BTC Sessions - JP Morgan Floats $146K Bitcoin Price Target As Digital Gold Narrative Strengthens ep135

Episode Date: January 7, 2021

JPMorgan sees $146,000 as a potential Bitcoin price top if its safe-haven-asset status continues to solidify. https://www.reuters.com/article/us-crypto-currencies-jpm/bitcoin-emergence-as-digital-gold-could-lift-price-to-146000-says-jpm-idUSKBN29A1IF Jack Mallers announces Strike Global in bid to disrupt global payments and settlement with Bitcoin and Lightning. https://jimmymow.medium.com/announcing-strike-global-2392b908f611 VanEck continues its efforts to launch a Bitcoin ETF, hoping to leverage a warmer reception among the SEC’s changing leadership. https://dailyhodl.com/2021/01/03/vaneck-announces-new-push-to-launch-bitcoin-etf-amid-changes-at-the-sec/ US Treasury OCC greenlights the use of public blockchains as a banking settlement layer akin to SWIFT, ACH and FedWire. https://twitter.com/jerallaire/status/1346233132396257282 75% of all existing US dollars were printed after Bitcoin was created. https://twitter.com/DocumentBitcoin/status/1346160162348953600 North America’s first cooperative mining pool launches via parternship between Marathon Patent Group and DMG Blockchain Solutions https://www.marathonpg.com/news/press-releases/detail/1220/marathon-patent-group-and-dmg-blockchain-solutions-to-form SUPPORT THE SHOW: LEDN Bitcoin backed loans –  get $25 free https://bit.ly/397rlLN Get Wasabi wallet for Bitcoin privacy https://wasabiwallet.io/ Cobo Vault: secure your Bitcoin! https://bit.ly/2GgMFlH BillFodl: get your wallet backups in solid steel. https://privacypros.io/ Bitrefill: use Bitcoin to purchase gift cards https://www.bitrefill.com/buy/?code=O04UMic9 LIGHTNING tips: https://tippin.me/@BTCsessions Telegram channel: https://t.me/btc_sessions

Sabi wallet and fairly private. What is going on, everybody? Welcome to this show. I hope you're all having a good one. What a crazy day. What a crazy week. What a crazy start to 2021 we have had. It is unbelievable.

I don't know if you guys are feeling this. I'm sure you are. But it's a wild ride. We've got some interesting news. this beautiful morning. Obviously, we're going to talk a bit about the price, but there's a whole bunch of bullish stuff that has happened lately. And I want to cover some of the news,

some of the exciting things going on. As always, well, not as always, but today the news here on BTC sessions is live. So just a little warning from my good friend here. We'll do it live. We'll do it live. Fuck it. Do it live.

I'll write it and we'll do it live. The fucking thing sucks. You never know. You never know with live streams, but hopefully everything's working all right. Very excited, very excited to get the show going today. So as always, guys, I'm Ben with the BTC sessions.

And this is your daily session. All right. So let's get into looking at the, we got a look at the price. Obviously, it's been crazy. So here on the Bitbo.io dashboard, by the way, you got to head over to this dashboard. It is excellent. But we're looking at the price right now.

We're sitting around $38,560 some odd dollars. That has been all over the place today. We did go above $40,000 U.S. dollars. We went up as high as around $40,300 and something. then big bounce off of that price level we dropped way down we got down what to around we in the 36,000 so you know like mid 36es yeah 3666 something like that and now have bounced back up we're getting close back up towards 39,000 again this is going to be the new normal guys when we get these kind of price fluctuations it's no longer going to be like a few

hundred bucks here and there. When you have the same kind of percentage movements, when you have five, 10, 15, 20 percent movements, that's now, you know, $4,000, $8,000 in a day. And we know that we can move 10, 20 percent in a day. In fact, if you go back to 2017, we saw much larger movements in single days than that. We saw drops where you would have the the Bitcoin price, you know, go on a huge run, but then have a 40% drop before coming back. Now, we haven't seen those 40% drops yet. And I'm a little bit curious if we're going to see drops that extreme. And the reason I say that is because of the types of buyers that we're getting this time

around. We have institutions that are not looking to trade this shit. They're looking to buy and hold for years and years. So yes, we may still see 10, 20% drops, you know, from people playing with leverage. But I don't know. I'm not sure. I'm not as sure as I was before that we're going to see those kinds of drops this time around. It's anybody's guess, though.

So anyways, looking at the dashboard a little bit more. And again, like we were just talking. It was just at $38.5 something. Again, $300 in the minute I was talking. So it's obviously volatile as hell right now. Now, what is consistently going down is the number of sats you're going to get per dollar. We're now sitting for a single U.S. dollar, you can get around 2,620-some-odd sets. That is getting down there.

Like it wasn't long ago. We were at 3,000. It wasn't long ago. We were at 4, 5. Last year, mid-year, it was 10,000 stats per dollar. you are getting less and less sats for your dollars as time goes on. Now, in terms of mining stats or rather fee estimates, to get into the next block,

you're looking at around 88 sats per byte. If you're looking at around an hour wait, 60 sats per byte. Yeah. And so if you're willing to wait a day or so, it can be less. In fact, I think they changed around. Yeah, they did. They moved the fees. It doesn't have a day fee anywhere because I guess maybe it's a little too volatile to have that calculation in there now.

Who knows? But if you want better details on what fees you should attach, head over to mempool.Space and you get more detail with the mempool and the waiting transactions. And just a quick note here, 88.54% of all Bitcoin that will ever exist have now been mine. that will be hitting 90% by the end of this year. Now, before we dive into the news, of course, shout out to sponsors of the show. ledden.com. You can use your Bitcoin for a variety of different services here. They've saved my butt a few times when I needed them.

Bitcoin back loans that helped me out. I needed to get my hands on dollars. Didn't want to sell my Bitcoin because that's a taxable event. And I was worried about having to buy back in at a higher price, which, holy shit, I definitely would have had to. So I was able to utilize them for that service and keep my, same amount of Bitcoin getting a loan in dollars. They also have Bitcoin and USDC savings accounts where you can earn up to 12.25% interest annually paid monthly. And they have their B2X offering,

which uses the same loan mechanism to instantly buy more Bitcoin, effectively doubling your Bitcoin on the spot. So be sure to check them out. Links down below. If you click that link and opt to get either their loan products, they will give you 25 bucks into your savings account for free. Now, I am living on Bitcoin. I've been doing that for a while now, actually. I really like the way I don't, you know, I try to talk about this when I can. I was worried that I would normalize spending Bitcoin and that I would get into bad habits of spending too much. But I've actually found that living on Bitcoin has made me a better saver because I value my actual money more. But living on Bitcoin, I also do need to eat. I need to survive. I need to do different things.

One of the ways I do such is bit refill because they basically have gift cards for anything that I could really need. So whether it be shopping, getting groceries, getting gas, all that kind of stuff. They have everything here and you earn sats back while you're shopping. So head over to bitrefill.com link down below. And yeah, you can pretty much get anything you want. So even if you're just happy that the price has gone up and you want to treat yourself a little bit, there's a way to do it. And finally, if you're backing up your wallet, maybe don't put it on paper. It's not fireproof.

It's not waterproof and you might accidentally throw it out. Look at getting it on solid steel with something like the bill throttle. You can head over to PrivacyPros.io to pick one up. And yeah, have that peace of mind that a house fire isn't going to get rid of your backup to your Bitcoin. And then also the Kobo Vault, of course, I love this thing. I use it all the time. My favorite, one of my favorite hardware wallets. And it's fully air-gapped, meaning you don't plug it into anything connected to the internet.

It's all done via QR. our code, love it. And I can use it with all my favorite wallets. Things like Bitcoin Core, Electrum, Blue Wallet, Specter, Sparrow, Wasabi. And it's great for multi-sig. It's super smooth, really easy to use. So check out Kobovalt. Link down below. I'm using the pro as a fingerprint scanner and the rechargeable battery. So let's dive into this news here. I mean, one of the big ones of the week was JP Morgan coming out saying that they see Bitcoin hitting potentially 100, $146,000 and they gave some reasoning behind that. Now, this is notable because J.P. Morgan and namely Jamie Diamond, the CEO, has been a huge

skeptic of Bitcoin, calling it a scam, call it a Ponzi scheme, all of these different things. He even said that he would fire people working under him if he caught them trading Bitcoin. That doesn't seem to be the case anymore. So let's read a little bit here from Reuters. They say digital currency Bitcoin has emerged as a rival to gold and could trade as high as $146,000 U.S. dollars if it becomes established as a safe haven asset investment bank JP Morgan said on Tuesday. Interest in the world's biggest cryptocurrency has soared this year with investors viewing

Bitcoin as a hedge against inflation and an alternative to the depreciating dollar. The rush led to Bitcoin prices more than tripling in the past six months to a record peak of, and this is already outdated and I love it when price stuff gets outdated so quick. 34,800. Obviously, we've already been up to 40 and back since then. Bitcoin's competition with gold has already started in our mind. The Wall Street Bank strategist said in a note, citing recent $7 billion outflows from gold and more than $3 billion inflows into grayscale Bitcoin trust. That could mark a new dawn for the volatile digital currency after years as a play for speculators and retail punters.

Quote, considering how big the financial investment into gold is, a crowding out of gold as an alternative currency implies big upside for Bitcoin over the long term, J.P. Morgan said. Bitcoin is likely to outshine gold as millennials become a more important component of the investment market over time and given their preference for digital gold over traditional bullion, J.P. Morgan added. Yeah, it's crazy. I agree with them, but I also find that their price target might be a little bearish. We've seen far bigger projections from other people.

You had Guggenheim saying $400,000. You had some other citing like $650,000. Now, I don't know if we're going to see that in the near term. I do seem to believe some of the some of the, some of the predictions that we're seeing of people saying multiple hundreds of thousands this year, though. I do think there's some credence to that. If it comes true or not, is anybody's guess, but, you know, we're seven days into the year and we just hit 40K. Yeah, it's pretty wild. Now, another notable thing, somewhat notable, we'll say. The crypto market value, like all cryptocurrencies and aggregate, has topped $1 trillion as Bitcoin hit 39K earlier this morning before moving on to 40.

So a little bit here from Bloomberg. The total market value of cryptocurrencies surpass $1 trillion for the first time Thursday amid a frenzied and volatile rally in Bitcoin to yet another record. Cryptocurrencies hit the milestone after a fivefold climb in market value in the past year. data from tracker Coin Gecko shows. Strategists have cited demand from speculative retailers, trend following quant funds, the rich, and even institutional investors as among the reasons for the surge. Bitcoin rose as much as 9% on Thursday to touch a high,

which is already outdated of 39 to 23, and has more than quadrupled in the past year, according to a composite of prices compiled by Bloomberg. It accounts for about two-thirds of the cryptocurrency market value, followed by Ether at about 13%, according to Coin Gecko. Digital coins are jumping in a world awash with fiscal and monetary stimulus, even as some commentators fear an inevitable bust and others question the basic integrity of crypto markets. Proponents of Bitcoin argue it offers a hedge against dollar weakness and the risk of faster inflation, a bit like gold, while critics decry the intellectuals, intellectual soundness of comparing the two assets. So a few things here.

Again, they're talking about the total crypto market cap. And they're saying that Bitcoin is around two-thirds of that. Yeah, it's been kind of around just shy of the 70% range a lot as of late, which in a marketplace where there are infinite coins, for Bitcoin to hold on to 70% of the market cap is astounding. And for the next closest competitor, which is ether, to be around 13% of it, is hilarious that Bitcoin has captured that much. And a lot of people back in the bull market of 2017, it was kind of a different story because so much money, it was retail, fomo and gambling, right? You had people coming in and they maybe had made some gains in Bitcoin or saw what Bitcoin had done and said, I want that. but Bitcoin is too expensive.

So I'm going to buy this plethora of shitcoins and ICOs and roll the dice over here. And you saw Bitcoin kind of in around the 30 some odd percent range in terms of total market cap of all cryptocurrencies. We're seeing a different story play out here because you have institutions, as I said, buying a large swaths of Bitcoin and pulling it off of exchanges. so it's not even available in the liquidity pool of people wanting to buy. And it's being held longer term. They're not trading this stuff for other random coins. They're holding onto it as a long-term monetary or reserve asset.

So it's very, very different the market itself compared to last time. We'll see if that continues. I think at some point we will see another retail fomo. We might be starting to see the inklings of it. it yet, but they cite it as a main reason here. I don't think so. I don't think so. I think we're just, just starting to see that now. Maybe I'm getting more, you know, more people reaching out. Oh, I need to learn about this. I need to. But it's, it's nothing like what I saw in 2017 yet, not even close, you know, I'm, I'm not getting that number of phone calls, that number of emails

that were reflective of even mid-2017 yet. So I think it's still, early when it comes to regular main street retail investors. I think when that happens, then yeah, you might see some of the shit coins pump because the same mentality is going to be that approach. Oh, Bitcoin's too expensive. So I'm going to buy this cheap thing that's a dollar, not knowing that that cheap thing they're buying for a dollar has an infinite supply. And when nobody wants to buy it can crash 99% of its value and you're losing your Bitcoin.

you know, the opportunity cost of not holding it. So I think that mentality will come in, but I don't think it will have as much of an impact on the market as it did back in 2017 because such a large swath of the market now is becoming these institutions that have hundreds of millions or billions of dollars to throw into Bitcoin. I think that's going to change things a fair amount. Yeah. So anyways, it's still nonetheless, $1 trillion in the space.

it's a notable thing. You can't ignore a trillion dollars at this point. It's not just bullshit. And for Bitcoin to be 70% of that, I'll be more excited when I see Bitcoin itself hit a trillion dollar market cap, which is not far off. Okay, now this one I'm really excited about. I'm very happy about this.

This is, if you don't know who Jack Mallors is, the guy, a kid is a legend. Well, kid, he's 26. So he's pretty young. But he launched a company, a product called Strike, that allows for quick settlement, tying in the banking system to be built on top of Bitcoin. So it's interesting because we're seeing Bitcoin have its VoIP moment. And what I mean by that is early on, the early days of the Internet, everything was done via the phone lines.

We were using the legacy infrastructure to try and shoehorn in this amazing. new technology. So you're using phone lines, tying up your, your, your, your, your, your, your, hardlined phone line in your home. So you couldn't make phone calls because obviously there weren't cell phones when it first started. You tie up your phone line and plug into that slower connection to try and send information. Eventually, infrastructure got built out for the internet itself. And you had this inversion where the phones were now done over the internet because it was done more efficiently. It was a better way to do it. We're seeing that with strike right now. What Jack Mallors has done is has realized that the infrastructure

that Bitcoin has as a base layer and some of the layers on top of it like Lightning Network serve as infrastructure to improve global banking. And he's taken banks and he calls it a Neo Bank and he's brought in things like US dollars and Swiss francs and British pounds and Japanese yen or whatever, all of these different currencies so that you can transact in a second for no fee. So let's talk a little bit about what he's announcing here. Now, this was previously available in the US. It's now rolling out everywhere, like 200 countries.

So let's talk about this. I love how he always starts his blogs with Yo. He says, yo, today I'm unbelievably excited and proud to announce Strike Global. Today, the world changes. The fundamentals of value exchange between our species enter a new epoch. Today we're announcing that Strike has partnered with Bitricks Global and will be launching in over 200 countries, has added support for USDT, USDC, euros, British pounds, Swiss francs, and a whole bunch of others, and more.

we'll be onboarding all 1 million plus Bitrix users onto Strike and Lightning. We'll have the strike card available in the U.S. in Q1 of 2021, and we'll have the strike card available in the EU and UK in quarter two of 2021. Jack, when Canada? But anyways, Strikes U.S. rollout has been an immense success. In our short six-month public beta, we are well into five-figure registered users and currently process millions of dollars in volume per month with our announcement today, the first of its kind Bitcoin native NeoBank is expanding its reach to over 200 countries.

We're not only bringing Bitcoin the asset and Bitcoin the network to billions of people. We're also disrupting the international funds transfer sector while doing it. Let me explain what he's doing. He talks about Swift and how slow and arduous it is and expensive to use it. He talks about transfer wise, how they kind of looked at it and they're like, it's just too damn expensive to actually send value. So they kind of do like a hot potato, not hot potato, but like a musical chairs kind of thing with money in order to make it cheaper and faster. Strike. This is the innovation.

He talks about how the Bitcoin network is incredible, but it needs layers to really facilitate that kind of quick transfer. He says, you know, this variable, variable cost to achieve transaction finality, right? You've got to pay the network fee to send your Bitcoin transaction, variable time, depending on the fee and how quickly, and also it varies when blocks get confirmed. And he says that obviously you'll have to use the Bitcoin that asset to send money. He says with Lightning Network, it solves the cost and time factor. You can send instantly and basically for free via Lightning Network. work. And now he said with strike, you can actually integrate, you know, traditional currencies so that if you want that stability of price for certain items and for certain exchanges of

value, well, then you can have it. And so let me describe what he did here. This is what I outlined. The world now has an open network that offers real time, cheap global settlement and self-clearing to the world's first native digital asset class. We've put in the work to make this network interoperable with legacy fiat. The result ties everyone on the planet together, making any payment anywhere at any time as easy as sending a text. If I wanted to send $1,000 from Chicago to Berlin, strike is able to make my U.S. dollars,

take my U.S. dollars, and deliver them to the intended Berlin resident in Euros, instantly at no cost. Again, instantly at no cost. How? Let's walk through it. One, I initiate the $1,000 payment, strike debits my existing U.S. dollar balance. Two, strike then automatically converts my dollars to Bitcoins, ready for use in its infrastructure using its real-time automated risk management and trading infrastructure. Three, strike moves the Bitcoin across the Atlantic Ocean where it arrives in one of our many European infrastructure pieces in less than a second at no cost.

Four, strike then takes a Bitcoin and automatically converts them back into euros using, again, their automated risk management and trading infrastructure. And then five, strike credits the existing user with the euros to their strike account. So all of these steps are happening in the background. You have no idea. You just say, I got dollars. My friend lives in Europe and these euros. send instant free.

Continuing on, US dollars to euros in less than a second and for free. No shortcuts, real physical value escrowed thousands of miles in real time and using US dollars and euros at the user's convenience. Did we need rocket scientists to pull this off? No. Why didn't Swift do this 50 years ago? They couldn't. This is only possible because we now have an asset and open monetary.

network that can achieve cash finality anywhere in the world at any time on any day at no variable cost and has 24-7, 365 days a year, liquidity at any currency pair you need. Bravo, Jack. This, I don't think people realize it, but even if people decide for some reason they don't want to hold Bitcoin over the next five, 10 years. Very soon, they will be using Bitcoin and they may not even realize it. And this is just the first step there.

Again, hats off to Jack. Very excited. I signed up for the early signup to get early access when that drops. I don't have a link for it down below as this is live streaming, but I'll add that in afterwards if you want to sign up for it. And it's just like dropping an email. and then when it comes out, they'll let you know when it's available in your country.

If you're in the U.S., you can get strike right now. So I'm a little jelly about that. Anyways, let's move on again. One last tip of the hat to Jack Mallors. Vanek announces new push to launch Bitcoin ETF amid changes at the SEC. So a quick little article here, Investment Management firm Vanek is renewing its efforts to launch a Bitcoin ETF. The New York-based firm filed with the U.S. securities

and exchange commission, the SEC, on Wednesday to win approval for a Vanek Bitcoin Trust. Prior to Wednesday's filing, Vanek retracted its last push for a Bitcoin ETF with the SEC in September of 2019. So it's been over a year since their last, you know, since they kind of backed off from this idea. As was proposed in the previous filing, the ETF would trade on the CBOE. So far, the SEC has denied all attempts to launch a Bitcoin ETF. But as we said, it's been a while since one was on the table and a lot's changed in that short period of time. Vanek and other financial firms may feel a sense of renewed confidence on the heels of major Bitcoin adoption throughout 2020 and beyond. The number one crypto asset by market cap has caught the attention of billionaires and institutional investors this year coinciding with a run up to, again, I love how outdated this is already, over $33,000.

Again, it starts talking about Michael Saylor using his company treasury to buy Bitcoin, so on and so forth, Square, Mass Mutual, all of these different companies moving into Bitcoin. Additionally, the SEC chairman Jay Clayton has stepped down from his position, perhaps leaving room for a more crypto-friendly regulator to take the reins when President-elect Joe Biden steps into office. The consequences of a Bitcoin ETF would likely be significant macro analyst and investor Ralph Paul says there is a tidal wave of institutional investors waiting on the sidelines for the launch of such a trust. You know, all through 2017, I was kind of saying, I don't know if the ETF is going to get through at any point in the near future. I always thought it was going to take a while. I think it might happen. I think it might happen at some point this year. Now, I don't know if it launches this year, but I think that we get the news of approval

potentially at some point in 2021. I think it's very possible. Again, just so much has changed. On top of that, you know, before there was no way for speculators or companies or, you know, certain funds to get access to any sort of exposure to Bitcoin. But now what they're doing is they're literally buying companies that are able to own Bitcoin. So you have people buying stock in micro strategy because they're so heavily exposed to Bitcoin. And so through proxy, you're getting that exposure to Bitcoin.

So in lieu of that, the SEC might look and say like, listen, everybody's already doing this in some ass backwards way to try and achieve it. maybe it's time we just get our heads out of our asses and allow people to purchase what they want as they see fit. I think that's going to be what happens because the market has routed around the SEC to find ways to do it. Yeah, I don't know. What do you think?

Let me know in the comments if you think that the ETF is going to actually hit or be approved at some point this year. Another notable thing, now this is from Jeremy Aller, from Circle and, you know, not from him, but he's announcing what happened here. Jeremy Aller on Twitter said, breaking major news from the U.S. Treasury OCC, office of the comptroller of the currency, I believe that stands for,

the largest U.S. banking regulator with new guidance allowing U.S. banks to use public blockchains and dollar stablecoins as a settlement infrastructure in the U.S. financial system. This is a huge win for crypto and stable coins. The new interpretive letter establishes that banks can treat public chains as infrastructure similar to Swift, ACH, and Fedwire, and stable coins like USDC as electronic stored value. The significance of this can't be understated. Decentralized, permissionless, open source, and internet-mediated software is literally becoming the foundation for not just the U.S. financial. system, but for the global economy.

And while I'm not a big fan of a lot of other cryptocurrencies, I do recognize that this is a major kind of milestone because it's the, it's the, oh, U.S. banking, U.S. banks can use public blockchains. They can use that and run that as a method. And I think it's significant because it's the first time that U.S. banks will be relying on non-government sanctioned methods of value transfer. And that's kind of huge. And so down the line, does this mean that banks are running potentially Bitcoin nodes? What does that do to central banks?

Because right now, up until now, banks, commercial banks and central banks have kind of been hand in hand, patting each other's backs, scratching each other's itches. Now you're seeing instances where they might come to blows, where they might be trying to outcompete each other. On one hand, you've got central banks realizing that a non-central bank issued currency is actually becoming quite large and becoming a threat. you've got Bitcoin and it's bigger. It's like in the top, I think the last I saw it was the number 12 currency in the world as far as size. It's probably bigger since the price bump in the last few days. So you have central banks that are like, well, we're going to make a digital currency too, not realizing or just kind of blind to the fact that the whole point of Bitcoin is to escape central bank policy. So that's that's one and of itself.

But they're talking about issuing currency directly between central banks and constituents. So citizens would have like a central bank app. And then the central bank would then be able to more closely fine-tune monetary policy on a citizen level. So you could technically have, and this is scary as hell, you could technically have negative interest rates within your digital wallet where if you don't spend your money in a certain amount of time, then they take some of your money. And I think we may eventually head towards that because the monetary policies that they enact are just not sustainable.

And in order to get people to spend, yeah, those negative interest rates, they got to find a way to enact them without people pulling money out of the banks. Now, at the same time, if they introduce this new infrastructure where it's direct central bank to individual, then you get into a situation where the commercial banks are being disintermediated. So what do the commercial banks do at that point? Well, they start offering services in and around alternative to central bank currencies. They start offering services for things like Bitcoin. And now you have commercial banks and central banks fighting for people's wallets, for people to utilize them. It's kind of beautiful. It's, I'm.

very excited to see how this goes. It should be very interesting. But nonetheless, this step of saying that banks can use a decentralized network for value transfer, it's pretty huge regardless of what you think of stable coins because it definitely opens the door to, hey, banks are just going to maybe run some Bitcoin nodes so that they can verify transactions themselves. Yeah, it's wild. Okay. Now, this is something that I'm not too keen on this next story, but I also think it's a non-issue.

So let me get into this. So Marathon Patent Group and DMG blockchain solutions to form the digital currency miners of North America or the DCMNA and launch North America's first cooperative mining pool. So a lot of people always complain or worry about centralization of mining in China. which has become more decentralized over time. Realistically, Bitcoin mining just seeks out the cheapest sources of power, the most efficient uses of power. So wherever there's waste or wherever there's energy that cannot be utilized, miners can swoop in and utilize that energy and sometimes reduce emissions and other great things

and also support a global financial network at the same time and be rewarded in the monetary token of that network, which is Bitcoin. Now, the interesting thing about what these guys are doing, other than the fact that it's in North America, and that means that some of the hash power, some of the network strength will be headed more so into North America, they're trying to impose kind of KYC or like AML laws. They're trying to impose legacy financial laws on an open financial network on themselves as. miners. And so they refer to clean block mining. And so they say that it will adhere to the Office of Foreign Asset Controls or the OFAC's compliance standards and reduces the risk of mining blocks that include transactions linked to nefarious activities. So what they're referring to here is potentially if they're mining a block and they see any transaction that looks like it may have come from somewhere that they deem unsafe, they wouldn't include it in the block. Now, what does this do?

Well, actually, let's read this other paragraph and then I'll tell you the game theory that I think will play out here. So DCMA MNA is focused on increasing transparency, trust, and accountability in the emerging mining industry, particularly as more institutions embrace Bitcoin as a store of value. Unlike other Bitcoin mining pools, Blockseer's pool will be audited by an independent auditing firm, ensuring that the miners receive accurate rewards and that auditors and regulators can trust the data provided. Using DMG's proprietary patent-pending technologies, the pool will also create transaction blocks that specifically omit any transaction deemed risky

by wallet score and which may not meet OFAC standards. As a result, North American miners who are DCMNA members will reduce the risk of the blocks they mine containing transactions tied to criminal or terrorist related activities. Number one, they're talking about putting an auditor on top of what's happening in the blockchain, which is the blockchain is the auditor. So that's why I laughed there. But anyways, okay, so they're saying that there's going to be. going to be a pool of transactions and they're going to go, they're going to take the time to do

the due diligence and try and flag transactions and say, this is not okay, this is not okay, this is not okay, we're not going to mine any of those transactions, we'll take those. So what does that do? Well, one, it's a huge cost when it comes to actually checking that. You know, the cost of compliance is pretty high because, you know, they can, they can look at that and individuals that are using the blockchain may say, okay, well, I just did something they don't like. Maybe I was gambling online or something, but I want to make sure my transaction gets mine. So if you're like an online gambling website, all you're going to do is you're going to send a transaction, you're going to do a hop. You're going to do an extra hop or something or you're going to do something to kind of obscure what

you're doing. Or if you're an individual that withdrew from an online website, you know, and you don't want that linkage, you're going to do a coin join or something like that. Regardless of the fact that these guys are censoring themselves, somebody will pick up that transaction. And odds are if a small portion of the hash rate is not clearing certain transactions, people will just say, well, you know, these guys don't like what I'm doing. I'm just going to up my fee by like 10% or something. And another miner will pick it up. Because remember, these guys are in North America only.

Even if it was like most of the Western world doing this, you're going to have minors all over the globe that will be more than happy to scoop up those transactions to have a slightly higher fee. And so these guys here, they have a higher cost of actually implementing this. And they have a lower pool of transactions that they can pull from that have. a lower fee attached to them. And so they're going to price themselves out of the market. They're going to basically be non-competitive in very short order because anybody, anywhere else that wants to accept those transactions will be making bank. I think in the end what happens is that, again, either these guys go out of business

and hash rate moves away from them. I think, I think that's pretty much just what happens. Hash rate moves. People aren't going to mine through them if they're less profitable than any number of other mining pools out there. So, yeah. Anyways, it's funny watching people try to adhere to legacy financial infrastructure while bringing in their own auditors to audit the Bitcoin blockchain.

It's, I don't know. It seems like these guys are out to lunch. But we'll see. I want to finish with a tweet. My favorite tweet of the week. This is why Bitcoin's around. At Document Bitcoin tweeted out on January 4th, 75% of all U.S. dollars in existence were printed after

Bitcoin was created. That doesn't turn your fucking head. I don't know what will. 75% of all existing US dollars created since Bitcoin started. Bitcoin started 12 years ago as of January 3rd. 12 years and they've created more. They basically in that time

from that point quadrupled the supply of money. It's insane. This is why Bitcoin exists. is why opting out exists. This is this is why it's important that Bitcoin is here. It's, it is important. I've opted out as fully as I can. And I'm better for having done it. How about you guys? What do you think? Anyway, guys, I'm going to wrap up here. As always, thank you so much for watching and or listening. This will be live on the podcast

later. If you want to help about the show, you can hit up the sponsors I mentioned previously down below. That was Ledden, Bit Refill, Privacy Pros for that Bill Fottle, or the Cobo Vault, all of that linked down below. I do want to say, again, check out Jack's Strike. I'm not affiliated with them in any way. I just love what he's doing. And I'll remember to put that link down below afterwards.

But if you search Strike right now, you can find it. really cool what they're doing and I love that guy. Of course, like, subscribe, share. All those things really help. It gets this in front of more people. And if you really liked what you saw, you can hit me up with a Bitcoin Lightning Network tip

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