BTC Sessions - Pierre Rochard Angers Ethereans, MicroStrategy Buys 21K BTC, New Grayscale Ad EP086

Episode Date: August 12, 2020

SUPPORT THE SHOW: LEDN offers Bitcoin backed loans – Sign up and get $50 free https://bit.ly/2XNH7oE Get a Ledger Backup Pack – Secure Your Bitcoin! https://shop.ledger.com/products/ledger-backup-pack?r=faca NordVPN helps with your internet privacy – Get 70% off https://nordvpn.org/btcsessions Get Wasabi wallet and enjoy your privacy https://wasabiwallet.io/ MY ALL-ENCOMPASSING GUIDE TO GETTING STARTED WITH BITCOIN https://www.btcsessions.ca/post/how-to-buy-sell-and-use-bitcoin-in-canada Buy Bitcoin in Canada on Coinberry and get $20 after your first $50 purchase https://app.coinberry.com/invite/c5d52730857 Buy Bitcoin in Canada using Shakepay and get $10 for free after your first $100 purchase: https://shakepay.me/r/HUQFI60 If you value my work and would like to send me a tip, they are always appreciated! LIGHTNING tips: https://tippin.me/@BTCsessions Join my Telegram channel! https://t.me/btc_sessions SHOW RESOURCES: Ethereum’s unknown supply queried by Pierre Rochard https://decrypt.co/38442/ethereums-unknown-supply-puts-its-users-at-risk-says-pierre-rochard MicroStrategy buys 0.1% of the entire Bitcoin supply https://www.businesswire.com/news/home/20200811005331/en/MicroStrategy-Adopts-Bitcoin-Primary-Treasury-Reserve-Asset Leger Nano X/S get firmware updates https://www.ledger.com/first-ever-firmware-update-coming-to-the-ledger-nano-x Vulnerability details https://www.ledger.com/enhancing-the-ledger-nano-xs-security New Grayscale ad https://twitter.com/Grayscale/status/1292913760982765572 BTSE Academy piece on Bitcoin meeting people’s needs differently https://www.academy.btse.com/post/bitcoin-freedom-trojan-horse

Wasabi wallet and fairly private. What's up everyone? I'm Ben with the BTC sessions and this is your daily session. Hodel their Bitcoin. Now before we dive in, I just want to give a shout out to sponsors of the show, leaden.io. This is where you can use your Bitcoin for a number of different services. Now I've been using these guys and working with these guys for well over a year. Had nothing but good experiences. And the first thing I ever used of theirs was their Bitcoin-backed loans.

So in my instance, I was in a pinch. I needed to get my hands on dollars, but I didn't want to sell my Bitcoin for two reasons. Number one, that's taxable. And number two, I was worried I'd have to buy in at a higher price point. So I was able to deposit Bitcoin, get dollars in Canadian or US dollars to my bank account within 24 hours. And when I paid that back, I got back all of my Bitcoin. Now, they have a couple other offerings. they've of course got their Bitcoin and USDC savings accounts where they have an interest rate of up to 10% annually.

And they've got their B2X offering. This uses the same loan mechanism to instantly buy more Bitcoin, which effectively doubles your Bitcoin on the spot. So if you want to check them out, there is a link down in the show notes below. Do check them out. And if you use that link to get a loan, well, they will give you 50 bucks worth of Bitcoin for free. And you'll also be helping out the show at the same. time. And secondly, if you want to help out this show in another way and you're looking into getting a hardware wallet, well, one of the hardware wallets that I use is the Ledger NanoS and the Ledger

NanoX. Now, I do use a number of different hardware wallets, but if you're looking to try and figure out how to get started, well, this is an option that you could use. And if you use the link in the show notes, you'll be, again, helping out the show at the same time. But if you're not using any hardware whatsoever, please do get into something regardless of what it is because anything is better than just leaving it on an internet-connected device, especially if you've got a sizable Bitcoin stash that is growing. So with that, let's dive into the show. So first up that I really wanted to talk about is there has been some controversy, started by Pierre-Rashard, more or less, regarding Ethereum's supply.

or rather the unknown supply of Ethereum. A lot of people think, well, I can just go over to coin market cap and check the number there, and that should be accurate. However, that is largely not the case. So I'm going to read a little bit from this article on Decrypt here about what has happened. There's been a lot of back and forth on Twitter about this, but it's pretty interesting to say the least. So the article is titled, Ethereum's Unknown Supply puts its users at risk,

says Pierre Richard. So Pierre Richard, Bitcoin strategist at Crypto Exchange Cracken, has claimed that the difficulty of auditing Ethereum supply carries a big risk for those who use the network. Now, he was just on the Pomp podcast. I listened to that earlier.

Interesting and nice and short and concise. It's like a 30-minute chat about what's going on here. So anyways, he laid out the risks in saying it introduces a vulnerability whereby your Ethereum could get diluted and you're really in the dark as to whether you're buying Ethereum. Are you actually receiving legit eth or is this fractional reserve eth that was kind of created out of thin air? Now, Richard, who kicked started the debate over Ethereum's total supply last week,

ended up paying Mark Andre Dumas, senior integration specialist at Maker Dow 1 million Satoshi's for coming up with the code to calculate it. The answer that the code produced differed from data on analytics sites leading to even more confusion. The debate continues to rage over what Ethereum's total supply is or whether that even matters, which I find funny. In Bitcoin, it's possible to query the current supply of Bitcoin. When it comes to Ethereum, it's much more complicated. Ethereum hands out rewards in several ways, including uncles or blocks that aren't included in the final blockchain. As a result, it's tricky to audit its total supply and data sites end up with different numbers. And so he goes on to

say it's about decentralization. If we're going to trust centralized third parties, we might as well go back to the Federal Reserve. What I find disappointing is that they have been promoting this narrative that Ethereum can compete with Bitcoin as a store of value. And I just fundamentally disagree with that. Yeah, so it's very, very interesting. Again, with this back and forth on Twitter, All he was asking was, can anybody easily, independently verify the supply of Ethereum? Vitalik at one point saying, hey, just go here and pointing him to coin market cap, which, again, if the goal is decentralization, then the most important thing to me is to be able to verify various things about the network, including the supply of the asset that I'm holding.

Now, a number of people have argued, does this even matter because Ethereum is meant to be more like the oil in the machine that allows for smart contracts. However, there have been a lot of people saying, eth is money, eth is sound money, it's better than Bitcoin in some ways. And if it's not verifiable, that's literally just not the case

when it comes to the value proposition of a sound, non-state-based money that is decentralized. So I was actually able to, I'm sure a number of you know that I run my node and that's kind of my my interface which I connect my wallets to be able to kind of self-verify everything and not have to rely on a trusted third party because if you're not running a node and not everybody needs to run a node but it is very good to do it for selfish reasons

if you're not running your own node then somebody else is running that for you meaning they're running a copy of the entire bitcoin blockchain they are telling you whether or not you have transactions, whether or not you have Bitcoin, whether or not that Bitcoin is valid. So you're trusting a third-party company to give you that information instead of running the software and verifying it yourself. So with my node, you run a Bitcoin node along with a bunch of other Bitcoin-related software that allows you to interact with Bitcoin in different ways. But they do have something on here that allows you to just audit the supply of Bitcoin fairly easily. So the way that you access this, and I tweeted this out, so if you're not following me on

Twitter, just go at BTC sessions and you'll see the tweet somewhere. If you're on my node, there is the Bitcoin app in the top lab. I'm not going to go back to it right now, but you go into, you hit the manage button, and then when you get into the screen with everything about your Bitcoin node, you hit the CLI button, which is the command line interface. At this point, you're going to be presented with kind of a blank box with nothing in it. Now you see there's a bunch of stuff in it right here. But what you can do is you type a simple command, and that command is get TX outset info.

And so what that does is it queries the blockchain for how much Bitcoin exists. Now if you don't know how to find that, you can literally just go here and you see underneath that says just enter help to see possible commands. And when you enter help, it gives you all of the possible things that you could type for various commands. And you'll see in the first group here under blockchain

is that command, which is, there we go, right there. You can literally just copy that and then paste it down below and then hit enter. It takes a few minutes, given that it's querying the entire blockchain and all of the outputs and seeing how many Bitcoin currently exist at that moment in time, but in the end, you'll get a number that tells you how many Bitcoin exist, which is right here.

And you can verify that and you can get somebody else to verify that. And if Bitcoin is indeed decentralized and is doing its job, you should come to the same number as everybody else. And we've seen that verified on Twitter all over the past few days as people said, well, we can do this? Why can you not? Is this not important? So if you're running my node, give it a try. Go hit Bitcoin, hit manage, hit the CLI button, and then put in this command, get TX outset info, and hit enter. It'll take a few minutes, and then you will get a number down at the bottom.

That is the number of Bitcoin currently circulating and available in the supply. So I recommend you check that out. Hey, I don't know. We'll see. And the other thing that I found interesting is people getting mad at Pierre for even asking that question. Because what he ended up doing is he basically galvanized a bunch of people to build that software, to be able to do that, to be able to more easily audit the supply. And is that not a good thing? Do we not want that kind of scrutiny for a decentralized application with a digital asset upon it?

So the people that got angry over that, I don't know. It kind of blows my mind. If we couldn't audit the supply of Bitcoin, I would probably be wondering why, but I would probably also be saying, we should probably be able to do this. How can we easily do this? Anyways, there you go. If you're running my node, go check it out. You can also do this if you're running any version of a Bitcoin node.

If you're just running Bitcoin Core, there is a command line interface where you can put in that same command and hopefully get the same number. Anyways, moving on. Micro Strategy. This is pretty crazy news. So reading a little bit from Business Wire here, Micro Strategy Incorporated, the largest independent publicly traded business intelligence company

today announced that it purchased 21,454 Bitcoins at an aggregate purchase price of $250 million, inclusive of fees and expenses. The purchase of Bitcoin was made pursuant to the two-pronged capital allocation strategy previously announced by the company when it released its second quarter 2020 financial results. And so the quote from the CEO here is, our investment in Bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders.

This investment reflects our belief that Bitcoin, as the world's most widely adopted cryptocurrency is a dependable store of value and an attractive investment with more long-term appreciation potential than holding cash. Since its inception over a decade ago, Bitcoin has emerged as a significant addition to the global financial system with characteristics that are useful to both individuals and institutions. Microstrategie has recognized Bitcoin as a legitimate investment asset. that can be superior to cash and accordingly has made Bitcoin the principal holding, the principal holding in its Treasury Reserve strategy.

So you have a large corporation, in fact, the largest, what do they say, the largest independent publicly traded business intelligence company in the world, basically say that rather than holding cash in our reserves, we're going to hold Bitcoin. Or rather than holding all cash, we want a large allocation of Bitcoin. In fact, how large is this? They bought over 21,000 Bitcoins. That is over 0.1% of the entire supply of Bitcoin that will ever exist.

I think, I mean, that's massive. Now, further to this, we have the Swan Bitcoin account on Twitter tweeting out, BlackRock is the largest asset manager in the world. Vanguard is the largest provider of mutual funds in the world. Together, they own over 25% of the company Microstrategy. They likely had prior notice. If so, these two financial behemoths just essentially approved a massive Bitcoin buy, which again pretty crazy we're starting to see large companies realize that hey if we're going to be

sitting on cash maybe we should be sitting on something that gives us a little bit more bang for a buck especially given the precedent of insane money creation that we've seen in the past few months here why would you want to be sitting on cash and just almost seems irresponsible at this point and i think Peter McCormick put it best when he summed it up as saying, micro strategy bought 0.1% of the Bitcoin supply. Very few companies will be able to copy this strategy. And what he's getting at here is, you know, how many companies can attempt to do this before the price is too astronomically high and the supply is way too low to be able to even feasibly do it? How many people are willing to sell their Bitcoin to these companies in order to do that? Probably not.

that many. It's not going to be too many before there's a bit of a race for this kind of thing. I think this next year and a half is going to be insane. Anyways, let's move on a little bit here. Just a quick thing, there is a couple firmware updates for not only the Ledger NanoX, but the Ledger NanoS. And they add a few things, but they also patch a minor vulnerability. And so just a little note on what that minor vulnerability was, it targets the MCU chip, which has nothing to do with like your pin and your phrase or your passcode or anything like that. So like the funds themselves are fine. But what it can do is it can potentially, if basically somebody would have to get physical access to the device to do this, so maybe a supply chain attack, something like that,

or if it went missing for a bit, somebody could feasibly get in. And all that this really does is potentially it could turn off the screen and it could trick you into, if you were to hit the buttons when the screen just turns off, it could trick you into sending a transaction that you didn't want to approve. So this update fixes that potential vulnerability. But if you were to encounter that, you could just opt to unplug and not interrupt. with the ledger at that point. So again, not anything crazy. Other than that, it adds a few little things, mandatory regulatory information from the devices settings menu, cryptographic support for basically some very technical things that I won't dive into. But it's always good to keep your devices up to date. So if you have a nanoX or nanoS, then you can update them via the Ledger Live software.

On another note, if you are using a ledger, I prefer to use my ledger outside of the Ledger Live software. I prefer to use it with Wasabi Wallet and I prefer to use it with Electrum, one of the two, depending on what I'm doing. So if you're not doing that, be sure to check it out. It's just a little bit more private. And with Electrum and Wasabi, I can actually connect them to mine out and be self-verifying. So if you're not down that rabbit hole yet, No problem, but worth investigating. Moving on, Grayscale, the Investment Trust dropped a new ad.

Now, if you remember back, I believe it was a year ago, I can't quite remember, but they dropped an ad and made some waves, and the ad, the campaign was called Drop Gold. And it was, you know, people running in the street and bars of gold. Everybody's rushing for bars of gold, and there's a couple people running. and they go and they're, you know, they're interested in Bitcoin. And they're showing how archaic gold is. And, you know, there's obviously a rip between them and Peter Schiff. And he was shitting all over their ad.

And anyways, it was a good ad. I thought it was pretty excellent. Now, they dropped this new one. We'll just say that the reception has not been as great. Now, the ad itself, until like the very end, I think it's not bad as talks about the history of money and then like how things have progressed from like seashells to beads to pieces of paper to gold. All of that kind of stuff, I guess, the opposite gold to pieces of paper and how, you know, the fractional reserve kind of

system have devalued everybody's money. So, you know, good points leading up to that. But then at the end, they list, they just list a whole bunch of assets they're in. So, you know, they have Bitcoin great. But then they've got Ethereum, Bitcoin, cash. XRP and light coin listed in there as their like bundle that you can purchase. Yeah, and people weren't super keen on that. And I mean, I even tweeted out. So they have this thing where it's BTC plus ETH plus XRP plus Bcash plus light coin equals GDL or whatever, GDLC.

We did the math. Thank us later. but I just I found especially we did the math I found to be funny so I checked the math so I just brought up again like the value of Ethereum in Bitcoin priced in Bitcoin over time the value of XRP in Bitcoin over time the value of Bitcoin cash in Bitcoin over time the value of light coin in Bitcoin over time and you can just see that you know over years and years for something. of these assets, it's just a diminishing return on your Bitcoin. You're losing Sats by holding these other assets. And if I had to guess, it's that history will continue to repeat itself. Will there be spikes and runups and altcoins? A hundred percent. But I think in the long run run, you're just going to lose Sats by buying this trash. And I think that's exactly what you're going to get by buying you know, GDLC, or what is it?

Grayscale Digital Large Cap Fund. That's what it's called. Anyways, yeah. Not so hot. This ain't it. Anyways, last thing I wanted to touch on, there is a new article on the Bitsy Academy. Bitcoin, a Trojan Horse for Freedom in a Speculative Disguise.

And it's from Vlad Casta. So, Vlad, thank you for this. Another great contribution to the Academy. Anyways, it talks about, Bitcoin and how you know people utilize in different ways and it has different values value propositions for people when they initially get in but by and large over time the net result is kind of this financial sovereignty whether it be protection from the whittling away of your purchasing power from from your fiat currency or whether it be living

under an oppressive regime and needing to go somewhere else and being able to actually transport your weld with you without the worry of confiscation, especially being able to simply remember a seed phrase in your mind and have no way for people to even know that you have it. So anyways, excellent piece. I do recommend you check it out. I will have that linked down below. With that, I'm going to wrap up you guys. Thank you so much for watching. As always, do hit like, subscribe and share all of those things really, really do help. So please do them. I was looking the other day, honestly, out of all my viewership, like only 25% are actually subscribed. So if you're not subscribed and you watch this and you enjoy it, please do hit subscribe

because it does really help out the show. Other than that, if you want to help with the show in another way, you can hit up the sponsor down below that was leaden. You can grab yourself a ledger. There's a link down below for that. Or if you really, really liked what you saw, you can always drop me a Lightning Network tip at my Tip and page that is t i p p p i n dot me slash at b tc sessions and with that i am out have yourselves a wonderful day a wonderful evening wherever you are and you'll see you next time for your daily session