Eric is asking about the Byzantine general's dilemma with physical coins and paper wallets. Suppose three persons have no access to the internet when they seek to exchange value in cryptocurrency. They have only their paper wallets and physical crypto coins. How do they overcome the Byzantine general's dilemma? Afterwards, they get on the internet and could update the blockchain with the exchange that took place offline. How does that work? How does that affect the Byzantine general's dilemma? Eric, if you do not have access to the blockchain, then you cannot, in fact, resolve the Byzantine general's dilemma. Specifically, the subset of Byzantine fault tolerance, which is the double-spend problem. I am holding crypto coins in a physical device, let's say a paper wallet, or some kind of other device, like a stick. OpenDime would be a good example, a crypto token, which contains a private key in it. I am trying to do a transaction with someone. How does the other person know that the coins on that stick are still available? This is a difficult problem to solve, because even if I have a full copy of the blockchain, let's say I synced it all to my laptop before I went on a trip, and I have the information up to last week. I can actually take the Bitcoin address, or some of the public identifier, from a paper wallet or a cryptosdick. I can verify that at some point in the past there was Bitcoin on there. But I don't know if that Bitcoin has been spent. A whole week has passed. I am out of date. I no longer have an up-to-date copy of the blockchain, and I don't have any idea of the current mempool. So I have no copy of the mempool, no copy of the blockchain. I can't solve the Byzantine general's dilemma. I could take a risk. But at that point, I can't use those technologies to assure myself. There are some interesting options there. If somebody presented me with an up-to-date copy of the blockchain with proof of work in it, I could then validate up to the last block issued, and have a much, much higher degree of certainty that the coins have not been spent. Again, not 100%, because I don't know if there is a transaction currently being propagated, about to go into the next block that spends these coins from right underneath my feet. But I do know a bit more if I have a latest copy. One of the interesting solutions to this problem is the understanding that participating in the Bitcoin blockchain is a highly asymmetric function. You need to download gigabytes of data in order to receive the blockchain, and receive the stream of real-time transactions. But you only need to update 350 bytes. You only need to upload 350 bytes or so to make a transaction. One of the best ways of doing that is with a satellite feed, because you can scale that very nicely. You can have an infinite number of receiving stations, receiving from a single broadcast satellite, receiving blocks and transactions, and you can then transmit your own transaction, which is 350 bytes, using a text message to a gateway that injects it onto the Bitcoin network, or a very low bandwidth transmission system. The first satellite transmission mechanism was introduced recently. You can envision a situation where you even have a field-capable kit, where you just pop up a foldable satellite dish, a solar panel, and a software-defined radio for your laptop, and you can sync the blockchain anywhere in the world, where the satellite coverage exists, of course.


Okay, well we would love to know some of your early beginnings. I'm real interested. Where were you born? I Was actually born in Hadesbury I was born at St. Joseph's Hospital, which is the big I guess it's a retirement home or Something up the hill top of the hill Fringe of the Hadesbury. Were we living at that time? My parents were living up on Twin Peaks, I think What were your parents names and where were they from? My father's name was Herbert Resner and my mother's name was Dorothy They're both Russian Jews both their families immigrated from the Ukraine Around the turn of the century Both their families went to Chicago. Both their families wound up migrating to Southern, California My dad went to Pasadena High and then he went on to the University of California As did my mother so it's kind of one of those synchronicity things that nobody knew was happening and What kind of work did you father do? He was an attorney. He went to Bolt Hall at Cal graduated in 1935. I think 34 or 35 and You know, this was a time of labor unrest in the United States and in San Francisco, you know, the general strike was not long after that and the first thing he did when he got out of school was go to work for the campaign to free Tom Looney who was a You know cause celeb of that period exactly, you know, and in fact, I was named after Tom Looney My my given name is Tom. I changed I changed it in 1966 amazing We were an only child. Do you have any brothers and sisters a brother Bill who died in 1981? And I have a sister Virginia who lives here in the hay It was four years When you were going to school you went to school in San Francisco. I I went to Presidio Hill School good commie school over here Presidio Heights Um I did a lot of the you know kids of the lefties back in those days and this is in the you know mid to late 40s um, I went to the u.s. Grand elementary school in pacific Heights And uh, then we moved to Los Angeles in 1950 And I went to a series of schools there came back to San Francisco My dad my mother died in 1955 my father relocated relocated back here around 57 and went to low-high school. Oh And then the old low high school high school on haystreet, right? Right And um went there for my freshman year and then My family life was a little weird my father had a crazy girlfriend And really didn't want kids around and My brother and I went to santa fell military academy, which was a military school across the bay in santa fell and Then I came back to uh Lowell for my senior here graduated from all amazing. Did you um I've talked for any higher education or college or any I I was into journalism at the time and I uh, I was actually the editor of the the red and white the Or one of the editors that you know the whole the little your book was the editor of the paper and got a journalism scholarship and to the university in Nevada and Reno of all places um And I went there for a year and then I met Allen Ginsburg Poetry and Miles Davis music and that was the end of that When when did you first uh start coming to the ateshwary? Well Just a quick little bit of background there, you know the In 65 Of course, we had this whole rock and roll scene Unleashed here in san francisco, you know the matrix and You know the trips festival, you know Long Sherman hall and the other thing down, you know the granddad south market the Carousel ballroom Which became the film our west and west and you know chat and bill and all that and sure We were very very excited like everybody was about You know the dance concert scene as it was called then And we decided we wanted to do shows ourselves. However, the available venues were taken when you say we who are you speaking of? We being uh, the gentleman in this photograph Let's see if we can Display it Where you want it You can get across it I have to look at it again to tell you to tell you left or right but in any of that it's uh Me my brother bill resner loser green gene williams who goes by the name of reggie and Jim wilson What was this photo taken about? When was this photo taken about? This photo was taken by jim marshall in probably 1967 Yeah, and uh Can I put it down? Yes, wonderful. Um Yeah, we were looking for a place. I can't remember what places we might have looked at or sure, you know explored But on one legendary day in 1966. I think around march or april Um reggie williams was tripping through the hay quite literally on some, you know unknown amount of Yes, and uh came walking down the hill and on the hay street and Um, lo and behold, there was a hay theater All boarded up like this photograph and uh You know that was a Might even have looked the way it looks now because this was a photo taken before you were involved with it Right. It was a theater that was closed for a long time. You know what happened in that theater when it was open What kind of a theater was yeah, well we know a little and a couple other people you'll be talking to can tell you more but um Of course, you know, it was a depression the depression era movie palace, you know with the The all the motifs of you know goddesses and gods and chariots and all of that painted on the ceiling and the sconces on the walls and and you know that environment And I guess it had been a successful theater in the 30s in the 40s and Up into the 50s when the hate itself started to fall on hard times. Sure and uh, you know, which is well documented and uh There were less patrons and then uh went to a succession of Occupants not owners that theater itself was owned by the Spreckles family. Gotcha, you know Very wealthy sugar family. Yes and hit in specific heights and uh They um They leased it out. I guess to the succession of people.  Wow In san francisco showing what kind of movie that I had no idea We found a lot of uh movie posters, you know when we took over the place, but uh, they were all you know Standard variety right john wane and uh, right, you know bogey and what have you So do you know when by any chance would you know when that theater opened or when it was built or anything? You know, I don't really I probably did it one time, but no longer. Do you know the history? uh Actually reggie williams is sort of the street theater Archivist if you will and he's he's the guy who'll know if anybody does exactly So here here reggie spots this theater and uh one day he's skipping on h street and yes, so reggie I'm not quite I guess what happened is he went into the hardware store Which was mcfarland's hardware, which was in them at the bottom of the masonic temple Which was old building next door and then a masonic hall right and uh later became the ibeam Exactly, right okay, and reggie discovered uh That mcfarland had the keys mcfarland I you know the theater was for rent and some mcfarland was able to show it to people so reggie went in And uh, the place was you know pretty wrecked. I mean it had been Vandalized, you know all the copper wire had been ripped out of the theater Uh, the whole place was in disrepair.  Oh my goodness. Oh, yes And you know I'm sure it was moldy as can be and dank and dark and all of that right, but of course reggie, you know Instantly digitalized something much grander than that And came back and informed probably my brother bill. Um, you know, they were they were very tight and About what he found and within weeks we had leased it for the princely sum of $500 a month. Wow. Yeah Which won't get you too far in the entertainment business these days So was that the amount of you had to pay for the rent every month? I think it was 500 It might have been selling but the number that I remember is 500 Amazing. Yeah, but in those days you could rent the whole house for $100. Yeah Well, and we all you know, we when we moved into the neighborhood, which we did we lived up on downy street Had a flat up on downy, you know the alley like street up the hill and and that was probably 50 or 75 God knows, you know, it wasn't much So, um What if you personally and there was many people involved you personally Um, were you bitten by any of what was going on on the street? Were you part of the wave? Did you feel Some reasons to be there. There were there were there were a couple of ways on hate of immigration if you will to hate street, you know and A couple of generations are more than a couple Of uh, bohemians less statement as let's use that as the generic term, you know Because you had your beads with whom, you know, I had hung hung out when I bailed out of the university in Nevada You know, I had made friends in north beach and and now these are the people that were, you know Ten years older than us And and in our group, you know, we were all born around, you know, 1942 43 During the war And you know, we're the age of Bob Dylan and Paul McCartney and you know all of those people And we're kind of like the it interregnum if you will between the beats and the hippies And you know, I mean there was no such thing as a hippie And we were just people that thought it would be really cool to not to have a place to Put on shows and had no clue of what hate street was going to turn into Right, you know, thank god And uh What was um real quickly uh in a few lines some of the problems before opening Well, the biggest problem was we didn't have any money, you know, literally and uh, we went out foraging and we each of us had a specific role um Loser was not there for the entire time because the loser took a sabbatical He might want to tell you about or not. Yeah, but uh Bill and Reggie were kind of like the quote business guys unquote, right and Uh, I was the person who booked the bands and so I was getting to know the bands and figuring out of course I thought we were going to open in a couple months People up and they're going oh, yeah Was it between finding it and actually opening it? I'm sorry. How how long was it between actually finding the location between april of 1966 and um July of 1967 so I mean literally took us uh, you know 15 months To you know fix up the place. I mean I have um Then finding the money for rent and supplies. It was it was literally a weekly thing just like everybody else was going through Just trying to live right But what we did was uh started going out and finding kindred spurious who thought it would be a cool thing Uh, you know to uh participate in and we got a lot of investors. We had I don't know how many you know More than 10 maybe 20, but they included rock bands the quick silver messenger service non-poltean and You know those guys sure were investors big brother in the holding company. Julius carp and those people sure um Jay ward, believe it or not the the guy that created bullwinkle, you know um Eventually albert grossman, you know, it was a kind of a word of mouth thing There was a guy connected with us named steven white who had been a screenwriter in hollywood for the bob hope show Uh, in fact, I have another picture sure Here's a photograph that was taken in the back lot behind the masonic temple and hold it to the your fingers to the edges Yeah, sorry Where was this taken now in the back lot This was taken behind the theater next door to the theater behind the masonic hall But this this is you know A group shot. I've got a whole bunch of these and different poses Of people who were involved helping us put the theater together and you know build it and rebond it and all that support. Yes And um You know, it was a pretty crazy crew but in any case we uh recruited a bunch of people To give us money, you know, I think I guess I imagine that steve white is who turned its on to uh um Jay ward because the hollywood connection right but you know through the rock and roll bands, of course we got in and there were, you know uh Various pot dealers and other people, you know, certainly came forward in the spirit of Korean, you know giving and Help to finance the straight theater, you know, we rounded up Somewhere around a hundred thousand dollars during the course of this experience well And um, I mean the whole place needed renovating but the real story and the it's a hilarious story About the straight theater Is that number one the city of san francisco didn't want us to be there Some things never change Right, you know, they did not want that because at this time now it was starting to build the whole Crazy psychedelic rock and roll scene And they did not want a dance hall on hay street. It was going to attract all these characters too Sure to the city um Or it would help Help attract So they made the permit process, you know beyond hard. They made the permit process impossible and So on the one hand, we were busily trying to remodel the place as I told you the wiring had all been ripped out We wound up eventually we we had a guy named Brent danger field who was our sound man And and I think I'll let lucid green tell you the story of Brent danger field because I'll remind you about it. You can do you can do justice by that one But you know Brent besides being golden throated radio announcer fancied himself an electrician Just about anything else you could chemist whatever, you know, he might be and uh Uh, he tried and filled of course to remodel to rewire the theater We had to hire a company named ever ready electric It was ever ready to take our money And uh, you know, but the city kept imposing new requirements Sure, and ultimately they required that we had to have I think it was 64 um 8 by 8 or 10 by 10 compartments Underneath the dance floor that we were constructing in the front of the stage You know with a fire sprinkler in each compartment and they were double walls and you know She'd rock and you know, I mean it could have all been like little pens or animals or a fish or something So how did you get around the situation of the permit to open that's so that's that's the big story I mean first week we went to the to the To the police department to get a dance permit. They said no So we went to the board of permit appeals and um, actually Let me get a place something take your time Look Because as you guys know the board of permit appeals is the arbiter and in fact decision-making Uh group and now in 2005 we've just got a music uh Commission which has never been in San Francisco. So times are changing 2005 when issues like this come up You have now 40 years. Yes. Now start to have some support um It was a real battle, you know the city was was uh Against us the media was chronicling this, you know, the whole book of clippings, but in any event it came down to this dramatic you know Hearing had a final hearing because I think we had two. I think there was you know One when they said okay, well, we'll think about it and come back another one And it got to the point where we had such people as dame judith anderson Who was luther greens step mom? dame judith anderson was you know, one of the great ladies Of of the theater And dame judith literally came to The hearing and testified about how The straight theater would help to bring culture to these uh, these huddles and masses And uh, so what was the final one happened? The uh, the upshot was that permit was denied How were you able to open and uh, well We were we were pretty we were stymied for a while. We had we wanted to open for the place was basically ready to go We had a beautiful sound system. We had which was supplied by the way by ausley stanley, you know grateful dead fame We had a cyclorama screen You know went from almost the floor practically all the way up to the ceiling went from 180 degrees around You know, it was a fantastic place for its time It was cooler than the film or in that respect because it was designed For the people, you know, there was a balcony, you know for the light shows and all that stuff And reggie williams by the way did the light shows Which was called reginald and straight lightning And uh, did you remember brian epps being there doing some lights sometimes? Yeah I must know we're talking about how did you finally open? Oh, yeah, so We wound up actually having our opening weekend with folding chairs, you know On the dance floor and we had you know, there were still theater seats. We didn't pull them all out There was you know, number of rows of bmc's and then there was a dance floor We had folding chairs in the dance floor, which was a lot of fun But we you know had a great opening day weekend. I don't have that poster But you know the dead plate and big brother played and Not as they played and a while fall, you know a lot of you know Famous bands at the time. Yeah, and uh While we're you know, people are sitting in seats, you know, this is Really cool. That couldn't go on too long. So Somebody dancing in their seats And I don't know who who came up with this idea, but it sounds was it was it may have been luther gree That there was a way that we could get by this and and open the theater for dancing and that was to become a dance school Great idea dancing academy What were the musicians on the stage dance teachers? Well, when that finally happened And I don't know the date and maybe and maybe luther can tell you that When we had because that that was the really monumental, uh, you know To new mom this whole thing when we opened the straight theater school of the dance And when people lined up, you know to buy their not their tickets, but to register to become Students See Oh, here's live here's ruther green and and dam judith anderson's you can see see luther luther was a front man, okay Now You know one thing that in one book about the hey charlie perry's book The uh, just called hate ashberry. I believe he referred to luther as movie star handsome luther green Anyway That's wonderful. So the first show is all bands playing and people on seats and that evolved Keeping it straight a dancing lesson That's great He's a no one bill Graham Got his dancehall keepers permit He had a lot of trouble. I was bill grabs our house And uh, he couldn't let children people under 16 in kind of changed the law through that whole thing and It was very difficult in those days. They don't call it dancehall keepers permit anymore But used to be to open a venue and have people in there The dancehall keepers permit It was very archaic as all the rules were in place from the 20s and the 30s So anyway, this it it was wild. I mean because here are the police. Here's the district attorney Crawling all over the place consulting, you know, the code and a lawyer at the time was a young man named Garrett howling there Still around The The DA of san francisco. So terry was there to talk to them and explain to them that, you know, dance schools did not require Uh permit. No, and actually the way they thought about legislating You know requirement for dance halls to be licensed. I mean, I'm sorry dance schools to be licensed And uh, that didn't fly and so, you know, they kind of just eventually looked the other way and You know, there was so much going on out here In the hey, it's so much crazier.  I'm gonna ask you I'm gonna be we have we have we have about 10 minutes left on this And you know when we're gonna have you join A group interview in a little while okay more information But I'd like to know about the new dance. That's very curious And then I also would like to know maybe two or three of your favorite events that happen there Well, that's definitely one of them Okay, share a little bit of that with me and uh, then I'd really like to know Um, a little bit more about you besides the straight theater. I'll I'll try not to digress too much No problem The new dance occurred um, and I couldn't I tried to find the police report because it's it it's a massive piece You know, it says they on a police report. They have a line that says weapon Tool or method used and it says dancing in the new And um, I managed to ban at that time called lowman joy While I was still working for the theater and I was also the master ceremony chef and um All the joy fancy themselves the guitar player was a big tall African-american guy named Roger who uh, sort of fancy himself, you know, kind of cross between Jimmy Hendricks and Pete Townsend or something like that, you know, they like to destroy their instruments every night Of course, I had no money that made but um They had started talking about wouldn't it be cool if you know We took our clothes off and got the audience to take their clothes off as well And at a certain point That's what they did, you know um, they played that, uh I forget what band was it 13th floor elevator. You're gonna miss me, right?  They came by the theater It was after hours the doors were locked They banged on the door. They were a little diamond shape, you know, uh windows in the doors Trying to attract the our security guard in a call the special And um, and special would not respond, you know Finally the special came to the door. We pushed uh, we wouldn't say pushed, you know, we we entered this theater We walked down we walked down the aisle there were two cops and and we observed, you know, uh A dozen or more patrons dancing in various states of disrobement, etc. So um I'm not sure how they stopped the music.  None of them got busted, right? But I got busted And uh, and one of the patrons who'd taken off his clothes some poor guy They're in his skitties, you know, and they're uh, he was a he was a school teacher from from Campbell or someplace And so they busted him and me and walk us over to park station Of course, I'm I'm clothed, you know This poor guy is wearing his shorts In the fog in the dark, you know at night and one in the morning or whatever in June or July they take you to jail And uh, yeah, they booked us both for you know, it's a nice crime I mean, I guess I have I guess I'm a sex offender, you know But somehow I know Right In public, yeah, anyway, basically the charges got dropped But it was a wonderful person To me, this is just a statement of the time People were taking their clothes off. They were they were Dancing in the streets and music the light shows the I trying to find a better way to love each other instead of fighting and finding things they agree on Um, I also know that you've done some work in the recording industry As well and uh been involved with mix magazine. Is it right? Well, I mean, I I remained involved with music when When you know straight we bailed out of here just just to put a cap around it We released the theater and rented it to matthew case You know, that's a whole anyway Founder and the guy that you know owned their name and all of that And matthew promoted some, you know concerts under the name of the banner of san francisco sound, which he also of course hit trademark And um, but we left And he wasn't here that long before you know, he closed and then we boarded up Um, so meant to catch the cage took it over after you guys I don't know that he Kept it Right, uh, maybe one of the other guys can address it because I don't remember Anyway, we migrated to pacific heights On film or street where we got a a storefront Which had been a frame shop And behind the frame shop, I mean behind the store from my sister opened a And a friend opened a used clothing boutique and it called paisley penguin vine trippery I'll be the first me the first counterculture You know On upper film, this is film on clay, right next door to the clay theater And uh behind it was the shop where they you know the framing people work, you know And it was just that just concrete floors and the skylights and all that kind of thing And um, we put in a rehearsal studio Um, rented it some some of our friends who were bands and nick and nick ravenitis Alice stewarton snake and uh People like that and then um At a certain point one of the bands that have played a lot of the street Who were good friends of ours with santana And uh my Father had actually when they had left grand my father became their attorney. My dad was a lawyer My dad negotiated their their second contract with columbia We were very tight with santana. So santana rented the place And spent on this is during the apraxis period and i looked upstairs You know while these guys were rehearsing apraxis. I know every note of that album By heart Anyway, they uh, I you have so many stories to tell I would love to keep hearing them I'll wrap this really quickly they They spent a lot of money to make a beautiful recording studio. Unfortunately. It wasn't a soundproof recording studio And next door there was a sculptor a society sculptor who was tip-tapping away on his marble and Or metal or whatever he was doing every day hearing he raised hell with the landlord They had to leave I wound up with a recording studio And a friend of mine got named billy roberts who wrote the song hey joe Who i managed and I started you know, we took over this place and started recording in there Uh, he eventually moved on I invested a lot of money and you know put a studio together And then uh at a certain point couldn't make it I'm living doing that and went to work for mix magazine which started in 1977 You already had this background management. Yeah, so I had a mix magazine.  I had remember I had been in the first place And I worked into chronicles a copy boy with jills with Not solid but john stanley and you know some of those guys in the chronicle Um, so I had those skills, but I actually you know became their first dad salesman And eventually became the publisher and then the editor-in-chief of mix magazine Great magazine, you know through the industry for years It's the magazine for recording people around the world And then back in uh 96 I couldn't you know magazines had been sold like four times. I couldn't take the corporate idiots who were running it And I resigned as publisher and and took over a foundation that we had started Called the mix foundation for excellence in audio Which produces a big award show for you for the recording industry called the technical excellence and creativity awards or tech You have them in different areas in different places And that's what I do. I produce the show. What is the way does it have a website? It does. It's a mix foundation dot war Um last year we had it in san francisco the show and we honored george lucas That's great and jimmy jam and terry luis and uh, are you involved with any other websites that we should know about? Are you involved with any of the websites? Does the straight theater have a website? The straight theater has a website The straight theater doesn't have a website. Reggie williams has a website The straight dot com. Okay, and um, you know, but to the extent that there's anything out there It's it's that's what it is and then it's interesting sure It's you know, it's the thing is it's still there. You know, I mean it still has the flavor I will say that it has a really good 1967 because of anybody seeing this in the future Has information has or somebody that's worked there or been there. There's at least a place to connect you Yeah to uh, yeah, well and reggie sells posters. Okay. So part of it is that he's merchandising poster Of course He did manage to to wind up with a lot of posters from the street and by the way I have a number of straight theater posters I'm going to invite you back in a little while Okay group discussion and a lot of the things you brought and we will make sure that all of them are seen And uh, it's an honor to have you here and my name is rebecca nickles and um, I am privileged to have you here A documenting history firsthand Uh, this is a very very important project that we're in the middle of Documenting the 60s in the haydash berry If it weren't for people like yourself and other people you worked with a lot of the magic Um, would not have happened people would have danced to To this song to that music, but one of the things that you did and many others that we haven't even gotten to Help focus people in their day to what they were going to be doing and helped create the normality and the threat of sanity through The flexible days of knows what we're going to do today. You could conduct these interviews for 100 years Exactly And not get it all out But we're so pleased to have someone that has been there can tell it from his feeling his his appreciation and his commitment to to building something and That is where we are now. We are we're living in the the the From all the actions that have taken place where we all are and where we are right now And so we're so pleased to have you here and we're going to have you back in a little while to to make it uh to have the rest of uh more conversation between all of you And uh, I just want to thank you so much to be part of this and besides asking you back We will be asking you back again. Um, this is a long going project. Um, documenting all of This information and one is documented. It will be made available for research And uh one last question 50 years from now somebody watches this tape Oh god and sees where someone like you Seeing a venue like this a theater like this no money no anything but a lot of hopes and dreams What word or sentence of advice could you give young people listening to this video as they will be 50 100 years from now I'll just borrow from nike Just do it Thank you so much


SCP-2300 Object Class, Euclid Special Containment Procedures SCP-2300 instances are currently individually contained within specifically designed containment units within site ██████. Containment units must not match the composition of the SCP-2300 instances they contain and must be resistant to damage caused by the contained instances in three states of matter. Radioactive instances of SCP-2300 are to be placed in a separate containment area with appropriate shielding. Description SCP-2300 is the collective designation for a series of 98 miniature humanoid figures. Each instance is comprised of a single chemical element, and is marked with their respective atomic number on the crown of their heads. Individual SCP-2300 are designated to match this marking. SCP-2300 are solid at all times regardless of the atmospheric pressure and temperature, and exhibit the normal properties of the respective element when in a solid state. However, SCP-2300 can be physically damaged, and separated material is subjected to normal melting, freezing, and boiling points. SCP-2300 are able to consume any and all matter, allowing them to regenerate sustained damage as necessary. Material not matching the instances will be rejected from the mouth orbits as a solid mass several minutes later, which will often be passed on to other SCP-2300 to consume. SCP-2300 are sapient and display varying degrees of intelligence, with SCP-2300 composed of elements with a lower density typically displaying greater intelligence. SCP-2300 often group together with others within their elemental period. While incapable of speech, SCP-2300 comprehend both verbal and written English. Footnote The transmission of communication between SCP-2300 is currently unknown. A new stage with writing implementation revealed that SCP-2300 considered SCP-2300-2,-10,-18,-36,-54, and-86 to be a nobility, each ruling over the elemental period that they are in. SCP-2300-2 considered the highest noble and by extension ruler over the first six periods, one defers to SCP-2300-1 as –1 appears to be the most intelligent of SCP-2300, with a foundation intelligence quotient of just 132. SCP-2300-87-98 do not follow this monarchy, instead taking part in a monastic order following the teachings of SCP-2300-1 directly. Testing reveals that while these instances meditate, they are not subject to radioactive decay, and it is hypothesized that other radioactive instances are also capable of this should they join the monastic order. SCP-2300 often damage themselves to great tools from their bodies to carry out given tasks. Sometimes altering themselves so severely that their entire body is a tool for other SCP-2300 to use. Thus necessitating other SCP-2300 to force-feed them to instigate regeneration. Should the mouth be damaged in a way to prevent typical regeneration, SCP-2300 will attempt to anomalously build a replacement from the leftover material. Newly created instances possess no knowledge of their former self and must be instructed by other SCP-2300 about their culture and situation. Most SCP-2300 activity is dedicated to the creation of art, which often possess anomalous properties. Despite SCP-2300 normally segregating themselves into small groups, they will often hold gatherings in the form of a gallery. However, there appears to be no preliminary process to what can be in any given gallery, including less experienced SCP-2300 are capable of showcasing material deemed unsatisfactory to majority of their more experienced peers. While works that are universally viewed as poor are often removed from galleries within a small time frame, some are left on display due to the approval of the high number of less experienced SCP-2300.


I think that if you made a word cloud for today, FinCEN would probably rank up there with everything else. Which is why it's fantastic that our final speaker for tonight is Jennifer Shasky Calvary, who is the director of the Treasury Department's Financial Crimes Enforcement Network. Previously, she worked at the Department of Justice, where she served as the chief of the asset forfeiture and money laundering section, and where much of her work focused on combating criminal financial schemes. Welcome. All right, I have the enviable position of being the last one up and being the one that's keeping you from hopefully going and enjoying maybe an early happy hour somewhere. But I'd like to thank our previous panelists, because as I've sat here just through the afternoon panels, it's been a great conversation, and one that I think was one of the more educated and interesting conversations I've heard on this topic and coming from a multitude of directions. So I'll try not to lower the bar here. I am, however, going to start with some prepared remarks. I think people at the Department of Treasury are a little scared to let me just speak on my own in an unscripted format. Never know what that Shasky, the former prosecutor, might say. So I'm going to start with some prepared remarks, but then go to the unscripted side on a Q&A, which I'm looking forward to. So let me start with this. First of all, good afternoon. I'd like to take a few minutes to set the stage on how FinCEN and this country's anti-money laundering and counter-terrorist financing regulator has been approaching the issue of virtual currency, as well as some developments that we've been observing as the industry continues to take shape, much of which has already been discussed this afternoon. Because any financial institution, payment system, or medium of exchange, has the potential to be exploited for money laundering, fighting such illicit use requires consistent regulation across the financial system. Virtual currency is no different from other financial products and services in this regard. What is important is that financial institutions that deal in virtual currency put effective AML, CFT controls in place to harden themselves from becoming the targets of illicit actors that would exploit their vulnerabilities. And I'm sorry, I use virtual currency, and I've been told by others that I should be using digital currency, but since our regulations speak in virtual currency, I'm gonna stick with that and we can debate this in the future, whether we need to change it to digital currency. To help in this regard, FinCEN issued interpretive guidance last March, which has been discussed widely today, to bring clarity and regulatory certainty for businesses and individuals engaged in money transmitting surfaces and offering virtual currencies. In the simplest of terms, FinCEN's guidance explains that administrators or exchangers of virtual currencies must register with FinCEN and institute certain record keeping, reporting, and AML program control measures, and less an exception to these requirements applies. The guidance also explains that those who use virtual currencies exclusively for common personal transactions, like buying goods or services online or buying pizza or living for a week on Bitcoin and San Francisco, are users and not subject to regulatory requirements under the BSA. In all cases, FinCEN's employs an activity-based test to determine when someone dealing with virtual currency qualifies as a money transmitter. The guidance clarifies definitions and expectations to ensure that businesses engaged in such activities are aware of their regulatory responsibilities, including registering appropriately. Furthermore, FinCEN closely coordinates with its state regulatory counterparts, such as Ben Loskey in New York, to encourage appropriate application of FinCEN guidance as part of the state's separate AML compliance oversight of financial institutions. Also to expand upon our March 2013 guidance, FinCEN issued two administrative rulings just this last month on January 30th. The rulings provided additional information on our regulatory coverage of certain activities related to convertible virtual currency, and both rulings the convertible virtual currency at issue was the cryptocurrency Bitcoin. The first ruling states that to the extent a user creates or mines a convertible virtual currency, solely for a user's own purposes, the user is not a money transmitter. The second states that a company purchasing and selling convertible virtual currency as an investment exclusively for the company's benefit is not a money transmitter. Since our March 2013 guidance was issued, many of the questions we've received have been about the applicability of our regulations to users of convertible virtual currency, and in particular Bitcoin. We're hopeful that these rulings will help to provide clarity in this area. I'm pleased to report that some virtual currency exchangers have registered with FinCEN since the issuance of last year's guidance. I do, however, remain concerned that there appear to be many domestic virtual currency exchangers that have not taken this step. FinCEN has been engaged in an outreach effort to virtual currency exchangers that have a domestic presence to outline the regulatory requirements and to offer assistance on the registration process. And if a business does not believe it is required to register, we're asking it to contact FinCEN so we can gather additional information in order to make a conclusive determination. Since our outreach efforts began, we've continued to see a steady increase in the number of virtual currency exchangers registering with FinCEN. As the financial intelligence unit for the United States, FinCEN must stay current on how money is being laundered in the United States, including through new and emerging payment systems so that we can share this expertise with our many law enforcement, regulatory, industry, and foreign financial intelligence unit partners and effectively serve as the cornerstone of this country's AML-CFT regime. FinCEN is certainly sought to meet this responsibility with regard to virtual currency and its exploitation by illicit actors. In addition to our efforts on the regulatory side, FinCEN's analysts are working hard to stay ahead of the curve in understanding emerging payment systems and related financial flows, including how they're exploited by bad actors and to put that information into the hands of our law enforcement and regulatory customers who need it most. Virtual currencies are a financial service and virtual currency administrators and exchangers are financial institutions under our regulations. Any financial institution and any financial service could be exploited for money laundering purposes. What is important is for institutions to put controls in place to deal with those money laundering threats and to meet their AML reporting obligations. FinCEN's main goal is to ensure the integrity and transparency of the U.S. financial system so that money laundering and terrorist financing could be prevented and where it does occur, be detected for follow-on action. Every financial institution needs to be concerned about its reputation and to go out of its way to show it is operating within the transparency and integrity within the bounds of the law. And it is in the area of transparency where some of our more recent concerns arise and some of which I think were brought up by the last panel. Liberty Reserve, a web-based virtual currency known to most in this room, I think, was one of our earliest concerns that resulted in a criminal indictment, of course, by the U.S. Department of Justice, as well as a 311 action by FinCEN under the USA Patriot Act. FinCEN designated Liberty Reserve as a financial institution of primary money laundering concern in May of 2013, the first use of section 311 authorities by FinCEN against a virtual currency provider. Liberty Reserve was widely used at the time by criminals around the world to store, transfer, and launder the proceeds of their illicit activities. Liberty Reserve's virtual currency had become a preferred method of payment on websites dedicated to the promotion of facilitation of illicit web-based activity, including identity fraud, credit card theft, online scams, and dissemination of computer malware, and some of the child exploitation that I think folks mentioned earlier. It sought to avoid regulatory scrutiny while tailoring its services specifically to illicit actors. More recent concerns include the use of Bitcoin on Silk Road and the Darknet, which led to a major money laundering indictment discussed again here earlier. Recent allegations that the compliance officer at a registered Bitcoin exchange were engaged in money laundering conspiracy involving the sale of drugs on the Silk Road, and reports that new companies and cryptocurrencies are being established with a stated goal of reducing transparency. However, on a more positive note, we're also starting to see instances where the virtual currency industry is taking steps to increase transparency in this space. In addition to registering with FinCEN, some virtual currency exchanges are beginning to comply with reporting requirements and are filing suspicious activity reports with FinCENs. Suspicious activity reports or SARs are just what they sound like, the report of suspicious transactions. While the dollar threshold differs slightly by industry, if a money transmitter knows, suspects, or has reason to suspect that any transaction or attempted transaction is suspicious, and the transaction or attempted transaction involves or aggregates to funds of $2,000 worth, $2,000 or more, as SAR is required. It's encouraging to see some players in the virtual currency industry taking their responsibilities seriously. Legitimate financial institutions, including virtual currency providers, do not go into business with the aim of laundering money on behalf of criminals, and legitimate customers will be drawn to virtual currency or administrators or exchangers where they know their money's safe and where they know the company has a reputation for integrity.  Will it be transparency, integrity, and legitimacy, or will it be shadows, criminality, and the risk, like of Liberty Reserve, of extinction? When I spoke on this issue several months ago, I closed with a challenge to our great innovators, which I think Chip may have just repeated here today, which is I asked them to extend their focus and devise creative solutions for preventing the abuse of virtual currencies by criminals. That challenge remains, and perhaps with even greater urgency today. I think we can all agree that the stakes are too high for both the industry and the government to allow virtual currency systems to be used by bad actors. FinCEN will continue to draw from the knowledge we've gained through our regulatory efforts, use of targeted financial measures, analysis of the financial intelligence we collect, independent study of virtual currency, outreach to industry, and collaboration with our many partners in law enforcement to protect the integrity and transparency of the US financial system. And with that, let the questions begin. I'll ask the elephant in the room question, because this may be the only room where we've got Jennifer Shastry and Matt Green sitting within five or six feet of each other. So my question is, to the extent that you're willing to say anything, what would you think about something like Zerocoin, which will literally remove any traceability to the identity of people doing transactions? I think the last panel alluded to this issue, and we started down the road of talking about this, the policy issue at stake, and of course at FinCEN, what we care about is protecting the US financial system from money laundering and terrorist finance. So that's our angle of how we look at this, and this is what we're regulating for. And so our rules are designed to do a couple things. One is to prevent dirty money from coming into the US financial system. That's one thing we try to do. The other is to report on it when we think it's in there. And so there's always kind of a sliding scale of trying to have a balance between those two things. But another thing we're trying to balance is privacy, a very real issue of individual privacy, data privacy, privacy in your transactions with the also very real need to have some level of transparency to prevent the abuse of the US financial system by illicit actors. And so it's where exactly on that spectrum we should be is the policy question that I think everyone's trying to come to grips with. It's an issue that I know is being discussed this very week at the Financial Action Task Force which is the international standard-setting body for anti-money laundering and terrorist finance. Different countries have different perspectives on how they look at data privacy versus needing to protect the nation from illicit actors. Different things happen in history to change where folks think that balance needs to be. Obviously after 9-11 we felt one way and that spectrum, it's probably a sliding scale on how you feel over the course of history and then given years. But at this point where we are in this country is seeking a certain level of transparency around financial activity in this country. And I guess I would take, there was a comment earlier kind of comparing the BSA and maybe confusing it a little bit with NSA and what they do. So let me try to pull that back apart. So I think when we were talking about revelations in the last year that have come up through releases of NSA information and Snowden and other things, we're talking about an issue in this country of was there a collection of information that the public didn't know about and that the public disagrees with and thinks it goes too far on the data privacy side in the wrong direction. That is very different than the Bank Secrecy Act which is a public statute. What is collected is on our website. You can see every single piece of information that is collected under the BSA regime. Every time there's a thought that we might collect some new type of information or extend the collection that's done through a public rulemaking process. Most recently when Chip was in the government thinking about beneficial ownership and whether we needed to collect more information on that, he did a city to city tour, asking people of the public to come in, be part of hearings and to comment on whether this was a good idea. That's a very different situation I think when you start talking about what's happening in the BSA public rulemaking space versus what's happening perhaps in the intelligence community. Both have different rules but they also have very different ways of doing business. Thank you very much. So perhaps some questions. I don't know who's got the microphone. I saw Jim Harper raising his hand first but I don't know if the microphone is around. The microphone seems to be gone so perhaps I don't wanna hold the program up so there we go. Here the microphone has arrived, okay. Point well made that the BSA and the NSA are different things. I just wanted to clarify that a little bit because I touched on it only very briefly. A pair of cases after the passage of the Bank Secrecy Act in the early 1970s created the legal doctrine that the National Security Agency uses to as its basis for collecting data about all our telephone calls. So the California Bankers case in US versus Miller were precedents that underlay Smith versus Maryland which is the telephone records case. I think I just wanted to clarify that. No confusion about the two. I won't ask whether you can confirm that the NSA does not collect financial information. I would refer you to the National Security Agency. We'll try to take that up with them. Okay, next I guess. Jerry, we have a question here. Jerry Brito. So recently two men were arrested in Miami charged with violating Florida's money transmission laws and apparently they met each other on local bitcoins which is not necessarily an exchange but it's a site that allows it to form where people can speak and find each other. How would Vincenzo's guidance or the BSA apply? Sure. And what's your general thoughts on that case? So my general thoughts, because great, that's where I was gonna start. So my general thoughts are that that might just be an example of where our AML regime is working. So you're always gonna have mentioned, I think in the prepared remarks that any financial institution, any financial service can be exploited by bad actors. I think we've seen through the test of time it is. They all are at some point exploited by bad actors. And so the whole point of the AML regime is to try to mitigate those risks and to respond to those risks when they do occur. So to me, in a general sense, this is us seeing our AML regime in this country at the federal level and at the state level working. In terms of how we would treat those same individuals under our rules, we have a fact in circumstances kind of test for every situation. So this is where I give you the really wormy answer of it depends on the facts and circumstances, but it is in fact true. But let me give you an example that we have a great analyst who's really into cryptocurrencies and knows them really well, follows everything. And we're having a chat yesterday about the dealers that advertise that if you wanna buy Bitcoins, meet me in the local Starbucks, give me your cash, I'll give you Bitcoins. And would that be an exchanger under our rules? And then we got into a debate because we're really geeky at FinCEN, but we did. There was a whole room full of us debating this issue. And I think the common belief for us is yeah, because essentially you're taking money from the public kind of at large and giving them value in return or something that substitutes for value, which is Bitcoin. So under that circumstance, that person would be required to register as a money transmitter with FinCEN. I'm sorry. So the website at which these exchangers find each other, the website that nearly facilitates. So are you asking whether they would register the website or themselves personally? They would have to register the business, whatever that is. And so we would get into a discussion with them of how they're organized and what that would be. Okay, so I think I've got, I saw Carter, then I saw Carol, then I saw Cashmere. And I don't know where we'll, we might run out of time after that, but it's. Yeah, just to follow on on that Florida case, because that's a really interesting one. And I shouldn't have been surprised that there are special money laundering laws in Florida, but I was, I don't remember my any advice. And, but it did raise the interesting question of, what does FinCEN sort of policy on how you view extra layered on state laws or regulations? Do you encourage them? They exist in some states, they exist in others, mostly as criminal statutes as I understand, but not as banking regulations. Most of the states just say comply with FinCEN's rules. So every state's got some level of its own laws and regulations and licensing requirements for financial institutions and those, they aren't all exactly the same, which is part of the rub that folks find it difficult to navigate, but every state's got something and they all cover banks in one way or another. And then when you get into the non-bank financial institutions, which is where we're finding virtual currency or digital currency, how they're covered depends. I think we heard Ben Loskey today say that he thinks the New York's gonna go in the direction of defining this under their money transmitter laws or laws yet to be determined like we have at the federal level. So this is just, we know this exists. It's not that uncommon, it's true in this space, but it's true in any number of business spaces, criminal law spaces where you have both state law and federal law that apply of concurrent and overlapping jurisdictions. What we try to do to deal with that, to keep the burden as low as possible on business and to have consistency in the way we give a regulatory approach, is to work as closely with the states as we can. There's something called the Conference of State Bank Supervisors, which is where all the state regulators belong to and they come together and try amongst themselves to have some commonality. They're engaging in more and more joint state examinations. So if there's a entity that operates and is licensed in more than one state, you might think of it in a money transmitter, like a more traditional money transmitter, like a Western Union money gram or something like that that's in every state, I think. Several states will come together and do a joint exam together to give that consistency. Vincent Will has started going in on some of those ourselves as well to give that federal to state consistency. There's probably more work we can be doing, but it's an issue that both the states and at the federal level, we take seriously. Thank you, so good. Carol, I think, and then we had Kashmir and I've got it. Thank you. The Interpretive Guidance last March, a year ago, seemed to affirm the position that the Department of Justice had taken in the prosecution of the EGLE case back in 2007, 2008. And at that time, the declaration was that it was a money transmitter and a MSB for BSA purposes. There were letters that were written in conjunction with the rewrite of the MSB regulation in 2009 or 10, and then again with the prepaid regulation encouraging that maybe a new category of MSB be created for digital currencies or virtual currencies. As you start to deconstruct what goes on in the digital virtual currency world, there really are multiple types of functions, and I know that the guidance that you put out made it clear that you weren't doing currency, that it wasn't currency exchange because currency exchange was defined to be fiat currency. Are you giving any kind of thought of looking at that there is a currency exchange function and possibly rewriting the definition of currency exchange to accommodate that, and then looking at the second piece of it of what really constitutes money transmission and possibly even reinstating the concept of stored value when you start talking about digital wallets where value is held. As I said, there are at least three or four different things that are going on here. Sure, so we considered, and Jim can tell you because he was director of fencing at the time, so we, i.e. him, and the people working for him at the time, considered all of those issues as I understand it and purposely went in the direction where we are, and we're pretty comfortable with it. Let me explain what that is, why we're comfortable with it and how we got there in a moment, but just to go back to the eagle 2007, 2008 timeframe, one thing that would have set that apart from where we are today, there's probably a couple things. Back then, to charge someone with the legal money transmitting business, prosecutors were using the state law. So we talk about federal and state law. There was not yet the Foley, as I don't think yet at that time, we had the Foley, the registration process in place yet at FinCEN, and so most of those illegal money transmitting cases were brought using state law. Since that time, we now have the registration process in place at the federal level. It's pretty streamlined. There's no cost to it. So businesses are tending to go that way and prosecutions are tending to rely more on the federal system at this point, maybe more of a nuanced detail than important. In terms of why did we go the way we did in terms of defining virtual currency exchangers and administrators under the money transmitting law? So before the guidance in March of last year, yes, last year, about a year or two previous to that, there was a change in the rules to change the definition of money transmission. And that was done purposely with the idea of emerging payment methods that were already being, we saw them in the marketplace, we knew there was more coming and wanted there to be some flexibility around how we would define the transmission, not just of fiat currency, but other things of value. And I always write it down because I can never remember the exact construction, but I think it's other value that substitutes for currency. So that was the phrase that was added into the rule for money transmitter that would give us a certain amount of flexibility that as things develop, as things change, we could throw it into the preexisting rules. The reason that that's important to us is because it gives a level playing field, right? There's all kinds of types of financial institutions out. They're all types of financial services. Generally, we're looking for them to have the same principles in place to protect the US financial system, reporting requirements, AML program controls to prevent dirty money from coming into the system. And we wanted them to get into that preexisting regulatory environment that all other institutions use, all other services are a part of that. At the end of the day, if there's a change and all of a sudden Bitcoin's thought of as a commodity, quite frankly, it's gonna have many of the very same AML regulatory requirements. So it's a little bit apples orange, who cares at the end of the day, as long as we've mitigated the risks, as long as we've got the controls in place. I think we have time for one more question. I think Kashmir here will head her hand up. I was gonna ask you, you have Bitcoin companies that are starting to register. I was wondering if you have any other virtual currency companies that are registering. And then you said they are starting to file SAR suspicious activity reports. And I was just curious how those compare to SARs that you would get from a normal money changer. Are people rave about how great the SARs are and how well written and how useful. So it's not many at this point, quite frankly. It's still pretty low in terms of the number of, we do have different virtual currency exchanges and administrators that have registered with us. It's not just Bitcoin. My folks tell me that we're up to over 400 different types of cryptocurrencies at this point worldwide. So there's a lot out there. And we're getting registrations from different folks. But overall, from what I'm hearing when we, the companies that are filing SARs know what they're doing and they're doing a great job of it. Great, okay. So we're about out of time, but we should thank Jennifer Shastry for a really interesting update. Thank you.