TFTC: A Bitcoin Podcast - Rabbit Hole Recap: Week of 2018.11.26

Episode Date: November 29, 2018

This week we are joined by Dan Held, Co-Founder of Picks & Shovels, to discuss: - lightningjoule.com - Ohio taxes and friendly Treasurer -https://www.theblockcrypto.com/2018/11/26/ohios-treasurer-talks-up-bitcoin-tax-payments-transparent-government-and-his-own-future-as-a-crypto-owner/ - Hash rate - https://www.coindesk.com/600k-bitcoin-miners-shut-down-in-last-2-weeks-f2pool-founder-estimates - Hester Peirce on WhatBitcoinDid https://t.co/aOSPdNAG5f - VanEck OTC index https://bitcoinmagazine.com/articles/vaneck-subsidiary-mvis-launches-bitcoin-otc-index/ - VanEck & Nasdaq futures cash settled january https://www.coindesk.com/nasdaq-vaneck-partner-to-launch-crypto-2-0-futures-contracts - Tether relaunches direct redemption at tether.to - http://tether.to/tether-reopens-account-verification-and-direct-redemption-of-fiat-from-its-platform/

This episode is brought to you by LifeLock. Not everyone is careful with your personal information, which might explain why there's a victim of identity theft every five seconds in the U.S. Fortunately, there's LifeLock. LifeLock monitors hundreds of millions of data points a second for threats to your identity. If your identity is stolen, a U.S.-based restoration specialist will fix it, guaranteed, or your money back. Save up to 40% your first year by visiting LifeLock.com slash podcast. Terms apply.

Hey there, freaks. Welcome to podcast number two of Wednesday, November 28th, 2018, the year of our Lord. This edition of Tales from the Crypt is a rabbit hole recap, and this episode is brought to you by Baboon. Baboon makes technical duffel bags for all our life's adventures. I'm going on an adventure in a couple weeks to Paris, and I plan on bringing my Baboon bag. That is because their bags use waterproof materials, are tear-proof, and last forever. Every bag comes with a free shipping and lifetime guarantee. Baboon duffels are called go bags you come in two sizes you get a small go or large go small is a carry-on you don't want to check your bags you want to pay for that you get the small hey you're looking to

spend a little bit more on your flight check some bags get the big bag large bag excuse me the large go bag um you can carry them wherever both sizes fit stuffed in a trunk carried in your back or dragged wherever your adventure takes you these bags will never break period there's a lifetime guarantee and what do we say about lifetime guarantees matt they're fucking dope they're dope see why condé nas traveler is called is calling it the ultimate weekender visit baboon to the moon.com and enter the code crypt that's c-r-y-p-t for 10 off your purchase baboon to the moon.com code word crypt 10 off uh you freaks out there we just recorded a interview series uh with our our guest who's in the house for the rabbit hole recap as well

i want to introduce you to dan held i've uh i've stuck around here they won't kick me out we won't kick him out we've we've lured him in with whiskey and he couldn't he couldn't walk away we we polished off some beers true story yes matt brought in the whiskey uh i'm on one right now matt a lot has happened this week i haven't even looked at the uh the schedule of topics but what we were just talking about i think it'd be a good first topic is the uh the announcement of opac opac opac there we go opac i was thinking of tupac they announced that they sanctioned two iranians in their bitcoin addresses uh they're now on a blacklist i guess uh so that the opac is trying to sanction these two bitcoin addresses they know are owned by iranians uh and these

iranians have been using these two particular addresses for more than five years what do we think about this and it's connected to ransomware and it's connected to ransomware right i think they were like that's an important it was a payout addresses for ransomware important detail uh so they kept getting reused they reused them for the last five years which is like horrible horrible learn how to use your xpub keys yeah to iranian hackers horrible opsec um so ransomware is is that uh is the viruses that they encrypt your computer and then to get your files back you have to pay them bitcoin uh and they were they got very popular over the last two three years heartbleed and uh what was the other one no heartbleed is not ransomware heartbleed was

the ssl issue that the bitcoin core devs discovered that was it was something locker then um yeah not the hurt locker that's a that's a movie it was a good movie though all right it was it existed uh it attacked that and most notably attacked the hospitals across europe last year yeah they they attacked a lot i mean i don't know if these particular guys um if these particular guys did or not uh i mean the question is is enforceability right is is can they actually enforce this um can they pressure you know known miners into not mining transactions that leave that address can they pressure exchanges into into not exchanging it for other funds and and destroying the you know the blockchain analysis btce when they got taken down they got taken down because

of ransomware uh part of the reason was the ransomware investigation that they were allowing people to transfer their ransomware funds into btce to get get either cash out or altcoins Didn't they prove that some of the Mt. Gox coins were being laundered through BTCE as well? Yeah, I'm pretty sure. For the listeners of the show, BTCE is this wonderfully charming Russian exchange or Eastern European exchange where when you log in, all that's required is an email address or when you create an account. And if you go to the FAQ section, it's quasi Cyrillic in English. so it's it's his way it's his they they invented the troll box uh so so i wanted to interject and include some old history here just to make sure everyone everyone knows uh the good old days

the troll box was a infinite source of wisdom and and good technical analysis the troll box was a place where uh it was a very innovative place where users would would route around uh variables set upon the the uh exchange uh most of which being around the word pump uh and there's still a troll box left in bitmex bitmex has the last yeah last toolbox standing these exchanges would try to uh censor the troll box uh keeping out certain words that would uh either try to persuade people to pump or not btc btc didn't censor their troll box no rules there there's no rules uh and that's why they got shut down eventually and then they supposedly reopened as wax but it looks like that might have been a honeypot or either or just criminals no that was a so i have an individual

that i'm not going to name who had his funds at btce he was a newbie i told him not to keep his money there but he did so uh they did the bitfinex model where they had like a token that represented the debt or the essentially the amount of money that there was seized but all the all the crypto there was preserved all of it it was only the fiat that was seized okay so they it was a i don't know if it's a honeypot or not like i don't know if it's used but i don't believe you had to use no identification you just use your old identification to log in i'm pretty i'm pretty sure everyone didn't get paid though did your your buddy got paid out so you got like 70 of your money back and then 30 was represented in those forms of tokens or debt tokens that

like Bitfinex did back in the day, too. But he actually withdrew? Yep. That's great to hear. Hey, there's some ethical scammers out there. I mean, I thought BTC was a good actor in the space. They were always a good exchange. All right, we're getting off the beaten path here.

What is going on with OPAC and these two Iranians? Oh, yeah, that's pretty bad, yeah. Yeah, so it's the first big shot across the bow from like, I say shot across the bow way too much on this podcast, noted. but the authorities are saying hey we're gonna try at least to regulate and point out certain addresses and say hey these are bad an obvious this is an obvious case because they fucking reuse the same address for five years and has a ton of fucking bitcoin in it right like of course you're gonna publish that address and be like this is a bad address bad opsec but like they can

cover their tracks like you know relatively well yeah so let's jump into this what if they sent so here's a slippery slope we begin with opac coming out and and basically coming after these two uh wallets in particular all right so they spin up an electrum they create a new address they send it to that address uh what happens then well probably all the regulated exchanges will still consider that even if you send it to a new address they'll probably but what if let's let's say some some person out there is buying otc from these two guys have no idea that their addresses are are sanctioned and well even if it is publisher could be a a useful idiot out there they could dump it off on to hop in a little bit exchanges will still accept coins that are from an

address that has been quote-unquote tainted if it's been more than a few hops the two hop methodology is i think very typical for a lot of the exchanges now i get that i get the absurdity of it i agree but what i'm trying to say is that this one with these wallets you think if they did like five hops they'd still yeah i think like six hops is typically like in the traditional financial world it's fine which is silly because you can just bounce it off of six different addresses and right which is the same wallet right yeah it doesn't really mean anything and this kind of highlights the the weird intersection of the traditional world with with the crypto one um but yeah i i think like these coins aren't permanently tainted forever

like there's no way that the u.s government would taint bills for forever um fungibility for the existing financial system is important too i don't think they're trying to like really like taint these forever and i just don't see that and this is actually a very interesting interesting topic to me in particular uh this summer when i was at a conference in your hometown down in dallas i asked tour de meester because this was something that bothered me for a while the fungibility question like is one bitcoin equal to one bitcoin are there bitcoin utxos that are superior to other utxos due to taint and tour made a perfect point like no not in a global currency where yes the u.s may sanction these addresses but another country will be like

hey we don't have like satoshi's coins what do you mean do you think those are worth more or less i think they're worth equal i think they'd be worth more because if you move them they you could tank the market all right this is a rabbit hole i was not ready to jump down i don't know about satoshi i'm talking about all right um no i don't bitcoin is worth no because i i agree with tour's argument like no matter what somebody's going to be able to buy them at market price and like if you're willing to buy why would you buy satoshi's coins at a higher price knowing that them moving would crash the market okay doesn't make any sense to me let me let me hop in here i think i have a good perspective on this so do vanity coins trade at a higher rate

than non-vanity coins right is that what we're kind of asking here i think yes i mean i don't see like it's not like i have roger coins and let's say i'm a fan of roger now i've got roger coins um which i'm i have a long history with roger but uh let's let's let's those might trade at a discount but yeah that's a great example is there any premium or discount for any type of coin in crypto or especially in bitcoin um and i don't think there is no market for tainted coins if there was you know i would certainly see people in other countries take full advantage of that spread and buy as much as they could and we don't see a secondary market for quote you know the tainted coins yeah well because we haven't really seen any kind of real enforcement yet i would say

well no no now but i would argue what tour the point that tour is making is that you're not going to be able to unilateral unilaterally uh well let's mandate these restrictions like it's impossible in right because what dan just said you have like regulatory arbitrage you would just have a spread go across across borders when you have a global currency yeah and and on a positive note let's say we really like those coins it's a roger it's a it's a it's a tur it's tur's coins i love tur tur is a great guy he's the first like bitcoin economist in the space i shared his piece around uh how like investment managers should think about bitcoin back in 2015 i shared that with my that was the first article i shared with my dad so tur tur is really great um so i want to

buy ter's coins because i like ter we don't see a premium for anyone's coins uh or vitalik's coins we don't see a premium for those either vitalik can't sell his coins because if he tries to move them the market tanks i already sold most of them too i mean there's we know his exposed wallets i mean we witnessed him watch hundreds of millions of dollars yeah he still has it we're not worried about i'm not worried someone just posted an article and they cited me because i was just doxing his wallets on twitter so they they quoted me it's a terrible practice matthew we do not condone you should not allow them to be visible like if they're visible i'm gonna post them on twitter i know so let's let's run through it well i will say i agree with dan i don't think uh i

think one bitcoin equals one bitcoin i don't think you can have tainted coins in the long run because at the end of the day there will always be somebody like hey send it to me like but there could be a spread where in the u.s for instance certain bitcoins you know need to be i don't know like let's pretend we're these guys right and you want to get you're on the opac list and you realize fuck i shouldn't have hard-coded these addresses let's you know clean up our act like all they have to do is is you know either go through a mixer or even better you know you go and go to like bisque or something like that or binance and you convert into monero you convert back and then you have no there's no blockchain analytics there and then you have completely i mean there's some

blockchain analytics but then you have completely uh obscure or like plausible deniability right you have enough plausible deniability that you can yes so these uh these attempts to mandate these restrictions may be in vain i would i would bet that they will be in vain um which is funny opac's gonna have egg on his face and uh mirage if you're listening to this he's at coin center mirage if you're listening to this we would we would love to maybe help with the uh commentary around this it's where if this is an issue that you're working towards we can help you craft craft that narrative mirage we're here well i mean if the u.s government really wants to shut this stuff down like they should really shut down zcash because it's being used to launder all this

money through to the system and it's based in the u.s so it's got you know big corporate pockets jp morgan amazon though you know do you think the u.s government's gonna go great the known addresses they're perfect you know where to send the subpoenas have you guys been following tmx zcash uh conspiracy theories he's out he's got it all for twitter he got kicked off of twitter tmx you got banned rest in peace my brother tmx i'm gonna miss you bro Twitter's going a little bit crazy, man. Yeah. A little bit crazy.

We're all going a little bit crazy with the bear market. No, I mean, I don't mean that. I mean, the actual company Twitter is banning people. They're banning way too many people. They're shooting themselves in the foot. Yeah. And I'm a big fan of Jack, especially his very forward thinking with Square Cash. I love the team over there.

They're awesome people. They're a sponsor. Oh, nice. I didn't know they were a sponsor. Cash, sponsor of the pod. We love you. My favorite place to buy Bitcoin. We love you.

Jack, we will be critical, though. Not too fond of Twitter right now. Cash me outside. How about that? So, you know, I think Jack has tried to be, he's pretty libertarian. I'm a little disturbed, though. I agree with the censoring of certain people on Twitter for various reasons. Like, this is a very slippery slope.

I don't know what happens from here. I think the main problem they got themselves into is that they like somehow figured out a way to make themselves like the arbitrator of truth and like liable for what's on your feed. And what it really should be is just there's no algorithm. It's just straight chronological and like users have self-moderation and like they're not liable for anything that comes up on that feed. They're just a vessel that it transfers through. but the second you start sticking yourself in the middle of what content gets shown and what content doesn't then people expect you to to start removing shit and you're just shooting yourself in the foot that's a great point let let the users curate themselves yeah and and

and ultimately we're just going to get censorship resistant talk about consolidating a narrative around something like that's how the twitter narrative should be consolidated like hey as a company we've created like twitter created the best communication tool humanity's ever had up to this point in history like they are shooting themselves in the foot like you said and they should revert to hey we're just going to provide the best communication tool humanity's ever seen you guys go crazy we're not going to step in we're going to step back yeah you don't see someone like freaking out at at&t because an alt-right person sent a text exactly exactly this is ridiculous that's hard for people to realize that people don't dan and i talked in this talked about this

in our long-form podcast, people don't think critically anymore. Yeah, do you, Dan? You want to say goodbye to the podcast people? Well, thanks for having me on here, guys. Glad to be in New York. If y'all are ever in San Francisco, we'll do a fun time out there.

We'll definitely hit you up. We'll do a steak dinner. I hope my restaurant recommendations bode well for you tonight. I think they will. It was due for me. So getting back to the topic at hand, last night i was at the bit devs meetups here in new york and saw willow burn who's a freelance

developer recently did the chain code lightning labs uh residency uh while he was at the residency hacked on this web extension called jewel uh which basically allows you to hook your lightning node up to the extension and go around the web and buy content uh interact with microtransactions stuff like that it was the first time since the release of the iphone one uh that i had like a holy shit moment with this is magical like i imagined uh like 10 years from now like the web like no ads and literally being run by like micro transactions via the lightning network it was a holy shit moment for me have you dug into it yet well first off um the oberon brothers are fucking dope and marty had them on the pod uh very strong bloodline make sure you go back and

check it it's like one of the early it's one of the early episodes so it's two part yeah go check it out they got fucking wrecked and it's just a really really good episode i'm wrecked right now by the way um it's my second podcast of the day yeah so like marty told me he's editing out a bunch of stuff that just happened so i'm not sure what i've said and what i haven't said which really bothers me i'm a censor censor um so when are you releasing dan's pod next week next week okay so he's already he's two pods deep right now and and he's a little bit drunk and i i got this nice whiskey talisker whiskey that that one of our uh tweeters um recommended and it's fucking delicious very very good whiskey okay so so to continue jewel is not to diminish it is

is basically metamask for bitcoin except you run your own lightning node which is a big difference when it comes down to you know don't trust verify the whole ethos exactly very very important distinction so you have a very simple user experience it's very easy to make lightning payment well it will be they're not accepted there's an extension for your browser and it's not accepted yet on the different stores but once it's accepted on the different stores you know you just you just install the extension from the store like you install any other extension you point it to your lightning node and you're good to go all of a sudden you can pay lightning payments at any website microtransactions at your fingertips so well bat is fucked right like they're brave has

no like will will actually brought up that in his uh in his demo last night yeah they're absolutely fucked the basic attention token is actually satoshi's is is really what the true basic attention token and this is this is something we've been preaching for years is hey everything you guys are trying to build will eventually be able to be built at some layer of bitcoin stack in the future and it's finally coming to fruition and last night in particular there was a lot of x consensus uh people at this bitcoin meetup in particular consensus with the y the ethereum juggernaut yeah um and they were like enthralled by the lightning demos and it seems like lightning is becoming just as easy to develop upon as ethereum might be if not easier yeah and

that's huge even going beyond micro payments and stuff like that uh will has this vision of web ln which is also a play on ethereum's web 3 stack which allows you to like carry your reputation around with you but your reputation is tied to your node so if your node is known for opening channels and providing liquidity for the network you'll have a good reputation and as you go around the internet to other websites with your jewel extension websites will be able to see hey marty's a very good contributing member contribute a little bit like a privacy issue uh he has discovered he has privacy he's coming from a privacy first principle stance where you only you only reveal uh your history to a website when asked when prompted and when you're

ready to reveal that info that's important yes it's very important um yeah i mean look every single token that exists for web-based micro transactions just got fucked right so like if it's an article paywall token that you know you're just you want to watch you want to read a single article and pay for just you know the one cent for that article boom fucked you know if it's bat and and you're paying a youtube publisher microtransaction to look at a video fucked you know so that's pretty fucking cool yeah this is a game changer i mean i have i i'm working on the lightning app that our major issue well we had two major issues for launching well we had three major issues for launching uh one is procrastination which is it has nothing to do

with any of this um two is there were just really no usable friendly wallets which which jewel is is a very pretty wallet which is like important i think it's a very user-friendly uh implementation and then and then the the the third thing was is the bear market which is you know no one wants to launch anything in a in a bear market that's true but uh and this but the number two was the most important thing you know i'm just being frank with you guys but the number two is the most important thing like you don't have wallets where people can use like we were literally we're like well what we're just going to recommend the eclair mobile wallet like the only user-friendly lightning wallet so this is fucking huge news this is like really really big news yeah and

they're using lnd as a back end so it's a pretty well tested implementation of lightning and will as i said he has a security first mindset and also ux first mindset which is imperative and i i shit you not like i can't have two first mindsets can you you can have first principles for two first principles being okay two of those principles being security they share the first the first category yeah um i apologize thank you don't give me that that's why i'm here i'm here to give you shit i'm here to continue but i shit you not like i had a holy shit moment like watching will demo this like buying articles on y'alls like yes it was y'alls.org which is a very bitcoin centric website well no y'alls was created in the first place it's a troll with

yours it's a troll y'alls is a troll and charles's b cash billion billion dollar company oh billion company yeah bullshit but uh but you can easily see that process being extrapolated onto incumbent publishers like the wall street journal new york great blog great blog yeah it literally like you can eat like all these publishers have to do is make it so their website can communicate with the extension which is a line super easy a line or two a code they don't even have to talk to brendan ike yeah you know exactly just if i can do it yeah it's insane and i i honestly believe it will like i think i saw like i think i had like the inside view of a product that will change the way we internet act with the internet uh in the next decade or two you freaks you just enjoy the

pod now because in the future like you're gonna have to pay us satoshi microtransactions to listen to this shit you know so like you're a free rider right now but eventually you're gonna have to you know use your jewel extension to to pay us yeah so shout out to will he built that by himself by the way from scratch man it looks one man shop super pretty super user-friendly and it's completely open source he's open source everything so if you want to take a look at it go to lightning jewel j-o-u-l-e.com uh you'll be able to easily find the github page and if you guys want to make a first of all download it use it uh have any critiques prs request uh start interacting with the github page it's completely open source i think this is the most excited i've been

on over a specific i'm telling you or like specific uh you know not core development or anything you know not a not a protocol level change or anything just uh this is massive an actual usable consumer product yeah i think this is the most excited i've ever been and you couple this with with the hardware nodes we've been talking about with you know the casa node and the the noddle noddle noddle dot it and then the coin mine which i don't really like but you get a shitty gpu miner in there too and then all all all a user has to do is you buy you buy a hardware node you buy a little dedicated computer that's running your your lightning node and your bitcoin node and and you get jewel you point it at your node and all of a sudden you can make all these

different micro payments and stuff on on the web directly in your browser frictionlessly and your your trust is is ridiculously minimized like obviously you don't read code and shit you know you're a normal user there's there's lots of trust in there um but that trust is is reduced to the greatest degree possible because you know it's open source plenty of other people are looking at it um and that's fucking dope that is fucking that's what the vision that's what the vision is you know the vision is coming together right and it's crazy that one man built this uh to this point the power of one man to help people realize never second guess yourself man like there's so many people space okay so then we have let's let's move on to the next topic so yeah

lightning jewel if you can help will out it's been he's been a one-man show up to this point like it's crazy that he's got to this point and that's open source like this is a an incredible base layer from which to blow on and like you grow on excuse me and like you said my mind was blown last night it's like the most excited i've been of anything outside like a protocol level development in a while um so definitely check that out uh next topic with ohio taxes uh ohio has a fifth pillar politician in the ranks yeah i mean the tax news is like no fucking big deal but the treasurer loves bitcoin and he says he doesn't own bitcoin now and but it sounds like he'll own in the future or he secretly owns it either way he's like major bitcoin proponent and one of the

things i liked was he didn't use the word crypto he literally said you know bitcoin is creates freedom for people and and reduces government size and and puts a check on government which is like exactly what you want to hear yeah from a government official and shout out to bitcoin sign guy who called this out he had the prescience to call out the fifth pillar politicians that will exist within our system this is just an example of one of them uh and staying on the same vein as ohio they have decided to accept uh tax revenue via crypto that's what i said that's no big deal no big deal but i want to bring it up they're using bitpay ohio you should be you should be using btc pay server uh you're not gonna use btc you should use coinbase merchant servants

i guess like i fucking hate coinbase but they're better than bitpay fuck bitpay bitpay is about to go obsolete bitpay is even uh uh capitulated with bip 70 um where they're finally depreciating themselves that doesn't work with any wallets except for their wallet so no it doesn't even work with their wallet anymore like so that's a deprecated yeah um next next up copay either no don't oh we should talk about that that's it's we were we're pressed for time right copay is copay had a vulnerability because they had a dependency further up the line uh of their project so that they had a javascript dependency that that they relied on that was automatically merged into their project and that's just a bad trust model

so they shouldn't have that trust model well this this this package in particular was specific to their implementation it wasn't all the packages this package is used in like a ton of different projects but i thought but the vulnerability was specific to copay so the the the package that was compromised is used in a ton of other shit but the actual vulnerability was targeted specifically at bitpay okay and it was weird because it's targeted at wallets like with a greater than 100 bitcoin yeah a hacker with morals i guess only attack their age is peter pan yeah not peter not peter pan robin hood yeah there you go um yeah so there's a robin hood hacker out there uh do not use bitpay and uh do not bad trust model yeah terrible trust model

um that's a multi-sig use electrum actually yeah good advice from bitdevs last night if you're doing multi-sig use multiple wallets create a multi-sig uh multi-sig of multiple wallets yeah like an electrum and a trezor or something like that yeah but electrum lets you use trezor to make the multi-sig yeah so you can use like a trezor a ledger and the point of using multiple different wallet softwares to to make a multi-sig is in case like there's ever like a critical vulnerability like a ledger or trezor or anything like that right but electrum allows you to use those multiple methods yes so like electrums though is the like the home base of that all yeah um next up we got hash rate talk we've got a couple we're about to have two downward

difficulty adjustments in a row first one was seven percent seven and a half percent uh next one uh projected to be in the next week week and a half is uh projected to be around 11 and a half 12 percent uh hash rate is falling with the price matt does price follow hash rate or does hash rate follow price well it's nuanced right but but hash follows fucking price guys like they're running a business they have to pay rent they have to pay labor you know what the price is matters to them that's how much money they're making uh the smart ones finally nowadays have legitimate ways to short so they can hedge themselves which is beautiful for miners uh obviously not a lot did um what's interesting is the electricity in china has doubled

because a drought right right which is normal with the seasons yeah it's winter there where It's a dry season, so there's not as much rainfall. Hydropower. All their power comes from excess hydropower. You don't have excess hydropower, prices go up, right? So their price has doubled. Bitcoin goes down. All the miners were overextending themselves.

The same reason all the buyers were overextending themselves. Mining is the ultimate long-term bet because you have major, major capex, and you're spending a ton of money to set all this shit up, and you get paid over time, right? So these guys are going basically levered longs. And if they don't, if they don't hedge themselves, like, of course, the price, the hash is going to go down when the price goes down. Yeah.

And one thing evens out the difficulty adjustment, make sure that this shit, that's the beauty of it. Exactly. That's what I was just going to get into. Do we believe in Amon's theory of the downward spiral of hash rate? No, the death spiral isn't going to fucking happen. And the truth of the matter is, is I can keep fucking saying that unless, and then the death spiral happens and you can you know be like you were wrong and then it's fucking over but i don't

think that i think it's been proven wrong multiple times in the past the difficulty adjustment is fucking beautiful it changes um and if you have like some kind of worst case scenario where there's like a large drop off and and blocks are like ridiculously slow then then we could technically fork to a different difficulty we could technically fork to a different pow if we needed to those are worst case scenarios but it's not zero you know we talk about hodlers of last resort a lot but a lot of people don't talk about miners of last resort and they really shine in these uh downward difficulty adjustments because there's people that are holding hardware that uh has not at a certain point was not profitable but now the difficulty is adjusting downward is now

profitable and they will turn those machines on to eek as much income as they can i can stats Exactly. So there is a there as there is a hodler of last resort, there's a minor of last resort. There's somebody who's got that hardware that has not returned their full investment yet that is waiting for a downward difficulty adjustment to turn it on and reap that benefit. I agree. So, yeah, we're going to see this play out. This is this happens every time it's going to look hash rate fucking blew up this year. It was amazing. amazing it just kept going up 12 to like 15 x so they like they had a lot of inefficient miners

that there's like a way more a6 that got developed that are way better and they you know they held probably a little bit longer than they expected because they wanted they expected the price to go back up you know just like a normal investor would you know they would have had irrational of hopium and um and and and it finally hit the point where they're like holy shit like every time i run that miner we're losing 40 cents a day so we're gonna fucking throw it out and that's what happened yeah you know um but there was like all there's like lots of fud triggers and stuff but whatever it's mostly there's nuance to it but mostly hash follows price if there's an incentive to mine if there's incentive to create more efficient chips you're going to do it if there's

an incentive to throw that shit out you're going to fucking do it right yeah exactly um we hear this same shit every single fucking time yeah well we're going to hear it into infinite like in 2025 when the hash rate falls they're going to be like death spiral okay wake me up when it happens right um no but it is uh there's a lot of fun out there a lot of people will point are pointing at bitcoin cash uh bch abc bch sv both are technically more profitable to mine than bitcoin no no sv isn't technically or abc we checked last night they both were but with that being said they they're their difficulty adjustment changes way more frequently um so so that makes sense to me that i thought it wasn't profitable on sv the key things that

you also have to think about is that miners don't get paid for 100 blocks after 100 blocks they can actually that's when the coinbase reward is yeah so if you're like on an unstable chain like sv uh and abc for that matter like you could get to a point where you know it's 97 blocks later and you get a fucking reorg you know and then you're fucked like you just lost a lot of money uh and and the liquidity issue as well where where just because it says it's most profit more profitable doesn't mean you can actually dump your coins on market and get market price you know uh if they're very thinly traded markets you know one of the reasons sv is so high especially because binance isn't fucking allowing deposits and withdrawals so the price is automatically pumping there's no

arbitrage there and especially if the mining pools in those particular uh minority forks are the market makers as well and like super centralized yeah exactly it's fucking garbage and i really like me and like some other people i've spoke to like we're ready to support i've been ready since the beginning give us a pool where the explicit goal is to fuck them let's just any shot 256 fork that's small we fuck otherwise we'll just mine bitcoin give me that option and they'll be dead let's do it they should have died way long ago they need to be killed you know people used to have balls with this shit it's time bitmain pretend they were protecting it for a while they're weak they can't protect it it's time to kill it let's kill it

Matt, you're so insensitive. It's time to do it. These people have a right to view that their chain is the Bitcoin. They can continue, change the POW. I agree with that. Let's force them into changing the POW, guys. Yeah, but as we have expounded upon here, I would not freak out about the much-vaulted Bitcoin mining death spiral.

It's probably not that big of a deal. As long as those miners are being thrown out, they're inefficient. Even if you wanted to use them for a 51% attack It'd be super expensive It'd be hard to sustain that kind of attack We always have the nuclear option Of changing the POW We can always do some

You know It's just No one wants to kill their golden goose No one's going to spend that kind of money to do it 51% attack today You should always be worried about a 51 But right now it's way less risky Than it's been for the last 2, 3, 4 years

we're doing really really good yeah in terms of that i mean bitmain's weak man if bitmain can't stop fucking craig wright then bitmain's fucked right now like they're they are all this rumors all this bullshit whatever you know i've been tweeting about it and shit with grains of salt but what proves that bitmain is weak right now is that they can't fucking kill sv because like what they should do is is keep reorging sv and if they if they don't have the ability to get five percent six percent hash to keep fucking sv over and over again then they're don't have any kind of capability to do anything to bitcoin like there's not even a fucking chance they both have negligible hash rates yeah and there's been a lot of people who try to attribute the price fall over

the weekend including jihan include to uh yeah i mean there was jihan had that we chat whatever where he was like i'm gonna if i do this that turned out to be fake that turned to be a fake that was fake that was fake but not including jihan there was a lot of pundits out there who tried to attribute the price fall to uh the bitcoin cash fork in particular uh whereas our friend mirama mamadav would say it's just a snowflake on the avalanche i mean i said it straight up on twitter too i was like this is not it has nothing to do with bcash it was we had we had very little volatility we were in a bear market that breaks down that's what happens yeah i i bet the bigger driver and i'm i'm not trying to force a narrative either but if i were being

completely analytical and looking at it rationally i would say the bigger driver is probably the fact that the crypto funds of last year that had one year lockups probably uh those lockups probably ended and people were able to liquidate their shitty investments and some of the funds actually had lockups where if you were an employee you get out when you leave the company yeah so a lot of people left their companies and they went back to their traditional finance jobs and and and they get out of their lockups see you losers like bear markets price goes down bull markets price goes up that's that's the way that's the way the cookie crumbles uh we got uh the sec head hester pierce on what bitcoin did not the head she's not the head she's one of the five board

members one of the five board members close as close to the head as you can get uh so peter mccormick who i actually met last week he was in town um awesome dude absolutely awesome dude bummed i wasn't able to join you guys uh he's uh what bitcoin did is his podcast um he interviewed hester pierce who was the dissenting opinion on the i think the most recent etf denial uh that's just fucking cool she reached out to him she was like we're ready to do a bitcoin interview he flew in from england to do it you know she took a picture with like like come on guys like in 2014 like we didn't have like one of the sec board members like saying that regulators in the u.s shouldn't shouldn't interfere with this right and then

furthermore at consensus yesterday they had uh clayton come in who is actually the chairman i think he's yes from the sec he's ahead and he made slightly negative comments but slightly negative comments made at a bitcoin conference is bullish that is that's awesome like that's ridiculous the sec chairman came to a bitcoin conference and didn't say that it's terrorist money you know like this is that's a that's a big deal i basically said he didn't positive thing at the end of the day he said he just didn't want the trading to be manipulated and he wanted custody to be locked down right yeah i mean but that's like a questionable talking point because like how far do you draw the line yeah because with bitcoin you'll never be fully sure that there's not some

whale manipulating whatever and like what is manipulation yeah i would say in a free market there is no manipulation that's just whales being whales yeah um so there is like some questionable whatever there but i think overall all of his statements and consensus we we talked we have some friends who went there right well you didn't go i didn't go but we had some friends that went there and they were saying that overall his speech seemed you know very uh besides the point that he was actually speaking at a bitcoin conference to begin with it seemed very positive right not negative yeah it seemed very not negative i think there's a positive there's a positive ev coming from this appearance from uh from clayton yeah absolutely

why would he even come you know you don't come you don't come to an al-qaeda conference i'm becoming more and more convinced that the regular is going to have no power in this space though especially after that opac talk earlier no see they have no power over bitcoin yes bit license prove that they have power over people that use bitcoin they have they have power over americans yes and we're americans so america gets fucked if they handle this poorly bitcoin doesn't get fucked that's an important distinction here it is very important as an american it's important to me because i don't want america to get fucked neither do i but as a bitcoiner it's inconsequential to me because bitcoin doesn't fucking give a shit yeah you know we were talking about the opac

earlier right if those iranians were using vert coin or some like ridiculous alt coin like it'd be way easier for them to be like if those fucking coins move you're going to get mo like you're going to you're going to either jail if you're an american citizen or you're going to fucking get mo if you're not an american citizen like you're fucked or like you know if you're a middle eastern country like you might get hit by a fucking drone you know like and then that that that those transactions better not move but with bitcoin it's like who do you pressure for that you know a miner is going to mine it and it's you can mine anonymously because we have small blocks so so so how do you enforce that how do you stop that from happening we'll find out and i think

this is going to be a big test this is maybe like a diamond in the rough story and a lot of people aren't paying attention to it but may have a big impact on the certainty that people have uh that bitcoin is censorship resistant and uh resistant to state attacks i would say this is a state attack in a way which one opec yeah i mean guys install wasabi wallet wasabi wallet.io and please start mixing your coins let's let's get all these things let that let's make plausible deniability for everyone yes it's important imperative all right last topic here we're to talk about vanak um otc index i did not i've not read any of these last three stories i love it you just trust don't verify i'm trusting what's going on are we getting an

etf in the next couple weeks uh no uh vanak uh put in otc price index so we can see the prices more transparent and otc it's like a it's a setup what desk are they trading tracking Multiple desks. Cumberland, Genesis. I'm not positive, but it's definitely multiple desks. And the idea is that they want more transparency in OTC markets. Circle Trade, Genesis Trading, and Cumberland are the three that they're starting with. And they're going to add more.

And this is key because the VanEck ETF is going to be based on OTC prices. So presumably it'll be based on this OTC price index, which is what we saw when the Winklevoss tried to do an ETF. They created the Winkdex. I don't know if you remember when they launched the Winkdex. I do not remember the Winkdex. It was a very pretty website, so I'll give them that. So this is them setting up that price transparency before they do their ETF, which is scheduled for February-ish. then also they announced that in january they're aiming for january ish for nasdaq

and them to partner with a futures product that is cash settled um backed is also aiming for a january-ish launch but that is not back cash settled that's bitcoin settled you can actually get bitcoin at the end of your futures trade this wasn't things this doesn't happen in 2014 we weren't talking about is nasdaq gonna list futures in two months like this is this we're in a completely different this is a completely different scenario now price wise you guys are way too fucking you guys are all calling for one thousand dollars fucking a week ago we're probably in a bull trap we'll probably go back down i'll probably lose my fucking bet you're definitely losing it but yeah it's a little bit confident so let's just fuck

them let's just go up and then go back down let's capitulate after after my state i would be so pissed if i buy you a steak dinner and then we go down that'd be fucking beautiful it'd be the best case um but this you know it's probably like a short squeeze bull trap situation you guys are way too exuberant for this to be the bottom but i don't play those games i just i just huddle like a little motherfucker yeah you motherfucker you um tether this is a big one relaunches the last one was oh yeah i see we actually did cover all this shit that's pretty good i think we're doing a short amount of time we did pretty good tether tether uh used to let you go to tether.to to switch your tether into real dollars and then they got rid of that because regulators were

gonna fuck them and now they reopened it and that's i think that's a big deal i think what his law master think of this what's our boy law master saying he's not our boy um i didn't call you i don't know last time you said that but you always say our boy uh until he buys bitcoin he's not my boy that's how i feel about that um very this is huge because i think the big deal the reason they got rid of tethered out too is because let's imagine you're breaking u.s laws right do you want a million three dollar bank transfers going through no like that's ridiculous it's super easy to shut it down right so you do large batch like otc deals where it's like three million four million at a time and then you could do like creative banking techniques where you like give

them different bank accounts over and over again all this different stuff it's a way different uh expectation than than giving consumers a direct redemption uh so it it protected them they were like playing you know like the same games that the sports books played when they were dealing with all the regulatory uncertainty uh so this is a big deal this means that they're probably like the doj investigation that we heard about is like probably on the mend and i mean tether has been like a main source of fun like i've been talking we've been both talking about this like way way way way way over a year oh wait my two years almost now yeah i mean bit for next sold at 800 so we've been talking about since then yeah so um i think i think this is like a

really good sign it's a very positive sign that that tether is and i never thought they were not solvent i just you know they're breaking u.s laws so they're always sketchy but they feel they obviously feel more comfortable probably because all the other stable coins have launched and they all allow redemption through their respective sites so they feel like they have some like political cover because those are based in the united states and they're not yeah is my guess so it's good news it's definitely it's super positive news it seems like there's a lot of good news in this bear market right now this is uh mr hoddle one of my my good friends One of our good friends online, Mr. Hoddle.

Love you, Mr. Hoddle. He's the most bullish bear market we've ever been in. Right. You know? As long as you're not into the shit coins. Like, there's... We don't know what's going to happen with those people. You know, you never know.

We don't. As we described earlier, it seems like Lightning is killing a lot of altcoin... Well, it kills a lot of token projects. Like... so when it comes down to like fair launch pow alt coins it's a whole different breed in my opinion but a lot of these bullshit token projects that were like where you're going to use this token to pay for wall street journal articles you're going to use this token to

pay for your youtube views and shit like that's bullshit that's clearly it was completely centralized to begin with doesn't have any censorship resistant properties uh gives you no equity in the actual underlying company. It's a completely worthless piece of shit. Yeah, I mean, with Bitcoin, the value prop is a very obvious value prop. It's a fixed supply asset, and the more people that buy it,

the higher the price should go, right? Yeah. And this is crazy. Like, having all these things... Like, Wall Street is fucking people, is what they're doing. I mean, I don't think they're suppressing the price. I think they're just taking advantage of the normal cyclical movements to, like, build up a massive position right now.

I think all the smart money is building up, like, a massive fucking position right now. I would not be surprised. And I would not be surprised one bit. Yeah, there's too much good news going on. I mean, I'm not calling for a price bump imminently or anything, but. Marty is calling for over $6,600 by January 1st. Under $6,600, but under $6,625. guys what we're aiming for is 66 26 by january 1st and then you can just dump you can capitulate

after that like let's just hit that point let's push it over let's push it over the edge all right get my free steak you you freaks can try we'll see if it happens um that's all i have to say for this week uh it's been a fun week it's been a long day it's been a very long day very productive day second podcast i have one more thing to state all right state it all the longtime bears have come out over this last two weeks to kick us while we're down and i think it's important that all of you guys go out and you you archive all their tweets archive them all on art go to archive.is and just archive all their tweets put them all out there i've had a bunch of them block me because i've been doing it across the board and it's important

that we document all this shit because they're going to delete it they always delete it and then they say the same shit at the top of the next bowl so we need to archive it all and they go fuck themselves okay that's my psa thank you that was uncle maddie's advice for the week his psa of the week i want to thank uh our guest dan held who joined us for the first half that was pretty cool right that was nice yeah that was a surprise you didn't tell me i was gonna meet him yeah and they came up big surprise guy here i hope dan is on a surprise guy hope dan's on a lovely date right now appreciate you freaks for tuning in sorry if i was a little inebriated tonight he was very inebriated tonight peace and love cheers folks