BTC Sessions - Huge Bitcoin drop, OpenNode integrates Apple pay, Layer1 mining ramps up EP022

Episode Date: February 21, 2020

SHOW TOPICS: Bitcoin drops $1000 in less than an hour https://bitcoinist.com/bitcoin-sees-its-fifth-largest-hourly-price-crash-ever/ Bullish CNBC segment https://twitter.com/CNBCFastMoney/status/1230261266058534913 China pumps 5 TRILLION Yuan into economy https://www.zerohedge.com/markets/china-injects-record-5-trillion-new-debt-arrest-economic-crash Opennode allows merchants to accept dollars but stack sats https://www.opennode.com/blog/opennode-apple-pay-debit-cards-and-more/ Coldcard upgrade – do not update Mk1 https://twitter.com/COLDCARDwallet/status/1230519981441458176 Layer1 mining facility in Texas targets 30% hashrate within 2 years https://decrypt.co/20018/peter-thiel-backed-layer1-opens-up-bitcoin-mining-facility-in-texas SUPPORT THE SHOW: Visit LEDN to check out getting a bitcoin-backed loan https://platform.ledn.io/join/0a00cca3dd61dea5909c95cd41f41685 Get Wasabi wallet and enjoy your privacy https://wasabiwallet.io/ Wasabi Tutorial https://www.youtube.com/watch?v=ECQHAzSckK0 Check out Rise Wallet – the easiest way to onboard your pre-coiner friends to Bitcoin! https://www.risewallet.com/ Rise tutorial https://www.youtube.com/watch?v=X2VUjj6wPM0 Get NORDVPN to protect your online privacy. 75% off a 3 year https://nordvpn.org/btcsessions Check out my website for private bookings: http://btcsessions.ca/ Looking for an audio-only version of the show? https://anchor.fm/btcsessions Join my Telegram channel! https://t.me/btc_sessions If you value my work and would like to send me a tip, they are always appreciated! LIGHTNING tips: https://tippin.me/@BTCsessions

Wasabi wallet. I'm fairly private. What's up everyone? I'm Ben with the BTC Sessions and this is your daily session. Before we dive in, of course, gotta give a big shout out to sponsors of the show. Ledden.I.O. This is where you can use your Bitcoin for a few different services. They've got Bitcoin savings accounts where you can earn interest on your Bitcoin paid in Bitcoin. They've got Bitcoin back loans. So if you want to use your Bitcoin as collateral to obtain a Canadian or US dollar loan. This is easy to do via the platform.

So if you're in a pinch and you need to get your hands on dollars and maybe you don't want to sell your Bitcoin, well, this could be for you. And then finally for you, Bitcoin bulls out there that want a little bit extra volatility. Their B2X offering gives you double the exposure to the price fluctuations of Bitcoin. You want to check out any of that. There is a link in the show notes down below. And if you opt to get a Bitcoin back loan via that link, they will credit you with an additional 50 bucks worth of Bitcoin.

And secondly, we have Rise Wallet. This is a physical Bitcoin gift card that you can give to anybody. They're super easy to use, super idiot proof. And I think great for onboarding new users. I've used a bunch of these myself. The way it works is you give somebody the card, you pick it up at a store near you. And when they get it on the back of the card, they're instructed to download the paired app and then scratch and scan a code on the back of the card.

This prompts the wallet to open on their device or create a brand new Bitcoin wallet on their device and then sends them an on-chain transaction for the face value of the card. So if you want to head over, check out risewallet.com and then you can click on the locations tab. That'll tell you where you can pick one up. They're only in Canada right now, but they are looking at expanding, so keep an eye out. And with that, let's dive into the news.

So we've had a lot of stuff happening the past couple of days, namely in terms of price and volatility. So we had a sizable dip and we'll get into that in a moment, but I just wanted to draw attention to this one segment that I saw on CNBC Fast Money of all places. Now, I've definitely seen a lot of crap on CNBC Fast Money, but this one was quite good. They had Mark Yesco on from Morgan Creek Capital, and he was talking about Bitcoin and its value proposition and how it's a savings, talking about savings and stacking stats and ignoring these short-term fluctuations and looking at the long-term end. And man, he knocked it out of the park. and so it's only obvious that given the track record of CNBC being a total contrary and indicator that we would have had a dip there. People always joke about that when they say something positive, no, you're going to make

the price drop and then when they say something negative, inevitably it's going to turn the opposite way. So, you know, maybe, you know, that's the cost of having a bullish segment on the news, although we did have another really good one with the guys from Lollinger. just the other day as well. So indeed, Bitcoin did see one of the largest hourly price crashes ever in terms of dollars. And so it was about a thousand dollars in under an hour, which is pretty wild. But let's look at that in context. So it may be a little bit difficult to see, but there's a chart here if you're watching on YouTube.

otherwise I'll explain it if you're on the podcast. So this was tweeted by Yassine. I'm not going to say the last name. I'm going to butcher it. So anyways, Yaseen Ark on Twitter said, today marks Bitcoin's fifth largest hourly price drop in price history, a thousand dollar drop in under an hour. The only time we've seen a greater dollar price drop

is at the December 2017 peak. And then they've got this kind of, Bitcoin hourly dollar price change and it's kind of like a scatter chart that shows the deviation from kind of like zero to, you know, upwards of we've seen 1,500 at one point in either direction. So yeah, this was the fifth largest hourly price drop. But it's worth noting that on the chart, you see major outliers a lot in and around 2017. But they do seem to be kind of tightening towards now. Now there are still big outliers and this particular price up was a massive outlier on this chart.

It's a huge deviation from the norm. And then we also do see some deviations to the upside as well this year. I mean obviously we saw in last year April and kind of late, I guess it would have been in June that we saw some major spikes to the upside and the other way around. So the only other time that we've seen such a dramatic decline was around when it was $20,000. So respectively, it was less of a movement than in terms of percentage. And so this, these metrics that they go on to say from a scene here, Bitcoin's hourly price change in percent paints a much different picture. A 9.1 percent hourly drop ranks 122nd. So in dollar terms, yes, it's the fifth largest drop

in that metric, but when it comes to a percentage of the total price of Bitcoin, this was nowhere near the top. So just to keep it also in perspective here, in 2013, which was the previous kind of mania and bubble, so we had 2017, we had 2013, kind of these four year, I mean, there's obviously ups and downs in between there, but it seems to be these cyclical manias following

and a lagging indicator of the having. So we'll see if that happens again next year for 2021. But I digress, in 2013, the month of April alone saw Bitcoin drop more than 9%, more than 20 times, in a single month. Now it should be noted that that particular month, there was an 83% drop in the overall value of Bitcoin, But this does put it into perspective that, you know, 20 times in a month to see those kinds of drops versus, you know, once this month.

So really not that big of a deal in the long term. Jacob Canfield does point towards some of these leverage derivative markets. He said in a tweet, Bitcoin, while fundamentally is designed to work, go up over the long term is currently being driven down by derivative markets. Short term and midterm price trends caused by over leveraged traders can go any direction they want. What can't be faked is the decade long bullish trend. And then you also have a crypto bull on Twitter commenting and bringing up a chart saying shake out before breakout and he points back to earlier in the month when there was a decisive dip followed by a huge upside and he's pointing to the same here.

Though I should note in the chart that he's showing here, which I do have up, this should give you guys a better look at it. If you're watching anyways, again, I'm explaining for those of you just listening on the pod. But anyways, earlier in the year, there was a decisive dip before a nice big upside. But then there were further dips afterwards that went, we had some lower lows. So who knows if we'll see that again, but if so, we could have, you know, if history rhymes in this case, even though it's short-term history, we could have a decisive upside followed by some lower lows than the current like 9,400 range or 9200 range, I guess we hit on the low end of the recent candle. So we'll see. At the time we're recording this, we are around the mid-9500s.

Obviously, by the time this airs, that will change dramatically, so I won't even fully comment on that. But just to keep it in perspective of what I'm talking about right now. Now, to zoom out beyond Bitcoin in the context of looking at the longer-term trends, Bitcoin still indeed does have a capped supply and is not able to be manipulated in supply by centralized entities. And in contrast to that, you have China injecting a record five trillion with a T trillion yuan in new debt to arrest economic crash. And just to put that in context,

the total credit injection of more than five trillion yuan or roughly $725 billion in one month was the single biggest on record. So keep that in mind next time you're worried but a little Bitcoin dip. Let's move on here. Something cool coming out of the guys at OpenNode. So OpenNode, if you're unfamiliar,

is an alternative to BitPay. If you're gonna go for an alternative to BitPay, then OpenNode is a good one. BTC Pay server also a good one. But OpenNode, for those of you that just want easy onboarding, minimal setup, and don't worry about a little bit of centralization and obviously they have to comply

because they're a US based company, but regardless, OpenNode, solid team doing some good work. And this is another great example of people starting to learn how to cater to the Bitcoin market and how to encourage it. We've seen a lot of things kind of be flipped on its head in the past number of years. So one of the ones that I like to point to is Fold.

Fold is a company where in 2014 they were saying, hey, you can spend your Bitcoin, using fold and you can use bitcoin to purchase gift cards and then use them at places like starbucks and so on and so forth um the thing with that is how many people really really wanted to spend their bitcoin first you had to have bitcoin you had to uh then want the niche use case of buying your coffee with bitcoin so you had to have wanted to onboard into bitcoin only then to offboard back into fiat by utilizing a gift card um and that's counterintuitive for trying to capture people because who that wasn't already interested in bitcoin would be saying hey i have dollars i've heard about

bitcoin maybe what i'll do is i'll use my bitcoin or i'll use my dollars to buy bitcoin so i can use my bitcoin to purchase the equivalent of dollars in a gift card uh so it's a little bit harder of an onboarding mechanism and there's a very niche market for it. Albeit there was a bit of a market for it. What they've done now, Fold, what I'm saying is they've turned it into a savings technology where you spend your dollars and you accumulate Bitcoin as rewards points, which I think is a far better idea. And other companies like Lolly and like, like, Lolly and like,

paid pay I'm not sure how to say anyways pay anyways they're all going after the Bitcoin rewards market and partnering with brands and giving the kickbacks of savings to their users through using their apps which I think again much better at onboarding new people because people love getting cash back and if they're mildly curious about Bitcoin then why wouldn't they instead of spending money on it just utilize it as a as a reward system and and then play with it from there. And some people don't even know that it's what it is. And over time, they will start to ask the question, well, why have my rewards points accumulated in value? And now I can purchase more than I could have the other day. So I think it's a good window to getting

people curious. So what Open Nota has done is they are a payment process so that allow people to accept Bitcoin. But now they've integrated Apple Pay and debit cards. And they're allowing the merchants that are privy to Bitcoin, which they will be if they're using OpenNode, they're allowing them to accept dollars, but have it immediately converted into Bitcoin, whether in full or just a percentage of it, and back into their own Bitcoin wallets. Absolutely genius, because again, merchants accepting Bitcoin, well, you know, in general, it's a positive thing. It's not going to drive the further accumulation of Bitcoin. But odds are, if a merchant is interested, enough in Bitcoin to really want to accept it and seek out somebody like OpenNode,

they're going to be more in tune with the idea of accumulating some Bitcoin while accepting it at the same time or turning some of their dollars that are coming in into Bitcoin and exposing them to the price volatility of Bitcoin as I'm sure they're interested in the first place if they're already interested in Bitcoin. So kudos to OpenNode is a really simple process if you're watching here on the channel it's again just like a merchant portal where you can see pay with your wallet and there's a QR code you can scan but down below there's a couple bit a couple options that says don't have bitcoin and then there's a button that says pay with apple pay and then there's another thing that says or with debit card and you can just click on that button

and you'll be ported through while still having the option for those that do have bitcoin to pay on-chain or via lightning. So, awesome tools. Kudos to OpenNode. I hope they continue to capitalize on that idea. And I hope it's popular and I hope it drives more adoption. Moving on here,

there is an update to the firmware in Cold Card, but you need to be cognizant of what you're doing. If you have one of the original versions, the Mark 1, the first cold card ever, it doesn't have the clicky button. So if you're unsure which one you have, if the buttons don't click, if it's just like a flat surface

and it's just a touch pad, and which didn't function super well, it is not compatible with the latest upgrade to firmware. So keep in mind that there's no auto-upgrades on the cold card if you want the new features, you have to manually upgrade, but if you're running one of the original first devices, these new upgrades that allow certain things

like user management, they've got something called their bunker where you can automate payments without manual intervention, a bunch of other things, not compatible with the Mark 1. In fact, it will brick the device. Now, I'm not a huge fan of it bricking the device, but I do understand the lack of compatibility with the new updates with the old devices, because a lot of these functions that are being updated

when it comes to previous models, namely the Mark 1, there's not enough RAM and computing power in the device to handle these advanced functions. So that's why it's not compatible. I am unsure when it comes to the bricking of the device, though, which is unfortunate. However, if you do have a backup of your seed phrase, as you should, then in a worst case scenario, your backup will still function. So just be cognizant.

If you're updating, you'll be fine in a Mark 2. You'll be fine in a Mark 3. should be noted that one of the functions is only Mark 3, which is the hardware security mode, which is signing with no human presence, so automated signing. That's not available on anything outside of the Mark 3, again due to hardware limitations. But they're going to continue iterating, and Rodolfo is going to continue to pump out new devices, and as hardware becomes cheaper and as more people want these higher-end functions or as he integrates them, the old hardware obviously is not going to be able to handle all of them.

So just keep that in mind, but it will still function as is as a regular hardware wallet with the current set of features that it has. So again, be cognizant, be careful, be aware, and don't go willy-nilly. updating things that you don't quite understand okay uh and then i wanted to touch on one last thing peter teal uh so he backed a a bitcoin mining facility or a bitcoin mining company called layer one um and they're opening a mining facility in texas the facility has multiple 2.5 megawatt liquid cooled containers according to the release plans to scale up to a 100 megawatt capacity in the coming months. So Layer 1 hopes to increase the share of Bitcoin mining happening in the United States

with plans to exceed 2% of the total hash rate once it hits that 100 megawatt tally and aims to reach 30% by the end of 2021. So pretty big aspirations on the side of layer one. Now, will they be able to attain that? I don't know. Like, that's tough because if the halving has the same effect as previously thought and a new mania starts in the coming year and 2021 ends up being quite wild, then a lot of new miners will be diving into the space.

and if that happens, will layer one be able to keep up to reach that 30% of global hash rate? I would say with unexpected new miners piling in because it's profitable for anybody to mine when it's a major bull run, then I would say that'd be difficult. But if they can survive the drop and they continue to be very, very efficient in their electricity usage, then maybe, maybe. I don't know. I'm skeptical of that number, though. 30% is pretty large.

Now, one interesting thing about layer one, they rely on renewable energy for mining, and they call themselves the first vertically integrated Bitcoin mining company. Vertically integrated means that they cover themselves all aspects of the operation. So they, as a company, produce their own proprietary ASIC chips. They also create their own mining containers. They get their own power and they do their own development. So they basically, they cover the gamut themselves.

Everything is in-house. They're not outsourcing any of that stuff to anybody. So very interesting to see how they do as compared to others that kind of are getting resources and getting chips and everything from elsewhere. So who knows? Do they become like the apple of mining because they're kind of doing everything themselves? I don't know, we'll see. Either way, good to see.

The other thing notable about the renewable aspect of that is it drives on the point that Bitcoin seeks out the most efficient power sources available. And if you're not efficient, especially in downturns, if you're not the most efficient, you will be pushed out. So if these guys go down the path of obtaining very, very efficiently, procured energy, then maybe. Yeah, maybe they could hit that 30% mark. But I guess time will tell. With that, I'm going to wrap up. Thank you guys so much for watching and or listening. If you're on YouTube, be sure to hit like, subscribe and share. And if you're listening to the pod via audio only, be

sure to share it via any of your social media networks that would be greatly appreciated. Now, if you want to help out the show in another way, you can hit up the sponsors down below. Those were Leden, Rise Wallet. And of course, course hit up with Sabi wallet because they are a great privacy solution as a desktop Bitcoin wallet and then finally if you really liked what you saw you can always drop me a Bitcoin Lightning Network tip at my tipin.me page that's tipin.m. me slash at BTC sessions and and yeah and any sats that flow in are always greatly appreciated and with that I am out have a wonderful evening and I will see

you next time for your daily session.