BTC Sessions - Strike Lightning Payments, IRS Eyes BTC Privacy, Slavery Through Money EP077

Episode Date: July 6, 2020

SUPPORT THE SHOW: LEDN offers Bitcoin backed loans – Sign up and get $50 free https://bit.ly/385JAPd 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 Get the Ledger Backup Pack – Includes Ledger Nano X & S https://shop.ledger.com/products/ledger-backup-pack?r=faca NordVPN helps with your internet privacy – Get 70% off https://nordvpn.org/btcsessions 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: Strike Public Beta Arrives – Easy commerce built atop Bitcoin https://cointelegraph.com/news/app-connects-bitcoin-and-lightning-payments-directly-to-your-bank-account https://medium.com/@JimmyMow/announcing-strike-public-beta-325877a79f87 IRS Wants To Track Lightning and Other Privacy Methods https://cointelegraph.com/news/irs-wants-to-track-nefarious-privacy-coin-and-lightning-transactions Aussie Bitcoiners get tax notices en masse https://www.forbes.com/sites/shehanchandrasekera/2020/06/30/350000-aussie-crypto-users-are-receiving-tax-warning-letters/#373b072e7dcc Robert Breedlove’s new piece “Masters and Slaves of Money” https://medium.com/@breedlove22/masters-and-slaves-of-money-255ecc93404f Sign up to get notified about the release of Umbrel https://getumbrel.com/ BTSE Academy “Issuing Assets On The Liquid Network” https://www.academy.btse.com/post/issuing-assets-on-the-liquid-network

Wasabi wallet and fairly private. What's up everyone? I'm Ben with the BTC sessions and this is your daily session. Before we dive in, of course, we want to give a shout out to sponsors of the show ledden.io. This is where you can use your Bitcoin for a variety of different services. Now, I've been working with these guys for well over a year, a year in a few months now. I first used them back in spring of 2019. And the first thing I ever used to theirs was their Bitcoin back 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. One, taxable event. Two, I'd have to buy back at some point, and I was worried it would be more expensive. So I was able to deposit my Bitcoin, get a loan to my bank account within 24 hours, and as soon as I paid that back, I got my Bitcoin back the exact same amount. So they've also got a couple other offerings. They've got their Bitcoin and USDC savings accounts and they just up the interest rates on those to a maximum of 8.8% annually.

And then they've got their B2X offering which uses the same loan mechanism to instantly buy you more Bitcoin, effectively doubling your Bitcoin on the spot. So if you want to check them out, there is a link down below in the show notes and if you use that link to get a loan, well, hey, you'll get 50 bucks worth of Bitcoin for free. Not bad. And secondly, if you want to help out the show in another way. You can hit up my affiliate link to grab yourself a Ledger NanoS or X or any sort of the packs that they have going on. Now, if you don't already have your Bitcoin on a hardware wallet,

it is a very important thing to do. Don't leave it up to fate of leaving your Bitcoin on just your phone or on your computer without extra security involved, especially if the price were to go up, you may find yourself worried about more money than you had your hands on before. and it becomes a very big security risk. Now I use lots of different hardware wallets. Ledger happens to be one of them. I do have the S and the X, and they work very, very well for me for various purposes.

So if you decide to get a ledger, and that looks attractive to you, there is a link down below and in clicking that and buying a ledger. You'll also be helping out the show at the same time. And with that, let's dive into the news. So very excited about this launch. It is the strike public beta.

So what is a, what is strike? First, I'm going to dive into a little bit of this article on Coin Telegraph, and then I'll show you guys the actual announcement. So Jack Mallor's developer of the Zap Lightning Wallet announced his new app for iPhone, Android, and Chrome on July 2nd, which allows users to send and receive Bitcoin and Lightning Network payments directly from and to a bank account. Strike, which has now entered the public beta phase, enables interaction with the Bitcoin and Lightning protocols with no wallet, seed channels, liquidity, white papers, while know-your-customer

protocols are kept to a bare minimum. Jack Mallors wants Bitcoin to reach mainstream adoption. To this end in 2018, he created Zapp, one of the first desktop wallets, making features of Lightning Network accessible through a user-friendly interface. So yes, Jack Mallors has come out. Now we've heard about Strike previously. This is the announcement here from his Medium page. But we've heard about Strike previously. It's a super sleek, very easy to use application where essentially you put in some basic information at this point. It's pretty much name, email, and phone number, no ID or anything like that required.

And you can make payments and accept payments via QR code from anywhere on earth. And if you choose to, you can have it instantly converted to Fiat in your bank account, instantly usable in your bank account. So that means opening up things like micro payments cross-border into your bank account for basically nothing. And we're talking like you could send a penny to somebody and it goes into somebody's bank account, which is by today's standards pretty unprecedented. So kudos to Jack. He's been working his ass off on this. and it wasn't just the technology side of things. That side of things, I suppose technically, wasn't as much of a hurdle as the regulatory

environment and being able to make this so accessible where you only need a name and email and a phone number and you don't need to have selfies and passports and all of that crap. Very, very interesting and again, just another step along the way of Bitcoin kind of becoming ingrained. The most interesting part about this for myself is I think we're seeing an instance of beckoning back to the early days of the internet using phone lines. And so the internet was using the existing infrastructure to kind of pigeonhole its way into regular people's homes. But at one point there was an inversion of that where the phone lines started utilizing the internet infrastructure to make the phones easier and better.

to use. And I think we're starting to see the first inklings of this here with strike, where traditional finance, bank accounts are starting to piggyback on Bitcoin and Lightning to enable these easy cross-border payments, sometimes micro payments, that just aren't possible with the legacy financial system. So again, hats off to you, Jack, solid work. And right now it's only available mostly in the states. There's a few states that are excluded, but I will be very excited. I'm a little bit jelly, but I'll be excited when it eventually makes its way up here to Canada. So, Jack, I'm looking your way. Let's move on. IRS wants to track nefarious privacy coin and lightning transactions. So I'll read a little bit

from the article here. The United States Internal Revenue Service is seeking information and tools to help trace transactions using privacy coins, layer two protocols such as Lightning Network, and side chains like Plasma and OMG. And I imagine also they're probably taking a look at liquid and some other things. So it dives in, names some coins by name. It obviously talks about Lightning Network.

Now Lightning Network, if you don't know, it by default is routed through Tor. And so that means it has multiple hops. Your payment has multiple hops along the way. And each one of those is, encrypted and so all of those hops along the way have no idea where they sit in that chain of hops they don't know if they're the the second person the second last person they don't know if you're the originator of the transaction or if you are just a hop along the way and they don't

know if the next person is the person who actually gets to keep the transaction or if they're going to be bumping it onwards so it very much offiscates where it's coming from and where it's going to. The only people that really know is the originator and the receiver. Now, there have been some technologies where people push a whole bunch of different payments and start to understand what channels are going where. So it's not 100% bulletproof, but obviously the IRS is starting to look into that because while Bitcoin is completely transparent and it's very easy to batch and and segregate transactions and reasonably find out who owns what. Lightning not so much, and same with liquid.

And obviously some of these privacy coins as well. It's not cut and dry for all of them, but they're obviously looking into it, and they're probably a little bit worried. The thing is, government and regulations is very slow to react to this kind of stuff, and privacy continues to barrel on. Like even just look at the privacy options for Bitcoin, which typically, as I said, is just transparent and easy to audit. You've got things like Wasabi Wallet, you've got Samurai Whirlpool, you've got Join Market. You've now got things called Pay to End Point, which was added by BTC Pay Server and is starting to be added into wallets where essentially instead of just paying a single transaction to a merchant, the merchant also puts up money and combines it with yours and then pull.

out the payment so it's really hard to tell who contributed what and what's going where so there's all these tools that are coming out and that's in addition to layer second layer solutions like lightning network so now imagine those base layer solutions combined to create lightning network channels there's all of these things coming together and honestly I feel like the regulators are actively getting their asses handed to them they may get some wins like along the way, but man, I don't envy anybody trying to figure this shit out because it's going to be difficult. And I don't know. I guess it's just kind of tough. They're going to have to deal with it and maybe figure out new ways to fund the ever-growing money vacuum that is government. I guess we'll

see. And in the same vein as that, 300, this is from Forbes, by the way, 350,000 Australian crypto users are receiving tax warning letters. So this from Forbes again, in March 2020, the Australian tax office with the ATO, the entity responsible for tax administration in Australia, similar to the IRS in the U.S., was in the process of initiating the largest crypto tax crackdown. This is reported by news.com.aU. the ATO was planning to send out crypto tax warnings to 350,000 Australians. We are now seeing taxpayers getting these tax warning letters. So reading from the letter here, it'll say, hi, so-and-so, disposing of your cryptocurrency

can result in capital gains tax obligations. Our records indicate you have previously disposed of cryptocurrency. Exchange in cryptocurrency for goods, cash, for other cryptocurrencies is normally considered disposal of capital gains tax for capital gains tax purposes. Make sure to include any resulting capital gain or loss in your tax return. By reporting your capital losses, you can carry them forward to offset your future capital gains. Remember to keep your records. And going on, it says these letters are intended to educate taxpayers about cryptocurrency-related tax reporting.

Those who receive the letters will have an opportunity to amend the return and pay the applicable. taxes. These letters look similar to the IRS letter received by 10,000 U.S. taxpayers previously. Now, again, the ATO letters, the things that separate them from the ones that the IRS set is it seems to be targeting a large number of users irrespectable of the size of their holdings, whereas people like the IRS are more inclined to focus on cases with high dollar amounts to justify the cost of administration. Now, how many people respond to these letters and are truthful after the fact? I guess we'll see. I mean, the cost of sending out these letters is probably, I imagine, less than the gains that they'll get from having people get worried and go through and

say, oh, I got to report this. But I guess we will see. Again, beckoning back to, the previous IRS tracking, I think in the long run it'll be a losing game for these tax collectors. And why I, the reason I say that is because those that want to will have privacy tools at their fingertips. And yeah, again, the cost of trying to enforce a lot of this down the road could be, astronomical. I mean, 350,000 people, how are you going to keep tabs on that? And if somebody, especially somebody with very immaterial gains or losses, doesn't update or just kind of ignores the letter. What happens then? Do they spend the money to go after that person? Perhaps they target a few people as like, hey, this is an example of what can happen to you. But in the long run,

they're going to blow through more money than they make back and trying to try to do this kind of stuff. So we will see, but obviously it's a very real thing. People that that make gains and sell, you know, have to be reporting. That's just kind of the, it's pretty cut and dry. That's just how it has to go. Myself, I'm, I'm more of a holder. I just hold and wait. Yeah, it's, I've never been a big spender of Bitcoin previously. But it's, you know, it's something that everybody has to think about. We will see how this goes moving forward. I'm inclined to believe over time in the coming decades, again, governments are going

to have to get more inventive with how they collect taxes and also how they spend money. Because if they find it's too difficult to collect, they're going to have to have to, have to make cuts in certain areas and be a little bit more efficient. Yeah, I'll leave it there. Let's move on. I wanted to draw attention to this article from Robert Breedlove. I was reading through it this morning, and it's fantastic. It's called Masters and Slaves of Money.

And I'll read a little bit just from the beginning. I'll give you kind of an idea of where it goes, but I highly encourage you read it. So it says here, money is a tool for trading human time. Central Banks, the modern era masters of money, wield this tool as a weapon to steal time and inflict wealth inequality. History shows us that the corruption of monetary systems leads to moral decay, social collapse, and slavery. As the temptation to manipulate money has always proven to be too strong for mankind to resist, the only antidote for this poison is an incorruptible money, Bitcoin. And he goes through some early history in Western Africa about something called

Agri Beads. And I could be saying that incorrectly. But it was the currency of the time. And it was these glass beads. It was very difficult to produce in Western Africa. But as people started coming there, as Europeans started coming there, they realized that this was the local currency and they could exchange it for labor locally. And they had much more efficient glassmaking production facilities back at home in Europe. And so they were able to then, for a fraction of the cost, recreate this currency and create very similar-looking beads that were passable as the currency, effectively counterfeiting it.

And they would send ships over full of these beads. And when they got there, they would pay for labor and everything. And it just destroyed the local currency to the point where people that had been saving, people that had assets or rather didn't hold assets outside of this, had their savings just inflated away. And they became indebted to the Europeans and eventually had to either sell themselves or, or rather others or themselves into slavery because of this. and it very much was a key component of the early slave trade. And it's very, very interesting to see how money was used as a weapon to propagate the human trafficking that came out of this time. He goes on into more recent times and how this affects. And it wasn't just happening once.

It wasn't just this one example. There were plenty of others. But besides the fact, he goes very, very deep into how this affected the slave trade. And the echoes of the approach to monetary policy that we're seeing nowadays with mass printing of dollars from the Federal Reserve, so on and so forth, and how it's being used as a band-aid to a situation which, regardless of intention, will eventually devalue your time and your work across the board. board and the people that are most hurt are usually the ones that are the worst off already. So again, highly recommend you read this piece. It's a doozy. It takes a while to get through. It's like here on medium. It says it's a 36 minute read. It is, it is lengthy. It is in depth.

But it is also worth your time. If you're valuing time, this is a good place to put it. Let's move on. Just a couple of the things I want to touch on here. Very excited. about this. Kind of cryptic, not a lot of detail, but this thing called umbrel. Umbrel. I'm not sure how what the pronunciation or the emphasis on the syllable is there. But regardless, the website simply says, become Bitcoin. Run your own Bitcoin and Lightning Network full node, self-host open-source applications, cut the middleman, and use Bitcoin to its full potential. And then it's got this scrolling side screen and it shows what looks like a Bitcoin core node with updated transactions, basically self-verifying that any transactions you receive are legit and that you're using

the type of Bitcoin you want to be and you're not being fooled by some fork or whatever. It shows that you can be using Tor. It shows that you can be setting up your own lightning network and channels. And then interestingly, we'll see if it swings by here shortly. Besides the fact, it shows BTC Pay server, again, a decentralized way of accepting payments as a merchant without no middleman anywhere on the globe. And the interesting one that I was excited about was it had a little widget for join market, another coin join implementation to help with your Bitcoin related privacy. Now, of course, I've used wasabi. I've used samurai wallet. I've made, you know, I haven't yet tried pay to endpoint, but I'm very excited for it.

There it is, Join Market right there. But Join Market is another implementation. And from the looks of it, what they're going for is simplification of everything. Everything looks very, very clean here. And I'm hoping that they've done a good job of simplifying Join Market as well. If the app and the way that this runs is anything like these little widgets here look, it's very tempting. I'm very excited to see this in action.

And it does have echoes of my node, which I've done a tutorial or a couple tutorials on how to use. And yeah, the more of this that we can get, the more easy it is for somebody to take out all the middlemen and basically just run a software stack where they don't need anybody in between, the better. So looking forward to seeing this in action.

And then finally, I wanted to touch on this article from the Bitsy Academy that we pumped out just before the weekend, but I didn't have a show then, so figured I'd touch on it now. It's called Issuing Assets on the Liquid Network. It was put together by the guys at Verify. Again, solid piece. They're talking about, again, the creation of digital assets. And they beck and back to whether the ICO craze of 2017 was proof that the,

digital assets are a total write-off, or whether it was partly a poor execution on top of a poor infrastructure. And what I mean by this is, is Ethereum is very malleable, and a lot of these contracts that are built into the base layer can have bugs. And implications of the first instance of that we saw was something called the Dow, where people piled a huge portion of the entire monetary base, of ether into it and when a problem arose, they effectively did away with the immutability

typically promised or what was thought to be promised with a blockchain was done away with in order to effectively reverse the funds to give them back to anybody who invested in the Dow. I would say ruining the illusion of Ethereum's decentralization. Now, obviously there was a lot of greed, a lot of bullshit that was pumped out there. It's just a lot of total trash. But were there any good ideas in there?

Is there a use for tokenization? And if it's done effectively and done well on infrastructure that isn't trash, can it be good? And they very much argue, yes, of course, stupid ideas can still be made and built atop good infrastructure. but there could be some use cases for tokens if need be. And so it goes through a lot of different things in regards to this. Myself, while I don't see a lot of tokens as super necessary, I do recognize value in having like a digital item that can't be counterfeited. So perhaps a digital ticket to an event where you were required to have that

and you can't duplicate it and sell those digital tickets to other people. So you know you have the only copy of that digital ticket, which has a shelf life until the event is over. So I see value and stuff like that. And then if you were to issue shares of an actual company, and it was done in a way where there was protections for you, but that holding that digital token means it cannot be inflated. And if there's a stock split,

then you're still holding the same piece. of the pie, I could see value there if people chose to utilize it because it adds the ability to then peer-to-peer transact with those shares of that company. So I could see that. But that was very much not what the ICO bubble was. You effectively held nothing. And they even use an example here. Where was it? Ah, this was in the terms of service for a basic attention token, which a lot of people still use, bat. It says in particular, you understand and accept that bat does not represent or confer any ownership, right or stake, share or security, or equivalent rights, or any right to receive future revenue shares, intellectual property rights, or any form of participation

in or relating to the platform and or company and its corporate affiliates other than rights relating to the receipt of service and use of the platform subject to limitation and condition in the terms and applicable platform terms and policies as defined below. That are not intended to be digital currency, security, commodity, or any other kind of financial instrument. And then they go on to say after that, kind of summing it up. As you can see, this effectively shows that this token, in particular, wasn't supposed to even have a financial value

as it represents, in fact, nothing at all. Very succinctly put. Good job guys that verify. But anyways, it just kind of beckons to the fact that while there can be uses for tokens, you also need to take into account. Some of them can also not have uses. Or they can claim to have uses but not have uses or they can claim to not be used for something but still be used for something. It's not very cut and dry across a lot of this. So part of it is execution, but the other part is infrastructure. And they go into talk. about liquid network and what this enables and maybe there's a better approach to doing this kind of stuff. So very interesting, curious on your thoughts about this kind of stuff, is the idea of tokenization just crap? Or do you think that it's worth exploring a little bit more in certain specific use cases if done right?

Regardless, people still have to think about what they're putting their money into. And if it's, and I think overall that's a good thing. thing. It's just going to take time to get people used to not being babysat and always told what to do with their money. Anyways, I'm going to wrap up there, guys. Thank you so much for watching and or listening. If you are here on YouTube, please do hit like, subscribe, and share. But also do check me out on my other platforms. I do stream video to Facebook Live, Twitter, Twitch, D-Live, a bunch of them. But I'm also audio only on the podcast. Here, you can find me on Anchor. it's pretty much across every major like Spotify, Apple Podcasts, Google, all of that stuff. You can find me there.

Now, if you, of course, really loved what you saw, you can always hit me up with a Bitcoin Lightning Network tip at my tippin.combe page. That is tippin.combe slash at BTC Sessions. And with that, I am out. I hope you guys have an excellent rest of the day, an excellent evening, and I will see you next time for your daily session.