BTC Sessions - Dave Portnoy Buys BTC With Winklevoss, FEDcoin, BitMEX Sweeping KYC EP087

Starting point is 00:00:13 Wasabi wallet and fairly private. What's up everyone? I'm Ben with the BTC sessions and this is your daily session. Hodel their Bitcoin. 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 variety of different services. Now I've been using and working with these guys for well over a year now. Had great experiences myself. And the first thing I ever used them for was a Bitcoin backed loan.

Starting point is 00:00:51 So in my instance, I was in a pinch, needed to get my hands on dollars, but I didn't want to sell my Bitcoin for a couple of reasons. One, that's a taxable event. And two, I was worried about having to buy back in at a higher price point. So I was able to deposit my Bitcoin and get a loan to my bank account in dollars, Canadian or US dollars, within 24 hours. When I paid that back, I got back exactly the same amount of Bitcoin. Now, they do have a couple other offerings. They've got their Bitcoin and USDC savings accounts, which have interest rates. up to 10%, and they've got their B2X offering,

Starting point is 00:01:25 which uses the same loan mechanism to buy more Bitcoin on the spot, which effectively doubles your Bitcoin. So if you want to check them out, there's a link in the show notes down below. If you use that link and ought to get a loan, you will get 50 bucks worth of Bitcoin for free, and you'll be helping out the show at the same time. And secondly, if you wanna help out the show in another way,

Starting point is 00:01:48 and you're into privacy, well, that's one of the things that I use in my arsenal of privacy tools is a VPN. NordVPN, I have this on my computer and my phone and my tablet and basically every internet connected device in my home. And so what it does is it hides your browsing data or encrypts your browsing data, it hides your IP address and it also has some other added benefits like unlocking geoblock content. So if you want to access something that's not available in your region, you just change your region from within the app and all of a sudden it's available to you. If you click the link and opt to get NordVPN, you can get 70% off and a month free.

Starting point is 00:02:30 It ends up being about $3.49 a month. So not a bad deal. And really, if you're using, especially public Wi-Fi, very, very important that you're using a VPN, whatever that VPN may be, because you have no idea how secure those connections can be, and a lot of your data can be leaked there, very sensitive data, especially if you're a Bitcoiner. So be sure to check it out, nonetheless. And with that, let's dive into the news. Now, we were talking about this guy earlier last week, Dave Portnoy, and he is the head of Barstool Sports. He's been kind of all over the news recently, diving into the stock market.

Starting point is 00:03:11 He's been, I mean, making a whole bunch of money because of the insanity of the current markets. you know, money printing just being funneled into equities and he's banking on it. And he understands that the dollar is effectively worthless as they print more and more of it. But he hasn't been super keen on Bitcoin until recently. Now, he's had it in the past. I think he lost his private keys, which is not great. But then he recently, he got curious because so many people were asking him about this. And he invited the Winklevoss twins to teach him what the hell to do and what Bitcoin is and well they obliged him they went to his house they sat down he dropped this the other day they sat down chatted about how to get bitcoin of course they onboarded him to gemini their own exchange based

Starting point is 00:04:01 it of new york um but he dropped a whole bunch of money into bitcoin now he also dropped this video which is about ten minutes long of them kind of talking about bitcoin learning how to get it on the exchange so on and so forth um and the response to it was pretty mixed, mostly on the part of how the Winklevoss twins handled it. Obviously, like Dave, he hasn't dove really down the Bitcoin rabbit hole. A lot of people were seeing this as an opportunity to potentially, you know, orange pill him to really understand or at least start on the path to understanding Bitcoin. A lot of people think that the Winklevly kind of shit the bed here.

Starting point is 00:04:42 And so what did they talk about? Well, they talked about Bitcoin and kind of its value. proposition in terms of being a better gold for the internet era, which, yeah, absolutely. But then it kind of went a little bit off the rails. They ended up talking about how gold is not going to be valuable because Elon Musk is going to go to space and mine asteroids for gold and it will rain down like as abundant as sand, which, okay, in a far off future, potentially we're mining asteroids for gold. But I mean, I don't think that's its number one value proposition for Bitcoin. And there are a lot of other routes that could have been gone down to better understand this.

Starting point is 00:05:26 A lot of people, I think my favorite response was Matt O'Dell from TFDC, just fuck you guys and went on a rant about it and said his DMs are open if Dave actually wants to learn about Bitcoin. I mean, yeah, I guess I would echo the sentiment. of it could have been a lot better. There were a lot of points where I was like, just say this, just say that. Either way, he appears to be quite sold on Bitcoin. So he ended up dumping 200 grand into Bitcoin. Unfortunately, he ended up also dumping like 50 grand into chain link,

Starting point is 00:06:04 which he obviously has no idea what it is or what it does. And then he also started talking about creating his own coin, because of course, and they're discussing creating Dave coin and, you know, Dave Portnay is talking about like pumping his coin and it'll be worthless but like people might buy it, which is basically the sentiment of like the ICO craze of 2017 and I think kind of what we're seeing with a lot of the defy shit that's coming out now. Yeah, so all in all, not great, but I mean, he's on board. So he tweeted out this video the other day. He said, hey, Bitcoin, see you at 12K tomorrow.

Starting point is 00:06:49 I don't know how close he is to that now. I think Bitcoin is around 11, 8, somewhere in there at the time of recording this. But the video is ridiculous. It's literally from the movie Armageddon, and he's got like his head and the Winkleby's heads and Elon Musk's head superimposed on this scene from Armageddon as they're boarding the rocket ship and so I get epic speech going on. I mean it's funny. I find it funny what's happening. I even posted where was it I I retweeted this and I was just kind of like reflecting on how insane last time was. Okay here's what I said I said we haven't even hit the previous all time high yet

Starting point is 00:07:33 and we've got accounts with 1.7 million followers which is Dave tweeting stuff like this. Can you imagine what the incoming mania is going to look like? And I firmly believe that. Like, we've got guys like Dave Portnoy who have a whole bunch of eyeballs on him, tweeting shit like this. We're like not, we're like halfway to the previous, a little bit more than halfway to the previous all-time high. But like, can you imagine the eyeballs that are going to be on this shit

Starting point is 00:08:02 and the types of accounts that are going to be talking about this stuff? post previous all-time high I mean, yeah, it's going to be wild. I firmly believe we're in for an insane 2021, but hey, time will tell.

Starting point is 00:08:19 Moving on here, the Fed says it is developing an experimental digital currency. Welcome Fed coin. It was only a matter of time, but let's clarify. They're not looking to create a digital dollar yet. This is definitely a precursor.

Starting point is 00:08:35 Let's be honest here. So this is what they said. The Federal Reserve on Thursday announced it is building a testing and testing a hypothetical digital currency equivalent of cash. The goal of the program is to enhance the Fed's understanding of digital currencies, said Fed Governor Lail Braynard in a speech to a conference of innovation sponsored by the Fed's San Francisco Regional Bank. Brainer went to great pains to stress that the central bank is not poised. to issue digital dollars. A separate policy process involving thorny legal questions would be needed

Starting point is 00:09:12 if the Fed ever wanted to use a digital currency. The central bank has not made a decision to even start such a process. We are taking the time and effort to understand the significant implications of digital currencies and central bank digital currencies around the globe, Brainerd said. Given the dollar's important role as a global reserve currency, it is essential the Fed remain on the frontier of research and policy development of digital currencies. There continues to be strong demand for U.S. currency, and we remain committed to ensuring the public has access to a range of payment options. Now, researchers at the Brookings Institution in a paper last month said that a central bank digital currency has progressed

Starting point is 00:09:56 in the past few years from a bold speculative concept to a seeming inevitability, I would agree, in the wake of COVID, prominent economists have noted that a digital currency would have made it easier for governments to send stimulus checks to workers. Obviously, and then it goes on to say how China has been rapidly working on something like this themselves. So, again, I agree it's an inevitability, but I also think that it's inconsequential. will there be some efficiencies there? Yes. But that will also come at costs too. So if, you know, a little bit easier to get money to people,

Starting point is 00:10:44 a little bit easier to implement things like UBI. But a lot of people don't understand that UBI just like creating money doesn't create wealth. There's a limited number of goods and services available out there. And if you just create more money, it just means a larger portion. of that money is going to be used in order to obtain those limited goods and services. So the net is a zero-sum game. There's always going to be a specific amount of money to purchase a limited amount of goods and that amount of money can grow and shrink. It doesn't matter. It's the percentage that matters of where it's allocated, I suppose.

Starting point is 00:11:27 So, yeah, again, I think it's central banks either feigning that they're still relevant or actually believing. I'm inclined to think that they actually believe they're still relevant and will continue to be the dominant way that currency is handled. And they're just thinking, well, we can just digitize and that's the innovation when really the whole reason for digital. currency for Bitcoin in the first place was to escape the failed monetary policies of the Federal Reserve and other other banks, central banks around the world. So yeah, sure, we'll probably see a digital dollar, but who cares? Let's move on. Party is over for Bitmex users that have been skirting KYC. BitMex has not really required a user verification. for most people, you just have to say, oh, I'm not from the US or like the sanctioned countries

Starting point is 00:12:32 that are not allowed to utilize the platform. A lot of people just would lie about that, then use a VPN and pretend that they're not from the US. And then they'd be able to onboard onto the platform. Not the case anymore, though. So reading from the Bitmax blog here, it says, we will be launching our user verification program at Midnight UTC on the 28th of August So coming up pretty quick here, where all customers will be asked to complete ID checks within the next six months. These new controls will enable us to create a more trusted and secure trading environment for all BitMex users. Very positive spin on this. As part of the new initiative, we will also be unveiling details of significant trading turn of a significant trading term.

Starting point is 00:13:19 Basically, they're just like fluffing it up so that it doesn't sound as bad. Oh, here's a positive thing. Also, we need your ID stat. Anyways, what new requirements can users expect? The user verification program will require individual users to go through a four-step process similar to ID checks that are on many other cryptocurrency exchanges. Individual users will be prompted to upload a photo ID and prove of address, take a selfie as well as answer a few multiple choice questions about source of funds and trading experience. It should take about five minutes to complete from start to finish. Yeah, so basically, I mean, Bitmex is absolutely massive derivative trading platform,

Starting point is 00:14:05 like billions and billions going through there on a daily basis. Funny thing, actually, I interviewed the CEO, Arthur Hayes, back in 2016 when I was in Hong Kong. At the time, he had me up to the office. Very nice, by the way, a great guy. had me up to the office to talk about what he's doing, what he's working on. And we came in, it was like nice kind of big floor to the space. We went into a back office and sat down.

Starting point is 00:14:33 So I was like, oh, hey, so you guys have this floor? He's like, no, no, no, we have this office, which is, was about the size of my home office that I'm in right now. It might have been smaller now that I think of it. And it was me, my wife, and Arthur Hayes sitting in this tiny office of Bitmex and to see the change in four, not even four years, it was like by the end of 2017, it was insane how much things have changed. And they own the most expensive real estate on the planet in like downtown Hong Kong now. It's crazy to me. But nonetheless, yeah, I think this is a trend. We're going to continue to see.

Starting point is 00:15:18 this is clearly regulatory pressure. They don't want to be shut down. They don't want to be basically hauled into court. I think they're just posturing based on some of the regulatory pressure they've seen across the board. And I mean, what does this entail for Bitcoin as a whole? Well, I don't know. Will you see volumes change on this potentially? I maybe, maybe not.

Starting point is 00:15:47 either way, everybody that's using this platform now is going to, everything's going to have to be above board because you're not going to be able to get by trading millions and millions of dollars or more without anybody knowing who you are, at least here. So we'll see. But it also could bring a certain level of, I guess it'll be a little bit more transparent. There'll be a level of everything when it comes to the platform in that people may not be able to screw around as much because they're worried about having eyeballs on them and consequences for their actions. So we shall see. Let's move on. I wanted to bring attention to this piece from the blog at Knox Custody.

Starting point is 00:16:40 And so this is touching on the other day we talked about micro strategy. is a company that's a fairly large, like over a billion dollar market cap company. On the NASDAQ, a publicly traded company that took its cash reserves and dumped them directly into Bitcoin. Again, like the company has a $1.2 billion market cap, and they converted their $250 million of their cash treasury, like all in into Bitcoin. And they bought up, all the end up, 0.1% of Bitcoin's entire supply. So they bought 21,454 Bitcoin in total. So this was huge news, but there's been more discussion around it.

Starting point is 00:17:33 And I just wanted to point that this article is excellent. It outlines kind of everything that's gone on. And it outlines the idea. I'll just read a little bit from it. So now that Bitcoin has been adopted as a primary reserve, asset by micro strategy, a well capitalized NASDAQ listed firm, other companies will be forced to sit up and take notice. Amid recent economic downturn driven by globalized lockdowns and supply chain disruptions in the first half of 2020, companies slowed down their investment

Starting point is 00:18:03 programs, reduced costs, and raised cash reserves to adjust to the economic uncertainty. The companies comprised of the NASDAQ 100, the index of the 100 largest non-futable. financial companies traded on the NASDAQ stock market are now sitting on nearly $1 trillion in cash. US tech moguls like Microsoft, Google, and Apple are accumulating more cash than ever. Now, this goes on to talk about how the stimulus is actually hurting cash. You can't go on and print, and I think it's, there we go, around $6 trillion and expect that cash to maintain its purchasing power. And I think that, and this article posits that this move by micro strategy and people like Paul Tudor Jones and other institutional players that are starting to

Starting point is 00:18:57 come into the space are realizing that sitting on cash is becoming a liability. And their actions are reflecting such. So I just want to say kudos to the guys over at Knox custody and in particular, like the author here. Tibb, I know you on Twitter. Solid piece, man. Good job. But anyways, I do recommend you give this a read. I also recommend you check out one other thing. I listened to this earlier.

Starting point is 00:19:27 Preston Pish was on the breakdown, and it was an excellent conversation overall talking about Bitcoin and where we're at, but they definitely touch on this micro-strategy stuff and the greater implications of such. It was a really good chat. So I do recommend you check it out. With that, let's move on a little bit.

Starting point is 00:19:46 Wasabi Wallet posted a blog regarding Tor vulnerability. And so Tor basically encrypts everything that you do on the internet. However, there's a man in the middle attack that has been taking place. So it's particularly targeting bitcoins and bitcoins who use mixing services. But this blog goes into why Wasabi Wallet is effectively not affected by this. So they say, summary of the attack, the entire operation is a man in the middle attack to Tor users. This attack tries to manipulate traffic as it flows through malicious hacker-controlled Tor exit

Starting point is 00:20:27 relays. I know this will get a bit techy, but we'll have a general summary of it. The attacker selectively remove HTTP to HTTPS redirects to. to gain full access to plain unencrypted HTTP traffic without causing TLS certificate warning. So basically, HTTPS has some kind of like security and privacy features to it, and they're able to kind of get around that

Starting point is 00:21:00 and see and basically like kind of see the underlying clear text stuff that is happening without triggering a warning that, what you're doing is insecure. So the hackers specifically attack multiple Bitcoin mixers. They replace Bitcoin addresses in the HTTP traffic to redirect transactions to their addresses instead of the user provided Bitcoin ones.

Starting point is 00:21:24 By replacing the destination address at the HTTP traffic level, the attackers hijacked the user's funds without the users on the Bitcoin mixer's knowledge. I know that sounds scary as fuck. And it is. but hold on why wasabi is safe and how it defends itself against this type of attack so it's simple because wasabi wallet is a non-custodial privacy-focused bitcoin wallet that implements trustless coin join there are no addresses sent to the server when sending money also unlike many other

Starting point is 00:21:57 traditional mixers where users must give control of their coins to another party and trust that their party will return the bitcoin to them wasabi does not take custody of assets when you're using Wasabi wallet and you're trying to obtain some privacy via coin join. Wasabi at no point takes custody of your funds. Now they are saying that also there is some nuance to this. Pretty much everything that happens within Wasabi always stays within the Tor network. It doesn't use exit nodes in the first place, which is kind of like the point where an attacker would try to try to intercept and inject different addresses, which again, we've already said is not possible with

Starting point is 00:22:45 Wasabi. But in certain fallback scenarios, Wasabi would exit Tor. It's still, the long and the short of it is using Wasabi, this does not affect you. So, but yeah, basically Tor, in this instance, It's people running Tor exit nodes and trying to take advantage of using that. So more than 23% of TOR's network exit capacity has been attacking TOR users. So a quarter of people running TOR exit nodes essentially are potentially malicious. So I mean, it begs the question, how do we get more people running TOR nodes?

Starting point is 00:23:33 With Bitcoin, it's kind of like a selfish thing to self-verify with Tor. How do you incentivize that? I mean, I suppose you could include it as part of a software stack to something like MyNote or I don't know. I don't know what the answer is. But yeah, it definitely begs a question on how to build out and protect against this and make it a little bit more anti-fragile. Moving on here, there's an update to.

Starting point is 00:24:03 to Spector. So Spector is a way to incorporate a variety of different hardware wallets and software wallets to create multi-signature schemes. This is where you have deposit addresses and Bitcoin wallets that require the approval of multiple hardware wallets or multiple wallets in order to successfully send the funds. And the reason that's important is you could spread those out geographically so that if somebody were to break into your house and obtain one of your hardware wallets, well, they're shit at luck because they need at least one more in a different location to even attempt to move your funds. So Spector is a piece of software that allows you to set up something like that. I previously covered Unchained Capitals Caravan.

Starting point is 00:24:49 Talked about that. I also did Electrum multi-sig as well. I touched on how to do that. This is just another way to do it, and there's going to be more and more. So they did some updates here, a number of different updates. A few things that pop out to me, they added animated QR code support for Kobo Vault, multi-sig. So Kobo Vault, again, great kind of air-gapped Bitcoin hardware wallet. You can do Bitcoin-only software. And, yeah, so animated QR codes are where multiple QR codes flash in a whole bunch in a row

Starting point is 00:25:24 to get enough information across instead of having to scan, skip, scan, skip. It's just another way to convey information. Just a number of issues fixed. What else did they do? Yeah, just kind of like improving the detect device speed. Yeah, just a lot of, oh, yeah, and Trezor and Keep Key change address verification. Yeah, a whole bunch of different things. I've been diving into Spectre a little bit.

Starting point is 00:25:56 As you can see, I'm kind of like setting up. I've got a Kobo on here, a cold. card, the Electrum wallet, just playing around with their multi-sig. There is an update to this. I'm doing this through My Node, and my node itself hasn't done the update that Spectre just issued. So I'm kind of waiting on that to play a little bit more. But all in all, definitely a cool piece of software. And kudos to CryptoAdvance for continuing to iterate on this. If you are running it, you can go check out their GitHub. I'll link that down below and you can download and run the newest one now. And finally, I wanted to let you know there's a new Bitsy

Starting point is 00:26:36 Academy piece today talking about using Lightning Network with varying levels of control. This is from the guys over I verify. Thank you guys for this. And they talk about kind of lightning network, it's proliferation, and how you can either do full nodes, fully technical, for technical users setting up your own channels, having your hands on every least. lever and button of the whole system. There's custodial wallets, things like wallet of Satoshi and Blue Wallet, their default setting, where you don't have control of your keys,

Starting point is 00:27:11 it's basically custodial, but because of that, you don't have to worry about liquidity or anything like that. And then there's kind of the in-between solutions like Phoenix Wallet and Breeze wallet that kind of abstract away the difficult bits, but you still hold your own keys and your own coins. and kind of like that right mix of easy, but also not relying on a custodian. So excellent breakdown.

Starting point is 00:27:37 Obviously, there's a bunch of tutorial videos that I've inserted in there to kind of complement the write-up that they've done. But yeah, highly recommend you check this out. Actually, I just want to highlight this while we're here. Let's go back to Twitter. But somebody tweeted out today. They just dove into Lightning. And here we go. This is it. Again, like this kind of gives me pause to be like, good, we're going in the right direction. So Carlos here tweeted out, I spent two years afraid to lose my money on Lightning Network. This week, I finally put aside a few minutes to read a tutorial. Thanks, BTC sessions. Thanks Carlos for the mention. And installed a couple of wallets on my phone. I'm still blown away how easy it is to start today. And I said that I, I

Starting point is 00:28:28 expected to see a lot more of these moments over the next year and that the difference between 2018 when Lightning Network launched and now, the ease of use and the iterations that have come in between to get to this point are pretty staggering, to be honest. Yeah, and so kudos to Carlos for taking that leave. If you haven't, read that article. Take a look at some of the videos and dive in. Why not? It's worth experimenting. Anyways, guys, I'm going to wrap up there. Thank you so much for watching and or listening. If you are here on YouTube, please, YouTube, YouTube,

Starting point is 00:29:04 please do hit like, subscribe, and share. All of those things really do make a difference and really do matter. So please, like, subscribe, share. If you wanna help with the show in another way, you can hit up the sponsor I mentioned down below. That was leaden.io link if you wanna check them out, potentially get 50 bucks worth of Bitcoin for free,

Starting point is 00:29:22 or grab a VPN to help with your privacy online. And finally, if you're really like what you saw, you can always drop me a lightning network tip at my tipin.me page. That is tipin tipin.me. slash at BTC sessions. And with that, I'm out. Have yourselves a wonderful evening, a wonderful weekend, rest of the day, wherever the hell you are. And I will see you next time for your daily session.

BTC Sessions - Dave Portnoy Buys BTC With Winklevoss, FEDcoin, BitMEX Sweeping KYC EP087

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