Untold Stories: Brian Hoffman From Silkroad To OpenBazaar

OpenBazaar founder Brian Hoffman talks about leaving his elite government job to grow a startup but covers some fascinating ground as well as:

  • How he took the good ideas and good tech of Silk Road and DarkMarket to create OpenBazaar

  • How far ahead government technology is than we know

  • What it’s like to go from privilege to understanding the wider world

  • How building large, peer-to-peer networks tends to skew toward centralization

  • How government agencies are at odds over crypto, with some using it to catch crooks and others in clandestine operations

  • The rollout of OpenBazaar’s app Haven

  • The importance and moving forward on better cryptography for crypto

  • How Brian’s in-laws experience of the Iranian revolution changed his worldview

  • How taking yourself too seriously can backfire

  • And what it was like for Brian’s boss to see his name in Wired magazine before he did.

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Charlie Shrem
Hey, everyone. This is Charlie Shrem and you're listening to Untold Stories.

This is a show where we dive deep into the lives and personal histories of some of crypto's most influential leaders, and find out how the crypto movement truly came to be. Let's dive in.

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Throughout the early days of the Bitcoin space, which eventually developed into the Blockchain all coin space, but originally in the bitcoin space you couldn't be involved in the space without knowing that the big elephant in the room is Silk Road. My background in the space has run through, my story has Silk Road weaved through it, and most early bitcoin people have some interaction with the Silk Road and as much as you say how bad it was, which it was, the concept of having a free market that's not controlled by any single party is that libertarian and narco capitalist view and if it wasn't for Silk Road, Bitcoin, in fact, the whole space that we know about today, wouldn't exist, and you have to admit that.

So, you look back at the early days of Napster, and we all know what Napster is like... Not we all, but most of my listeners here have probably used Napster, Limewire, eDonkey, one of those torrent things sites to download of course legal music and legal movies, of course, 100% and that eventually, that technology, that was so bad, and all the music industry would talk about how bad it was, and the MPAA and the FBI would have the big banner when you watched a movie, "This is the worst technology in the world. We should make it all illegal." If it wasn't for that technology you wouldn't have Spotify, Apple Music, Pandora, none of that would exist. All the technology was moved over.

My next guest, Brian Hoffman, realized that the technology behind the Silk Road, which then became DarkMarket, the ideas behind it are good. And the technology behind it are good, and that's what really makes bitcoin and the crypto economy here something that is so important. So, he took it upon himself, when probably the whole world told him it was a bad idea, to fork that technology and to launch OpenBazaar. Brian, welcome to the show.

Brian Hoffman
Thank you so much for having me. That's quite an intro.

Charlie Shrem
What do you think about what I just said?

Brian Hoffman
I think it's clearly one of the most fundamental drivers of Bitcoin in the early days is Silk Road. There's clearly no other more basic use case.

Charlie Shrem
For better or for worse. It is what it is.

Brian Hoffman
Yeah, for sure.  You have a currency, you've gone to the lengths of proving that transferring value works, but what's next? It's trading and exchanging goods and services for that currency. So, yeah, it just was a no-brainer. I think it clearly did do a little bit of gaslighting across the world, with it being so focused purely on illicit goods. It's hard to think what Silk Road would have done if it had been more broad, but clearly that was where people were interested in using bitcoin initially.

Charlie Shrem
Of course, in any new form of money, or any new form of information, or any new technology, it's the ones that are being pushed out of the other systems, that are constantly looking for new ways to do whatever they're doing, are the ones that are going to go to that new technology first. It's not to say that it will always be like that, but look at the credit card industry, right? There's a movie, all my listeners should watch it, it's called Middle Men, and this movie talked about how using credit cards over the internet wasn't pioneered until the adult entertainment industry actually was the one who pioneered it. Because here you have an industry where people want instant gratification and adult entertainment online, and you can't mail a check or pay cash for that, but the technology to do credit card processing over the internet wasn't really there yet.

Brian Hoffman
Yeah, that's true, and people often forget that the first E-commerce transaction on the internet was actually a marijuana deal between college students I believe at Harvard or MIT. I can't remember exactly where.

Charlie Shrem
Was it really?

Brian Hoffman
Yeah. Exactly. So, early adopters were the fringe users for sure. But generally those fringe users don't become hundred millionaires and billionaires like we're seeing with crypto, so there's clearly an even more complex results coming out of this because you're creating wealth, not just economic opportunity. It's interesting to see the first era of bitcoin early adopters grow into this more mature, more wealthier-

Charlie Shrem
Did we grow or did we just be pushed aside?

Brian Hoffman
You mean the early adopter group?

Charlie Shrem
The people, yeah. Do you think we've grown up? Are we just still those people, but wearing suits and ties now? I only wear flip-flops, actually. You know this.

Brian Hoffman
Yeah.

Charlie Shrem
But have we been pushed aside, or have we grown up and now we're the big boys in the room?

Brian Hoffman
I think that there are certainly some folks who have parlayed what they got early on into other businesses, and things like that. We clearly have the Coinbases and the Geminis and all these. It wasn't that long ago that it was just a rumor that the Winklevoss twins are going to get these coins, and then they did, and what are the going to do with it?

Now, it's this very mature exchange business that's regulated, all this stuff, and that has happened very quickly, much more quickly than any of the other areas of the financial industry, so in that respect it has matured and grown. In other cases, you have folks like maybe yourself and Fluffypony and others that are still doing what we're doing, and it's just part of the community. So, yes and no, I guess.

Charlie Shrem
You just put me in the same category as Fluffypony. I'm flattered by that, thank you.

Brian Hoffman
It's hard to put anybody in his category, really.

Charlie Shrem
I think it goes towards... What people don't realize is that the biggest trolls online, like yourself, and that's a compliment, by the way... and Ricardo Fluffypony and all these other guys, WhalePanda, in real life they're actually some of the nicest people you'll ever meet.

Brian Hoffman
Oh, yeah, definitely. I remember meeting Ricardo in person the first time, I think it was at Satoshi round table, and just had a great conversation. I think we all have a lot of overlap on our ideals as how we ended up here in the beginning. I think online there tends to be a lot of tribalism and fighting back and forth, of people misconstrue statements, or you shoot your mouth off at someone who has a connection with someone else, and it just becomes this huge brouhaha.

But, one of the things that was so interesting about this early punk rock movement of bitcoin was just that there were some odd characters, and it there's a lot to criticize, there's a lot to comment on, there's a lot to compliment. It's messy, but that's what made it fascinating. In a lot of ways, if we all went to go work at some very black tie financial firm doing bitcoin, you'd probably get bored of it and leave anyway. These personalities are not the type of people that lend themselves to that kind of work.

Charlie Shrem
What you did in 2014, rarely do you get pivotal moments that really show that crossover between the crazy early adopters into the next wave of businessmen and people that are going to really make the thing what it became. So, in 2014 when you forked DarkMarket, which was, if I recall, Amir Taaki was one that was really pushing for DarkMarket. Amir Taaki, who's a very, very, very polarizing figure in the early crypto days, who's pretty much forgotten, never talked about in the news circles.

Most people don't know who he is. If you bring him up at a crypto conference, it's only the old wise men with the beards, "Oh, I remember that young whipper snapper," but no one really remembers him, but he was such a polarizing figure in the early days, and then what you did, and what was interesting was he basically said, "I want to take Silk Road, I want to take the technology behind it, and I'm going to build out DarkMarket," and I remember it.

I have to tell you he came to my house. I was on house arrest. He came to my house in 2014, came to my parents' basement in Brooklyn, and showed me the demo of DarkMarket and said, "I'm going to demo this in a few weeks at a conference, and no one knows about this yet," and I was like, "Wow, this is crazy. What are you calling it?" and he said, "I'm calling it DarkMarket." Then, it was a few weeks later when you decided to take DarkMarket and launch OpenBazaar. Can you tell me how that all happened? Because that was the pivotal moment from you saying, "Hold on, hold on, hold on. This is really good technology. If we launch this DarkMarket, then we're not really changing who we are."

Brian Hoffman
Yeah. There's so many things that he had his fingers in, in early days, that were so impactful, especially on my perspective of things. Because when I came into the space, I was a programmer, and I wanted to figure out how to get involved with bitcoin development, but the bitcoin core product is pretty high-bar excellence to try to participate. You're doing proofreading, things like that, copy reading to get started. So, Amir had started Britcoin, which was a complete alternative implementation of bitcoin, and they were building a complete different full node software stack, which was crazy because everybody was saying, "We don't need another one, and it's too complicated to do," but he was doing it. Then, he built DarkWallet, which was-

Charlie Shrem
I remember DarkWallet. Yeah.

Brian Hoffman
I think it was the highest crowd raised Bitcoin product at the time. I think they raised $20,000 or something, $50,000, not much money by today's standards to do DarkWallet, which is thumbing its nose at the regulatory and stuff like that. Basically just built for money laundering and mixing and things like that and they were proud of that. They took that dark branding and parleyed into this DarkMarket concept which was an extension of that and it seemed brilliant. It almost has the same feel as the Samourai guys have now. It's this very intense privacy focused-

Charlie Shrem
But Samourai is more focused on privacy and allowing you to have your own keys. Amir's DarkWallet was anarchist in the negative sense and I want to be completely away from the government and be this dark and allow any type of listings and that branding and that mantra, if you launch with that, that may at the time might not have been what most people in the space were motivated by.

Brian Hoffman
No. I think he opened up people's mind's to what the potential of something like bitcoin could have on the entire world. I remember when I forked DarkMarket, that first week, WIRED Magazine called me on my phone. I still don't know how they even got my cell phone number. They called me and they were just like, "Oh my God. This concept is going to destroy the world. What happens if Fiat goes away and the market places are all black markets."

It's this very tantalizing vision of what happens if we just blow up the incumbent trade world.

Charlie Shrem
Let's go through the thought experiment here for a second. What happens if that were to happen?

Brian Hoffman
I think over the last 10 years, we've realized it's a very hard thing to do, to unseat that... The world's economy is massive. As successful as bitcoin has been, it's still nowhere near unseating all of that. But what would happen if it did? It's hard to say. I think it would take quite a while, but it could change it in many, many interesting ways. Think about state's borders. Once a digital currency is literally the world's reserve currency, what does that mean? You're going anywhere, anytime. You're spending your money equally wherever you go.

Charlie Shrem
Well, there's two different schools of thought on that, right? So, there's the school of thought and you know this very well. There's two school of thought. One school of thought is that bitcoin will become this global currency for all to use, consumers, like me and you transacting. And the other school of thought who won't outright say it, but this is what they want and what they see and what they're building towards, is bitcoin becoming this global reserve settlement currency between all these other currencies and payment systems around the world. And I've had guests on the show advocate that.

Brian Hoffman
Yeah. I hate to sit and push on one of those so hard in a very passionate fashion, because I'm not really sure what happens there. I can see either option being likely but, I think early on, we just assumed that bitcoin would be the strongest currency and it would be very fluid and you'd be able to transfer it and the fees would be low. We were always pitching bitcoin as the lowest cost-

Charlie Shrem
Dude, I would pitch it as free. I would say it was free.

Brian Hoffman
Free, negligible.

Charlie Shrem
I would never even say that it would have any fees. I would say that it's free.

Brian Hoffman
When we started OpenBazaar, I think the fees were four or five cents. That would just negligible. I remember pitching-

Charlie Shrem
Yeah. It was so minuscule, the wallets just absorb it.

Brian Hoffman
I remember when we talked to the investors in 2015. We were still like this is a free market place essentially in all aspects. Now it's shifted a lot. Part of that is growing pains of a network where people are not positive how they're going to scale it and how else do you continue being positive and optimistic about that outlook if you don't know how to solve that problem. Do you invent layer two? You come up with different positions of what it is.

And, if layer two does work out, then maybe layer one is more of a settlement layer. I don't know how that would work exactly. I've heard really great arguments either way. But, that's not my specialty. I don't focus daily on that aspect of it. I'm not an economist. I'm not building a Bitcoin Core right now, so I just try to stay up on those topics.

But, ideally for our business and our project it makes sense to have some kind of viable transactional currency that doesn't cost too much.

Charlie Shrem
Your business is a socioeconomic experiment because your business is... Tell me if I'm wrong, your business is building the ability for people to have virtually lemonade stands in their houses and allow them to transact with anyone anywhere in the world, person-to-person.

Brian Hoffman
Yeah. Exactly. And I think as that grows and matures, you can see it expand even business-to-business and business-to-consumer and all kinds of different models because that underlying technology is reusable, it's scalable, in a much more different way than bitcoin. Bitcoin, there's only a finite amount of space in the blockchain and people fight over that resource and the way that our network is built, it's much more similar to BitTorrent where the more people that use it, it actually gets more efficient.

I think trade, the currency piece of it is where challenge lies, the payments piece. We've had to expand beyond just offering bitcoin because of that constraint. But, in terms of the network and the way that trade actually happens in the internet, that's infinitely scalable.

Charlie Shrem
Well, I think that's in the value of the whole concept of free market is you should allow anyone to use whatever currency they want to use and so the more people that are on the OpenBazaar platform, it's similar to the way BitTorrent works where you have more seeders and you have more people and more connections to each other and more nodes and it allows the technology and the network to grow.

Brian Hoffman
Yeah. Exactly. Building large peer-to-peer networks, which is essentially what OpenBazaar is, it's not easy. People have gone to it and gone away from it millions of times. In fact-

Charlie Shrem
Why?

Brian Hoffman
Because centralization is just so tantalizing. If you don't really have a need for centralization then why would you chose something that's slower to build, harder to build, more expensive to run?

Charlie Shrem
See, this is what I don't get it. I'm sorry for interrupting you, but I can't wrap my head around this. I had a guest on the show the other day, and she's a consultant for Enterprise Blockchain. And I just couldn't wrap my head around it the whole show and when you listen to it, you can really hear me struggle with this, and I think I flat out said, I said, "Centralization is so much better for your clients. It's faster, it's simpler, it's technologically easier. Why in God's name do they need decentralization?"

Brian Hoffman
That's a great question. I was talking to someone last night who was like-

Charlie Shrem
I don't get it.

Brian Hoffman
"A friends trying to figure out how to get healthcare, health records on to the blockchain." And I actually came from health records before bitcoin. And I'm like-

Charlie Shrem
Did you really?

Brian Hoffman
I don't understand it. I think that there's this feeling that maybe this new technology is so different when you don't understand what it really is that you're like, "Oh, this could solve all our problems. This is the next cloud." And it's not the next cloud. But even cloud was just a rebranding of things that we already had, data centers.

Charlie Shrem
It's with any new thing that seems cool. I'll give you another example that has nothing to do what we're talking about and everyone is going to think I'm crazy for even using this example. But, it just popped into my head. Where you live, do you have traffic lights or do you have those roundabouts?

Brian Hoffman
Oh yeah. Definitely traffic lights.

Charlie Shrem
Okay, so America, for all my European friends here, America loves traffic lights, and we don't have roundabouts. It's just not a thing. In fact, Americans don't even know how to use roundabouts. Where I live in Florida, the City Manager, I think he traveled to Europe a few years ago and he fell in love with these roundabouts and he's been putting roundabouts in every single intersection in our city.

So, Brian when you visit Florida with your family, and you come to Southwest Florida, you will see roundabouts everywhere, and the problem is people don't know how you see them. So, the running joke is that we're act going to put roundabouts in our houses now. The hallway between my bathroom and my bedroom, I'm going to put a roundabout there. Because it's new technology, and we get so excited about it, we just use it for everything.

Brian Hoffman
When all you have is a hammer, everything looks like a nail, right? So, it's true. I've had that problem with-

Charlie Shrem
It's not a bad idea to experiment, though.

Brian Hoffman
No, certainly. I was dying... I worked at Booz Allen Hamilton before Bitcoin and that's where Edward Snowden worked and within that company I was trying very hard to push for exploration blockchain, and I think the only thing that we ever were actually using it for a sustained law enforcement to try and track down transactions and things like that. There was no interest in actually trying to apply it to some kind of problems within the company or for our clients. They thought that was stupid, which maybe it was, but they had no interest in it.

And, it's funny, a year after I left, they started a whole blockchain practice and they're very into it.

Charlie Shrem
So, you studied Computer Science at James Madison University and then eventually, your career started, you worked on a lot of government projects that I'm sure you can't tell us about. And, you did some DOD. You worked with Booz Allen Hamilton, which everyone knows, if you've heard of Edward Snowden, who actually just spoke at a bitcoin conference last week.

So, I have two questions. How and why? That's one question. How and why did you jump to bitcoin? And two, what was that like working on these classified programs?

Brian Hoffman
Yeah, sure. So when I left school-

Charlie Shrem
I'm interested. This is cool.

Brian Hoffman
When I left school, I got the job offer to work at Booz Allen, which is not weird for people in this area. DC area is all general contractors for the most part. But I went to that team, and we were working on identity stuff, so biometrics, user authentication, things like that, and we were using these old LDAP directories, old school technology to track identity information. Then it was graduated to databases and then it started, we want to share these identity databases across different clients and be able to identify people across different services, single sign-ons and stuff like that.

Charlie Shrem
You can type in Charlie and then scan every video camera around the world and find me?

Brian Hoffman
Oh, you'd be amazed at the kind of stuff we were building, way back in 2005, 2006 we had this eye scanner technology that was used at military bases at their gates, and it would be able to identify every person in a vehicle from 100 yards away and run it against an identity database to see if there was some unknown individual in the car. And, it could do it if you were laying and all this stuff. It was crazy.

Charlie Shrem
What if there was a mannequin in the car? With fake eyes.

Brian Hoffman
I don't recall if it would detect a fake person, but it would certainly be able to identify it was a real person there and that they were not in this database.

Charlie Shrem
That's crazy.

Brian Hoffman
And we were testing that stuff on top of parking garages. In northern Virginia, there's a parking garage a mile away or 100 yards away, we'd try to run these tests. We were doing all kinds of crazy stuff like that. In our lab, we had all the latest and greatest retina scanners and things to get it. It was really, really interesting stuff but one of the things that was weird about it, we had these clunky federated system that you had to set up and configure and it was weird. It used PKI, public key infrastructure in order to track identities.

Charlie Shrem
Can they crack AES256 and PKI and things like that?

Brian Hoffman
I have some friends that have worked at NIST and still do, and they claim that there's a lot of work being done that we'd be very surprised about it terms of quantum cryptography and things like that. So, I have no doubt that that stuff is coming. I don't know what the real state of it because you have to be working there to know and I…

Charlie Shrem
Is bitcoin safe? Or hardware wallet's safe?

Brian Hoffman
I think at the moment, yeah. I really do.

Charlie Shrem
I don't care about the moment. I mean 10 years down the road.

Brian Hoffman
I really think there's going to have to be some game plan for moving. I do. I think if there's-

Charlie Shrem
Moving what?

Brian Hoffman
Moving into some other options. Some kind of cryptography that's more safe.

Charlie Shrem
Luke Desherlia and others have said that they're interested in doing that. If technology exists to break the cryptography that's used now.

Brian Hoffman
Oh yeah. Definitely. The things that I'm worried about is if there's people who have put lots of money into trusts or something or they can't touch these things, how are they going to move them? I'm not sure about the mechanics, but I thought I remember saying, some of the people like block stream locked up their coins for a certain periods of time. What happens if there's some kind of vulnerability and you don't have the ability to move things.

Charlie Shrem
Yeah, you use time lock verify and things like that, of course.

Brian Hoffman
In open, lightning is all built on bla, bla, bla, all this stuff. What happens. I think there are things that we have to be thinking about. It's not like the government's going to like, "Okay. We did it. Hey everybody, it's out." They're going to be using it for years probably before we even know that it exists. That's just the way it is.

I was about to be working on a project right before I left Booz and it was related to working with classified agencies and what they were pitching as possible and what they were already doing with bitcoin was scary. They're not stupid. They're looking at these things.

Charlie Shrem
What type of technology existed before we knew about it? I heard the military used GPS years before we even knew about it.

Brian Hoffman
Yeah. That's a good example. As far as I know, Tor, that came out of the Naval Research Lab.

Charlie Shrem
Oh good point. How did that happen? How did something like Tor that was such big tool for the government out of the navy research lab, became such a tool for the privacy movement worldwide now. How did that happen?

Brian Hoffman
You think about these agencies. You have CIA which is clandestine, so they're looking for... Their agents go into other countries and it's not like those countries sanction hat kind of stuff, they're spies.

Charlie Shrem
Oh, of course not.

Brian Hoffman
So, they're coming in and they're trying to use cutting edge spying technology. The things that we're trying to prevent attacks from others with, right? But, they're exploiting that. So, if you think about bitcoin, let's say bitcoin's used for money laundering. Well, hell yeah the CIA is going to use it for the same thing, right? How do we get money for tactical missions in other countries?

Charlie Shrem
Do you think the CIA and other government is using crypto even early on in order to help with various activities around the world?

Brian Hoffman
Oh I'm sure of it. I'm sure of it. And what's even weirder is that-

Charlie Shrem
I think so too.

Brian Hoffman
... you have agencies like FBI who are the law enforcement arm and they're trying to bust this. So, they're trying to find these technologies to crack down on them and the CIA is trying to find them to exploit them. It's conflicting perspective on what crypto currencies are for.

Charlie Shrem
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Brian Hoffman
You have agencies like FBI who are the law enforcement arm and they're trying to bust this. So, they're trying to find these technologies to crack down on them and the CIA is trying to find them to exploit them. It's a conflicting perspective on what crypto currencies are for.

Charlie Shrem
Well, when the government does it, it's okay. But when we do it, it's not. That's what their motto is.

Brian Hoffman
Yeah. Yeah pretty much. Anything goes.

Charlie Shrem
Okay, so you have to admit that you're working in a pretty fucking cool industry. Why the hell would you leave to join this trolley annoying... don't you just hit your head sometimes and the social level of these people that you deal with on not a day-to-day basis is just insane. I see you on Twitter sometimes and if my listeners want to really enjoy and have some good laughs, they should follow Brian on Twitter. You're dealing with big boy government people, bureaucrats and you got to deal with crypto people. How do you deal with that?

Brian Hoffman
One of the most frustrating things about working in the government space or large companies with this is that you have people higher up that don't necessarily grasp it and they want to poke holes in it and you have to continually justify to these people why it exists, why we should be looking at it, using it, working with it. It's very frustrating. It's tedious. Now, working in my own space, I only have to work with the people that really believe in this stuff. I'm dealing with people that are passionate about it. It's a completely different approach.

Now, I don't know, it's been over four years since I worked back at a large company like that or with government, so maybe they've changed a little bit. But, it was just so hard. You stood out like a sore thumb, "Oh, it's the bitcoin guy. How much did you lose this week?" It's that kind of stuff constantly, you aren't taking it seriously.

Now, at those classified agencies, they're a little bit more experimental though. They're willing to extend some resources to see if this stuff will work. Okay. We got some skunk works bitcoin stuff. The majority of their money was being spent on how do we use MoneyPak for these kinds of things. How do we exploit the existing banking system. Those things were magnitudes more important that crypto currency.

Charlie Shrem
I don't understand why the government just couldn't create a new... Like a shadow bank and then just use that. Why not just do something like that? Why have to go down and use things like Tor and bitcoin to move money around the world. The US government controls the financial system anyways.

Brian Hoffman
That's a good question. There's a lot of stuff... I can't even share about things that they do.

Charlie Shrem
Tell us.

Brian Hoffman
Yeah. They use existing infrastructure in ways you would be very surprised. You think about... For instance, how would a CIA agent get a fake cover? The CIA does not go to the DMV and say, "Hey we're going to do this illegal thing with these fake identities. Can you give us a bunch of fake identities?"

Charlie Shrem
They don't do that?

Brian Hoffman
There are special set ups where they go to certain…

Charlie Shrem
They have printers and stuff, yeah.

Brian Hoffman
They find ways around this stuff, but they don't necessarily rig it. They have to find exploits themselves, so that everything just operates as normal and they're living within us.

Charlie Shrem
Normally because people will audit these things and they don't want it to be known. It's very interesting how that works.

Brian Hoffman
Yeah and this happens across a bunch of different areas. In terms of crypto, let's say someone wants to purchase some cryptocurrency with a fake identity. A CIA guy is going to buy some crypto to take to Libya. How can he do that? He can't go to Coinbase and get a level three verified identity with a fake drivers license. It's not going to clear. It's going to hit the DMV databases and they're going to prove it.

So, maybe they go to a third party Coinbase. Runs all their identity stuff through a third party verifier, right? Okay, let's go to the verifier. Let's set up something with them. Now, Coinbase doesn't even know. They just ask the verifier, "Hey is this guy a real identity?" "Oh yeah, he's all good." Next thing you know, you're buying crypto on Coinbase with your fake identity. Something like that and so there's things that these companies don't even know. They think they're complying, yet they're complicit in these KYC issues and they don't even know it.

There's all kinds of little things like that, that those agencies are working with.

Charlie Shrem
Did you think that OpenBazaar would be your foray into the space? Did you plan of for it?

Brian Hoffman
No.

Charlie Shrem
When you forked, it just seemed like you just pushed a button and here you are. How did it all play out?

Brian Hoffman
Oh God. Yeah. At the time I was saying I had done a few typo corrections on Bitcoin Core, submitted a PR here or there for that and it was just getting nowhere. So, I was looking for a product to work on. So, when DarkMarket hit, it was awesome, fascinating, this is amazing. And a lot of people felt that way, they thought it was great. And they open sourced the code, so I was like all right this is a perfect opportunity. It's a grounds floor project, seems really approachable, it was written in Python, something new. I'll get involved. And when I reach out to them, Amir was like, "I'm not doing this. We won the money."

Charlie Shrem
You were everything that Amir despised.

Brian Hoffman
At the time though, I was nobody. I don't even think he spent a half second trying to figure out who I was.

Charlie Shrem
He probably didn't. I knew Amir very well in those days. He didn't trust anyone.

Brian Hoffman
Oh no-

Charlie Shrem
Still doesn't trust anyone.

Brian Hoffman
And I don't think he had any reason to. I remember when I reached out to him and said I wanted to work on it, he's was like "Just fork it. There's a bunch of people who want to fork it, so we're going to just list all the forks in the DarkMarket repo, on the read and meet. It will just say, "Hey, here's all the implementations of DarkMarket." And I was like, "Okay." So, he put us in there as the first one and I think we still, to this day, are the only one. I think if you go to github.com/darkmarket or maybe it's darkwallet/darkmarket, but anyway, if you find that repo, it just links to OpenBazaar.

That's how we did it. So, we just forked it and started working on it and then it just became more and more popular very quickly because people were very interested in the idea. And you'd be surprised at how many-

Charlie Shrem
DarkMarket fell by the wayside.

Brian Hoffman
Yeah.

Charlie Shrem
Amir dropped the project a little bit once you took it over.

Brian Hoffman
When I emailed him, I emailed him at his Riseup account because I was on the Riseup mailing list, and he replied back and said, "Look. We're not doing this. It's too much. It's a great idea but we're not doing that right now. We won the money-

Charlie Shrem
I think he was scared himself.

Brian Hoffman
I don't know about all that because I never had too unique of conversations with him about it. Basically when we forked it and he relinquished it, it got a life of its own and then he was more interested in DarkWallet with Cody and they were winning that money in the Toronto Hackathon for DarkMarket. I think that they won that money in order to keep funding DarkWallet essentially.

So, which also got dropped. I don't know Amir really well, but I think he got the solution, it seems like from a lot of perspectives in terms of where Bitcoin was going and got interested in the Rojava stuff and all that. So, they took him away from it.

When we rebranded it to OpenBazaar which was basically out of respect for the dark something brand. You have DarkWallet, you have DarkMarket, which I didn't want to commandeer that since they were working on it and so we just forked it into OpenBazaar.

Charlie Shrem
Where did you get the name OpenBazaar from?

Brian Hoffman
I ran through my head a million times. Free markets, all these things just seemed silly but actually it clicked because my wife is Iranian and the bazaar thing popped up into my head and then open.

Charlie Shrem
Oh yeah. Markets. Bazaar is centralized market.

Brian Hoffman
Yeah.

Charlie Shrem
A shuke.

Brian Hoffman
Yeah exactly. We felt like that's exactly what it was, right? You go to a bazaar. It's this huge conglomeration of all these different vendors. They're all existing, you're talking with them. You're negotiating. You're haggling. You're doing all these things but it's more social than Amazon. We were just taking that world global market online. So, it seemed like a really good fit.

In hindsight, it seemed like a pretty good name. People always comment on it.

Charlie Shrem
What are your... I'm not going to say political views, but what are your life views on the role of governance? I'll tell you why I ask. Because what you're building and I've said it before, is a socioeconomic experiment. It's let's build an OpenBazaar that people can use and act, react and do without having a regulator or manipulator being involved and what ever you want to say about it, it's an experiment right? It's a human experiment.

So, obviously what drives you of course, you're a capitalist, you want to make money, but what drives you maybe and tell me if I'm wrong, is this wanting to see how that would play out but at the same time you did work on government contracts and things like. I'm serious, had you grown up a libertarian or were you always someone who believed in the role of government and then worked in the government. Have things changed for you?

Brian Hoffman
My political views have changed a lot over the years. I remember in college, I went to a predominantly white college in western Virginia, so I was surrounded by a lot of that good ole boy mentality.

Charlie Shrem
Preppy type of thing.

Brian Hoffman
So, 9/11 happened while I was at school and I voted for George Bush at the time and was very supportive of the whole approach we took with the Middle East at the time. Then I got out of school and I started working in the DC area, which is much more diverse and I met my wife whose parents just came over from Iran. She's first generation. It just becomes much more complicated. You're working with a lot of Indian and Asian people and you learn that there's more out there than his hardcore, hillbilly white culture from Virginia.

My ideals have shifted a lot more to “let's think more about people and what are we doing globally here.” And so, it shifted to the other side. But then as I started working with bitcoin, then it starts to go in a different direction with the libertarian piece. My ideals are all mixed up in terms of picking things from here and there.

Charlie Shrem
You're wandering now.

Brian Hoffman
I think it's so fascinating. One of my co-founders Sam Patterson, he's a pretty strict libertarian and he's very convicted to a lot of his thoughts on that. I'm not as fixed in my thinking. I'm very open-minded. But, I do believe in one thing is that I want fairness for people. I want people to be treated properly, and I want everybody to have a great opportunity to succeed in life and I think that cryptocurrency, bitcoin, blockchain, decentralized networks, it's opportunity for technology to help us empower people around the world. Technology is my passion. It's my background. It's what I work in. It's what I'm always interested in, so I'm trying very hard to make sure that my skills and stuff go towards positive things like that.

It's hard sometimes though. You hear people criticize products like OpenBazaar, a lot of these people that are trying to be very compliant and regularity friendly and they look at projects like ours, and they get scared. And, I'm saying when did we get into the mentality-

Charlie Shrem
Fear breeds hostility.

Brian Hoffman
... that everything has to be set by these rules is the way it's supposed to be. Yeah. I know.

Charlie Shrem
After 9/11, we did.

Brian Hoffman
People tell you to take off your shoes, you're like, "Okay." Because we're just so scared of what happens if you don't follow the rules.

Charlie Shrem
That's a great example. At my house, I like my floor, so we ask people to take off their shoes. And I had someone in the crypto space come and stay over for the weekend. I have a lot of guests and I won't say who. He's an awesome guy. Anyways, he stayed over few months ago and I asked him actually, I said, "Can you please take off your shoes?" And he's like, "No." And I was like, "What do you mean no?" And he goes, "You don't want me to take off my shoes." I was like, "you know what, all right. I'll clean my floors when you leave."

Brian Hoffman
Same for me. I grew up wearing shoes in the house. So, it's a little weird. But, I think... I find a lot though within the crypto space and libertarian space, that people are very much willing to say no. You go to the airport, I'm going to opt out. I'm going to do all these things. To me, it never occurred to me to be like, "No."

Charlie Shrem
I've never opted out before and I've seen Roger do it. I traveled with Roger once in 2013 I think, and he would say, "No." I'm like, "Roger, please can we just... because we traveled around the world together and I have pictures. "Roger, please can we just go through this, I want to go home," and he's like, "No." It's like, "Oh my God," and I have videos and he's just getting patted down and the TSA they don't know what to do, they don't know how to handle him.

Brian Hoffman
It's funny though that TSA or law enforcement, when you exert your rights, they're exhausted by that.

Charlie Shrem
Yeah they are just like another one.

Brian Hoffman
"You going to use your rights? Okay. Fine" It's like, why? But, yeah people are busy. It's easy for people to comply and just go on with their life. And that's the same thing that OpenBazaar is trying to solve and I think that's one of the biggest challenges we have as a product and as a business is getting people to break out of that, I don't care, I just want to get shit done mentality.

And it's like, okay I know that you can just go to Amazon and do this, but do you understand what's happening when you're doing these things?

Charlie Shrem
Brian, I think it comes down to motivation. I think that even when you got involved in 2014, and how you got involved was still very much a, we need to change the world, we're ideological, we want to break shit and see what happens mentality. That mentality doesn't exist anymore. No, I shouldn't say that. It's not as prevalent as it was and it's not the main motivation to why people get involved in a space.

You know this. People got in the space over the past two three years for money, to pump ICOs.

Brian Hoffman
Oh yeah. Of course.

Charlie Shrem
So that mentality is not there anymore really as it was and what really moved... I still think that some of the largest breakthroughs in movements that we've broken through as a community have happened between 2013 and 2015.

Brian Hoffman
Yeah and I completely blame that ICO culture of really discouraging bitcoin growth in terms of development and innovation. And it just fermented the whole value argument and all this settlement layer talk, because we saw it as a product. Early on, there were only a few really cool projects you could work on. If I listed off the people that actually contributed code or ideas in OpenBazaar's early days, you'd be so surprised. Blockstream, Coinbase there was really well known people.

Charlie Shrem
Really?

Brian Hoffman
Yeah. And, we extended offers to several people that went and worked at Blockstream and other companies. So, it's a Who's Who roster of people in the space now.

Charlie Shrem
But let me tell you something for a second, as much as people... and I'm not the one to defend Brian Armstrong, I've been a critic of coin base but I was in the room with Brian in 2013 at his house, at a barbecue with Tony Gallippi, Roger Ver, Jered Kenna and Brian was working at Airbnb at the time and he said, "I want to start this company called Coinbase," and I said Brian, "Why?" And he told me why and it was basically because he wanted to open the world to cryptocurrency. But bitcoin wasn't trading very high. It wasn't a crazy moneymaker. Sure, he was one of the first Silicon Valley people but his motivations were a lot purer than people think it was.

Brian Hoffman
Well yeah, but you have to understand that things get out of hand really quickly. We went from a little open source product that we just worked on at night to being a start up that was invested in by Andreessen Horowitz and Union Square and we were in WIRED Magazine. I didn't even know I was in WIRED magazine.

Charlie Shrem
You got the big boys.

Brian Hoffman
I didn't even know I was in WIRED magazine. They published an article about it, citing my name in WIRED and I was still working at Booz Allen and my boss called me from Cleveland. He had taken a flight and he just grabbed a WIRED Magazine to read on the flight. And he found the article and he called me immediately when he landed. He was like, "Is this you? What is this?" Like, "What are you talking about?"

Charlie Shrem
No. So what happened?

Brian Hoffman
It got really, really awkward.

Charlie Shrem
This is the untold story right here.

Brian Hoffman
It was insane. He said it was in the magazine and I was like, "Oh, shit." So I ran down to Barnes and Noble and bought the magazine. I'm holding it as I'm checking out, I can't believe this was happening. And I'm reading it and I'm like shit, what am I going to say because it looks legit. It sounds like it some serious product.

Charlie Shrem
Yeah. WIRED magazine made it look... I remember that article.

Brian Hoffman
My boss calls me in and he's like, "Are you doing this during work hours? What's going on?" I was like, "It's just a side project." He already knew I was into bitcoin, but they're like, "What's going on?" And it just got more and more awkward, but pretty soon after that, we started negotiating the deal with the investors. So, yeah it just kept being weirder and weirder and I remember my boss was like, "You got to choose, this or that."

Charlie Shrem
Uh-oh. You got to chose between the government or going over to the dark side. No pun intended.

Brian Hoffman
Yeah I was like, "Okay, well, I'll let you know." And the next day, I went in there and I was like, "I quit." Because we closed the deal and everything. He was like, "What are you going to do?" I was like, "I'm doing the bitcoin thing." And he's like, "Well, you're welcome back whenever this fails."

Charlie Shrem
No, he didn't say that.

Brian Hoffman
Yeah. Yeah. And he was dead serious and I was just like, "Okay." And that moment was so scary because yeah we had this backing of these investors, but they've back hundreds of companies-

Charlie Shrem
Did you think people were going to follow you or something? Did they maybe see it as a threat?

Brian Hoffman
Nobody I worked with-

Charlie Shrem
I know it sounds silly but in the back of your head you were like, "Well, I have all these secrets and I'm leaving the government to work in bitcoin."

Brian Hoffman
Nobody that I worked with was in it anywhere near as much as me. There were a couple people that were somewhat interested but just very causally. I was that crazy guy.

Charlie Shrem
This is a good movie plot by the way.

Brian Hoffman
A lot of the people were proud because it is an accomplishment to get those kinds of investors interested but I think-

Charlie Shrem
Of course. Andreessen Horowitz is like getting... it's the number one investor in the world. You don't call them, they call you.

Brian Hoffman
Yeah if you think about it, I think right after they invested in us, I think that was pretty much it in terms of really traditional companies. I think they started looking more at doing their crypto fund and stuff. So there were only a handful of startups that were real true startups. Coinbase, a media chain which got bought by Spotify, Blockstack which was one name, us and I don't know there might be one other one that I'm leaving out. But that was it and then they just stopped investing in crypto companies. They were like, "Oh no, this is their roster." Feel a lot of pressure to be successful, especially with a big company like that or a big fund.

And things have changed a lot. God, I remember having conversation with Chris Dixon in Silicone Valley when we were trying to raise our second round and he's like, "What do you think of Optherium," and I remember being like, "Oh Optherium is a clown project. The real developers are on bitcoin. You didn't feel like Optherium was real yet. And, we missed the mark a lot on that. I think we really missed out on being so myopic in terms of just bitcoin and nothing else. I think there's some really, really cool people. Great products and things like that in that space.

Like you said, it's all an experiment. For anyone, even bitcoin to sit here and say this is not an experiment still, it just being very... You're just blinding yourself. We just have to be realistic about that. Some of this stuff is going to get pulled in across different products and can be useful. It may not. 99% may be crap, but if you're not open minded about it, you're never going to find the 1% that's actually good. We missed the boat on that a little bit.

Charlie Shrem
Behind every great man is a great woman or behind every great woman is a great man. From what you told me, your wife, fled or just left Iran to the US, has what she went through changed or opened up your eyes to different view points around the world?

Brian Hoffman
So, my wife is first generation. She was actually born in Chicago, but her parents came over for a college opportunity weeks before the revolution in Iran in '79. That was really dramatic for them because her mom was getting letters from her grandmother saying, "It's really bad here. Don't come back, you have to say there." So, they chose to stay in the states where they didn't speak english and didn't have any other opportunities other than school and what they were going to do after that and then try to figure it out.

My wife is lucky to have that because she grew up speaking Farsi and understanding that there's another part of this world and incorporated that into her view points. I think that's rubbed off a lot on me. I'm really close with the family. They live close by. I think it's been really, really good. For them coming... Her background is from a country that US is practically at war with and trying to understand those view points.

Charlie Shrem
Which is so stupid.

Brian Hoffman
It's so important. It is stupid. And you see a lot of that now within the crypto space between these different products. You see these stupid fights and we're all trying to do the same thing, we're all trying to do the right thing and you get hung up on stupid things. But, it's something you have to navigate. It's really hard. You got to be very patient.

You've mentioned it a couple times on podcasts so far, I try to inject some humor into the situation.

Charlie Shrem
Sure.

Brian Hoffman
Doing these funny videos where you dub over people's voices and things just to bring some humor to situations. For the most part, most people are fine with it. The people that I do the videos about contact me and they're like, "Oh that was so funny. It was great." But, some people just take it so seriously.

Charlie Shrem
I think a little too seriously because they're very passionate abut it but trolling in this industry can flair up sometimes and get a little bit too much, but we just make fun of it more.

Brian Hoffman
Yeah. I think the people that take themselves too seriously are the ones that they end up hurting themselves. That whole Craig Wright debacle, he clearly takes himself extremely seriously and that's where people find something to pick at.

Charlie Shrem
We can't talk about him. I don't want to get sued again.

Brian Hoffman
That's another thing too. That just causes even more backlash.

Charlie Shrem
What the future for OpenBazaar? When can you sit back and say, "All right, we've been successful in this experiment or this business idea?"

Brian Hoffman
Man, I get asked that question. I'm just continuously growing.

Charlie Shrem
You have to understand why I'm asking. You know this, you're not just another crypto startup. What you are doing is you're taking one of the killer apps for crypto, for bitcoin and you're bringing it to market, bringing it to life. So, your success is our success. Your failure could be our failure. Not to try to put pressure on you, but you are leading the charge on that and building that free market and a lot of people are watching and what happens if you succeed and when you reach a critical mass, you'll see a lot of other projects take that technology and take those similar concepts and do things like that based on your success.

Brian Hoffman
It's weird. I feel that we're pretty alone sometimes in a lot of ways because we're one of the last vestiges of the true bitcoin use cases, the core use cases that aren't these layer two extensions and all this stuff. Think about you see companies like BitPan, all these guys are scaling back their point of sale stuff. Most of the spend it bitcoin people are breaking off into bitcoin cash or something else. It's just like who are the big let's spend bitcoin people. You got Gif, you have all these different things. Purse is pretty quiet recently.

Charlie Shrem
Oh man, Purse, I haven't heard from Purse in forever, what are they doing?

Brian Hoffman
Every once in a while I talk with them and it's the same old, same old. There's not big huge things that people are getting excited about in terms of that. But, we are actually and this is pretty exciting for us, because it's been long time coming is that we're a week or two out from releasing our mobile app which we call HAVEN and-

Charlie Shrem
That's a big deal because 90% of things that are going on are happening on the phone.

Brian Hoffman
Oh yeah. Definitely. We're going through our final beta test right now. We have over 250 people using the app.

Charlie Shrem
How will that work though? Aren't these app stores centrally controlled and the whole premise of OpenBazaar is that it's a peer-to-peer network?

Brian Hoffman
It's a real pain in the ass. So, Android and Apple are two different groups as well. Android is super open. As long as the app's not crashing for the most part or you're doing something egregious, they're pretty flexible and we've seen that throughout our process. But, right now, we're still currently working our way through the Apple process. There's a lot of things, a lot of feedback that they've given us and it's funny. The first review, they were selling THC vape pens, and it was immediate rejection.

They're searching for heroin and hit men and all these things. They know what's going on and that creates a very big challenge for us when you have this flexible market place you can do anything on. But, the key thing is our HAVEN app on the iOS app store is going to be a much more constrained experience than the desktop is. That's just the way it is.

But, you can think of it as BitTorrent. The network itself is uncensorable. If you operate on Apple-

Charlie Shrem
Okay, I get it now.

Brian Hoffman
It's just not going to be that complete anarchistic movement. But what it will do-

Charlie Shrem
Will you tell people though? Will you give some sort of, "Hey, you're using this on your phone, these are the freedoms that you're giving up here?"

Brian Hoffman
We tried that and Apple didn't like that.

Charlie Shrem
No you didn't. Really?

Brian Hoffman
Because they flagged it and we pushed our luck a little bit. We had this pop-up when you try to-

Charlie Shrem
But that's what you're supposed to do.

Brian Hoffman
Yeah, well we put up a little pop up that said you can get OpenBazaar or get the Android app and do it and they were like, "No, you can't crap on Apple."

Charlie Shrem
Oh my God, that's great.

Brian Hoffman
"You can't crap on Apple when you're talking about this stuff," so they didn't like that. They we're on that right away. So, we're still trying to negotiate a system with them but we're pretty close. I think we got past all those issues and we're looking really good. So, we're excited to get it out.

But, I think the idea behind it is we're trying to build a private shopping application that uses cryptocurrency that will introduce people to this world and if they're like wow, I need expanded capabilities, then we have the desktop and we're actually working hard to try and figure out to get it on to the web so that it's just browser based and that will create this... You said where are we going to go in the future, that's what I want to see. This ubiquitous open decentralized web app that does everything it can and all you have to have is a phone and a browser or a computer and a browser. That's where we want to go so people will use it all the time.

But HAVEN is a good step forward. It's a pretty mainstream friendly app.

Charlie Shrem
It's a huge deal.

Brian Hoffman
Yeah, we're really excited. It's been years in the making, really.

Charlie Shrem
Well congratulation and how can people follow your progress?

Brian Hoffman
Obviously follow me on Twitter @brianchoffman and @openbazaar on Twitter for the OpenBazaar project. And @havenprivacy for our HAVEN and that's pretty much it. We've got a site community that's pretty growing fast with a lot of our developers. People are really deeply interested in things but otherwise, the social feeds are where we announce everything. And as part of the launch for HAVEN we're going to be doing some really exciting stuff. We're going to have some really cool promotions that we're going to run. Definitely want to check that out and that's going to be happening soon.

Charlie Shrem
Awesome. We'll link to it. The links from the show notes and everyone can check it out. Thank you so much for coming on the show.

Brian Hoffman
Yeah. Thanks for having me.

Charlie Shrem
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