BTC Sessions - BTC Breaks $11K, Square Invests $50M, BitMEX Coins High Risk EP106

Episode Date: October 9, 2020

SUPPORT THE SHOW: LEDN offers Bitcoin backed loans – Sign up and get $50 free https://bit.ly/34FeT2f Get Wasabi wallet and enjoy your Bitcoin privacy https://wasabiwallet.io/ Buy a Cobo Vault to secure your Bitcoin! https://bit.ly/2GgMFlH Cobo Vault Tutorial https://www.youtube.com/watch?v=JnRjvZKulrA 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: Bitcoin breaks $11K https://www.coindesk.com/bitcoin-tops-11k-for-first-time-in-almost-3-weeks Square invests $50M or 1% of assets into Bitcoin https://decrypt.co/44319/square-invests-50-million-in-bitcoin Publicly traded companies with Bitcoin on their balance sheets https://bitcointreasuries.org/ Bitcoin hashrate and price charts on Glassnode https://studio.glassnode.com/metrics?a=BTC&category=&m=mining.HashRateMean&mScl=lin&pScl=lin&resolution=1h Riot Blockchain aims to quadruple hash power https://www.coindesk.com/riot-buys-antminers-bitmain BitMEX coins labelled “high risk” by Chainalysis https://www.forbes.com/sites/billybambrough/2020/10/07/high-risk-warning-bitcoin-exchange-bitmex-is-in-even-worse-trouble-than-thought/#3ca4afe314b3 LND vulnerability disclosed, upgrade to 0.11 and higher https://decrypt.co/44439/a-version-of-bitcoins-lightning-has-unknown-vulnerability Check out my interview with Anders: https://www.youtube.com/watch?v=ivgFgq2No4g

Wasabi wallet and fairly private. What is up, everyone? I'm Ben with the BTC sessions, and this is your daily session. Hold on their Bitcoin. Before we dive in, of course, I have to give a shout out to sponsors of the show, leaden.io. This is where you can use your Bitcoin for a variety of different services. Of course, they have their Bitcoin-backed loans.

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there is a link in the show notes down below. If you click that link and you opt to get a loan, well hey, they will give you 25 bucks directly into your USDC savings account. So be sure to check them out and you'll help the show in the process as you do so. Now up next, we have our friends at Crypto cloaks, if you haven't heard of these guys, you have to check them out. A bunch of awesome Bitcoiners got together, started cranking out incredible swag with their 3D printers. Now, I have my beautiful node case behind me. I'm doing a video on Get Umbrel, how to run your own Bitcoin node with a custom case, but they've got tons of other stuff.

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It can be used on a ton of different multisodes. options. I really love the thing. Be sure to check it out. There's a link in the show notes if you want to grab one. I for reference am using the cobo vault pro because I really like the rechargeable battery on it and hey, they're giving away some stuff too if you want the chance to win a cobo tablet plus, which is a steel seed plate where you can back up really any Bitcoin wallet that you have doesn't have to be a cobo vault. But besides that, all you need to do is hop over to Twitter, retweet today's show, tag myself and Kobo and just let us know why you want one I'll be giving one away for every show from now till the end of November. With that, let's dive into the news.

So Bitcoin has officially topped $11,000 for the first time in three weeks, actually. So Bitcoin hit just over $11,000 as of 1105 UTC time. And that's the highest since September 20th. That's according to CoinDest Bitcoin Price Index. The rally to $11,000 marked an upside break from the past two weeks range between 10,500 and $10,800. And the Bitcoin remained fairly steady above $10,000 for the past two weeks, despite news of one Ku-coin got hacked and a bunch of tokens and Bitcoin got stolen. Historically, that would be bad news and you'd see a dip. Bitcoin didn't really flinch.

U.S. regulators brought criminal and civil charges against BitMex. That was big news too. Bitcoin, again, barely flinched at that. Maybe dip, you know, a few hundred bucks, but not much. And Donald Trump also announced that he would end talks with Democratic lawmakers over a new fiscal stimulus package. So despite some of that news that could be seen as bearers for Bitcoin, it has largely kind of just bounced back. We can see at the time of recording this video, we're up around 11,100. Obviously, that can go anywhere at all times, but nice to see it breaking back above that level again. Now, one of the things contributing to this could very likely be news circulating around Square investing $50 million or 1% of assets into Bitcoin. So let's just read a little bit here from this article on decrypt. Payments company Square has invested $50 million into Bitcoin.

According to an announcement today, it has bought 4,709 Bitcoin with 1% of the company's assets. Crazy to think that $50 million is less than 5,000 Bitcoin now. Insane. Anyways, we believe that Bitcoin has the potential to be a more ubiquitous currency in the future, set Square's chief financial officer. As it grows in adoption, we intend to learn and participate in a discipline way. For a company that is building products based on a more inclusive future, this investment is a step in that journey. Now, Square, of course, owned by Jack Dorsey, CEO of Twitter. Square

also owns Cash App and they've been offering Bitcoin for quite some time now. Yeah, he, he right at Jack has been no stranger to Bitcoin. He's been big in the Bitcoin space and he says that he regularly maxes out his weekly Bitcoin buy limits on Cash App. Yeah, they also have Square Crypto where they contribute to Bitcoin developers in and around space. Yeah, very, very interesting stuff here. And this is on the heels of the news from Microstrategy. I mean, comparatively, Square's investment is quite conservative compared to micro strategies. But Microstrategy went out and pumped $425 million into Bitcoin out of their $500 million treasury, which is insane.

I mean, in the long run, honestly, I think that's going to be very lucrative for them. But comparatively, square investing only 1% is a conservative move. But that could also be because Michael Saylor, CEO at Micro Strategy, basically has majority voting rights, whereas Jack Dorsey, he has board members that he has to answer to. So probably getting 1% was an accomplishment in and of itself. uh regardless i love this tweet from uh nick camp mine on twitter here he talks he's actually showing a website put together by rodolphel novac who created the cold card it's called bitcoin treasuries dot org and it has bitcoin treasuries in publicly traded companies and he lists six of them and amongst

six companies well i'll just read the tweet from nick here six companies own fucking 510 000 400 162 Bitcoin. There isn't enough Bitcoin out there for all your friends and family to own one full coin stack accordingly. Yeah, I mean, it's pretty amazing to see that out of 21 million Bitcoin that will ever exist, half a million of them are owned by now just six companies. And if you think that more public traded companies aren't going to be jumping on. on this train, I think you're crazy. I think we're gonna see a lot more of this through the end of the year, through all of next year.

And I think it's gonna be a major driver for price movement, especially in the coming 12 to 18 months. I think it could be the backdrop of a pretty spectacular next bull run. But hey, I could be wrong, we shall see and we'll watch as this pans out. Now also in the bullish category, The Bitcoin hash rate has hit a new all-time high.

I mean, we've been hitting new all-time highs pretty consistently other than, like, dipping low into January of 2019. We were below all-time highs for a good chunk of 2019. But, I mean, when you zoom out and you look over the past years, it's just exponential growth. It's crazy. So the hash rate hit a new all-time high of 170 x-a-hats. for the first time in history on the hourly chart.

This is an increase of around 40% since the having in May, substantially adding to the security of the network. And it shows here historically the reason I wanted to bring up this price chart, along with the hash rate chart from GlassNode, it shows the price in relation to hash rate back in 2017 and prior, I guess into 2016, and the price had been, these massive spikes not reflective of the growing hash rate. Yes, the hash rate was going up,

but like the price was going up much quicker than hash rate. Today we're seeing the inverse. We're seeing the price is relatively stable. Obviously, we're just talking about it, you know, a little bump over $11,000. But compared to the movements in hash rate, this is, if anything, a massive bullish indicator for myself because it means that even though we are not close to the previous all-time high

of $21,000, you have people piling in to participate and secure the Bitcoin network. It is by far the most secure computing network on the planet. And that while we're still sitting at 11K, it's insane. if anything, it bodes well for the coming year to see the hash rate. And I think the hash rate is going to go even more through the roof. Of course, with that will come the fud around, oh, Bitcoin is an environmental disaster. But if you look at some good articles, like there's one called, I think it's called Beware Lazy Research, so and so forth, it goes into what's actually driving Bitcoin hash rate, where the energy is coming from.

from not just how much energy it's using. A lot of its renewables from a lot of hydro actually in China. It's also helping reduce emissions in places like my home province of Alberta here in Canada where gas that would just be flared into the atmosphere is now actually being utilized to power Bitcoin miners instead of just being released. So it's actually doing the opposite of what a lot of this fud is saying. Anyways, in that same vein, of mining, a company called Riot Blockchain has bought another 2,500 S-19 Pro Antminer Rigs, which are kind of like top of the line new mining rigs for Bitcoin, from BitMane Tech PTE as the publicly traded firm races to quadruple its mining power

denominated by hash rate by mid-2021. So as I was saying, I think that hash rate, what we're seeing now is nothing. and we're going to see a massive race all through the next year to year and a half before it ever kind of peaks back down perhaps for another bear market. But anyways, I'll read a little bit more here from CoinDesk. Riot said Tuesday it paid $6.1 million for the rigs. Delivery and deployment are slated for December. The new purchase plus the thousands of not yet delivered Bitmain Riggs Riot Exp.

expects to begin arriving this month will drastically increase Riot's hash rate from current levels, around 500 pet a hash a second, to an estimated 2.3X a hash by June. Riot's latest purchase and lofty hash rate goal are further evidence of massive infrastructural demands that Bitcoin miners face to stay competitive as Bitcoin's price and mining difficulty both rise. Again, it's a massive, massive race. to compete for that shrinking piece of the pie that is the newly issued Bitcoin. I don't know how to better say how insane this is for the Bitcoin Network and how much it's growing, but I expect to see fireworks over this next year and a bit here.

Now, on the more kind of negative side of things, we referenced it in a story earlier, but there was the fallout from Bitmex being cracked down upon by US regulators. Now, if you're out of the loop, effectively Bitmex was called out by the SEC and I can't remember the other entity, but effectively, they were called out for running an illegal derivatives exchange to US customers, which is hilarious because not only on their website did they say they're not available to US customers, but they also blocked US IP addresses. So what the U.S. is expecting them to do is to KYC all of their customers from anywhere else in the world just to ensure that they're not allowing U.S. customers to sneak through, even through VPNs. So they're putting the onus effectively on any company anywhere in the world to abide by U.S. law.

Yeah. So anyways, a little bit from Forbes here, the Bitcoin and cryptocurrency, World was rocked last week by news. US authorities had levy charges against major Bitcoin and crypto exchange. Bitmex. Actually, it's just Bitcoin. They just do derivatives on other cryptocurrencies. Now, in a further blow to the controversial Bitcoin and cryptocurrency, again, Bitcoin-only exchange, the influential blockchain data company Chainalysis has branded Bitmex a high-risk exchange

with external data showing investors have removed almost 50,000 Bitcoin. Bitcoin from Bitmex last one. Oh man, the writing for this article is awful. They refer to them as Bitcoin tokens. Oh shit. Is this? Oh, man. Billy, the author here, Billy Bambrough.

Get your shit together, dude. Anyways. Okay, here's the important part. On Monday this week, Chain Alice's warned its clients that Bitmex, which rose to prominence through Bitcoin's massive 2017 Bull Run was up until recently, the largest Bitcoin derivatives exchange would be considered a high-risk exchange. Any transfers from October 1st and later should be considered high-risk chain analysis told clients in an email that was first reported by Bitcoin and cryptocurrency news analysis outlet the block. Holy crap. Sorry guys. Adding Bitmax transfers

will trigger alerts for those using the chain analysis monitoring tool. The chain analysis warning compounds data from blockchain analytics firm GlassNode that shows around 45,000 Bitcoin tokens. Oh my God, dude. Stop. Bitcoin's Bitcoin, not Bitcoin tokens. Anyways, 45,000 Bitcoin have been withdrawn from Bitmex since the start of the month representing a 27% drop in the total Bitcoin on that exchange. Wow. So anyways, what? What does this mean for regular people or people that may have Bitcoin that were on Bitmex? Effectively, it's a giant fuck you to anybody that happened to be on Bitmax before this came down, regardless of where in the world you are.

So if you had coins on Bitmax and you withdrew them because you saw, stuff is going down, maybe I better get much stuff off of an exchange, which is probably a good idea in the first place, It's not good to have your coins sitting within an exchange, especially for extended periods of time. But besides the fact, if you withdrew that, but then you went to use another service, perhaps one like Coinbase, Coinbase started issuing, from what I've seen on Twitter, started issuing error messages when people try to withdraw those coins. Now, why? Because they're flagged as high risk by. chain analysis which is used by a lot of different companies as like a way to comply

with rules that don't yet exist chain alysis slaps arbitrary labels on certain coins based on kind of where they've been and companies can choose to use them thinking that they're being proactive and impose restrictions that really again have no basis in in rules. The coins themselves are not, are not illegal. It's that they're saying, well, hey, this was on an exchange and our company that we hire to analyze inflows and outflows of coins, say they're risky. So we're just going to not let you withdraw them. So, folks, this is why we coin join. This is why we use tools like Wasabi Wallet or like Samurai. This is why we use stuff like that because it breaks what chain alice is trying to do. It effectively breaks the links of

of coins and makes the currency fungible again. With enough taint, companies will be forced to uh, companies will be forced to treat it as cash. And you can't really, um, if there's enough taint across all Bitcoin, then either a company can deal with Bitcoin. or not deal with Bitcoin at all. And that's kind of where I see it eventually going, especially in light of stuff like this. Take a look. Blue Wallet just released version 5.6.1.

And what they've implemented here is pay join support. What is pay join support? Pay join from their tweet is a type of coin join where both sender and receiver coordinate to build a Bitcoin transaction. So what does this mean in practice? If you have Bitcoin sitting in Blue Wallet on your phone and you go to spend it with somebody else

who has Pay Join enabled, say a merchant online that has BTC Pay server, what you can do is as you're sending Bitcoin to the merchant, the merchant also sends Bitcoin as part of that transaction. And so it kind of meshes those coins together and then the merchant only pulls what is supposed to be, their part of the transaction for whatever good or service that they've offered.

So what that means is you cannot tell which coins were originally the customer and which coins were originally the vendor, if you even know that a vendor was part of the transaction. And furthermore, you don't see how much the transaction was actually for. So I think we're going to see stuff like this popping up. We already know that Green Wallet is working to implement this. I would love to see it in Wasabi as well. We know that Samurai has a version of this as well. They call it cahoots.

But I'd like to see this interoperable across many, many different types of wallets so that just regular sends become coin joins all the time. So anyways, I think this is great for fungibility, and I can't wait to see more of it. Moving on, a version of Bitcoin's lightning has an unknown vulnerability. So previously unknown vulnerabilities have been discovered in older versions of the Lightning Network, Damanor LND, a full node implementation of Bitcoin's second layer solution Lightning Network, according to an announcement published today by Connor From Neck, I'm not sure to say that last name perfectly,

head of cryptographic engineering at Lightning Labs. So as tweet said, partial L&D vulnerability disclosure, please update to anything beyond version 0.11 whatever. Okay, so full disclosure will be published on October 20th. So per the post of vulnerability affects anything below version 10.11, or 0.11, I apologize. To safeguard from these exploits, users should upgrade to L&D 0.11.1.1.2.2.2.2.2. or higher as soon as possible the announcement stress. Now I did notice that I've been running Umbrell and playing around with it.

That's already upgraded. My node, same thing. Most software will have already upgraded, but if you're running it independently, if you're running L&D on your own, make sure that you get up to 0.11 or beyond. So the company stated that it will disclose full of these new vulnerabilities on October 20th.

October 20th a bit sooner than usual due to unknown circumstances. The quote here, the circumstances surrounding the discovery resulted in a compressed disclosure timeline compared to our usual time frames. We will be publishing more details about this in the coming weeks along with a comprehensive bug bounty program. So there's no evidence suggesting that this has been exploited in the wild so far, but it's always good to keep up to date on any updates like this. Now again, And as we've seen, lightning is still very early. In the early days of Bitcoin, the first couple of years, there were a lot of bugs that had to be worked out, a lot of kinks.

And luckily, it was in an environment where it wasn't so adversarial and there weren't as many people that were trying to exploit it. Now, lightning's a little bit different. However, the whole reason behind building this transaction network on top of Bitcoin is so that you don't have to compromise to base layer of Bitcoin. point itself. And that's also the reason that you don't put more than just spending money into lightning. So as always, be careful. I still use lightning regularly. Things like this are going to continue to come up. Again, we're like two years into lightning development here or into main net lightning. So don't be surprised with stuff like this arises. But again, only keep a little bit of money on here. You don't want to keep like thousands upon thousands of dollars. I guess it's

relative for everybody. But for myself, maybe I keep like a couple hundred bucks on lightning, just if I need to do something quick. But outside of that, everything is, you know, actual main chain or in cold storage. Now moving on here, a couple last things. Sparrow wallet, new release. So Sparrow is a desktop wallet. You can reference your own node and everything. I've been playing around with it, looking forward to doing a video on it. But very excited. They just added a few things. Number one, you can do TestNet.

I'm more of an on-chain, kind of all-in type of guy. But TestNet is very good if you're testing stuff out and you're unsure of yourself. Now, you can view and edit a Wallace output descriptor. You can exclude specific UTXOs on the Send Transaction diagram. And this is my exciting part. cobo vault air gaped file import and export and import and export ex-bub with QR codes. So what that means is you can now easily import your cobo vault as a usable wallet in Sparrow. And I believe you'll now be able to utilize it in the multi-sick schemes as well.

So that's pretty cool. I'm excited to play around with that. I think it's almost time for another multi-sig video. I've done four so far. So this will be number five. But I'm very excited to try. And lastly, if you haven't checked it out already, be sure to go back yesterday.

I posted an interview with Anders, aka Danish Hoddle. So we got talking about the psychology of the halving cycle. We got talking about the markets that Bitcoin stands to potentially take over over the coming decade. And we also talk about when he thinks like the end. game is coming, like hyper-bitcoinization. If that happens, when can that happen? And he put some lofty price targets and he's, dare I say, more bullish than I? Either way, it was a super fun conversation. So if you haven't listened to it or watched it yet, be sure to do that. Also, I haven't given away a prize for that episode for a retweet for the Kobo tablet either.

So if you want to go back, if you want to try and double up your chances, then you can retweet today's show and yesterday's show and tag myself on Kobol. Let us know why you want one of those. Anyways, guys, I'm going to wrap it up there. Thank you so much for watching and or listening. As always, if you're here on YouTube, please do like, subscribe, and share. All of those things are very, very important, and they really do help. More eyeballs on the show or ears on the show is always great.

Now if you want to help with this show in another way, again, you can hit up the sponsors down below. That was Ledin. You can grab that 25 free bucks. You can check out CryptoC Cloaks 5% off with code BTC sessions. And of course, the COBOLVOL links for that down below. And don't forget to retweet the show for a chance to win. And finally, if you really love what you saw, you can drop me a Bitcoin Lightning Network tip at my tippin. That is tipin.m.m.com.

At BTC sessions, with that, I'm out. Have yourselves a wonderful. evening, a wonderful day. And if you're in Canada, a wonderful Thanksgiving weekend, and I'll see you next time for your daily session.