BTC Sessions - Bitcoiners Unite To Give 1 BTC To Colombian, Purse Shuts Down, $25M DeFi Hack EP046

Episode Date: April 21, 2020

SUPPORT THE SHOW: Visit LEDN to check out getting a bitcoin-backed loan https://platform.ledn.io/join/0a00cca3dd61dea5909c95cd41f41685 Buy Bitcoin on Coinberry and get $20 after your first $100 purchase https://app.coinberry.com/invite/c5d52730857 Get Wasabi wallet and enjoy your privacy https://wasabiwallet.io/ Wasabi Tutorial https://www.youtube.com/watch?v=ECQHAzSckK0 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 SHOW RESOURCES: Bitcoiner American Hodl united Bitcoiners to help a humble Colombian man stack more sats. More than 1BTC in a single day. https://twitter.com/i/status/1251885447967457283 https://twitter.com/hodl_american/status/1251907094187368454 https://twitter.com/i/timeline https://blockstream.info/address/1KHG7xXffaDwtU3UqbBXmTMVCMjkJRvnpg Purse.io is shutting down after 6 years of getting Bitcoiners cheap Amazon orders https://www.coindesk.com/bitcoin-startup-purse-to-shut-down-after-6-year-run Unprecedented Oil Crash https://cointelegraph.com/news/bitcoin-now-buys-600-barrels-of-crude-oil-as-prices-fall-below-zero https://twitter.com/i/status/1252277424986914818 https://www.bloomberg.com/quote/CL1:COM Yet another DeFi hack – this one to the tune of $25 million https://cointelegraph.com/news/dforce-hacker-attempts-to-negotiate-after-allegedly-leaking-his-identity “It’s Time To Build” by Marc Andreessen https://a16z.com/2020/04/18/its-time-to-build/ “The State Is Bad At Distributing Money” by Marty Bent https://tftc.io/martys-bent/issue-720/

Wasabi wallet and fairly private. What's up everyone? I'm Ben with BTC Sessions and this is your daily session. Before we dive in, of course, shout out to sponsors of the show, leaden.io. This is where you can use your Bitcoin for a few different services. They've got Bitcoin savings accounts to earn interest on your Bitcoin. They've got Bitcoin-backed loans and this was the first service I ever used for them. This is where you can use your Bitcoin as collateral to obtain a Canadian or US dollar loan. Super easy.

I used it in a situation where I was in a pinch and I needed to get my hands on dollars, but I didn't want to sell my Bitcoin. I wanted to hold on to it. So I was able to plunk my Bitcoin into a dedicated address that I could audit 24-7, doesn't get re-hypublicated. And when I paid back the loan, I got back on my Bitcoin. And then finally, they've got their B-2-X offering. This uses the same loan mechanism to, buy more Bitcoin, more or less doubling your Bitcoin on the spot. So if you want to check out any

of that, there's a link in the show notes down below. And if you opt to get a Bitcoin back loan with that link, they'll give you 50 bucks of Bitcoin for free. Secondly, we've got CoinBerry. This has been my go-to to pick up and stack sats as of late, especially this year. I've been using the mobile app a ton and their web interface is super nice and sleek. So a few things that really stick out to me when it comes to Coinberry. And by the way, this is just in Canada. So sorry, anybody outside of Canada. But besides that, I really love a few things about this. Number one, the speed at which I can fund my account. So e-transfers for me are super, super convenient and easy to use. I, in my experience, have only ever had to wait around 20 minutes funding my account.

That can vary based on your bank. But, yes, super convenient. And the second thing that I really love is their dollar cost averaging feature. They call it autopilot and you can essentially fund your account, set the interval, set the amount, and it'll just buy for you on the spot there every day, week, month, whatever you prefer, and it takes the emotion out of stacking your sats. So if you want to check them out, they've also got one of the best incentives for signing up that I've seen out of really any company so far. It's after your first $50 purchase, they will give you 20 bucks for free. So if you want to check that out, there's a link also in the show notes down below. With that, let's dive into the news. This is one of my favorite things that I've seen in quite some time.

So kudos to American Hoddle and all you Bitcoiners out there. So what happened was Hoddle was doing his thing, swinging his big dick on the internet, talking about, you know, how great Bitcoin is. and then he stacked a ton of Bitcoin. And then he got this response from a guy Ancap children on Twitter. And he said, You can only respect when a man puts his money where his mouth is, I salute you, sir.

And if minimum wage in my country wasn't $2,500 US dollars per year, I would be buying sats like a crazy person. Then he went on to say, I've been doing my part, though. I'm not all talk. It took me two months and almost nothing. but and it's almost nothing but here's what I got greetings from Columbia I will never let them steal my money again you inspire me for real and he shared a screenshot of his wallet at the time which has

just over $19.19 US dollars for the Bitcoin that is 0.0026 so and so forth so you know he'd been given his means he was able to over a couple months save up about $20 worth of Bitcoin. At that point, you see Hoddle reply to him and he says, send me an address to which he does. And then

he shoots him over 0.01 Bitcoin. Good luck. I boosted this. Good luck on your journey. You cannot sell the million sats for, I sent you for 10 years. That's our deal, man to man.

At that point, Hoddle shared out the address And he said, Atlas is a Colombian bitcoiner who's been working hard to stack. He's not asking for anything. I just decided to donate to him a million sats. And then Anon Bashko donated $12 worth. Show him some love if you're in the mood. This kind of shit can change somebody's life.

And the result, within a day, between the on-chain donations and lightning donations, Ancap has confirmed to me that he got 99 million. Satoshis. This is the final million sats right here. 21 million bitcoins ever and Atlas now has one. Life changed. Family tree changed. Fuck,

I love Bitcoiners. And this is one of the coolest. I just, I love stuff like this. Everyone's in a while, Bitcoiners will just focus in on one point and make a difference with an individual. And this is super cool to see. So, congrats to

Ancap. Yeah, full coiner, a whole coiner. Congratulations. When the national minimum wage of his country is $2,500 a year, he's got a whole Bitcoin. And the deal is no spending, no spending for a decade. Ooh, that's going to be a tough one. The other thing that some people brought up here is, given that it was a single address, which you can see on the blockchain right here, you can look at all the inputs and outputs.

there. And indeed, there's about 0.946 Bitcoin in there, plus the lightning that he received. But is the question of security and Opsack. This was a very, very public thing. You know, a great thing, but a very public thing. And I believe Trezer sent him over a device to secure it with. But also, there's the question of, what do you do at this point? Do you mix it? If somebody in his country knows that he got this and has malicious intent, could they, you know, $5 wrench attack him? All of that, yes, there's the question of, do you do something like a multi-sig with something like CASA or unchained? All good questions. I think he's just taken it slow at this point. a lot of people have brought him some resources to read through and I think he's just trying to

digest it all. So lots to consider there, but all in all, really super awesome to see. I love stories like this. You guys are great. Oh yeah, let's move on. A little bit more of a sad story here, at least for me anyways, because I was using these guys early on. The Bitcoin startup purse is going to shut down after a six-year run. So they're quoted as saying it was a business decision, nothing funky going on. That's from Eduardo Gomez. Purse will disclose more information in a forthcoming blog post, he added. Purse will continue to facilitate services until June 26th, but signups will be seized

Thursday. Additionally, the startup's shop and earn functionality will be disabled next week on April 23rd and open orders that have not been matched will be canceled. So yeah, unfortunately, these guys are shutting down. If you guys are unfamiliar with purse, by the way, what they did is they matched buyers and sellers of Bitcoin. And the way that they did it is they allowed you to create a wish list on Amazon. And then if somebody bought your wish list with Bitcoin, you would pay them, but you would pay them a discounted price. So the idea was somebody who has a tough time getting their hands on Bitcoin

could simply buy an Amazon order for you, and then they would receive Bitcoin, although a lower dollar amount of Bitcoin. So it was cool to use, and for early adopters of Bitcoin that just wanted to ensure that they could indeed use it and spend it and buy real-world things with it, this was a good method to do it. you could get some pretty good deals on Amazon by doing this.

But if you weren't replenishing on the regular, then years down the road, as with myself, I'm going, oh, God, what did I spend my Bitcoin on? But regardless, still sad to see these guys go. Now, there wasn't some contention with purse, particularly around the scaling issues that we had is in kind of throughout 2017. scaling debate raged on. And obviously, on-chain fees did go up considerably towards the end of the year because you didn't have transaction batching. You didn't really have widespread usage of Segwit. You didn't have release valves like lightning and liquid. But now we have all of those things.

And so, unfortunately, their business model, it was tough with that fee crunch. And they went the route of adding Bitcoin cash, which a lot of Bitcoiners were not super stoked about. But anyways, they've continued on for a couple extra years after that. And here we are. Here we are. So best of luck to everybody involved with purse. Yeah, you guys built something cool. And I hope that you guys will be able to go on and build some more cool stuff in the future.

Let's move on here. This isn't exactly Bitcoin news, but it's insane nonetheless. So this article was from an. hour ago, well, no, it's probably more than an hour ago. Let me just refresh here. It was four hours ago, and the title of this article on Coin Telegraph, Bitcoin now buys 600 barrels of oil, of crude oil as prices fall below zero. So that's kind of a disconnected title. But regardless, the price of crude oil dropped so much that you were able to buy 600 barrels of oil with a single Bitcoin and oil in other areas has dropped below zero. And so further to that, it's dropped even

more. So this is Joe Weisandthal and he kind of was tweeting about this as it happened, but I'm just going to read a few of his tweets. This oil crash is incredible. West Texas oil for May delivery has fallen below $8 a barrel. But you can see by comparing May delivery, versus June, how much of this is about there being physical oil that's about to be delivered and almost nobody having a place to store it. And then continuing on, holy crap, it's now below $6 a barrel. And then he posted a Bloomberg article about refineries rejecting barrels at historic pace because the levels are pretty much to the brim. They can't store anymore. There's too much oil storage at this point. Now below $5. Now below $3. Now sub $3. Now, he goes on to say,

crazy to think that if you bought oil for May delivery last night around 9 p.m., you're already down 83%. And now, yeah, it dropped 80%, more than 80%, in a few hours. And then at last we saw, it was below $2, although I think it's come up a little bit since then. Just absolute insanity. So let me just refresh this chart here. Are you serious? A dollar, a $1.26. I don't even.

That's 93% drop. That is absolutely insane. And then not any better. here where I am in Alberta, we have the oil sands. And so the premier of my province tweeted out 13 hours ago, Western Canadian Select Oil is now trading at negative prices. Killing and delaying pipelines landlocked us. COVID-19 collapsed demand. The Russian-Saudi Prince war search supply, filling up inventories. The future of hundreds of thousands of Canadian jobs is at stake and indeed are the oil uh western canadian select uh it is negative now you may be wondering

how the hell do you have a negative price on something that's when the cost of shutting down production is actually more expensive than paying somebody to take away your oil and that's kind of the place where we're at right now you can you can more or less if you're willing to store it you can get at the time of the tweet, it was negative one cent, but I saw it as low as negative 15 cents. I'm not sure what it's at right now, and I'm not going to go searching for it. But unprecedented times, this is absolutely insane. Anyways, let's move on from there. Speaking of crazy things going on, and I guess it's not really that crazy.

This is not unprecedented, actually. I take that back. This is very, very precedented. This has happened before. Who could have imagined this happening? Defy and more money has been stolen from another defy platform, a ton of ether stolen. $25 million, actually.

And the attack appears to very much be the same as the original Ethereum hack that caused or incited the fork between Ethereum and Ethereum Classic, in which somebody drained a smart contract. repeatedly. So how did the hack work? I'm just going to read this whole section here just so you guys get a good picture of what's happening, but defy decentralized finance, smart contracts in and around finance and gaining exposure to different assets, different stable coins or pegs to other cryptocurrencies. So here we go. How did the hack work? The hacker used IMBTC token as the Trojan horse of the attack. In one of many Ethereum wrappers for Bitcoin, which was

written according to the ERC 777 specification, this is considered a more advanced but also more vulnerable version of the common ERC 20 standard, especially when used in a decentralized finance context. The hack exploited this by combining it with a crucial flaw in lend F. Me's contract and how they updated their user balance. An analyst going by the pseudonym Frank Top Bottom explained on Twitter, the hacker executed many iterations of a simple attack. In every single transaction, the hacker deposited IMBT on LendFMe platform, which was registered on his account's balance.

A second deposit from the same transaction would add a minuscule amount of IMBT, which would allow using a re-entrancy to, withdraw the previously deposited tokens. Crucially, the contract failed to update the hacker's balance when withdrawing money. He was thus free to deposit the BTC again, doubling his balance each time. Eventually, the hacker siphoned off the entirety of the IMBT present on the platform, amounting to some 291 IMBTC, which is around $2 million, according to the analyst. He then continued to perform the same attack, which at this

This point simply inflated his balance until its value covered the entirety of the funds held in the protocol. Finally, he used the fake balance as collateral. This is the best part. He used the fake balance as collateral to borrow almost every single token available on the LendFME platform, carrying off about $25 million in various cryptocurrencies and stable coins. Holy hell I don't really know what to say with this but it is funny that it's more or less

the same kind of siphoning mechanism that you saw with the Dow hack back in 2016 and for those of you unfamiliar people piled a ton of money into a decentralized autonomous organization and the way that it worked is if you wanted to split off because you didn't agree with the allocation of capital

within this digital corporation you could split off your own company with your capital, but there was a mechanism that didn't recognize the withdrawal of your capital quick, and the hacker was able to siphon his capital over and over and over again, gradually siphoning off everybody else's money until it was stopped, and then they had to decide what to do, and Ethereum basically stopped and refunded everybody from that smart contract, whereas Ethereum Classic left the hack as is under the ethos of you shouldn't be able to reverse a blockchain.

So technically speaking, Ethereum Classic at the time was the backwards compatible original Ethereum. And Ethereum itself was the fork and the new protocol. So anyways. Now the hacker has already been partially busted. So he wasn't, it looks like he was used. It looks like he was using a VPN, but the VPN, because every time that he executed this, it was through the same IP address, but it doesn't look to be his. So it's probably a VPN, but that VPN may be subject to warrants to give up information on that part.

Yeah, and he's had some trouble trying to cash in some of the money. He also sent some back as a symbolic gesture. Yeah, so I don't know. Yeah, it seems like there's a little bit of a digital trail here that they can crack down upon. We'll see. We'll see what happens. Never a dull moment. Now, I wanted to finish off with a couple good articles here.

This one from Mark Andresen, from Andresen Horowitz, is pretty good. and he's just talking in general about kind of Western civilization and the lack of proper allocation of capital through this whole crisis that we've gone through and how it's time to build again and how what we've decided to build has maybe not been some of the best choices. He definitely wants to get away from regulatory capture and misaligned incentives there. One of my favorite quotes out of this article, he mentions in the U.S., we don't even have the ability to get federal bailout money to the people and businesses that need it. Tens of millions of laid off workers and their families and many millions of small businesses are here in serious trouble right now,

and we have no direct method to transfer them money without potentially disastrous delays. A government that collects money from all its citizens and businesses each year has never, built a system to distribute money to us when it's needed most. Pretty apt point. Yeah, he goes on to to talk about how whether you're left or right, each side kind of has certain mindsets that can get in the way of innovation. And he alludes to kind of right-wing, aversion, a version, to change and the left wing lean towards, I don't want to say stateism, but reliance, over reliance on the state and public infrastructure. And his call to both of them is on the right to be more open to change and to new ways

of doing things and discovering better ways of doing things. And to the left, if you're kind of more pro-state, prove that you can do it better in an environment of actual competition. If it's state-funded, great. Is it better than what can be done privately? And prove that out. And yeah, I'd agree. I think it should be a meritocracy. I think the things that are best should be built. And I don't think that you should have a system that favors one over the other. It should be whatever is valued most in the market. And to that point, I quite like the issue of the Bent today. I know I've been mentioning Marty Bent and TFTC a lot in the show lately,

but he has a way with words. And so I just want to read this to finish out the episode here. The title of this is The State is a bad. Oh, Marty. He got an extra letter in there. The state is bad at distributing money. Okay. I'll give you that one.

Anyways, in this financial crisis and the response to it by the state, if this financial crisis and the response to it by the state has highlighted anything, is that the state is a terrible allocator of capital. I had already held this belief pretty strongly before the onset of the crisis, but it is always stunning to see just how inefficient and corrupt the state can be when it comes to allocating capital. At a time when there are tens of millions of Americans out of work and struggling to get by, those in charge of drafting up bills and plans are playing political games to make sure they get

their special interests taken care of, holding bills hostage for weeks. Institutions with large endowments receiving millions of dollars in aid that they do not need and could be better spent elsewhere. The blatant misallocation of capital that is happening right now is down to. right, nauseating. Luckily, once the world inevitably transitions to a Bitcoin standard, I love the confidence there, this type of capital misallocation will be severely curved as millions of sovereign individuals with low time preference will be in control of the world's wealth.

No longer will the control of capital and money fall under centralized governments and central banks that have historically made terrible investments and debase the common man's purchasing power. Instead, millions of independently wealthy individuals will control the world's wealth, making decisions based on profit motives and the needs of the market instead of the needs of cronies and the financiers of political campaigns. If you're paying attention, you should be able to notice that this shift is already beginning. Bitcoin's market cap is around 130 billion, and there are millions of individuals around the world who have a material balance of sats. If this trend continues, we may be able to witness the death of centrally controlled nation states within our lifetimes.

What a time to be alive. I love the cheery note that it ends on. Kudos, Marty. I also like that he included his tweet with a shot of the sovereign individual. If you haven't read that, check it out. Anyways, I figured I'd end on that positive note. I'll wrap it up. Thank you guys very much for watching.

As always, if you're watching on YouTube still, like, subscribe, and share. If you're watching this on any other medium, do share it there if you've witnessed my debacle with YouTube over the last little bit. Also, if you're on YouTube, then please do go to any other medium that I'm on, whether it be Facebook or D-Live or Twitch or what the hell else am I on now. I'm on a lot of things. So just look and you'll find me. search on any platform that you can. Subscribe to at least one of those other ones. And also there's audio, right?

So you can go to Apple Podcasts, Google Podcasts, Spotify, I'm on all of those, and you can get audio-only versions of the show. Other than that, if you want to help out the show in another way, you can hit up the sponsors. I mentioned down below. That was Leiden and Coinberry. They've got some deals for you. And also check out with Sabby Wallet.

Great for helping your Bitcoin privacy. And outside of that, if you really loved what you saw, you can drop me a Lightning Network tip? Actually, no, don't. Don't drop a Lightning Network tip today. Instead, go back to the dude that I talked about from Columbia and drop him a Bitcoin tip. Don't tip me. Ignore that. Go tip the Colombian dude. Yeah, I'm going to wrap it up there. Thank you guys very much. Have a great time. Have a great rest of your evening. And I'll see you next time for your daily session.