BTC Sessions - NEWS ROUNDUP: BTC Price Spikes With Inflation, Taproot Activation Imminent ep214

Episode Date: November 12, 2021

Bitcoin price spikes to all time highs amid soaring inflation numbers, as Taproot is on the cusp of activating. All this and more in this week's news roundup. 💪 SUPPORT THE SHOW: Shakepay is the easiest way to buy Bitcoin in Canada Sign up now and get $10 free after your first $100 purchase! https://shakepay.me/r/BTCSESSIONS ALSO search/subscribe to Shakepay on YouTube! LEDN Bitcoin backed loans –  get $10 free with a savings balance of $75 or more for 15 consecutive days! https://start.ledn.io/btcsessions Get Wasabi wallet for Bitcoin privacy https://wasabiwallet.io/ Keystone Wallet: secure your Bitcoin! http://bit.ly/KeyStoneSessions BillFodl: get your wallet backups in solid steel. https://privacypros.io/btcsessions Bitrefill: use Bitcoin to purchase gift cards https://www.bitrefill.com/buy/?code=O04UMic9 Like what you see? BITCOIN TIPS: https://strike.me/btcsessions

Wasabi wallet and fairly private. What's going on? Welcome, everybody. We have some news to chat about today. Well, this week, we've had a bunch going on. If you've been hiding under a rock lately, you may have missed the crazy inflation numbers that are the highest they've been in quite some time. You may have also missed that we hit a new Bitcoin all-time high

the other day, a very quick spike and then a very quick retracement back down. And we have a bunch to talk about in and around that stuff. We're also going to talk about Tim Cook and Apple and what they're thinking about Bitcoin. We're going to talk about a whole bunch of stuff. As always, this is live. Anything can happen. So I defer to my friend Bill here. We'll do it live.

Okay. We'll do it live. Do it live. I'll write it and we'll do it live. thing sucks. If you haven't already, be sure to hit like, subscribe, and share all of those things really do help. And without further ado, I am Ben with the VTC sessions.

This is your daily session. Before we dive into the news, let's take a look at where we are in the market right now. I'm on the Bitbo. I.O dashboard. We're sitting at 65,272 bucks per coin. A single U.S. dollar will pick you. you up 1,532 sats. 89.86% of all Bitcoin have been mine.

That's going to be hitting 90% pretty quick here. And in terms of fees, next block, a little bit of a bump here in fees. 15 sats per byte will get into the next block. If you're willing to wait up to an hour, one sat per byte will still do you. Surprising. Yeah. So take a look at this chart, by the way, since we have it up here. This is looking over the past week.

So yeah, we saw that in and around the, what was it, the November 8th, we hit a fresh all-time high and then kind of came down from then. And then yesterday we got some inflation news, which kind of drove home the point of Bitcoin. And we saw another big spike closer to, I heard some people saying we got to 69K. I didn't see it myself. I think that was very limited, maybe on a couple of times. changes. But for the most part, like I typically look at Bitbo and, you know, I got a 686 somewhere around there. So yeah, I'm not calling it official. My memes are still saved sitting on the

desktop. I didn't want to waste them on on a fake 69K. Well, we'll wait. We're waiting for that 69.420 price target is, is when it's official, I think. Anyways. Yeah, but yeah, you can see it went from that morning it was around 66.4 and then it spiked up to 686. So it basically like a in inside of 30 minutes, I think I was looking that morning. It went up $2,000. But then inside of, you know, a couple of hours it dropped from 686 all the way down to for a little while. It went below 63 on, on some of the lower time frames, but, you know, we've kind of rebounded a little bit from that. Guys, we're basically at all-time highest right now. We're in and around that.

If you sold, if you sold during that like sell-off down quote-unquote sell-off to 63, I don't know what to tell you guys. But let's not get too deep into that. First of all, rather, shout out to sponsors of the show. So shakepay.com. If you're not stacking sats in Canada using shake pay, I don't know what you're doing. If you haven't heard, they just up their referral rates currently. And this could be limited time where if you use the link down below and sign up and buy

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There's going to be some good sales. And finally, if you're backing up any important Bitcoin wallet, get in and steel, guys, paper just doesn't cut it, water damage, fire damage, accidentally discarding it, especially this year, I've heard a lot of horror stories. This is how I back up my important hardware wall. So check out the bill foddle over at privacyprose.com. Links are down below. Let's get into that inflation chat now, guys.

There's been lots of rumblings, you know, famously just a couple weeks back. He saw Jack Dorsey tweeting about hyperinflation. You know, it's been all over the news. And no wonder, we printed between 30 and 40% of all existing base money on the planet. in the last calendar year. Of course, there was going to be inflation. And yes, there's going to be blames of, of, you know, supply chain issues. And I'm not saying those issues don't exist.

But certainly adding 30 to 40% to the existing monetary base is definitely playing into that. So here, U.S. inflation rate hits 6.2% in October highest in over 30 years. So prices for U.S. consumers jumped at 6. jumped 6.2% in October compared with a year earlier, as surging costs for food, gas, and housing left Americans grappling with the highest inflation since 1990. The year-over-year increase in the Consumer Price Index exceeded the 5.4% rise in September, and that's from the Labor Department reporting on Wednesday. From September to October, prices jumped 0.9% and the highest month of a month increased since June. Inflation is eroding.

the strong gains in wages and salaries that have flowed to American workers in recent months, creating political headaches for the Biden administration and congressional Democrats and intensifying pressure on the Federal Reserve as it considers how fast to withdraw its efforts to boost the economy. The thing is they can't really do that because the bond market is so skewed, these artificially low interest rates. If they're to change them, the bond market just falls apart. So I really don't know what.

more they can do than just continue to print money. They might try to take their foot off the gas for a bit, but as soon as they start actually trying to, to, you know, pull out, as soon as they start trying to contract the money supply in any way, shape, or form, things start to implode. And we saw this with the repo markets in late 2019,

well before any of the global craziness that we saw happen in 2020, even got started. So, you know, this was just a house of cards waiting to fall. And it just took something to expedite it a little bit. Now, this isn't the only inflation metric that's up. Wholesale prices rose 8.6% year over year in October tied for the highest ever. And so this is, they'll separate out the consumer price index and then the costs for wholesale prices for producers. It's called the producer price index or the PPI instead of the CPI.

So this is largely in part due to searching prices for gasoline and autos. The reading is one of two important inflation measures, of course, the other one being CPI, which is the one we just discussed, which is at 6.2. But basically, this dictates, you know, what is the cost for people producing goods? and it's high. It's high. That's why you're starting to see it happen. And so this tends to be the CPI, I would imagine, trails the PPI because the people producing

things are most exposed to those price fluctuations. They then have higher costs and then they then have to bump up their prices, which are reflected in the CPI because consumers are buying the products from the producers. So if PPI is at 8.6%, you know, of course CPI is going to be heading up. So we shall see what happens there. This is another one from CNBC. They say inflation is taken away all the wage gains from workers and then some. So it says real average hourly earnings when accounted for inflation actually decreased by half a percent for the month.

A 0.9 inflation increase negated a 0.4 percent rise in wages. Consumer confidence has been sliding despite the rising wages, which are up nearly 5% nominally year over year, but have declined 1.2% in real terms. The Fed finds itself under increasing pressure to adjust policy accordingly, but we know they can't do that. You can't stop it. It's growth at all costs. Otherwise, everything implodes. So I don't know what people are going to expect them to do. You know, if they actually do begin to taper and they actually do begin to kind of reverse what they've done, it's going to cause problems.

This is how the fiat world works. Now, I did a video yesterday. I do weekly lightning sessions, which are just like two-minute explainers for questions that people have. And one of the questions was, how is inflation measured today versus price? to 1980. And so I did this video talking about this. There's a lot of information over on shadow stats. And what shadow stats does is it takes the way that inflation used to be measured prior

to 1990 and prior to 1980. And back then it was actually prior to the 1940s, the CPI was actually called something along the lines of a standard of living index or something like that, constant standard of living. I can't recall exactly, but that's what it measured. It measured the cost to maintain your current standard of living with the same goods. But they've changed a lot since then. They have allowed for substitutions. And so that means that if something gets too expensive, they can sub in a totally different product that is cheaper and lower quality because it will serve the purpose. So, for instance, if steak is incredibly expensive, they can sub in hamburger because their reasoning

is, well, nobody buys steak anymore. It's too expensive. So we'll just put in the lower quality meat that more people are buying because we price them out of the last thing. The problem with that logic is it keeps on going. Where does it stop? If meat itself, if beef becomes too expensive, just hamburger meat, and nobody can afford it anymore and they start buying fake meat, if they start buying beyond.

beef or if they start buying whatever else, if they start buying just like garbage in the middle aisles of the grocery store because it's cheaper and it's made with high fructose corn syrup and that's where they're getting their sustenance. Is that a good replacement? Is dog food a good replacement? So I don't really like that logic, but that's what they've gone with. They can substitute in things if other things get too expensive and nobody buys it. Furthermore, they've all, also allowed for if something increases in, increases a lot in quality. In particular, the big one is electronics.

Their argument is that if it goes up in, if it improves in any way, say a computer next year for a laptop is more expensive, but also way faster, they'll be like, well, you're getting a better computer for it. So we're going to adjust for that. it's twice as fast. So we're going to count that as, well, we'll cut the price in half because you're getting basically two of the good computers you would have gone last year.

But that doesn't really account for out of pocket costs for individuals, right? Because you can't go in and ask for half of a new computer. Or you can't go in and ask for a 10-year-old phone and expect that phone to function based on the needs of today's society and run the apps that you need it to function, right? So again, it doesn't actually account for real world experience and what you're actually paying. And so the interesting one here, this second chart, and maybe I'll just, this second chart here, this is how they based it in 1980s versus how they based it in, well, currently. And so the blue would have been the 1980s based and the red is how they measure it now. And the discrepancy is damn near, what, like 8%, 8% different, just kind of eyeballing it there. If you were measuring based on the metrics from 1980, you'd be round in the corner to 15% inflation already, which is terrifying.

15%. So basically, if you didn't get a 15% wage increase over the course of the year, you're underwater. So anyways, highly recommend that you check out that website. It is a wealth of information. there's a lot of stuff. And again, yeah, they, they inject some of their own thoughts there, but the data is just the data. They say this is how it used to be measured. This is what it would be based on the way it was measured. And this is how it's measured now. And so this is what it currently is. So the numbers are just the numbers. That's it. You can draw your own conclusions from it,

if you like. And then we had some more comments on inflation from the Bank of Canada, the governor, Tiff Maclam. And he said, so he's talking about transitory. Well, we'll talk a little bit about this, this word transitory. He said, let's read a little bit here first from Kitco. The latest take on what transitory inflation really means came from the Bank of Canada governor, Tiff Macklin. The BOC governor described inflation as transitory, but not short-lived, noting that it will be around for longer than expected. His quote, I think transitory to economists means sort of not permanent, McClum said in an interview with CTV's question period with Evan Solomon. Quote, I think a lot of people, to a lot of people, transitory means it's going to be over

quickly. And maybe I don't know exactly what the right word is, but it's probably something like, you know, transitory but not short-lived. What are you? Okay. So let's cover two things. Basically, he's saying it's going to be around for a while. And he goes on to say, well, we've got the tools to rein it in. Kind of, but what are the after effects of doing that going to be for you? But secondly, transitory. Transitory does not mean that the prices will go up and then come back down again. Transitory is referring to the rate of inflation.

So let's say inflation in the states, for instance, is measured at 6.2% right now. They're saying that that high rate of inflation, you know, in and around that level or maybe beyond high inflation for them above their typical 2% target is going to be around for longer than people think. It's going to be around for a while. But it's transitory in that that rate of inflation will come back down. So as the prices inflate at 6% a year being generous saying that their numbers are actually true and we're not talking about shadow stats here. If that rate of inflation persists, the prices of everything goes up on average 6% every single year and it sticks around for a couple of years. Well, that increase in price never comes back down. That's just the new price.

What they're saying is it won't go up as fast later. It won't go up as fast later. It sounds hilarious to say, but that's exactly what they're saying. So they're saying it'll go up 6% for a year and maybe more for another year. And then it'll probably start to come back down. So it only goes up 2% the next year. It's still going up a lot and it's still going to be a lot more expensive over time and your dollars will buy less. So, yeah, it doesn't, again, when you get into the nitty-gritty of what they're trying to say, it doesn't exactly ooze confidence.

Let's talk about the response of Bitcoin to that. We were talking about the price before. We saw that $2,000 spike as these numbers dropped. But then we saw kind of a big sell-off, big-ish, you know, percentage-wise, it wasn't that bad. But regardless, it went up to see. 68, mid-68's, high-680s, and then it dropped down to around 63,000. Really simple answer for why that happened is a bunch of D-Gens got degenerate gamblers, basically went in, got all leveraged up using Bitcoin as collateral and bet that the price

of Bitcoin would continue to rise. A lot of these orders in the order books are transparent. You can see where they're placed and everything. And so people with a lot of money on the opposite side of things said, hey, we could we could make the price drop and we could basically wipe out all these people and take their money because they bet the wrong direction. So the moral of the story is don't be a Dgen,

don't use leverage, bets with your Bitcoin and you should be fine. But just a couple of little quotes here. This from Dylan Leclair, he said, why the Bitcoin pullback from 68K, there was a massive increase in Bitcoin margined futures, open interest this afternoon.

traders going long Bitcoin with Bitcoin as collateral. He said there's no free lunch. These traders are in the process of being shaken out. Fellow analyst William Clemente pointed to the upcoming Taproot soft fork as a clear reason to be bullish and discard short-term price moves. Taproot will bring a host of protocol improvements to Bitcoin. These having no comparison to any changes since the introduction of Segwit, the transaction technology that was implemented. implemented back in 2017. He said derivatives funding rates,

meanwhile, serve to prove that a shakeout had indeed taken place, returning solidly to neutral territory across exchanges. So basically, we shook out all the people that went DGN and started gambling, and they're now, you know, they got their asses handed to them. But taproot is just around the corner. And if you're unfamiliar, what's taproot, might you say? So this is a soft fork to Bitcoin, meaning a backward. compatible change to the protocol that is opt-in.

So if you're running a Bitcoin node, you can upgrade it to the latest version and that will lock in and activate and allow you to utilize taproot transactions. Now, what do those do? Let's just read a little bit here, this from Bitcoin magazine. In short, at the highest level of abstraction possible,

the Bitcoin Taproot soft fork will optimize scalability privacy, and smart contract functionality, it will bring about a new address type, allowing Bitcoin spending to look similar, regardless of whether the sender is making a simple payment, a complex multi-signature payment, or using the Lightning Network. Moreover, tap route addresses will allow users to save on transaction fees.

The more complex the spending conditions, the more of the user will save compared to previous address types. By reducing the transaction size and making nearly any transaction appear like a simple single signature one, Taproot will also enable larger and more complex operations to be deployed on Bitcoin that were previously unfeasible or almost impossible. So this is, it's a pretty big deal. Most people, the average Bitcoin that's maybe not like super deep into this things. And for sure, mainstream coverage of Bitcoin is not going to cover this. but it is a massive improvement.

It actually makes aggregated transactions and coin join and things like that down the line. It effectively makes it cheaper to do these complex things than to just do a regular transaction or make it on par with doing some stuff like that. So in something like a coin join where a whole bunch of people are signing, eventually you can get with Schnorr signatures, you can get signature aggregation. which means taking the signatures of a whole bunch of different people all at once and compacting them down into a single signature, which uses a lot less space,

which is much more efficient using the Bitcoin blockchain, which cuts down on fees for basically everybody, because again, we're optimizing the base layer. And this is what I love about Bitcoin Protocol Development is everybody is so focused on optimizing the base layer so we get the most bang for a buck so that decades out, the entire planet is using Bitcoin and in various ways using lightning and using side chains and using other things.

All of a sudden, you have this incredibly efficient base layer where people are thoughtful about how they use it. And yes, we will have full blocks still. We'll have high fees on the base layer. But those high fees will basically be, I don't want to say socialize.

It's a bad word. but basically it kind of divvies up those fees amongst everybody that is using the base layer in a way where if you're using lightning or something like that, maybe you create a channel alongside, I don't know, a thousand other people at the same time and you all kind of split on the transaction fee to make that happen because it's all aggregated into one and it's very, very optimized in terms of block space use. So sorry, I've been rambling a little bit, but this is a big deal. It's important. It makes Bitcoin much, much better. It improves upon it. And a lot of people are sleeping on it.

So exciting stuff. Let's keep moving here. Apple CEO, Tim Cook, says he owns Bitcoin. Like, was I surprised about this? I mean, it's kind of inconsequential, but I guess it's a vote of confidence saying that all of these tech industry leaders are saying, well, of course, yeah, I own some Bitcoin. So what does he actually say? Apple CEO, Tim Cook implied in an interview on November 9 that he personally owns Bitcoin after he was asked the question at the Deal Book Conference.

Quote, I do. I think it's reasonable to own it as part of a diversified portfolio. Cook said when asked if he owned Bitcoin or any other cryptocurrency, quote, I'm not giving any one investment advice, by the way. Cook was also asked if he could be labeled as a Bitcoin bull specifically he dodged, saying that he wouldn't like to put a label on it, but that Bitcoin is certainly, quote, something I'm interested in. Cook added that he had been interested in Bitcoin and cryptocurrency for a while and that he'd been researching them.

The Apple big boss reiterated, however, that his interest is purely from a personal point of view and that the company currently has no plans to jump on the Bitcoin ban wagon. Quote, I wouldn't go invest in crypto, not because I wouldn't invest my own money, but because I don't think people buy Apple stock to get exposure to crypto. And so he's just basically referring how Apple's not going to be picking out Bitcoin on its balance sheet anytime soon. As far as adding Bitcoin services to Apple products or accepting Bitcoin as payment, Cook also said not something we immediately plan to do.

Yeah, that's about that. So basically he stacks on the side and has no plans to implement it into his business. But I mean, overall, maybe that could happen or come to fruition over time. We'll see. Let's keep going here. MasterCard launches Bitcoin payment cards in Asia Pacific. It's a big headline, but let's read into what it actually is. And then we'll pass judgment then.

So the meat of it is here. Card Giant MasterCard has partnered with. Cryptocurrency service providers Amber Group. I think that's Alex Svetsky. If so, congrats, Alex. Bitcoin and CoinJar. To offer Bitcoin linked payment cards across Asia-Pacific region, the company said in a statement on November 8th,

these firms are the first A-PAC-based platforms to join the card issuers global crypto card program, which seeks to make it easier for Bitcoin and cryptocurrency firms to offer payment cards to their customers. Quote, for the first time consumers and businesses, in Asia-Pacific region will be able to apply for crypto-linked MasterCard debit or prepaid cards that will enable them to instantly convert their cryptocurrencies into traditional fiat currency, which can be spent everywhere. MasterCard is accepted around the world.

Cardholders will be able to use their MasterCard throughout the arrangement established between the card issuer and the Bitcoin services provided, which entails having the corresponding amount of Bitcoin or other currency be deducted from the user's account and instantly converted into fiat currency. So basically, this is why I'm not, I don't really give a shit about this. I was using this in like 2015, 2016. There's videos from when I first started the channel and I was using Bitwala and Wirex, I believe, were the two. And so what it is, it's not like an auto debit thing. where it actually just like in real time spends your money.

And I could be mistaken here, but this sounds like it's exactly the same thing that I experienced, you know, five years ago is you have an app on your phone. You load it with Bitcoin. And then there's also a dollar balance. And what you're doing when you convert to be able to use the card is you basically convert your balance to dollars.

You're selling Bitcoin so that you have a dollar balance that is spendable. It's not automatic in any way. you have to do it. And a lot of the times the fees to do so are just like trash. I would not be surprised to see basically the same thing at a MasterCard. So yeah, I don't know. This isn't that exciting for me to read. It is funny that MasterCard has done an about face since their original Bitcoin is shady

and only for criminals back in 2015 or whenever they released that horrible video they did with, what was his name? use something. Anyways, they had been released some terrible video where they were just shitting all over Bitcoin and saying it's not trustworthy. Yeah, so this is kind of a change of pace for them, I suppose. I'm more interested in a couple things. So obviously here in Canada, shake pay is going to have a card. And it's it's the same thing here where your dollar balance is what's spendable. But the thing that I'm excited about is you can get, you basically earn stats back on all of your expenses. So when I go to get gross,

I can have dollars in my Shake Bay account and earn Bitcoin rewards as I spend. That's something that I really want. Then also, I would look more to things like strike in the U.S. I mean, the way that they're doing it, they're basically doing it. So it makes it effectively zero cost to convert into and out of currencies by using the Bitcoin Lightning Network as instant ways of transacting and and transferring value with effectively no fee in between, which is incredible.

And that's the experience that you want when you're traveling and you're just using a card. Convert to whatever currency you want locally, instantly just by tapping and using it as a regular card. That's amazing. So out of the two, you know, like Bitcoin rewards and cutting down on fees,

the sounds of it, the MasterCard deal doesn't really offer those things. both of the things that I'm mostly be interested in having a card for. So we'll see. I don't know. Regardless, the competition from Strike and other rewards cards like Shake Pay

is going to force MasterCard down that road just to remain competitive. So, hey, it is what it is. Robin Hood. They, a while back, said that they are going to allow for Bitcoin withdrawals from their

app. Historically, you were just dealing in IOUs. Basically, you just got exposure to price, but you couldn't self-custody. You couldn't withdraw or anything like that. That is eventually being turned on. There's a waiting list now. So let's read the C-O-O said 1.6 million people are on the company's wait list for withdrawing Bitcoin. One point six million. Holy shit, you better hope they're not fractional or reserving that shit. Or they're trying to stack sets to make up for the Bitcoin they don't have. I don't know. The long-awaited feature would come as a cryptocurrency wallet to the firm's trading app. So basically, you'd have a native wallet in the app that you could then use to withdraw

and deposit, it sounds like. And they said it's still unclear when customers will be able to take ownership of their Bitcoin. No wonder, they're probably biding their time to make it work. They did say that there's some complications to make that work. And they want to make sure that they were there was the quote. The ability to deposit withdraw cryptocurrencies is tricky to do with scale and we want to make sure it's done correctly and properly. So hopefully they're looking at things like address type and they're looking at things like batching withdrawals because 1.6 million people, let's try not clog up the base chain again, clog up all the blocks again, Robin Hood.

Hopefully they'll have learned from the mistakes of others in the past. Anyways, it's probably a good thing that they're rolling this out because they just got a huge data breach impacting 7 million customers. Let's read into that. So Robin Hood has disclosed a data breach after their systems were hacked and a threat actor gained access to the personal information of approximately 7 million customers. Well, that's not good. The attack occurred November 3rd after a threat actor. I've heard this.

Is this a thing that people say a threat actor? Is that like a correct? Is that how you say it? A threat actor? Honestly, up until recently, I hadn't heard those words used in that order. Anyways, a threat actor called a customer support employee and used social engineering to obtain access to customer support systems. This wasn't even like a hack. This was like you called up Jane at the support line and was like, yo, can I get into your system?

That's what it sounds like. Damn, that's not good. That person, Jane's probably fired. After accessing the support systems, the threat actor, was able to access customer information, including full names, email addresses, and form a limited number of people, date of birth, and zip codes. Quote, at the time, we understand that the unauthorized party obtained a list of email addresses for approximately 5 million people, full names for a different group and approximately 2 million people. We also believe that a more limited number of people around 310 additional information, including name, date of birth, zip code, and a subset of approximately 10 customers have more extensive account details.

What extensive. Oh, my crap. So in summary, 5 million email addresses, full names for 2 million people, name, date, birth, and zip code for 300 people, and other information for 10. not great. Also wouldn't be great if they got account information regarding what they own because that becomes a problem. And we've seen stuff like this with data breaches at Ledger where anybody, if your email was on that list, then you've gotten fishing emails all the time. Oh, upgrade your thing.

Type in your private keys here and all kinds of stuff. Some people have been got stuff mailed to them physically, like different devices. is saying, hey, this is a new one just for you. The seeds already in it. And some people have fallen for it. Some people have lost money. So data breaches are no joke. Use a PO box if you can.

Maybe a dummy email address for certain things. But I mean, this kind of stuff is tough to navigate when everything requires an email address. Anyways, a couple last things here. Top White House tech critic Tim Wu. hold more than $1 million worth of Bitcoin. Tim Wu, a top antitrust expert at the White House, is a Bitcoin millionaire, according to a personal financial disclosure he recently filed. Wu, a tough critic of tech company's power, owns between $1 million and $5 million in Bitcoin,

as well as between $100,000 and $250,000 in Filecoin. Oof, how would you own that? Anyways, let's not even bother with Filecoin. His investment in Bitcoin is his largest holding in his financial portfolio. Wu joined the Biden administration in March as a special assistant for technology and competition policy to the president at the National Economic Council. While Wu will not have any involvement in developing policies about cryptocurrency in that role, the disclosure show that one of big tech's most prominent critics is also invested in an asset class that is a major tech world obsession. There was a pretty good thread on this from David Zell over at BTC Media slash Bitcoin Magazine.

And he said, Tim Wu, a Columbia law professor and renowned antitrust expert who coined the term net neutrality has been advising U.S. presidents on tech policy for years. Now he's barred from weighing in on Bitcoin. Wu has been studying Bitcoin for a while now. In a 2017 New York Times op-ed, he referred to Bitcoin. as a shared hallucination and a bubble, but also defended the network and its ethos slash value proposition fairly well. So why can't Wu advise the White House on crypto? That's because 25% of his net worth is in Bitcoin.

According to White House officials, Tim is recused from any particular matters involving Bitcoin or cryptocurrency generally because of his financial interest and has not worked on any such matters. This should piss you off. Wu actually has Wu has actually used the tech he sent Bitcoin,

read the white paper and spent time thinking about Bitcoin in the broader context of monetary and economic history but because he owns Bitcoin he can't

share his thoughts a policy that forces owners of Bitcoin to recuse themselves from weighing in on it seriously impacts the quality of advice in the name of avoiding

bias you can't hear from people prescient enough to pick up on a trend early who haven't quite the head start, who have quite the head start in studying it. Instead, you're stuck listening to people with an even stronger bias, the bias of not owning Bitcoin. What do almost all of Bitcoin's big critics today have in common?

They publicly bash the network between 2013 and 2017, gloated over its drawdowns, and insulted advocates. This is a sinister bias. Imagine waking up every day, knowing you'd be rich. If you had bought Bitcoin the first time you said it was stupid, it's got to hurt. But if you're not, at least now you get to weigh in masquerading regret behind a veil of objectivity. Imagine if we applied such a standard consistently. Should gold experts be banned from weighing in on policy related to gold?

Every single member of government owns equities, but we don't ban them from making financial policy that would seriously affect their holdings. How is our government supposed to make informed decisions on Bitcoin if owners are barred from the conversation? Our model of governance relies on listening to diverse opinions. This policy isn't just dumb. It's anti-democratic too. The Bitcoin double standard has to end. Pretty good thoughts there. Honestly, if you're going to be making policy relating to something, you might want to listen to people that both like and dislike the thing.

Right. And then you can kind of form your opinions around that. But when you when you weed out anybody that has an interest in it because they likely have some, well, guess what kind of policies you're going to get? Last thing I want to touch on, and I didn't even know if I really wanted to touch on it, but I'm going to. Miami to give Bitcoin yield from Miami coin to its citizens. There's so much here. Okay. So basically, you know, Miami is where Bitcoin 2021, 2021, 2020. conferences are slash will be. And the mayor has been pretty open and receptive to Bitcoin and kind of a big proponent of it. And then he started looking at a platform called Stacks, which is kind of in a way built on Bitcoin or it uses information that is baked into Bitcoin blocks to more or less secure the data on the Stacks blockchain.

Okay, so basically bits of information are embedded in Bitcoin blocks and in order to secure the Stax blockchain, they refer to that information in the Bitcoin blockchain, meaning that in order to change transactions, you would also have to do a reorg of Bitcoin in order to achieve that, which is very, very difficult to do

and if not completely economically and feasible at this point. regardless the mayor of Miami decided he was going to make Miami coin now what is the purpose of Miami coin like what does the coin do I don't know this is my honest thing

I don't I don't know what it functions as like what is what does it actually do like if if there's a Miami coin what is its function what how is it used I haven't had a good answer to that yet.

So again, forgive me. I'm trying to form an opinion around this, but, and my, you know, Bitcoiners typically, we think pretty adversarially. And so, you know, the initial thing is to be, is to be very, very critical of it. And that's kind of what I'm trying to be. And not a lot has convinced me otherwise yet. So effectively, what is he done? He's creating this coin, Miami coin, and you can buy the coin and you can stake it.

And if you stake it, or they don't call it staking, they call it stacking. Basically lock up the coin and then you earn the Stacks token, which is gas for transaction fees on the Stax blockchain. So yes, there's an additional token interjected into here on a protocol that partially relies on the Bitcoin blockchain. The Stax token, the way it works is it's a token that sits on the Stacks blockchain. And the way if you, God, how do you get stacks? You basically, you exchange Bitcoin for Stacks token. And so the Stacks token, if you, God, Jesus, God help me, if you stake it, sorry, if you stack it, if you lock it up, then you are paid by people that are entering the ecosystem to get more Stacks token. That's like their transaction fee to get into the ecosystem.

So your staking rewards are basically people paying for more tokens to get into. It kind of, as I'm saying it out loud, it doesn't make me super confident about how this ecosystem works. The best I could kind of piece together, and forgive me again, I'm just, my brain is fried. I've been trying to read about this stuff right now. It kind of sounds to me like if you're staking or, go ahead. If you're locking up Stacks token, in your brain, you're thinking that the value of your token will maintain its value or appreciate alongside the stacking rewards that you get, which is actually in Bitcoin, more so than just holding on to the purchasing power of your Bitcoin and not holding the token. So that assumption, if the value of stacks is going up, then all is hunky dory. But the economics of it is if people start not wanting the stacks token and it goes down in value, then does that narrative start to fall apart in that if the security of that blockchain is that you're stacking or you're locking up your coins?

what happens if people don't do that anymore because the value of the coins is going down faster and outpacing the rewards that they're getting for locking up their coins and it's in your best interest just just hold on to Bitcoin. So it kind of seems like it's a great idea until it starts going the opposite way. Now again, you might be asking what what's the purpose of the Stax blockchain? It is basically smart contracts and things. Oh my God. Guys, I'm sorry.

Anyways, so I'm not, I'm not super confident on this. I don't see value. I'm trying not to be close-minded about it, but I'm also looking at it being like, first of all, why do you need a Citicoin? Second of all, why do you need to introduce an additional token here? It seems like it's the additional token is mostly to like payout developers and stuff like that. So I just I keep gone circling around to but why?

I don't have an answer yet. But the long and the short of it is Miami creates coin. Miami locks up coin. Miami magically receives yield. Miami pays people who have said coin from magic yield. Is that about right? I don't know. I think Matt O'Dell.

replied to me. He's like, it's a forever ICO on top of a forever ICU. I'm sorry if somebody's working on stacks and watching this. I just, I don't get it. I don't I don't know.

I should, I'm going to pull up the comments right now. I need to see what you guys are saying. Yeah, Miami is a scam from Avery Hold. Overly complicated. I feel you. I feel you too. like, uh, idiot mares start shitcoining.

Why can't people just stick with Bitcoin? Yeah. Yeah. A token on a token lost me. Yeah, guys, I don't know. This is my initial and like, it seems like the stacks team is part of their mindset is like, well, we don't want to build on, on other shit coins.

We don't want to build on Ethereum because proof of stake is terrible and so on and so forth. I get that, but I don't, I mean, you've created another token that in, it seems to be not necessary. So I guess I'll just leave it out there. I don't know. This is just rambling me trying to find a reason for this to exist. And maybe, maybe there isn't one, but we shall see. I'm trying to be diplomatic here, guys. I don't know.

Anyways, okay, I'm going to wrap up there. Thank you guys so much for being here, for joining me. I hope you're having a good week. Let's see some new all-time highs this weekend. Let's do it. And also, you know, follow the money who gets paid. Right. Gone gone.

Good point. Okay. Okay, I am going to bring up one more comment. Miami coin represents ownership in a virtual stake of meta Miami, which exists on top of real-life Miami, but only in the collective mind. Okay. Yeah, to me, like, I was reading a thread that basically said, like, oh, let's lock up Miami coin. And if you agree with the governance of Miami of like actual what the mayor is doing with the city, then you can lock it up.

But if you don't, then you take it out of, you unlock it and then you sell your coins and the value goes down. I don't see any reason to incentivize that specific behavior of stacking that coin. and actually locking it up just because the mayor does something that you like. To me, it just seems like people who stack will gravitate towards that behavior because they're gambling. It's pure speculation. I don't see any correlation or reason why those two actions would be linked implicitly. Can you? I don't.

I think, yeah. And somebody said, Pomp explains it in his latest show if you want to hear what he says. about it. I'll have to listen to it. But I don't know. I just don't get it. I don't think the incentive structures line up. Maybe I'm wrong. Maybe I'm not. We'll see. Anyways, guys, thank you so much. Of course, like, subscribe, share.

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