BTC Sessions - Bitcoin Dips Below $10K, Sushiswap Exit Scam, Upgrade Wasabi EP093

Episode Date: September 5, 2020

SUPPORT THE SHOW: LEDN offers Bitcoin backed loans – Sign up and get $50 free https://bit.ly/3gZFPOl Get Wasabi wallet and enjoy your Bitcoin privacy https://wasabiwallet.io/ Buy a Cobo Vault to secure your Bitcoin! https://bit.ly/2GgMFlH Crypto Cloaks: Get the BEST Bitcoin swag out there https://www.cryptocloaks.com/shop/ If you value my work and would like to send me a tip, they are always appreciated! LIGHTNING tips: https://tippin.me/@BTCsessions Join my Telegram channel! https://t.me/btc_sessions SHOW RESOURCES: It’s all over, according to Forbes https://www.forbes.com/sites/billybambrough/2020/09/03/if-bitcoin-drops-below-10000-its-all-over-heres-why/#7feb5530621c V shaped recovery unlikely https://www.coindesk.com/bitcoin-crypto-recovery-price-analysts Sushi-swap gets dumped by founder https://decrypt.co/40976/founder-of-sushiswap-defi-protocol-cashes-out PlanB, Preston Pysh and Jeff Booth get bullish https://www.whatbitcoindid.com/podcast/bitcoin-has-entered-phase-5 Zug Switzerland accepting Bitcoin for taxes https://www.btctimes.com/news/zug-will-start-accepting-taxes-in-bitcoin Upgrade Wasabi wallet, responsible disclosure https://blog.wasabiwallet.io/responsible-disclosure-v4-hard-fork/ Upgrade Trezor/Keepkey – passphrase vulnerability found https://www.btctimes.com/news/developer-discovers-ransom-attack-explot-within-keepkey-and-trezor-wallets Coinbase discusses Poop tokens. Actually. https://blog.coinbase.com/around-the-block-8-the-promise-and-potential-of-synthetic-assets-9fbb15c2b24e Sparrow wallet now available https://www.sparrowwallet.com/

Wasabi wallet and fairly private. What's up everyone? I'm Ben with the BTC sessions and this is your daily session. Poddle their Bitcoin. Before we dive in, of course, shout out to sponsors of the show, ledden.io. This is where you can use your Bitcoin for a variety of different services. I've been working with and using these guys for over a year and the first thing I ever used to theirs was their Bitcoin backed loans. So in my instance, I needed some dollars but I didn't want to sell my Bitcoin because That's a taxable event, and I was worried about having to buy back in at a higher price point.

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I love them, a bunch of hardcore bitcoins that got together with some 3D printers and started banging out some awesome stuff. They have node shells. They have these cool Bitcoin grenades. you can put your open dimes in. They've got the Bitcoin Honey Badger, I guess, shelf drawer. I'm not sure statue how to describe it, but I'm going to get one of these on the shelf behind me, and I'm going to be storing some hardware wallets in it for fun, for easy access. They've got awesome sticker collections.

They've got their shells for cold cards and lots of other hardware wallet accessories. They've just got a ton of awesome shit. So do check out these guys. Head over to Crypto cloaks. dot com. There's a link in the show notes. And finally, of course, we have the Kobo Vault. Now, I did an awesome video on this covering how to use this. I was actually just playing with it before this video as I was playing around with something, some software I'm going to talk about in a bit. But anyways, Wiggott awesome hardware wallet. It has optional Bitcoin only software,

which obviously I opt to use. Everything is totally air-gapped, meaning that you never plug this thing into an internet connected computer. Everything is communicated through QR codes. Yeah, I love this thing. And one of my favorite things is their interoperability between my favorite wallets. Of course, Bitcoin Core, they've got Electrum, Wasabi, Blue Wallet, and they've got a lot of them that work with Malteseig as well. And we're going to be touching on a new wallet that I've been playing around with a Kobo on as well. But all in all, these guys are friggin awesome. Now, what they are doing is a giveaway. So, free shit alert, every show that I do for the next three months, they will be giving away a cobo tablet plus. This is a steel plate to store your backup seed for any wallet.

And they actually made this one after James and Lobb did a test of their regular seed plate, found that it didn't stand up to his standards. And they created this even heavier duty one where the individual tiles won't even shift after warping with extreme pressure. So if you would like a free cobo tablet plus to store your seed phrase in steel as a backup for a regular wallet or for any wallet if you happen to get the cobo actual cobo vault, then all you need to do is get on Twitter, retweet this show, and you need to tag myself and cobo vault and tell them why you want a cobo tablet plus.

choose a winner before the next show airs. I'll reach out and I'll DM you and get you that device or not rather device the plate as soon as possible. But anyways, with that, let's dive into the show. If Bitcoin crashes below $10,000, it's all over. Here's why, guys, it's all over. Apparently it's all over if we go below $10,000, which I find super hilarious. Now, despite the title, Here's why. I didn't really see a lot of why in this article. But nonetheless, people are panicking because there's been a pretty steady drop the past few days here. We've shed a lot off the Bitcoin price. And we did indeed crash below $10,000, albeit briefly earlier today. We were in the 9,900 range. But we have since rebounded a little bit. But again, besides the point,

This article itself I found, comparatively to the title, it wasn't all that scary to read. They were just saying like, hey, $10,000 is a huge psychological level. It took a long time to decisively break above it. And if we break below it, there could be further shedding of price. But it was pretty level-headed through most of this. Again, like they're saying, like moving forward, it is important to keep an eye on the last zone of defense between 10,000. $10,500, Joe DePascal, the chief executive of San Francisco-based Bitcoin and Crypto Hedge Fund, BitBull Capital said via email.

As long as this range is respected, Bitcoin is unlikely to see a prolonged bearish spell. And it kind of goes on throughout most of this talking about how it's just a big psychological level. Obviously, it took a long time, as I said, to break decisively above it, breaking it below it decisively for an extended period of time. you know, wouldn't be fantastic, wouldn't be too exciting to look at. But hey, now one thing to note that, and I'll highlight it here in this Forbes article, the open trading gap, so there was a trading gap set on the CME or the Chicago Mercantile Exchange. It opened higher after the weekend close on July 27th, something some analysts think causes a disconnect with the underlying market,

and appears to have set Bitcoin on its path to recent highs of around $12,000. Technical analysis shows that 90% of such trading gaps are eventually closed, with the price sooner or later retracing back to the gap. So this gap, as we said, was just below the $10,000 level. I'm not sure if we actually triggered it yet, but those gaps do tend to fill. We're pretty close to filling it if we haven't already, So that could be one thing to take a peek at.

Now, another article here at a coin desk, the title here is V-shaped recovery from Bitcoin's biggest drop since March is unlikely, say, analysts. Now, a few analysts here are saying similar double-digit price pullbacks observed in April and May were quickly reversed in a couple of days, a sign of buy-the-dip mentality. And I know I've been seeing a hell of a lot of that on Twitter

for a while now. This time, though, a quick V-shaped recovery back to recent highs around $12,000 looks unlikely due to cryptocurrency's increased sensitivity to traditional markets. The worst may be behind us, but Bitcoin can take days to form a good base. I find that quote a little bit contradictory to the tone of the rest of the article. Again, they're saying, a V-shaped recovery probably not going to happen. It could take days. That's a big panicky thing to say. Again, let's, okay, if we actually look at what Bitcoin has done here, we first decisively

broke above this level again in July. Okay? You know, we were above $10,000 earlier in the year, but July was kind of when we first really, really made it up here. We broke a little bit, when was that? That would have been in mid-early February, somewhere in there. we were above the 10,000 mark very, very briefly. And again, in May, beginning of May, early,

ended, sorry, end of May, early June. We just barely kind of breached that level. But other than that, we hadn't really seen it since last year in the fall. And then before that, kind of like the summer and that big kind of pop that we had in June, July of 2019. So, you know, it's been a while since we've been up here, but we have kind of rebounded back from that panicky, a little bit from the panicky moment we had earlier today,

but we're still down in that 10K range. And you can see here we went down to around 9925. Who knows? I mean, again, if we broke quite decisively below that, then, yeah, we're probably going to be lingering down here a while. But to the opposite of this, we have some bullish people, which we'll touch on in a moment, talking about potentially breaching previous all-time highs before the end of the year, like Christmas time.

What plays out? Who knows? Who knows? What I do know is that the rest, the rest of everything got royally screwed. This chart that I'm looking at here, if you're watching on YouTube, coin 360.com. Basically, the redder, the debtor. If you see heavy, heavy red,

then, yeah, it's just massive, massive losses. Tons of double-digit losses. Like Bitcoin, I think, at its lowest, had like a 5% drop roughly within a 24-hour period this is. Whereas you see Ethereum, at one point, they were down an 18% drop for the day. You see a lot of like heavy double digits. If we go over to coin market cap, just devastation.

Like the worst of the worst, sushi swap. A 63% drop within 24 hours. We see 39, 31, 28, 27, 26, 25. Just a lot of, again, random shit coins. A lot of, a lot of defy crap that's just being dumped. Anybody in defy, I, again, I've tried. tried to say you gotta be careful here, but it is unreal how much that shit can dump and how quickly. And so like we're looking at the sushi swap one. That one really, really stands out because of how insane it's been.

Like it peaked out at around just over 10 bucks US and right now it's at about $1.74. So it's lost over 80% of its value in four days. And why? Why is that? It's because, and we talked about this actually just a little, a few days ago, the founder of Sushi Swap, which is like a DFI, again, DFI is basically like complex financial derivatives and leverage to get yield, more or less out of nothing. and massive amounts of printing just to like give that yield. Basically you deposit your Bitcoin or Ethereum or whatever in order to get paid out a lot of interest in whatever the token may be. So sushi swap was one such thing.

Anyways, the creator of sushi swap held like $27 million in just a regular wallet that could be dumped at any time. Turns out the time was now. because he dumped it all. He dumped everything. He dumped like $10 million worth. Anyways, let's read a little bit here. Chef Nomi, the mysterious founder of Sushi Swap, the latest decentralized finance protocol to flourish above the thriving canopy of Summer's defy craze. I'd say that's more praise than it deserves. He just cashed out. Over the weekend, the self-described head chef withdrew

approximately 2.5 million sushi tokens from the decentralized exchange. in exchange for 18,000 Ethereum worth about $10 million. The move recorded on ether scam comes just after the creator of Sushi Swap, a fork of the popular Uniswap exchange was hit with mounting criticism that he controlled nearly half of the coins in the system. So he liquidated half of all of these tokens. In somewhat of a prophecy, a Twitter poster going by the name Sasa pointed out on Tuesday that Chef Nomi had 27.

million worth of sushi ready to be dumped into the pool. And this is what we talked about in the previous show, how he was sitting on that. Of course, not worth $27 million anymore. Anyways, he withdrew the liquidity for the token. In other words, reduce the amount of sushi available to trade for ETH. And again, the price is halved. Well, actually, two thirds, I'd say of it, has disappeared in the past 24 hours because it's dumped even. more since this article. Now he did respond a little bit. Again, he blamed it on FUD. He said he's still here. He said, I wrote the migration code. I did all the audits. I coordinated the largest LP polls ever. I created a large community. I sprung up hundreds of LP scam projects all in one

week. He said, I'm still here. He compared himself to the Lycline founder, Charlie Lee, who famously sold off all his LICO in holdings in late 2017 at the height of the crypto bubble. He said, Satoshi Light, aka Charlie Lee, did that, and Lightcoin had no problem surviving. This is for sure just an exit scam. It's like this guy was sitting on something. It blew up. And he had no regard for anybody holding the token, obviously. And I mean, if you dumped hundreds, thousands into this thing, then, I mean, did you really,

Like, it popped up days ago and people dumped this amount of money in it and lost even more. So, yeah. So I actually tweeted out in regards to, I guess, the sushi swap thing, but, like, just the space in general. I said, speculating on all coins is like sitting at a poker table. Except your poker chips can be inflated. Your bets and winnings could be reversed. Everyone might stop accepting your chips. The game rules change often.

and the dealer could steal all your money and kick over the table. It is an absolute war zone out there still. It's the ICO craze 2.0. It's like people's memories just got erased. Again, obviously there's going to be new entrants every time there's a new bull market. Every time there's some sort of mania. And so a lot of people aren't privy to what happened with ICOs back in 2016, 17,

in and around that time. and I guess into 2018. But it's much the same. It's a lot of hype with basically zero substance. And people are dumping money into it, thinking that they're going to make insane amounts of money and be able to hold onto it and not avoid these types of pump and dumps

when realistically the people that are making off like bandits are the people actually making the coins. So again, it's gambling, guys. Be careful. if you must do this, which I don't recommend, if you must be dabbling in this crap, you know, treat Bitcoin differently. Treat Bitcoin as your savings.

You're gradually accumulating Bitcoin and just letting it sit for a long period of time. And if you're touching any of this stuff, again, which I don't recommend, think of it like, again, pulling the lever at a VLT, machine, right? It's literally gambling. You have no idea if you're going to make any money, and if you do it will be either short-lived, a total fluke, or you might get lucky.

Anyways, moving on from kind of the all-coin defy garbage stuff, in terms of the sentiment around Bitcoin as the inverse of kind of like the panic of this dump, I am seeing a little bit of this. people saying like macro CRG a guy on Twitter. I literally cannot believe how bearish everyone is right now. I could be wrong and I hold my hands off if I am, but I honestly think we're going to bounce hard soon. So a little bit of a different take on people saying, you know, in that CoinDess article that the V shape recovery is unlikely, we shall see. And again, like, it depends on what time frame you're looking at. Like if you're looking on the daily, if you're looking on three days, if you're looking on weekly, again, like, I mean, if you look on weekly, V-shape is basically what Bitcoin

does in either direction. I think we're just so used to how quickly this thing moves that days or weeks seem like an eternity. I'm sure many of you would echo that sentiment. But one thing that did make me incredibly bullish and again just kind of gives you a nice step back to to be calm and even talk about being impatient in this podcast. But I do recommend you listen to this on what Bitcoin did. They had Preston Pish, they had Jeff Booth and then Plan B. And they were kind of talking about the macro environment and the rampant money printing that's happening. And this kind of opposition to a natural deflationary environment that comes with the technology that we have these days and how central banks are directly opposing that, but there's only so much they can do before

deflation just takes over and how Bitcoin is the perfect complement to a deflationary technological environment. Excellent, excellent listen. Loved it. These guys always knock it out of the park. So kudos to Plan B, Jeff Booth, and Preston Pish. What a, what a dream team on a podcast. to listen to. So do recommend that. A few other things to cover here really quick. Zug. Zug. Zug. Anyways, the canton of Zog Switzerland, colloquially known as Crypto Valley, has taken an enormous stride towards cryptocurrency adoption by establishing tax settlement in Bitcoin and Ether. Zug will accept tax payments in both cryptocurrencies as early as 2021, following a pilot expected to take place within the next few weeks.

weeks, crypto tax settlement will be available for private individuals and companies alike, up to an amount of 100,000 Swiss francs, approximately 109,000 US dollars at press time. We are not taking risk with the new payment method, as we always received the amount in Swiss francs, even when paying in Bitcoin or Ether, finance director Heinz Tonler explained in a press release issued on Thursday. The tech-centric Canton will facilitate. to facilitate crypto tax payments thanks to a collaboration with crypto financial service provider Bitcoin Suisse, who will convert the cryptocurrencies into Swiss francs on behalf of the state. The combination of trading technology and payment transactions with cryptocurrencies

enables us to offer the taxpayer a good user experience and to offer the Canton of Zug a mature service, and this from the CEO of Bitcoin Suisse. Yeah, I mean, interesting. It would be more interesting if they were just keeping it and holding it in treasury as a reserve asset. But yeah, and why would you, like, when I think of paying taxes, why would I want to give up my Bitcoin to a government that's just going to flip it back to their local currency? Why would I not want to dump my constantly depreciating fiating fiat, as opposed to hold on to my Bitcoin?

Yeah, anyways. I don't know. Would you pay your taxes in Bitcoin? I definitely would not. I am not going to be giving that up. I would rather dump my dollars. A couple little updates. There's a responsible disclosure from Wasabi Wallet. I recommend you update as soon as possible. Now this disclosure, it hasn't been enacted in the wild, but it's a possible denial of service. So what this is, who is affected, no user funds are affected and they cannot be, but it could prevent you from coin joining. Okay, so it says under the who's affected tab here, it says before the version 4 hard fork, an attacker could have exploited the vulnerability to perform a denial of service attack in such a way

that it was difficult to identify the attacker itself. Denial of service means the attacker would halt the entire coin join process for all other participants and wasabi rounds would no longer work given the fact that we have not observed any denial of service attempts so far we assume that no wasabi user has been affected by the vulnerability it is important to specify that the attacker could neither steal user funds nor de-anonymize anyone what they could have done was to prevent the completion of the coin join process so mostly just would have been a pain in the ass if you're trying to coin join and somebody you was trying to do this attack, it just would, you would not have been able to, to do any coin joints. So, um, anyways, if you upgrade to the latest version, uh, 1.1.12, uh, then you should be fine.

Uh, this dropped, uh, back in August. So, yeah, it's, uh, yeah, August 5th, this release was out. So it's been out for over a month now. But if you have not upgraded, head over to the Wabi website at Wasabi.io and you can download the latest one and it should be fine. Now another more important development is a developer discovers a ransom attack exploit with Keepkey and Treasurer wallets. So you do have to be careful here. So according to a developer of hardware wallet, Shift Crypto, an attack vector affecting Keep key and Treasor devices could allow hackers

to hold crypto funds ransom. So pass phrases are a security layer that can create hidden wallets and they belong. So both ShapeShift and the Keepkey and the Treasurer devices. Basically, you can add a passphrase to your wallet and it's kind of like adding an additional word to your backup phrase. So when you set up a wallet, you have 12 or 24 words that are your backup. It's like adding an extra word that nobody knows is there. And if somebody takes your backup phrase and puts it in somewhere,

they would just see a zero balance unless they also entered a passphrase, which there's no indication that there even is one. And only then would they see actual funds sitting there if you had used one. Anyways, so the developer that discovered this goes by Markle and writes that pass phrases belonging to both the Keepke and Treasor devices

only need to be entered into a corresponding host wallet, such as Electrum, not into the hardware wallet itself, though Treasurer does give the option to enter it onto the device. This produces a vulnerability in which malicious wallet or man-in-the-middle attacks could in effect lock the users out of their own funds by changing the host wallet passphrase. The passphrase that the Treasor or Keepke ends up using

might not actually be the one that you entered when setting up, but a passphrase controlled by the attacker. Since both the passphrase and the device are needed to spend funds, the user is locked out until the attacker shows the fake password to the user. So, again, just to reiterate what's happening here, if you're setting up a treasurer or a keep key and using some software that is malicious in some way, what could happen is you put in the password you want to use

and then you deposit funds. unbeknownst to you, the person in the middle, the hacker, has actually not used the password that you put in and actually created their own for your wallet. And so when you deposit the funds, they see that the funds have been deposited. They now essentially, because you don't know the passphrase that was used because the hacker is put in their own, you are stuck there with your funds stuck in this wallet with a mystery passphrase. And until they reveal that passphrase to you, you can't move them. So what the attacker will do is say, hey, I'm not going to give you this password until you pay me out X amount and send me money to this address. So the funds in the wallet, I suppose technically are not at risk unless you give the attacker, your seed phrase.

But they can bribe you to send them money. Okay, so that's kind of the attack here. Effectively, they hold your funds ransom and they say send me at least this amount or you do not get this back. they'd have to request less than in the wallet in order for it to make sense. But, you know, they could easily say, hey, you deposited two Bitcoin here. If you want to see one Bitcoin back, you better send one Bitcoin to me. So it's basically like they're a game of ratios and percentages of what they can get away with in order to give back your funds.

Yeah, anyways, so there is an update to the Treasurer and the Keep Key that you can go and download. So if you have not done such, then be sure to update your treasers. Okay. I just have to touch on this really quick. This from the Coinbase blog, and this is just people always make fun of Coinbase for delving so deep into shit cornery, but they really have literally delved into shit coinery here. Part of their blog here, they're talking about synthetic assets, which are tokens that are digital representations of derivatives. Anyways, here's a specific example that they use. Okay, poop exchange.

This is not fake. This is real. This is really on, you can see the URL blog.com. This is a real thing that Coinbase wrote. In late 2019, a few developers had an idea and released a prototype. What if we had a synthetic asset that tracks the frequency of poop, sightings in San Francisco. It's insane that I'm reading this. Token holders profit when more poop is cited and the token issuer profits if poop sightings decrease using an Oracle that simply

reports the number of poop sightings. This poop token market could align incentives for local San Francisco government. If the city of San Francisco issues poop tokens, they are incentivized to clean up the streets in order to profit. Conversely, citizens could purchase poop tokens as an emotional hedge, ensuring that at least they make money if the streets don't get better. A simple example but showcases the potential of synthetic assets and markets for anything. Okay. So, I don't think that they've considered the incentives properly here,

as iterated by Bitcoin brains here on Twitter, but he says like me, I can't believe this is real. Ignoring the Oracle problem from an Oracle being like that if there's an Oracle, an outside source of information that feeds information onto a blockchain, that information outside is only as good as the input, so it could be tampered with.

Okay? Anyways, ignoring the Oracle problem for a minute, this token clearly incentivizes people to shit on the street. How detached from reality can these interventionists get? Yes, it would, so if you're incentivized to, literally what you could do is you could shit on the street and then clean it up and then make money, like your own shit. This is what it incentivizes, okay?

Again, as it said in the article here, people are incentivized to clean up the streets in order to profit you could purposely inflate the amount of shit on the street and then clean it up and then profit from said action people could like if the city of san francisco issued poop tokens to everyone everyone would be incentivized to then go take a dump in the street

and then clean up their own dump at which point they would profit Step one, issue poop tokens. Step two, shit in street. Step three, clean up shit. Step four, profit. We've completed it. Oh, my God, guys.

Anyways, that's a thing that was written and is being taken semi-seriously by Coinbase. Delete Coinbase. Last thing I wanted to touch on here. Sparrow wallet, this is a new one that I'm downloading. I've actually been playing around with it. I said a little bit before I was dicking around with the, Kobo and everything. Kind of cool.

Yeah, another interface, kind of a little bit more technical, but the same kind of thing where you can import various hardware wallets and use them either as single-sig. So I've got a single-sig-Cobo set up here. Or you can do multi-sig. So I've got a multi-sig here

that has like a couple ledgers and a cold card. And I'm about to play around with Kobo and Cold Card and Ledger to see how they all work together. But anyways, excited to play around with his. Cool to see so many solutions. I'm still looking at Spectre and playing around with that. Lilly wallet was great.

If you want, go back and take a look at that. But a lot of excellent solutions coming out. So just a few things. Full support for single-sig and multi-sig wallets on all common script types. Full partially signed Bitcoin transactions. USB and air-gapped modes. Full coin and fee control with modern coin selection. labeling on transactions, inputs and outputs,

lightweight, and multi-platform. Yeah, so kudos to Sparrow. I will eventually put together a full video, but I want to play a little bit before I dive into it. Either way, really, really cool to see this pop up. Anyways, guys, I'm going to wrap it there. Thank you so much for watching and or listening. If you are here on YouTube, please do hit, like, subscribe,

and share all of those things. Really, really do help, so please do them. If you want to help the show in another way, you can hit up the sponsors I mentioned down below in the show notes. Those were Leden that was Crypto Cloaks as well as the Kobo Vault. And remember there's that giveaway. So if you retweet this show and you tag myself and Kobo Vault and let us know why you want one of those seed plates, you could win. And you have a chance to win literally every show. So just keep trying.

And besides that, if you really liked what you saw, you can always drop me a Bitcoin Lightning Network tip at my tip in Dumb. me page that is t i p p i n dot me slash at b tc sessions and with that i am out have yourselves a wonderful evening or a wonderful day wherever you are and i'll see you next time for your daily session