BTC Sessions - Bitcoin's Bullish January, Trezor Is Hackable, Lightning Innovation With Strike App EP013

Starting point is 00:00:01 Wasabi wallet. I'm fairly private. What's up everyone? Ben with the BTZ sessions here and this is your daily session. Before we dive in, of course, shout out to sponsors of the show, leaden.i. This is where you can use your Bitcoin for a variety of different services. They've, of course, got their Bitcoin's savings account where you can earn interest on your Bitcoin, paid in Bitcoin. You have your Bitcoin back loans. This is where you can use your Bitcoin. Bitcoin as collateral to obtain a Canadian or US dollar loan. So if you happen to be in a pinch where you need dollars, but you don't want to sell your Bitcoin, this could be a good option for you.

Starting point is 00:00:45 And finally, there's their B2X offering. So this gives you double the exposure to the price fluctuations of Bitcoin. So on the upside, that's a attractive offer. But be aware, there are, of course, the risks of downside as well. But if you want to check out any of the offerings, you can click the link in the show notes down below. And if you opt to get a Bitcoin back loan, you'll actually end up getting an additional $50 worth of Bitcoin credited to your account. And secondly, we have Rise Wallet. This is a physical Bitcoin gift card that you can pick up at a store near you and gift to whoever you choose. I love these things. I think they're super intuitive, super easy to use, really idiot proof. And I think they're great for onboarding new users. The way it works is you pick

Starting point is 00:01:32 one up, gift it to somebody, and they're instructed on the back of the card to download the paired app, scratch off and scan a code, and it creates them a brand new Bitcoin wallet on their phone on the spot, and then sends them an on-chain transaction for the face value of the card. So if you head over to their website, risewallet.com, you can click on locations to see where you can pick one up. They're currently only in Canada, but looking at expanding, so keep an eye out for them. And with that, let's dive into the news. So as January comes to a close,

Starting point is 00:02:08 let's reflect on how well things have gone for the beginning of the year. Bitcoin is up 32% this year so far. And let's just remember back, if you were watching and listening and seeing me on Twitter earlier in the year on, I believe it was the 4th of January. I'm just looking at it, cross the room right now, Jim, January 5th, actually. That was when Peter Schiff tweeted out that

Starting point is 00:02:37 Bitcoin's 4% rally had everybody excited, but if that's all that Bitcoin could muster, then it's pretty poor. Well, you know, end of the month, 32% up. I think we've kind of, I'm glad I got that tweet framed, is all I'll say there. Anyways, yes, we're up 32% on the month. Now, of Of course, Crypto Bull tweeted out Bitcoin is up 32% this month. If we go up 32% every month this year, we would be at $152,000 in December. Now, do I think we're going to go up that much this year? Probably not. Yes, the halving happens in May, but historically, like in the past couple of havings,

Starting point is 00:03:21 it takes quite a while for the effects of that to take hold. Now, somebody did reply, you know, a bunch of people saying it was pretty outlandish to expect that. But he did reply and say, Bitcoin moved. Where was it? Where? Here it goes. Just finding it here. Sorry.

Starting point is 00:03:46 Okay. Yeah, everybody was saying nothing goes up in a straight line. Now, it's worth noting that Bitcoin in 2017 went from, uh, what, like $1,200 to almost $20,000. And if you average that out, that was actually around the 32 percentile per month. Yeah, 2017 opened at $960. It reached a high of $19,666 in December. That equals an average of 32% every month.

Starting point is 00:04:21 So interesting numbers there. Again, I don't think we're going to see that this year, but hey, maybe next year. We'll see. And on the note of profitability with Bitcoin, 75% of Bitcoin in circulation are now in profit. Now, that number does fluctuate quite a bit between bear and bull markets, but it has never dropped below the rate of 40%. So it's never been that 40% of Bitcoins created were not in profit. We did hit a low through this past bare market of around 41.5%. Around June when we saw the spike in 2019 up to around 13K, 92% of Bitcoins were in profit.

Starting point is 00:05:12 And we drop back down to 56% and now we're back up at 76.05% of Bitcoins. So really the main takeaway from this is people that have dollar cost averaged will have done the best in these scenarios because you're picking up when it's the lowest and those low buys end up appreciating over time. But you're also taking the emotion out of those buys. So you're not panic buying or panic selling through that. yeah so again i i that's kind of my tactic typically is just to kind of dollar cost average over time and uh it's worth noting that the worst bear market of all was um was the bear mark my first bear market um which was in basically 2014 2015 it went from a high of 1100 all the way and this was just over the actual calendar year, 1,100 down to 226. And that was the record low value was 40.5% of Bitcoin

Starting point is 00:06:27 in profit. So that was what I got started with. So I guess that's also probably why I'm not so much phased by these crazy movements. Watching 20K to 3K wasn't all that scary for me this time around. So maybe that's why I've already been through the worst bear market that Bitcoin has seen. Anyways, let's move on here. Cracken came out with a post today revealing that treasur wallets can be hacked. However, this isn't really news. People know that these hardware wallets are vulnerable. Typically not remotely, unless you're fished, like unless somebody convinces you to send Bitcoin somewhere through a

Starting point is 00:07:14 fake website or something like that. But this is a physical attack. So it requires you to gain access to the physical device, but not only that, but you need some very specialized equipment. So they needed to disassemble it, take out the chip, actually solder it to something and connect it to something that would, what would it do? It was connecting to some critical connectors and it had like a glitcher device. It would send signals at specific moments, and they were able to do that to abstract the seed phrase from the device.

Starting point is 00:07:52 After that, they still had to bypass the pin, which was really trivial because it's a pin number. You can just kind of brute force that by trying multiple pins over and over and over again until one works. And, you know, an easy algorithm on a computer can do that. but this is an instance where it would have worked only if the person had not utilized the passphrase function of the treasurer so what that is is you get your 12-word phrase you add a 13th word or a password onto that so essentially your wallet is those 12 words combined with whatever your secret password is that's the seed if they just have the 12 words even with the pin They get nothing.

Starting point is 00:08:39 They need to also have the password that you've created, which can be as complex as you like. Of course, that adds in some complexity, and it does put more responsibility on the owner of the wallet, because if you forget that password, there's no getting your money back. Nobody has it anywhere. It's not stored on the device in any way, shape, or form. So if you don't have your password, if you can't remember it, those funds are essentially. lost or I mean you can try and brute force it but if you have a really good password it's probably not going to pan out so again you you got to kind of weigh it but this report by crack and it's not

Starting point is 00:09:20 really anything new we've kind of known that all all hardware wallets more or less if you should just assume that if you have a hardware wallet and somebody gets a hold of it that given time and resources they will be able to extract the funds so treat it as such And then just keep tabs. If you notice, you know, regularly check that your device is where you've securely placed it. And if it goes missing, then grab your seed phrase, which hopefully you have in a separate location, and sweep the funds off into a more secure wallet. So just remember that nothing is perfect. Security is imperfect no matter where you go.

Starting point is 00:10:01 It's just it's not an excuse for no security. So if you are saying, well, why would I get a hardware wallet because they can be hacked? Yeah, but how much more difficult is it for somebody to get physical access to your device, use specialized hardware to extract it, brute force the pin, and that only works if they don't have your password. Or if they do have your password or if you haven't used a password. So, you know, it's orders of magnitude more difficult for somebody to access your funds. that way than if you just have it on a mobile phone or if you have it on your laptop. So, you know, step up your security. Don't let things like this worry you out of taking those extra

Starting point is 00:10:49 steps. Let's move on here. It would cost $21 million a day to attack Bitcoin. And this would be in the form of a 51% attack. So a 51% attack is where someone would obtain. hashing power or computing power equal to more than 51% of the entire Bitcoin network hash rate, all of the computers mining and securing the chain. Now, it should be noted that with this attack, first of all, it's the most expensive chain to attack by far. It's eight times more expensive than Ethereum, which would cost around 2.7 million to attack for a whole day. but this is based on the cost of renting hash rate through what's the company's name nice hash yeah nice hash so you can

Starting point is 00:11:46 nice hash is a company where they set up miners remotely and you can rent out those miners from them and get paid out a portion of the mining rewards so you can rent out some bitcoin hash rate but you cannot rent out 51% of it. So that means that you would have to rent out a little bit of hash rate, and then by and large, you'd have to be either a minor doing this yourself, or you would have to then source the equipment from somewhere else, and it's just, it's not very feasible. And then at 51%, if you obtain 51%, you can start tinkering around. You can start playing around, rejecting certain transactions, you can start reversing or redirecting certain transactions, maybe.

Starting point is 00:12:38 To sustain 51% would be incredibly difficult and it still doesn't guarantee that your reversals and your attacks are going to work. Not only that, but in order to go back further than just like the most recent transactions, the last couple of blocks, it would take much more hash power and sustained hashpower. to do that. So really, it's just, it's becoming completely infeasible for a regular minor or a regular individual with just basic resources to do that. Now, this could still be susceptible to state sponsored attacks if they really, really wanted to take down Bitcoin, but I don't think it's really on their radar yet. And soon it will not be feasible for a state actor to do. Soon,

Starting point is 00:13:29 it'll be a question of not do they have the money, but do they even have access to the power and where are they going to get it from? Okay, moving on. This I was really happy about. This is a story from Jack Mallor's, excellent, excellent, very smart guy he presented at Bitcoin 2019. I believe he's back at Bitcoin 2020 this year, which I'll be at. But he announced something called Strike by Zap, which is his lightning wallet. So he does a lot of work with the Lightning Network. He created something called Strike, which sits on top of another product or infrastructure piece that he created called Olympus.

Starting point is 00:14:09 And so what this does, and I outlined the part I liked, he said, what if my debit card could pay a Lightning Invoice? What if by connecting my bank account I can scan any Lightning Invoice, hit pay, and it would work. No wallet, no backups, no channels, no capacity, no copy. custody issues, no volatility, and no taxes. What if instead of spend and replace, it was buy and spend in seconds without noticing? With a few pennies in USD from the above user, what if a few pennies in USD from the above user was enough? What would it look like? It would look like strike. That's what it would look like. And so he has this demo video that he put together of him

Starting point is 00:14:52 essentially using this app he's created that hooks up to your debit card. And, you can use it to scan any Lightning Network invoice and instantly pay just using your bank. And so this enables anybody to pay any merchant anywhere via the Lightning Network and go through using the Bitcoin network as rails, as payment rails seamlessly. And people won't even realize they're using Bitcoin, which is kind of unbelievable. It's pretty incredible. So a few clarifications here. He said, can strike be used to buy Bitcoin?

Starting point is 00:15:32 Sure. Create an invoice from your existing wallet and pay it. Can strike be used to sell Bitcoin? Sure, create a request and strike and send it from your wallet. Can strike be used for remittance payments? Yes, of course it can. Can it be used for internet tipping? Of course it can.

Starting point is 00:15:48 Is strike another custodial wallet? Not at all. It owns nobody's coins, nobody's keys. If BTC is hacked and stolen, it's my BTC. and I'm fucked. No one else. That's the way it should be. In a weird way, it's a beautiful and innovative hybrid. So he's created a way that traditional banking and Bitcoin now can intermingle pretty seamlessly. Like in the example that he shows in his videos, which I recommend you guys check out afterwards. This link will be down below. It's just seamless. He just pays a lightning

Starting point is 00:16:22 invoice from a debit card instantly. It's pretty incredible. it reminds me it's reminiscent of at first when the internet had to use the phone lines as its infrastructure but then you had this flip where all the sudden the internet became so efficient and the infrastructure for the internet became so efficient that the phone lines started utilizing the internet's infrastructure to function. And this seems like it could be that precipice where all the sudden the infrastructure that Bitcoin has built up is actually expediting the traditional banking system. And so we're starting to see this inverse where it's easier to use your traditional bank via Bitcoin than it is to use your traditional bank via the regular pay.

Starting point is 00:17:23 Payment Rails. So kudos to Jack. I'm super excited to see this rollout. They're starting with US only, so I can't even try the beta yet, but they do plan on kind of rolling out everywhere over time. So have patience. I'm super excited to see where this goes. And to finish up here, I just want to encourage you guys to check out an article. If you haven't heard of Vlad, I'm going to butcher his last name, Vlad Kostia. I hope. I said that right. Anyways, Vlad, I've been kind of working with him, getting him to create some content. So I work out of Bitsy and I'm in charge of content creation. I'm kind of like content manager over at Bitsy. And so I'm trying to bring in a lot of great Bitcoin focused content.

Starting point is 00:18:13 And so I've had Vlad do up a few articles for the Academy over at Bitsy and he just dropped this piece today about Bitcoin's leadership. advantage and how it came to be. So he talks about the startings of Bitcoin where essentially Satoshi was the head of Bitcoin and then gradually passed it off to Gavin Andresen and then you had the Bitcoin Foundation which kind of crumbled and how Bitcoin has gradually more and more so decentralized itself into this kind of leaderless mob where where it's the consensus of the crowd. And it's a good read. I encourage you to check it out and get a good dose of Bitcoin history and see how we came to be where we are now and what advantages that gives us. With that,

Starting point is 00:19:06 I'm going to wrap it up. You guys, thank you so much for watching and or listening if you're on the podcast. Of course, don't forget to hit like, subscribe and share. And if you're on the podcast, of course, share it out to your social media. It will be great to get more people listening. Now, if you want to help out the show in any other way, you can check out the sponsors down below that I mentioned before. Leden and RISE wallet are in the show notes as well as Wasabi Wallet, which is great for your Bitcoin privacy. So check that wallet out. And finally, if you really like, you can check out NordVPN. This is a program I use on my computer, on my phone.

Starting point is 00:19:40 I love it. It basically hides your IP address. It encrypts your browsing data and your browsing history. And it has some other added benefits like unlocking data. Geoblog content. So if you can access some content where you're from, just simply change your country of origin in the app and it should be unlocked for you. If you want to check them out, there's also a link in the show notes and or you can just head to their website and use the code BTC sessions, all one word. It'll get you a deal where you get 70% off and one month free. It ends up coming to

Starting point is 00:20:10 about $3.49 a month, which is pretty damn good deal. With that, I will wrap up. Thank you guys again. and I will see you next time for your daily session.

BTC Sessions - Bitcoin's Bullish January, Trezor Is Hackable, Lightning Innovation With Strike App EP013

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