TFTC: A Bitcoin Podcast - Rabbit Hole Recap: Week of 2018.12.05

Episode Date: December 5, 2018

This week Matt and Marty are joined by Bitcoin Sign Guy and they discuss: -Rogoff v. White recap -Vertcoin 51% - https://twitter.com/matt_odell/status/1069989819969929218 -International oil contracts - https://twitter.com/arbedout/status/1070323234845925376 -Buy Bitcoin in Paris - https://twitter.com/MartyBent/status/1069330451695845383 -Pierre Rochard's lnd launcher + Zap + Joule - https://twitter.com/pierre_rochard/status/1070296265806745600 -Wasabi UX update - wasabiwallet.io -Death spiral - https://www.theblockcrypto.com/2018/12/04/the-bitcoin-mining-death-spiral-debate-explained/ -Coinshares Bitcoin mining research - https://medium.com/coinshares/an-honest-explanation-of-price-hashrate-bitcoin-mining-network-dynamics-f820d6218bdf -RAMP - https://en.wikipedia.org/wiki/Russian_Anonymous_Marketplace -Larimer new coin - https://twitter.com/MartyBent/status/1068129098088755200

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What is up, freaks? Welcome back to Tales from the Crypt. It's your boy Marty Bent here on a Wednesday for this week's edition of Rabbit Hole Recap with Matt O'Dell and a very special guest who brought a very special drink with him, Bitcoin Sign Guy, who's supplying the Clarified Milk Punch tonight. Welcome to the pod. Ahoy. How's everyone doing? It's good to be here, guys. This is a weird drink you brought us. Yeah. You want to explain this drink? Yeah, explain what you brought us, this concoction. This is a clarified milk punch. It's made with port and black tea and then rum. But the real trick of it is you put all of these ingredients on top of milk and then you add lemon juice and

the lemon juice curdles the milk and it makes it coagulate into curds that then you can strain off. And so you're left with the whey taste of milk, but it's a clear ruby colored drink. And so it has a creaminess to it, but it's perfectly clear and there's no lactose or something like that. Is this a traditional holiday drink? Is that why you made it? I think, yeah, it's a traditional European holiday beverage. So I figured. I hope it's not strong because it doesn't taste like alcohol at all.

It's very strong. Well, here we go. It doesn't look like milk at all. there's no there's no milk looking looks like fruit punch that's the curds they're all

strained out through a cheesecloth it's pretty cool we learn new things every day learn new things try new experience just if you're a future

future guest on the rabbit hole recap and you come to join us this is you know what you're up against it'd be nice if you if you also brought us

a custom beverage it's the type of cultured aesthetic we're going for here there you go it's beautiful so I'm also drinking scotch

next to it though because I'm not I'm not fully sold on it Yeah, not sure how the combo is going to work out towards the end of the episode, but we'll see. We'll see where it takes us. But let's get back onto the subject at hand. It's, I think, the 15th or 16th edition of Rabbit Hole Recap.

We'd be killing it. The three of us attended the Soho Forum earlier this week. It was a debate between doctors Larry White and Kenneth Rogoff. Larry White is a free banking evangelist, and Ken Rogoff, I guess most listeners of this podcast, uh would call him a statist uh that is state evangelist yeah state evangelist yes um but it was an interesting uh debate and i really liked the forum and the way it went uh going in i was telling you guys earlier i was like totally like down on rogoff obviously because he wants to

institute nerp and stuff but like after he explained what's the band cash wants to ban cash and stuff like that but uh he did make some compelling arguments not that i agree with them but they were uh compelling i could see to some people what do you guys think i mean i think his you know like i guess his arguments are decent enough but like like cryptocurrencies make them irrelevant yeah because because they just i don't you know i i think the cat's out of the bag they they can't stop us like ideally they would like everyone to fall in line and use a digital money that's easily trackable that's you know censorable but i i think but also that central bank digital currencies are the most direct way for central banks to apply negative interest rates so it

doesn't they could apply negative interest rates across all held money uh in the money supply not just deposits at the federal reserve so the the sort of mechanism that he advocates here is uh in case people don't know is that when you have cash in an economy and the central bank tries to impose negative rates, people will just withdraw and flee to cash. And that dampens the efficacy of the negative interest rate. And so, of course, I think that this is a lever of power that central banks shouldn't have, even if it is, as he states, and I somewhat agree that it is probably the most elegant form of monetary policy. I would prefer it, or I would probably predict that its efficacy would be better than say quantitative easing but i still think that

constitutionally it would constitute a taking and would i don't know have have other issues thereof i mean the bigger issue is that you know bitcoin exists so so they have to compete like the whole time he was up there making his argument i was like this guy is the best bitcoin promoter there is you know you have people out there saying you know it's desirable to ban all large cash bills to move to a completely digital system so you can easily implement nerp and basically take your money take your wealth that is like is there any better bitcoin advertisement than that like that's the best thing you could you could hear yeah no and uh i completely agree with you guys uh and to give the other half of the debate uh dr white's perspective from the free banking perspective

if you freaks will actually learn a lot more about this next week when i post the episode with matthew mesinxius from the crypto voices podcast who went over this thoroughly uh but dr white would argue that we should have a free banking system in which uh private banks compete with each other and are able to uh create their uh own notes that are backed by potentially bitcoin reserves in the future and they can compete on their own merits in the market and people can choose which money they want to use, which bank they want to trust. And there was actually, I learned from Matthew, in Canada between, I believe it was like 1816 and 1920, that 60-year period, they had a true free banking system and they were actually affected more heavily than the

U.S. was during the Great Depression. But with that being said, none of their banks failed, which was very interesting to me. I did not know that. Right. So I would highly recommend that any listeners who are more interested in learning about these, I guess, select periods in history of extreme banking stability read several of the books by George Selgin, the scholar at the Cato Institute. He's, I guess, the leading expert on all of those. So go there if you want to learn more. yeah um no and that and that's another thing i think that bitcoin does brilliantly is has people thinking about these differing theories and these differing schools of thoughts whereas maybe a decade ago this type of conversation wasn't happening so uh very encouraging monday night there was a lot of young faces in the crowd a good bitcoin crew there very good bitcoin crew

too bitcoin or showed up in mass there was developers pierre was there uh they called up bitcoin sign guy they're like we got a celebrity sign guy asked a question they recognized them yeah they recognized them right away they're like that's the guy that's the guy that was fucking cool uh the other thing to note is that uh larry white is uh important portland he's he said everything right and i went in there actually one of the main reasons i was going was was to see you guys but but the second main reason i was going was to heckle larry white and literally i agreed with every single thing that came out of his mouth but like you have to be skeptical of him because he has he's an advisor for for initiative q which they have his name on

the website all over the website uh he didn't mention it once but he did shill beam which is uh the grin implementation the mimble wimble implementation that is like more it's a grin competitor but it's more corporate right and of course they have larry white as an advisor to it So and be wary a little bit. Matthew from or Matty from Crypto Voices actually had him on the podcast a few months ago, so was able to walk up to him and approach him. And he asked, he called him out on it. And Dr. White's excuse was, hey, let a let a hundred flowers bloom. So I guess that's his perspective.

Well, that's always that's the strongest the strongest altcoin founder visor defense is let the free market play out. i mean that's why i'm not specifically against altcoins from an overarching perspective i just think the individual advisors are taking advantage of dumb people but i think from an overall market perspective you know let them all fucking go for it yeah it's meritocracy at the end of the day uh and i would argue that we believe bitcoin will win out in the long run we'll see though uh back to the news items of the week vircoin big 51 attack this week is the fourth one fourth one super deep matt you are this is your this is your bread and butter i'll let you take this one well i'm i'm glad that like people are starting to fucking wake up to it you know i i i haven't

shut up about this for over a year now i mean the market completely over just just completely disregarded any kind of chain security or censorship resistance which is the main value prop of all of these these fucking things uh and i think the hash war the the so-called hash war with bitcoin cash also you know brought it to light a lot you know they bitcoin cash abc ended up having to institute centralized checkpointing system which is you know you're just throwing the baby out with the bath water you're not really solving anything um so with vert coin they're a famous asic resistant coin um asic resistance is futile you can't trustlessly put in asic resistance because eventually someone will make a specific

chip that outperforms a general purpose chip this is just that's how things are that's the natural order of the world um you can make something purpose built that will outperform something general purpose. Uh, so the only way to do it is to manually, uh, constantly fork out ASICs and that introduces centralization risk. That's, you know, what Monero has been doing and Vertcoin, because there's such a shit coin, they, they were like really slow about doing that. So supposedly people think that some ASICs were made and, uh, because most ASIC manufacturers would never make a vert coin asic because they're afraid it's going to get forked out they don't have like vital they don't have true competition there with asics it was like super trivial for

them to get 51 percent attacked and and and basically money gets stolen from exchanges in that in that case so any any exchange that has uh you know has has weak chains connected to it and no kyc because that's important can can get exploited yes kind of so our boy uh at all Storms on Twitter actually tweeted out this scenario, which is creating an Anon account on insert Anon exchange here or exchange without KYC here. Send altcoins, market by Bitcoin, withdraw Bitcoin, 51% deep reorg, whatever altcoin you originally sent. And you basically get your money back and Bitcoin for free. The big one you would attack in the day would have been ShapeShift, but now they have KYC. So now it's basically Binance.

you know binance gets around it a little bit because they have pretty stringent limits if you have a non-verified account i think it's like two bitcoin you can withdraw per day so like if you're trying to do a sizable attack like that's going to end up being pretty expensive if you did it to someone like coinbase they literally have your address well right like your home address they could just go to your house and be like dude you just stole a bunch of money from me well this brings up an interesting point about bitcoin attack vectors and a lot of people allude to the possibility of a future state attack on bitcoin in particular but uh what we're finding with these types of scenarios is it might be possible an easier attack vector

for the state to go after these exchanges via these reorg attacks uh basically bankrupt the exchanges and disrupt the on on and off ramps if they wanted an easier way to attack bitcoin instead of attacking it directly i mean there's look i think the exchange that probably right now has the most ire of the u.s federal government is bitmex and bitmex solves it quite elegantly they only allow bitcoin deposits and withdrawals and they only process them once a day for withdrawals so they have a very simple process it's only dependent on the most secure chain and that attack vector is is you know very limited to them it's more it's more like these shitcoin bucket shops that are that are vulnerable to that it's a little chilly this time of year in

new york should we take a field trip to the seychelles i think we should i don't have a case to bring but uh i'd definitely go you have no case you have no business in the seychelles where is the seychelles like the eastern coast of africa yeah east coast of africa it's it's also near where uh if you play metal gear solid five the uh snakes base the diamond dogs they're off the coast of the seychelles that's probably where arthur got it from absolute closest thing to ancapistan right now we're gonna get yelled at for uh for levels make sure you're bringing the mic close to your face but this is true um another so many uh audio audio files who listen to your show yeah uh very sensitive subject on this podcast in particular

bitcoiners are maximalists in all different sorts of of hobbies and shapes and sizes this is true uh staying on the vircoin story too to get back on topic zuku uh ruffled a lot of feathers today uh saying this is a serious problem nakamoto consensus is failing pow is dead uh vircoin is currently being 51% attacked and he's trying to conflate all of PW to to Verquin being susceptible to an attack which I don't agree with and there's an argument to be made that even though Verquin got 51% attack Nakamoto consensus did not fail you know I'm a little bit I mean first of all Nakamoto consensus is working exactly like designed exactly you know I'm a little torn because like I've been screaming from the rooftops that people aren't taking security

seriously and you know because of vert coin zooka's finally seems to be taking it seriously so i'm happy about that um of course the human condition is the second you take something seriously you go to the full fucking extreme and just say nothing is secure you know these are false equivalencies like it's infinitely more difficult to attack bitcoin than it is to attack vert coin it is even infinitely more difficult to attack z cash than it is to attack vert coin and the difference between zcash and bitcoin is also infinite so there's like a very there's a lot of fucking nuance here and uh putting my conspiracy hat on for a second here uh zuku is the leader of zcash a project which is pretty contingent on its uh founder reward or dev reward

that's baked into founder reward founder reward baked into its uh block reward there's a lot of speculation that they would like to increase or expand or uh extend that founder's reward further into the future than was previously uh accounted for uh and if they're not able to do that uh basically another way to create the revenue uh that is produced by the founders reward would it be a transit to proof of stake and become a main staker in the network and then they can maintain the and and besides that this whole time zuku has been part of this war against ASICs where they don't explicitly say that they're going to fork out ASICs, but they have all this conversations with, oh, we want it to be GPU friendly. Oh, maybe proof of stake. Oh, maybe

we'll change the reward. Maybe we'll do... And all these things discourage security spend on your network. They discourage people from making more ASICs. There's a critical point there in the beginning where you need multiple manufacturers to come in and produce ASICs. Otherwise, you end up in a super centralized situation and um i i just think he's been very hypocritical in that regard because he hasn't taken it seriously with zcash and then all of a sudden you know some shit coin you know vert coin gets attacked that has basically no action no activity on it and now he's like it's just like completely dead so it does kind of feel like a pos show and then the other thing is the weakness for zcash is in nakamoto consensus the biggest if you're talking

about state resistance the biggest weakness for zcash is that zuku and the whole zcash company can be thrown in jail if they don't fucking comply and all the investors barry silbert and all the rich investors they can just get fucking thrown in jail they're the weakness you know i i I think Zcash is questionably secure to begin with, with just, you know, POW. But I think it is completely way more weak in terms of their organizational structure, right? Like it makes it way weaker than the actual POW. Because at least they have ASICs.

Yeah, BSG. The fact that they have ASICs is big. Any thoughts on the subject? well things that are valuable usually require sweat equity to be invested i think that uh if you have an aversion to proof of work you might be the type of person who thinks that in the soviet union your job would be anime appraiser i fucking love you cheers and that was uh that was talking vert coin so hey just be aware these weak chains can be attacked they are being attacked and i only expect these attacks to

continue and increase in the future but you mentioned a barry silbert i saw today i think that grayscale now has 210 000 bitcoin thank you for bringing in their in their coffers i mean that's that's 10 of the one percent excuse me yet thank you for clarifying running away with the math here but uh that's that's a lot of bitcoin that's one percent of the future maximum supply and uh i guess that would give them an incentive to change bitcoin to proof of stake but i guess that's not on the table yet yeah yeah there is a big discussion to have around the ethics of how much coin these funds hold well i mean first of all like bitcoin's not moving to proof of stake uh wait wait wait wait i guess my i'm not i'm not suggesting that we

debate that my question is more is is that is the fact that they hold that much bitcoin a vulnerability where is the if there is a vulnerability in that you know let's let's freaks i'm sorry for the levels i know you're going to complain like i'm looking at we only we have two mics and we're passing the mic in between me and bsg so i apologize yeah no but that i am uh bitcoin selling i'm happy you brought that subject up it is an important one one percent of the whole Bitcoin supply is now owned by grayscale investments. I think the better argument is, is that these types of

funds are going to exist no matter what. It makes sense from an efficiency point of view. You know, you have one person custodying it and everyone gets to trade it on their TD Ameritrade account or whatever the fuck they want to trade on. So it's going to happen no matter what. Also custodial exchanges, no matter what, are going to hold

a shit ton of Bitcoin, like Coinbase and stuff. So the real question is if you're a proof of stake proponent are you comfortable with these funds you know being major you know major elements of the security of your chain do you are you comfortable with these funds having like actual direct influence because i don't think i personally don't think they have much influence over the direction of bitcoin because it's proof of work and not proof of stake i think segue 2x

proved that you know there was plenty opportunities for us to do some kind of stakeholder vote type of situation that ethereum did when they pushed through the dow fork with only five percent of the vote but um we didn't everyone was against that even the major bitcoin stakeholders and i think that it was a it was a big turning point where it doesn't matter how much bitcoin you own that's not you know where you get where you get the say in the network yeah very good point um yeah so be aware of that as well freaks uh very interesting news and also good news i think i would say that gbtc owning you know one percent of the supply is probably good news because it's the only exchange traded um thing for americans really except for the etn which is like kind of

around the side you know it's not legit as much yeah for americans yeah like i don't think it's available as and on as and on as many platforms a lot of bitcoin by new yorker held by new yorkers Winklevii they have 1% too wasn't that their goal back in the day to get to 1% of all Bitcoin could have been I think their goal is just to dunk on Zuck so

whatever amount of Bitcoin they need to hold to get to that level I hope they make it you got this Winklevii actually yeah Facebook's fucked man have you been reading what's going on there fuck Facebook we're not gonna dive too much into that stuff delete Facebook

i just wanted to say i know we're a little bit hypocritical with twitter but when you use twitter you should use a nim and not show your name and shit and also i know we're hypocritical about that as well but not bitcoin sign guy so he's got that going for us and and as far as we're concerned you know we're doing it for you guys yeah taking one for the team next subject uh we're gonna go from bitcoin and crypto specific to macro uh we've talked about this before in the past i've talked about this and Marty's been many times in the past, but the growing trend of countries looking to denominate their oil's future contracts in their native currencies. We've talked about China and Russia creating energy deals between each other with the oil contracts based in yuan and

rubles. It seems that the Eurozone, the ECB or the Euro Council, whoever makes these decisions for them, is looking to do the same. They would like to have oil contracts based in the euro too. arbed out was tweeting about this today um so this is just like a growing trend that i think is a huge macro development to pay attention to especially if you're a bitcoiner because basically the petrodollar underpins the u.s dollar is the reserve currency of the world and when you have a scenario in which the reserve currency is in question uh typically throughout history the safest uh commodities that just so happen to double as money are apolitical so gold and there's an argument to be made that now bitcoin exists and could be that vehicle as well

Yeah, well, not to not to change the subject, but in macro terms, Bitcoin faces probably its most important test coming up, which will be when the economy, as it's currently, you know, cooking along, eventually takes a correction. will bitcoin be a will it will it trade counter to i guess whatever impending market correction we have so we're sort of laying the groundwork for bitcoin to be able to pump in spite of this but everyone will need to buy bitcoin when stock market starts tanking jill uh carlson had a good thread about crypto in general being a canary in the coal mine for a impending macro crisis but yeah well form your own opinions on this yes and i actually think pierre had a very very good take on this he tweeted out yesterday or two days ago i believe my contrarian view bitcoin is not a risk on reach for yield asset nor is it a risk off safe haven asset those are just two of many narratives

Bitcoin sits outside of that dichotomy as a growth currency with an exchange rate driven by endogenous properties and adoption drivers, which I thought was a very good explanation. I mean, we have our own cycle. Bitcoin has its own cycle. I think that, you know, so it depends on on when these macro events hit Bitcoin in its own cycle. right like if we're overextended and we're in a bull market and all the shit coin and eos is trading at 18 and multi coins giving out a bullish thesis that they're pretending that didn't exist now are they really yeah yeah they were short the whole time and they they made bank um if if you're in a if you're in a bull cycle and you're overextended like the price will will probably

come down and come down harder than usual you know and and and if you're in a bear cycle and sellers are exhausted you know then then maybe bitcoin doesn't get affected as much in these kind of risk off scenarios i mean i would be hesitant to um i mean you you mentioned the the jill carson uh thread and and i would be also yeah i would be hesitant to uh to to say that we're a canary in the cold mine i mean i i think i think bitcoin had a blow off top that it's had you know the last three times and that that's what happens you know i i don't i'm not sure if the macro situation had that much of an effect this time around i'm simply saying that bitcoin's reputation will be determined in the next macro cycle where people discover whether

it is truly a risk on or risk off asset and if and if that we can get the fundamentals to the point where bitcoin can move counter to the macro cycle then you know all the all the better for us yeah no it's a good uh it's a good sort of shining beacon in the future to aim towards and and and this was something uh actually a good point to bring up i say this a lot on the podcast and the newsletter is that my biggest uh gripe with the space in particular is the the collective impatience everybody wants everything out of the box there is a caveat to that like you have to balance the impatience with the need for a certain sense of urgency

to build out these tools and make them so that they have strong defenses against outside attackers. Yeah, we also have to be in a rush, but also patient. Yes. Yeah, right? Which is, yeah, a lot of you freaks might yell at me,

like, what the fuck, Marty, you've been telling us to be patient the whole time, but there is some nuance where, yes, there is a certain amount of urgency that you should be thinking about as well. Agreed. you want to be preemptive you want to be thinking through like all the different scenarios uh you know i remember a couple months ago you know now we're talking about if someone can rent hash rate on nice hash for like 800 and 51 attack your shit coin like it's this big revelation that

didn't exist like eight months ago six months ago when we attacked syria when the u.s government attack syria and we launched 130 cruise missiles at them or whatever it was i was like can your chain handle 130 cruise missiles like these are things that people we should be thinking about like we should be building for the future where you need to be resistant to that you know that level of of kind of attack so uh fun fact those cruise missiles are actually tomahawk missiles and a week ago less than a week ago i went with my grandfather who was in the air force to the commissioning of a new arlie burke class destroyer in boston shipyard and i saw those tomahawk missile cells so uh i can i can say that i've i've seen them recently and they're they're all

ready to go and uh yeah the just the struggle is real they exist as they say it's crazy man i'm glad you're assessing our threat model for us no we appreciate that and a lot of people like oh you guys are fucking crazy paranoid but this is the type of uh mentality that you have to have as a bitcoiner you should have if you actually care about so-called open finance and you know censorship resistant networks state resistant networks like this is what you have to talk about like you can't have a like a decentralized financial global network and allow one country to be able to take you know easily take it down i guess it comes down to uh how far are you willing to go to keep the bitcoin network operational so it may be a counterfactual but for example if the

government is going to start kicking in doors of where ip addresses are located that have bitcoin nodes running you know what do you do in that situation get a get a safe house you know start stockpiling also yeah never never have your whole uh never have your whole stash of uh you know bug out stuff at your primary residence go listen to jameson lopp get a get a secondary location that you can retreat to you'll always be taken by surprise the first time you know go uh go make a standoff like a bundy standoff on your bitcoin node elsewhere don't do it at your primary residence oh you're incredible i'm glad we had you here um well staying on this sort of tight macro topic uh what's going on in paris i said this earlier this week like paris

obviously the paris riots the yellow vest movement the yellow jacket movement whatever uh you want to refer to it as it seems as though uh mac macron's presidency is not going as well as planned for him they have precipitously raised taxes and it seems like the middle class is revolting uh we actually found a picture of one of those yellow vest uh re-meming bitcoin sign guys mean buy bitcoin in the middle of the protest there's only one thing i have to say to those uh protesters and that's uh let them drive electric i don't know uh yeah whether uh macron is a latter-day marie antoinette tbd but i certainly would love to meet the guy who wrote by bitcoin on his yellow vest so how does it feel to see

your meme spreading i it feels it feels good man it feels like uh i wasn't i wasn't alone doing it i don't know i i would encourage more people if you're if you're at a pivotal moment in history just consider well let's talk about this so i brought this up earlier i'm not trying to directly analogize this to the arab spring but it has a very similar feel where it seems like a group of people in a particular section of the world are very unhappy with their government and the people leading them uh i think the camel the straw that broke the camel's back this time around was a was a price rise in the gasoline taxes in particular which forced the truck drivers to protest and sort of tumbled from there in the arab spring some people would argue i mean it's

the last snowflake to fall in an avalanche but that was commodity prices rising there as well in the form of wheat uh obviously there's going to be two different outcomes to these movements but it's very similar like fever and it seems to be spreading in europe in particular i've heard stuff in italy and greece as well happening so it's just an interesting tumultuous period of history right now well i guess the theme and you know the people that write for the economist like to you know hold it with a gloved hand at a distance and say oh it's it's populism and they talk about it like it's some virus but uh i would say i would say overall it's a realization that there won't be a one-size-fits-all globalist formula for how

you know societies should be run and uh i guess right now this is manifesting in the breakdown of the european project can i add something no yes of course i mean so i would say i i there's two things i have to say first of all the french are very good about rioting so like let's not you know we'll see how this somebody had a long knife and a baguette i didn't but that is that was that was passed down from generation to generation but one sec anyway my my point is is that it's good to see that they're riding i wish i wish americans were more apt to do that when we're not trying to incite on on rabbit hole recap here and then the second thing is uh we that was an interesting uh i think

the editorial we were reading where they were talking about um you know macron is childless and like how many leaders in in europe are childless and they they don't childless yeah not childish no not childish children yeah child less he has not yeah child lacks no children he's married to like a 70 year old he's married to his teacher yeah um and i think merkle doesn't have kids none of them right uh uh may doesn't have kids in great britain theresa may doesn't have kids and they like went through like a bunch of the john claude junker john claude junker the head of the uh european uh council i think he's uh bare branches as well so yeah in case you didn't know you know bitcoin is pro natalist

no i just think you should have skin in the game like i feel like the incentives are are misaligned there if you if you don't have like future generations that that you care about directly in your bloodline uh very interesting point a very uh it's again it's a social aspect uh humans are weird and we have very weird tendencies and we should be very hyper cognizant and hyper uh alert of how we organize ourselves and the amount of control of our individuality that we give over to the state and just that is i think it's pretty cool that like now we have the option to opt out non-violently if you don't trust your government with your money with your wealth you can you can buy bitcoin and hold bitcoin now yeah great tweet by pierre i think

he most recently pointed it out that you know we have hash wars now whereas we had trench warfare a hundred years ago so steady improvement i mean but i would argue that the future hash wars are going to involve guns and missiles and destroyers and all that stuff hopefully we get to a point where it's decentralized enough where the uh the the cost of attack is so much uh or not even that so much that it would be a Pyrrhic victory at some point. You don't think nations will go after go to war over shit coins? I don't know.

Oh god. Hopefully, I mean these are incompetent nations like I think we're going to beat them in the playing field of meritocracy. I don't think they're going to be able to create a competitor that's even worth fighting over. I think the real thing is the

game theory between nations, the prisoner's dilemma of you know, nations that aren't the u.s that have lesser stake in the monetary status quo would be incentivized to you know harbor bitcoin nodes and miners in their country instead of you know they would be willing to sacrifice having their own sovereign currency to at least you be on the leading edge of the bitcoin wave and you benefit from that so i see russia and china probably as being the two countries that you know they're sort of aggressively authoritarian in this moment but if they could be

the first two to prop up bitcoin and benefit thereof i think that they would uh i think that they would take that trade-off yeah we actually had a carpe noctem give us an update on i mean And you can go to Coindance and check this, but he brought it to our attention. The local Bitcoin volume in Venezuela is on the rise again. I think it hit its highest volume day last week. Yeah, and a lot of those people are corrupt government individuals. That's true. I mean, and the other thing is you look at, let's look at something like people love comparing cryptocurrency to the Internet, right?

So people said that the Internet was going to be the downfall of these authoritarian regimes, specifically China, but then also later russia uh when when we realized that you know the the the wall the wall falling wasn't as big of a deal as people thought it was and they were receding back into authoritarianism um they they not only did the internet not destroy their societies because people said it was going to open up information and everything they leveraged it to make themselves more powerful you know like china is a fucking expert at it russia is is pretty good it's not as good as china you know but they're pretty fucking good at leveraging it and and using it to control their populace to control other populaces and uh it's in their self-interest

to do that with bitcoin as well yeah no that's beware that's uh it's something that uh it exists and it's it's a heavy it's a heavy uh realization to come to and have that conversation with yourself is it worth it i think in the long run it is but we should also be again cognizant of the social and technical attack vectors and take that deeply into consideration when it comes to nation states they have to either adapt or die this is true um away from the macro back to the technical uh pierre we've been talking about uh pretty frequently throughout this podcast his builder too he's a very good commentator he's building shit he built uh uh basically a node package would you say it's pretty cool yeah explain it you've been playing around with it i

have not yet i don't have a windows computer so yeah so we've been talking about um the at home nodes you know like the casa node and the the noddle.it where it's just a plug and play node that you plug into your router um pierre's idea is let's make it as simple as possible for you to use your own computer to uh run both a bitcoin full node and a lightning node and he created this one-click launcher that we'll link to in the show notes and i i played with it this weekend because i wanted to test it out so if you guys have any issues or whatever when you try and use it you can ask me for help if i can't help you pierre is happy to help as well uh which is also really fucking cool and props to him for that um so basically installs it installs a bitcoin node

for you full node it installs uh lnd so you have a lightning node and then from that point i can i installed zap which is jack mauler's uh litecoin i mean litecoin jack mauler's lightning wallet and um fucking slick this wallet was like super super fucking slick and i opened a couple channels with that and then i connected it to uh jewel which is that internet extent uh that that browser extension we talked about and then i went to satoshi's place and i was able to successfully pay with my own lightning node thanks for popping up all through that and it was fucking it was it was it is very close we're closer than people realize it is still most people might have one or two troubleshooting issues you know we'll help you work through that but the vision is there you

know once you have that all set up which pierre made as easy as possible right now and it's going to only get easier as he refines it and as you know we troubleshoot things uh once you have that set up it's just two clicks i literally just i went to satoshi's place when it when it gave up my charge i just click you click the qr code and it just the extension automatically reads it it just pops up and then you press okay put in your password and you're good to go what did you draw though on satoshi's place all right i pumped the pod i i put a tfts oh i oh uh this is why i had um i forget what the term is but i said litecoin instead of lightning was 40 and slip was 40 and slip because i did two things when i went on to satoshi's place they had uh charlie lee's uh

that meme of charlie lee where he's like the litecoin uh star wars guy or whatever i don't know like the anime the magic internet friends yeah so i x that out and then i wrote tftc.io on top that was my contribution uh you bitcoin terrorist and it was pretty cool it was the future i felt like i was in the future you know yeah no no like you said two clicks and like i said after attending the bitdes meetup you were not at the meetup when he demoed no i missed i was playing tennis like magical we won the match and like you said we're very close yes it's not perfect yet but you can the vision is there and it's just refining and iterating on the vision i had it under my fingertips like i literally did it right and i didn't have to trust anyone

that's so fucking cool i think you know it's fucking dope jules really cool yeah we all need ways to automate our podcast feuds it's actually uh going into anchor the uh the hosting are are very uh generous and uh i would say forward thinking uh podcast hosting service uh going in tomorrow talk bitcoin with them we'll see how it goes um yeah so definitely check out pierre's uh node launcher test it out hook it up to jewel hook it up to zap hook it up to whatever you can yeah we're gonna put the guy we'll put the guide in the show notes you have any issues let us know it's on mac windows uh linux i i've done it on both linux and windows so i can help you out with that i didn't know it was on mac i would have tried it out if it was on mac yeah i intentionally

booted up an old windows box just to do the whole thing on windows so i could walk three people through it if i need to and i just wanted to say thanks to all these people that like made this happen jack maulers willowburn uh pierre uh lightning koala for satoshi's place like you guys are the real mvps that's pretty fucking badass shout out to the true mvps out there we're always thinking of you um matt give us a wasabi ux update what's going on it's cool it's cool they made it nicer you know we have a we have a telegram chat where we all reduce the anonymity set by talking about it together and we have been working through the ux and the ux is much more user-friendly i think this is the type of wallet that don't be scared guys it is it is

you know i want us all to have a lightning node on our computers and a bitcoin full node but that previous segment might be a little bit more intensive for some of you guys wasabi is not you literally just install it there's no syncing you put a little bit amount of bitcoin in there you know you have to put in at least 0.1 and it makes it it makes it more private for you uh it it helps hide blockchain analytics you can't like it makes it much more difficult to connect uh your transactions and you pay them a very small fee and it's set up in a trustless way so so even if they're compromised they they can't take your privacy yeah i think it's important so So whenever you take money from an exchange, it's connected to your name and address and stuff.

You use Cash App, you use, you know, don't use Coinbase, but you use Coinbase and you pull your Bitcoin out. That Bitcoin transaction is forever connected to your name and your ID and all this other stuff. And any other transactions you make along the way will always be tracked based on that initial. You'll have plausible deniability, but they'll have a pretty good idea. And so Wasabi breaks that connection. So you transfer to Wasabi and then, oh, someone mentioned this on Twitter. Right now you can't directly withdraw from Coinbase or Cash App directly to Wasabi because Wasabi uses the new address standard, which is BEC32. So you have to withdraw to either Trezor, Electrum or Samurai, and then you send it to Wasabi and then Wasabi will end

that connection and then from wasabi you can send it to cold storage or your hardware wallet or wherever yeah and i can say with a certain uh amount of certainty that i i believe cash app has back 32 on on the roadmap um yeah rumor is it's coming guys yeah um so just be on the lookout for that uh death spiral big topic of discussion for the last week i'm fucking sick of it uh let's just hit it quickly. You describe what people are assuming may happen at death spiral scenario and why the difficulty adjustment of Bitcoin's incentives may prevent this. The death spiral is a fear that people have been proclaiming about for over a half decade now. And the idea is that the price falls so quickly that miners stop mining because it's not profitable. And then we have

either no blocks being uh mined or we have very uh few and far between blocks being mined um the difficulty adjustment is literally there so that doesn't happen um you know every 2016 blocks it self-adjusts either down or up based on how much hash power there is um to make it if if hash power is going down if hash rate is going down price is going down then then the difficulty makes it more profitable for the existing miners that still exist there and then they find an equilibrium yes and the the the notion that every miners is going to turn their miner off at a certain price point is naive i would say to a certain extent the worst notion is is people that try and pretend that there is a price point because there isn't every

miner has different fucking costs in different situation that they're in exactly so like imagine being a miner just expended a bunch of capital you just so happen to turn them on like the last two weeks like you're not going to turn your miners off and lose that right or there's people that are mining because it's the most censorship resistant way to get to get bitcoin um you know like it's way it's way easier to to get bitcoin for mining and you can even get it anonymously um where you can't do that if you have to buy from an exchange yeah there's there's two there's two critical points one being the cash break-even whether you're literally making money on every you know bitcoin that you mine and then second whether all-inclusive your roi is positive or

negative so you could have a negative roi but have positive cash cash and it would still be in your best interest of mind because you would want to recoup your your roi your initial investment And also, you know, that that critical number, you could you could just take a value approach to that and say, OK, well, I think fair value for a Bitcoin is over a million dollars. And if you've, you know, budgeted for that ahead of time, you know, yeah. Who's to who's to say that you're mining unprofitably? Those are some fun books. I like to value Bitcoin at a million dollars. that's what i use for my own personal holdings you bear um no but i there's there's a couple

other things i had another thing that yes and then these miners they have instruments through which they can hedge right we have the shorts they could hedge their investments in the financial markets so the people on the other side say they use they use the secondary markets as an argument for why the game theory is broken and they say you know the miner doesn't care about destroying the network because he can short it at the same time but then they completely disregard the use of shorts to hedge price risk which you know smart miners will be doing um and it's really great that we have a more mature ecosystem in that regard you could actually use regulated shorts now you know you don't have to just use bitmex or okay casino uh and then the other thing

is miners only get paid after 100 blocks it takes 100 blocks for their their coinbase uh reward to mature so they're incentivized to continue the system they have locked up return that's also locked up to get to the next difficulty adjustment um you also have in in a worst case scenario you have two things happen you have fees will build up because blocks are slow so either people trying to dump because they think bitcoin's in a death spiral will be using really high fees to send to exchanges. But you'll also have that in combination with probably rich Bitcoiners sending high fee transactions almost as a bribe to get miners to get us to the next difficulty adjustment. And then in some kind of worst case scenario, even worse than that, we could fork

and change the difficulty down if we absolutely had to. And that is not an ideal situation. And we will probably never have to do that but it's important to say that because every single person complaining about the current state of affairs is advocating for a fork to change it so no matter what like your solution is going to require a fork so in the worst case scenario we can actually do that and we can change the difficulty adjustment it's not an issue yeah and all these arguments neglect the historical precedent that is uh there were miners for two years uh when bitcoin had no value and there have historically been uh sort of ideological miners like slush for example that have seen themselves as arbiters of the network and will provide this hash rate at a loss

i think i think the market price for bitcoin on exchanges is simply a thermometer of what people think bitcoin is worth just because the price on the exchange says two dollars in some kind of freak incident doesn't mean that people worldwide are valuing bitcoin as such and it'll be a short blip if if if that if it if that kind of city because this is the situation they're talking about is like a 95 drop you know within 10 minutes yeah you know and just like absolute chaos fucking chaos yeah and then they don't think about cruise missiles and shit so like what why is all of a sudden now we're thinking you know death spiral's not gonna happen yeah um so that's that's what we got on the death spiral uh but staying on mining in particular coin shares put out some

bitcoin mining research recently uh bitcoin sign guy was alluding to it with the the the different types of costs that these operations have that was one piece and then they did another piece on breaking down the energy uh consumption the types of energy that bitcoin miners are using uh i will caveat this with i i don't know how how much i agree with the final numbers they came to i think they're they're i love the numbers the numbers are fantastic huge support the numbers are something like 77 percent of energy used to mine bitcoin is renewable energy is probably renewable energy probably yes but there uh there are some uh there are some people that are questioning the uh the methods of the study but but you have some some but even if it's even if it's even if they're

off by 50 like 25 is still fucking badass yeah exactly you know and and everyone knows that excess excess renewable is the cheapest is the cheapest electricity so it makes sense that they're going to be crowded around these types of situations here's bitcoin sign guy oh yeah i was going to just agree with that that if even if the number is wrong it's still likely directionally correct uh right that's huge yeah that's what i meant to say it's directionally correct i assume i've been uh i've been interested in the company upstream data uh lately good good episode on uh stefan g garber is that stefan steve barber barber barber that's what it is yeah uh he's making a a minor skid that is inside a shipping container that can be sent wherever natural gas is being

drilled and right now you know they're just venting this methane into the atmosphere which is not good uh and so they i believe the skid has an engine that burns the methane generate the electricity on the spot and then mines it back so i don't know i think oil and gas companies will be crucial players in bitcoin infrastructure in the future much as a you know aluminum companies aluminum refining companies are helpful now to uh for those of you that don't know aluminum refining is a highly energy intensive process so aluminum refineries go where there's cheap excess energy and it allows countries that are you know not able to export their energy they can export refined aluminum i think this is the case in iceland but i may be off on the specifics

there no it's a very uh very good point to make and it's again it's going to drive uh innovations and energy efficiency energy consumption efficiency and then renewable energy as well one of the arguments against coin shares uh research paper was that uh bitcoin miners are 24 7 so when the excess electricity from the renewables isn't running that's bullshit they use coal they're not but one of the reasons i bring this up is because upstream data is there's two important things about upstream data which uh bsg just mentioned is that it uses excess methane and that methane is worse for the environment if it's not burned and a lot of regulations mandate that they burn it for a waste they don't even mine bitcoin with

it they just burn it for a waste and then the second thing is those skids don't mine unless that excess methane exists the second the second it stops venting they stop mining they're going on and off with cheap electricity they went as mining hard right now mining hardware his life cycle isn't that long because there's huge improvements all the time so you're trying to like maximize as much money out of this piece of uh computer as possible um before it goes obsolete but as this plateaus the main the main cost is going to be electricity and and they're going to want to maximize cheap electricity as much as possible and they're going to be turning it off on and on off and on yeah i'd go as far as to say that you could focus

if you're a an equities investor you could focus on companies like exxon mobil uh shell baker hughes slumber jay as these would be the presumptive purchasers of these skids in the future just anywhere along the oil and gas uh you know supply chain supply chain uh these are the companies that will be implementing bitcoin mining to cut their costs and you know tighten their margins yeah it's uh no it's a beautiful thing the incentives of bitcoin are beautiful satoshi created a beautiful uh incentive system the other thing is like do you think like the venezuelan government is going to turn off their fucking miners when when the when when price falls like what else are they going to do with the sanctioned oil like they're going to just keep mining yeah but that's

for the previous conversation but i just thought about that also beyond beyond spare capacity in renewables and excess byproducts of shale gas drilling etc also keep in mind that we have what's known as the duck curve for urban energy production so when people are home at night and they're running their heat or they're running their air they are their ac they're using all their home appliances the energy demand load it spikes uh during the hours hours yeah during peak hours when people are home and just regular urban power plants are left with the dilemma of oh well we sort of need to phase out our our generation during the day uh when not as much energy is being consumed with bitcoin they could keep their machines running at full tilt and just

turn them toward their bitcoin mine and not the not the energy grid this is a this is a discussion and topic i jumped into thoroughly with joe looney who was uh the original creator of rare pepe is one of the original creators and he actually worked in an energy facility and described this exact scenario and uh i bet there's a bunch of people in that industry thinking about doing something like this yeah the duck curve look it up it looks like a duck i love the name um ramp what is ramp ramp is fucking badass what is it the russian anonymous marketplace okay um our buddy brendan bernstein showed this to us yeah um so it's like the evolution of silk road they've been trying to shut it down for a while uh it's russian specific

hence the name the biggest vulnerability of a dark marketplace is shipping it you have to get the drug shipped somewhere uh the merchandise shipped somewhere and that's usually connected to a name address camera something you know video cctv will catch you um and that that's an issue that's you know on the payment side you can pay with bitcoin and you don't have to worry about much but on the on the receiving side you have an attack vector so with ramp which is really fucking cool is they hide like small parcels of drugs all around russian cities and when you make the purchase they send you coordinates so you can you can make a purchase on this marketplace and get get your drugs within 30 minutes you know 40 minutes like right away and and then they like

send out runners like every day to like put it in new places and whatnot and then they have an arbitrator if there's come some kind of dispute the arbitrator with their whole review system and reputation system and everything and i just think like that's you know like the cypherpunk future like it exists now well life finds a way yeah easy does it arjun balaji we're looking at you we know you're a little g-cashing son of a gun no but it like like i don't want to be cheesy but life does find a way like in these authoritarian governments people are finding a way to to make markets happen well we're gonna have autonomous drones soon but this is pretty fucking cool in the meantime yeah it's pretty dope too um yeah so the russian be aware anonymous

what is it the russian anonymous marketplace marketplace aka ramp yeah we'll link to that as well last time we're not linking to the marketplace we'll link to the article about this we'll link to the actually just while i have this platform i have a question if some of the audience members know anything about this can we please have a drone to drone delivery such that we can make onion routing for you delivery of physical objects i think that i don't know we need some protocol where uh there's some some yeah some chip embedded in a package and two basically one drone can drop it off at a given coordinate and another drone can go pick it up i think that that closes the loop in many ways for us we are well known for future

business ideas and i think this may be the best one we've uh we've uh created on this podcast there you go billion dollar idea folks so any of you ai drone operators out there here's uh here's the million dollar cypherpunk future you think it it beats rentable toilets yeah yeah totally beats boober poober airbnb obviously poober um last topic i really like that idea by the way that's a good idea last topic that built perennial scammer dan larimer seems like he may be moving on to a fourth scam he's had well some people will say uh no it's like eighth six or seven yeah some people say safe or eight excuse me uh his three most famous to date are bit shares steemit and eos and uh via the eos communication channels i believe it leaked that he announced that he's

already working on a bitcoin like project yeah that billion dollar shit coin that's just a side hustle five yeah five billion dollar and this was the same this happened like the same day that it came out that steam it like had failed miserably and they like fired 70 of their employees yeah because it's got a centralized so there's cameras everywhere i tweeted out months ago i think in the beginning of the year like any idiot dumb enough to fall for dan lammer's third scan deserves to get uh what's coming to them so uh heed my advice this time don't fall for his fourth scam i um yeah i mean i just put this in here because it's fucking hilarious uh larimer is famously the person who satoshi said uh you know if you don't if i don't have time if you don't get it i don't

have time for you yeah i think i believe i just put you the quote but but the famous don't understand it uh you don't get it i don't yeah i don't have time to explain it it was great it was just a great and that he said that to larimer um and larimer he just he just launches hype hype scam after hype scam and then he leaves them when they're like 70 done yeah and then moves on to the next project you know i joked around that in 30 years he's going to be 66 and he's going to be on like his 25th ico and it's going to be the the most hype thing ever and people just going to give him billions of dollars don't be a larimer greater fool freaks resist yeah and i just want to reiterate that multi-coin posted a bullish thesis at 18 for eos and so like 250 or something

beware there's scammers everywhere and uh be careful who you take advice from always try or excuse me always verify do your own research um that's all the topics of this week but i think i think we can rip off some other stuff you guys have anything you want to talk about yeah i mean vague had a very important topic uh boxers boxers or briefs uh well that's the wrong question it's boxers briefs or neither so so you're you're a uh bitcoin commando i like that that's so that was bsg we're among we're among everybody you may not know who we are but we exist i'm a i'm a boxer brief kind of guy i think it's a nice balance in between hey christmas is a nice conservative i like walking around my apartment naked though too that's a plus that's i

i'm uh i'm very liberated in my apartment as well um but freaks it's christmas time matt is a is a briefs guy i always like fresh underwear when i was wearing them around christmas time so good gift just buy bitcoin just for yourself and just hold it very high time let's let's get ourselves to 66 26 by january 1st otherwise a very expensive dinner on my well we have one of the most eloquent speakers on the subject in the room i feel like it would be a waste if we didn't get like a parting diatribe from from bitcoin sign guy what's on your mind these days how things been since we spoke in july things are well what do you what do you think the state of bitcoin is right now state of bitcoin is strong i don't know the bare

markets when people have the the headspace to do what's necessary the bull market almost is impossible to do anything during it because you're just posturing for the the ramp ramp capital blowing the top off yeah um you optimistic or yeah i'm optimistic i i'm following the vanak etf pretty closely i wish uh jan and gabor all the best i think they had one of their sec no votes depart the sec since and i think the sec is getting a new person uh and then they also had one i think person one commissioner changed their mind on their subject so uh things are probably looking looking up in that regard yeah and uh peter mccormick at what bitcoin did actually just interviewed the dissenting vote from that sec decision whichever

one that was uh so if you freaks want to go check that out and get a little peek into the mind of the sec you can do that there um that's all i got for this week freaks anything else matt bitcoin sign guy gabor is a badass yes i like his twitter big fan big fan of gabor shout out uh you know i don't you know don't get your panties in a bunch don't get your boxes in a bunch over uh over this etf because they've been talking about this shit since 2013 yeah you know and and bitcoin doesn't live or die based off this etf it will pump when the etf and ultimately gets approved um but you know it's not something that you should really concern yourself with you should just be excited that you have this opportunity to potentially invest in a

um a brand new asset that doesn't have an etf yet you know like with that is a a super rare situation and you know every day that we get without an etf is is a day we get ahead of all those people who will buy after the etf very good point um thank you freaks for joining us this week uh i don't know if we're gonna have a show next week we're still trying to decide i'm going on a trip yes i'm going on a trip i look forward to this show every week so you have to okay we'll make it happen we'll make it happen we'll probably do it on monday okay yeah we'll do it on monday all right peace and love freaks