BTC Sessions - Adam Back: $300K BTC, Hidden Bitcoin Mines, Core Ditches BIP70 EP065

Starting point is 00:00:13 Wasabi wallet and fairly private. What's up everyone? I'm Ben with the BTC sessions and this is your daily session. Before we dive in, I want to give a shout out to sponsors of the show, leaden.io. I've been using these guys for a bit over a year now. And they've got a few different services you can use your Bitcoin for. They've of course got their Bitcoin back loans, which is the first thing I ever used. I was in a pinch I needed to get dollars in my account, but I didn't want to sell my Bitcoin because I won the tax implications and because I was worried I would have to buy it back at a higher price later. So I was able to use their loan. Basically, my Bitcoin was collateral. I got the dollars in my account within 24 hours. And when I paid back that loan in dollars, I got all my Bitcoin back, regardless of the

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Starting point is 00:02:04 a month and they made my life a lot easier because of the service they provided. Basically, you can get pretty much any gift card you can imagine with Bitcoin. So if you're trying to make that transition of living as much on Bitcoin as possible and an opt out of the Fiat system entirely. This is a godsend. Honestly, they've got just about everything you could want here. Super easy to deal with. They've got some gift cards that have zero fees. They've got super quick delivery on a lot of them.

Starting point is 00:02:37 They've got physical delivery as well as digital. And you can also top up your mobile device as well if you're going by minutes there. So be sure to check them out. There is a link in the show notes down below as always. With that, let's dive into the news. So Adam Back was on, what was he on? CNBC, I want to say. Anyways, he was interviewed the other day.

Starting point is 00:03:04 He was talking, oh, sorry, Bloomberg, that's what I was talking about. Adam Back, Bitcoin developer and CEO Blockstream. He was on Bloomberg, and I'm just going to read a little bit from the article on Coin Telegraph here, about a little bit about his price predictions for Bitcoin in the next little bit. So, Blockstream's Adam Back says that unlimited money printing will drive retail investors toward Bitcoin and push the price to 300 grand within five years. In an interview with Bloomberg, in which he once again denied he was the Bitcoin creator, Satoshi Nakamoto, sidebar there, back outlined his thinking behind the sky high price prediction.

Starting point is 00:03:44 The OG, who was cited in the Bitcoin White Paper, added that BTC may not need the long-awaited flood of institutional money to push it into a bull run. The quote says, it might not require additional institutional adoption because the current environment is causing more individuals to think about hedging and retaining value when there's a lot of money printing in the world. Now, he said in regards to Goldman Sachs, so he was praising gray scale investments, which is now buying up more Bitcoin than is being mined. He said that the investors call from Goldman Sachs last weekend where they basically shat all over Bitcoin. He said it shows many big players did not understand the paradigm shift. However, this was a money-making opportunity for those already in the space. the quote. It showed some misunderstandings about digital scarcity and what's useful about Bitcoin. You have a major sophisticated market player like that with unclear understandings of the value.

Starting point is 00:04:50 To me, that indicates there's still a lot of headroom for price appreciation and adoption in the market. Yeah, it's basically, he goes on to talk about how these outlandish prices that we see thrown around, you know, a few hundred thousand dollars, millions of dollars, in the context of inflation may actually not be that crazy. If you have a dollar worth of purchasing power that due to inflation over the next decade or two decades is worth 10 cents worth of purchasing power later, then, you know, a $30,000 Bitcoin today in a couple decades is actually $300,000 worth of purchasing power in a couple decades time.

Starting point is 00:05:37 So in that context, along with how early everything is and how little market penetration Bitcoin has so far, those outlandish prices become a lot more reasonable. So I don't know. What do you guys think? Do you think 300K is a reasonable price within five years? I know I'm pretty bullish. I could be wrong, but I also think that when he says five years, I think he's, trying to under promise and over-deliver.

Starting point is 00:06:10 Honestly, I feel like we could see it sooner than that. But hey, don't quote me. What the hell do I know? Moving on in regards to that Goldman Sachs, them kind of not understanding Bitcoin. If you want to check back in some of my previous videos, I outlined the whole thing where they basically don't understand a thing about Bitcoin and they're utilizing a lot of arguments that were mainstays for most institutions,

Starting point is 00:06:34 back in 2014, 2015, but I've been debunked multiple times. Anyways, a little quote here. So there was from Swiss quote, the head of digital assets at Swiss quote, fired back at Goldman Sachs over a presentation it made dismissing Bitcoin as an asset class. So Thomas rebuked at Goldman Sachs' opinion of Bitcoin and of cryptocurrency in general,

Starting point is 00:07:02 and that it did not, constitute an asset class of its own writing, The world is witnessing an emerging asset class being formed. Bitcoin and other select others are driving, sorry, are the driving force behind the paradigm shift which is happening. Goldman Sachs is ignoring the strong foundations of this emerging asset class based on cryptographic principles and a world where many, if not all assets, will be tokenized and trading them will be democratized.

Starting point is 00:07:34 Basically, he goes on to also say that it was a complete disservice. He said it was very one-sided and unfair to the community and a disservice to the Goldman Sachs investor base. And I've got to say, I don't disagree. I love that he also alluded to later some of their other bad calls. They talked about one of the points that Goldman Sachs talked about was the volatility of Bitcoin and that it had a huge drop on March 12th, along with the rest of other markets in a single day, a 37% drop. And I love this quote that he used here.

Starting point is 00:08:12 He said, absolutely, Bitcoin did fall 37%. And just one month later, oil markets plunged 33% in the space of 24 hours, a nearly 10x greater drop, touching a low of minus $40 per barrel at one point. In December 2019, Goldman Sachs predicted the average. price of oil through 2020 would be $63 per barrel. So, you know, jabbing a little bit about some of their old, some of their previous bad calls and not even that old, like a six-month-old bad call where they didn't really understand the market there either. So all in all, yeah, again, it didn't really need to be said again, but I'm glad it's being brought up again that

Starting point is 00:08:55 maybe Goldman Sachs really doesn't understand what's going on or maybe they're just purposely putting out old and bad information as they start to dabble a little bit in the background and try and get a better understanding. Who knows? Moving on, Coin Square, there was a hack previously. When was this? This was back in 2019, I believe, or in and around that time. Anyways, the Coin Square hacker that got into their systems actually was able to get quite a bit of user details. So, So now they have the information for sim swapping attacks. So this is where, if you're unfamiliar, a lot of online exchanges will have two factor.

Starting point is 00:09:43 Two factor is a good thing in general to have. So it requires more than just a password to get into your account, requires a second bit of information, a numerical code that is generated independently of your password. And that can be done either via a text message, Or it can also be done via something like Google Authenticator where it's just an app on your phone

Starting point is 00:10:06 and it regenerates a new code every 60 seconds, I believe. Now the problem with the SMS version of two-factor is that if somebody gets access to your SIM card, they can see those notifications coming and they basically create a clone of your phone. They get the same text messages that you do and then they use that information to be able to get into your accounts.

Starting point is 00:10:31 And so they can do stuff like trying to get a password reset and a lot of other attacks. And then they have the other necessary information that they need to get into your account. And if you're leaving coins sitting on an exchange or any other centralized service, well, hey, guess what? You could be screwed because they can withdraw your money. And so the whole point of the original hack

Starting point is 00:10:57 was he wanted to embarrass the platform because they said that they were the most secure the most secure Canadian exchange which again like it's it's every time we see anybody make large claims about about security there's always going to be somebody that tries to step up and disprove that we saw that with the I believe it was the bitfi wallet where they said unhackable and that was the one backed by John McAfee and of course immediately you have people getting the device and and owning like poning it and putting like doom on it and being able to get into it and see everything

Starting point is 00:11:35 and even being able to retain some information a little bit longer than expected and extract certain information so yeah i mean it's inevitable with stuff like this so my i think the takeaway that we need to see here is SMS two factor is not secure and your best bet is to always use something like google authenticator or offy which is a free download you can get on any phone, iPhone or Android, and it will cycle your two-factor codes. And all you need to do is when you go to log in, you put in your password, and then it says enter your two-factor, you open up the app, you look for whatever service you're trying to get into, and you put in the code that shows there.

Starting point is 00:12:18 And that'll mitigate this attack vector for you. Moving on, I just thought this was so hilarious, and it shows kind of the lengths people will go to to mine Bitcoin to get some Bitcoin for cheap or free almost. Chinese police found a secret Bitcoin mining operation in suspected tombs. So if you're watching a video right now, you can see there's an image here of these mounds. It looks like burial sites in a region in China. And yeah, so there was a nearby oil firm. that told law enforcement about unexplained power losses. It looks like these guys were actually routing power from that oil firm

Starting point is 00:13:06 to these hidden Bitcoin miners that were underground in these mounds. Not only that, but local media reported that earlier the same week, the law enforcement there found 54 mining rigs under a dog kennel in this same county, in the same province. So it looks like there's a kind of how did you. digital money in Bitcoin has incentivized hackers to lock down people's systems. Like we saw the Wanna Cry malware that happened a couple years ago where essentially you'll ransomware somebody's computer if they have poor security and make them pay in Bitcoin. Again, this has also incentivized people to try and steal power.

Starting point is 00:13:54 And so you can look at the negatives of this of saying, like, hey, yeah, people are using money as a way to reward themselves for bad behavior. But it's also incentivizing people directly as business owners to actually get better security for their systems because there is consequence for not doing so. Overall, I think in time, what we'll see is that the idea of digital money will contribute to a more digitally secure future. future, probably in very short order, I imagine. The incentives are starting to come out of the woodwork when it comes to all the ways that you can be exploited when there is digital, irreversible,

Starting point is 00:14:43 and for the most part, not trackable cash. Now, I wanted to jump to this quick tweet to kind of tag on to, we were talking a little bit about the protests yesterday and how we're seeing a little bit of some bitcoinsers inserting themselves into these situations. And again, I'm not going to speak too much to the politics about it, but there was an interview of this guy, and I can't tell quite, it looks like a Spanish station, but in L.A. And he's being interviewed about what they think about the protests and everything like that.

Starting point is 00:15:20 And he does allude to Bitcoin as a way to opt out of basically the entire thing. regardless of what side you're on. It's a way of opting out of the system that funds some of the less desirable parts of a government that perhaps has a little bit too much control. So this was a tweet from Noah Liebuwitz. He says, Bitcoin does very well in inflationary crony capitalist environments, but it thrives in anarchy. Cryptoanocrity is on the rise. And I encourage you to watch the clip. It's also interesting because as he starts to get to his point of like, hey, let's opt out of the economy and stop funding this crap. And we can do that by buying Bitcoin. They start to cut away. It's almost like they don't want the segment to finish or don't want people to hear it.

Starting point is 00:16:12 But anyways, yeah, interesting nonetheless. Let's move on here. So firmware updates for Treasur 1 and Treasor Model T. And this is in relation to a bug found. reported responsibly a responsible disclosure by what was the individual's name uh selim rashid and so the bug was reported via our responsible disclosure program and we thank selim for yet another great contribution so uh what this is is that it's it's kind of like a shoulder you know it's it's a fringe case of of something that could happen but um it has to do with if you're trying to to execute a transaction and your computer had malware and you were executing a couple different Segwit transactions, then feasibly somebody could interject themselves there, create an error

Starting point is 00:17:09 message and get you to try and sign again and in doing so get you to pay a rather sizable minor fee. So it doesn't seem like the attacker themselves would be a direct beneficiary unless they were mining as well and had a decent chance of getting a higher minor reward. Regardless, it's been patched via treasur. It's been disclosed to other third parties that also utilize this. It shouldn't just be, you shouldn't just be considering this for treasurer, but it's also the attack could be carried out on ledger, on cold car, basically every hardware wallet out there. So, so patches will have to be made. Also third parties, like if you're utilizing treasurer or ledger or cold car, or whatever via things like Electrum and Wasabi and BTC Pay server.

Starting point is 00:18:01 Again, it is kind of a fringe attack vector, but I imagine updates will be issued shortly. So if you are using Trezer, you can update that via their website and get the new firmware and expect updates for a lot of those other softwaers. Otherwise, in the meantime, all you really need to do as far as mitigating risk is if you see an error, then perhaps pause, take a look at what you're doing, double check that no other transactions have gone out, double check where everything is going, make sure the addresses are yours and the correct destinations, all that kind of stuff. So just be diligent when making transactions. If you see anything funky with a wallet, odds are you won't be affected, but still always good

Starting point is 00:18:46 to keep an eye out for that kind of stuff. One other software update that I wanted to touch on before we finish here. So Kyle Honeycut, thank you for the heads up here. He said Bitcoin 0.20.0 released today. Although there are several notable changes, I think the sweetest of all the official, is the official removal of BIP 70, or Bitcoin Improvement Protocol 70.

Starting point is 00:19:15 It was previously disabled as default, but now it's gone. Rest in peace, BitPay, Bravo, open source, BTC pay server. So context here. What does all of this mean? So number one, there's a new release of Bitcoin, an update, obviously backwards compatible, as always, or not as always, but as the trend is basically being cemented.

Starting point is 00:19:41 BIP 70 is a payment protocol for Bitcoin. And so what you typically see is BIP 21, which is the QR codes being able to scan, easily. And that's kind of the norm. That's what most people interact with. However, there was, there are some issues with BIP21. It's not quite as secure as some. There can be some instances of man in the middle attacks, which can be mitigated in various ways. But BIP 70 was an effort to try and make that much more difficult. The problem with BIP 70 is the following. So BIP 70 was put forward by Mike Hearn and Gavin Andresen, two early Bitcoin advocates and contributors to the code, who have since more or less left the project. So Gavin

Starting point is 00:20:32 has become very much a big blocker, was huge in, he was very much in support of the Segwit 2x effort in which a bunch of companies wanted to more or less hijack the code. Same with Mike Hearn. Mike Hearn famously rage quit. Bitcoin said that it was a failed protocol back in 2016, before it went crazy in 2017. He sold all this Bitcoin and went to work for some like cabal of banks that were trying to build some sort of protocol called R3. Yeah, it was kind of ridiculous. Anyways, these are the guys that put it forward. The problem is twofold. Number one, it's not compatible with BIP 21. meaning that if you had a regular Bitcoin wallet and you went to pay an invoice on part of BitPay,

Starting point is 00:21:26 at the time the world's largest Bitcoin payment processor, you would not be able to pay it with a regular Bitcoin wallet. You had to jump through hoops just to make it work, which I'm sure, especially to a lot of new users, completely put them off using Bitcoin or trying to pay with Bitcoin. The other problem is privacy related. So I'm just going to read a little bit from this. This is from an old post by Petro Wallace,

Starting point is 00:21:56 and this is from July 7, the 2019, where he broke down BIP 70. I'll link to this down below, so you can read the whole thing. But this little part, how can BIP 70 lead to privacy violation? So he said, when your wallet makes a call to the merchant's server, the merchant or the payment processor will be able to see your device's IP address and easily identify you. Usually, you can mitigate this by using proxy services or Tor. However, using BIP 70, the user will have to use a clouded BitPay URL to request for the merchant's address and other relevant invoice details.

Starting point is 00:22:33 If BitPay detects that you are using a VPN or Tor, they will not acknowledge you, making it impossible for you to pay your invoice. So you basically have to give up your IP address when utilizing this. In other words, not only is BitPay exploiting their position to force people to use a particular protocol, but they are also dictating how you can interact with the system itself. As expected, BitPay received heavy criticism because of this. So, yeah, basically what has happened now is that the core contributors to Bitcoin core, the protocol, have removed BIP 70 entirely. So those of you using the most up-to-date Bitcoin,

Starting point is 00:23:14 whether it be your wallet, your light wallet is utilizing it or whether it be a payment processor using it, whatever. Basically, BIP 70 is no longer an option. You now, by default, you're going to be using BIP 21, the regular QR codes, which do not require you to give up your IP address. We saw plenty of other wallets disable BIP 70 in the past as well. So, yeah, sucks to be BIPP pay. I mean, they kind of took it away as well. Previously, they realized that regardless of their position in the industry,

Starting point is 00:23:50 nobody wanted their crappy protocol or to be forced into giving up information. And kudos, BTC pay. I would count this as a win. BTC pay being the open source alternative to BitPay and a much better thing to utilize, I would say. Anyways, what do you think? What do you think about all this? Are you happy to see BIP 70 be ripped from the protocol? Anyways, guys, I'm going to wrap up there.

Starting point is 00:24:21 Thank you so much for watching and or listening. If you're here on YouTube, do hit like, subscribe, and share, but also check out my other platforms that I stream to. I'm live on Twitter. God, Twitch. Why am I forgetting everything? Facebook Live. Just a whole bunch of D-live, a whole bunch of stuff.

Starting point is 00:24:39 I'm also audio-only on the podcast for like Apple Podcasts, Google Podcast. Spotify, all of that, you can find me pretty much everywhere, so do subscribe elsewhere as well. If you wanna help with the show in another way, you can add up the sponsors down below. That was Ledin and Coin Cards, as well as if you're not already, be sure to get your coins on a friggin hardware wallet.

Starting point is 00:24:59 We see crazy price fluctuations and you don't wanna be left with your coins just kind of naked on a phone or on a computer without a second level of security to it. And a hardware wallet gets your private keys off of an internet connected device and onto something that's completely gaped away from the internet.

Starting point is 00:25:18 So be sure to do that. I use the X and the S, and they're both excellent. I use them for different purposes. So if you wanna check that out, there's a link down below. They've got some solid deals there. So outside of that, if you really like what you saw,

Starting point is 00:25:31 you can always drop me a lightning network tip at my Tipin.me page that is tippin.m.me slash at BTC sessions. And with that, I am out. Have yourselves a wonderful day. a wonderful evening and we'll see you next time for your daily session.

BTC Sessions - Adam Back: $300K BTC, Hidden Bitcoin Mines, Core Ditches BIP70 EP065

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