BTC Sessions - Nakamoto is not ProBTC, John McAfee Abandons Bitcoin, Segwit Hits 66% EP003

Episode Date: January 6, 2020

SHOW TOPICS: Nakamoto “Technical Journal” has a disastrous launch https://decrypt.co/15969/why-the-pro-btc-nakamoto-telegram-group-was-a-complete-disaster @CitizenBitcoin gives reasons for pushback https://twitter.com/CitizenBitcoin/status/1213870001775620097 @BitcoinMemeHub aggregates #ProBTC tweets https://twitter.com/BitcoinMemeHub/status/1213817467728015360 Insight on Coinbase’s shady past & the #DeleteCoinbase movement https://www.youtube.com/watch?v=0l1KwAZKGts John McAfee renegs on $1,000,000 BTC bet, calls Bitcoin “ancient technology” https://bitcoinist.com/has-mcafee-drops-bitcoin/ Segwith adoptions hits 66% network adoption https://cointelegraph.com/news/bitcoin-network-segwit-adoption-hits-66-after-bitmex-embraces-upgrade 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

Wasabi wallet. I'm fairly private. What's up, everyone? Ben with the BTZ sessions here, and this is your daily session. Before we dive into the news, of course, shout out to sponsors of the show, ledden.com. This is where you can use your Bitcoin for a variety of different services, one of which is a Bitcoin savers account, so you can earn interest on your Bitcoin paid in Bitcoin. They've got their Bitcoin backed loans is where you can use your Bitcoin as collateral to secure a Canadian or US dollar loan. So if you're in a pinch, you need to get your hands on dollars,

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immediately on chain. It is awesome. It is idiot proof. I think it's a great way to gift and onboard new users to Bitcoin. Yeah, and I'm very happy to have them as part of the show. So if you want to check them out, head over to risewallet.com. You can click on locations to see where you can pick up one close to you. Of course, this is only available in Canada right now, but they are looking at expanding, so keep an eye on them. And if it's not near you, when you're in Canada, you can always go to coincards.cai and get one delivered. So with that, we'll head over to the news. So there was a bit of a mess on Bitcoin Twitter the past couple of days here over the weekend. And it was centered around something called Nakamoto.com. So what was this? It was meant to be kind of like a

a place to get your Bitcoin-related news and articles and research. And it's meant to be a place for building your Bitcoin knowledge, I suppose. However, it drew the ire of Bitcoiners because of who was spearheading it and who the contributors were. What really sparked this was when the Twitter account came out and said that all the contributors were pro-BTC. and we'll come back to that term in a moment. So I'm just going to read a little bit from this decrypt article here because it sums it up nicely. On January 3rd, a new site was set up under the name Nakamoto, the pseudonymous surname used by the inventor of Bitcoin to provide dialogue from thought leaders in the crypto space.

The site doesn't specify who runs it, but former Coinbase CTO, Balaji, and I'm going to butcher this last name, Srinvizan, I'm so sorry, is the owner of the accompanying telegram chat suggesting he may be in charge. In just three days, Nakamoto has gone off to a rocky start. Things kicked off when the Nakamoto Twitter account announced that all Nakamoto contributors are pro-Bitcoin for the long term. The contributor list had raised a few eyebrows beforehand since many Nakamoto writers were figureheads in other communities rivaling Bitcoin's own, including Michael Harrington, co-founder of Arrington

XRP capital and the Bitcoin cash proponent Roger Vair, as well as Vitalik Boudarin, who was moderating the Telegram Channel. So what ended up happening, oh, and I should mention a couple other things, the Telegram Channel moderators also included Zucco Wilcox, creator of Zcash, and Hudson Jameson, who's a community manager at the Ethereum Foundation. They also began banning many, we'll say, vocal Bitcoin proponents. So they banned people like where, let's see, Pierre Richard. There's a Bitcoiner on Twitter called Stop Into Crypt, who's quite large, and also John Carvalo CCO at Bit Refil. So all of these people were basically instabanned the moment they got into the Telegram channel. Carvalho even said, imagine being so pro-BTC that part of your day includes

banning people before they can even speak something anti-BTC. And pro-BTC actually ended up becoming a meme on Bitcoin Twitter where people created a dummy account or a parody account called ProBTC, where they would just say the inverse as if everything was opposite and things that were definitely not pro-BTC as being pro-BTC. They've also had Tour de Meester, who was originally going to be a contributor, rescind his membership of Nakamoto now that it's kind of come to light who else is contributing. So you may be thinking, well, what's the big deal? It's a bunch of people getting together writing some stuff on a website.

Well, I think that Brady over at Citizen Bitcoin on Twitter, summed it up in this little tweet storm, which I'll all read to you right now. Why are toxic bitcoins giving Balaghi such a hard time about Nakamoto? What's the harm in trying to bring alt-coiners and Bitcoiners together in a civilized discussion as a reaction to all the toxic drama of Bitcoin and crypto Twitter? Good questions. First, understand the context in which we are debating. There is so much at stake here.

Taking money back from central bankers is the most important fight happening right now. The potential good for humanity is ordered. of magnitude more than any other effort. Also, understanding of context in which Bellagie launched this project, he has a track record of what we call affinity marketing, orange washing, or I like Bitcoin, buy my shit coin. Not to mention his connection to Coinbase and their actions, and there's a lot of background. When it comes to Coinbase, I did make a video when there's a movement called hashtag delete Coinbase. I will include that in the show notes down below if you want to learn about more of the history of Coinbase.

Moving on. Okay, with all that in mind, let's look at Nakamoto. The publication uses the name of the creator of Bitcoin and declares all contributors are pro-Bitcoin. Included in the launch batch of articles are at least two that are unequivocally anti-Bitcoin. The article, A Beginner's Guide to Defy FI, mentions Bitcoin once and in an anti-Bitcoin way, declaring DFI stablecoins to be a fix. for Bitcoin's volatility. No mention of the reason for the USD volatility or the volatility is steadily decreasing. Number five, Zcash, the HTTPS of blockchains, this article mentions Bitcoin six times, but all in an anti-Bitcoin light used to favorably compare Zcash to Bitcoin without mentioning the current and coming tech that will improve Bitcoin's privacy, or ZZZ.

Zcash's own flaws in delivering privacy. Nakamoto is merely another instance of Bitcoin is great, buy my shitcoin. It is disingenuously marketed and Balaghi should admit and fix that mistake. That won't happen. Instead, toxic bitcoiners are forced once again to call a spade a spade. And if you still don't quite see the problem here, let's just take a look at some tweets that Bitcoin meme hub aggregated from some of the contributors that are on the Pro-BTC Nakamoto contributor list. Roger Vera saying Bitcoin Cash is Bitcoin. Vitalik from Ethereum saying, I consider

BCH a legitimate contender for the Bitcoin name. There is Michael Errington from XRP, the investment fund that he put together. Investors believe XRP is better than Bitcoin and Fiat money for money transfers. And let's read one more, Dan Larimer from Eos. Satoshi's vision of a trustless politics-free currency died when hash power voting was adopted to change rules. A true politics-free system has immutable rules. Hashtag Bitcoin and hashtag Ethereum are mutable protocols and are more prone to collusion of the unelected Chinese than EOS. So he's obviously there promoting his coin that he created, which, by the way, he has exits scammed many a coin. He's been a part of many projects, which he just ditches part way through.

So, I mean, with all of that, again, I take a look at this and I say, okay, well, I understand why this is happening. I understand why people are not particularly enamored by Nakamoto and what they're putting together. And I think this is kind of just a natural reaction of the Bitcoin community saying, hey, you're coming out as pro-Bitcoin, but then you're trying to pump all these alternatives to Bitcoin and having very little input from actual bitcoins. And yeah, I think this is pretty par for the course. Bikourners are very good at calling out this kind of stuff very quickly. And just a little tag onto the story there, their telegram chat ended up being shut down, or not

shut down, but rather changed to read only. And they were cited that there were trolls and spam bots that were inundating everybody and that they may move to a paid chat model, which is, is funny because realistically, it was just Bitcoiners coming in and calling a spade a spade. And that's what ended up causing this. So, you know, best of luck to Nakamoto and kudos to Bitcoin. for jumping in there. Let's move on. Ah, so John McAfee, this next story. So back in 2017 at the beginning of the bull run when Bitcoin started to hit around, it was getting into the $2,000 to $3,000 range. John McAfee made a very famous bet. Now, John McAfee, if you're not sure, he was the creator of McAfee Antivirus. He's since gone on to run for president.

unsuccessfully will say he's currently running for president, though you wouldn't know that unless you're in the Bitcoin crypto space and seeing his sometimes unhinged tweets and videos. But he has come out and said that number one, he's not going to go through on his bet that he said if Bitcoin did not reach a million dollars by the end of this year in 2020, he would eat his own dick on television live. And yeah, so he has rescinded that bet, given that Bitcoin is still in this, you know, mid-7,000s at the time of recording this video slash podcast. And we'll get into the reasons for that. But in doing so, he also said that Bitcoin is ancient technology.

So let's get into what he said. So I'm going to read a little bit from this article from Bitcoinist. So they say there have been plenty of million dollar price predictions for Bitcoin, but few of them for 2020. Crypto Warlord John McAfee made one back in mid-2017 when BTC was priced at $2,200. Since then, Bitcoin prices have skyrocketed, but they're still a long way from his predicted seven figures. In a recent tweet, the outspoken cybersecurity boss said it was just a ruse to onboard new users.

Either way you look at it, it worked, and McAfee keeps his manhood. He added that BTC was ancient technology, likening it to the Model T Ford's first automobile. So here are the tweets from McAfee. Bitcoin was first. It's an ancient technology. All know it. Newer blockchains have privacy, smart contracts, distributed apps, and more. And then he said, eat my dick in 12 months.

A ruse to onboard new users. It worked. Bitcoin was first. It's ancient technology. blah, blah, blah, Bitcoin is our future, was the Model T, the future of the automobile? Now, a couple things here. First of all, did anybody really believe McAfee was going to eat his dick on live TV? Obviously, that was never going to happen.

Yeah, so that's that. But number two, speaking to his Bitcoin is ancient technology. So he draws the comparison to the Model T, the first automobile. The thing is, model T, an automobile as technology is quite different from trying to establish a sound money. If your Model T becomes obsolete, number one, you can still use it for years and years until it breaks down, right? So it doesn't stop being useful. You just, you don't have the features of newer automobiles. But also, when you go to replace your automobile, you're not losing all of your savings and purchasing power and having to restart from scratch.

That does happen if the precedent is set that new money will be created the second that there's any type of innovation that is not currently on the previous money. So what Bitcoin is trying to do, obviously, is to come in and be a replacement for a base currency and, make things like central banks obsolete so that we don't have to rely on their monetary policies and their fiat currencies. It's meant to be a replacement for the gold standard, which we used to have, but was able to be snatched away because of a couple missing features in gold itself. One, auditability and two, easy deliverability. So people got complacent. They placed their gold with banks, which was then able to be easily seized. It was also unable to be audited so people couldn't see the fractional reserve that was happening.

When they got clued into that, there would be a bank run and those left holding empty bags were just kind of out of luck. And then we moved away from that on a global scale when Nixon reneged on the gold standard when people tried to repatriate gold back to their own country. so France was asking for its own gold back along with some other countries. And in 1971, he said, hey, no, we're not going to do that anymore. And overnight, the world went from having a gold-backed sound money to just fiat currency. And so that was because, one, gold was not easily deliverable.

And two, you couldn't audit it in real time so that obviously what was happening there was they were printing more dollars than were backed by actual goals. gold. So, Bitcoin doesn't have that problem because it has very quick deliverability, 10-minute blocks. It's also easily auditable. So if anybody was playing games, especially to a certain extent, even if they weren't giving away their deposit addresses and showing auditability on the blockchain, you could do some cyber sleuthing and kind of figure it out. But also, you could see who's claiming to have how much Bitcoin, and then you could just do some simple math and say, does that much exist? Also, you don't need to rely on centralized third parties to hold your Bitcoin because you can

hold it yourself relatively easily. So with that, Bitcoin trying to replace a gold standard and replace central banks. Well, the problem with the idea that, hey, there's new technology, so Bitcoin is old and we're going to move on to something else. if you're placing your purchasing power for long-term holdings in a money, you want to know that that money is going to retain value and that some new feature is not going to make it useless overnight and you're not going to have to keep playing hot potato with what the next new currency is. And so if we set the precedent that something better comes along and switches and goes to become the de facto, store of value currency over Bitcoin, then we're going to have to get used to the idea that that's going to happen often because there's always going to be changes and new innovations

that other coins can implement quicker because when you start a brand new coin, you can do whatever the hell you want. What we actually need to consider is what has one first mover advantage, although that's not always the case, but in Bitcoin's case, it's just so far. head of everything thus far that it's in my mind not very likely that something will overtake it. But where is, you know, where are the eyeballs? Who's using what? How many people? What's actually being used? So let's take a look at, you know, transaction volume, hashing power, how secure is the network. If we start hopping from protocol to protocol just because of incremental improvements in other protocols, then we are doomed to a life of switching from currency to currency and having to

start from scratch every single time if you're not quick enough. And if you're trying to be quick and you make a wrong call, you also lose all of your purchasing power. So not a good precedent set. And I firmly believe that Bitcoin is on the trajectory to maintain and become the de facto sound hard money of the world and that any incremental changes and improvements, if good enough, will be implemented in additional layers on Bitcoin. But that's my thoughts. Let me know what you think. Anyways, I just think that more or less John McAfee is totally wrong here.

And, you know, time will tell. The funny thing is, is I bet Bitcoin at some point will hit his price target, which, will be ironic. Of course, I don't think in the time frame of him being able to save his manhood if he was going to honor the bet, but I think it will hit that and it will make this tweet that much more ironic him saying it's ancient tech. But let's move on to one last story here. And that is that Bitcoin Network Segwit adoption hits 66% after Bitmex embraces their upgrade. So, number one, for those of you that are newcomers and aren't sure what Segwit is, Essentially, throughout, I guess, 2015, 16, 17, there were debates regarding how to scale Bitcoin,

how to optimize, how to include more transactions per second, how to get more transaction throughput, because we're starting to bump up against the limit of what was possible for transaction throughput on Bitcoin, which meant either paying a higher fee to get through quicker or waiting and paying a lower fee. Well, one of the solutions that was proposed was just to increase, the block size, just saying, okay, well, we're just going to allow more data to go through on-chain every 10 minutes. The problem with doing that was that it would create what is called a hard fork, which is a non-backwards compatible upgrade to Bitcoin, meaning that everybody would have to upgrade at the same time and agree to the changes, and that anybody who didn't would be

left behind and essentially operating on a separate currency. That was by and large rejected. What was implemented and approved was a non-backwards, or sorry, an actually backwards compatible upgrade called a soft fork, and this was called Segwit, and that was short for segregated witness. What this meant was that when you send a Bitcoin transaction, you use your private key, the key that allows you to unlock and move your funds, to sign a transaction, to essentially sign off and say, I approve that this amount of Bitcoin is going to be sent to this new destination. And so that data, that signature data, proving that you own the keys to that money, it takes up a fair amount of space when using a regular Bitcoin address, one of the ones that start

with a 1. Bitcoin addresses can start with a 1, a 3, or a BC1. So the one that starts with a 1 is known as a legacy address, and that includes the signature data. It counts it towards the total amount of data that can be put through in a Bitcoin block every 10 minutes. There's a limit of one megabyte when using that model. What segregated witness did was it just kind of rearranged the data so that your signature was still there, but it did not count towards the total amount of data that could be sent through the network every 10 minutes. So it was an effective block size increase. We got more transactions per second with it. And the more people that adopt Segwit, remember, it's backwards compatible so you can opt into it, but you don't have to use it. So the more people

that use Segwit addresses, the more transactions we can fit into a single 10 minute Bitcoin block. And so while it was slow to be adopted at first, it's gradually grown more and more. It was implemented in August of 2017. And over time, it has gotten up to this point of 66%. Now, you might say, well, that's not a lot. And that doesn't really sound like much of a victory to me. But let's keep this in the context of, is Bitcoin truly decentralized? And seeing this number and seeing it gradually trend up over time,

means that people are gradually opting in. If that had just swapped right away and gone to 100%, it would mean that there was a decided lack of decentralization and people making their own decisions on the network. And we see this all the time with, well, I guess the elephant in the room would be Ethereum. They had a hard fork on December 7th, which went off supposedly without a snag overnight.

and then they forgot to implement something on the protocol and did another hard fork as of January 1st, which again supposedly went off more or less without a snag overnight. And so that speaks to the lack of decentralization because to get an entire network to fork on a dime and upgrade overnight without any real issues, well, that means that not a lot of people are actually running the infrastructure themselves, but rather pushing those responsibilities to a few centralized third parties. So when I look at Bitcoin hitting Segwit adoption hitting 66%. That's wonderful. It's more throughput. It's more optimization for Bitcoin transactions on the base layer. And it also speaks to the decentralization of Bitcoin where it's a gradual growth.

Bitcoiners are very, their time preference is low. They're not worried about having everything right away. So this type of a gradual trajectory to the upside for a network-wide upgrade to me is excellent. And it speaks to the ethos of Bitcoin that I see developing around it. So I'm going to cap it there, guys. Of course, thank you for watching or. I guess listening, if you're listening to the podcast, welcome. This is the third ever audio only version of it.

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