Bitcoins and Gravy #66: Pamela Morgan: Third Key Solutions Is Here (Transcript)

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[0:00] John Barrett (Announcer and Host): Welcome to Bitcoins and Gravy, Episode #66. At the time of this recording, Bitcoins are trading at $240.00 dollars each, and everybody's favorite, LTBCoins, are trading at $0.000088 U.S. dollars each. Mmm...Mmm...Mmm... Now THAT'S gravy!

[Intro music]

John: Welcome to "Bitcoins and Gravy", and thanks for joining me today as I podcast from East Nashville, Tennessee, with my trusty Siberian Husky, Maxwell, right by my side. Say hello, Maxwell.

Maxwell: Grrrrr.....

John: We're two Bitcoin enthusiasts who love talking about Bitcoins, and sharing what we learn with you, the listener. Long time listeners, thank you so much for hanging in there, and for your generous tips. And new listeners, welcome to the show. We hope you enjoy it.

[end of intro music]

[0:57] John: On today's show I interview Pamela Morgan , the CEO of Third Key Solutions . Pamela works closely with Andreas Antonopoulos who serves as the Chief Technology Officer, and with Richard Kagan , the Business Advisor. Third Key Solutions can design a fool-proof plan for your company to securely generate and store private keys to help reduce the risks of embezzlement, coercion and fraud. This is a major step forward, friends, as we travel together here at the Dawn of the "Age of Crypto-currencies."

And a quick side note, friends. During this interview we had a slight Skype problem, that unfortunately caused us to lose a bit of valuable content. Pamela spoke highly of Richard Kagan, the business advisor for Third Key Solutions, but in editing this I was unable to save this segment of the interview, Very sad. Suffice it to say though, folks, that when you combine attorney Pamela Morgan, with Andreas Antonopoulos and Richard Kagan, you have a powerhouse of a team that exemplifies intelligence and integrity.

[Segway music]

[2:10] John: Ladies and gentlemen, I am thrilled to be speaking today with Pamela Morgan, the CEO of Third Key Solutions. Pamela, welcome to the show.

Pamela:Thanks so much for having me.I'm thrilled to be here.

John: Oh, it's great to have you. Do you mind if I read a little intro first?

Pamela: No. That would be great.

John: Okay. This is great stuff. Pamela is an entrepreneur, an attorney, and an educator who has spent most of her career working in, and advising, small businesses. She began focusing her law practice on Bitcoin and crypto-currencies in early 2014.

She's a widely respected authority on multi-signature governance, smart contracts and legal innovation with crypto-currencies. Third Key Solutions is the culmination of her work advising Bitcoin startups in multi-signature governance processed and key management.

Whoo! [laughter] That's some great stuff.

Pamela: [laughter] Well thanks. You did very well. That's a lot to get out in one sitting. So, well done.

[3:03] John: So okay. You're an attorney, and somebody introduced you to Bitcoin, and now you're somehow in the Bitcoin sphere. Tell us how that happened.

Pamela: Sure. Actually, I was introduced to Bitcoin when I was speaking about entrepreneurship education in Athens, Greece. I was there speaking at the Disrupt Conference, and it was a conference about disruption in all sorts of areas, including entrepreneurship education. And someone who is known and loved throughout the industry, Andreas Antonopoulos, was there, and he was speaking about Bitcoin. That was my first exposure to Bitcoin. I had no idea that it even existed, and I heard this speech about the power of Bitcoin, and how it could really impact people's lives. That's what I've wanted to do my entire life, [and] so my entire career has been really focused on helping people - typically in small businesses - reach their goals.

So whether I'm teaching in college, [or] practicing law, [or] whether I'm doing the other things that I do, it all revolves around this idea of helping people accomplish their goals, and changing the world at the same time.

[4:06] John: Okay.

Pamela: So I found out about Bitcoin, and I was just completely taken aback. I thought it was the coolest thing I'd even heard, and I needed to know more, so I did a ton of research, and spent a lot of time focused on the programming behind Bitcoin. I read the whitepaper and really looked at, "Why is this so great, and WHAT could it actually do to change lives?"

After that, I decided to leave my profession at that time, which was entrepreneurship education, and really focus all of my attention on Bitcoin and my law practice.

John: Wow.

Pamela: So that's how I got involved,

John: Now, how has that been received by your family and friends and coworkers?

Pamela: Fantastic, actually. I'm passionate about Bitcoin. I really don't do things that I'm not passionate about. So it's pretty easy for me to convince my friends and family that this is something fantastic. And I think it's really easy, especially when you have a personal relationship with someone, you can start talking to them about what this actually means for people; how this can actually streamline payments; how I can send my mother Bitcoin wherever I am in the world, and it doesn't matter, and I can send it instantaneously if she needs something.

[5:18] That's really powerful when you hear it from someone you know and respect. So my friends and family have been incredibly supportive, I think I'm fortunate in that way.

John: Wow, that's great. I think that you also have a PERSUASIVE platform upon which to stand when you speak. You're an attorney. You have that background, and so when you're speaking from that platform I think people are more likely to listen to you.

The reason I say that is by comparing [myself], if I'm speaking to my brother-in-law who is an attorney - [and] works for a really good firm - it's really hard for him to take me seriously, because I'm a podcast host, I have a background in research, [and] I'm also a musician. But I'm not an attorney. I don't have a voice of authority. So I really think THAT'S been part of the reason why it's been so difficult for me to communicate about Bitcoin with him. I have to blame myself, my approach, [and] my delivery. But he has absolutely no interest in it.

[6:15] That saddens me in some ways, because I think that if he DID he could be doing some things that are positive in the Bitcoin world that are making a difference, other than just doing the law that he's doing, which I won't comment further on. It doesn't really matter. He'll never listen to the show. [laughter]

Pamela: Well, before you take the blame yourself, and of course, this isn't directed directly at your brother...

John: Brother-in-law. [laughter]

Pamela: ...Ah, brother-in-law. Excuse me. But many attorneys are what we in the tech field describe as Luddites. So, attorneys are fairly reluctant to adopt new technology. And I've given a lot of thought to this, because I wonder why many of my colleagues aren't as excited to adopt new technology.

I think it's because in law school we're taught that what's tried and true is what you should stick with. That's why contracts are so long, and many times we use language that normal people can't actually read - [and] normal people including myself.

[7:12] A lot of times it takes us a long time to get through contract language. But we put it in there because it's tried and true by the courts. So this, kind of, holding onto the past so tightly because we're sure... We know it's a known risk sort of situation, right?

John: Yes.

Pamela: So I know what the risks are if I put this language in. I know what the risks are if I use this technology from 1990. I know that every so often my computer is going to crash. I know that if I'm using Word Perfect, what's going to happen there.

But if I adopt NEW technology, now I don't know what the risks are. And because lawyers are typically risk-averse it's less likely. I think that's one of the primary driving factors behind the reluctance to adopt new technology, and specifically Bitcoin.

I would like to point out very quickly, just in the event your brother-in-law DOES listen to the podcast, there are a number of really interesting legal projects that are happening in the space that don't necessarily require an in-depth understand of Bitcoin per se. One of them is Common Accord . Have you heard of that?

[8:18] John: I have not. No.

Pamela: It's a really interesting project, started by a man named Jim Hazard. He's got some really smart people working on it, like Primavera De Filippi from Harvard. They're working on this, kind of, open source, legal contract language, whereby there are specific contract clauses that are referenced with code. So it's a marriage of computer code with technical, legal language. And why it's cool is because attorneys can contribute to this code repository. They will work on the back end, to be able to pull that language into smart contracts, that will be executed on the blockchain, or even those that are being executed outside of the blockchain.

John: Wow. That sounds great. Now tell me, what's that called again?

Pamela: It's called Common Accord.

John: Common Accord. Okay, and any other just off-the-cuff recommendations for my brother-in-law?

[9:17] Pamela: Sure. There's a workshop series happening. It's called The Blockchain Workshop . The first one was in November at MIT. The second one was in January at MIT and Harvard. The third was at Stanford. And the fourth is going to be at Cambridge. It's coming up in June.

The Blockchain Workshops are intended to get really smart people in a room [to] talk about what's happening with the law, and this technology. So there are a number of working groups, [and] one of them is Crypto Equity.

So for those of your listeners that are really interested, as I am, in the new SEC rules in allowing crowd funding, and marrying crowd funding with equity. The legal questions surrounding those issues are being taken up by one of the working groups.

Another working group is the Smart Contracts working group. So this looks at, "What is a smart contract?" And, "How is it implemented?" And then from the legal perspective, "What happens when you shift burdens and you actually have a full electronic implementation?" What happens when you have a - you know, a lot of people are really into the Internet Of Things right now.

[10:27] John: Mmm...Hmm.

Pamela: Did you see the video with the dishwasher that order its own soap? So the question, for those of us are legal nerds, is, "Well, what happens if that dishwasher decides to buy five MILLION gallons of soap? Who's responsible for that? IS there someone responsible for that? And, "Should there be legal right and responsibilities of autonomous agents?" What does that look like? What do we WANT it to look like?

Because we can't actually draft contract and draft regulation until we figure out what we want it to be from a societal perspective.

John: Right.

Pamela: So the Blockchain Worships are bringing together not only lawyers, but also coders, thinkers, people that are smart [and] interested in these sorts of questions, and really hashing it out.

[11:17] And as I said, it's working group, not conference. So they always have a conference that's open to the public. Typically, it's two days after the working group conferences, where what we've found, and what we've talked about, is presented to anybody [who] wants to come.

It's an interesting opportunity for members of the community to get involved with these sorts of [heady] legal questions. So if that's what you're into maybe you should look up Blockchain Workshops.

John: Okay. Wow, that's great stuff. Now, tell me again, what initially took you to Greece?

Pamela: I was speaking about entrepreneurship for persons with disabilities.

John: Oh wow. Okay, and that's something that you champion still?

Pamela: Yeah. Entrepreneurship is a passion of mine. I grew up in small businesses, and I've been working in them almost my entire professional career. I think that entrepreneurship is really the way. Especially for persons with disabilities, [among whom] the unemployment rate is so high, that really starting your own business is one way to generate income.

[12:17] John: I see. That makes a lot of sense. Just that advice right there, going out to anyone who has disabilities could be empowering just hearing that. "Wow, I could do something other than just going around searching for a job?" Yeah, that's great.

Pamela: Yeah. MAKE your own job. There are a lot of opportunities for funding that as well. And although that's outside the scope of our conversation, a quick Google search would show a number of funding opportunities everywhere in the world for this sort of thing. This is something that people care about, and people want to put money behind. So it might be worth looking at.

John: Okay. So you were in Greece, and then you heard someone speak about Bitcoin. Was that Andreas Antonopoulos actually?

Pamela: It was. Yes.

John: Okay. Yeah, he's very compelling. He's an amazing speaker. Sometimes I think that he had a chip implanted and that's how he...

Pamela: [chuckle]

John: But he assures us that it's actually just years of public speaking experience. I have a background in public speaking, but I'm nothing compared to that guy. He is just absolutely phenomenal. He can take a subject and he can make it interesting. The subject of Bitcoin is ALREADY fascinating, and then you bring this guy, from a securities [and] tech background, to talk about Bitcoin articulately, and even throw in a little bit of humor and some interest anecdotes. I mean, the guy's just amazing. That alone is why you are interested in Bitcoin right now, I would think.

[13:34] Pamela: I have no doubt [that] had I seen someone else speak, who was less passionate [and] less compelling, it might have floated right by me. But it was an incredible speech, and everyone in the room was moved by that, and it's my understanding that it's a really popular video. I send it to people when they ask me, "How did you get involved in Bitcoin." I'm like, "Here. THIS is how I got involved in Bitcoin." So it's nice that YouTube is there to bring people in on that. But yeah, absolutely.

John: So now you're company is Third Key Solutions. You're the CEO, and if I'm not mistaken Andreas is the Chief Tech Officer.

Pamela: Yes, that's true. We also have another person [who's] working with us, Richard Kagan, who's a business adviser. So Third Key Solutions really grew from my law practice. So as I mentioned before, after the Disrupt Conference I was really interested in Bitcoin, and started looking at smart contracts and all of these ways I could serve people in the space.

[14:38] And I started taking clients that were specifically interested, or operating, in Bitcoin. And this question kept coming up over and over again. The question was, "Hey, we want to implement multi-sig. Can you hold a third key for us?" In many cases I would say "No." And the reason is because I don't do escrow or dispute resolution. The reason that I don't do is is because although it sounds all nice and neat and in a bow, the actual action of arbitration is much more muddy than what people typically think it is.

John: Hmm.

Pamela: So this idea of having a third party resolve disputes is great. Don't get me wrong, it's fantastic. But that third party needs to have some parameters as to how they resolve a dispute. And it doesn't necessarily keep you OUT of court. It just means that maybe a different person is going to go to court. [laughter]

John: I see.

[15:28] Pamela: So I was asked repeatedly, "Hey, can you hold the third key for my business operations?" And me being the person that I am, I don't typically just limit my questions to, "Sure. What exactly do you need?" I start asking bigger questions, like, "Hey, well how are you operating? How do you plan to operate? How are you going to implement this multi-signature address? Are you going to have just one address for ALL of your business operations? Or did you get funding in Bitcoin, and if you've got money or are investing your own money, maybe you don't want all of your money to be comingled in one address, correct?"

John: Yeah.

Pamela: So I started talking about corporate governance, and what separation of duties looks like. This was during a time where there were a number of different news pieces where people had either raised money, or taken their customers' money, and run away with it.

So the problem that I was trying to solve - and the problem my clients were interested in solving was - "How do we prevent that from happening?" And it's really easy with Bitcoin, because you just implement a multi-sig, right?

[16:31] John: Yeah.

Pamela: So when you implement multi-sig - and I don't just me two or three signatures. Typically we think of two or three. But you can have a number of different signing configurations. You could even have 15 signers on an account if you wanted to.

So when I was working with these companies to implement multi-sig solutions, we were looking at, "How many people are going to be signers on the account?", "What are your internal policies?", "Are you going to take money from your capital account every day, every week, every month?", "Who should sign off on that?"

And an interesting thing happened. I had a couple of clients who had investors that were Bitcoin savvy. So we devised these plans where the investor could actually be a signer on their capital account. That was really cool, because the investor got to have direct access to that account without having any individual power over it. But they could see, at any time, what was happening with that account, whether or not they signed a transaction.

[17:28] And they didn't have to wait for management to give them a report. They didn't have to wait to connect with a CEO, or CTO, of whomever, to find out what was happening with that account.

John: Nice.

Pamela: Yeah, so as I was implementing this, and as I was thinking about saying "yes" to actually holding that third key, I realized that I didn't have the technical acumen to do that. So I started reaching out to people in the community, and Andreas happened to be one of those people. I asked him to help me create a best practices plan. He did that, and we've actually been working behind the scenes for about ten-and-a-half months, before the official launch of Third Key Solutions, to do this with a number of different clients.

John: Wow, that's great.

Pamela: Yeah. I'm really excited about it, because I think it actually serves a real need in the community, and that need is to have people look at their internal governance, and how you're actually going to do recovery in the event of key loss, key compromise, [and] all of these sorts of things. Really, I look at it as a tool to replace regulation.

[18:31] John: Mmm...Hmm.

Pamela: I prefer technology to regulation in many instances. So I think by implementing multi-sig technology within businesses, and within our community, as a voluntary measure, I think that we can supplant the need for regulation.

John: Yeah, I like that. As Andreas would say, "The reason I don't like regulation is because it DOESN'T WORK!" [laughter]

Pamela: Exactly. Absolutely.

John: Of course, SOMETIMES regulation works, and we DO have to have regulation. Obviously there are certain things that HAVE to be regulated in this world. But when we look at some of the BIGGER regulations, like regulations on Wall Street, and federal regulations, and how we know that the lobbying is basically the same thing as just passing money from one person to another, "Hey, do me a favor and I'll give you a chunk of money." That's been going on since the beginning of time.

I'm sure you're familiar with Patrick Byrne and the whole concept of being captured, and "deep capture", right?

[19:22] Pamela: Absolutely.

John: It's funny, because there's still so many red-blooded, or blue-blooded, Americans - or just people all over the world - but I emphasize Americans because of how we think. I know well how we think because I AM an American. But it's so funny how many people are still so "Rah-rah! Wave the flag!", that if you were to suggest to them Congress is crooked, even though Samuel Clemens, Mark Twain, spoke elegantly as how Holbrook goes around the country, still at the age of 80-something, doing his show that IS Mark Twain. Some of what he's talking about, in terms of corruption [and] how regulation doesn't work in Congress and in the government, and with big businesses. Some of what Mark Twain wrote back then in the 1800s sounds exactly like he's talking about what's going on today. It's so relevant.

Pamela: Absolutely.

[20:15] John: Which really just proves it's been going on for so long. And yet, you'd think [that] something that's been going on that long would be just common knowledge. And I think, under the surface, your average person knows, for instance, that Washington is rotten in certain ways, and they know that Wall Street is rotten. But if you were to ask them any specifics about it, or any details, they would back off an say, "Well, I don't KNOW that it is. I've HEARD that it is."

But people who have done a little bit more reading, [and] people who are a little more educated, they know. They've read the facts, [and] books that make reference to these problems that we have that are so pervasive, and so ripe to be disrupted and changed. So yeah, what you're talking about, with multi-signature governance, and the whole idea behind what Bitcoin can bring, once you do understand the TECH behind it, [that] it's not just a digital currency, I think it's something that's really, really worth talking about and spreading the news. It's something that has caused people to become evangelists, and RIGHTFULLY I think.

[21:19] Pamela: Absolutely. Well - to go back to this idea of people not really being interested [in], or recognizing, that a lot of our political systems are broken - I think a lot of that comes from not feeling empowered. From recognizing, "Okay. Let's say that I DO buy into the idea that our political systems are broken. What can I do about it? How much time should I spend out of my day focusing on how to solve these problems. And if there really ISN'T a solution available, than isn't it a waste of my time?" That's what I used to think before Bitcoin.

John: Hmm.

Pamela: And when I realized the potential of Bitcoin to make these sorts of things transparent. To say to, for example, politicians, "Okay. Let's make campaign finance transparent. Let's use the blockchain. You register your addresses. Let's ALL take a look at what's actually happening out there. Let's ALL do democratic voting through the blockchain. "

[22:24] When I saw the power of transparency, coupled with scalability with Bitcoin, that's when I knew it was worth... this is the "change the world" sort of thing. This is the "change the world" technology. And this is really what drew me to Bitcoin.

John: Yet, when you talk with people about Bitcoin. Let's say they've only heard about Bitcoin by way of CNN, or the Wall Street Journal, or what-have-you, then you're talking with this person who basically says, "Well now, I heard that currency crashed, [or] was a scam, [or] was a Ponzi scheme." And their whole thinking is on the coin, right? Small "B", lowercase "B", bitcoin, and they have no knowledge at all. How do you communicate with people, to tell them...? Obviously you'd like to spend an hour or two with everybody, to go into great detail, [but] you can't. You may only have five or ten minutes when you're commuting on a train.

[23:23] How do you communicate to somebody, "Hey, it's so much more than just a digital currency, like the "Hobo Nickle", or the "BarbequeCoin" (bbqcoin ) or the Dogecoin? How do you explain to them that this is a working protocol that IS changing how we are going to live our lives. How do you explain that?

Pamela: It really depends on your audience. So I try to relate whoever I'm talking to [with] what they're actually interested in. So, for example, right now with the Nepal earthquake, the Red Cross is accepting Bitcoin, and they're accepting it though Changetip ( ). So you can use Changetip to donate Bitcoin directly to the Red Cross for the Nepalese earthquake.

That's a really powerful tool. That's something that while, yes, you could technically text, how do you know where you're texting? I have a lot of friends who are artists and musicians, so I talk to them about getting instant tips. So all it takes is putting up a little QR code when you're spinning, for example, if you're a DJ.

[24:24] John: Yeah.

Pamela: Or putting a QR code next to your artwork. Are you going to become a multi-millionaire from it? Probably not. But is it more than what you would have if you DIDN'T have the QR code up? Yeah it is. If people are interested in voting, I talk to them about voting. If people are interested in contracts... One unifying theme is people like to get rid of lawyers, so that's one of my ins. I talk about how we can move to a more streamlined process, using smart contracts, and things like that, to ENSURE performance. Now, I think that there's a bit of a misunderstanding in the community, generally, and then also overall, as to what a smart contract is. The definition of a smart contract is really dependent upon who you're talking to, and what their preconceived notions of contracts and smart contracts are.

John: Mmm...Hmm.

[25:14] Pamela: But at its core, smart contracts can streamline the process, and ensure payment. Where right now, if you and I have a contract, and I promise to pay, that's all it is. It's a promise to pay. With a smart contract, I actually have to put that money up, like we do in escrow, right? So we can take payment tools, like escrow, and bring them into our everyday transactions. We can scale trust in that way.

John: Mmm...Hmm. I like that.

Pamela: I think that's a powerful tool, and I think it's something that's been reserved for the elite, and large scale transactions. The reason is because it has not been financially viable to do escrow on a transaction-wide basis.

John: Yes. Until now.

Pamela: Right. Exactly! Until now. That's why Bitcoin is so great. Another one of my pet projects is this idea - and I'm not doing it yet - of using the blockchain to transparently show charity donations. So when we look at non-profits we could, in theory, have non-profit organizations register their general addresses. And we could have someone write a program that allowed us to see, [and] translate, the information from the blockchain into our traditional financial statements.

[26:36] John: Mmm...Hmm.

Pamela: Like a balance sheet, [or] an income statement. All of these things are possible with Bitcoin. And it's possible to do this in a way that is absolutely transparent and verifiable by anyone. So we don't have to trust these audit firms to go in and say, "Yup. I looked at everything. You can trust me." It's now, "You can trust WE." And I think that's a really powerful shift.

John: Right, and the money is saved PAYING the auditing firms. So that money wouldn't have to be paid.

Pamela: Exactly.

John: What a HUGE savings.

Pamela: Absolutely.

John: I was going to say, I think it's so rare these days that business has even HEARD of Bitcoin, and if they have, again, they're getting the CNN sound bite. They don't realize [that] right now - or coming up very soon - it's possible that [the] Bitcoin protocol could actually be saving your company A LOT of money - millions!

[27:25] Pamela: You know, now that we're talking about this, I forgot my best sale to lawyers - and really to ANYONE in the business community who bills - my best sales pitch for Bitcoin comes from my experience. So the first time I had a client pay me in Bitcoin I did my typical work - I'm an atypical attorney. I usually do the work first. I don't really like retainers. I feel like I should be paid AFTER I'm done with the work. So typically that's how I do it. So I did the work, and I billed the client, and I got paid in - are you ready - three minutes.

John: Wow. [laughter]

Pamela: And I was like, "Really? No, this can't be true." Because in the non-Bitcoin world three days is amazing for payment. Normally it's more like three weeks, [or] three months, and you have to follow up, and say, "Hey, did you get the invoice?" And, ""When can you pay?" And, "Now I can only pay half." and blah, blah, blah, blah, blah.

[28:28] And it takes up all of this time and all of this effort. [But] with Bitcoin, three minutes [is a] HUGE selling point for me. In fact, I TRY to only accept payment in Bitcoin now for my legal services, because it's so much easier. Why would I even want to deal with a check, or wire transfer, or any of this other nonsense, when I can just get paid in Bitcoin.

Streamlining the process, and improving cash flows, is a HUGE deal for businesses. They just don't RECOGNIZE it right now. Again, I think because, as you said, many businesses are only familiar with the CNN "Dark Web" stories.

John: Right. The "child's version" of Bitcoin. [laughter]

Pamela: Yeah, exactly.

John: Wow. So you have been practicing law for how long?

Pamela: Eight-and-a-half years.

John: Wow. And what kind of law do you practice, for the most part?

Pamela: I typically focus on small business. So really, startups. I like to focus on transactional work, so: contracts, negotiating contracts, getting just basic contracts in place for businesses that they can use as templates.

[29:33] But what I'm REALLY interested in... You know, I'm one of those aliens that enjoy writing contracts, and negotiating contracts. But I also really like the strategy. I really like the business strategy, and talking with them about, "Okay. Well, how do you think this process is going to work within your business? How does this relate to other processes? What are your overall goals?" Helping them stay focused. Kind of a larger, counseling mentorship, sort of, role.

John: I see. Wow, I bet your clients love you.

Pamela: [laughter] I'm highly selective with my clients, and I'm much more interested in if I'm a good fit for the client. I think that's the most important thing. And just because I'm not doesn't mean that the client is bad, or that I'm bad. It just means that I need to work with people that I can communicate with, and that can communicate with me well.

[30:30] That's my primary focus when I'm looking at whether or not I can help a client. I also have experience in commercial real estate. I worked for a federal judge for a while when I was in law school. That was really fun, [and] eye opening. I've done a lot of work for a lot of different TYPES of clients, but primarily I try to focus on small business.

John: I see. And as far as small businesses go, do you have many client now? Are the numbers growing? Are you seeing the numbers grow, in terms of Bitcoin startups, or Bitcoin businesses asking for your help?

Pamela: Yes, but unfortunately right now I am NOT taking any new clients, because I just started a startup myself, which is Third Key Solutions. So I'm not accepting new clients right at this particular moment. I'm really, really focus on Third Key, and how we can serve the community in that capacity.

John: I see. Well, I was going to ask you, with Bitcoins and Gravy, my podcast, I'm in the 65th week - this will be the 65th show.

[31:31] Pamela: Congratulations.

John: Well, thank you very much. I was going to ask you, maybe I could get your legal assistance, or you could help me - I could hire YOU to help me with doing something with my business. But then I realized [that] I'm not making any money, and it's just me. [laughter]

Pamela: [laughter] You're in good company, my friend. Many people in this space are right there with you.

John: Right. I started out as a volunteer, and now I earn LTBCoin doing the show. And I'm actually - I don't know how many of my listeners know this; I may be letting the cat out of the bag here - but I am actually an LTBCoin millionaire.

Pamela: Fantastic. Excellent.

John: [laughter] Yup. Yup. It feels pretty good.

Pamela: You don't need to brag. You don't need to rub it in to all of us who are not YET LTB millionaires.

[32:21] John: I probably shouldn't. I probably shouldn't. But yeah, LTBCoin - I don't know if you're familiar with it - but I know that you're super busy. But gosh darnit, if you get a chance, when this show airs, I always have loyal listeners who are following this show, and who will comment in the "comments" section, there are Let's Talk Bitcoin. So if you have time I'm certain that some people will be asking questions - usually what I do is I say, "Okay. I will take that question, I will ask the person I interviewed, and I will get back with you here on comments section." It happens, occasionally, that the person I interview will actually sign up for an account on LTB - a free account - and they will just APPEAR there, in the comments section after the show, answering these questions and stimulating the conversation and moving it forward. So you're welcome to do that. It's not required. I know you' re super busy.

I suggest that also, because maybe there would be a way for you to network with people that would enhance your business, or whose businesses you could enhance just through nothing else but a positive word, or directing them - as you did with the information you gave me earlier about Common Accord and the Blockchain Workshop.

[33:35] Pamela: Absolutely. I'm happy to do that, and although I'm not accepting new clients right at this particular second, I DO have a wide network of attorneys who are practicing in this space. So I DO refer people, depending on where they're located, and what their needs are. If I know someone who's practicing in that space, I'm HAPPY to make a referral.

John: Okay. Well that's great. So how do you see your business growing? Is it growing exponentially, as they say the Bitcoin technology - the Bitcoin startups - they say the whole thing is growing - other than the price of Bitcoin the currency - is growing exponentially. Are you seeing that? Are you seeing that people are coming out of the woodwork - these Bitcoin startups, the legitimate oness - are you seeing these? Pamela: Oh yeah. I mean, I get contacted by multiple startups every week, asking me for help in this space, and asking me for referrals.

[34:31] John: Okay.

Pamela: So, I've definitely seen an increase.

John: Okay. Well that's great. So obviously you have no plans to stop doing this. Now, what about the price of Bitcoin, the currency? What do you think about that? I like to ask people about that just to get their opinion. Some people will be bold and give just their full-on predictions for where they think the price is going to go. But how do you feel that the price of Bitcoin is going to do over the next couple of years? And how do you feel that that could affect YOUR work, or the entire Bitcoin sphere, the Bitcoin community?

Pamela: Great question. I usually don't make predictions, and as far as the price itself goes, all of us would like to see the price high. But there is something to be said for a lower price point, and that is inclusion. So as the price is lower it's a little less scary to get in.

[35:23] The price doesn't really affect me in what I do, and the reason is because when I'm paid in Bitcoin I don't mind. If I need to convert some of the Bitcoin to fiat in order to pay my bills, I do that. Otherwise, I'm willing to take the risk of the price rising or falling. That's just me [chuckle].

I know a lot of people are a little more risk adverse than that. But for me, I think it's much more important to see how Bitcoin is actually going to CHANGE things over the next few years. I'm much more interested in thinking about THAT than I am about the price.

John: Yeah. Me too. Absolutely. Okay. So Pamela, we've covered a lot of ground so far, but I have not heard enough from the CEO of Third Key Solutions, and that is you. I'd love to hear more about Third Key Solutions.

Pamela: Great. I'd love to talk about it. The reason I want to talk about it is because I'm so excited about it, NOT just because I'm the CEO, but because I think that the company is actually providing a service that the community needs.

[36:22] John: Okay.

Pamela: As I mentioned before, this company really grew out of a need of my clients saying, over and over again, "Will you hold a third key for me?" What does that look like? How do we ensure that your business is set up on the INSIDE for success? Not just how you face you clients, but also internally. How can we make sure that you have good practices? How can we make sure that you're not going to have one employee that's going to run away with all of the money?

John: Mmm...Hmm.

Pamela: So as I was looking at this, and as this corporate governance developed, Third Key grew directly from that need; from the need of businesses in this space to really understand, and put into place, not only a plan for good corporate governance, but then also recovery. And if you're listeners are asleep, I apologize, but I'm about to wake you up. What happens, for example, if you have a two of three multisig , and you, john, are a signer, I am a signer, and the tea company down the road from you [are] a signer.

[37:25] So let's say that I'm your third party. What happens if, God forbid, your laptop goes in the pool? What happens if you don't have access to that key, for WHATEVER reason? Maybe it's lost. Maybe it's stolen. Maybe you got hacked. Maybe, God forbid, there's a fire. Maybe there is something that happened. How do businesses continue to operate in times of emergency? And a lot of businesses in the space aren't actually looking at that. So that's, I think, one of the key services that Third Key Recovery - no pun intended - offers. [It's] the ability to come in and say, "Hey. We've implemented these recovery plans before. We've implemented these corporate governance plans before. These are the things you that should be looking for."

And while every company is different, every company is going to implement these ideas in different ways. We can be the people on the other side of the table saying, "Hey, have you thought about this? What about that?"

[38:23] We can't plan for every situation, but we can plan for a LOT of situations. And the benefit of planning at the beginning is that then when the emergency happens, it's not 2 a.m. and you're frantically making phone calls and texts. Right?

John: Right.

Pamela: So this is the benefit. Also, we want to try to prevent against spoofs. So this idea of, let's say, that three of us are all holding keys, and I get an email from "John" that says, "Hey, my laptop went in the pool. Can you sign this recovery transaction for me? That is our entire 250 Bitcoin. Can you transfer this to this other [new] address?"

Well, when SHOULD I do that? When should I NOT do that? What kind of approval do I need from you? How do I really know that came from you? And if you don't have all of that set up in advance, you're going to make a mistake. Really. That's what it boils down to. If you don't have a plan in place, the chances of you actually losing your Bitcoin grow exponentially.

[39:22] So instead, taking a few minutes to actually write down a plan, and talking it out amongst your business partners, is a really, really good practice. It's an industry best practice outside of the realm of Bitcoin, and it should an INDUSTRY best practice for companies that are operating In the crypto-currency space.

John: Absolutely. I loved your web site, where you have a list of "What we do." And then you have a long list also of, "What we DO NOT do." [laughter] I think that's great.

Pamela: Yeah. Well, our goal is to be as transparent as possible. So you'll also notice on our web site [that] we list our pricing. We do that because we want people to know. We don't believe in, kind of, backdoor agreements, "Oh, well for YOU we'll do this, and we know you." So we really embrace the transparent nature of Bitcoin, and we try to do that in ALL of our business practices. And that's a core value of Third Key Solutions. And that's a core value of the principles of Third Key Solutions as well. [40:17] I'd just like to talk a little bit about the Key Recovery Network. Do you know anything about it?

John: I do not. I must confess.

Pamela: Oh, good. Well, you wouldn't really. That was, kind of, a trick question, because we announced the creation, or the formation, of the Key Recovery Network when we announced Third Key Solutions at the very end of March.

So the essence of the Key Recovery Network [is that it's] an industry association, and we're working with a number of different other companies in the Bitcoin space that are operating in key storage and recovery only, to create this network where we can define what best practices are, as far a recovery goes, [and] where we can streamline the process for businesses and customers.

John: Okay.

Pamela: When we were sitting around talking and thinking about, "Okay. What exactly do we want to offer? What services do we really want to offer?" And, "What does the community need?" Not only do they need multisignature storage and setup and recovery, but we also need backups for our own keys.

[41:19] This comes from the idea that many of us are not so great at cold storage. So a lot of times what happens is [that] people create a wallet, and they have this cold storage option, and they're not really sure what to do with it. So they print out a cold storage wallet on a piece of paper, and they put it somewhere - [they're] not really sure where. And hopefully they put it in a fireproof safe. But we're not really sure if they actually KNOW how to execute it. And we don't really know if they understand, number one, how to store it properly, right - so not only in a fireproof safe, but what about water? Do you have an extra backup? Etc., etc.

John: Mmm...Hmm.

Pamela: And the reason that this all matters [is] because, as you know, if you lose your keys you lose your Bitcoin. You can't access it anymore.

So we need a way for companies who are holding large amounts of Bitcoin - or even individuals who are holding what THEY deem to be large amounts of Bitcoin - to be able to backup their private keys. But the key is [that] we don't want them to back it up with one party, right?

[42:21] John: Right.

Pamela: So John, you're not going to give me your private key to your Bitcoin address.

John: Probably not.

Pamela: Number one, I'd never take it, because that would give me the full ability - just like a joint bank account. If you have a joint bank account, either party can take out all of the money. That's the same thing if two people have a private key.

John: Right.

Pamela: So how do we solve that problem? How do we increase the likelihood that people are going to actually be able to recover their funds, in case something goes bad. But also NOT give custody. We don't want to recreate the banking model. We don't want to say, "Okay. We'll give this OTHER "trusted" person our private keys." Why would we do that? We don't have to.

John: Right.

Pamela: So how can we use the technology to protect us? Well, one way is you can use this really cool thing called "Shamir's Secret Sharing." Have you heard of that?

John: I have not.

Pamela: Okay. So, I am not the CTO of Third Key Solutions. Let me just put that out there now. So I'm just going to share with you the layperson's version of Shamir's Secret.

[43:21] But basically what it is is you take a secret, which in this case is a private key, and you use this sharing mechanism to split it out into a number of different pieces. Each piece alone can't do anything. But when you combine the pieces, then that recreates the secret.

John: I like it.

Pamela: Yeah, I know right? Isn't it cool? So in this case you could create a sharing scheme whereby you could split one private key into five pieces. And you could say, "Alright. Any three of these will recombine in order to give us access to the private key." They'll recombine to make that private key.

You could give it to five different companies, each a piece, and those companies don't even need to know who else is holding the private bits. When something bad happens, you John, can say, "Okay. Let me call Third Key Solutions. Let me call these other companies and say, "Okay. I need you to send me your piece."" And you could actually recreate your own password, even if you lost EVERYTHING.

[44:32] John: Wow.

Even if you lost your computer, your cell phone. Even if you lost everything, you could still have access to your Bitcoin if you do it this way.

John: I love that.

Pamela: Yeah, I do too. So that's why we decided to create the Key Recovery Network, because obviously we can't do this on our own. We need other people in the industry - our "competitors" - to work with us to create a system whereby you, John, could say, "Okay. I know that I'm going to contract with THESE people. They're part of the Key Recovery Network. And they all know how to work together in the event that I need them to." So we're all going to give you the key back, or the part back, in the same way.

You're going to know what it's going to cost up front. You're going to know how to do this, right? So this is the overall idea of the key Recovery Network. And it's going to launch probably near the end of this summer, with at least two partners.

[45:26] We have two partners right now. One is Keeper, and that is Michael Perklin's company ( ). You might know Michael because he's part of Bitcoin Sultans, and he's also part of the C4, so the CBP exam. He's also working on the CCSS security standards. Then Armory ( ) is another partner of ours that's starting this network.

So we're working with them. You'll also note that there are different jurisdictions involved, and that's an important part of the key Recovery Network. So we want to decentralize our own business, and that's, kind of, how we do it.

John: Wow. I love that. Now let me ask you a question. For someone like me, let's say I've got a paper wallet, and I've got 20 Bitcoins on it. Is this something that's worth the cost of me working with your company to make sure that these are safe?

[46:13] Pamela: I think that's an individual question for each person. First of all, we don't really work with individuals. We work with businesses in the space. So, for example, you're on the LTB network. So we might work directly with the LTB network to secure THEIR coins.

John: I see.

Pamela: But we DO sometimes work with individuals. It really just depends on the amount, and the way that you want to store; what you feel comfortable with. So there are a lot of multisig solutions that are available now. Green Address or BitGo ( ), or I actually have a tutorial on my web site about how you can create your OWN multisig address using CoinBin ( ), which is, kind of, an open source tool that will allow you to do that. And it will allow you to execute transactions on your own, without going through a specific provider.

John: Oh nice. Okay.

Pamela: So yeah. There are a lot of different opportunities right now, and this space is growing. So it's hard for me to give advice without having a bigger conversation about what this might look like.
[47:20] If you're sure that you can recover your paper wallets - paper wallets are still a great way to store cold storage. The problem is [that], as you know, once you open up that paper wallet it's no longer cold storage. So you need to sweep ALL of the funds from that paper wallet somewhere.

Now, you might sweep it to another paper wallet. You might sweep part of it to a multisig wallet. There are a lot of different options that you have. And it really depends on your appetite for risk, [and] how much you want to go online and move things to warmer storage versus cold storage. These are all decision that we would talk through if this is something that you wanted to do.

John: Okay. Yeah, because there is that risk point when you're taking something from your safe paper wallet, and deciding to move it somewhere else. It's like, "Wow. Am I going to do this online?" or, "How am I going to do this so that I don't get ripped off, or so that I don't make that one little fatal mistake?"

[48:17] Pamela: Exactly. Well, and there's one more thing to take into consideration - and I don't mean to muddy up the waters - but you've got 20 Bitcoins sitting on a paper wallet. What happens if, God forbid, something happens to you? Does your family know how to get those Bitcoin? Do they know how to access it. Does your estate planning attorney - if you've talked to someone, [and] created a will - are these included in your will? If so, HOW are they included?

John: Pretty much gone.

Pamela: Right. Exactly. So this is another thing that I do as part of my law practice. I'll work with estate planning attorneys, or people that say, "Hey, this is part of my estate. I want to make sure that we can access it." And while, of course, I can't guarantee, because you can never guarantee recoverability of funds, I can work with you.

[49:08] And really quickly, another important point, whenever you're moving money either to a paper wallet, or to a multi-signature address, or EVEN to a regular address, please, please test it first. Don't move all of your Bitcoin onto an untested wallet. Please test the process. This is something that people are reluctant to do. They're excited. They're like, "Okay. I want to move this. I want to be done with it. I don't want to deal with it anymore."

John: Oh, it's funny. I remember back in 2011, when I was first getting into Bitcoin, and trying to figure the whole thing out, and reading online, and I was fascinated by the whole thing of course. But I couldn't figure it out, so every day I'm learning a little more, a little bit more, a little bit more, and I finally get to the point where I can make a paper wallet, and where I can send some --- [[spoken to John's dog ,Max]] Hey redneck, stop banging! You're killing me!

Pamela: [laughter]

[50:02] John: My gosh. So I finally get to the point where I can do these things, and I can do these things safely. But I did take that advice that was given, [and] that you just gave, and that is, "Start small. Use something that's less than five dollars." I think I did make a few mistakes, [though], and I lost $10 or $20 here - or in my memory at the time it was the equivalent of $10 or $20, maybe hundreds now, I can't even remember.

Pamela: Right.

John: Things were weird in those early days. It was just uncharted territory.

Pamela: Absolutely. And what's nice about the industry is [that] it's starting to mature [and] recognize that we need to make things easier, right? We need to make things easier. We need to have these best practices in place. We need to grow as an industry, overall, not only in the way that we interact with end users and customers, but also in the way we do business behind the scenes. And I think that in 2015 we are moving in that direction. I think there are a lot of companies that are offering solutions that are much easier to use, [and] much easier to implement.

[51:04] It's my hope that those days of, "Oh no! I had to try four paper wallets and lost half of it." Hopefully those are behind us.

John: I hope so too. Yeah, we're moving toward the future rapidly, here at the dawn of the "Age Of Crypto-currencies", as I like to say. And it sounds to me that Third Key Solutions is going to be leading the charge there. Pamela Morgan, thank you so much for being on Bitcoins and Gravy. Listeners, you've been listening to Pamela Morgan, the CEO of Third Key Solutions.

Pamela: Thanks so much for having me. I really enjoyed our talk, and I hope to do this again.

John: Absolutely. We'll talk down the road, and you can give us an update. That would be great.

Pamela: Sounds good. Thanks.

John: Hey, and if you happen to run into Andreas tell him I said hi.

Pamela: I'll do it.

John: Alright. Hey, thanks a lot.

Pamela: Talk to you later. Bye.

John: Bye.

[Segway music]

John: I know that it may sound absurd, but I have for you a magic word. And today the magic word is "world" - W -O - R -L -D, as in this sentence taken from an excerpt from John Perry Barlow's "A Declaration Of The Independence Of Cyberspace". And here we go. Check this out:

[52:13] "Governments of the industrial world, you weary giants of flesh and steel. I come from cyberspace, the new home of mind. On behalf of the future, I ask you of the past, to leave us alone. You are not welcome among us. You have no sovereignty where we gather. We are forming our own social contract. This governance will arise according to the conditions of OUR world, not yours. Our world is different. Ours is a world that is both everywhere and nowhere. But it is NOT where bodies live." "We will create a civilization of the mind in cyberspace. May it be more humane and fair than the world YOUR governments have made before."

[53:08] Again, listeners, that great quote was provided to us by our good friend from Yale University, Ian Panchevre. That was a quote from John Perry Barlow's "A Declaration Of The Independence Of Cyberspace".


[public service (Nepal disaster relief) announcement]

Kerry: Hey podcast listeners, I'm Kerry, and I'm here to tell you about something really powerful that's happening. Nepal recently suffered a TRAGIC earthquake. Thousands of lives were lost, and people around the world are wanting to help. Fortunately, Red Cross has opened a Bitcoin wallet with ChangeTip, and is now accepting Bitcoin donations. In just a matter of days, thousands of dollars have poured into this account, turning Bitcoins into food and supplies for those in need.

[54:12] With ChangeTip we can send Bitcoins through Twitter, and use our social platforms to build momentum towards giving. We can give ANY amount, no matter how small, and together it really adds up. So to open an account go to . There you can buy Bitcoins, or transfer from your Bitcoin wallet. Start giving, and if you want, redirect the gifts people give YOU to go to Red Cross. Let's use these amazing tools we've created to pull each other up and show the world the value of Bitcoin through generosity.

[end of public service (Nepal disaster relief) announcement]

John: Folks, we have a special treat for you. ANOTHER loyal listener who has taken it upon himself to cover "Ode To Satoshi: The Official Bitcoin Song". This time it's Alex O'Brian giving us his version of Ode To Satoshi. And for more information about Alex O'Brian please check out the show notes and the credits there at Let's Talk Bitcoin. Take it away Alex O'Brian...

[music and lyrics to "Ode To Satoshi: The Official Bitcoin Song" performed by Alex O'Brian]

[55:15] "Well Satoshi Nakamoto, that's a name I love to say,
And we don't know much about him, but he came to save the day.
When he wrote about the way things are,
And the way things ought to be,
He gave us all a protocol this world had never seen.

Oh Bitcoin! As you're going into the old blockchain,
Bitcoin! I know you're going to reign, gonna' reign,
Till everybody knows, everybody knows,
Everybody knows your name.

[guitar instrumental]

Down the road it will be told about the Death of Old Mount Gox,
About traders trading alter coins, and miners mining blocks.
But them good old boys back in Illinois,
And on down through Tennessee,
See they don't care to be a millionaire,
They're just wanting to be free.

[56:19] Oh Bitcoin! As you're going into the old blockchain,
Oh Bitcoin! I know you're going to reign, gonna' reign,
Till everybody knows, everybody knows,
everybody knows your name.

[instrumental interlude]

From the ghettos of Calcutta, to the halls of Parliament,
While the bankers count our money out for every government.
Oh, Bitcoin flies on through the skies of virtuality,
A promise to deliver us from age-old tyranny.

[57:23] Oh Bitcoin! As you're going into the old blockchain,
Oh Bitcoin! I know you're going to reign, gonna' reign,
Till everybody knows, everybody knows,
everybody knows - give some exposure - everybody knows your name.

[music interlude]

Oh Lord, pass me some more, and
Oh Lord, before I go.
Oh Lord, pass me some more,
Oh Lord... before I go and [?]...
As you're going into the old blockchain...

[Segway music]

[58:28] John: I'd like to thank my guest on today's show, attorney Pamela Morgan, the CEO of Third Key Solutions. To quote Third Key Solutions, "We securely generate, and store, one to three supplemental keys for your internal multi-signature business operations accounts." Friends, this IS the future, so listen to the man when he tells you to climb aboard.

A quick announcement, also. A good friend of mine, Elise Peterson, the owner of is looking for an easy way to send money around the world using Bitcoin. So listeners, if you have information for Elise, please email her via at Or open up a discussion with all of us in the show notes at

[59:15] By the way, is a fantastic source of for fair trade teas directly from the growers. Elise and other good folks at work tirelessly to help empower people working in the tea trade around the world. But the best thing about is that they accept Bitcoin and Litecoin payments. Thanks for your question Elise, and if I'm not mistaken, I believe it's "tea time".

And great news, listeners. Our transcription page is now live on the web site, thanks to the continuing hard work of one of our loyal listeners, who is also a consultant to the show. These professional transcriptions are provided by one of our fans, who can be found at:

And, of course, you can find a link to this web site in the weekly show notes.

[60:10] And if you've enjoyed the show, please take a minute to scan my QR code, or copy my public key, and send me $0.50 in Bitcoin. If you'll do this every once in a while it will help me out more than you know. Folks, it's not easy being a podcast host, trust me, and putting in 10 hours each week to produce the show sometimes takes its toll. Remember that giving someone a small tip in Bitcoin is what makes Bitcoin folks stand out in this world.

I know, personally, that whenever I give a tip to someone on Reddit, or Let's Talk Bitcoin, or one of the forums, I feel better about myself knowing that I've given back just a little to help that person continue creating great content.

And signing off now from East Nashville, Tennessee. I'm your host John Barrett, here with my dog Maxwell. Say goodbye, Maxwell.

Maxwell: Grr...

John: Join us again next week for another episode of Bitcoins and Gravy, and until then y'all be good to each other out there. And remember, the only thing necessary for the triumph of evil is for good men and women to do nothing.

[61:15] Do something y'all.

[instrumental music]

[music and lyrics to "Ode to Satoshi" song]

John Barrett: Now climb aboard y'all! This train is bound for glory... and there's plenty of room for all...

"Well Satoshi Nakamoto, that's a name I love to say,
And we don't know much about him, but he came to save the day.
When he wrote about the way things are,
And the way things ought to be,
He gave us all a protocol this world had never seen.

[62:06] Oh Bitcoin! As you're going into the old blockchain,
Oh Bitcoin! I know you're going to reign, gonna' reign,
Till everybody knows, everybody knows,
Till everybody knows your name.

[guitar instrumental]

Down the road it will be told about the Death of Old Mount Gox,
About traders trading alter coins, and miners mining blocks.
But them good old boys back in Illinois,
And on down through Tennessee,
See they don't care to be a millionaire,
They're just wanting to be free.

Oh Bitcoin! As you're going into the old blockchain,
Oh Bitcoin! I know you're going to reign, gonna' reign,
Till everybody knows, everybody knows,
Till everybody knows your name.

[instrumental interlude]

[63:08] From the ghettos of Calcutta, to the halls of Parliament,
While the bankers count our money out for every government.
Oh, Bitcoin flies on through the skies of virtuality,
A promise to deliver us from age-old tyranny.

Oh Bitcoin! As you're going into the old blockchain,
Oh Bitcoin! I know you're going to reign, gonna' reign,
Till everybody knows, everybody knows,
Till everybody knows your name.
Till everybody knows, everybody knows,
Till everybody knows your -- "Give me some exposure" --
Everybody knows your name.

Oh Lord, pass me some more,
Oh Lord, before I have to go.
Oh Lord, pass me some more,
Oh Lord... before I have to...

[instrumental finale]

[64:23] John: Oh-ho! Thank you East Nashville! Y'all be good to each other out there, ya' hear?

Max: Grrr....