Monero Monitor

Episode 3: Betting on Bitcoin and Monero with the co-founder of LuckyBit and The "binary fate" of a cryptocurrency entrepreneur.

24 Apr 20170 Comments

In this week's episode, I talk to BinaryFate, the co-founder of the LuckyBit online Bitcoin casino, Cryptosphere Systems, and about his involvement in cryptocurrencies. Find out about NP-hard problems, overcoming miner censorship, and the future of LuckyBit and We even do a bit of fortune telling, discussing a hypothetical app that between the taping and airing of this episode came to life via a third party!

Did you enjoy this episode? Please show your support by donating today.


Podcast Transcript:

~~ { Introductory Music } ~~

Mike: Hi, everyone. This is Mike. You may know me as bigreddmachine, and you’re listening to another episode of the Monero Monitor podcast.

Welcome back to any listeners that we’ve had before, welcome to any newcomers. Today I’m excited to talk with one of the earliest entrepreneurs in the Monero space and also a prevalent entrepreneur in Bitcoin as well, co-founder of LuckyBit, and other cryptocurrency startups. My guest today is Jérémie Dubois-Lacoste, otherwise known as BinaryFate. Welcome to the show, Jérémie. 

Jérémie: Hey, Mike, thanks for having me. 

Mike: Did I get your name pretty close? 

Jérémie: Yeah, I must say for a non-native French speaker, it’s not that bad.

Mike: Well, I’ll credit that to my French-Canadian grandfather then. Can you tell us a little bit about yourself?

Jérémie: Yeah, sure. I’m a computer scientist and I come from academia. I spent quite some time doing research in academia, doing a PhD in artificial intelligence. If you’re interested, I can explain briefly what I was doing, I’m quite used to summarize it. 

Mike: Yeah, we can talk about that in a second.

Jérémie: Yeah, great. Then I worked as a post-doc, still in academia and still mostly about artificial intelligence topics. Pretty much at the same time, I discovered, or the Bitcoin space discovered me, I would say, and that’s basically why eventually I left my day job as a researcher because I wanted to embrace the blockchain revolution fully and that’s something that I couldn’t do directly in my day job.

Yeah, started as a researcher and then eventually ended up, still, right now in the position of more of an entrepreneur in the crypto space. I still do some development, but not only that, I still do a bit of research, I still actually have an office at my former university. Partly because I’m lazy to move it and so far, nobody told me anything, but I’m still happily doing a bit of research because I like the intellectual part of that. But yeah, I’m mostly interested in blockchain now.

QS 02:37 Mike: Very cool. Since you brought it up, I looked up what your thesis was, its title was “Anytime Local Search for Multi-Objective Combinatorial Optimization, Design Analysis and Automatic Configuration”, can you maybe break that down in simple terms what it was that you looked at? 

Jérémie: Yeah, I can try to. I must say it’s quite brave of you to look at that, like any PhD thesis, it can be quite obscure. My research was about the design of algorithms and those algorithms are tackling, attempting to solve problems and I was particularly interested in combinatorial problems that belong to the class of so-called NP-hard problems. So, that class of NP-hard problems are basically the problems that are too difficult to solve in polynomial time, with respect to the size of the problem. So, what it means, it boils down to basically when you grow the size of the problem, if you want to solve it to optimality, you quickly need billions of years, which is not workable and what we do instead for these kind of problems is to design heuristic or non-exact algorithms and I was working of that. And the purpose of these algorithms are to find a solution quickly enough that it’s actually useful in practice, but you lose the proof of optimality, so you never know if you actually have the best solution or not. I was working on quite famous problems, like the travelling salesman problem. There’s even a movie about this problem.

Mike: Yeah, I’m familiar with it. I read a blog post about it at one point and then actually came up with… Used some code that I found somewhere to come up with a solution for a kind of funny bike tour. I live Boulder, Colorado, and we have a bike-share system where there are maybe 40 bike stations all around the city of Boulder and there is this competition that they do or prize or whatever, where if you go and check a bike in and out from every bike station in the whole city within a day, then you can get some kind of prize pack. And so, one of the guys I worked with and I put together the travelling salesman problem for that so that we could figure out what’s the minimum amount of time and distance that we would need to bike in order to hit up all of these different things. Yeah, I’m familiar with travelling salesman; I actually was going to ask you about it once I heard you start describing your research. 

Jérémie: Right, what’s nice with this problem is that you actually, when you approach them formally, you just look at the mathematical formulation, definition of those problems and you realize they appear in a huge variety of situations. Sometime, it might be obvious enough, like your example, but it might be also about pointing a telescope towards some stars, it might also be about radiography, when you want to kill a tumor without sending too much radio-wave to the same flesh around, that’s also an instance of the travelling salesman problem. So, it’s quite nice because once you get an algorithm working, you can actually apply it in a huge variety of real-life situations.

So, yeah, I was working basically for these sort of problems and my approach in particular was about automatic configuration of algorithms because researchers for decades have been designing and fine-tuning these algorithms by hand, trying to get as much performance as possible. But in fact, you can see this problem itself as an optimization problem, you simply want to obtain the best possible algorithm and you can use a variety of techniques to try to get to these results in an automatic fashion using machine-learning techniques, statistical modeling, etc. Basically, then trying to optimize the parameters to your algorithm to the point that you actually define the entire structure of the algorithm in an automatic fashion. That was fun. I enjoy it. But yeah, that came to an end, luckily as all successful PhD theses. 

Mike: Yeah, I can understand that. Have you thought at all about how all of your research might somehow apply to the cryptocurrency space? 

Jérémie: Directly, not really, but let’s say I’m very, very familiar with combinatory systems and when you start  dealing with inputs and outputs, and how they relate to each other and the fact that you can apply some analysis based on graph-theory, etc, the familiarity that I got through my research is very useful to grasp all those things, yes. 

QS 07:38 Mike: Okay, cool. So, it sounds like you’ve been in computer science for a long time, at one point did you discover, or I think you even said, it discovered you, Bitcoin and cryptocurrencies in general? 

Jérémie: I discovered Bitcoin in the Fall of 2012. That was from a colleague of mine in my laboratory and he was interested in Bitcoin mostly for trading reasons. He was a bit obsessed with trading. But he mentioned it to me, and that picked up my curiosity and very quickly, I set up a little working group, completely informal and unofficial, but we were meeting regularly every week just to discuss Bitcoin because the subject was really fascinating enough. And very quickly, I wanted to expand that working group beyond the boundaries of the lab and I created the Bitcoin meetup group in Brussels which was at that time one of the first and for some time, one of the biggest in Europe. As I’m French, but I was living in Brussels at the time and the meetup group ended up being larger than the one of Paris and I was really proud of that. 

Mike: Wow. So, are you still in Brussels now?

Jérémie: I’m between Brussels, London and a few other places. I’d say professionally, I’m between London and Brussels, the other places are just for the fun.

QS 09:05 Mike: Okay, I can understand that. So, then, how did you find Monero? 

Jérémie: I found out about Monero, I’m a bit ashamed to say it, but I was looking for a coin that was CPU-mineable and profitable if possible and I found, I think it was called Quazarcoin coin, I’m not even sure, but that was one of these very, very scammy coins coming from the Bytecoin constellation. They added plenty of little shitty coins along with Bytecoin, but I found this one first, and then, thanks to that, a couple of days later I found Monero because the code was very, very close, but it turns out, the community was very, very different. And after following a bit the Monero thread, I think that was the third week of existence of Monero, so it was early May 2014 and I very, very quickly was completely in love with Monero. 

And that was like many other people I’ve heard them saying the same thing, it was replaying the same story again that I had with Bitcoin originally. The same passion, fascination and especially now that the crypto space got by many different standards quite rotten or corrupt, let’s say. I find Monero so refreshing and it’s like, it’s like having oysters when you’re hangover. And I think without Monero today, I would just have a bit of nausea for this space in general, but thanks to Monero I’m still around and still as passionate as before. 

Mike: Very cool.

Jérémie: I’m very glad I found it. 

QS 11:26 Mike: Okay, so we’ll talk about your company, in a little bit, but I thought maybe we could talk about a longer-running company, one that maybe many people who have followed Bitcoin for a while might be familiar with. When we were talking, you and I were talking a few weeks ago, you told me that you were one of the co-founders of LuckyBit, is that right? 

Jérémie: Yes. 

Mike: And can you tell us or tell anybody who maybe isn’t familiar with LuckyBit, just real quick what that is? 

Jérémie: Sure. That’s a gambling platform that was fully automated, and you didn’t need any account to be able to play. You were basically sending - it’s still on, so you can still send - to a specific Bitcoin address and the result that is determined in a provably fair fashion is returned to your sending address. You don’t actually even need to open the website to play, you just send to an address through your wallet and that just plays.

I think some people might be even more familiar with Satoshi Dice because it was the first one that was a so-called on-chain gambling platform and LuckyBit was really just the same idea, except that we had a graphical visualization. So, if you were to open the website, which was not a requirement to play, but if you were to open it, you could actually see your coin coming through and stuff happening. That was for me, with a friend, that’s something I did quite early on, beginning of 2013. And that was originally just a way for us to put our hands within the technology, we wanted to learn everything about Bitcoin. 

And because we’re developers, and computer scientists, the best way was to build something on top. And the fact that it was based on the on-chain principle, basically forced us to put our hands in the very low-level of the technology and that was really a perfect learning experience. It turns out, after some months that were really, really calm, quite suddenly it became a huge success and at that time, I think for more than a year, we had about 5% of all the Bitcoin transactions every day.

Mike: Wow. 

Jérémie: So, if you were to open, it was just like non-stop. That was fun and we still have the third address with the most transactions of all time, the first is Satoshi Dice.

Mike: Of course, I’m sure there are people like Luke-Jr that probably have said some not so nice things about that, calling it spam or whatever else, but that’s pretty cool that you built a system that was that popular.

Jérémie: I think, Luke is just a funny character and for me, I have really good memories of fighting with him and his pool that was trying to basically blacklist some transactions, including ours. That was a fun distance fight.

Mike: Yeah, I feel like you’ve made it a little bit when you had to take on a fight with Luke. What are the future plans for that site? I know it’s still online, I logged into it and was able to kind of get a glimpse of the interface that you were talking about. Although, it seemed to suggest that maybe somebody from the United States isn’t allowed to play, if you want to talk about that too, that’s fine. But where do you see that site going? 

Jérémie: Yeah, so one thing I could mention is that thanks to LuckyBit I was also encountering fungibility issue very early on compared to most Bitcoin users because I was selling a few Bitcoins at that time that were coming from the profit of this website and people knew I was running it. I was not hiding that. I was meeting a lot of people in meetup groups and when I wanted to sell Bitcoins, they were worried that it was coming from a gambling platform and that they would have issues later on. 

Mike: Yeah, that’s interesting. I haven’t tried dealing with some of the issues with fungibility too much myself. I really haven’t spent a lot of Bitcoin in my day-to-day life, other than buying like a daily coffee and that coffee shop closed here recently. So, I haven’t had to worry about that, it’s interesting to hear from somebody who deals with that directly, or at least did. 

Jérémie: Yes, yes. And very briefly, in terms of future plans, unsurprisingly, the on-chain business, the on-chain business model for basically any sort of Bitcoin platform is just now deprecated because the transaction times are such that you completely lose the snappiness that was actually the interesting part of the game. And it also makes it extremely hard to run something without being double spend constantly, because we were really at the forefront of fighting against people trying to double spend us. So we had an extremely quick engine that was judging the likelihood for a transaction to be double spent or not and whether we would pay the bet immediately on it. It was so interesting that actually we were thinking to sell this as a service through an API and some company later on actually did just that. But the on-chain business just doesn’t work anymore, so we are developing a new version, but that will be a more traditional approach of people depositing their funds, playing, and then withdrawing. 

Mike: Okay, kind of like how fluffypony’s Monero Dice works then. 

Jérémie: Yes, exactly. So, completely different games, but the same idea. 

Mike: Okay, and any plans of adding Monero or Ethereum or some other currency? 

Jérémie: Monero absolutely, I’m not a huge fan of Ethereum, but Monero will come next, yes. 

Mike: Okay, cool. All right, so then, that’s been now going for a few years, was it 2012 that you said you started, 2013, that the website started? 

Jérémie: Yeah, 2013. 

QS 18:04 Mike: Okay, and then more recently, you’ve been involved with which if you go to read-the-docs for, it says it’s part of Cryptosphere Systems. So, is that a startup that kind of is blanket company over top of 

Jérémie: Yes, it was definitely, now we’re decoupling the two. But Cryptosphere was a blockchain consulting company that I founded with two friends. That was one of the first blockchain-specific consulting companies in Europe. We founded that in 2014 and that was at that time the parent company for Now it’s just moving away to be its own entity. 

Mike: Okay, awesome. And then, you also worked for or a co-founder of RISE Technologies, can you tell us what that is?

Jérémie: Sure. That’s my day job actually. So, I left my day job as a research to start blockchain-related startup and RISE is London-based and we design blockchain-based platform for settlement and financial markets. That’s quite far away from the open-source cryptocurrency space, but that’s also a job that has some legitimacy, that is sometimes very difficult to find in the more grayish area, let’s say. So, yeah, that’s my day job. The main reason for which I’m in London, where I founded the Monero meetup group because I didn’t have enough after the one in Brussels.

QS 19:45 Mike: Very cool. I’ve always been curious if there would be enough people here in Colorado where I live to form a meetup group, maybe down in Denver or something. But anyway, that’s a different story. Let’s talk about It’s got to be one of the first startups in the Monero space, but when did you get the idea for it? 

Jérémie: I couldn’t say from the top of my head, but if I look at the post when we launched the service, probably it was about three months before. It took us probably a couple of months to implement everything. 

Mike: Okay, and what was the motivation there?

Jérémie: Honestly, it was just that we wanted to something with Monero, because we loved Monero, and there was just nothing. Everything needs to be done and that’s super-exciting when you have the capacity to develop services. Monero is just a wonderful landscape because there is so much to do.

Mike: And I think you even beat ShapeShift to the field, didn’t you?

Jérémie: Yes and the funny part of that is that the founder and CEO of ShapeShift was anonymous for quite some time when we started ShapeShift, it was not known who was behind, and later on Erik Voorhees revealed that he was the guy behind. And he was already the guy behind Satoshi Dice. It seems we are doomed to just do the same things over and over again. 

Mike: That’s cool. I actually got to meet Erik about a month ago, he’s originally from the part of Colorado that I live in now and he was at a meetup in Denver that I went to. That was kind of cool to get to meet him. But he seems like a nice guy I suppose, but certainly somebody who is probably comparably as deep into all this as you are. 

Jérémie: I think he’s not a techie, but he is indeed a nice guy and he’s a very successful guy and I think he deserves it all. 

QS 22:00 Mike: Yeah, yeah. Okay, so you got the idea, you implemented it. I’ve used a couple of times, I think it’s a really straightforward service, but can you talk to us a little bit about maybe some concerns that people might have over you stealing user funds, or privacy of a user, or types of logging that you do… things like that? 

Jérémie: Right, well, we hold on customer funds for a few minutes, after the transaction confirms, we send the Bitcoin pretty much immediately. We could try to run away with the funds at any point in time, but we never have much because it’s just going through, so the concern in general is not very founded because there is not a huge incentive for us to do that. We’re also quite known in the space and I’ve been openly running the service since the very beginning and I know enough people in real life that I have no reason to run away. In terms of privacy, it’s something we take very, very seriously. There are good reasons why we love Monero and I think is also a service that people like because the philosophy of it is very much in line with that of the currency of Monero, of the project. 

And privacy is really the main characteristic of, so it’s very important for us that people feel at ease with their own privacy when they use the service. So, we purge every information very quickly after only a day. We don’t remember anything of the owners which sometimes is an issue because we get some support request and people ask us, “By the way, I did an order on 22nd of February and I can’t find the address that I was paying.” And there’s really nothing that we can do to help them. It’s really something we take seriously.

Mike: I think there is even some kind of note on the site, if you have some type of issue, to make sure that you get in touch with you guys right away because otherwise, it’s just going to get lost. 

Jérémie: Yeah, exactly. And just to mention that in terms of privacy, thanks to Monero properties and that’s fundamentally why the service is interesting, is that even if we were just bad guys trying to spy on people, because of Monero fundamental characteristics, there is really nothing that we can learn about them. The only thing that we can learn about our customers are their IP address, but they are completely free to reach us over Tor. We even have an onion address, but in terms of the Monero payments we receive, there is really nothing for us to look at there. So, they actually don’t even have to trust us in terms of privacy.

Mike: Yeah, that’s very cool. I saw you tweeted maybe a month ago or so that you added the onion address. Do you also have an I2P address as well? 

Jérémie: Not yet because the onion address was just, let’s say in terms of effort versus utility, that was the most urgent one. But the I2P is absolutely, definitely coming, it’s just such a good fit with Monero.

Mike: Cool, cool. So, then what do you see as the future of, is it going to stay strictly Monero to Bitcoin or could that expand or are your thinking about expanding into other services? Can you tell us maybe not all your plans because it’s probably a little bit of a secret, but can you give us a glimpse into that? 

Jérémie: Sure. In general, we’re quite open about it and we are also happy to get feedback. We are really keen on Monero and I don’t think we are ever going to accept anything else than Monero. The purpose of the service is really to allow Monero holders to spend them at a huge number of merchants, which so far don’t exist by themselves, so you have to basically find merchants that accept Bitcoin and use a service such as ours. In faraway future, I don’t find that very plausible, but who knows. If Ethereum takes over and is actually accepted by more merchants than Bitcoin, then we will probably offer something that receives Monero and sends Ethereum. But, in terms of accepting anything else, there is no point because we really want to offer people a private way to spend their funds and Monero is just perfect for that.

Mike: Cool.

Jérémie: In terms of future plans, we are looking to integrate I2P, move the entire service towards an integrated address which would reduce the support request. 

Mike: Yeah, I’m sure.

Jérémie: Because some people are forgetting the payment IDs. And we are looking to allow zero-confirmation transfer for amounts that are not too gigantic so that we could take the risk and also increase the maximum order size which right now is 5 Bitcoins and we would probably look to 10 or 20 Bitcoins in the near future. 

Mike: And your service basically just works by always kind of having a slush fund ready to make a trade on Poloniex or something like that? 

Jérémie: Right. So, we have a hot-wallet, so we ensure that whenever we receive a transaction, that Bitcoin can actually be sent out immediately, there is no delay. The Bitcoins are there, they are ready to be sent. And the fact that we are uni-directional, unlike ShapeShift and a few others, ensures that we don’t ever receive any Bitcoin from random guys on the internet which is quite a big deal because we only send fresh and clean Bitcoins that are coming from reputable exchanges. While if you go to ShapeShift for instance, because they also accept Bitcoin in their hot-wallet, you never know what sort of tainted coins are there because not only you necessarily have some of them that are tainted, but in fact, people that have tainted coins have an incentive to use this kind of service, rather than going to Poloniex, etc. So, I would postulate that the ratio of tainted Bitcoins is quite large on these kinds of platforms and we don’t offer anything like that. 

QS 29:02 Mike: Okay, cool. I know your service has a really nice API. Matter of fact, that’s why I was on the read the docs that I saw that other thing, and what that basically would allow is anybody creating any type of, I don’t know, payment system, or a wallet or whatever to integrate directly into that. Do you have plans to try and do anything like that yourself? Maybe have an official wallet or are you working with other people or have there been discussion about how that API might be used? 

Jérémie: We don’t intend to develop an entire tool by ourselves. But, there was a few of them in the past already. I can remember that Shen, who is quite famous in the space for designing the RingCT scheme, he implemented an Android mobile wallet that was relying on API so that you could spend Monero from your phone and pay a Bitcoin address with them. 

Mike: Yeah, I remember that. 

Jérémie: It was a nice service. What we intended to do ourselves, is to help design the module to the official GUI. But right now, it’s not something that we have really started because the plugin architecture for the GUI itself… There’s still a lot to do, if we had more time, we would be happy to contribute to this, but at least as soon as the plugin framework is somewhat in place, we would be glad to contribute. And there’s also collaboration, potential collaboration that will happen with the MyMonero desktop app that is designed by fluffypony. 

Mike: Cool. Yeah, I was actually thinking about how you might be able to create like a Firefox and Chrome extension that would just, any Bitcoin address that it saw on a site, the extension could just put a little button next to it that would allow you to just automatically do the conversion right there in the browser. I don’t know how useful that would be, but it seems like something that might work. Maybe it’s something I’ll poke around with over the summer or something like that. 

Jérémie: If anyone wants to do that, it should be easy. It’s not something we did ourselves, but the extension for ShapeShift is called ShapeShift Lens if I’m not mistaken and that’s open source. So, forking that should be really, really easy.

Mike: Yeah, I’ve made a couple of Chrome extensions myself, so they are very straightforward if you understand JavaScript and HTML. It’s something that I kind of thought about, but just really never had time to look into, but maybe I’ll get in touch with you in a couple of months if I decide to pursue that.

Jérémie: Yeah, great.

A note on this bit: this conversation originally took place on Friday, 21 April 2017. The next day, the reddit user stoffu actually announced essentially this extension! A great example of how in even a couple days between recording and release of an episode anything can happen!

QS 32:02 Mike: So, okay. Then, how about anything else? Do you have anything up your sleeve, other projects or thoughts on the future of the scaling debate or anything like that you’d like to talk about? 

Jérémie: I’m really sick of the Bitcoin space. I don’t even check the reddit anymore. Actually what I would like to do, I would like to train a neural network to recognize which post is coming from r/btc and r/bitcoin because I think the communities are so polarized, that it’s getting really ridiculous and I’m really not that optimistic for Bitcoin. As I said, without Monero, I would be really sick of the crypto space. So, I don’t have a specific stand on that, I’m just sad at the way it’s currently growing in terms of the scaling debate. Well, maybe just, I would advise to start some Monero meetup group. You mentioned that you are thinking about that. I think it’s the right time. We’ve seen a few of them popping up around the world and I think we should all unite and push in that direction.

Mike: Yeah, that’s a good idea. Anybody who’s listening to this show, if you are in the Denver area or come to the Denver area every once and a while or something like that, get in touch with me and let’s chat about maybe getting one going in this area. That could be fun. Okay, do you want to tell anybody how they can get in touch with you if they want to find you on social media or on reddit or whatever else?

Jérémie: Well, I go by the name of BinaryFate on reddit, bitcointalk, and on IRC. So, yeah, happy for anyone to reach out.

Mike: Okay, where did that name come from, BinaryFate? 

Jérémie: I have no idea how I came up with that. But it’s something, I found this name, I don’t know how it came up, but that’s something I use specifically for the crypto part of my life, so that was towards the end of 2012 and I guess it’s just… It means to me that I’m really willing to lose everything or make it big. Make it big for me, it also might be just about the quality of life, what I want to get from my travels, from the friends that I’m making, etc, but that was a way for me not to resign and get into a normal life. So, it’s just make it big, make it really happy, or don’t make it at all, and that would be my BinaryFate.

Mike: Well, that sounds like a much better reason for a username than I have. I basically, I’m a big baseball fan, I don’t even know how much you know about baseball, being from Europe, but there’s a famous team from back in the day, the Cincinnati Reds that were nicknamed “The Big Red Machine”, red with just one D, and so then when I was looking to sign up on reddit, I said, “Oh, that would be a clever pun of The Big Red Machine, if I was the Big Red, with two Ds, Machine.” So, that’s where mine came from. It sounds like your story is a little better than mine. 

Jérémie: I can say your story is great.

Mike: All right. Well, thank you for coming on the show today. It’s been fun and thanks for talking about everything from your thesis, to your casino, to, and your thoughts and everything. It’s been fun hearing all that and I hope you enjoyed coming on.

Jérémie: Thanks, Mike and it was very nice to talk to you. And thanks for organizing these shows, and these podcast. I think it’s a great initiative, thanks for that and thanks for having me. 

Mike: Yeah, you’re welcome. I think I talked about this with Riccardo a little bit, but basically, I looked around and said, “I wish somebody had a podcast that would talk to people like you and like Riccardo and like Howard”, and so on, to talk about stuff that’s going on in Monero, other than just like, “What is Monero?” Because that’s all you really ever find. So, after a couple of months of saying: “I wish somebody would do this.” I just decided I would do it, and so anybody who’s listening, if you’ve got an idea, I would encourage you to do the same. Don’t wait for somebody else to do it, just go do it or get on reddit and try to find somebody to help you do it.

Jérémie: That’s a true Monero spirit. 

Mike: Exactly. Anyway, I hope everybody has enjoyed listening to the show. You can find our episodes on You can get me on Twitter, my handle is @MoneroMonitor, or as I already said, my reddit name is bigreddmachine, and that’s red with two Ds, just like reddit. Until next time, so long, everybody. 

~~ { Closing Music } ~~