BTC Sessions - The Bitcoin Attacks are NOT About Money | Simon Dixon

Starting point is 00:00:00 I assume this attack and coordinated by default. It's not innocent until proven guilty. This is guilty until proven innocent. I find it hard to believe that you get an attack on nodes, an attack on self-custody, an attack on hardware wallet, an attack on decentralized payment merchant processors, and attack on Lightning Network without us having a message. What is the message? Exiting the battle is not an option.

Starting point is 00:00:24 In this episode, Simon and I pick up where we left off our conversation with Duneberg. We go deeper on the recent Bitcoin infrastructure, infrastructure attacks on self-custody, lightning, merchant payments, as well as reflect on the outcome of the BIP-110 Fork and Simon's decision to back it. If you haven't seen part one yet, the link is in the description down below. All right, Simon, thanks for sticking on. I wanted to continue the conversation with you, because there's been so much that's happened to Bitcoin over the last week, last 10 days, that I felt like we needed to just have a conversation, chat about it a little bit. I wanted to

Starting point is 00:00:53 kind of get a sense of what you're thinking and where you're at. We've had the cold card, low-entry wallet vulnerability and attack there. We've had BTC pay server's been under attack. We had Zeus Walls under attack. We got Bolts is under attack. Like, it's just been not, it's been, it looks, it's hard to not feel like it looks like an ongoing attack, particularly on the most hardened bitcoins, like the maxis, the self-custody guys, the, the Bitcoin only crew.

Starting point is 00:01:17 And then we also had just on Saturday, we had the fork and the chain split as a result of BIP 110. And I think that that's essentially come to its conclusion now. And I know that you were more in favor of. You were supportive of BIP 110 coming in. I tried to stay very quiet. I wanted to maintain more of a neutral position. I was talking about it a little bit more at the end,

Starting point is 00:01:34 but I was not necessarily in favor of that proposal. But I did align with a lot of the ethos and what people were, the reasons for the advocacy for it. So even maybe let's just start with BIP 110. Just happened on Saturday. Want to get just kind of your initial thoughts, your reaction, kind of what you're thinking now and what's top of mind.

Starting point is 00:01:51 Yeah. Okay. So philosophically, taking a zoom out. I'm always on the sides of nodes. So in the case of the user activated soft fork, I was there for the whole journey, like on ToneVe's channel. And, you know, I remember the battle that we were facing at that stage because we were years into the block size war debate.

Starting point is 00:02:17 I remember, like, it really starting early with, like, a coin base at Bruce Fenton's. Satoshi Roundtable where Brian Armstrong stormed out of the room and blockchain. info was a company that I'd invested in as well as Coinbase and they were all on the side of getting the transaction fees down because they had a business model which relied upon them sucking up the transaction fee and then charging a fee on top in a centralized service. So at that time, fees were so low when the pitch around Bitcoin was, you know, free payments and it's significantly cheaper.

Starting point is 00:02:58 So that was the ethos. And then we went through this whole realization that Brock Pierce came along. He brought Tether. It was built on Omni. Omni then did an ICO in 2013 called MasterCoin on top of Bitcoin. And then Tether started to get traction. And the block started to fill and the fees started to really go up.

Starting point is 00:03:21 And then we went through the series of agreements. There was like a meeting in Italy. I was in the Hong Kong meeting. And then finally, there was a meeting in New York. And Barry Silbert from Digital Currency Group was the guy that was putting together all that he was, you know, the main investor in all the companies. They were kind of at that time, there were a few VCs. There was Brock Pierce's VC, blockchain capital. Then there was Digital Currency Group with Barry Silver.

Starting point is 00:03:49 and then I was investing via a fund called a Bitcoin Capital, which was funded from Bitcoiners, just everyday Bitcoiners through the company Bank to the Future. And so if you looked at the cap table of all the companies, you saw these people. But Barry Silver really tried to centralize a lot of the companies together into what he thought was a diplomatic agreement, Segwit 2X. And it was, you know, the miners,

Starting point is 00:04:18 you know, they started to get very suspicious around the developers. And the developers, you know, kind of a group of them either took the big block side or the small block side. And we had this whole thing, I think,

Starting point is 00:04:36 you know, this whole block size war. But in the end, it looked like, you know, the corporates were going to win and they wanted to build an implementation and they were funding it via, a developer called Jeff Garzik and ended up in another company called Block

Starting point is 00:04:54 anyway the whole point was there was a resistance from users which was the user activated soft fork and it was a victory from the nodes

Starting point is 00:05:11 to demonstrate to large miners and large corporate entities that no matter what they wanted, you know, there was one of the big bit main. They had an advantage called ASIC boosts where they were like getting an advantage over all miners and they didn't want this change. So the Blockstream was proposing and the community were getting behind as an alternative scaling solution layer two that led to lightning and everything now, which is being attacked as we speak.

Starting point is 00:05:42 But look, so we ended up in this split, this community split, which was infamous. But it was the resistance from the nodes against a change from the miners and the big corporate companies that was being resisted against. Now we enter into where we are now, 2025, 2026, we had the changes. that happened around off return and no point, I'm sure all the users, anyone listening to this will know the whole history from your channel. But, you know, this whole narrative that kind of brought back the same debate. And so initially it started with, okay, let's have a competing implementation of software you can run on your node and point your node to, which returns to what Bitcoin was doing.

Starting point is 00:06:39 and then, you know, what the implementation was before or the policy rules were before. And so once I put the time in to realize, okay, this is something to be taken seriously, I started using knots and I supported knots. Then this whole thing of BIP 110 returns and came back. And I published a blog on believing, okay, this is the divide and conquer operation coming again. And I did a blog where I was following the money on potential funding issues and compromise issues on both sides. And I recognize this operation from before.

Starting point is 00:07:20 However, you know, I wanted to lend my support to NOTS and No. And so I publicly came out and said, yeah, I'm running NOTS, and we had more and more people there. Once I understood a bit more about BIP 110 and the return to this, I was like, right, I think we need to go through this and we need to see what happens because the rules are slightly different here. You know, this is the same narrative, which is a resistance against large corporate takeover of developers or, you know, the same type of narrative.

Starting point is 00:07:57 But it was actually reverse because Bitcoin Core had made the changes. You know, the changes were there. And people look back and said, hey, was that a mistake? Teguit, taproot, the operator, and all the things that happened. And I don't think anyone was paying enough attention to development, you know, relative to what suddenly came along. And so as a result of this, everyone started paying attention to developer centralization, developer funding, large corporates, all the attack vectors.

Starting point is 00:08:31 And so to me, this was, okay, this is something we should be exploring and getting behind. Now, when BIP 110 came along and they said, right, we're going to do a softfall, it was effectively the opposite, because now it is, the change has already happened, but the narrative was we want to take it back to where it was before. However, the aggression was, if you really think about it, from the node operators. And so there was previously, the aggression was large corporates and miners that wanted to change the code. And then there was a resistance

Starting point is 00:09:13 from the node operators. This time that switch, there was a resistance from the node operators, but it was the node operators that wanted to make the change, which is put it back to what it was before. So in hindsight, when you think about all of that,

Starting point is 00:09:29 the narrative feels the same. It's confusing for a lot of people. You could ideologically agree with something, but actually it was, who is actually proposing the changes is a different setup. And so with that different setup, I was saying, well, could minority nodes actually make this change? We haven't seen this before.

Starting point is 00:09:53 Okay, this is a new situation. And we might as well do this with this unique setup where Luke Dash used to be a consultant to block stream. He went off on his own path. He was part of the user activated soft fork. For me, it was like, we need to demonstrate this, you know, demonstrate this and see how it rolls out. Does it lead to a reject? So, you know, so that was always my thinking that I philosophically wanted to align with what Notts was doing.

Starting point is 00:10:25 But I also published all my concerns around BIP 110. But I was also like, we got to go through this. So what if you put maximum support behind BIP 110? and then see what actually happens here. And that's what we witnessed on Saturday. And so Bip 110 failed. And some people are now taking the narrative that led them to want to support it to then go the stage that I said I would never go down.

Starting point is 00:10:57 And I published on the blog and said, but if this becomes a new coin, I'm out. I'm completely out. I do want to go up to the resistance to see, can the pressure from nodes, ordinary nodes, you know, where it got to like 20% of nodes were running north, can that actually determine what Foundry does as a mining pool and pool and F2 pool? And does that actually, does that kind of minority, you know, because it was 20% of node operators that had really made a lot of noise,

Starting point is 00:11:34 was we've never seen anything like it in terms of an alternative implementation. Well, even if you remember prior to this whole thing kind of kicking off, I'm pretty sure, because I was, I was running knots for quite a long time there. And it mostly came out of a curiosity from Luke. It wasn't any particular technical reason. It's that at the time, I really liked Luke and found it very interesting and found he out of his own implementation. So like, I'm just going to try it.

Starting point is 00:11:56 It really wasn't anything more than that. But pre this whole kind of controversy and kickoff, I believe it was at sub 1% adoption. And then you just saw it rocket up to 20% in response. So, sorry, please continue. Yeah. Now, there's questions around people who have conspiracy theories, right? Why is this happening? Because that's what we have to do as Bitcoin.

Starting point is 00:12:18 We've got this open source boardroom. And, you know, we need to use intelligence. We can't just, I mean, there's dumb ass shit that happens all around. 99% of it is. But we need to apply some intelligence here. And by intelligence, pardon the pun, There are intelligence all around trying to infiltrate various parts of the Bitcoin ecosystem. And so, you know, we have this don't trust verify situation.

Starting point is 00:12:46 So I thought what I published in the game theory was, here's what I'm skeptical about BIP 110, but I think we need to go through this. And I think we need to demonstrate the can allowed minority of nodes influence the mining pools and the miners. And so that's what we went. The answer was no. So, you know, BIP 110 didn't successfully and all the nodes around it, even though it was the most successful attempt to galvanize the nodes, around a resistance against large corporate interests,

Starting point is 00:13:23 and we've got a lot of large corporate interest. It couldn't change the mining pools because the only people that ended up mining these blocks were, you know, through Luke Dash Jr.'s company, Ocean, that'll allow people to set the policy. Now, what he's doing, now here's where a bit of intelligence comes in and our human side takes us down some crazy thing. I support what he's doing with creating a resistance

Starting point is 00:13:54 against mining pools with miners and having that choice. That's a good thing. That helps mining decentralization. I support what Notts is doing. I think having competing implementations and alternative default policies and the ability to decide whether you want to reject a block, or a rule, is a useful thing. But what do we actually learn from this?

Starting point is 00:14:22 As soon as it became an alt-coin, I've seen that with BCH, BSV, all that shit. I'm out. You know, that's not, I'm not going to die at the hill for a cause. give up the one shot we'll ever get at having money you can own, money you can spend, the money that has a fixed supply, in order to end up with a shit coin. Like, you know, I've seen that one before. So at this stage, I'm out. But up until can we influence miners, I thought we have to go through this.

Starting point is 00:14:55 And then what do we learn from it? Well, what do we learn? What we learn, if you really think about it, is that on the key, case of Segwit 2x, when miners wanted to implement the change and they were behind the change, you know, Ji Han Wu was funding Bitcoin ABC and you had Jeff Garzik that developed Segwit 2X and various other things. When they wanted to make the change, you know, they were trying to change and it was the nodes that stopped it. Now we got the opposite. The nodes tried to make the change and the miners stopped it.

Starting point is 00:15:32 And so that's the lesson. The lesson is that it's incredibly hard to make consensus-level changes in Bitcoin, no matter who you are, whether you're the nodes, whether you're... Now, the developers changed policy, but they didn't change consensus. It's very, very hard.

Starting point is 00:15:53 That was the... Get-segwit, get-tapp route. people weren't paying enough attention around those times. We were for Segwit, we weren't for Tapru, and we weren't for the Op return. But then Nodes brought that back, and now everyone understands the game. And so what I encourage you as Bitcoiners is some people are going to end up a shitcoiner accidentally, which is what Bitcoin Cash did and Bitcoin SV did. I really encourage you to check that and apply.

Starting point is 00:16:28 There is still battles that we need you for in Bitcoin, right? What do we know? Well, there's alternative implementations. There's default policy. There's minor decentralization. There's pressure on developers to check. There's no compromise. All of those things, all the skills that were used around this still need to be applied.

Starting point is 00:16:49 And so that's the lesson. Anybody that wants to be the hostile, whether the nodes, whether the miners, whether the companies, and whether the developers, we know it's very, very, very hard. As long as we make sure that it requires consensus from all those parties to make the change. So all this to say is there will be people that are very upset. there will be people that are gloating saying, see, I told you. I encourage you to take the lesson.

Starting point is 00:17:21 I published a blog on this on Simon Dixon.com of what I learned, like 13 different things. And Bitcoin's stronger for it. Am I concerned about where developer power, ego, will go with this? Minor power and ego. Large economic nodes where they... Yes, I am concerned. But that's exactly what, you know,

Starting point is 00:17:46 what we need to bring our attention back to because there's not going to be another one. There's no alternative. There is not going to be another one. And you need to get back into the battle and apply that skills because that was useful. I appreciated everything that happened. I became smarter and I think people got smarter. Don't allow this to make you dumber and end up with a shit coin. No, I hugely appreciate that message because,

Starting point is 00:18:16 I'm right there with you. Like one of the things that is most concerned me about this whole thing was these kind of social consequences of the what would happen. In particular, that the, a lot of the problems and concerns that were brought up by, we'll say the BIP 110, the not side as well, are completely legitimate and valid concerns. And they're difficult problems and they're very difficult from not only just getting consensus, which I think one of the big red flags with this whole thing was just how unbelievably rushed it felt to me that we were moving forward without having a a larger cohort all on board

Starting point is 00:18:46 with regards to both not only just additional in terms of other nodes but as all the exchanges to try and make sure we have consensus with some of the miners more maybe at the mining pools because again like the miners

Starting point is 00:18:58 also need to be able to sell this for Fiat to hit their operating expenses as well like it it moved way too fast in my opinion without social consensus beforehand and one of my biggest worries is that's the fallout so even like looking at it now and again I do want to echo that sentiment is like, this is all we got.

Starting point is 00:19:14 Don't become a shit coiner. Come back into the fold and let's continue working at that open source boardroom. Because right now I feel like this, like if I wanted to further centralize Bitcoin, this whole viasco has further centralized Bitcoin. We've taken Ocean, which was actively doing a commendable job on block template decentralization, giving the actual template structure to control to the miners. It was a wonderful pool. It was growing.

Starting point is 00:19:40 And now it's taken a hit in terms of its, um, rate that it has in its proportion to the rest of the network. You have some of the most ardent bitcoins fighting for, I would think they would describe it as like the monetary maximalism, very philosophically aligned and very well aware of who the, the enemies, I guess, of Bitcoin are. And they're crashing out. There's some that are leaving that were good plebs to have in this battle. And then additionally, we've lost, and this I think is the biggest hit, is we've effectively lost knots now, which was really the only other competing implementation so now all you have is core

Starting point is 00:20:14 because Luke is openly talking about a proof of work change, he's not coming back that means knots is gone so we've handicapped the pool that was working on block template. Yep. Is that you can't use?

Starting point is 00:20:27 100%. Okay. Well, so there's, you can't, so I got to double check this, but if I remember correctly, so you can't still run an older version of knots without the BIP 110 because they made it part of the default as well.

Starting point is 00:20:38 Now, they will say that there are other you can't download the new version. exactly and I'm pretty sure Nott's has a basically you have to update every two years that Luke had coded into it that you have to update it and so if you were to update it and that was one of the things I didn't like about it I could be wrong about that so if I wrong I apologize but I'm pretty sure I remember that correctly that Nott's they'll let us know immediately but Nott's needs to be updated after two years by the way that it's been set up and that would mean going off onto the wrong chain now so and plus just in terms of like credibility and maintainers working on it. So we had a competing implementation because we have like Lib Bitcoin and we have like what is it like Bitcoin D or BTCD something like that but none of them have any

Starting point is 00:21:21 uptake, right? It was basically just knots and core like 80-20 and so we lost our competing implementation we have, I think it's production ready is the one that I think Jimmy Song and the guys are working on so I look forward to having a new competing implementation but the concern was centralization and we lost the other competing implementation.

Starting point is 00:21:40 The concern was centralization and control and we took a hit to a major mining pool working on that. And so the dividing conquer strategy definitely still in the back of my mind. And so I just for sure want to echo the sentiment that like, please come back. Please keep working on there. There are absolutely problems with minor centralization. There are absolutely problems with core. I agree with all of that.

Starting point is 00:22:02 And I hope that this isn't, I hope that this isn't as large of a hit as I think it currently is right now. That was a lot. I was kind of just spewing it out there, but I want to get your thoughts. Yeah, look, there's a, there's a higher, there's a higher purpose here. Like, you know, Bitcoin has never been a company technology. And the, yes, people remember, yes, things get heated. But you need to, you need to check yourself and become a rational actor here. And so, you know, really make sure you, you don't go down.

Starting point is 00:22:41 an irrational path because right now we are weaker in the sense of what you just identified we are more centralized than we were before this

Starting point is 00:22:52 but we're smarter and we're wiser and we know how to defend against this and so the work that was being done needs to continue to be done and you know you've got to appreciate that even if you got

Starting point is 00:23:09 what you wanted and we went down this path, we would have also gone to a significantly more centralized place, and we would have had to have worked on all of that again, all right, what developers are going to go over here? You know, how are we going to get these people over here? You know, how are we going to protect ourselves from somebody else trying to replicate this that may be more malicious, you know? And so all of those things, we would have had to have, there would have been a lot more work if it succeeded. Now, we are right now weaker, there's no doubt, but we're smarter.

Starting point is 00:23:44 And so we need more smart people applying that. Because as we said, you've got to get back to what is your North Star. Your North Star is that we will never fork off without consensus and create another Bitcoin. How many times have I seen that? How many attempts to do cheaper, faster, better? But how many times when the community, and it's obvious, the community's angry, there are centralizing forces. We have many of our Bitcoin is money for your enemies. We know all of that.

Starting point is 00:24:22 But you've got to bring that back. And I get it if you don't want to. But don't let ego get in the way of the most important monetary change that the world's ever going to. see. You know, stay the course and I get it. And I also encourage you to welcome people back. If you can, you know, it's difficult and things get said that you can't forget. But this is the nature of an open source boardroom. If somebody is handing out an olive branch and they want to come back, then you have two choices, right? Either you kick them while they're down or you welcome back and say, you know, you know, that's that's the choice, you know. And the more people

Starting point is 00:25:14 that do that, the stronger Bitcoin is going to become because the more people around it, the better. I agree. And I'll even just quickly, like one, yeah, emotions got incredibly high and they still are. And I agree that ego is getting in the way as well, too. Check your ego. It's not helping you. Check your emotions. It's not helping you in the broader mission. Additionally, again, to the ladies in the audience, I absolutely love you. And thank you. you for being here. I can see in the YouTube back end that it's very male dominated. And there is a kind of male behavior that I want to particularly highlight in this moment. It's something along the lines of like, look, like, let's just say, like Simon and I were getting into an MMA match. For

Starting point is 00:25:53 whatever reason, we've decided to take up fighting. We could get into the cage and beat the living shit out of each other, but then at the end still shake hands and move on or keep working and go and have a pint. And the same thing I think also applies here. Some horrendous shit has been said. you may, it may, it very likely may warrant at least maybe an apology, but I think it may be apologies where necessary, all of branches where possible, bringing as many people back into the fold and continuing the mission. Like, shake hands, guys, we can keep working here. We have a lot to do, right? Yeah. And also, Bitcoin's so unique, right? We still need you to do what you were doing before, which is exposed, you know, we still need to expose all the shit, all the enemies.

Starting point is 00:26:31 We still need to be suspicious. We still need to not trust and, you know, we need, we need, we need to verify and there are very serious infiltration attempts. And that is real. I mean, I don't know, you know, I don't have the answers for you because, yes, we can shake hands, but at the same time, we need to question and be suspicious. It's 100% unique. It's not how humans operate. We, you know, we don't function this way.

Starting point is 00:27:00 You know, it's not a normal thing. So I understand why emotions are crazy. Because there's nothing normal about this. You can't have a marriage and then continually, you know, continually be suspicious all the time about whether they're cheating on you. But if they are cheating on you, you need to be aware, right? Yep. So, you know, this is the challenge here.

Starting point is 00:27:24 It's not easy. It really isn't easy, but it's worth it. Agreed. It's money for enemies. You're going to have enemies within the Bitcoin camp. It's going to happen no matter what. Like, no matter what, that's absolutely going to happen. One company I like pointing people to when they ask about Bitcoin mining is abundant mines.

Starting point is 00:27:40 They were founded by Bo and Christine Turner after losing over half a million dollars to broken promises in the mining industry. And they built their hosting model to remove the usual headaches. With abundant mines, you own your machines and keep 100% of the Bitcoin you mine. There's no revenue share, no hidden skims. Pricing is simple. One flat monthly fee covers power, parts, labor, and repairs. They also guarantee uptime. The machine goes down, their hash rate redirect system routes hash power from their fleet,

Starting point is 00:28:11 so earnings don't just stop. And every machine is insured at full replacement value. Everything is hosted in the U.S., powered by hydro, and mining equipment may qualify for 100% your one bonus depreciation. Learn more at abundant mines.com slash sessions. I want to take, I really appreciate your sentiment there and your thoughts there. And I hope that message kind of comes across to people as well. And I hope that at least some people can maybe at least have a think about it. Stop and think about that sort of perspective.

Starting point is 00:28:42 We also had, again, like I mentioned at the top, we had the cold card entropy bug resulting in, like, I think we're well over 2,000 coins now. Last I looked, we cleared over $100 million in value stolen. Absolutely tragic. And my heart goes out to everybody that's impacted by that. Then we had BTC pay. We had bolts being cyber attacked. We had Zeus coming down. And we've got the red team out.

Starting point is 00:29:03 they're doing their best to audit the code. And they're finding a lot of critical vulnerabilities as well, too. We wouldn't necessarily have evidence this, Simon, but I'm curious if you feel, are these two things related in your mind? Is it a coincidence that they're happening about the same time? Do you have any insight or what your even initial kind of thoughts are with regards to the cold card low entropy wallets? A tragic, terrible mistake, something malicious. Where are we kind of at all of this has been going on. And it's only been like a week. It's been like the most insane week.

Starting point is 00:29:37 Yeah. Yeah. Okay. Yeah. Again, the human game. If you lost your savings, it's tragic. I know people that have lost everything through centralized hacks. I know people that have lost everything through someone stealing their key.

Starting point is 00:29:58 This was a new one. And it really hit me emotionally. Because it's the hardware wallet, right? And it was the hard way of wallet. It was the people that tried to do the right thing too, right? It was like the people that were trying and they were, for all intending purposes, they were doing the right thing. Yeah.

Starting point is 00:30:17 By the, you know, and I can't, look, I can't prove to you what's coordinated and what's an attack. But I tell you where I'm at right now, I assume this attack and coordinated by default. It's not innocent until proven guilty. This is guilty until proven innocent. in this game, right? Because that's the game we're in here. Okay. So it was really, it was really brutal because the cold cards wallet users were a very specific type of user. You know, they were the people that were the Bitcoin purists. They were the people that took security seriously. Or they followed someone's advice and, you know, they were trying to do it, right?

Starting point is 00:31:01 but they just didn't understand enough about the wallet. So it was a very specific type of person. So if you lost your money, nothing I say is going to help you here in terms of making it feel better. However, it was a small hack relative to the centralized hacks. It was targeted. And here's the thing.

Starting point is 00:31:26 I've been involved in, you know, as a shareholder in many of the exchanges, I saw, you know, the BitFinex hack that was like 120,000 Bitcoin. It's really, really hard to spend stolen Bitcoin. You know, it requires government level, intelligence level power in order to spend stolen Bitcoin at scale. And so spending that Bitcoin requires a malicious state level, intelligence level actor in order to get away with it. whether it's a hacker that's connected to some kind of protection racket or whatever. But here's the thing.

Starting point is 00:32:07 Forget about it. It's going to be really hard to spend. But when, you know, like with the BitFinex coins, seven, eight, ten years later, we're going to know what this was. And they're going to, you know, like with the BitFinex hacker, they put someone and they pretend they're the hacker. And then there's a settlement and then the coins get returned. And it's normally around a compromise operation or something, right?

Starting point is 00:32:37 You know, this is how the Fed recruits. They steal, then they return, they make it look like your life is going to be over, and then they turn you into an asset. This is the oldest strategy in the book. So look, forget about it. It's gone. It may come back. And in 10 years, we're going to know what actually happened here.

Starting point is 00:32:57 and I'm pretty sure about that. For now, we can only speculate and we have to assume the worst. So what is it that this has done? Right. So it's gone, start again. What have you got to learn? So you've got to learn that don't put all your eggs in one basket. You're probably going to have to do some sovereign sessions, learn some multi-sig,

Starting point is 00:33:21 diversify your vendors, learn what entropy is, roll the dice. Okay, you didn't know to ask any. of those questions a few weeks ago. Right? Some people did if you were watching, like, you know, if you were, if you were deep into some of these things on BTC sessions or watching some Andreas videos from back in the day, you know, or whatever. Look, 99% didn't know what the word entropy was and they now do.

Starting point is 00:33:47 Okay? Yeah. That's reality. And yeah, you could sit there and be all smug and say, I knew I was protected and all that type of stuff. That's not useful. But was useful. I saw the community come together in the middle of a civil war,

Starting point is 00:34:02 forget about the civil war and help each other. Like the early days of Bitcoin when we were a small community. And that was touching. Like, you know, there were people on complete opposite sides of the Civil War that were on spaces all night trying to help someone move their coins before they got stolen. And I know you guys were up all night and it was a crazy time for you all. So just recognize that, right?

Starting point is 00:34:30 Sometimes the worst things are the best things that can happen to us. Now, what could have happened? Well, imagine if you didn't got hacked now, and Bitcoin's worth $10 million, and you got hacked then, and you didn't have time to rebuild while the price is here. So don't let this stop you from starting over. You have to start over. That's really important. You know, the worst thing, if I live...

Starting point is 00:34:57 look back and maybe you have the same experience, anyone that's distance is, when I look back at some of the worst things that ever happened to me, in 10 years, I look back and said, that was probably a defining moment in my life every time. And I'm sure you all have a similar experiences. This will be a defining way. I can think of two. I can think of two. That was exactly how it played out. Exactly. And so you have to use this as a defining moment in your life. and you need to recognize, okay, that's tragic. I need to mourn it. There's a mourning process.

Starting point is 00:35:31 But was Bitcoin broken? No. There was a, you needed to learn entropy. And we needed to learn about wallets and we needed AI to attack it. And the community, after the cold, and I know it's no compensation, but after the cold card hack, the community is a thousand times wiser than they were in general. I think most people know how they could have prevented this happening with the information they have today. So you need to use the information you have today and you need to start over. That's just it.

Starting point is 00:36:05 And I don't know what else to say. But, you know, is this, I think we can assume there's enough evidence at this stage to say this bog was known in 21. There's enough evidence to say that there's elements of suspicion around inside jobs. and I think there's we will find out why, how but here's one thing I can tell you in general. Hacking coins to personally enrich yourself

Starting point is 00:36:34 is incredibly difficult with Bitcoin. It's one of the hardest things. To hack an exchange and then spend those coins. So in general, when it happens, it's because the point is to destroy trust in something or to compromise an exchange. or to turn an asset or something. So that's the more likely thing that happened here.

Starting point is 00:36:57 So we need to figure that out. And we need to recognize, okay, if you ended up, and I understand your first priority is to protect your coin. So if you ended up sticking them in Coinbase, that's the right thing to do. Forget about everything else, protect your money. But now who benefits from that? These are the questions that will be asked, will be answered,

Starting point is 00:37:20 and eventually it will be a long time from. now when we probably have a really good idea over what happened here. But for now, assume it's an attack, and what is the attack? What is the greater game? There are centralising forces that don't want you to self-custody.

Starting point is 00:37:38 And self-custody is a skill that comes with risk. And there are certain setups that are significantly less risky, but you have to think about it. around, you know, it's not a user experience.

Starting point is 00:37:56 I'm not signing up to Facebook here. I'm building personal, you know, sovereignty. It's like you don't, you know, if your house is your castle, how long does it take to determine where you're going to live, buy your house, get the right structure, optimize it for tax, all that. That's like, you know, a big process, building a business. So securing your key is the only way that you're going to protect yourself in a world dominated by centralizing forces. Centralizing AI, stable coins, custody, social media, everything is driving us towards centralization.

Starting point is 00:38:41 And you've got two choices, right? You're either going to submit to centralization and you're going to say, all right, you do it. and therefore, I will own nothing and be happy and you'll own it for me. Or you're going to start again, you're going to diversify, you're going to be smart, you're going to think about what's right, you're going to say, well, but you're going to rebuild and you're going to rebuild stronger. And, you know, this is what BTC sessions was created for. I remember the earliest videos of, you know, people going through hardware wallets and learning how to

Starting point is 00:39:18 do these things. And so that's what you have to take away from this. You have to say exiting the battle is not an option. So therefore, what are my options? Maybe it's a multi-sig with a third-party provider. Maybe it's a more secure. Maybe it's creating my own entropy. But ask the questions and recover because there's no alternative.

Starting point is 00:39:44 The world we are entering into is those that own their keys, and those that give their keys to someone else. I don't think there's much in between. No, I agree. There's a few things I want to touch on. One, this idea that, like, I agree. I'm working from the default that everything is an attack. Like, just, I'm assuming that Bitcoin,

Starting point is 00:40:06 it was one of the things I learned from you that that was actually incredibly valuable as a heuristic. We were talking with Duneberg about, like, mental models, is my mental model is Bitcoin is constantly under attack from many different vectors, not just one, right? And the fact that it was, like, some of the, it was basically the best among us over the last week for a number of different reasons, whether it be ideological or philosophical and kind of hardened or whether it be in terms

Starting point is 00:40:26 of custody and learning, like the best among us got made an example of, which just screams attacked me, at least assume it and move forward. One of the big lessons, even shout out to that prior conversation with Duneberg, is one of the things that I'm definitely taking away from this whole endeavor is that unlike gold, this would be like a major difference between, say, like gold and Bitcoin is unlike gold, your learning and your ongoing kind of education within the Bitcoin space has to be consistent. You can't set it and forget it. You need to be practicing with the tools rehearsing. You need to be familiar with what you have. You need to be keeping up on the latest updates or observations or new best practices or even just new security options that might

Starting point is 00:41:10 be out there. I immediately think of products like Frost Snap and they're multi-six setup or more or less. that you cannot, and I think this is, if I can try and sum it up, and I want your thoughts on this, is that I do not think you can be passive in Bitcoin. I don't think you can just be along for the ride. I think it requires that you are an active participant, especially while we're going through this change into this transition to this new world. I agree. And it's not a judgment call.

Starting point is 00:41:42 I'm not saying that sovereignty is right for everybody. There are moments in your life. when you probably don't value sovereignty, but you just think about this. Owning your key is sovereignty, and maybe sovereignty is not for everybody, and that's not a judgment, because you are going to have to do a lot of proof of work.

Starting point is 00:42:04 You're going to have to think about inheritance. You're going to have to think about security. You're going to have to think about wrench attacks. You're going to have to think. But imagine if you were doing that with gold, right? You'd be thinking, where do I bury it? What safe do I need? How do I diversify?

Starting point is 00:42:16 what happens if someone shows up in my house and tries to steal it? Where do I, you know, all of those things. It's the same thing. Or you just say, screw it, I'll leave it with the bank. And so if that is your option, there are more options here. There's a multi-sig third-party vendor set up. There is custody where there is legal protections on the custody. There is Bitcoin Treasury economy.

Starting point is 00:42:42 There are different things. And I'm not going to judge you, But if you want to be sovereign, then this is what you have to do. I can't sugarcoat you. And there is a cost to being sovereign. It's proof of world. And that's what everyone needs to appreciate. Key storage is your freedom in a world where everything's going to digital.

Starting point is 00:43:15 and everything's going towards you giving your key to someone else. And there's no alternative. And so that's that is that is the battle. And again, it's not all or nothing as well. You can diversify. Diversification is a good thing. You know, ask yourself if this setup goes, am I still okay? And that's probably one of the most important things you can take from here.

Starting point is 00:43:41 But have no doubt there will. there was a civil war which is basically let's call it attack on nodes or attack from nodes depending on which side you sit on that there was a self-custody hack which is an attack on your trust and how you store your key self-custody

Starting point is 00:44:06 so now you've got nodes now you've got keys there was an attack on some kind of lighten service so an attack on layer two. There was attack on a decentralized payment gateway. You know, so those that actually don't want to use BitPay or other for their merchant processing. I find it hard to believe that you get an attack on nodes, an attack on self-custody, an attack on hardware wallet,

Starting point is 00:44:34 an attack on decentralized payment merchant processes, and attack on Lightning Network. without us having a message. What is the message? The message is, we don't want you to self-custody. And your reaction is, I'm either going to submit or I'm going to continue to fight.

Starting point is 00:44:58 Or I'm going to do a little bit of both. Agreed. Agreed. Well, Simon, I think that's a perfect place to wrap that. I just want to make sure we cover that, all those going on this week as well, too. Is there anything else that you want to leave the audience with?

Starting point is 00:45:12 I think we covered a lot of it, but just want to make sure I get it in there if there's anything else that we missed. Yeah, I mean, I just encourage people to be skeptical, don't trust, verify, but also, as you're skeptical of people, you know, they're either going to work with you covertly or overtly, right?

Starting point is 00:45:35 And so you might as well welcome people back in but continue to be suspicious. and I really don't have the answers to that. But what I would encourage everybody is to try and be the higher self. When you find that need to kick someone when they're down and not let them back in or something like that, you know, that's a personal decision. But it doesn't really matter anyway

Starting point is 00:46:01 because this is a decentralized border and a decentralized project. But don't allow yourself to become a worse person. and please don't find yourself dying on the hill with a shit coin that ends up destroying all your value in a completely centralised project that it has got zero chance

Starting point is 00:46:24 of ever becoming Bitcoin. If you haven't seen the conversation with Simon Dixon, Doonberg, click on the link to watch it right now or check out the latest live stream.

BTC Sessions - The Bitcoin Attacks are NOT About Money | Simon Dixon

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