BTC Sessions - Bitcoiner Resolutions, Hashrate All Time High EP001

Episode Date: January 2, 2020

SHOW TOPICS: Top 7 Bitcoin New Years Resolutions https://bitcoinist.com/7-new-years-resolutions-for-bitcoin-hodlers/ My tweets & links on running a Bitcoin node https://twitter.com/BTCsessions/status/1212133601950797824 Bitcoin starts 2020 with a new hashrate all time high https://cointelegraph.com/news/bitcoin-kicks-off-2020-more-secure-than-ever-as-hash-rate-hits-record https://bitcoinist.com/bitcoin-hash-rate-now-7x-the-size-it-was-during-2017-ath/ Malicious Ledger browser extension found for Chrome. Beware! https://cointelegraph.com/news/ledger-wallet-user-allegedly-lost-16k-to-malicious-browser-extension SUPPORT THE SHOW: Visit LEDN to check out getting a bitcoin-backed loan https://platform.ledn.io/join/0a00cca3dd61dea5909c95cd41f41685 Get Wasabi wallet and enjoy your privacy https://wasabiwallet.io/ Wasabi Tutorial https://www.youtube.com/watch?v=ECQHAzSckK0 Check out Rise Wallet – the easiest way to onboard your pre-coiner friends to Bitcoin! https://www.risewallet.com/ Rise tutorial https://www.youtube.com/watch?v=X2VUjj6wPM0 Get NORDVPN to protect your online privacy. 75% off a 3 year https://nordvpn.org/btcsessions Check out my website for private bookings: http://btcsessions.ca/ Join my Telegram channel! https://t.me/btc_sessions If you value my work and would like to send me a tip, they are always appreciated! LIGHTNING tips: https://tippin.me/@BTCsessions

Wasabi wallet. I'm fairly private. What's up everyone? Ben with the BTC sessions here and this is your daily session. Before we dive in, of course, shout out to sponsors of the show, leaden.com. This is where you can use your Bitcoin for a variety of different services, one of which is their Bitcoin savings account where you can earn interest on your Bitcoin, paid in Bitcoin. They've also got Bitcoin backed loans. That's where you can use your Bitcoin as collateral to secure a Canadian or US dollar loan. So if you're in a pinch, you need to get your hands on dollars, but maybe you don't want to sell your Bitcoin.

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It is a Bitcoin gift card. So the way it works is you go to a store near you. You pick it up. There's an activation fee much like if you get a prepaid visa, but then you can gift it to whoever you like. And this is an excellent idiot-proof way. to get somebody onboarded to Bitcoin. So the way it works is you download the app, you scratch the back of the card, and you scan the code.

And when it scans it, it actually creates a personally held Bitcoin wallet for the receiver and sends them an on-chain Bitcoin transaction directly to their newly created wallet all in one fell swoop. It's, it is instant. It's awesome. So if you want to check them out, head over to risewallet.com, click on locations to see where you can pick one up. Now, keep in mind, this is currently only available in Canada, but keep your eyes open because they're looking at expanding. And if you don't have a location near you, you can head over to coincards.cai and get one delivered to you. With that, let's dive into the news. So this is my first

show of the new year. And actually, this marks the first upload of the audio-only version. So if you're watching this on YouTube, then welcome back. But if you are listening on Spotify, Apple, Google, wherever, then also welcome. I'm very excited to kind of expand out and have various ways for people to enjoy the show. So yeah, let's dive into it. And being the new year, everybody's setting their own New Year's resolutions. I know I've got mine. But what about Bitcoiners? what kind of New Year's resolutions do you have as a Bitcoiner? Have you made any? Maybe you should. So this is an article by Bitcoinist. It's seven New Year's resolutions for Bitcoin Hodlers. And I think it's a pretty good list. So let's just break down a few of them.

So number one, they've got Stop Getting Caught Up in Short Term Price Action. And this is one that I think it is an excellent goal. and it is a tough one to conquer. I was very much the guy that daily, hourly, sometimes every few minutes, I was checking my phone to see what's happening with the Bitcoin price. Now, not so much. Sure, I'll glance at it, but even when the price starts swinging wildly, I'm not nearly as concerned.

Now, part of that is a symptom of, you know, the longer you're in it than the, the, the less negatively impacted you are by the short-term swings because, you know, it's 11 years in and Bitcoin has gone up like 9 million percent. So the more exposure that you've gotten over the years, the prettier you're probably sitting. But this also plays into the idea of not trying to time the market and just kind of dollar cost averaging in and not, uh, letting your emotions take hold of what you do with your Bitcoin. And I think that's an excellent goal to have. Number two, they've got get stricter about securing your private keys.

And this is huge. And many people have been burned by not having good practices of their private keys, either by leaving everything on an exchange, which, by the way, it's proof of keys tomorrow, which means that if you have Bitcoin sitting on an exchange, or with a custodian in any way, shape, or form, you should take a look at pulling that off into your own custody just to, if anything else, just to practice your own monetary sovereignty. But as far as this resolution goes, yes, I think that everybody should practice good security when it comes to securing their Bitcoin. That means not having too much in a mobile wallet.

you should treat that like a regular wallet with cash when you carry around your life savings in your pocket probably not uh so you know get yourself a hardware wallet um start thinking about that kind of stuff and minimize your exposure to custodians if you're using a service um and you've taken into account the risks of leaving it with a custodian for a certain purpose whether it be if you're trading or whether it be if you're you know doing something like a savings account or perhaps you are doing one of the loans that I mentioned before, you know, don't put all your eggs in one basket, understand the risks, and if you opt to do it, still take part in proof of keys. It's very important. Number three, they have spend less time on crypto Twitter. By the way, it's Bitcoin Twitter.

It's better on Bitcoin Twitter than crypto Twitter. But yeah, this is one that I should probably partake in because, man, Twitter has become. an absolute time vampire and you can get on there and you can get scrolling and you can get into little tiffs with people and arguments which i'm fully guilty of i'm i'm a pretty non-confrontational guy in in person but it's super easy to fall into those things on twitter uh and it's it takes up way too much of my time i find that i'm checking it way too often so i think i'm going to try and limit that a little bit more this year. Number four, finish reading the Bitcoin standard. I have read the Bitcoin standard and it's fantastic. If you have not and you're in Bitcoin, you should check it out, absolutely. And like, don't just go and buy it and then let it sit

on a shelf and collect dust. Actually read it. And if you're not a person to sit down and read through it, get the audiobook because it is a fantastic resource on the, the why of Bitcoin and how it may grow to become kind of like a mainstay base, a monetary base for not just individuals, but potentially even central banks in the future may be stockpiling it. So it's an interesting look at the history of money and where it could be going with Bitcoin if Bitcoin is successful. Number five, start reporting your Bitcoin taxes correctly. Now, this is an interesting one because it's a little bit different from jurisdiction to jurisdiction, how this kind of stuff is dealt with.

There are plenty of ways to track your Bitcoin now. There are companies that deal with Bitcoin tax reporting and software that you can use to do that. But most importantly, looking at this, if you're getting screwed on taxes, it could be because you're doing a lot of buying and selling and trading of your Bitcoin. So keep in mind as you're doing that, there is a tax consequence to a lot of that. Now, I'm obviously a hodler. I just gradually accumulate and hoddle. And so because of that, the burden of that kind of thing has not really,

come up for myself. So just keep that in mind that, yeah, it's probably a good idea to keep that in the back of your head. And, yeah, that's all I'll say on that. Number six, accumulate more Bitcoin. I think that's always a lofty goal for all Bitcoiners is to get to a certain level where they've set in their heads. Oh, I want to accumulate this much over time. I think our friend Matt Odell over at Tales from the Crypt, another great podcast, says it best when he says, stay humble, stack sats. And the easiest way to do that I've found for myself is just dollar cost averaging, saying I want to put X amount of dollars into Bitcoin every week or month. And then regardless of what the price is at that point, you just put in the same amount every time

and you just forget about it. I think that's an excellent way to handle it. I mean, some people may be different, but that has worked fantastically for me. And when it comes to accumulating more Bitcoin, hearkening back to some of the other points here, in particular, number one, stop getting caught up in short-term price action.

Dollar cost averaging helps take out that emotion and also helps you be less speculative when it comes to putting your money in Bitcoin. so keep that in mind there. And number seven, and this is one that I think anybody listening here, you should set this as a goal for 2020. And that is to run a full node. Now, why might you want to run a full node? What is a full node?

A full node is basically running an entire copy of the Bitcoin blockchain, which is all transactions ever, that has ever happened on Bitcoin. in which case you get to verify, you self-verify without trusting anybody else, incoming transactions that you have indeed received real Bitcoin and you're not being, not having the wool pulled over your eyes by a third-party wallet. It also allows you to ensure that you are running the Bitcoin software that you intend to be. So you're following the rules of the network that you want to follow. things like 21 million Bitcoin will only ever exist, things like the block size limit, things like really any governing rule in the Bitcoin protocol, you are verifying that yourself and

complying with those rules on your own accord. And if somebody else outside of your node opts to change the rule set, you can simply ignore that. this did come up in 2017 when a number of companies and a lot of Bitcoin miners tried to change Bitcoin and kind of install their own devs on the project. And people running full nodes essentially said, we will not follow what you guys do regardless of what you decide. And Bitcoiners running nodes one. And so it's integral for people to run nodes. Now, not everybody has to run a node, but I think it's good practice to get as many people as possible doing this. I have mentioned a couple possibilities that you should check out.

These are ones that I've run myself. So I'll link to this in the show notes. But on Twitter, I tweeted out, Happy New Year, everyone. Want a Bitcoin resolution? Try building and running a node this year. Just know that it's okay to mess up. You're learning. I recommend checking out my node, BTC.

Here's an easy product list for you and a shot of how pretty it. will look after level up. And so I included a list of parts that you can get from Amazon, super easy, as well as a picture of my beautiful node that I put together sitting on my side desk. And it looks great and it runs great. My node is an excellent resource to run your own node. Now, if my node becomes, if it seems a little scary to you, you don't want to put any hardware together, then you can always buy a plug-and-play node. And I've also linked on my Twitter here to a video I did on the CASA node, which is a plug-and-play node. You can order from their website. They'll send it to you. You literally plug it in and then you access it via your

web browser on your regular computer. And it's pretty idiot proof. It sets itself up. And yeah, And then you can start using a node and connecting your own wallets to it and not relying on pushing that responsibility to third parties. You become kind of a self-sovereign individual of running your node. So put that on your list this year. Hell, put it on your list right now. If you want to do this this year, what greater time than the present to go ahead? And so I would say either check out, and I'll link this in the show notes, my tweet that has

the shopping list and it links to My Node BTC's Twitter handle or you can check out my video on CASA and pick up one of those but you know better sooner rather than later if you put it off you may never do it okay let's move into the next story here and so Bitcoin has kicked off 2020 more secure than ever the hash rate for the Bitcoin network has hit a record high so the hash rate is a measure of the computing power securing the Bitcoin network. And for Bitcoin to experience any real threat of being kind of overtaken, you would have to have an individual or group of people obtain more than 51% of all of the mining power in the entire network, which is becoming more and more expensive to do as time goes on. So where is Bitcoin right now? It

depends because how you measure the Bitcoin hash rate can very much depend. It's more of like a guesstimate based on network activity. So it's not set in stone, but we can get an idea. So according to blockchain, we hit 119 quintillion hashes per second as of January 1st, whereas on Coin Dance, they put that figure at 143 quintillion hashes. this per second, which is, you can also say, 119 X a hash or 143 X a hash. Now, to put that in perspective, we are at about seven times the hash rate as it was during the high in 2017 when we hit $20,000. Back then, and this is using the smaller number, by the way, back then we were at 14.6 x a hash. And again, right now we're on on the low end of these guesstimates. We are looking at

what, 119 x a hash. So that is an impressive improvement. And that is despite the price being just a what maybe a little bit more than a third of what it was at that all time high. So what does that mean for the network as a whole? Well, when you have miners piling in at the peak of the price, right? Back in December of 2017, you have a lot of speculative people that just see the number going up and they just assume that they're going to make tons of money because they think, regardless of what it costs them to mine, the price is just going to continue to go up and up and up and they'll be fine no matter what. what we found is obviously when the price went back down, a lot of those miners were mining very, very inefficiently. And the Bitcoin network does not favor that. It actually favors people who find the most efficient, least expensive way to obtain energy in order to contribute to the Bitcoin network. And what happened is we actually saw a drop in hash rate after the peak throughout 2018, there was a pretty sizable drop in the hash rate. But now we see it at a minimum of

seven times what it was at the all-time high for price, but only a little bit over a third of the price in dollars. And so what that means is a number of things. One, the hardware has gotten a lot more efficient. And two, the miners have found very cost-effective ways to mine Bitcoin and thus are able to make more of a profit with less expenditure. And so this is a net positive for the network as a whole. It is becoming easier for people to jump in and partake. But it is becoming prohibitively expensive as a whole for somebody to attack the network. So I'm excited to see this continued growth in the hash rate. And as the growth over the course of 2019, it was just like a steady uphill climb as more and more people piled in. And that also speaks to the fact that

they see value in continuing these operations because people are buying hardware, up brand new mining farms around the world. And so it's pretty bullish, in my opinion, moving forward for the network as a whole. Let's move on here. Just a little FYI, the Ledger Wallet, there is a malicious browser extension that you can download. This is a Chrome extension. And it's called, what is it, Ledger Secure. And so this was tweeted out by friend of mine, Wizard of Oz or at BTC Shelling Point on Twitter.

He said malware Chrome extension alert. If you have ledger secure installed, remove it. The Chrome extension ledger secure contains malware that passes your seed phrase back to the extension's author. This is not a ledger product successfully used against another Twitter. users named hacked ZEC. So this individual seems to have been hacked for about $16,000 worth of Zcash. Now, the handle has only existed since this year, so the past few days here, but it seems like the person obviously created that handle just to let people know and warn people about this browser extension without giving away their information as to who they really are.

So we do have, we do have Jeremy Walsh's Kasa chiming in on this. He said, firstly, be very careful what extensions you install. If you're using the same computer for your crypto as you use generally, be extra diligent. Better to have a separate minimal machine or use a virtual machine that is the only place you do crypto activity. So what he's saying here is, you know, if you're using the same computer that you use for day-to-day use as you do for anything cryptocurrency related, you've got to be pretty careful because if you get some malware on your computer, even if you're using a hardware wallet, you could be at risk. So, just, you know, be careful. Um, ways to mitigate this is to ensure you're only, um, if you decide

to do this, you only use the software. directly from the provider's website. If you're really deep into it, you can actually, you can actually cryptographically verify that the download of that software is indeed legitimate. And if you really want to get into it, you can have a separate minimalistic, as Jeremy was saying, a minimalistic machine, just a basic, even like a $200 laptop that you only use for cryptocurrency. currency related stuff.

So, yeah, you've got to be very, very careful because what you see on your computer screen could be different from what your ledger is actually doing. And the same applies to lots of different hardware wallets. So while your keys are indeed offline in those devices, your computer could be malicious. So tread lightly, tread cautiously, and always. be aware of stuff like this. Don't install software that you don't know where it's coming from. And I just wanted to finish up for one other little thing here. This is Ethereum related. Obviously, I am super bearish on Ethereum. I'm not a big fan of the alt coins. And this is

some, this is one of the reasons why. So Ethereum did indeed have a hard fork back in, I believe it was December 7th of last year, 2019. And that was a planned hard fork with various upgrades to the network. But in doing that, they also forgot about, apparently forgot about the Ethereum Ice Age, which comes along, or it's also known as the difficulty bomb. And so what this does is it gradually but then exponentially slows down the speed of Ethereum blocks. It makes it very difficult to mine Ethereum blocks. What this was originally meant to do was it was supposed to force people into proof of stake. So there's proof of work and

proof of stake. Proof of work means you have to contribute computing power in order to mine the network and be rewarded with new coins. Proof of stake moves away from that is less energy intensive but can also be gamed in a variety of ways that I'm not going to touch on right now. But essentially, if you're holding coins, then you're entitled to more coins if you stake them. So it kind of makes the rich richer over time. And it does that through inflation. So what happened is this ice age, this what's the difficulty bomb, it keeps on getting pushed off. So they keep on doing hard forks to push it, you know, two million blocks down the line.

In this case, four million blocks down the line. So years ahead. So what they did is they didn't realize that it was coming soon. And then blocks started slowing down after this hard fork that they already had on December 7th. And then they said, oh, shit, we actually have to hard fork again. So they've just hard forked again on January 1st. Now, the problem that I have this with this is there's a few of them. One, the standard that they've set as far as are they going to move to proof of stake?

Well, if they keep on putting it off, then it's clear that this mechanism that was designed to force them into proof of stake is not being taken seriously. And if they can put it off this many times, what's to stop them from putting it off indefinitely? number two is the precedent that they set that the underlying protocol is so malleable that you can regularly have hard forks without without even blinking so the rules that people have opted into that govern the network can be changed really at any time because the precedent has been set that hard forks are totally okay and who knows what's going into them clearly not many people because they didn't even catch that they had to fork again to prevent the difficulty bomb from taking place. And finally, the fact that they were able to quickly execute a hard fork in this amount of time

and do it relatively successfully, and I'll get into the relatively part in a moment, and relatively successfully do it across the entire network kind of points out that Ethereum is not very decentralized. It was so difficult to get minor changes made to the Bitcoin network in 2017 as a soft fork, a backwards compatible upgrade to the network. It was so difficult to get that even activated, let alone actually utilize. We're still at, what, 50, 60% for Segwit adoption a couple years in. And in my mind, that's a positive because it shows that people are actually deciding and opting in themselves manually.

If you can pull off a hard fork that was announced a week or two back across an entire network and get everybody to upgrade instantly, it kind of shows that, one, not many people are running their own full nodes. and two, most of them are just like cloud-based solutions. People are using just web wallets. And they don't really care or have any say in what happens with the protocol. In fact, there wasn't really any splintering with the exception of this. And this is where I say it was relatively successful. One of the clients called Nethermind or Nithermine, I don't know how to pronounce it.

I think they're playing on the word, never mind, though. Nethermind is having issues syncing with this upgrade. And so this kind of plays into Ethereum's stance of move fast and break things, where if you're running this particular implementation of Ethereum, well, you're just not part of the network now. We've seen major issues with parity as well in the past. And it's just kind of a, when people are saying, like, hey, Eath is money, which it's not. But when people are saying that, but then they just

fork willy-nilly and people can just be forked off the network if they're not quick to act, that's not a quality that I personally want to have in my money. I want to know that my, you know, node from my node from years ago that I haven't bothered to upgrade at any point time is still going to be compatible and that my money's still going to be there. And so this, amongst many other things, is one of the reasons I am super bearish on Ethereum and why I lean towards Bitcoin. Anyways, guys, I'm going to wrap it up there. Of course, thank you very much for watching or listening if you're listening. If you're on YouTube, hit like, subscribe, and share.

That would be huge. If you're listening to this and podcasts, feel free to share this on your social media. I would very much appreciate that. If you want to help out the show in another way, of course, hit up Leden or Rise, the sponsors I mentioned before, and also check out Wasabi Wallet, which is much-needed privacy when it comes to transacting with Bitcoin. And finally, if you really want to help with the show, you can check out NordVPN. What this does is it helps hide your IP address.

It encrypts your browsing data and it has a bunch of other added benefits like unlocking geo-blocked content. so you can access content that is maybe not available in your area just by switching where you appear to be from using NordVPN. If you want to use this, you can use the code BTC sessions and you will actually get 81% off. It ends up being about $3.49 a month, which is pretty damn good in my opinion. There's a link in the show notes below as well that'll take you directly there with that code. And with that, I'm out. Have a wonderful rest of your day, evening, wherever you are, and I will see you next time for your daily session.