TFTC: A Bitcoin Podcast - Rabbit Hole Recap: Week of 2018.10.15

Episode Date: October 15, 2018

Topics of the week: Tether + Bitfinex - https://twitter.com/matt_odell/status/935185540982497280?s=19 ETH Constantinople hard fork on testnet - https://twitter.com/5chdn/status/1051194779890003974 Liquid Announcement - https://blockstream.com/2018/10/10/liquid-launch.html goTenna unboxing - https://www.youtube.com/watch?v=UzZen7ajmKA&feature=youtu.be Fidelity announcement - https://medium.com/@FidelityDigitalAssets/the-evolution-of-digital-cash-da19b06aa58e Hugo fire flames - https://medium.com/@hugonguyen/work-is-timeless-stake-is-not-554c4450ce18 Lightning bike - https://twitter.com/MartyBent/status/1051832593082175488 Nouriel - https://twitter.com/MartyBent/status/1050766810348445696 Thanks to our sponsor, The Cash App. Download it here: https://cash.app/

What's up, freaks? Welcome back to Rabbit Hole Recap. It's Monday night here, October 15th, payday. A lot has happened in the last week since we last spoke to you, freaks. A lot has happened, particularly today. A lot of topics to talk about. Before we jump into the topics, though, again, we have to thank our sponsor this week, CashApp. You guys have heard the spiel here.

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usage back on um so visit the app store or google play uh download the cash app and get your free cash card today uh again my favorite place to buy bitcoin pretty seamless experience the way they set up ach is impeccable um but all you freaks know that we've been showing them for a while now So, Matt, what a week. How are you holding up? It's been a pretty crazy, crazy ride. Yeah. But all said and done, the price has basically not changed.

Why do we even announce the price at the beginning of these pods anymore? Yeah, right? It's a stable coin. Right now, we made the bet with Murad last week, and it was at 6,225, I believe. 6,625 was the bet. 6,625, that was it. Right now, it's at 6,390. After a busy week in news.

and uh well we're gonna we're gonna do the bet based off of bitfinex's price right uh we never made that clear there's not i i think we go with the trade the trade block index is probably the best way to know yeah we definitely are not using bitfinex's price yeah the xbx trade block i think that's uh that's a good one that was a good transition into this uh bitfinex tether mess we've had big mess uh a lot of drama going on this is one of your favorite stories i think that's been ongoing for years uh you had a lot of trolls that you were you were i was battling the trolls today today was a fun day for that why even feed them i don't like blocking people i don't either i just mute them yeah but then

they're still doing their business under there you know i can ignore it i like i'd i'd rather see their notification and be like i'm not going to respond uh the thought of them pissing into the wind gives me much joy so i'm a big fan but they're not pissing in the wind they're like pissing into my my followers face yeah sorry followers don't if i can't see it they're pissing into the wind i think i would do block over mute but i'm not i don't do either so there's that all right regardless of that back to the topic of at hand bitfenix bitfenix and tether uh overnight in particular tether uh lost control of its dollar peg and bitfenix was trading at well over a thousand dollar premium at one point did it hit that high i'm pretty sure yes uh right

now it's at like 600 premium or something i think um i don't know about 600 it is at uh 400 not even 400 330 premium to bits that's not that bad yeah uh so last week we were talking about how the rumor was they got hsbc as their new banking partner that was just a rumor um After their previous bank, Noble Bank, is shutting down, it looks like, or going out of business or something. Not sure if that's related to Tether. No one really knows. And then before Noble, they had a different bank that was based in Taiwan that had all U.S. deposits and withdrawals blocked by, like, Wells Fargo and all the major U.S. banks. So that's why they had to switch to Noble to begin with.

And now they're looking for another bank. At one point, they stopped deposits. I'm pretty sure. I mean, I don't know who's crazy enough to send deposits there, but withdrawals are definitely not being processed. I think crypto withdrawals, like Bitcoin withdrawals, are being processed, but I'm not positive. Cash withdrawals.

Definitely not. It's a tough spot to be in. Yeah, I mean, the reason the premium exists is because people are buying bitcoin and the other the premium is not just on bitcoin it's on all their trading pairs and the idea is that you you know you use the fiat you have on the on the exchange or the tether and then you you buy crypto and then you pulled that off which is what we saw with mount gox uh back in the day uh with the smart guys were the ones who who paid like the extra 300 for their bitcoin and just got the fuck out while the usd was

um frozen i i mean we said last week just don't use bitfinex like no one should be using bitfinex right before all this fud happened this most recent round of fud it's just a bad idea we went over how they had their their previous hack that just you know relatively recently happened it was like late 2016 late 2016 i was wrong i had originally said they lost 116 000 bitcoin i went to go fact check myself it was in fact 120 000 bitcoin it's a little bit more even worse even worse correct um it was like pretty much everything i think because they had like no cold storage at the time yeah pretty piss poor uh security practices if you have a fit yeah and it's just a sketchy like bucket shop type exchange where they're breaking u.s regulations and and

it's just inevitable that eventually at some point like the whole thing will come come crashing down well that it's uh it's tied to its ugly little step brother which is tether and tether proving that stable coins are inherently instable in the long run. I mean, I think the whole tether thing is being a little bit overblown. Why do you think that? The peg

isn't off that much. It was off by 20% at one point. It was trading at 80 cents overnight. But that was like ticked there, right? It was just wicked there or whatever. It wasn't... I mean, what is it trading on right now? Like 92 cents or something? 93 cents?

I don't have the tether charts up right now i can look into that but uh you know it kind of it makes sense that tether would trade at a discount uh to the other regulated to the regulated stable coins and and by extension u.s dollar because there's more risk involved in holding it yeah what's that right now 97 and a half cents yeah like that's oh it's two and a half cents off its peg oh my god the end of the fucking world you know that's a slippery slope though you know if their banking relationships are in trouble and they're trying to get everyone was giving shit to tether for the last two years because they were afraid that tether didn't have usd reserves they thought

maybe that their reserves were backed in bitcoin instead right and now this and that their bank wasn't public right and now we're seeing firsthand what the fuck happens when they are holding the reserves in usd and it's stuck in the legacy banking system and no banks will support them because they're breaking us kyc aml laws right so like if they held bitcoin reserves right now instead or at least a portion in bitcoin reserves they could easily prop up their peg the way the peg is held is is they and market makers need to buy tether on the market to bring it back up to the one dollar right yeah and if they can't get funds onto the exchanges to buy it up and bring it back up to the peg then the peg is gonna is gonna be weakened every at least if it's you know

they can do it to a degree but if they can't do it fully then you're gonna have like a little bit of weakened peg yeah that is really uh illuminating the the infrastructure problems that exist in the space in particular yeah i mean like tether was people have such a short memory and a lot of people are new in this space like tether was literally created because we had this banking blockade on all these exchanges and companies couldn't get bank accounts and they couldn't they couldn't do business through the legacy financial system so tether's like we'll handle all that nitty-gritty for you and then you know you have to trust us but those companies had to trust banks anyway not to freeze their funds i mean people forget that gox did a ton of shady

shit but like right before they went down the u.s government froze a bank account with five million dollars in it yeah you know like that was the the real thing that pushed it over pushed it over the edge i think that was february 2014 yeah exactly so this is it's it's it's very hard to be one of these exchanges if you're not like a coinbase or a gemini that's like fully regulated and has a ton of money behind you and there's a base in the u.s to like get proper banking partners and when this shit when they get exposed like this and they they lose one bank and they're scrambling for another like you know it makes sense that that you're gonna have these arbitrage issues yeah so uh what do you think happens uh the rest of this week how do you think the week unfolds you think

bit phoenix uh the funny bit phoenix is in the clear i think tether's in the clear the funny the funny thing uh was uh carpe noctum on uh on twitter he was like 15 stable coins walk into a bar and i was the first thing that thought of my mind i was like and then they all decide that they're gonna keep their usd reserves in each other's stable coins you know and like when tether was first created they didn't have any the the irony of all these tether competitors which i don't think even compete with tether because the whole point of tether is it's unregulated and has no kyc

is that tether could actually presumably hold some of their usd reserves in the different stable coins if they can get their fiat to the stable coins instead of a new bank right they could presumably have like 10 different stable coins in their portfolio and and use that as the reserve sounds like the beginnings of a ponzi yeah i mean it's it's probably horrible long term but it could buy them some time yeah um i think long term all these regulated stable coins are going to add kyc aml start blocking accounts and stuff but they haven't yet it's basically like they're they're trying that same practice that a lot of silicon valley likes which is just hourly break the law and have have zero plans in place besides just complying and whining afterwards

so like right now there's like this honeymoon period where like tether actually probably could hold like a decent amount of the competing stable coin projects and not you know they're already at risk holding it in bank accounts because they're such a target right so like i don't think it would be that much additional risk for them but it'd be horrible you know it would connecting them all would be would be bad someone will probably do it damn stable coin world blows my mind like the kyc aml stable coins in particular like what is their purpose like well like right now they're just they're outwardly breaking kyc aml laws but they're pretending they're complying yeah and like eventually they'll be forced to fully comply they're in an ask for for forgiveness

type state yeah they have the they have the power to all these all these all the regulated fiat back stable coins like they have u.s dollars in a bank like built on the tether model where they have where they have u.s dollars in a bank account and and it backing everything they those are centralized tokens just like tether is any of any of the accounts can be frozen at will they can block transactions they can refuse redemptions right to actually change it back into money so they're completely centralized so the government goes to whatever the centralized entity is and they're like you have to comply otherwise we shut you down and in tether's case they've been hiding offshore right but all these regulated ones aren't hiding offshore so they're

just gonna have to comply eventually i think bit bit for next could be done uh this could be the end of the road for bit for next i think it could too i mean it's just like eerily similar to what was going on at mount gox like the type of vibe that yeah the aurora around the the rumors that are swirling about their solvency and their access to dollars and i i do you think i i don't think there's any scenario where one goes down the other doesn't oh no way right they both go down together all those funds are commingled and shit right yeah there's no way I think they're

if one goes down they both go down but staying on the topic of stable coins another big announcement was in the last week was Blockstream launching Liquid maybe we could avoid this but like side chains well you just have the same situation but

instead you know instead of Tether running on the Omni layer it would just run on the Liquid side chain yeah uh because of federation it's still yeah i mean they're both centralized oh yeah so let's so you have the same issues really let's explain what happened so liquid uh been a much highly touted project by blockstream that people have been waiting for for years now um they officially launched last week and announced that they have a consortium of 16 exchanges i believe might have been more than that might have been more might have been more than 20 30s wasn't it might have

been but they were like none of the big exchanges yeah they're there's like bitmex was probably the biggest and bitmex yeah bitmex was on the list was bitmex on the list yeah they were um yeah but anyway a lot they were all like the quasi legal ones yeah a lot of exchanges i didn't uh i don't really recognize to be honest but i think a lot were in asia and they really don't cross our paths yeah i think like okay coin was definitely on there yeah um but they finally released liquid product that's been talked about for a while and it's a federated two-way pegs side chain basically that uh allows they have a federation of these companies that are participating and they basically run the nodes and confirm everything that's going on on the side chain

and with it you can do special things like issue assets do confidential transactions and it will really help the exchanges that are involved do settlement a lot quicker than than doing it on the base chain yeah it's basically like they took a almost like a copy of of ripples tech and they bolted it on top of bitcoin so you can seamlessly go back and forth and the unit is always bitcoin you know so it's one-to-one you load bitcoin in and then you get equivalent amount of liquid btc on the other chain and and it gives you all the benefits of these the easiest way to make transactions on your network cheap and fast is to centralize right yeah so the idea here is they the liquid network is centralized the liquid chain is centralized and then it gives you or like

quasi centralized because there's like 23 participants that like a quorum of them can fuck with shit and then and and then you get cheap and fast transactions as a result uh and the main use case they're saying right now is is inter-exchange settlement settlement yeah um yeah so in my opinion like everybody was like oh my god like the block stream conspiracy theorists came out of course it was perfect timing um paul paul stork uh was not happy he had some words i don't want to say he wasn't happy but he criticized it a little bit but the way i view it is just like block stream is proving a use case on top of bitcoin the protocol level yes it may not be the side chain i want to participate in but they they

are proving that it's possible and maybe paving the way for other side chain projects to build the confidence to deploy yeah i mean i think it's just like too simple for paul yeah uh it's like a very and it really jives with like block streams uh ethos that it's just a it's a they simplified it to just do one thing really well and they get there's a bunch of trade-offs the main things are centralization censorship resistance but but they have a working product that you know can work right now and has a major use case which is sending bitcoin between exchanges and one of the issues with sending bitcoin between exchanges is a lot of people watch those transfers and front run them but liquid has confidential transactions so you can't see like the amounts and the

destination so so so the arbitrage it makes the markets more efficient it's harder for them to be front run yeah apparently it's going to screw up a lot of uh indicators like the mvt yeah i don't know if it'll we'll see that's what willie woo was saying yeah i mean it's his indicator yeah um but like our transactions are still going to be counted you know so yeah yeah um yeah so liquid i think it's just cool to see it launched and in the wild and it's proving that anything these altcoin projects are like trying to to differentiate themselves in a product market fit perspective like can be built on top of bitcoin on different layers and this is something i've been preaching for years many people have uh and i think this is an event that proves that

this is a workable thesis yeah we have like our own centralized network that gives you all the benefits that like your favorite centralized chain of choice offers you but you know the fast transactions cheap transactions you can you can issue tokens on top of it so they can do all their fun little token games that they want to do uh and it's just all bolted on top of bitcoin no ico no token required are we hypocrites for being okay with this being done on top of bitcoin but not other networks no i had a bitcoin cash troll ask me why i was worried about centralizing on chain but not centralized liquid and the main reason is because i'm never going to fucking use liquid so why the why the hell do i care you know it it is an option it gives you another option

and there's no reason that if your goal is a centralized network that you need it to have its own token and everything like you might as well just build it on top of the strongest most secure network exactly it comes back to security of the base network and bitcoin has proven up to this point that it is the most secure most robust network at the protocol level i would argue um ethereum they're uh trying hard to transition the proof of stake i don't know how big this news is it's just a development but uh i think friday or saturday they were attempting to um to perform a hard fork on the test net to basically prove the use case of constantinople i guess which is part of their transition to proof of stake uh and there was a huge kerfuffle uh the

testnet just started stopped excuse me mining blocks for hours on end and apparently when the first block was mined uh there was a consensus split between the three uh different um node protocols and yet three different ethereum chains on the testnet uh i added this to my to my thread that is basically expounding upon. I don't think POS is ever going to come. What are your thoughts on this? Well, I mean, I own so many Ethereum POS-related domains. Like, it'd be nice if it actually came to fruition.

I mean, we've been talking about this for a while now. I mean, I've been... And on Twitter, it's been heating up a lot recently about arguments of proof-of-work versus proof-of-stake. And I actually think that Ethereum is pushing itself into a corner where they have to do proof-of-stake to compete with the chains that are launching with proof-of-stake default that are competing for the same user market fit,

which is like these smart contract platforms or whatever they want to call it, which is like the Tezos and EOS. and i don't know like i probably definity and cosmos or whatever i don't know all our vc friends talk about those and i know nothing about them hedera hashgraph or whatever i don't know uh and so they're like kind of pushed into a corner because they need they they want to compete with those guys but at the same time they by doing it they're gonna lose i think they've already lost but they're gonna lose the war against bitcoin because proof of stake is inherently less secure and less resilient than proof of work so i actually thought

maybe for a little bit there they would back off because i also think there'll be a chain split when they ultimately tell the miners to go fuck themselves well that's that's one thing like i'm interested to find out like so apparently there was no miners willing to mine this hard fork on test net like maybe this is because they're already angry about it exactly so maybe this is a signal from the miners like fuck you i mean and they're also cutting minor incomes like the next hard fork like they know this is i think this will cut the reward from three to two and they've they've talked about they've talked about uh forking off a6 and making so like miners have just been neglected like absolutely neglected and like how do you invest uh you know how do you make

investments in the network when you're constantly getting neglected but anyway all this renewed talk on twitter and on reddit and irc and stuff i'm they're all in they're going they're gonna if they break the chain if it takes breaking the chain and you know they're gonna they're gonna go for pos they're gonna go for proof of stake i don't think you know it might not be so soon and it's gonna be messy as fuck but i think eventually we will we will see we will see the attempted transition and then ultimately after that maybe it's a year or two we'll see like a major proof of stake chain failure and then we'll finally be able to put all this shit to rest and be like proof of work is is what it's all about damn that seems like a long time from now i don't

know if i have the energy to put up with this nonsense for i don't want to say nonsense but uh highly recommend you freaks i actually went and reread this piece from paul stork over the weekend that he wrote in august 2015 nothing is cheaper than proof of work and basically proved that at the end of the day costs are just sloshed around uh if you're going to transition to proof of stake those costs just uh pop up in different areas of of the network and so if you guys are interested in learning uh about proof of work versus proof of stake in a very detailed manner i highly recommend going to truthcoin.info and checking out paul's blog post nothing is cheaper than proof of war also uh pow versus pos which is uh dot com which which i have redirected to

my favorite piece by hugo uh on on the resilience of proof of work versus proof of stake well this is actually a good uh spontaneous topic hugo actually just put out another piece where he expounded upon that that piece yeah that piece was good too i uh retweeted that i also think i might I might change my redirect to that new to that new page I really kind of want to create like a landing page where it's just like all of Hugo's work

that's going to be my proof of work versus POS well this most recent post he really drove home the fact that like POW like secures all the economic value that's been transacted on the network

up to this point in time where it's proof of stake it's only securing the stake at a certain point in time and that stake can leave somewhere in the future and it doesn't really create like the ember effect that proof of work does over time I just think that like proof of work is fucking

beautiful and people don't appreciate it enough and don't realize that like one of the main geniuses of Bitcoin is how the distributed proof of work comes into effect and securing the network and providing a fair fair distribution of the incoming supply that can't be gamed that you always know like what the true chain is what the chain that that has you know the highest the

highest cumulative proof of work is just it's the connection from the the digital to the physical world such a it's so short-sighted to think that that it's a waste or that that it that it could be replicated by you know a couple lines of code that say that you own some funny money yeah that's a concept that's i forget who was bringing it up on twitter this week but that should really be driven home is that like proof of work is the first like connection between the physical and digital world like where you're you're connecting the value destroyed in the physical world and and representing that in the digital world. It is pretty fascinating and

a huge revolution that, like you said, I don't think enough people appreciate. Yeah, so that's proof of work versus proof of stake. Ethereum. Try to do it on the testnet or begin doing it on the testnet over the weekend. I had a little hiccup. I think they're going to try

again this week. We shall see. What's the name of that dev who was talking about it? Great question. Afri, I believe. He said he thinks he says he thinks it's going to be delayed till 2019 now uh at least on the main net so yeah that's the important part yeah so i think they're they're going to try again on the test net in the coming weeks let me find this i mean i guess there's a scenario here where they just never

get to it in time and everyone just all the ethereum proponents just switch to their favorite proof of stake chain of choice yeah that's uh it is a race against the clock uh in many aspects uh their chain's getting bigger obviously as a proof of work chain like that's another reason why they want to get a proof of stake is the the burden of the data size of the chain but that still exists in proof of stake not as it's isn't it highly uh but the efficient part is that they don't have to do the proof of work part yeah but but the actual state size and shit is still but it'll grow at a slower pace correct why would it grow at a slower place it matters how many transactions there are is what is what is increasing it they want to shard and do all

those other like pruning and sharding and all this other stuff that'll presumably make the node requirements lower which i don't think will but that's the plan but that has nothing really to do with proof of sake proving my ignorance there thank you for schooling me matt um uh yeah so afri showed on was the guy that i wrote about my news or or added to the thread he he was talking about it uh going back to being able to do things on top of bitcoin that all coins want to do another project that we want to highlight this week uh is i wrote about in the newsletter today uh some dude out of germany matthias i forget his last name off the top of my head but he basically showed a perfect concept of him walking up to a bike and renting it uh using the lightning network

doing a lightning network payment to basically rent the bike hop on it and start riding away and i thought this was interesting because this was very similar to what slocket was trying to do when they launched the dow like this was going to be one of the first companies that got funded with the DAO tokens, correct? I don't remember that specifically until you called it out on Twitter. Yeah. No, that's what Sloket was.

That was one of the DAO investments? Well, it was run by, so Sloket led the DAO and their whole company was like an internet of things like being able to unlock and use things, quote unquote,

the internet of things, which I think is another buzzword, but basically. IoT. IoT. Yeah. Basically using a blockchain token to prove ownership

at a certain point in time and ran out at a microtransaction level. Right. The whole point of the DAO was that it was going to make autonomous investments in other autonomous investments and then you were just going to sit back

and make money but instead they just lost all their money. Yeah. That's why we have Ethereum Classic. What's kind of interesting is I was on World CryptoNet today with Richard Myers of Gotenna. very jealous of that yeah it was really a humbling experience and big thanks to richard and the whole

gotenna team for everything they do um but what was interesting was we brought up the lightning bike and it'd be pretty cool if that lightning bike had like a little gotenna in it right to to handle the transactions and the communications it would be completely you could have it basically off grid and if you had enough lightning bikes they they're all notes so they're all communicating with each other and then helping out the rest of the mesh at the same time so you do mesh plus lightning and then all of a sudden you have like these lime scooters or whatever

but you can just have them in completely like separate decentral you know distributed cypherpunk that's pretty cool utopian future a true cypherpunk electric bike running team future but

but again this is what I stress in the newsletter today like this is proving that patience is key in this space like expanding on what liquid enables us to do that other blockchains are proclaiming that they can do that bitcoin can't uh what matthias is proving with this lightning bike is like this was a big idea of a company that raised a bunch of money and if people were willing to wait it'd take a decade for bitcoin to get built out at a protocol level to get segwit enabled then start building out the primitives sorry for using that word of lightning network uh and then getting the network

stacked to a point where yes we can enable this type of microtransaction economy uh it just took 10 years to build the infrastructure to get there it's going to take time to build out the system well i mean it matters who you're talking to like if you're an ico promoter patience isn't good like you should show this idea now make bank and then never deliver a good product but if you're like the consumer like don't jump into that be patient yeah um hopefully that that is a theme that gets spread spread more widely now patience it's a virtue i mean this this last run we've had we had icos for every single bullshit thing you could think of and 99 of them didn't need their own token right 99.99 i would say yeah i was just being nice you wanted to uh you have goten on the

list here too is there anything else you want to touch on i know i just wanted to say that i had a great conversation with richard yeah shout out richard thanks for uh all the work you're doing uh scoop here i think we're going to get daniella uh the the ceo of goten on tales from the crypt for an interview series episode in in the next few weeks so be on the lookout for that um today we had some big news onto the next topic fidelity announced that they're they're going to roll out custodial services for institutional investors starting with bitcoin uh pretty big news um especially in the midst of all this tether phoenix bud it was good to see uh a glimmer of shining hope in in the news today so fidelity

has sort of opened the door and uh like uh coin shares put out a piece i believe it was a month ago maybe three weeks ago where they said uh bull runs are usually uh are usually uh preceded by new on-ramps being developed for new types of investors and this is a pretty big on-ramp i just feel like every day we're getting new big on-ramps it's like what i was talking to you and marad about last week i was like how like these are major fucking players this is not you know 2014 2015 bullshit where we're excited about some half-assed mention by a ceo of bitcoin right it's not a overstock ceo pumping out at some random conference this is a major deal i think they have 1.2 trillion under assets and that's a lot of money yeah so quite a lot of money anybody investing

within fidelity now has access to bitcoin at an institutional custodial level which is huge interested to see how they're doing custody uh they're doing it all in-house so um let's hope they have some experts in there well i mean i liked i like pierre's comment like if you outsourcing a solution is just someone else's in-house solution so yeah have they outsourced it no they they in-housed it which is good no people don't like when you in-house then you know they say oh use big go or something yeah but it's good more options the better they have a lot of money they're supposedly like pretty real about it like they they know what they're talking about so we'll see yeah fidelity they've been on the scent for years and that was the one thing if

you guys watch the i guess there was a conference hosted by bloomberg today they had a live stream i've watched that throughout the day and i forget the man's name who was representing fidelity but uh he said they've been working on these products for for four or five years now so that's good to see just that alone like they announced it at a fucking bloomberg conference in new york right yeah like it was a it was like a major live event and i don't know it's really hard i mean i look at everything on a long-term basis but it's like really hard for me to be for me to be bearish right now this kind of news is is crazy it's gonna help you get that those two stakes of january 1st i mean it might not but but either way it'll help me get a lot

more stakes after january 1st i so it's because it's the whole idea is that they they're going to provide custodial options for institutions right they'll hold the bitcoin for you they'll hold potentially ethereum but i think it starts with bitcoin yeah yeah and galaxy is partnering with them so nova is bringing his pump train to to the fatality because custodial uh solutions so there'll be a whole slew of shit coins you can count on that yeah we'll see how that progresses so maybe arjun was wrong maybe uh maybe the institutional investors will buy your bags on binance maybe they will that would be incredible actually i don't even have a binance account um but um noriel do we want to jump into him fuck noriel do you see he's claiming he's getting

hacked by crypto terrorists today because people are clicking the I forgot your password button and he's getting the email resets. That's pretty funny. That's not hacking, Noriel. That's just trolling. You'll see what hacking is. Oh, don't say that.

I'm not advocating for it, but you stirred the wrong rabbit's nest. Kick the hornet's nest. No, rabbit's nest or rabbit hole recap. Oh, yeah. You could say that. Rabbits can be fierce. Yeah, rabbits can be fierce i don't know about that fierce lovers no but i think uh actually think our friend nick

carter said it well like these uh and it's interesting because noriel thread was fire yeah his comments were on point like 95 of the time uh we're referencing his congressional hearing that he uh he went to the was the house banking committee uh and testified is it senate or house senate senate housing uh banking committee senate banking committee excuse me uh noriel was there with peter van valkenberg from coin center who was uh very impressive i can't believe he he kept a level head throughout and he was a very good advocate for bitcoin and cryptocurrencies in general and did a very good job of breaking it down in my opinion for uh the congressmen and women uh but noriel that's like i wrote about it last week too like i just i hate

that our government brings idiots like him to talk on a subject where he's obviously uh not well versed or as well versed as he should be he's never even sent a bitcoin transaction like if you haven't even attempted to send a bitcoin transaction like fuck you you don't get to tell me anything about it right and like i'm not going to appreciate your opinion i mean his he's famous he famously called bitcoin's death at 58 in 2013 and he just keeps doubling down on it because he feels like a fucking fool and now recently like bitcoiners have celebrated him a little bit because he's been trashing on shit coins but i refuse to celebrate him he doesn't get that he can just go fuck himself and and the important thing is is that him and like paul krugman and

the rest of those guys not owning bitcoin is a huge positive for my bitcoin value prop because i look forward to them having to buy our bags you know way down the road when they finally get on board yeah and it's a feature not a bug and nick pointed out uh it's a good reason these people are lashing out and particularly i mean their careers are built on a system that we are openly uh questioning in and questioning and moving away from uh with our investment dollars by buying bitcoin and we're opting out of the fiat system and this is shared this is what nick said it's a shared artifice it erodes its power and legitimacy so we're actively trying to delegitimize what these people have built their careers on so it makes sense that they're lashing out if you're

a statist it's really hard to understand the value profit of bitcoin that's what it comes down to like if you if you trust your government then there is zero value to bitcoin and that is absolutely fair you will not trust your government in the future at some point and you'll come on board is is is what i think but if you if you just if you want to do all these outlandish bullshit claims and say like bitcoin is dead bitcoin is dying it's a failed project it's completely unnecessary like we're going to give you shit about it you know that's what's going happen but like i completely understand that statists don't see the value prop yeah and then uh i mean this is like some bullshit e-news gossip here but then like vitalik hop in

said i'd debate you apparently there's gonna be a noriel verse vitalik debate i think i'd rather masturbate with ben gay than than than be subjected to that i literally choked on my beer when you told me that he like actually sent that message definitely very painful i would watch the chat over masturbating with ben gay uh i don't know but that's like the only reason i would do it like if i was being forced to if you're putting that uh put in that situation uh you know vitalik pierre pierre richard said something interesting about that it's like vitalik has to defend his pre-mind like he has no choice like with bitcoiners like we can just ignore this guy and the tide's just going to keep rolling

and sooner or later they're going to have to adopt it. All these guys are going to eventually have exposure to Bitcoin. Yeah. Yeah, we'll not be tuning into that debate if it happens. The other thing Noriel said is that like Cash App

and like Venmo and like all these other PayPal and shit are like the real fintech heroes and like Bitcoin doesn't bring anything new to the table. Thank you for bringing that up. is using using venmo they can't it's literally a sanctioned country they literally can't use fucking venmo well and that and i'm happy you brought that up because this is actually a very

important distinction we need to make like they are not they might be in a fintech category but most of these companies i would i would with high confidence say are not creating new financial technology what they're creating is better ux on existing financial tech technology on existing financial rails bitcoin is truly new fintech because it's completely new technology whereas square uh paypal venmo they're using fintech that's been around for decades and they're just putting a better ux on it and really helping the users out by taking the burden of dealing with the incumbent financial system i mean yeah that's that's a very good point i mean it comes down to the fact that they're not censorship resistant and they they don't have sound it's not sound

money those are the two the two main value props of bitcoin is that is that is that your government can't stop you from using it or it's very difficult for your government to stop you from using it it's very difficult for your government to seize your money and it's very difficult for your government to inflate away your value and none of those services offer that and it shows how fucking privileged him and Krugman are that they keep thinking that. Like, if you think that, you are wrong. Like, there's plenty of things where I'm like,

you're not necessarily wrong. Like, there's different opinions. It's a scale. There's grace, you know. Not everything's black and white. But like, if you think that Apple Pay or Venmo or Cash App is a competitor of Bitcoin, you're just wrong.

Just plain out fucking wrong. I would agree. um no but it does show like and after watching the bloomberg conference today i think it was a lot of good news but there was also like a lot of bullshit buzzwords being thrown around it's like holy shit like these people are so out of their depth in some cases that it's like we are it it's comforting to be like all right we're a little bit ahead of the curve here if we are right no i mean i mean it was a bloomberg blockchain conference right it wasn't a bloomberg bitcoin conference so that says all you need to know right there you know

uh if anything like if you don't want to just be bitcoin you could call it a bloomberg pow conference you know because i think that's the bigger the the bigger creation than than blockchain but uh yeah i mean the other thing that that made me realize there's all these different things that make me realize that not only are we still very early but that there's a lot of money to be made off of dumb money that thinks they're smart money is there was a lot of talk this weekend about bitcoin wallet ux not being easy to use and like a couple prominent well-positioned people that have like a lot of money behind them mentioned that they still feel uneasy when they're sending a bitcoin transaction um that blows my mind right like i is it is it a hundred percent simple no but

like the easy being your bank being your own bank will never be the easiest option or the easiest choice and the most convenient choice it's always gonna have drawbacks you're gonna have to put in a little effort and you're gonna and i think it's worth it to put in that effort but i it is it has gotten so much there's still a long long way to go in crypto ux and bitcoin ux but they it's come so far and if you put in you know two hours three hours of time like you should be able to figure this shit out you should be able to figure it out use a treasure it's like pretty obvious yeah like at this point if you're like five years in you should have at least downloaded wallet download it to see like realize like what you're working with and then again like i would

say like there are ways to be very comfortable with sending bitcoin transactions just has a mental checklist of like all right i'm gonna check these boxes before i hit send and with the especially with hardware wallets that are out there right now you can check on the device that the address lines up just read that 10 times to be safe the hardware wallet even fucking tells you it's like now check it on the device exactly then press the check mark then you press check and you press send like could it be easier like yeah it could be easier but like your your own bank governments can't seize your money you know it's not ever going to be as easy as venmo it's impossible because venmo can always always call customer service and venmo could be like well

we're going to change up the transactions or whatever and like move it around for you and help you out and do these things yeah it's about complete responsibility here people it's uh it is going to be like you said is it going to take a little work uh it's going to be a little stressful at times but uh it is the price to be paid to attain self-sovereignty in today's day and age maybe i mean and i even with that being said i think the ux is probably going to get orders of magnitude better throughout time this is the easiest ux for maintaining self-sovereignty we've ever had in humankind okay alternative way of putting it yeah ridiculous that's ridiculous this to me like i kind of i like i understand like it's it's complicated guys i understand

well that's you know but play around with a little bit amount of money just play around with like 50 send it between your wallet send it to your buddy send it back from your buddy you know bet him 10 cents on something but you know whatever we were talking about this earlier today too like a lot of people have claimed to have had their aha moment when they read the white paper the first time but i truly did not have my aha moment until i downloaded a wallet that recorded a seed phrase and then sent Bitcoin from Coinbase to that wild. I was like, holy shit.

I had this money in these 24 words now. And that was my aha moment. And like you were saying earlier, these people who have never likely used Bitcoin and are diminishing it, I've never had the opportunity to have that aha moment. And I think if they tried, they may have that. My favorite was the tip bots.

i i i think i'm really hoping that we see some lightning tip bots come back because uh one of my favorite things to do was troll people i guess i was at the forefront of the the ripple tip bot troll where i would like tip economists five dollars in bitcoin tell them to go fuck themselves we're using change tip what we're using yeah i was using change it was centralized it was and the beauty of change tip was i could send them the tip and because it was all off chain if they never claimed it which 99 of the times they didn't claim it i could just reuse that money and do it to someone else so i would send like large tips not this xrp bullshit where they send you like two cents i would send like ten dollars i'd be like go buy a round of beers

you know and they just wouldn't accept it right it was crazy the opportunities people had to get bitcoin earlier days like remember faucets like you could literally just get a website put in a public address and you get sent like five bitcoin well that's what i would i think we talked about it on the pod that it's like one of the first examples of gavin being naive as fuck gavin anderson the former uh lead scientist of the bitcoin project uh the yeah the former maintainer of the bitcoin uh project he had an early faucet and it was set up in such a way that like people were gaming the captcha to get all the bitcoin and drain the faucet and he was just like oh my god like why are people being so mean about it you know like

I created this easy faucet for everyone to use, and they're being so mean. It's like, dude, stop being so naive. If it can be gamed, it will be gamed. Exactly. Yeah. But it was crazy that those existed. Could you imagine?

Oh, this is actually a good topic of the last week. Did you see that puzzle that got solved? So for you freaks that don't know, there's been many times in the past where artists will create puzzles with Bitcoin private keys hidden in images, and last week an artist released

one of these puzzles and the reward was 310 Bitcoin I think it was solved in like 5 days so just for like solving a puzzle somebody got a couple mil it wasn't 300 310 Bitcoin why isn't this why didn't this pop up on my feed did you tweet about it

I think I retweeted it why didn't you talk about it that should have been in Marty's bent the best newsletter in the space maybe I'll write about it tomorrow though you should say it's my recommendation but that's crazy i'm gonna look that up afterwards that's pretty badass yeah but like if you're if you're out there wondering how to attain bitcoin you might not have much uh disposable income there are things out there where if you are wise enough and

cunning enough to solve these types of puzzles people will give you 310 bitcoin yeah i don't think that's really that i i still think the i do agree that i think the most viral way of marketing this shit is like a ready player one style international race race or puzzle or something to get a get a pot at the end you think that's what satoshi's gonna do at some point that would be such a cool way of doing it all right um he'd have to do like right away like just put it into like a multi-sig or something where he can't spend it uh and then the other key is is somewhere else releases it yeah otherwise the market would just freak out so but i i have faith that he she they would would do it properly if they still have access um but i think that's the most viral way

like you tell you tell the whole world that there's there's 200 million dollars worth of money in like 10 different places and like people will go crazy for it it would be like an absolute phenomenon uh treasure hunt yeah modern day treasure hunt it would be really cool or you There was people that hid it in that new game. I forget what that game is called. Sky something. The one that was super overrated. It's like an open world game and they're like hiding $30 worth of Bitcoin in different planets.

You wouldn't be able to like explore the whole universe of the game in one lifetime. Right. That's pretty cool. Yeah. And that's even more Ready Player One style where like it's actually all virtual. And you can do that with Bitcoin because all you need to do is put those private keys anywhere where text is allowed and people can claim it. Do you remember the Geo altcoin project? The what what?

Geo. So Geo was an altcoin project, and this is something that could happen to Bitcoin to play out what you're envisioning right now is they were like an AR-based. I don't know if it was AR or just what they did was basically airdrop Geo, their altcoin, into geographic locations.

You'd have to go with your cell phone and claim the Geo in those locations. but you could conceivably do that with bitcoin in the future with augmented reality and virtual reality and do like treasure hunts like that where you you go and find a private key and you can maybe even like use a qr code scanner to to get bitcoin like in an ar world uh qr code could work if you use gps gps space that shit's just gonna get gamed it's too easy to yeah to fool it yeah but they start with like should like pokemon go like people were like pretending they were in like tokyo to get the the rare pokemon or something yeah you know no but it proved again

it was a proof of concept that's fair yeah but that's another example of something like if you have patience it will be on bitcoin but if you want to make a bunch of money shilling your alt coin or ico then don't have patience and do it right now and dump it on retail yeah yeah exactly patience people that's the theme of tonight's episode just wait for it man patience is key uh that's the list of topics i have do you want to riff off anything else we got like 10 minutes uh you shouldn't keep large amounts of money on exchanges if you want to trade use multiple exchanges and split up the money consider every time you send bitcoin to an exchange it's lost forever that's that's that's so much your model you should be working under i just i just assume

it's a black hole and then i just plan accordingly um that's good advice and just don't use bitfinex you shouldn't be holding tether uh yeah i think let's i'll expound on that topic in particular like the fud around bitfinex and tether like i like we said like we do not recommend it i do not use tether i do not use bitfinex and i like bitfinex the i don't want to call it conspiracy theorist but the guy has been on this case for a while the guy that dumped it dumped at 800 and yeah it's been telling everyone to sell their bitcoin since then but this this stuff is not structurally uh structurally uh what's the word i'm looking for uh like what what happens if tether and bitfinex go down tomorrow it's not structurally going dead

marty no or is it over the network's still going to be producing blocks like that's the thing like they're extensions of the network there's layers built on top of the network to to an extent like it is not bitcoin that's what that's the message i'm trying to get do not conflate bitfinex and tether with bitcoin success if anything it shows the value of bitcoin because tether isn't a competitor bitcoin if if it fails it shows you why centralized solutions are inherently less secure than bitcoin is right the whole value prop of bitcoin is that it can't collapse like tether can collapse and also all the funds in tether have already fucking dumped right they already sold their bitcoin for tether they're you know i i

does bitcoin go through like a little bit of a fud crisis as it happens yeah maybe it drops a thousand dollars you know maybe it goes right under our 6600 bet before january 1st just to fuck me like that might happen you know but long term bitcoin's unaffected literally absolutely ridiculous noise it's noise in the long term complete complete noise um yeah that's all i have to say tonight had a good weekend very low-key made a nice beef bovignon last night actually reheating on the oven right now what is that which is a nice stew nice fall stew good felt like a good fall night to make a stew i like you just you give them you give our listeners a solid beef reference just i've been eating i've been

eating meat don't worry i had some red meat last night fasted today what um you got any final thoughts um uh fuck noriel uh tethers you know if you don't own tether you don't have any money in bitfinex like it's not the end of the world if if for some reason tomorrow everything fucking implodes like don't freak out like if you're gonna freak out just sell now you know right there's gonna be like there's gonna be if if it fails there'll be like panic wicks and shit where the price is gonna go a little bit go a little bit honky but if anything i think there's this situation here where tether being gone removes like a major fun line so like if tether gets implodes and

Bitcoin's still standing, whether that's at like $4,500 or whatever the fuck the price is, like institutional guys and all the finance bros and shit, they're all going to be like, survive this. Let's go. All of a sudden, there's this major black mark that's

on, you know, black eye that's on that is somehow put on the Bitcoin community. That whole narrative is gone. They're going to have to come up with another narrative that we're going to have to argue about for two years and then and then hopefully that narrative will be gone it'll happen expect it uh that's all we got for tonight freaks uh thanks for our sponsor cash app uh shout out to our friends honeyminer too they're gonna be doing a gpu giveaway soon so be on the lookout for that

on honeyminer uh on their twitter and then and our ref link is stacking sats.com for that you gotta fix that link i'm gonna fix the link but that's the ref link i own the domain stacking BreakingSats.com, great domain name. Great domain name. I own that domain name. That's our referral link. If you guys are liking this, please rate, share, subscribe, unsubscribe, resubscribe. Yeah, everyone go unsubscribe and resubscribe.

Does that help us? That doesn't help us. I think that helps us a little bit. Okay, everyone go unsubscribe and resubscribe. That's an old Barstool trick. If it can be gamed, we will game it. Yes, we will. And you freaks can have the solace of knowing that in perpetuity.

Enjoy your nights. Peace and love. Love you guys. Cheers.