TFTC: A Bitcoin Podcast - Rabbit Hole Recap: Week of 2018.08.20

Episode Date: August 22, 2018

Join Marty and Matt Odell for their new weekly series, Rabbit Hole Recap, in which they break down the latest news pertaining to Bitcoin. In their inaugural episode, the two discuss Bitmain's IPO and balance sheet, Bitcoin Core's impending release of v0.17, Square's Cash App gaining steam vs. Venmo, Venezuela and the Petro, and Siacoin's decision to hard fork to become ASIC resistant to certain miners. Links discussed in the show: https://twitter.com/btcven/status/1028743266739662849 https://www.greenbergglusker.com/content/uploads/2018/08/Complaint-as-Filed-3063362-1.pdf https://medium.com/mit-media-lab-digital-currency-initiative/http-coryfields-com-cash-48a99b85aad4 https://coin.dance/volume/localbitcoins/VEF/BTC

what is it freaks welcome back to tales from the crypt uh or should i say rabbit hole recap with matt and marty before i introduce my new co-host for a new segment we're doing let me sort of introduce it uh the the concept behind this so one of the constant feedbacks that i get is that people love the conversations love the in-depth conversations with the guests that i have on they're looking for more uh more of like a news like program vibe of a recap of the most pertinent uh recent events in the space um so asking you shall receive i've uh been having a conversation on the side here with uh with a good friend of mind for the last couple of weeks trying to put this together and finally got him to agree to do

this. It wasn't that hard, actually. So he's already been on the podcast before. It's actually one of your favorite episodes. So welcome back to Matt O'Dell. How's it going, guys? Happy to be here. It definitely was not a hard sell. So basically what we're trying to do here is it's going to be a week in review. We're going to record every Tuesday, try and drop it as quick as possible um it'll be separate but but on the same feed as as your usual tales from the crypt yeah it's a little uh it's a different vibe it's not the interview vibe we're going to try not to get as drunk as i do uh when i interview people we are drinking though we are because that's an important aspect of your podcast as i've constantly reiterated well this is our podcast now man right

at least one of my favorite parts of your pod is the drinking it really opens people up uh so it's actually it's actually a a powerful tool for me i get smart people to get drunk and loosen up a bit and disclose some information yeah yeah the best is uh nick's most recent pod with you nick carter you you got him drunk and he he promised all of us that it was going to be his only podcast and he lied and then he went and he did three other podcasts i'm pretty sure i think he i think he's up to seven now seven wow i'm kidding look at that i don't know what the number is but it's no longer a scarce resource it's it's never been a scarce resource he lied he lied he pre-mined he scheduled a bunch of podcasts and told me it was only gonna be one that's why you

don't trust centralized actors no never they'll always inflate the supply but enough about that scoundrel um back onto the topics of the week so it's been a big week in crypto uh you have had a couple of fire threads uh i guess we'll start with bitmain's ipo and uh it seems like a lot of people were very bullish on it a few weeks ago uh not so much anymore a lot of drama uh around bitmain right now there's some rumors that their reported revenues from last quarter were precipitously lower than than previously thought a couple weeks ago um and they have a big bag of shit coins matt why don't we dive into that their uh their their shit coin exposure so we had uh samson mao earlier this week he leaked some docs and they're holding major major bags of uh bitcoin cash they

have one million bitcoin cash that they're just holding they have they can't sell it if they sell sell it they're gonna they're gonna tank the price um and they have a bunch of other a bunch of other altcoins as well what do they have there they have they have 930 000 litecoin so they have almost almost a million litecoin a million bitcoin cash 312 000 dash and a thousand ethereum 22 000 bitcoin and 22 000 bitcoin proper this is as of march i'm pretty sure so we're not really sure exactly what they have right now but uh i imagine they couldn't sell they couldn't sell that bitcoin cash and and the litecoin right um without without taking the price yeah charlie lee uh was the first to big sell on litecoin at the top i don't think you're gonna be able to replicate that at any

point i i it was a it was a good timing on his part but i'm not sure about the ethical uh situation there yeah especially going on cnbc and doing but he did he did call it he did call it pretty much perfectly i'm pretty sure like exactly perfectly but enough about charlie lee bitmain's financials um so they're they're approaching their ipo apparently there's rumors that tencent and well first we should how did they end up with so much bitcoin cash so some people are saying that they were actually selling their bitcoin because their bitcoin amount was going down and they were they were buying bitcoin cash with it to try and push up the price seems about right uh and then the other the other thing they had was uh they only sold their miners with bitcoin cash you can

only buy their a6 it didn't matter which which uh algorithm you wanted to mine on you're gonna buy a dash miner from them um it would you'd have to buy with bitcoin cash all of them had to be bought with bitcoin cash so they were making their customers basically do the prop of the price up for them but then they get stuck with these these big bags and the price broke a pretty strong technical level at 0.09 dealer last week yeah exactly 0.1 before that i would say 0.1 is right is the technical yeah that's what they were holding at 10 of a bitcoin um i mean that pretty much if you didn't if you didn't need if everything else didn't tell you that that that the fork is sealed the the price tells you you know the market the market has decided it's it's less

than 10 percent of a bitcoin you know anyone who says that bitcoin cash is bitcoin is is frankly full of shit well do you think they're ipoing to save their ass because their their balance sheet is so piss poor with their holdings well you i that's what i think yeah you think so too right i mean i don't know if i know enough to to say supposedly their their recent wafers have also you know yeah their most recent production run has been like wrought with failures um i'm guessing they probably overextended themselves a little bit all those all those shit coin bags they have are all miners that they sold um you know they have they have miners for those algorithms They have a Dash miner, they have a Litecoin miner.

And actually, I'm not that surprised that Ethereum is so low, is because... They don't have GPU miners. I think they've been hesitant to go to Athash, because Ethereum likes... The Ethereum community would be more likely to fork them out. I don't think they thought Monero would, but Monero ended up doing that.

Mm-hmm. which is another story altogether. But the fact is that they were probably a little bit too scared to touch FHash for that reason. I would agree. And the POS shift, right? Yeah. And the proof-of-stake shift.

That's a big risk. That'll never happen. I've actually made that prediction on Twitter last week. I predicted that Ethereum will never transition to proof-of-stake. I haven't bet anybody. It's just a prediction. I don't know. You could bet it on Augur.

i don't even feel like going through that effort but i will say uh just another a parting note on bitmain i think bitmain is uh is your classic icarus story like last year this time last year after the hard fork they they i think they jihan and crew really thought that miners ran the chain and and decided the rules and would have a lot of swaying power with via their hash power at the end of the day and after the bitcoin cash and hard fork and the user activated soft fork it sort of proved that nodes run the network and that thesis that jihan and bitmain had was proven wrong and since they've been trying to save face and maybe the last straw is an ipo this is just a theory this is what i think but i think jihan and crew flew a little

too close to the sun after a lot of hard work and a lot of positioning to get themselves in a profitable space and profitable place in the ecosystem. The weird thing is is that I do tend to agree with you.

Flew too close to the sun but the problem was they flew too close to the sun and they didn't make the move. You know, so like November, December they added Bitcoin Cash got ninja added to coinbase it went up to like 0.5 bitcoin um you know that was like it was like bullshit price but it did right at that point when there was all this confusion and like there was

like i'm i know people that panic sold some bitcoin for bitcoin cash because there was like for a two-hour period on like a random tuesday night because the coinbase right before christmas right like what the fuck they they ninja added it it went up to like 0.5 at that point if if bitmain had just switched all their hash power over to bitcoin cash you know they probably had like 50 50 around 50 of the hash rate if they just switched that over to bitcoin cash at that point coupled with bitcoin cash's difficulty algorithm they probably could have forced a bitcoin pow change um they didn't do that and and it was because they were afraid that they might be wrong right and they were too scared to kill the golden goose that is bitcoin i mean bitcoin is

everything to them it makes them the lion's share of their of their profits they don't want to they don't want to kill that and they didn't make that move so they flew too close to the sun but didn't you know take it out yeah i would i would agree and now this seems like a desperation move i would say the ipo is is heavy desperation yeah we'll see how it plays out as we get closer and closer to the ipo date a lot of drama uh apparently we already mentioned this but apparently their uh their revenues were not as high as previously expected and then on top of this you have a bifurcation of the bitcoin cash uh community uh they're about the hard fork or they're splitting up into two regimes jihan wu uh and uh dr craig wright doc don't don't put fake toshi fake toshi

um but i'm interested uh i don't think roger has has picked it chosen aside yet roger bear that'll be interesting to see how that plays out um so that's bit main news we're going to try and keep the show to an hour so we're going to get on to the next topic uh let's shift to bitcoin core what we all came here for i went to the bit devs meet up here in new york city last night incredible meetup hosted by uh or moderated by jay and and john newberry and john gave a great presentation on the upcoming uh upgrade of bitcoin core protocol uh zero point version 0.17.0 um before we dive into that i want to say last night's uh bit devs meetup in particular was very interesting because we had uh eric from the lib bitcoin team uh in town and he came and gave

a presentation on lib bitcoin uh which i thought was fascinating and it's crazy like the way uh that node software runs compared to bitcoin core um so definitely looking to lib bitcoin they do things differently but it's it's fascinating uh the different approaches these these different teams have to to uh creating nodes uh to to run within consensus um but uh core version 0.17 so john gave an incredible uh presentation on uh what's being rolled out uh in in uh version 0.17 point zero of the bitcoin core uh software project um most interesting part of the presentation was uh the stats of how many new uh contributors there are uh to the to the project in general there's 60 since the last upgrade which was 16 point something uh 67 new people have contributed

to the Bitcoin Core Repository, which is an incredible stat. Like to have that many new people a decade into this free and open source software project, becoming interested in it and interested enough to develop the skills to actually get some commits pushed through. It's a good fundamental indicator. Absolutely. And another fun fact, only 13% of the commits

in this version of core were committed by block stream employees so the block stream uh conspiracy that narrative can we put that to rest i would i would like to but i think it's funny to uh i think we can turn this like into like a maximalist meme where we turn on everybody else it's like oh these uh this 13 of this project is trying to take over the world the block stream uh what's their investor that everyone uses uh axa axa yeah blockstream axa conspiracy bilderberg bilderberg's in there too yeah they throw bilderberg it might as well throw bilderberg in gotta throw bilderberg in can't have a good conspiracy theory without bitterberg that's extremely impressive that we got and they were most of them were first time right there was a

lot of first yes first time contributors yeah 67 that's crazy yeah and like the the vi the The virality of the testing, reviewing, pull request, commits, all that is very strong right now. There's a lot of interest in that repository. I just think the whole ecosystem surrounding Bitcoin dev has just improved so tremendously over the last year or so. Yeah. Even stuff with like Pierre's. Bitcoin X. Yeah.

Fantastic resource. So you can just go to a website and just see it all right there very easily. Yeah, incredible resource, BitcoinAxeAKS.org, I believe. I believe it's a .org. And then on top of that, John Newberry had a very good funny quote. A lot of people's favorite fundamental indicator out there is GitHub commits. And he said that's a terrible metric to use because commits are not fungible. Some commits are a lot better than others.

And it's very easy to game commits. Yes, you can change commas. You just keep submitting them, yeah. Yeah, so be wary of using that metric as a fundamental indicator. Any metric that you can go home and game, just throw that metric out. Yeah. Or at least view it with a grain of salt. Exactly.

And then there was one more thing I wanted to add about this upgrade. Oh, so the upgrade is September 9th. If you're a developer, I am not. they need help testing before the official merge on the 9th. I think it's a tentative date, but if you're a developer out there looking to

help out with the core project, I think some testing between now and the next two to three weeks is much needed. And definitely anyone, especially if you're a dev, but just everyone should really subscribe to BitcoinOps

newsletter. Their new newsletter, which is at bitcoinops.org. Yeah, definitely do that. I actually just came out with one today. It was a little short and sweet, but it was good. Good signal to noise, actually. It's fantastic.

It's absolutely exceptional. Very little to no noise. Okay, shall we? Yeah, I think we should jump into Square Cash. Square Cash. This is you. All 50 states, we got Square Cash now. So the Square Cash App.

Georgia is struggling. Was Georgia the last one? I think Georgia was the last one. Horrible money laws down in Georgia. They had it go state by state. So Marty actually shills it on his pod, even though they don't pay him for it at all. Jack, I'm working for free out here.

Square is Jack Dorsey's company. He's famously the CEO of both Twitter and Square. uh they make those little those little rectangle pucks that you see like connected to ipads that you could swipe your credit card on yep and now they have a venmo competitor they have the cash app which is amazing how simple that name is that people have just grasped onto it there's like this whole grassroots community i think there's like 50 rap songs out right now that yeah that mentioned Oh, Travi Scott just gave out $100K. Cash at me.

Cash tag. No, send me your cash tag. It just sounds good. Send me your cash tag. It's literally a hashtag with the freaking dollar sign. And it's just viral, right? And it's simple. It's just a nice, simple app.

You can buy Bitcoin on it. You can kind of sell Bitcoin on it, only if you... You can sell Bitcoin on it. But you have to have bought it on the platform because you can't deposit Bitcoin. You can withdraw Bitcoin. so all these what i understand they're they're about to like yeah but they haven't done that yeah not yet you can't deposit yet you can withdraw yes and you should withdraw you shouldn't keep your your bitcoin on any of these centralized services but but the cash app is extremely easy

to use their prices are cheaper than coinbase which is what most people are using uh in america at least the ux is better yeah oh the price does look like it's more expensive than coinbase but if you do the math after you buy some bitcoin if you do the math after fees and everything coinbase is actually more expensive so that's i marty and i are actually we're friends with with the the project lead at cash app and i've i've expressed this to him because i think it's a ux failure but it's actually cheaper than coinbase in practice yeah uh that's funny i like the the hidden fees in coin like there's there's ways to game sort of exactly yeah especially if you go to like coinbase.com and you don't sign in like the price they show you isn't the price you're going

to pay and that's where most of the issue is with people they go into the cash app they go to buy and then they they go to coinbase.com and they they see what the price is and that's not the so then the other thing about square was um they got more downloads than venmo they surpass venmo if you're like me all my friends use venmo that's huge i've i've i use venmo it's like my main way to transfer money between friends even as a bitcoiner because you know most of my friends don't accept bitcoin and the ones that do i made them accept it at like 16k 17k they're like a little upset about it even though i did the reverse i did the reverse um but they 33 million downloads they pass they pass venmo it's insane and and it's it makes sense number one uh because i think

they offer again free ads for cash app you guys can start paying me whatever uh i think they offer like a superior service of mo like your cash card you have a debit card connected to it and you get they have this boost program like every time i go to buy a cup of coffee it's a dollar off if they give you a free card yes and they ship the car and it's a cool looking car customize it you customize it's a visa right and you customize the card you can spend it anywhere visas accepted they don't have to just accept square so it's basically like a bank account alternative you can even get direct deposit yeah you can do ach direct deposit to it and then they have this like clever reward system where you can switch your rewards every day and they're like pretty high

yeah you can get 15 off chick-fil-a 15 off chipotle a dollar a dollar off coffee is what i use so once once they offer deposits bitcoin deposits you can basically it's for all intents and purposes it's a bitcoin layer 2 solution that's centralized exactly so you you would send some bitcoin into it you know maybe top it up with a hundred dollars you turn it into dollars and then you can use your cash app card anywhere with visa you know and just and and spend your bitcoin anywhere if if you so desire to spend your bitcoin yeah so and i think that's going to be crazy for adoption like again like we said like travis scott travis scott was just giving out a hundred thousand dollars on it like send me your cash tag with a lyric uh that's crazy yeah for

astro city like and some people think that was it wasn't sponsored it actually wasn't a sponsor he was just like i'm gonna give away 100k there's some i mean he was buying followers he was buying attention that's what you do when you have these any kind of contest that offers money in return for likes and retweets and stuff is the week you drop an album makes sense you're buying it that's a good 100 you're buying that's a good hundred thousand dollar investment but the the important thing is that cash app is viral they they support bitcoin they don't support any of the the other altcoins or tokens and and the uh it's big for adoption it's major for adoption it sets up you know right now we're in a bear trend but the next bull trend right exactly and it sets it up

i don't want to keep shitting on coinbase here but i think uh the cash app team is more focused like in my opinion coinbase is spread themselves too saying they're going this is an ethereum land right now yeah all their acquisitions are ethereum focus um they put out a good product they but they're centralized the issue is that they have too much they have too much control over the space anytime there's anytime there's a lot of volume like they their apps go to shit yeah i mean i look i i hate coinbase as much as the next guy um but but they've never had a major hack you know they got siphoned from the etc uh they had that etc exploit when uh ethereum classic uh they didn't want to support it at first so they were they were leaking a bunch of etc people

were able to double spend on poloniacs or something like that i'm not sure they they were pulling it out of coinbase yeah they were basically every time they withdrew ethereum they were also getting etc because coinbase was pretending that ethereum classic didn't exist even though it was the original chain exactly um but and then they also had the issue with if the fees didn't come down they had a ton of ton of freaking transactions that were four million four million utxs that were unspendable that's utxs not dollars basically they had like all these little transactions where the fee was higher than the the value in in the utxo set so they they were unspendable so if the fees didn't come down they would be completely screwed

but besides that they've never actually had like a major hack or anything the interface is like pretty good um the cash stored on it i'm pretty sure is fdic uh they're cold wallets actually so actually no they're hot wallets so like only if no i'm talking about the usd but i'm not actually sure on that but i'm pretty sure the usd on it is fdic insured that yeah that's like a partner bank yeah i was gonna say it does it they're they're hot wallets there's like one percent of their holdings regardless you shouldn't use coinbase just use cash app well let's let's give some coinbase some like i've said this on this podcast before we would not be here without coinbase right that's what we would not be here that's that's all i'm trying to say is that i think they put

out like a pretty solid product um my biggest issue with them is that too many people use them right and and and way way too many people use them as a as a wallet yeah like that dude oh this is a good segue money on coinbase this is another if you want to use coinbase just buy on coinbase transfer them out to a wallet where you control the private keys like don't don't play that game you're just playing with fire you play with fire you're gonna get burned yeah well i'm happy you brought that up because uh there is currently this is another current news there is a a lawsuit uh in the world right now this dude michael turpin is suing at&t because he got uh i forgot about this yes so he got glad you thought he got uh he got phone ported somebody

twice twice somebody went to twice it's his fault well apparently there was michael's fault apparently there was an insider at at&t who like helped make this happen doesn't matter but michael turpin was known right yes he was bitcoin foundation wasn't he at one point i'm not positive but he was holding 24 million dollars in a coinbase account i knew michael turpin was a bitcoiner i knew that he was an early bitcoiner with a big wallet like i knew he had a lot of bitcoin you know and like for him to store it on coinbase and to have the his phone number known which it was probably known to a bunch of people he had two factors set up with with his phone number right it was sms yes yes exactly it was sms well you could have it there's

a separate two-factor that's that's you could do all the yeah i mean you you downloaded an app and you scan the qr code and and it links it it's uh it's based on time protocol or whatever otp i think yeah it's uh and you get a new password like every 20 seconds that's the way to do it don't use sms because you you might get ported but you shouldn't even have any bitcoin on coinbase exactly that's like i don't have the stress at all but anyway he's suing how much 225 million i think i think 10x the value is at 240 ridiculous it's like oh like not only was it my fuck up that i started with them but now i'm gonna you know sue them for extra amount for my hardship yeah um the funniest part of this they shouldn't be able to port so easily i i do give him that argument

but it's it is his fault yeah well so that's so this is a good news topic that's the debate right now who's at fault here at&t or coinbase should coinbase have a better user experience or is at&t negligent for allowing these these uh well it is actually it is i think it's a combination not suing coinbase no he's suing at&t right i think i think at&t is trying to drag coinbase it's more of coinbase's fault because you should i mean 25 million dollars i feel like you should have some kind of extra authentication hey hey i know you uh might not be upset conscious but like that's somewhere we have like we have like an internal like not hr but like like a biz dev manager like hey i notice you have 24 million dollars in your hot wallet uh i think it would

be wise to to take advantage of some of our custodial services we can get that into cold but even that like i think this goes that would go through the custodial service probably yeah right i mean i who the fuck has 25 million dollars anybody uh i hope that the transactions were like slow bleeds like the the person who was compromising imagine if it wasn't imagine if they doing you know 10 bitcoin at a time or something but if it was a 25 million dollar transaction at once like to use just sms seems a little bit yeah that's your warrant like a skype call but that's not an at&t that's on coinbase yeah so you're like a personal visit yeah exactly exactly you should have like a briefcase with a with the handcuffs like handcuffs to your hands like

i've got the third private key i can't believe that happened i really if it wasn't in legal docs i just wouldn't believe that would be one of those rumors that someone oh did you hear michael turpin got ported i i would just wouldn't believe it i would just think it was bullshit yeah would you be too embarrassed to file this lawsuit i i definitely for that amount i would i would probably file for the bare minimum and just be like and i'd yeah i don't know i just would never be in that situation yeah that yeah it's a shitty situation don't want to be there um but it does bring up an interesting debate uh particularly in this space phone porting swatting telecommunications companies in general have really shit the

bed when it comes to opsec and helping their customers preserve their wealth and that's a combination problem with the apps and the services that we use that require our phone numbers to taking access censorship right yeah um just like blanket isp censorship where the internet service provider is screwing with what you can connect to exactly so it's it's a interesting debate i think that should be more hashed out uh pun intended um in not only in the bitcoin world but beyond that just in society as general like hey we're we're there's a there's a big attack surface in this certain area of the internet and it's being exploited more and more these days especially as cryptocurrencies become prolifer well that's the beauty one of the beauties of bitcoin is that

we we're discovering all of these things that are inherently vulnerable right that you wouldn't know otherwise but now all of a sudden people can make money exploiting them so you know you have they come to surface we get to we actually get to see them happen they become more obvious yeah because people can exploit it and make money like if you can make money on something you're gonna do it exactly exactly um so uh and well one thing i would caution you should not leave your your bitcoins on these exchanges but before you move into the cold storage please do your research please know what you're doing it's no it is um it is something to be taking very seriously do very diligently and very carefully and definitely test test how to make a couple

wallets spin up an electron wallet or three send a minuscule amount of bitcoin to them at the lowest fee possible just to make sure you know what you're doing then when you have complete confidence move it to something like a trezor or even uh like a paper wallet or crypto steel or something like that i would say the number one rule is don't store all your shit in one place you know so use multiple i like i like that idea that you just you know use multiple wallets you know trezor and ledger we both we both respect a lot you know never use a ledger can't speak to ledger i've used the ledger i respect it a lot they have a very long track record right um and and they haven't been exploited so far they have some extra issues

because they have a proprietary authentication chip in it that Trezor doesn't have, which is supposed to make it more secure from physical attacks, like if you actually have the device in your hands. Either way, neither has been exploited in any meaningful way. So what I usually tell people is you have Trezor, Ledger. If you have a lot of money, buy both. Have some on both.

And then you should also go, like, the paper wallet route as well. And just because we call it a paper wallet, you can print that shit on steel. Exactly. You can print it on whatever you want, you know, stamp it, engrave it in something, you know. We call that a paper wallet. Yes. It's just when you're basically writing it down. And my favorite way is Tails.

there's tails.boem.org T-A-L-S T-A-I-L-S tails.b-o-u-m.org and you can download that that's an operating system that you download onto USB stick they have Electrum built in

oh really? yeah so you can just run Electrum on that on a computer that's never connected to the internet you record that seed down and you have a nice little cold storage wallet there it's like probably the the easiest way to do like pretty pretty fucking secure cold storage that's pretty dope uh and then beyond that beyond that level i would start

building a web of trust people you trust uh hopefully family members that you don't have too much money tied up with and figure out how to get a multi-sig uh operation that's definitely important yeah but you can even just add that you just add that to the element so you have multiple ways you know so so the multi-sig only controls a certain amount of your stash exactly you know and then worse comes to worse if one thing gets the whole point is it's compartmentalization compart compartment compartmentalization compartment compartment whatever it is it's like what the titanic tried to use and failed you just want to have it all separated right and worse comes to worse you only lose a bit yeah is that why the titanic cut in

halves because like it wasn't separating the water was just sloshing in the wrong way that was just a complete fuck up this is a shit coin of a ship um let's move on to the next what's our next well yes yes let's move on to the next one but remember uh do not leave 24 million dollars on an exchange don't don't keep money on big coinbase learn how to spin up your own wallet and secure your own coins, develop a web of trust and make sure you're 100% certain of what you're doing before you do it. So test it out.

And two-factor, two-factor, use an app. Exactly, two-factor. Do the OTP. Google Authenticator. If you're very hardcore, get a YubiKey. Yeah, I don't even know if that really gives you, probably doesn't even at the end of the day, doesn't give you that much more.

Like unless you're like dealing with state actors in your threat model. Hey, hey. Which I don't think a YubiKey would necessarily help you. You can't count out state actors. I don't not count out state actors But I don't think my two-factor is going to stop them So I think your YubiKey will get

Intercepted in the mail or something That's a good point If you can buy it in cash Buy it in cash at the street corner I don't know if I trust that They can always intercept a package, remember that Alright, next topic They

The government Okay, what do we have next? We could go with Maduro's bullshit pet yes yes let's do that so maduro devalued his currency by five decimal points i think i think that's a 95 i think he basically just took the black market rate as the official rate now uh either way it's just like complete shit show over there and he said this new currency is going to be backed by the petro what is the petro man what is it we haven't gotten shit for details on that he it was originally supposed to be ethereum based and now i'm pretty

sure it's nem based supposedly yeah what i never knew like nem was always in like the top 10 but i was like what is just nem is like a bullshit uh shit coin fork that i it's not a fork i apologize the nem people got angry at me i called it a fork in their telegram channel it's based on nxt Which is like one of the oldest Bullshit shit coins that we had Is that a Bryce Wiener shit coin? I don't think NXT was Because it was like

It wasn't good enough marketing for Bryce But We don't have any real details Someone was looking into the addresses And nothing moved And they pretended there was this big ICO At the end of the day It doesn't really matter

It's all bullshit The only thing that you have to know is that it's bullshit. They pretend it's backed by oil. There's no way you're trusting them. At the end of the day, it requires a full faith of the Venezuelan government. No one should give them that faith, right? What are you talking about? They've been an upstanding government.

This is a poorly timed joke. And the point is that if he actually wanted to do an oil-based currency, the best way to do it would be Bitcoin. it's back it's literally backed by energy yeah you made a great point about this today so explain that like you can literally turn you're sanctioned by the whole goddamn world and i'm not fighting for the maduro regime here right but like it'd be the smart move yeah i'm fighting from a logic perspective like if like you're using logic and you're using like hey i'm backed up against the wall i'm a horrible regime i'm sanctioned by the whole fucking world they're idiotic everything i

don't want to give advice to to nicholas maduro here but if if you really want to do this right like you said turn the oil into the ground into bitcoin and then you have somewhat of a capital reserve that you can use to to expend yeah the only time i'll defend like a fake socialist dictator is if he's trying to launch a shit coin and i'm trying to get him not to have shit coin so basically he could have an energy dependent currency if he if he used bitcoin either a full switch to bitcoin or if they just did provable bitcoin reserves at least so they have like major major mining operations like we i've i've seen pictures from people there where they have both confiscated miners they steal miners from people yeah it's pretty fun um they they either force

the miners to work for them a lot of times and give them a cut and if they don't do that then they actually confiscate the miners and then they have new they have new mining hardware i remember something leaked that said like everything was banned except like remember they had a bitmain exclusion on an actual ban and they're probably taking like boatloads of cargo ships yeah with bitmain hardware and the whole idea is they could take sanctioned oil they they convert it into bitcoin by mining basically they they they buy some asics and and they they they're able to convert that that sanctioned oil into a way better revenue source in bitcoin than if they were to sell it on the black market or to countries that don't accept the u.s sanctions yeah way better leverage ship

if you so they could actually prove their reserves because they own all this bitcoin presumably we don't know that but they could we're pretty sure they they they have a lot of bitcoin they could prove that by signing a message which is the same thing we asked craig wright to do um and he never did he pre he did all these theatrics and he never actually did it's trivially easily to take your private keys and and you can sign a message with them well the third member of the three of multiseg is dead right so we'll never know so satoshi's dead um but uh yeah so so oh so then we also had so we have that bullshit so he's like pretend pretending it's backed by the petro but that's all that's in the end of the day that's just all bullshit to hide the fact you know that

is just a horrible measure to actually stop the inflation that his that his people are experiencing and um no i think it's interesting to see how like the geopolitical situation within bitcoin is playing out and how uh it's obvious that bitcoin has not hit the scene yet because this is not obvious to to the nicholas maduro regime like if they don't get well that and that actually makes it's like a double-headed sword like that makes me optimistic as well how i think they realize they're just like if we can excuse our inflation with some cryptocurrency bullshit like may you know you make it like a propaganda-y thing but the petro is like it doesn't matter to them the petro is a non-starter it's like literally doesn't even exist right so it's just it's like

but but this makes me desperate this makes me optimistic like governments aren't prepared for this yet uh i bet some are more than others uh obviously um but also with that being said for future references thinking about the progression of uh this new set this new show we're doing uh maybe segments like get alejandro machado or uh eduardo medina on like a skype call for like five minutes to talk about this stuff because they love that yeah they have their their ears to the ground so alejandro or eduardo if you guys are listening or anybody from venezuela um maybe that's something we'll do in the future like a little five minute segment or something like that yeah no and this because we should not be talking about the subject from this episode is

literally just we're just spitballing and like we would love feedback yeah you know give us your feedback segment ideas things like that how to format the show we just want to give you what you want exactly um i do always i i feel i i have a concern whenever i tweet about venezuela or iran or turkey i i'm a white person in america you know and so there's there's i don't understand exactly what you're going through you know i'm trying my best i have there's people i have venezuelans who dm me and like they give me contacts and stuff they're like matt signal boost this signal boost that and that helps me a lot but but i i am very concerned when i'm when i'm talking about these things right um specifically like today i tweeted out that

it doesn't it doesn't matter if maduro sanctions bitcoin or not like says that bitcoin is is currency like the people can just accept it themselves all right see yeah and let's get into that um chart of the day is uh local bitcoin volumes denominated in bitcoin within venezuela and this is actually an impressive chart if you look at it around this time last year peaked and then it troughed in december and then it's on its way back towards the peak this year and from chart perspective it's very deceiving chart because what you don't realize is that the the bottom of the trough is around december when bitcoin price was at its highest so venezuelans were only able to buy uh they were able to buy smaller amounts at a time they couldn't expend more money so it looks

like the amount of bitcoin being bought on local bitcoins in venezuela is pretty constant now basically the chart shows how much bitcoin is bought in venezuela every day through local bitcoins right local bitcoins allows you to p2p exchange between people so it's two people one person selling bitcoin to the other person's giving them boulevards either through bank account or through cash a lot of times it goes through bank account um and we're nearing all time highs in terms of in terms of how much how much bitcoin is being purchased every week in bully i mean in dollar terms so like no not in dollar terms in bitcoin in bitcoin terms yes right so like we have july 25th around yes like the week and that's what i'm interested to say

like where was the price yeah and that would make sense around july 25th is when the around in late july was when they were buying the most bitcoin but when you go with price and stuff it kind of seems like it was relatively consistent exactly it's just that their boulevard went a shorter distance yes um and and if you're in these countries like it's it's very easy to see the value prop of bitcoin if you can't if you can't get your hands on on u.s dollars which right now is is probably absolutely still king um definitely but but imagine you're a dev if you're a dev in venezuela you can work online you're independent of your economy your global marketplace and you can just get paid in bitcoin like that's amazing like that is you know would you prefer u.s dollars

sure but would you prefer bolivars no way like there's not in a million years you would prefer bolivars and that's it's like the stepping stones right yes and you would prefer u.s dollars even if you would prefer u.s dollars you would have no way of getting them because you're sanctioned like so bitcoin is an only option at that point so when the krugmans and stuff say like oh they prefer venmo like yeah i'm sure but actually venezuela blocked you know you can't use paypal and venezuela anymore paypal blocked it i'm pretty sure not not venezuela but not vemo but paypal and vemo are the same company yeah so you can't use either of those in in venezuela so there you go you know um sanctioned country can't can't use them we uh next topic next topic but before

we go on to that like um this one the people of venezuela know like hey i'm fucking pulling for oh that actually reminds me at btc ven at btc ven is bitcoin venezuela which is um they're doing they're funding soup kitchens and stuff in venezuela they accept bitcoin donations um they just seem they seem like good people i personally contributed you should too yeah we'll put their address in the show notes yeah or at least we'll put it we'll put a link to their to their to their uh the proposal they have pictures there and stuff it's it's pretty fantastic awesome yeah so um and again if anybody from venezuela wants to help us give updates in the future uh a little five minute segments yeah reach out to us yeah um all right last segment

here you wanted to talk about sia coin is it sia or saya this is our last segment let's let's move through this one so we can so go quick see a coin have you heard of it i i have heard of it i don't know too much about it's a competitor to storage and file coin the whole idea is that it's like dropbox but instead of instead of you paying dropbox to store your ship for you you pay some random guy to store your stuff for you and that that's the idea um they decided they're boston based i'm pretty sure they're definitely american based and they decided that they're going to create their own asic they decided this eight months ago ten months ago with the idea that asics make your network more secure which they're not wrong about multiple companies have also

decided to make asics um asics are specialized miners if you don't know they're specialized chips that are designed to mine whatever coin they're designed to solve one specific problem and with bitcoin in particular shot 256 right see it's whatever their pow algo is i don't know what it is but anyway these other companies beat them to the punch they were slow to release and now they're proposing a fork they're not even they're just pushing through a fork that makes all the other miners obsolete and their miners are the only ones that are able to work on the fork and they're pretending that it's community driven but at the same time every single person who owns a miner has a worthless piece of shit now freaks matt's really heated about this subject and it's

i've never seen him this like jacked up about about uh indiscretion in the crypto space so this isn't the first time they proposed this they proposed this back in january and i had like a really really nice thread about it i thought it was a fantastic thread david vork or york david vork vork has some of the best uh medium posts for mining and like the incentives and the economy i think he's the ceo at catech yeah he wrote an incredible paper on the um the economies of scale afforded to bitmain in particular it's it's fascinating yeah so vorik followed me they looked at i i'd like to think they looked at the thread and they decided that was a bad idea we shouldn't do this and then here we are now look at you it's fucking all yes on twitter changing

see the coin i i liked i liked the fact that i thought that they read my thread and they were like this is a horrible idea but here we are in august and it was eight months later seven months later and they're they're pushing through the same thing that they originally said they weren't going to do after they originally proposed it and my main complaint is is no one else is going to make asics for your network your network is going to be forever centralized and and at the end of the day someone's gonna store you know i it's a great example so that's why everyone always uses it someone's gonna store child porn or or some kind of torrented video files and the judge is gonna say to them you push out the code for the software you you've made the white paper you

raised funds and you're the only maker of minors that that run the run the software obviously you're hosting it you know it's it's the most short-sighted bullshit right and and it's from a coin that a lot of people said wasn't a shit coin you know and well so let's let's let's steal man this like what good guys what is the comeback response from what's the justification of the hard fork well the justification is that cia tech is going to go out of business if they're not able to sell these asics that they've already sold but if their asics are if their asics launch in the market right now they just aren't profitable they're they're not bringing in enough cia for the energy output and the the competitors beat them to the punch and and why would a small

american company decide that they're going to try and competitively make you know mining equipment blows blows my mind but but the argument i've gotten in return is that ciatech goes out of business if if they don't i mean what is the like what is like what is the best case scenario in their minds well they're i don't know if they believe they're bullshit but they're basically saying that the community supports this fork so it doesn't matter um obviously a hundred percent of the hash rate disagrees with that because they're running miners that are gonna get obsoleted um do miners do miners uh do they count or is it all about nodes both count yeah um they i think it's a checks and balances type of situation would you agree

i would agree wholeheartedly you're just trying to get me in a gotcha no no i'm trying to i'm trying to lead people through certain points of the rabbit hole he's trying to increase ratings he's trying to increase ratings no i'm not we haven't told them the name of the show yeah i announced it rabbit hole recap with matt marty that's what we're gonna name it by the way guys if you haven't heard that already can we fit in another topic yeah we definitely got like 10 more minutes we can fit in two more topics we got eight minutes eight minutes bitcoin cash vulnerability oh yes this was talked about last night but that's too uh bitcoin cash had a vulnerability that was um disclosed a few weeks ago let me pull up the website here real quick

all right yes that was another thing that was brought up at bit devs last night uh was the responsible disclosure of uh the bug in bitcoin cash and i believe it had to do with a certain opcode um let me see here yeah no excuse me sig hash bug um so they had a sig hash bug that was uh i guess it was in the open for at least a couple months a couple weeks at least i think it was longer than that longer than that um some it was because they refactored a bunch of shit okay so they decided to rewrite a bunch of shit that already worked and they pushed it out with minimal review review on that and cory fields one of the bitcoin core contributors realized that and was kind enough to uh to disclose this bug

anonymously that's another thing that's actually pretty interesting about this article is the uh the ethics of disclosing so apparently uh i just learned this this week like when you disclose you should do it anonymously well no that's to cover your ass exactly which was a smart move which is but it's the ethical myth as well i wouldn't say necessarily ethical move yeah um but you know i support it you know but i you don't want to leave that blind you're doing it for your own self-interest which right but that's not necessarily ethical would but i would say it's ethical in the sense that to make this disclosure you have to put like you have to go through some shady shit to make the disclosure so that like that journey to make the action is

actually more ethical than some would give basically cory was worried that it was going to be exploited in between the time when he reported he didn't trust the people he was reporting it to first of all bitcoin cash didn't have like a good way of reporting it so he had to go out of his way and the second thing is if you report it to the wrong person that person might exploit it and then be like cory exploded it right he emailed me about it exactly so cory didn't trust the people he was reporting it to um so in in his defense like it makes complete sense to do it so he did it anonymously this was a couple months ago i think a month ago yeah this is the post the post-mortem just came and then he had he acknowledged it now he acknowledged it a

week and a half ago yeah something like that um no it's interesting it's interesting the simple the simple end of the day is is that they the bitcoin cash devs refactored a bunch of code they rewrote it for no reason they didn't do any review on it they did minimal fucking review on it and it had a major vulnerability in it that would have split the network and would have lost tons of people lots of money wouldn't want to be any money would have fucked up bitmain's ipo and it affects all of us because it doesn't just the bitcoin cash holders like yes like they get fucked the most and it would actually would have been kind of beautiful but but but if if they got if they got like a coinbase or or a shapeshift or a binance and they they really screwed them

on a double spend because they they split the network in a malicious way at the right time it would have hurt it would have hurt the whole ecosystem exactly uh is that it would hurt bitcoin cash the most do you think it would hurt bitcoin how much would it hurt bitcoin it's short term it would hurt bitcoin okay long term bitcoin honey badger doesn't fucking matter yeah be completely fine a lot of people were pissed that uh short term it would have caused a capitulation wick a lot of people it would have a lot of people are pissed though that uh cory didn't let it be and maybe not exploit it himself but let somebody else find it and exploit it if it was me hypothetically and i was cory i would not have hypothetically reported it um you don't have to

get a hypotheticals he did it yeah but i wouldn't i wouldn't have done that you know i probably not i probably are you a lesser man because of that i'm not saying that i would you know i i don't there's no criminal act happening here but i'm just saying that what i might not have reported are you trying to tell us that you found this bug before cory i wish if i i just think that bitcoin cash dying sooner rather than later is for the greater good the only reason it's at the price is currently at is because four or five people are are supporting the price including bitmain which we've recently found out as holding a boatload of fucking bitcoin cash yes um and i would agree to an extent i would say yes let it fail on its merit and if somebody exploited that

bug it would have failed on its merit the merit would have been shitty via the review process but i think there's i don't want to get too political with this stuff but i think there is a little bit benefit for the bitcoin maximalist case in general uh if bitcoin cash is prolonged because i'm pretty confident that they are so technically and organizationally incompetent that it's just going to be a slow drag of their reputation like over years and it's going to be definitive after a certain amount of time that like these guys have been completely discounted no i want to be clear here that i think that forks and altcoins are no threat to bitcoin Like, I personally feel that if you believe strongly enough in Bitcoin as both a technology, a community, and just as like a seismic shift, like we don't, you shouldn't have to, you don't worry about them because they're not even close.

you know it's not even and and and and yes it is like a complete reaffirm reaffirmation of the fact that you go slow and steady conservative you know you're you're moving billions of dollars you don't want to fuck that up you're moving more money than gold settles every day exactly you're creating this is actually pretty heavy shit now i mean if you're creating a global financial system you don't want fuck-ups it's uh it's interesting because like it is just a drop in the bucket still like multi hundred trillion dollar address total addressable market potentially that tam and uh it's only uh a fraction of that less than a percent probably and um but it's still surpassing incumbents in in function so the amount of dollars settled per

day on bitcoin is now more than gold on daily basis and that's pretty uh pretty good benchmark To surpass at some point I would argue Psychologically Yes Matt just got lost Yeah I got completely lost So I just said yes

But I would argue So What are we moving on to next Do we have another topic or are we done We're an hour in but we probably Had to cut out like five minutes topic yeah so i guess the last topic we'll touch on uh pertains to the etn the exchange traded note that is now available to fidelity uh customers via their their brokerage accounts it's not just

fidelity i thought it was just fidelity is it really i'm pretty positive it's just fidelity i haven't tried to buy because you honestly shouldn't buy any of this shit so let's go on your own yeah it's gonna be so this is this has actually been a heated topic i feel like uh the sentiment we can jump into this in general general topic is uh exchange traded notes exchange traded funds whatever it may be an etf and etn uh but basically products that give institutional investors access to bitcoin access and exposure to bitcoin uh via traditional financial institutions uh for a lot of the beginning of the summer and i would say spring beginning of summer a lot of the uh bullish potential was based off the potential for an

etf approval uh bitcoin maximalist myself included definitely written and spoken about this uh extreme it would be extremely bullish because they have to buy the underlying bitcoin but i i don't know if i completely agree with this but more recently people have like been nagging on that like hey maybe we don't need an etf um curious to see what you think and like have you noticed that as well well first of all etf is inevitable second of all have you noticed that though no i haven't that's it's recently become more negative yes which is of course that's going to happen as we get denied more often um you know i've been waiting for a bitcoin etf since 2013 when the wink of bosses said they were gonna the wink of i said they were gonna launch their etf

i think i wouldn't own an etf but an etf is dope you know you have anybody who has a td ameritrade account or a robin well robin hood you can just trade it now but you you don't own the underlying bitcoin but but any of these brokerage accounts fidelity td ameritrade whatnot you'd be able to buy bitcoin and you don't have to worry about any of the technical specifics of it and you get exposure to it and if any if if if any etfs decide to to go the the non-backed route right and they're working on like fractional reserves like i think in the next bitcoin bubble they get fucked right right i don't i don't see the negative downside i think it gives people more exposure with a new custodial option and this is a this is a good topic to jump into should before these

products uh be brought onto the market should we develop standards that say hey should we draw a hard line in the sand and say these need to be fully reserved and there needs to be proof every quarter every semi-annually every year every three years whatever it may be we need proof that you have the reserves i mean that'd be nice is it possible no why not because we're gonna tell them that that's we'll draw the line in the sand market might the market might right so if you have an etf that is full reserve and you have an etf that's not full reserve like the etf that's full reserve is gonna do better it's gonna command a premium because it's legit right yes and i think the market will figure itself out you know but they're not gonna listen to us if we tell them

that they should go full reserve uh but what but the counterpoint to that what if it's a game theoretical situation too where the first etf to go full reserve actually benefits the most in the market they probably do yeah they probably do i i i i fail to see the reasoning where there's any kind of attack vector here or anything as is my point i i think bitcoin is designed to go up forever it is literally designed that way it's designed to in every other metric to go up forever like if you value in any other thing it's gonna it's gonna trend up forever and the price will will have extreme volatility that will reduce as time goes on but you'll have extreme volatility but over time it'll it'll go up forever um that's how it's designed yeah and if you go fractional

reserve in that situation and and you're way too leveraged like you're gonna get fucked yeah and and the market will route itself around that but but the etf etfs in general open exposure to bitcoin and and allow more buyers to buy in into a truly fixed supply like like we don't know how much gold there is you can keep mining it right now it's just how much does it cost you to mine it we don't know exactly how much is there you know with bitcoin you have a you have that purely fixed supply and they just get fucked if it runs up they get fucked yeah and i'm happy you brought that up about like it being a new on and off ramp um to exposure of bitcoin because i actually wrote this in the newsletter today uh on the 17th last friday i believe um the folks from

coin shares in particular ryan rodloff uh posted a provocative medium post i would say that's the etn by the way is a new etn yeah it's coin shares it's coin shares okay so the stockholm nasdaq and now it's tradable otc in america yeah and uh so he wrote this incredible medium post wrote about today half of the remaining non-minted bitcoin supply is spoken for uh and he basically said anytime uh bitcoin adoption has gone up it's obviously not obviously well it is pretty obviously because new on and off ramps have developed throughout the years. And that's usually when you see, uh, a precipitous, uh, increase in, uh, adoption. Um,

so he basically wrote this paper and said, a lot of people think the institutional money institutional money is going to drive the price to a hundred thousand, but like people are going to be waiting on the sidelines for the institutional money and retail is going to drive it up that high in the meantime, as people watch by, I mean, the, the, the, the sum of all retail money is way bigger

it's just retail usually can't get access to this shit and I mean me and you are just unabashedly bulls right I don't understand what selling Bitcoin is like in hindsight like I probably should have sold

at the top you know that's why we're drinking our if I could have timed it I would have but I can't exactly um and i i there's not that much bitcoin to go around right at the end of the day like there's very very little bitcoin so i i do not trust myself it's very well known that i've had very few credit cards i just got my first credit card very few credit cards he literally just got his first credit card um i do not trust myself like if i were to sell my bitcoin at the

top i do not think i would be able to time the bottom and get back the same amount of bitcoin that i sold at the top yeah but even if you bought it at like 14k like you would be better than yes yes but yeah when i had the will the thing is you would buy in and panic panic sell out exactly and you would you would panic sell out come on i got this come on take the last bit all right we're keeping that in you better keep that into the podcast it's in there we're just finishing the mccallan 15 we'll drink mccallan 18 once we turn into a bull trend yes the promise we're gonna we're gonna stick with 15 if we go under 3k we're gonna switch to 12 i we're gonna switch we're gonna switch from a gallon 12 and then but if but if we no i'd say we switch to

jack if it goes under no fuck that i'm not drinking jack i'm not you know we're not don't be so uppity people are listening to us you have to have a certain level of uh composure i think you lost composure there saying you can't drink jack kidding um but classic philly that is the philly special five dollars you get a pbr i know it's a philly special it's a great special five dollars at participating bars so is that are we done for the week i think so that was a good hour we love you guys please give us your feedback right let's give a little recap so we talked about bitcoin cash going through a little uh little turbulence right now vulnerability bit main as well alongside that uh vulnerability um cash app getting hot definitely check it out if

you haven't um yeah the bullshit petro bullshit yeah venezuela uh went through what they're doing there uh definitely again venice if anybody's in venezuela listen to this by chance please reach out we'd uh we'd love to talk to you um and then uh see ya see ya bad decision that's how you pronounce it fuck them yeah like honestly not happy with like i thought you i thought you read my thread matt is not i thought you read the thread read his threads um we have square cash fucking killing it we have the etn we have the bitmain ipo did i miss anything no i think we're gonna cut out the recap i think it's redundant right the recap is a little bit we can cut it out that was a good that was a good riff though i kind of like the recap we'll just keep this part

in okay just keep it in all right we're gonna keep it saying that we're gonna i think it like adds more allure to it exactly i like that all right we're gonna keep it give us your feedback right you're hearing us think out loud here yeah we're just gonna we're spitball that's the point of this series this idea is is is that you get us if there's one thing i learned at the ux takes If there's one thing I learned at the UX boot camp I went to, it's that you can design anything, including a podcast and the segments you go to. This is what we're trying to design. It's an iterative process, all right? This is the first iteration of the rabbit hole recap with Matt and Marty.

Thank you guys for joining us. We'll see you next week. Fuck yeah, buy Bitcoin.