On The Brink with Castle Island - Weekly Roundup 10/16/20 (Does China control Bitcoin?, Filecoin launches, Heath Tarbert praises Ethereum) (EP.138)

Episode Date: October 16, 2020

Matt and Nic cover deals and news of the week. In this episode:  NYDIG emerges from stealth and announces a Bitcoin balance sheet position More companies add Bitcoin to their balance sheet Filecoin launches at a $200b implied fully diluted valuation Is the Filecoin SAFT different from the other SAFTs? Why token projects are strongly incentivized to be untransparent about their tokens CFTC chair Heath Tarbert praises Ethereum The relationship between securities and commodities Ripple complains about securities regulation and claims China controls Bitcoin Grayscale Ether Trust becomes an SEC reporting entity Grayscale raises $1b in Q3 Breitling creates NFTs as an anti-counterfeiting measure Risks involved with brainwallets Coinbase plans to sponsor Bitcoin developers A new deadline in the Mt Gox saga Content mentioned in this episode:  Crypto VC panel on privacy from the Fidelity privacy conference Ripple, What's at Stake for the U.S. When It Comes to Digital Asset Regulation The Block's new data dashboard Bitmex Research, Call me Ishmael Ryan Castellucci talk at DevCon, Cracking Cryptocurrency Brainwallets

Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of Concentive Easing. You print a couple trillion dollars, and all of a sudden, people start to worry.

So out of this worry, we have something called a Bitcoin. Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And another busy week in the books. You had Kyle Simani on the podcast this week. Yeah, I thought people would get mad at us for having Kyle on. But to their credit, no one was upset.

I thought it was a pretty interesting episode. I mean, he talked about their EOS position and where they went wrong. there. Talked about a couple Web3 projects that are basically live that kind of work. So talked about his current view of Bitcoin and Ethereum. Had some surprisingly pessimistic views on Ethereum, honestly. How can you get mad about having Kyle on? Kyle is one of those people that is never afraid to have his thoughts in public. And that takes a certain amount of courage. Yeah. Yeah. Me and Kyle have bickered a little bit, but that's never stopped us bringing someone on the podcast before.

Kyle. Kyle was great on the podcast. He actually just went on Howard Linson's podcast. And I listened to that this morning. I thought that was really good too. So he's on the circuit. And then you appeared on the crypto asset venture capital panel hosted by Fidelity Digital Assets. That was a cool one. Yeah, this is their third conference. They've done now. Unfortunately, this was remote. The previous two years were good, mining and L2. This had been at Fidelity HQ and Boston, really high quality stuff. This one was also good. Unfortunately, it was remote. Post- the link in the show notes. All right. You want to do some deals? The first one this week is New York Digital Investment Group. This is Nidig. This is the subsidiary of Stone Ridge Asset Management, which is a really large asset manager down in New York. So they announced a couple things this week. One was, it was sort of an emergence from stealth, although if you're in the crypto asset market infrastructure space, you already know these guys for sure. So they're a custodian, they do trade execution and they also have an asset management business for crypto assets. So they announced that they raised $50 million from FinTech Collective, Bessemer, and Ribbitt. They also announced that they're

holding Bitcoin on the balance sheet. So add them to the list of companies that are holding Bitcoin on that balance sheet. Yeah, it's a rapidly growing list. I tweeted last week that it was like a denial of a service attack because it seems like there's just like one like every single week now, a new large company holding a significant Bitcoin position is pretty happening fast than I expected, honestly. That website, what is it, Bitcoin Treasuries.org, that's a, that popped up really quickly and that's a good place to monitor the publicly traded companies that have Bitcoin exposure. Yeah, and that's only the publicly traded ones.

I mean, there's a lot of private companies that hold Bitcoin. If you talk to enough, you'll find them. The next deal is, I never know how to pronounce this. Aave? A. It's like A.A.V. So anyway, Avae or Aave, as the case might be, which is effectively, I would say, I would describe it as a competitor to compound. It's kind of a D5 project lets you borrow and lend.

There is 25 million from blockchain capital, standard crypto, blockchain. dot com ventures and others. The next one is Dapper Labs, which is the company behind CryptoKitties. So they're doing non-fungible tokens. They have a partnership with the NBA. They raised $18 million in a token sale. And then Boardroom, which is a project dedicated to making governance for token holders easier facilitating governance processes.

There is 2.2 million from standard crypto, variant coin fund, framework. and slow ventures. And the last one of the week was persistence, which is, that's a great name. How do you get that name? This is a trade finance company based in India. They raised $3.7 million in a token sale from Arrington, XRP and Alameda Research.

Persistence. All right. So what happened this week? All right. Well, a lot happened this week. So phyloin launched. So phyloin, which is, you know, if you've been living under a rock, This is the decentralized cloud storage platform.

They raised $205 million back in, I guess it was 2017. They launched their mainnet today. And I don't know, the price appears to be going through the roof on that thing. I mean, understanding of the century, Filecoin currently accounts for half of the aggregate crypto market cap if you use their fully diluted valuation, which is probably not going to last, you know, something like only 0.75 bips of total supply.

actually exists. But last I checked, Filecoin was trading and implied $200 billion fully diluted valuation, which is one of the most preposterous things I've ever seen in the history of this industry, which is a pretty crazy industry in the first place.

It's like, it kind of reminds me of when Zcash launched and they had the constrained supply and there was, you know, the price was going crazy there. So we'll see what this looks like at equilibrium. Yeah, but undoubtedly it looks like it's going to go right into that cohort of large caps. It's enormously popular in China for some reason. Don't know why, but it is. Is that because of the censorship-resistant nature of the storage?

I don't believe it's related to anything fundamental like that. I think it's just popular with Chinese investors. And I've seen some of the clips of conferences out there dedicated to file a coin, some pretty wild stuff. Kind of reminds me of the hash graph. launch, you know, that kind of level of glamour. I've seen a lot of crypto lawyers going back and forth on Twitter about how the file coin saft is different from the telegram saft and how all of them are different from like the hashgraph saft. And I still don't really have a good handle on this.

I mean, I would love for, we do a lawyer every episode, it feels like. But, you know, call to action here. Someone needs to write a medium post that just compares the safs of these various projects. and the ones that got shut down and the ones that didn't, and then just lay out what's different. Yeah, maybe we should get Trevinsky back on, actually. He seemed like he had some pretty strong feelings on that. I will say comparing them to some of the other tokens,

especially the tokens of your, their transparency around things like supply has been better than the average. But the problem I really have, the fundamental problem I have with all of this, is that because every project is strongly, incentivized to be as least security like as possible. They have a strong incentive to be incredibly untransparent with regards to the nature of the token and economic drivers and what will cause it to accrue value because the view is in the industry, and this is totally something that

every token product is aware of, the more they speak about that, the more resources they create about that saying, hey, this is why the token is going to be worth X and these are the unit economics of the system. The more they say about that, the more they think that they might be assumed or understood to be a security. So their incentive is actually to be completely quiet about it. That's why we never get disclosures of any sort. There's no disclosure registry, nothing like that, despite some attempts. Token issuers just don't get behind that. And it's a huge loss for the whole industry. There's no equivalent of a crypto S1 for a token launch, which would be amazingly useful. And so that's my big, big issue with the crypto industry. I mean, I would say it's really also

an issue with the securities regulators that haven't given token issuer as a construct or framework to produce those disclosures in. Yeah. So that last part, if you didn't say it, I was about to say it. I think it also has to deal with the regulator, as you point out. And Hester Pierce has long been pushing for this safe harbor, and I don't know if you heard her on Larishin this week, but it sounds like the safe harbor is sort of back to the drawing board or maybe on pause or something. It doesn't sound like that's necessarily something that's moving forward,

and she sounds like maybe the only one of the commissioners that is on board with that, and so it has some convincing to do. So absent having something like that in place or having some sort of a clarity on just how these things can actually launch, I don't think you're going to see that level of transparency. There's really no incentive for an entrepreneur to come out and tell you exactly the value creation mechanics if they're just worried that they're going to run into securities law issues. But it's preposterous because that's what securities laws pertain to in, you know,

regular equity markets. What's the point of, you know, that's really what securities laws cover. That's the obligation. You have to be transparent. You have to disclose material information. you have to describe the risk factors. So a lot of these things are, I call them pseudo equity. You know, they are equity-like.

They might give you some control rights, maybe even some implied cash flows. Clearly investors deserve good, true information on that. And it's not like there's no information. It's just that you get this extremely bifurcated market where you have people that are proximate to the teams, they get the information firsthand. and everybody else is in the dark and they're left doing this guessing game where they're trying to figure out, what's the supply, what's the token economics, you know, how does it work?

So it's much worse for everyone to have this current regime because you just end up, you know, creating a situation where certain people have privileged access to information, everybody else is left in the cold. Yeah, I think it was you and maybe a few other people in the industry have started to use this analogy of Uber. So it would be like as if Uber is about to hand out equity and the way that they're about to hand out that equity is in reward and in proportion to the amount of rides that you've taken. But it's not really said. And so what you end up having is just a lot of people going out and taking arbitrary rides, just 24-7, just in an Uber, in the hope of getting more equity.

And that's some of the dynamics that we're seeing from some of these defy protocols. We have people just piling in and using these things because they believe that there's going to be some sort of anirdrop after the fact and they're going to get rewarded for it. So on that same topic, we had some pretty interesting language from our beloved CFTC Chairman Heath Tarbert about Ethereum, which kind of ruffled the feathers of some Bitcoiners a little bit. So he praised Ethereum and he said he was very impressed by it. Although, actually, Ethereum, this isn't the first time he's talked about Ethereum. I remember being in D.C. at the Fintech Summit 2019, he said, we'd the CFTC consider Ethereum to be effectively commodity. And that was when they encouraged the private sector to produce derivatives.

So Ethereum and Bitcoin are the only two crypto assets, which are kind of explicitly considered commodities and have those regulated derivatives markets in the U.S. Yes, I saw his comments. And I think he came across as someone who was very educated on the tech. technology and was speaking with a real firm grasp of not only the financial services industry, obviously, but some of the things that are happening in the crypto asset industry, particularly around things like where price discovery is happening, the relationship between the derivatives market and the spot market. As you point out, the Ethereum piece got some of the coverage. I think that was because he was talking about defy and generally had a positive view, I would say. A couple interesting

things to me, one was just around some of the non-compliant derivatives exchanges. So he was asked if there were other non-compliant exchanges a la Bitmex. And he sort of had this non-answer. He said maybe, but it's pretty clear from, yeah, if you read between the lines there, we might not be through with some CFTC enforcement actions on exchanges. And the other thing to remember is that the CFTC is not the only regulator that considers crypto exchanges to be within their ages. So they were the ones alongside the DOJ that went after Bitmax. If you look at Defi EtherDalta settled with the SEC because they had effectively what the SEC considered to be unregistered

securities circulating on their platform. So the CFTC is not the only regulator of consequence here. No, but certainly if you're going to do anything in the derivative space, whether that's a wheat derivative, a corn derivative or a Bitcoin, derivative that's going to be regulated by the CFTC. And if you're doing that serving U.S. customers and you're not complying and you don't have a CFTC license, then you're probably going to have some problems. Yeah, the other thing I thought that was interesting that he'd said was to reinforce this idea that the line between commodity and security is fluid. And actually,

as far as I understand it, they're not necessarily mutually exclusive. Something could be considered both a security and a commodity. So you have kind of overlapping categories, kind of like how all toads are frogs, but not all frogs are toads. So is everything a commodity? Almost everything is commodity, except for onions and box office tickets. We'll get into that in a future episode. Are you a commodity?

I don't think it's polite to talk about humans as commodities in this century, at least. Anyway, he did imply that the line between securities and commodities was fuzzy and something could actually stop being a security and then go back to being a security if more centralized control was asserted. And that was something he was interrogated about, whether if switch to staking would make Ethereum look more like a kind of capital markets asset with kind of shareholder or token holder governance. Not that Ethereum plans to have explicit governance, but it starts to look a little bit more like shareholder governance, where you have that proportional token control. So I didn't consider this to be unambiguously positive necessarily, but definitely pretty progressive from one of the top financial regulators. Yeah, the other interesting thread there at that conference, and part of it was in this address, as well was just around central bank issued digital currencies. And just the awareness of China's efforts here, I think it's really picking up on the U.S. side.

And it's being seen as a geopolitical issue, which it should, you know, the kind of the ability for the U.S. to exert just dominance of the dollar really being threatened by what China's doing. So people are talking about it. So on that topic, you had to bring it up. Ripple really triggered me this week with an article that they wrote and actually promoted on Twitter. So they paid to get this article in front of my eyeballs, which I think they're going to live to regret now. Because I've since read the article and I'm pretty hot about it.

Okay. So tee this up. What did they write? So it looks pretty benign on its face. The title is what's at stake for the U.S. when it comes to digital asset regulation? It was written in August. Was it just promoted on Twitter? Yeah, they're just firing all the bullets they have now. So they promoted it today for some reason. And I saw it. And basically the whole point is that, first of all, they're grumbling about securities

regulations. They're effectively complaining that Ripple isn't in that elite club of assets, which have been described by the CFTC as commodities, which is just a two asset club right now within crypto, as Ethereum and Bitcoin. They seem pretty upset about that. So I think they would like to join that club. We'll see. The other thing is they characterize the kind of Bitcoin versus ripple debate, which isn't really a debate that exists, but I guess they're having that debate. They characterize it as part of the U.S. China Cold War suggesting or implying really

the Bitcoin is kind of controlled by China, and it's, in fact, a tool of kind of Chinese imperialism, and the U.S. response to that should be to embrace American assets like Ripple, you know, homegrown coins, which, as we all know, XRP was discovered in San Francisco underneath the soil in the year of our Lord 2012, blue gold, they called it. This crazy discovery. Yeah, bubbled up. A farmer was plowing his field, and he hit a rock, and then this blue gold just started gushing up.

It's crazy. Little blue fidget spinners. So they, I'm going to quote some of this because it's crazy. The Chinese government subsidizes vast amounts of energy needed to fuel Bitcoin and ether miners. at least 65% of Bitcoin mining is concentrated in China. It's reported that ether mining is also controlled by China. China can effectively block or reverse transactions, end quote.

So this kind of offended me a little bit because it just, while it's true, we factually know that lots of Bitcoin miners are based in China and 65% seems like a pretty good estimate of hash rate. This in no way can, you know, implies. that China in any way actually controls Bitcoin. Miners don't control Bitcoin. We know this. We know that the community can override the desires of miners. We've got historical precedent for this. This isn't just a supposition. And second of all, I think it's completely illegitimate to claim that the Chinese government subsidizes Bitcoin mining. We actually know that there are countries which do

subsidize Bitcoin mining. I believe the Georgian government actually subsidizes bit fewer to a certain extent. But Bitcoin mining is concentrated in China because the Chinese government overbuilt hydro capacity in places like Sichuan. And there was just lots of spare capacity on their grid because that's kind of what socialism does. It leads to like weird allocations of capital. And some smart entrepreneurs took advantage of this. But as far as we know, And all the evidence we have speaks to the fact that this is just private sector actors, which took advantage of cheap electricity. In fact, the Chinese government has gone back and forth on Bitcoin mining, characterizing it at times like a black market activity, like something they're not really happy with. They're not fond of.

So this doesn't look like a subsidy at all to me. It just looks like mining is concentrated there because of a consequence of the fact that they overbuilt hydro. that's not a subsidy, that's just a poor allocative outcome, and then some smart entrepreneurs taking advantage of that. So, anyway, this really triggered me. I mean, you can be skeptical of China's increased control over the international system and what it might look like if the world ends up being based on a DCEP standard, and Ripple kind of rightly points out that that would be a world that wouldn't be very enjoyable

for people that believe in freedom and so on, and that we shouldn't really normalize this notion of social credit, you know, on the blockchain or anything like that. You can be skeptical and nervous about all that, but that doesn't mean you have to embrace what looks like an unregistered security, even if it was issued in the U.S. That doesn't necessarily grant it any additional credibility. You're getting it.

You're all worked up about Ripple. There's nothing that Ripple could really say or do at this point that would get me this worked up. You got to, don't let them get to you, man. I mean, this is just preposterous, though. And we know that they lobby DC pretty heavily. I've heard, I've heard, you know, top policymakers repeat these exact talking points. So it is effective.

And I think we still have to push back on it. You know, really regardless of your opinion on Ripple, it's odd to see them maligning Bitcoin because they're part of the industry. And I don't think they understand that it's pretty. self-defeating to characterize the industry as captured by foreign hostile interests, which it is not. It sort of has the vibe of someone who's been put into a corner and is really just kind of flailing and trying to land a few punches, like a boxer that's really on its last legs. There's got to be some stuff going on behind the scenes because, you know, Chris Larson's

talking about moving the company elsewhere. We haven't seen any sort of SEC clarity on Ripple. It just feels a little bit desperate. Yeah, and if you look at Heath Tarbrid's comments today on Ethereum, he specifically says he thought Ethereum was decentralized because there isn't a single company standing behind the protocol. And that's true. I mean, there's a lot of critiques of Ethereum you could have,

but there's no single company that kind of dictates Ethereum development. On the other hand, Ripple, there is effectively one company that minted the units and distributed them. They've sold over $1.2 billion worth of, those units just on the open market to all comers. There's one company that effectively manages his development. I mean, it's hard to read that Heath Tarbert statement, say, oh, it looks like Ripple's going to get the regulatory blessing here. So I agree. I mean, this does wreak a little bit of desperation. All right. Well, now it was talking Ripple. You want to move on to some more news?

Look, if they don't want me to excoriate them, they shouldn't promote tweets and get them on my timeline, okay? Just don't, you know, exclude me from your next campaign, okay? I didn't have it in my timeline, so it's quite possible that you were the only recipient of that. Do you think they micro-targeted you? The whole thing was just designed to fire me up. All right, let's move on to some more, maybe some positive news, actually. So, Grayscale, their Ethereum Investment Trust, they became a registered reporting company with the SEC. So this is actually a fairly big deal. The Bitcoin Investment Trust is also a registered reporting company. And the reason it's a big deal is because that makes that a product that more

institutional allocators can actually participate in. So there are definitely entire categories of institutional investors that would not be comfortable investing in a trust structure that was not an SEC reporting entity. So not kind of going through that standard with the regulator. And so this just makes it a little bit easier. And also, I believe it makes the maturity window six months as opposed to a year. And so, you know, there could potentially be some implications in terms of the premium that that product trades at relative to NAV, although we'll see. Yeah, that's my, that would be my takeaway is that shortening the maturity period for the new placements in the trust would structurally reduce the premium. By the way, speaking of the premium, there's a new

set of dashboards where you can follow it. We're not paid to say that. but I just thought it was great. So the block has created a data dashboard, and it includes that data on the Ethereum and Bitcoin Trust premium. Oh, that's cool. Yeah, it's, I mean, it's really good. It's got a bunch of on-chain data, market data, derivatives data. It's really well done, actually.

A lot of coin metrics data in there, too. The last thing on that one, so Grayscale disclosed that they had raised a billion dollars, more than a billion dollars actually in Q3. So goodness gracious. What an asset gathering machine over there. Yeah, it's mind-boggling, honestly. I mean, and some people say, well, a lot of that's in-kind contributions.

I think we were actually some of the first ones to point it out on this exact podcast that if you looked at it, you looked at the disclosure, as a lot of them are in-kind contributions, which implies that it's hedge funds that are playing the premium game, but what's often missed is that the reason the premium exists is because you have that bid from retail on brokers, on brokerages where these things trade. And so the fact that they can keep creating so many units of the trust and that there still is a structural premium implies that there is organic demand for exposure to these things from retail investors. So here is something kind of interesting.

Brightling, which is the watchmaker, is issuing NFTs to go alongside their watches so that when you buy the watch, you have this authenticity guarantee. And if you want to resell it, I guess, you can prove that it's not a counterfeit and that you truly own it. which is honestly a really clear use case for NFTs or just really for public blockchains generally is providing this digital counterpart to analog device. And it makes a lot of sense for luxury products because you have enormous counterfeiting problems. So this is something a lot of people have expected to see for a long time, but it's pretty cool to see it instrumental as in market. And honestly, I think Brightling watches are pretty handsome.

You call me basic, but... I'm not a big watch guy, but those are good-looking watches. You'd see how you'd want to know that it's authentic and not some rip-off. You know, it's hard for me to imagine that what Brightling's doing here is not something that's incredibly pervasive in the next five years for all luxury goods. So just to be able to have that authenticity. Another company in this space that's doing some pretty revolutionary work is dust-identism. which disclosure were investors,

but the idea of just tagging highly valuable goods and making sure that you can timestamp and notarize those records, essentially connecting things that are happening in the real world to digital records so they can be authenticated and ultimately trusted. Yeah, I don't think it's much of a stretch to say that virtually all luxury goods are going to have some measure of authentication most likely using public blockchains in five years' time. I'm going to make a bold prediction.

It's going to be that and every photo or video that you want to be authenticated via a public blockchain will have the mechanism to be authenticated via a public blockchain in the next five years. And so I would bet that your smartphone, police dashboard cameras, cameras that are at intersections, they will all have some connectivity to a public blockchain timestamp. So effectively proving that a photo is created at a specific time. and with specific credentials by either an individual or a device, which has a key. Right. Right. Yeah. Locating it in time and place such that no individual like police department or individual could roll back the time on a database. So really just giving a level of trust to a process that otherwise you'd have to trust a third party. Yeah, I think that's a pretty reasonable thing to predict. So request for startups. Exactly.

All right. So here's a couple other things. So one of the most fascinating pieces I read this week was actually from Bitmex research. So it's good to know that they're still doing research over there. But they wrote this awesome blog about Brain Wallets. So for those of you who are not familiar with brain wallets, this is when you essentially encode your private key with a phrase. So you could come up with any arbitrary phrase and you could use software to unlock that. So call me Ishmael would be a common phrase. And You know, you jump in here, but what it looks like they did is they put some actual Bitcoin to work under some common phrases, and they tried to see if anyone would brute force that phrase. So if anyone would essentially be running bots to essentially just be guessing past phrases against addresses, against public keys. And it worked. And so people were, people were brute forcing these common literary phrases. So if you're going to do a brain wallet, I guess the lesson learned here is don't pick a very. common set of words. Yeah. I mean, honestly, probably you shouldn't do a brain wallet period. So read the article. I mean, there's a talk. I think it's from 2016 demonstrating that these bots

existed. They're constantly scouring Bitcoin. They're comparing all new addresses on Bitcoin against an enormous database of, you know, effectively private keys generated from literature and song lyrics and quotes and so on. So there are active bots that are scouring the blockchain for this. And there have been lots and lots of funds lost in these brain wallets. There's a researcher that said he returned something like 250 Bitcoin from someone that had used. I think it was like how much wood could a wood chuck chuck or something as the basis of their private key? And he tried to figure out how to return or notify this individual that they'd used a really low entropy password, basically, or low entropy private key. And so he stole a little bit of Bitcoin from the

address and gave it back to kind of demonstrate that it was vulnerable. And then eventually he emailed a pool operator, because he saw that the Bitcoin's had been mined from a specific pool. He emailed a pool operator and asked him to tell the guy. And so then he got this guy's email and asked him, hey, did you use a brain wallet to generate your keys here for your coins? And he told him as insecure. And so those coins were saved. But that was before the current epic where you have really sophisticated entities that are doing this. And I think people just have a bad intuitions about entropy. And you might think that's a memorable phrase from literature or a poem that you like, nobody else would have thought to use that.

But the truth is, it's very computationally cheap to look at a database of all the words that have ever been written down and create private keys against those and then constantly check to see if there's Bitcoins held in those keys. So just use dice to produce your randomness. Use dice in a cold card. You know, use entropy that you can trust. Well, so on that, not to be alarmist, but I mean, what about random number generating? and kind of proprietary random number generators.

Can you imagine how disastrous that would be if some of these entropies were poor? Yeah, I think that's something that hardware wallet developer is probably a pretty good handle on. So my guess is that's completely buttoned up and so on. But it is weird because there's no way to audit the randomness that your wallet is producing, really,

unless you're doing it yourself. Yeah, I don't think that, like, for instance, on Allegra, I'm not sure that you can actually no full. I mean, they're all certified, so I'm sure they're fine, but I don't think you actually have a full audit there on their randomness function. Given some amount of randomness, you can't know if it's good or bad randomness unless it's, you know, very obvious that it's a string of all zeros or something. So you really do have to trust that, you know, the hardware and the secure element are all working seamlessly and they're not backdoor and so on. So it is kind of a little,

that's why I think if you really want the best highest quality randomness, you want to use Las Vegas dice, and you want to probably use a cold card and produce your own private key, basically. Yeah, the other argument would be to just use different devices in a multi-sig. So, you know, some people on CASA use a cold card, a treasurer, and a wedger all in the same setup. Yeah. But brain wallets used to be pretty popular back in the day.

Really much less popular these days, I think. Well, the whole thing was like, hey, you can travel across a state border with just a pass phrase in your head. And I guess that's true, but you might have, you know, run into the dark forest and lose all your Bitcoin. Exactly. Randomness is a tricky thing. It's very difficult to reason about. Adding lots of different sources of randomness together doesn't necessarily make something more random. Can actually make it kind of more predictable. This just came out. So Coinbase has announced that they will be sponsoring two Bitcoin core developers with community grant funds. And they gave a shout out to Peter McCormack when he had Brian Armstrong.

on his podcast and encourage them to do this. So great to see. I mean, and also actually Michael Saylor said that he was going to do the same thing this week and sponsor a Bitcoin core developer from Micro Strategy. So this is great. Really impressive from Coinbase. Glad to see they're having a little bit of a rapprochement with the Bitcoin community. I think I can say that.

And I do remember listening to that podcast with Brian Armstrong. And Peter was pressing him pretty hard on the topic. and they turn around a couple months later and they actually he honors his promise so pretty cool did you listen to the Michael Sailor ones yet with Peter McCormick

they're just that guy is really knowledgeable about Bitcoin for someone that has not been in it for a long time I can't keep up with all the microsailer podcast because he's just like a content machine it's like his full-time job to do Bitcoin podcast now he's I think he's we're the only podcast he hasn't

done. That's okay. No hard feelings, Michael. I mean, also, it seems like, you know, no disrespect to the guy, but it's hard to go on 10 different Bitcoin podcasts and say unique stuff every time, right? So we're optimizing for originality here. Yeah, I listened to the Naval podcast with Tim Ferriss, and his saying was that the sequel is always, you know, worse than the original. Exactly. So we're going to do some, we're going to try and surface some new guests. You know, it's always our thing, try and get some guests that have never even done a podcast before. And then subsequently, they become really, you know, busy podcasters, Dan Medashevsky, one example. That's it. He's a good podcast. He does all kinds of podcasts now, but the first one was

with us, never forget. So last thing, the Mount Gok story rumbles on. And the coins were kind of, were one of the deadlines. I don't know if this was the deadline. for actually returning the coins to, you know, to the claimants. But there was a deadline for October 15th, and it has now been pushed back again to December 15th. So I think it's the submission deadline for the plan itself. So once that deadline is reached, then we'll know what the actual plan is. Anyway, there's a lot of coins at Gawks, something like 150,000 BTC. A lot of people are very nervous that they're going to be dumped on the

market, well, that has been deferred another two months. So there you go. Yeah, there is that sort of like the sort of Damocles, right? Those coins appear like they will be sold at some point. Well, there's a lot of people that have been waiting a very long time for those coins. Although some people have sold IOUs for those coins to Fortress and places like that. But then you must think that the hedge funds that bought the rights for those future coins are also going to want to complete the other leg of that trade and sell the coins when they collect them. Yeah, so that's some sell pressure in the market. But I guess, you know, probably be offset by a lot of people that are just now getting attuned to Bitcoin and just hearing about it for the first time and forming their opinion.

So at the end of the day, does it move the market? Who knows? Yeah, not to, you know, EMH, show the EMH here or anything. But my guess would be once the plan. plan of action becomes clear at that point, there would be a market impact because it would be priced in at the moment when the schedule is known. All right. So I think that's it for the week. We will be back and we will see you next week.