned like streamium faradam decentraland we also collaborated on bitcoin building bitcoin which is the open source javascript library for bitcoin applications as part of the open source uh initiative by bitbay

so um so some so maybe with that we could go into discussing your uh your new project streamium so for the for our listeners that have never tried streamium or heard of it could you could you describe what it does and who it is meant for yeah sure so streamium is a live streaming application that uses bitcoin payment channels as a monetization and option so it started off as a hackathon project between seven friends it's actually the team is quite big and we we it was a group that we used to get together in during the weekends for we call them bitcoin dinners

we got together and talked about latest news about bitcoin what we saw about the future and after a while we got bored about just talking because most of us are developers or work with technology so we wanted to actually do something one of the guys suggested doing a hackathon so we got together on a weekend and started it was actually stefan's idea to build streamium we were talking a lot about payment channels and we wanted to build an application that was interesting in in the sense that it showed the real value of payment channels as a protocol so we we built it over a couple of weekends

and we launched it several months later because it was a super slow development in our free time but that's that's so what it basically does is uh um it allows a user to to record something and stream it live uh and stream it live and in exchange receive payments through through bitcoin uh bitcoin micro uh payment channels so uh maybe we could discuss part of the architecture of of streamium uh and there are two important sections to it one is how does the money flow and the second is how does the data flow and could you explain how both of these things happen when i create my own

streamium stream yes of course so streamium uses webrtc which is a decentralized peer-to-peer protocol so browsers can talk to each other we are currently relying on a rendezvous server so that browsers can create the connections between each other and with that webrtc connection you can send both data and the video we're using the capability of sending data so they can negotiate a bitcoin payment channel and this is uh actually i think it's the first implementation of

a payment channel for some kind of like real world usage and once that payment channel is established the video streaming starts and it's a broadcasting mechanism so if i'm broadcasting my video everybody that is receiving the video will have to be paying me through a payment channel so from a from a technical standpoint it's a well it's not fully fully decentralized we have i will say the the gotchas in a second but both the video

it goes through a peer-to-peer protocol and the and the payments because payments grow through bitcoin payment channels which we'll know is a decentralized payment system and the video goes through webrtc which is a peer-to-peer protocol for the browser and the the two the two points of centralization are what stella mentioned the the rendezvous server where peers can get the other peers information for for discovery and of course the the static html server that serves the files for the client to run the the application okay so could you describe the the payment channels and how they work in more detail

so a payment channel is kind of like opening a tab in a bar you set a certain amount of money that it's the maximum that you want to spend in that payment channel and you lock those funds in a two of two address so this two of two is controlled by both parties in the payment channel so any transaction that gets signed will have to have the approval of both parties and there's a time lock mechanism in case i funded this payment channel but the other party that is going to be receiving the funds

will not be willing to sign a transaction giving back all the funds so after a day you can recover all your bitcoins is that clear enough yeah but so so if i understand those in this case what you're doing is you're doing a two of two trans uh multi-signature transaction the the person that's doing the streaming will have incentive to to sign that but so for the for the viewer so there you were simply the one the viewer is the one that will fund the channel uh we we usually call

them technically the consumer and the provider of the service so the consumer funds the channel and asks the provider for a sign a transaction that becomes valid the next day so he can have the fund funds back if the protocol gets interrupted interrupted okay so once the stream is is initiated the consumer has already signed his part of the transaction and is waiting for the provider to sign his part of the transaction yes he actually does this uh he signs a transaction and he waits for the provider to sign a transaction a second transaction spending that first two of two

paying to two to a two or two address transaction it's kind of like complicated i will need a blackboard to explain it sorry well that's okay because this is a podcast so people don't necessarily see if they're not watching the video they're not gonna see it anywhere but um and so the the payment channel is opened and then so if there's a payment for every chunk of let's say 30 seconds of video how does that work how do you how does the money keep flowing all right so as uh sending an update of the payment channel which means uh spending a little bit more money from those locket funds um

when when i send one of these small micro payments to the provider of the service he will send me back the video right now in streaming what we are using is we interrupt the video if the payment flow stops coming and if the video stops coming we interrupt the payment flow so it's a trustless solution for payments so so basically um could we say it like this suppose it's me uh me the creator of the video and esteban is the consumer i'm the producer and esteban is the consumer then what is happening is uh when i start my stream

um nothing happens now when you want to when you want to when you want to see my stream then you will send your bitcoins into a multi-signature address that is controlled by you and me jointly right yes and so now so so basically when the service started you agreed to watch the service for a maximum of one hour and then let's say the price of that one hour is fifty dollars an hour so you locked fifty dollars worth of bitcoin into uh into uh into an address which is jointly controlled by you and me now now what now what starts to happen is

there has to be data that needs to go from my webcam because i am the producer to your your terminal so with each item of data let's say like the there's a there's a there's a big packet that that has 30 30 seconds of video so corresponding to the transfer of that item that packet of data from my computer to yours you need to send me a transaction which allows me to claim part of the funds that were locked into the multi-signature account right yeah that's that's correct and we it doesn't have to be 30 seconds it can be one second it could

be one minute and you may want to be sure that you have a certain margin of error so you don't stop the video because you didn't receive the payment so it's actually more like a flow of video from one in one connect in one way and a flow of payments in the other way okay so the question i i start to have here is let's say let's say i am i'm creating a stream and i have already created this multi-signature account with esteban because esteban is watching my stream now manuel joins manual wants to see my stream so i create another account with

manuel and then sebastian wants to join there's a third one created is it the case that i am broadcasting my video data to all three of you through webrtc wouldn't that need a lot of bandwidth on my side yes you are constrained by the amount of bandwidth that your upstream connection has so if you want to have many users let's say i guess that more than 10 will start to really stress the connection you may want to look into another a different solution some kind of like first cast to a

server that will then broadcast the video to a lot of users or maybe use a more decentralized solution like bittorrent for the distribution of the video right let's take a short break to talk about our brand new sponsors hide.me uh personally been using them for about a year so i'm really excited to have them on you know you know we sometimes take our our our privacy and security online for granted i know that i did i often tell people if you use public wi-fi uh you might as well assume that your data has been compromised in some way there's so many ways people can attack you nowadays i mean if you're using a website that isn't ssl people can on the same network as you

can pretty much see anything that you're doing on that website and even ssl websites like your bank social media or bitcoin wallets for example can be vulnerable to certain types of attacks so you know as a bitcoin user in your office or in a co-working space or like if you're a public wi-fi someone could potentially target you just based specifically on the websites that you visit now you want to protect yourself against that and to do that you need high.me high.me gives you an encrypted connection between your device and their network of servers so attackers and even your isp have no idea what you're doing this all happens over super fast gigabit ethernet so there's no lags and you have an encrypted tunnel there uh which protects you and in addition to that hide.me keeps no logs of any of your activity

and the great thing about height.me is that they have a free plan the free plan gives you up to two gigabytes of data per month for an unthrottled bandwidth and that's just enough so you can protect yourself whenever you use a cafe when you're traveling you're on an airplane in an airport or use any public wi-fi spot and you can sign up and get that free account when you go to high dot me epicenter the great thing too is that if you ever decide later to get a premium account then signing up with that url is going to get you 35 off the premier account includes unlimited bandwidth access to all their servers worldwide and they've got lots of them and it also lets you connect up to five

devices simultaneously you use it on your mobile phone and with all your devices and of course you can pay with bitcoin now we'd like to welcome heidt.me as a new sponsor we're excited what they're doing and of course we would like to thank them for their support of epicenter bitcoin so um i guess this is sort of a structural problem with webrtc is that it's it's a peer-to-peer only protocol now you mentioned bittorrent that's interesting because we thought uh about you know different ways that you could um scale webrtc and i guess this would not only apply to what you're

doing and sort of the you know bitcoin micro payments space but also could be potentially used for you know large scale webrtc broadcasts by just about anyone is by using bittorrent or perhaps ipfs or some other distributed file sharing protocol to stream video has that does that already exist has that been done before or is this something that you're looking into for streamium well actually one of the other stream developers his name is shemel he did a small experiment about that uh we we had the same idea and he wanted to test it out and it actually worked pretty well but well not not pretty well it could

work but it was hard to make it uh perform well uh talking about video live video quality so there there are some complications where you're dealing with a live stream of video and we were having like because torrents are predetermined size files because you need to check the file integrity and and it has it's not it's not designed to to stream files so you have some problems when you are connecting several chunks of video and it's also as estevan pointed out in live streaming you can drop some frames and it's fine

but the bittorrent protocol doesn't support that kind of stuff you need to download the whole file so we we had some pretty successful experiments with that but there's still a lot of work to be done to optimize the protocol and allow other ways to distribute the the video without relying on on the provider to to share the same video to everyone and this i mean is this something that has been addressed like i mean the the the problem of streaming live video to a large audience uh without having to rely on some centralized

uh third party like ustream or something like that is this something that has been addressed or perhaps we have actual solutions for uh sort of outside of what you guys are doing uh not that i'm aware of but it will be interesting to see if there's a distributed peer-to-peer version of the real-time protocol which is what webrtc and uh skype or all those solutions use it's either rtp or xh263 or 363 or something i don't remember the name it could be a really cool experiment to

build something on that well i mean if you guys successfully do this with bittorrent you essentially be the first to to achieve that right yeah we actually don't know if there's another project doing something similar uh we should look it up but uh as i told you it was it's what it was it worked like as a proof of concept but it it still needs a lot of work to actually work correctly you we would need to polish the protocol in many ways and i don't think the best solution is to use bittorrent based on the the things i mentioned earlier but maybe building a specific protocol for this could work

another question is doesn't the doesn't the fact that bitcoin need confirmations uh to confirm a bitcoin transaction one needs one hour and zero confirmation transactions are are not secure doesn't it impede impede streamium in any way like for example if me and esteban want to launch this stream then esteban's money needs to be locked in this 202 multi signature account and the process of that locking to be secure needs one hour so how how does it work out well if i try to double spend you so right now streamian uses several confirmations

by block cipher and we are using the [Music] confidence in transaction parameter from them because uh the thread model is quite uh quite low on restrictions um if like the worst thing that could happen for you is that i can watch a few seconds of video from you uh because the streaming right now when that it detects a double spend uh it will cut the channel off and so you you could be a stolen of a few seconds of content from me

but that's kind of like the worst that could happen streaming on your side will take care of that and if the transaction gets confirmed then it will stop checking for double spans or stuff like that okay so so basically what you're saying is that um when when i'm trying to create this stream uh there is a risk of double spends but the value at risk is very low so for example if i'm if i'm taking if if i'm charging ten dollars an hour for a stream and you do a double spend maybe it's the case that you saw two point five dollars worth of video and uh and i didn't get paid for it yeah we managed to successfully

double double spend and probably even less because uh right now block cipher at the moment it detects in any any transaction anywhere it will uh report that and the streaming on your side will say no hey this guy is trying to make a double spend so let's stop the video right now today's magic word is stream s-t-r-e-a-m head over to letstalkbitcoin.com to sign in enter the magic word and claim you're part of the listener award so what is the monetization model for uh

for a service such as for a service such as streamium are you looking to monetize it in any way yeah so streaming visa is an open source and free project and anyone can use it for free there's no charge i mean the the streamer charges the their audience but to use the the product is completely free there's no fees we're not playing we're not planning to to monetize the monetize it in any way we had some ideas of doing uh like a separate service that allows uh streamers to increase their their potential audience based on the scalability problems we already

discussed given that it's completely peer-to-peer and the the limit is based on the on the streamer's bandwidth and we were thinking about building a service that broadcasters could connect to for a fee distribute this it could distribute the video for them so still using webrtc but with an intermediary for video distribution uh but we we haven't completed that i mean we haven't moved forward with that it's an idea it's it's there in case we want to pursue monetization of streaming so then the the content producers get

100 of the money that uh that they charge for the video yeah exactly oh that's really cool so i mean this isn't so we had another question regarding piracy um [Music] what prevents someone from rebroadcasting a stream that they're paying for on for free or for for cheaper than what they're paying for it basically nothing i think information wants to be free the moment that you gave out information the people that received it is free to re-broadcast it i think that what waits in favor of the content

producer is that probably the quality of the rebroadcast will be lesser because of the video streaming it kind of like loses some quality it's important to to know that we're not trying to solve a piracy with a with streaming it's just a way to monetize live content you create for free but of course once the the viewer gets the video on their machines they can rebroadcast it in any way they they want they already have like like any content essentially yeah exactly yeah okay um well then i mean my uh my next question is uh on

on use cases so um you know there's so many ways to do steering video these days so we're using google hangouts right now um of course that doesn't provide monetization but you know some other solutions do i believe youtube is now starting to do uh monetization in their streams and there's other services that allow that uh what differentiates a streamium user from uh youtube paid live streams i don't know what they call it but uh you know from centralized services what types of people you see using streamium as opposed to other types of streaming services

uh it's kind of funny but we we have like 50 of our users are basically porn so it's uh girls come girls doing shows online for their clients i guess the the other big use cases are education and live gaming so it's people doing online classes or showing their their screens while they play video games but the biggest one by far is porn we think that it's probably based on the advantages you have with bitcoin where you you don't have the the so-called

we learned about this after launching streamium it's something we don't know about but in in uh live uh porn like live camera porn there's the problem of what they call the wife chargeback where it's it they have a really high rate of chargeback and it's not based on the actual user but when the wife sees oh what is this and he says no i don't know i didn't use that okay let's do a chargeback uh and that's a big problem apparently and this sort of solves that but it also allows the the user to sort of end the stream at any point in time so you don't have to prepay

for something you want to watch and it's sort of a win-win in both sides that's our analysis of why this is interesting for the porn use case but so there's the privacy and anonymity part on the client side and i suppose on the provider's side is more money in the girls pockets and not having to subject to you know like the rules and restrictions of some campsite um yeah essentially the the people using it are completely independent yeah and apparently the the fees those sites charge for the the girls or the well the video producers

is really really high like i i don't remember exactly the numbers but i heard something like 40 or 50 percent so it's mad so on the other types of people using it well you mentioned education and online gaming are you talking about uh sort of twitch style uh people streaming their online gaming exactly so in education we have several uh language classes like english or spanish teachers and some a small amount of users doing consulting um and on the gaming side it's mainly just people playing uh video games and streaming their screens

while they play that's that's a feature we added some weeks after we launched streamium the possibility to broadcast your own screen because some people some users requested that so we added so uh like i mean obviously like with with everything bitcoin all the technologies are in this super early phase and uh somehow uh it also resembles the the internet of old in which uh pornography was the first killer application so maybe it's it's fitting that even for bitcoin this should be one of the one of the first i i had this imagination that uh maybe one day uh drones could stream like i have this i

have this like four hundred dollar parrot pop drone that uh you can fly around and even though it's moving in the air the video quality is extremely still like it it it seems like it's it's a tripod flying in the air and i was i had this imagination that perhaps in the future i'll go to a concert from pantera or some band or bono and there'll be drones flying around and i can actually uh check out and they'll be using something like streamium to send out the video and i can actually take any of this stream and see what the drone is seeing basically so uh so i mean like i had the feeling that

it's uh it's an idea that has a lot of uh a lot of uses in the future and maybe it needs just bitcoin to catch on in uh in order to be really used be really widespread it was interesting also to just to see like uh you you mentioned that you have this service that just does micro payments could you could you tell us what that is yes um based on what we talked with our early users mainly the on the education side most were requesting some features we were not ready to develop like okay we need a digital whiteboard where we can sort of write stuff and the student can watch that

or we need a dual video communication so that the the viewer can also send their their webcam content and we we said okay we want to really build a an education product uh but because what they we based on what we talked with them what they really valued was the the fact that they could charge by the second they were doing the class because sometimes they have problems charging after the class ends so you you do a two-hour class and then the student disappears and they never pay and so it's hard to get the money the money is uh a problem in in online teaching so when do you charge before the class after the class so this solved this

and we thought that maybe extracting the the payment system from streamium and doing a a super simple app where you can use payment channels inside of any other application could be interesting so we did that we built farada it's uh just a good way to describe it is streamium without the video so we you have a you create a a session it's like a timer where you create a a timer you set your hourly rate or your rate per minute and then you can connect a client and charge them by the second and you can use it combined with any

other application like skype or whatever it could actually be a chat session or or whatever you want and charge but charge for your time to your clients so which k which gets the higher number of users is it streamium or is it um is it paradigm so as i understand it it's streamium is faradam plus uh plus the plus the software to do live video streaming so which one is proving more popular yeah actually faradam was a pretty unsuccessful experiment we had really few users it was basically the the users that requested that functionality that used it a couple of times but then

we didn't see any actual growth even though we tried to make it grow in some in some ways so it's definitely streamium is way more popular and we have more users there i mean it it seems kind of obvious since you know stream is sort of a more of a final product where fair damn i mean you sort of have to make it uh you have to you have to come up with the the means to provide the service which you're charging for so um and of course you have all that porn on streaming and that we all know that brings in a bunch of people right i wanted to talk about uh alternative funding models i mean micro payments have sort of been

touted by the bitcoin community is one of the killer apps and bitcoin has often been described in in some sense as a way to solve the content monetization problem uh that we have i mean i mean we've definitely it's been something that we've thought a lot about how do we monetize our content i think a lot of content producers off also ask themselves that question uh there's different ways to monetize your content you can sell advertising as we do uh you can have a paywall you can charge by the article which is most like pay-per-view and for the most part advertising has won uh pretty much for every types of content

that they don't literally pay for with money um now with regards to bitcoin and and micro transactions and how you would pay for content i mean it seems promising it seems interesting as an as a thought experiment that you know you would go on some website and you would come up to an article and it would tell you okay you want to pay for this and you just say yes or a youtube video or perhaps a stream but in reality i'm not sure that people are ready to do that for one um you need to have people using bitcoin in this particular example and two people are so used to [Music] you know not paying for content directly

that in order for that for that behavior to change you would need a whole lot of sort of pressure i guess from the content industry i'd like to know what your thoughts on this where do you see micropayments going in the future i have some thoughts but i think i'm talking too much i want to know if steven has some comments there first well one of the biggest issues that we've seen with a user facing micropayments is the the mental cost of those transactions

you don't want to be browsing around and at the end of the day knowing that you lost 10 dollars 20 dollars in some random website but at the same time you don't want to be agreeing to be paying one cent per each article that you're reading so it's kind of like an unsolved problem from an usability point of view but at the same time it's probably going to be most used in machine to machine [Music] the this aspect of micropayments although right now the best solution that we've seen for content

monetization is this one of recording every website that you've been to and at the end of the day pay out accordingly to each each one website that you seen based on how much time you spend on it or how much you like it it or how many which ones you liked the most as a donation essentially yeah something like that with right now i think it's the best uh kind of like solution i don't know what manuel uh that's one of the things that we were discussing with manuel

yeah i agree it's a it's a really hard problem like there's many many many companies and many smart people working on this because we we all see we all have the intuition that there's some way of using bitcoin micropayments to sort of change the way content is monetized on the web or in general in online but it's a really hard problem we we need to work on the really small details of the user experience there's a really great article by nick sabo talking about the mental transaction costs of micro payments and how smart contracts can help with that i recommend reading that if you're interested in the topic

but it's it's actually a it will be a really long work of trying to figure out what the user interface is in the case of a human level micro payments for content i agree with steven that will probably see other applications where there are no humans involved and their micropayments make much more sense because essentially what micro payments and smart contracts solve is the problem of trust between the parties they reduce the the trust between the two parties for an economic interaction and in the case of computers i mean in the case of humans that trust

is usually there uh so it's it's really in the details where you can improve the experience with micropayments but when you have two machines interacting uh it's it's really machines cannot trust other machines because they can break or they have i don't know the concept of trust is really human and it makes a lot of sense to try and build some applications of micro payments with machine to machine interaction there's one interesting example of an attempt to try to solve this content monetization problem or to at least reduce the number of ads

that we see as perhaps you've seen a google contributor so basically what google has done is said to their users uh i mean to everyone who uses the internet and sees uh google uh advertising so whenever you go on a website for instance and you see an ad there's a pretty good chance that that ad was sold through google and the content producer is making money when you see that ad when you click it and what google has done is they said okay we're gonna put up this platform called google contributor and as a user of the internet you can pay up front say two five ten twenty dollars per month to not see ads and rather than paying the content producers

through the display of ads you're going to pay the content producer directly through through google contributor and we we will give them the money basically as though you were seeing an ad instead you'll just see a white box or you can put custom html in there or whatever um so i thought that was really an interesting experiment but you know google is in a particularly good position to do that because they own the advertising space that's part of the the problem with these kinds of solutions too it's hard to solve the distribution of of a micro payment solution for content monetization because when you

don't have any sites that support this you have no reason for users to have the the client side of the application and if you have no users that can pay for that can pay for these micro interactions the sites don't have any reason to implement the system too so it's also a business or sort of growth hacking a problem where someone needs to figure out a way to to make the this grow in some way to solve the chicken and egg problem so to speak [Music] it's time for our word from our sponsors valtteri.com the goal to bitcoin exchange

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how much somebody charges per hour and then the system works and you just decide whether you want to give something 50 dollars an hour and then you watch the stream and you close out and everything else is handled on its own the user doesn't really see the meter running for example have you what kind of user feedback have you received regarding regarding this aspect are users happy with this kind of system or do you think something else is needed something even better is needed well right now the highest barrier for using payment channels is the knowledge of that you are sending this transaction

with a for the maximum amount of time that you will be watching and that kind of like confuses the users because well i have i've already tried to explain the payment channel but it's a complicated thing to do with the streaming we're having that maximum amount of money to be locked in thing which is the current biggest problem for payment channels for users because the fact that the users need to log funds and there are currently no wallets supporting payment channels natively we need to ask them to make a sort of

deposit then we create the payment channel and even though it's trustless we require the user to send the actual total amount so it feels like okay am i prepaying this or not so a big barrier to that is actual wallet adoption of the payment channels protocol that would decrease the the mental costs a lot i think but with regards to the metered payment we actually asked this question because we were afraid of the same thing about users being i don't know nervous about the costs not knowing how much they're actually paying but from what we interviewed all of them were said that it it was okay like they they understood

it and they were not nervous they were not checking the time to see if if they were wasting a lot of money or not it was i think we did a pretty good job but we're still we're still really far from an optimal solution i think yeah i i used your service and in the beginning i i i saw this multi signature address and the first thing i thought was uh it's a centralized service that i'm sending money to you and you will partition the money between me and the and the stream creator but then that turned out to be turned out to be wrong it's actually a wallet in a browser that we have to code so we can have the payment channel so so basically when when i put in money

i am actually creating a new set of private keys and with those new private keys i'm i'm putting money into this multi-signature signature address so it's my own browser that is my own wallet in the background without me even realizing it right yeah that's right exactly so um so maybe we could uh we could talk about one of your other projects that uh that is that is quite interesting it's uh it's called uh decentraland and it's a project that i that i saw that merges virtual reality and blockchain technology now i've been surfing around the virtual reality world for

for the past half a year and you see you see many people talk about the intersection of the blockchain and the virtual reality there's their statements like bitcoin will be the currency of the metaverse the metaverse is the virtual reality universe or or you see statements like um that uh the virtual reality needs to be decentralized so could you explain what is what is the connection between these two technologies and why you chose to devote some of your time to it yeah it's actually a super experimental project we did for fun so don't expect a lot of sense to come out of this but and we were also really we really excited personally about virtual reality

and of course blockchain technology because we work there in the in the industry and we wanted to do a small experiment where we could combine those two cool ideas and i don't know how much sense that makes but we wanted to build a blockchain based virtual reality world the idea is to to use the blockchain as the support for the structure of the world so in bitcoin you have the blockchain as a data structure that allows you to synchronize the state of the decentralized network so that all the nodes can agree and reach a consensus on what the to simplify it the balance of every bitcoin addresses so the same idea could be applied to a

network where the nodes synchronize the state of a virtual world so transactions in this in this blockchain would be state modifications of the world so uh and in the case of decentraland we did a really simple technical prototype where you have uh the model of the virtual world is just a pixel grid so a two-dimensional color grid where each pixel can have different colors and transactions represent a color change in the two dimensional grid so one transaction in the central end is a message that changes the color of one

pixel at coordinate at an x y coordinate and mining is is used as in bitcoin to to validate and provide security to to the to the transactions and when you generate a new block the coinbase transaction in the center line allows you to add a new pixel to the grid so initially you have a a one by one grid so only one pixel and when you mine the next block you can add a new pixel to the grid in an adjacent position so the idea is that the the grid of pixels will will grow over time when users are mining new blocks and then where the owners of each pixel can change the color

so it's actually a really simple model of a virtual world it's sort of a proof of concept that has no actual use but it was a fun experiment to do so it was like i could see that it's a prototype but it could to my eye it also um it was sort of the answer to one of the problems that that that virtual reality has well not not an exact answer but what a really interesting one so so with virtual reality i think the the problem is um if i actually start to live my life in virtual reality then i i want to have my own house or my own property in virtual reality and i want

to own own something in virtually like like the way people used to own stuff in in second life but the problem is if if uh all of the information to create this virtual space is with a company like google and i call something my house in virtual reality but actually all the information to build it is owned by google that can go down in any day that can prevent me from own accessing my own house in virtual reality so a centralized model is like i i i want to own something but i really can't own anything in a centralized model of of data processing so uh so it seemed to be that with decent land

i could have uh my ownership over something and the the data structure that is giving me ownership is not a centralized entity and that makes it really interesting you agree with that yeah it's exactly what we try to do with the centerline this first version you could see those pixels as parcels of the world and you own those parcels and you get to decide which color you can find paint those pixels but in a further version that would be your land your house instead of a pixel and the color

also the motivation for that like why why would you want it to be decentralized and actually own it we even even today where we have virtual worlds that are super centralized say i don't know games like world of warcraft players spend a lot of time and invest a lot of of money and time into those virtual worlds and we think that when you actually own the stuff and you don't have the risk of a company changing the rules of the world or taking ownership of what you built uh the the time and the things we will see created in those virtual worlds will increase a lot like the investment of users into virtual worlds will grow a lot because they will

actually know that there is no risk to lose that to the the whims of a company before we wrap up here i'd like to briefly uh talk about proof of existence so manuel you sort of pioneered this the idea of proof of existence and it's funny because i was reading a just randomly reading this white paper this week and it mentioned you in the abstract as the as the person had pioneered the the sort of idea the proof of existence in the blockchain so proof of existence essentially is um time stamping a piece of data with a hash that you then put into a transaction and

in the in the op return and that hash is is sort of notarized into the blockchain forever so you can prove that you know time x this piece of data existed so it could be a document it could be an mp3 file it could be it could be a contract whatever and that allows you to notarize a piece of information at a certain point in time i personally find that this is one of the most most interesting use cases for bitcoin and blockchain technology outside of payments and i wanted to get your ideas about what you think about that and you know where do you think this is going um yeah first first of all i i have to say that i was not the first to think

about this after building proof of existence i found that there are several projects doing the same thing the same idea although proof of existence was certainly the the first user-friendly experience most were tools for developers where you had to download some command line utility to do this and running a full node so it was actually the first user accessible way of doing it but yeah it was it is considered by by many like the first real world application of the blockchain that is non-final non-financial uh and i think it's a it's a really interesting way to think about the blockchain like uh

there are a lot of things we can there are a lot of properties of bitcoin that can be used for other systems rather than payment and mainly what proofread system does is using the the fact that it's a public ledger where you have the centralized consensus on on data that is published um and that that the the blockchain structure allows to timestamp that data and so i fro this this project was launched three years ago or so and since then there have been many many similar projects coming out some trying to improve on the technical style

some trying to sort of build a nicer product more targeted to a specific use case recently there have been a couple of really interesting developments uh the the ethereum project sort of uh improved uh both in the technical and the business side they are building a a system where it's based on an open source uh project called chain point where what you do is instead of inserting each documents hash in a single bitcoin transaction they they use a merkle tree to insert several documents so you only insert one hash per each

bitcoin block which is the it's a better way to do it because with bitcoin you only have one timestamp for each block so it makes no sense to add many documents into the same bitcoin block uh but they solved it in a really interesting way where they they can provide you a proof like a proof where you don't need any of the other documents in the same block to know that your document actually is in the in that bitcoin block so the basic idea is you have a set of documents each 10 minutes and you build a miracle tree from that and you insert the root of the tree into

a bitcoin block and then you give each user a miracle proof or the the path in the marker tree that proves that your document is part of that marker tree so the user can then use his document and the miracle proof or how they call it i think it's a blockchain receipt or something like that with those two pieces of information you can prove that your document had a certain timestamp in the using the bitcoin blockchain that's an interesting project um uh yeah i'm i'm i'm very interesting to see interested to

see where where this goes are you aware of any uh any instances where uh a notarization in the blockchain was my question is basically is there legal precedence for this to stand up in court or in some sort of a dispute resolution and for instance copyright because there you know there's other companies like we've talked to um uh trent mcconaughey of ascribe you know they're doing sort of neuralization of digital art on the blockchain and like you mentioned there's so many other projects that are doing similar things i i i feel like this might be something that

sort of gains somewhat interesting quantities of adoption how do you think that how do you think that it would be legally will it become legally binding soon you think do you think that it would be adopted as something that people would sort of trust as a a a viable way to notarize documents rather than going through like a notary or what other copyright registration things like that yeah so the there's no legal president yet the only uh similar case we have is the canada state canada senate that they

when they did a cryptocurrency research they they actually uh used uh a similar well actually the same protocol from proof of existence to to certify their own cryptocurrency report in the blockchain that's the only like a government acknowledgement of this technology working but it's we still haven't seen any legal precedent of someone using it in court i think that the the way this could develop is someone that used proof of existence or a similar blockchain based time something system uh going to court about something and they

they will need to have a an expert witness like i i don't know how these are called in english but and the people that go to court and try to explain to the judge yeah an expert witness yeah okay ask for witness and in that case we'll we'll see what what president is is set and if if he can actually hold the holding court or not um but i think that as it works technically uh it only needs time so that people sort of understand it and see the the value and sort of this kind of things need time so it's a matter of and as you said with all these companies

emerging and doing work in this area i think it's it's better even but we we still need to see what happens in court the technology is solid though and when we ask some lawyers in argentina they said that this could pretty easily hold a an investigation and it would actually be could be held correctly against the shots which actually surprised me because i i i thought that there would be no chance that that judge would take something like this into his trials

yeah maybe we need a good uh we need a big big uh case where it's like a hundred million dollars on stake and the proof is on the bitcoin blockchain and then and then the judges agree on it and then that that really drives this kind of thing mainstream it's pretty similar to what what happened in uh in biology like people were shouting that can we patent life uh for 20 years and then there's there's one guy who actually did patent it and then there was a huge case for 50 50 million dollars and after that suddenly this uh this idea of patenting genes went into the mainstream maybe maybe maybe bitcoin will be

similar it needs this big lawsuit moment where some big parties are suing each other and the only proof is the bitcoin blockchain what i find really interesting about the sort of service like proof of existence or some other services out there is that it it i find that it opens up the business mod there's the business model is not necessarily reliant on bitcoin payments so a service like proof of existence or the others that you mentioned tyrion and services like this can charge per notarization with a credit card or whatever so it it allows people from outside of the bitcoin and blockchain space to

use the blockchain for something actually pretty useful which is notarizing documents yeah that's true and i i think that that's a really big strength for a bitcoin business right now or a blockchain based business because user adoption is is growing pretty slow so if you if you are basing your product on on the assumption that your users will have bitcoin you really you you need a really really compelling use case so that you get users to actually buy bitcoin to use your application uh in in other case you need to have an application where bitcoin is invisible and you as you said you can have credit card or paypal payments

and still use the blockchain in some other way where it's invisible to the user so before we wrap up um we just want to mention briefly so you guys have a new company can you just tell us briefly about the company and what you're trying to achieve yeah we just started a new company it's called smart contract solutions we're doing work with smart contracts we're currently in stealth mode so we cannot talk about the details but hopefully hopefully we'll have something we can talk publicly about soon okay great well um i want to thank you both for coming on today it was a really interesting discussion i think that you know this problem i mean problem the issue of content

monetization is one that there's definitely uh bitcoin definitely tries to solve it in some way now whether or not it will catch uh it'll catch on because of user adoption of bitcoin or you know as we mentioned the user experience problem that needs to be solved that still remains to be to be seen but in any case i think that it does provide a really interesting way for content providers to uh to monetize their content yeah definitely we are also very eager to see solutions in that space content monetization streaming faradam proof of existence they all there is something from that into all

this okay well thanks for coming on uh thanks for joining us and uh to our listeners thank you for for joining us today on another episode of episode bitcoin we release new episodes every monday uh you can subscribe to the show on itunes soundcloud or wherever you get your favorite podcast it could be also on the uh on ios or android and you can also watch the video version of the show uh on youtube at youtube.com epicenter bitcoin of course you can always send us a tip and the tipping address will be in the show notes now just as a quick note regarding the t-shirt bribing operation that we had going on for these last few weeks we've actually run out of t-shirts so

you can still leave us a review on itunes and you can send us an email at show at fifthcenterbitcoin.com to let us know that you've sent us a review unfortunately we won't be able to send you the t-shirt right away we're getting some new ones made as quickly as we can and as soon as we have some new ones we'll be shipping those out to to our listeners and for those of you who have uh received a t-shirt uh we would be super uh grateful if you could take a picture of yourself with the t-shirt and send it to us and we'd like to post that on social media so thanks so much and we look forward to being back next week [Music]

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