TFTC: A Bitcoin Podcast - Rabbit Hole Recap: Week of 2018.12.31

Episode Date: January 4, 2019

On this week's edition of RHR Marty and Matt come to you live from RiseNY to shoot the shit about Bitcoin's first ten years as well as some current events. Shoutout to our sponsor Blockfi: Head over to www.blockfi.com/talesfromthecrypt to see how you can leverage your BTC today!

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Well, hey there, freaks. It's your boy Marty Bent here to introduce this week's very, very special edition of the Rabbit Hole Recap. Last night, Matt and I sat in front of a live audience here in New York City, hosted by Iterative Capital. We had a great time. We reminisced about the ten years that have gone by since the Genesis block was mined on January 3rd, 2009. We got a little drunk, so this one's a little bit of a feisty episode. We had some audience participation, so it was a lot of fun. Before we jump into that, this week's episode is brought to you by our sponsor BlockFi You guys already know about it, BlockFi is helping people Who are forced to sell their crypto when they're trying to buy a house, fund a business Or even pay off their taxes

Excuse me, they're helping people avoid having to pay their crypto to pay for this stuff So with BlockFi, you keep your crypto and still pay for all of your projects with a crypto-backed loan Use your Bitcoin, your Ether, or your Litecoin and get a USD funded directly to your account in a pretty quick amount of time with loan sizes ranging anywhere from $2,000 to $10 million. Pretty big range there. BlockFi is perfect for reaching financial goals of all sizes. So whether you're a small business or a big investor, you can use your crypto to lever up your Bitcoin, your Ether, your Litecoin. So visit blockfi.com slash talesfromthecrypt to learn more about putting your crypto to work without having to sell. That's blockfi.com slash talesfromthecrypt.

And you freaks got that special offer. If you're taking out loans below $10,000, you're going to get $25 of free crypto collateral. Add it to that loan above $10,000, you're getting $50 free dollars of crypto collateral. So check out blockfi.com slash talesfromthecrypt. Let's see what you can do with your crypto today. I hope you guys enjoyed this episode. I know Matt and I had a lot of fun. I'm still hurting from it.

Enjoy. What is up, freaks? That makes me so happy. What is up, freaks? Well, happy 10th anniversary of the Genesis block. Thanks for coming. Shout out to Iterative. Shout out to Jay and Aaron for the first round.

I loved it, getting poetic about Satoshi who is Satoshi yeah, I'm a little bit nervous right now I've honestly never done anything live so we're going to crack open the whiskey we have Yamazaki from a listener at LowBTC

I told you like three times, yeah, at LowBTC and LowBTC he donated this to the pod so we'll be imbibing this tonight as we do a rabbit hole recap, it's going to be an addition to rabbit hole recap, we're going to mix it up a little bit. We're going to start off with the topic, and then we're going to give it up to the crowd. If you guys want to talk about a topic, whether it be something that's happened over the

last 10 years or something more prescient, more present, we'll dive into it. We're going to little interactive. Matt wanted to talk about the first topic tonight. He's very excited. I don't know if all of you saw this, but the CEO of Coinbase jumped on Twitter tonight, or excuse me, earlier today, and it looks like he's looking for a little bit of penance, trying to get back on the good side of the Bitcoin community in particular. Matt, cheers first. This is your topic. What the hell's going on?

He bent the knee. Happy birthday, Bitcoin. Thank you guys all for coming here. Thanks for having us. He bent the fucking knee. He bent the knee. Did he, though? All right, so let's preface this.

I, in particular, with Marty's been, I have a long tenured history with Coinbase and Brian Armstrong. I've called them out many times throughout the last year and a half in particular. More recently, they've got a lot of backlash for their addition. I would think it's more specifically their 12 days of Coinbase. I think that's what really triggered a lot of people.

Yeah, Tokenbase tried to introduce people via the 0x token, which some people would argue does not really accrue any value and is a very bad first spot to introduce people to. Right, so they've been adding tokens. Coinbase now supports more tokens than they support actual independent chains or cryptocurrencies, and one of the tokens they added was 0x, and so they have this learn to earn concept, where you watch videos about AUX, and you earn AUX by watching the videos. This is true.

And the videos, like, I'm pretty, I have no idea what the AUX token is used for. It's, I mean, it's supposed to be used for governance, but I have no idea how it's supposed to accrue value. I watched the videos. Still have no idea how it's supposed to accrue value. But that was the least of it. That was just the icing on the cake. This is after Bitcoin Classic,

BU, Segwit2x, what else is in there? Well, all the four clients, right? Yes, all those. Unlimited, Classic, XT, Segwit2x. So it seems as though today in particular, Brian said, hey,

I'm going to try and get back in the good graces of the Bitcoin community. You were very vocal about this. It was a nice thread. It was a nice thread. I was very happy about it. Were you? I mean, I saw before we started recording,

Pierre talked about it. He was very happy about it. Everyone did like their little, whoa, their little circle jerk about being happy about it. That's what we're doing right now. You know, Brian's done a lot for Bitcoin. He's done a lot against Bitcoin,

but it's good to see him on today, on the 10th birthday give some respect to it. He said it like 5 or 6 times in 13 tweets. It was like a heavy Bitcoin concentration. I think this is a good segue into

this is the 10th anniversary of the Genesis block. Coinbase came in what, 2012? They've been around for almost 8 years now. This is what I wanted. We didn't know how to do this when we were describing, like,

what are we going to talk about tonight? We're going to open it up to the floor. We're probably... We're going to... Our strategy is usually we just sit down, we get drunk, and we read through a list of Bitcoin news. Yeah, but...

That's literally the strategy. I think tonight in particular, like, going back to Bitcoin's first 10 years, like, where Coinbase came in and how much it's changed since then. So that's when I first came in, around 2013, 2014, coinbase was my entry to bitcoin you bought coins on coinbase i bought coins on coinbase i bought

coins on coinbase i just doxed myself um but coinbase actually doxed me to the irs they sent them all of my all of my transactions all my addresses everything all my buys yes but the point here is they fought that that was when coinbase was doing really good they they fought it they tried to stop it and then they sent it yes so over the last six to eight years or excuse me six to seven years in particular coinbase has sort of been that on-ramp and for me in particular i have fallen out of love with them and that is as bitcoin has evolved over the last six years uh i won't even say bitcoin has evolved this is one thing that i harp on a lot on the podcast more recently is that like bitcoin isn't evolving it's an expanding universe and we're sort of

discovering it as we use it more and there's more activity on the network um and sort of that's the the beauty of this whole movement to me is seeing how people react differently to discovering Bitcoin. And I said this on Peter McCormick's podcast last week. One thing I would caution in this space is this is, again, it's an exploratory space. A lot of people will put their sort of flag in the ground and say, hey, I believe this is going to be the future. And sometimes Bitcoin will prove that that future is not as advantageous as they once thought. And some people sort of cling to that idea of they thought of what it should be, sort of not reacting to the discovery of everything

that's going on. I would argue that Coinbase is one of those companies, and just one of many. And Brian in particular. That thread was kind of him saying, I was wrong. Yes. So, eating a little humble pie. So that was the first topic for tonight. A little bit of a shit show.

Does anybody have any topic in particular? Past or present? We have more lined up in case you guys don't. We really have very little faith in you. Is there an issue that you want to talk to for the 10th anniversary? yeah yeah that's exactly what he did for you freaks at home you cannot hear and gemini and kraken and all the other sites well that's the thing that's the beauty of it so that's like going back to like 2013 2014 there was very few sites through which there was very few on-ramps

and he said in the thread he's like bitcoin is the dominant currency on our platform uh most people buy Bitcoin on our platform. Most people hold Bitcoin on our inner wallet. I thought it was kind of funny because Balaji, who's their CTO, he was telling people oh, today's proof of keys, which is you're supposed to pull

your keys off of exchanges if you pull your Bitcoin off of exchanges because you don't have keys if they're on the exchanges. So you pull your Bitcoin off and we can see if they're solvent. You shouldn't have any Bitcoin on exchanges to begin with, not substantial amounts. But Balaji, the CTO

of Coinbase. He was like, everyone, you should participate in proof of keys. You should pull your keys off. You can send them to Coinbase's non-custodial wallet that doesn't support Bitcoin. We're working on it. We're working on supporting Bitcoin. It's a little bit

lip service. Proof of keys. Do we have any data from that? Does anybody know? Nothing has fallen yet, right? I mean, the memo was not accepted for whenever BitMEX dumps. So they're closing out. makes us fine. They have the insurance fund.

But I talked to a few friends in Asia and I was very like, I mean, I like the concept of it, but it was not well transported to like that part of the world. So I and they have a lot of exchange in Japan, which I think could be underwater saying something. Yeah. I mean, yeah, I think for I think you bring up a good point here. I think a lot of people in this room in particular are probably in the Twitter bubble.

How small is that Twitter bubble, do you think? That's a question I always have. That's my main avenue through which I consume. It's bigger than it ever was. It's bigger than it ever was, but relative to what? Than it was before. It's way bigger. but like it is a bubble it's absolutely most bitcoiners don't ever go on right well that's the question i want to do that or do they not like do most or most bitcoiners i used to go

on reddit and bitcoin talk all the time like twitter most of it has migrated to twitter i think i would like you still have irc you still have telegram you still have bitcoin talk reddit to me is dead well again the point i'm trying to get at is this confirmation bias or How much of the conversation is happening on Twitter and how much is it just individuals who don't even know about Twitter? I think that's another thing about Bitcoin in particular that's really shining a light on some of the cultural differences that exist in the world. You literally are creating a distributed system globally and we're finding East, West has to collaborate on this stuff. And Bitcoin, like I say, it's going to change us more than we change it a lot. and we're discovering we're having to interact with cultures

that maybe you do not have to interact with directly in the past. And Bitcoin is that driving motivation to cooperate with each other. We should get back to Proof of Keys, though. Proof of Keys, the issue... Well, this is the whole point of Proof of Keys. Did they know about Proof of Keys? Like, who knew about it? So Proof of Keys will get more effective over the years, right,

as you have a tradition around it, obviously. Well, this is something Dhruv brought up that I like. Dhruv Bansal from Unchained Capital did an excellent analysis on the dust that exists within Bitcoin at any given point in time, depending on how much demand there is for block space. But he brought up the idea of maybe like an annual dust holiday where miners will eat up dust. Yeah, the fee holiday.

Yes, the fee holiday or something like that. These are conversations that we need to start having now. And that's the point I was trying to make, like how open are our communication channels? of communication like a twitter small bubble that we're in like how is the east consuming their their information about this okay but back to proof of keys the issue with proof of keys is that you didn't have a lot of people know about it the people that knew about it already didn't have bitcoin on exchanges you know i knew about it i had nothing i had nothing to remove and they were already off the exchanges and then the third thing is if you're a bad exchange like

HitBTC, which no one should be using. It's just a random horrible exchange. They just didn't allow withdrawals. They were just like, well, we're not doing withdrawals after Proof of Keys. So do you actually solve anything? It's like the threat

on the door, like, I have a gun. Unless you get Bitfinex or something. And they have warning. If they know it's Proof of Keys day, they have like, okay, we've got to get up our liquidity in two months when it's time to pay out 30% of the people who actually participate.

It's a good idea. I like the idea. I thought Trace brought up a good point, though. The proof of key scares me because again, we're early. This is only 10 years in. The UX around all this shit is so fucked. I don't want to say fucked, but if you're not technical,

it's going to be hard. I still get nervous when I send Bitcoin. You shouldn't be. Just call me up. I will. But I know, again, let's talk about the responsibility of proof of keys too. You have to teach people how to take this financial sovereignty into their own hands. No, I agree.

And we said this last episode, it'll never be easy to be your own bank because it takes responsibility. It's an unsolvable problem. If you have responsibility over your money, then you're responsible for it. And there's no solving that issue. And a lot of people don't want to be responsible for their money. But you make it as easy as possible, and you educate them in the benefits, and hopefully more people will do it. But again, I'm going to be the hard ass right now. You're driving the skeptics case.

Will it ever get to a point where you think it's easy enough where Bitcoin can go mainstream? I mean, it's already easy enough to buy Dogecoin on Robinhood and not store your own keys. Is that the future we want, though? I'm just saying my grandmother can own Dogecoin, not worry about security, probably not get robbed if Robinhood is legit. Does it embody Bitcoin? No. But there'll be options for every single person, all the different types of people. some people will want full custodial some people, as they should

will want to control their own keys and then you'll have that large spectrum in between that does the different balancing acts So why do we need Bitcoin at all? Should we just walk out? Bitcoin's better money, Marty You don't need me to tell you that

Bitcoin is the future Bitcoin's why while everyone's freaking out on CNBC and Bloomberg and everything thing about the economy, I sit here and I'm like, I got my Bitcoin, they can't take it away from me. It's that nice little security blanket. Yeah, but I think Jay and Aaron actually brought up a good point in their thing.

How do you get people to buy into this idea? And I think what you guys touched on in particular that I wanted to sort of piggyback on is the idea that Bitcoin was marketed towards libertarians early on as a libertarian technology. The beauty of that though, if you go back and read bitcointalk.org, Satoshi noticed like, hey, this actually may entice libertarians more than anybody else at this particular moment. So they

were sort of like a Trojan horse into proliferating this technology. Ideally at the end of the day, the technology, whether you're a Marxist or a hardcore like neo-reactionist, like Bitcoin works for you. Where did the Marxists come from? Why are we just bringing them in here? It's the same. Marxists aren't

involved with Bitcoin. There's no Marxists in Bitcoin. They could use it. If Satoshi was a Marxist, we wouldn't be here today because Bitcoin wouldn't exist. Well, no, but I think that's the beauty of Bitcoin. No matter what your political ideology, you will be able to use Bitcoin. Okay, I agree.

Marxists can use Bitcoin if they want to. Yes, exactly. They haven't opened their eyes to it yet, but they will. They'll buy our bags, like 10x. You're selling your bags? I thought Bitcoin has got to a point where you don't have to sell your bags.

Like metaphorically. Okay. Should we go to the next topic? We've got Hector here. Yeah, I wanted to ask, like, what do you think about, like, it does seem like there's potential for this stuff to get pretty political soon. So you have, like, the HR stuff just happened, like, HR speaking to some people off the platforms of the oversight league,

and there's a clear, like, ideological, like, what's happening here, and I feel like there's potential for Bitcoin to get very, kind of, politicized, particularly by the right... To the right. I mean, and by the alt-right. And is that something that's good for the ecosystem or bad? I think ideally, well, first of all, this is a best-case scenario.

Repeat the question for the people at home. Oh, for the people at home, the question is, is the war on Patreon going to push Bitcoin towards the right politically? Right? Like, that was a good sum-up. Right now, the majority of people getting kicked off of Patreon are either, Yeah, they're on the right side of the political spectrum. This is a perfect example of the use case of Bitcoin, so it is a fantastic opportunity

to educate people on why you want to control your own money, why you need to have an uncensorable payment method. I mean, ideally, Trump will start going after the left so that we could have some left people that are also getting censored. But yeah, that is, I mean, is that a solvable issue? Like, we just hope that, you know, we don't get pigeonholed over to the right, right? Like, I think Bitcoin's for everyone, right?

So it just happens to be that the people on the right are getting censored, right? Luckily, we have Bettys in this world. The Bettys of the world. I'm bullish for Betty. I'm always bullish for Betty. We're always bullish for Betty, but no, I do think... By a raise of hands, who knows who Betty is?

Look at that. That was like a pretty good inside joke. All right, so for those of you who don't know, Betty is a woman who runs a barbecue joint in Kenya. Where is she located? In Kenya, Nairobi, I believe. And she educates her customers on Bitcoin once a week. She bought the hotel with Bitcoin.

She sells her food for Bitcoin. She has a restaurant. We're bullish with Betty. But going back to like... She educates people. Yes, Bitcoin will be used to sort of paint different spectrums of the political venue or excuse me

the political world with bad brushes at certain points in time but again like Bitcoin that's what people have to remember is like Bitcoin is agnostic fucking soulless technology just produces blocks every 10 minutes it doesn't know who's anchoring data into

a block of transactions every 10 minutes it doesn't know what lightning channels are being created it doesn't know who we are give a fuck about who we are it's just going to work and as long as it produces a block roughly every 10 minutes in a arguably

decentralized, I mean I wouldn't argue it's fully decentralized now but it's arguably getting more decentralized over time I think it will work and it will work for different people and different points of time depending on the narratives they're trying to push. But I do agree that it does kind of, it pigeon holes us

a little bit. Yeah. And like you have to be you have to be aware of that and you have to try and well well why are they trying to pigeonhole you like why are they trying to frame it no because they say they say oh okay so so the idea is that in a month two months three months they say the jordan petersons the dave rubens the way worse people that are even more right uh milo's of the world right or accepting bitcoin and then Bitcoin is evil, right?

So you have that... We already went through this. But you also don't want to alienate the left, right? You want everyone to be equally willing to buy our bags. And so it's important to, like, always try and be as neutral as possible. You know, try and be... Bitcoin is for everyone.

Well, literally anyone in the world can buy Bitcoin and be a part of a decentralized financial system, and that is pretty fucking badass. Yes, and that's the important part. Thank you for saying that, Matt. I think that's the question or the idea that we have to drive home here, especially at the 10th anniversary, is that at its core, Bitcoin is about freedom,

like literally the definition of freedom and liberty in the modern age. And some people would argue that freedom has been castrated to a certain point in our modern age due to the way that the monetary system is so controlled. Gold, arguably, cannot be an apolitical sovereign currency anymore because governments have it centralized in their vaults. Hayek famously said we will never be able to take back the production of money

unless we find a sly roundabout way to take it from the hands of the government and Satoshi may have just done that I think if you look at an overarching political ideology people want change you had the Bernie Sanders on the left you had the Trump on the right

people want change fuck the bankers not even fuck the bankers though No, but that is, it's, you had Occupy Wall Street and you had Tea Party on the right. It's not fuck the bankers, it's fuck the function at which money is created. And you can't fault the individuals that work within that system. They are just cogs in the shoe. Oh, yeah, not the bankers, right?

Yes. No, it's fuck the function of money creation. It's different. You have to de-alienate. You can't make it personal. The banks. You can't make it personal against Jamie Dimon. You've got to say the system is set up in a way where, hey, good for them.

They fucking worked their asses off and got to the point where they can take advantage of the system. Okay, can we switch to a positive topic? Okay, who's got a positive topic? Gigi, you better have a positive topic. A lot of people talk about software in the world, and I think we are experiencing right now how Bitcoin is eating the world.

It's like 10 years ago, Bitcoin mentioned the Times, and today, the Times mentioned Bitcoin. We bought the Times today. That's pretty fucking cool. so you freaks at home so you freak so you freaks at home gg just was that a question no it was just a comment but i want to expand right yeah but we have to repeat it for the people yeah so bitcoin has expanded from uh where it was hashing a headline from the times of london into its genesis block to a point where bitcoin is being literally marketed in the times 10 years

later to the right so bitmex today bought a front page yeah shout out bitmex shout out arthur arthur can't wait to party with you in the what is it the she shells say shells say shells there we go one day bring up a court case in the station this is actually another another topic we can talk about how much is that that ad cost we were debating this earlier was it cheap like 30 40 k something like that i think it might be the best roi of any crypto company ad new york times page okay yeah it's way better than the bullshit ufc litecoin bullshit right like we got a full page he put the chart in there it was like really nice you know because he had the front page and then he went farther with that and then it was great

it was actually they're just such bad a good driving point that drives into one of my pet peeves is they try to educate people on what bitcoin is what proof of work is the research on everything they're a degenerate gambling site yes that has a research arm that provides some of best education in the space welcome to bitcoin how cool is that right isn't that fucking badass it's true so fucking cool but that's like one thing jay and i were talking about earlier too is like do you need to teach people do you need to evangelize this and i would say yes like so there was a point santiago siri he said this on my podcast too there was a point in the world where like clean potable water came to the world you had plumbing you could take a shower you could

wipe your ass huge to wash your hands people literally had to learn how to wash themselves had to bathe themselves like it took time like a generation like how the fuck do i take a shower people didn't take showers for a long time and it's going to be a similar process but like securing your bitcoin and learning how this stuff works it's going to be it's a new technology that has never existed is anyone else imagining marty like trying to figure out how to take a shower still trying to learn so if anybody wants to bathe me later let me know Kidding. Next topic.

All right. We've got Harry over there. So, Satoshi famously said when Bitcoin was trying to use WikiLeaks, we're not ready for that. This is going to bring too much scrutiny. What, in your guys' opinion, has changed fundamentally about the technology between then and now that makes Bitcoin ready for WikiLeaks? Do you want to go first?

So the question was, is Bitcoin ready for WikiLeaks today? Well, no, the first, the question was, in 2011, when WikiLeaks went to accept Bitcoin donations, they weren't ready. Are we ready today? Correct. Is Bitcoin ready for... We were ready then. Can we kick the hornet's nest right now?

We did it. We did it, right? We were ready. We were ready, right? No. It worked out. WikiLeaks held back. WikiLeaks said, all right, we want to do this.

I don't think they held back, did they? I'm pretty sure they did. Did they hold back? Does anyone know? I don't think they did. I think they fucking started accepting it and the world didn't end. Yeah, that's true.

Bitcoin persevered. I think Bitcoin right now, I expected Bitcoin to be persecuted in America. I thought Bitcoin was, I thought as a Bitcoin holder, I was going to have to worry in America. Obviously, I'm less concerned now because I'm standing in front of all you people

talking about Bitcoin, which is like a little bit unnerving. I don't work for Vice and New York Times I can't handle this they're like taking pictures of me look there's a camera over there this is horrible

try and find a picture of me online people will be able to know but Harry that's a good point because last year we were not ready I think Trump sealed the deal what are you talking about Trump I talk about this all the time I think we wouldn't have come close to 20k without Trump

I think Hillary would have been amazing at regulating Bitcoin. I think she was born to regulate Bitcoin. I think she would have had a whole powwow with all the banks and they would all come together and they'd be like, we're going to fuck this shit. It's going to be destroyed. We're going to destroy it.

We're going to make sure that they all get screwed. And then Trump got elected and they were like, we're worrying about all this other shit. And then Bitcoin just flourished. And now they're fucked because we have two years to the next election. They might lose that and then they're not worried about bitcoin bitcoin is is going into rich people's pockets and as more rich

people have it it's harder and harder for them to regulate it out and uh i think we might have done it but i'm just gonna yeah no and then from a technical perspective i think uh like from a blockchain perspective like last year with the the mania like obviously we had high fee situation the exchanges literally couldn't stay open because they couldn't handle the the volume of transactions and trading that was going on. I would argue that a year, 375 days since the all-time high, a lot at the protocol level, or not even at the protocol level, at the blockchain efficiency level has been solved.

Obviously, segwit adoptions precipitated, lightning networks proliferated. I think it's in a better spot, but we won't know until there's more traffic. We're in such a better spot. Yeah. We're doing so much better. I would agree, too.

I'm very happy with where Bitcoin is right now. You may be too happy. You're like drunk and happy right now. I'm like worried about some complacency from you right now. Dude, I was happy at 6,000. I'm happy at 3,700, whatever. Actually, I owe him a dinner. I have to take him to a very nice restaurant.

It's official today. It's official today. You owe me and Murad. I have to take him to a very nice restaurant along with Murad, yes. Yeah. Why? Because we bet that the price today, I bet that the price would be higher than $66.25.

and he bet with Murad that the price would be lower than $66.25. The price is lower than $66.25. Not if you're buying Bitcoin off of me, though, because I'm not going to sell it to you for this price. So, like, you know, we're like, kind

of, we're like at a stalemate, but I'm going to buy them dinner anyway. So it's like, it's cool. Two Michelin stars because I doubled down in December, which is, you know, in my personality. So you guys should just get used to this. Yeah, so I don't know.

Murad figured out that I will just always double down on a bullish Bitcoin bet. It just gets me every time. This is the third time it's gotten me. All right, this is a good question to ask. What would ever make you bearish a Bitcoin? Ooh. What would change your mind, Matthew?

That's what I want to know. I don't know. If the whole Segwit2x thing turned out differently. I'm so fucking bullish right now, it's ridiculous. like I'm just through the through the this is what worries me dude yeah you should just be worried the most paranoid person I know if you're waiting for me to be bearish never gonna happen okay you're fucked all right the day I'll be bearish is the day like I'm sitting there and this is like worth zero it's just like too late you know it's like I was bearish too late okay

so like don't wait for that all right it's a bad idea all right um One of the big things he's been saying is that for us as users of the network, it's up to us to sort of police exchanges and make sure that they're solvent, essentially. I was wondering if you guys know any other ways, since I would mention, yes, most of these people in this room didn't have anything to pull off exchanges. Other ways for us to participate in sort of policing the exchanges that we can show our VR part for the network? Yeah, I think honestly it comes down to social pressure at the end of the day.

You literally have to demand it as a customer, the user. Like, hey, if I'm going to be using this... He's already doing that, though. He's keeping his own keys. Yes, but... The biggest thing you can do is keep your own keys. Don't store money on exchanges. Every day that you don't store money on exchanges,

you're holding them accountable. What about your scenario where you hold 80% in private keys and 20% on an exchange? All right, what about that scenario? What about that scenario? Yeah, how do you, like, you should compel, I would argue that you should compel the exchanges to say, hey, if I'm going to use your exchange, I want at least some, like, quarterly. I think Kraken was doing that for a while, right? Yeah, Kraken, well, that's the thing.

They were, like, providing people with reserves. What does that look like, though? Is it just, like, angry tweets at them? Well, no, they can sign a message that says how much funds they have. I would argue in this space in particular, the power of the individual consumer goes a lot further than the power of the individual consumer in the overarching economy because it's such a small world right now. Brian Armstrong, his tweet thread today was probably in reaction to a lot of members in this very small community saying, I do not want to use Coinbase anymore, specifically. Well, first of all, for our podcast listeners, the question was, how do we keep exchanges honest? We haven't told them that.

I think, fuck that. Don't keep exchanges honest. Just make sure you have yours, you know? And then we'll all come together because we all have ours. And the exchanges that aren't honest will only fuck over the people that aren't doing that, right? So they'll learn. That's my feeling on it Because it's not going to fuck me

So I don't give a shit What about the video that showed Like Security Vulnerabilities in the hardware walls Oh we talked about that Did you listen to the pod It was a very good pod

We made sure to do it We did it like a day after It was fantastic, great timing It worked out These guys at Wallet.fail They were at a hackers conference somewhere in Europe and basically took Ledger and

Trezor wallets, hardware wallets in particular. The original Trezor and Ledger Nano. And they walked through four attack vectors in which they could be attacked and basically proved on stage. Supply chain, supply, or excuse me, supply chain, side channel, firmware, and chip level attacks.

Should we sum it up for people? Yeah. If someone has your hardware wallet in their possession, they're holding their hardware wallet, Assume they can compromise your keys. Before this happened, you should have assumed that. That's how hardware wallets should be dealt with. Because it's a piece of hardware that's holding your fucking keys.

So there's a chance that they can take that. Every attack they had gets stopped by the unique passphrase. So if you have a unique passphrase, you should be good. They have to brute force the actual passphrase after they pull your seed from your Trezor. The Trezor is the most vulnerable. We already kind of knew that because they went the open source route,

so they didn't have a secure chip there that is proprietary. So you have that balancing act where you want fully open source versus maybe more secure if it's personal. If you do multi-sig through Electrum, then you could actually make it so one key is Ledger, one key is Trezor, and then you kind of get the best of both worlds. Both companies are gonna update based on this, and they should be able to mitigate the specific attack vectors, but Trezor was more effective than Ledger.

Because of that open source versus using a private security Yes, and to be clear, an attacker would have to have physical access to your Trezor No matter what physical access is required across the board but physical access might mean in the mail, or it might mean

taking it from Marty's backpack while he's So that's actually, it's a good point you bring up there is, so what these hardware wallets do in particular is they'll put a sticker on, a unique sticker and a lot of people are able to use like high-tech hair dryers to pull it off. Actually, Peter Todd

was speaking about this, I think, last week. I saw a really dope high-tech hair dryer the other day. Yeah, so one thing they do is they're taking nail polish now with glitter in it and so you glitter over like the... Ari talked about this like Ari Paul talked about this like two years ago. But it makes sense. You use something that is completely

random, which is like a nail polish with glitter in it that you lay over something and nobody can scientifically tell how the glitter in the nail polish is going to go over it. You take a high def pick, and then once you get delivered the package, you can confirm that high def pick. Yes, it's a long

sort of... It seems so difficult, Martin. It's a long journey to confirming it, but it is a way to get around this. Martin, you can't even send a Bitcoin transaction without being worried. How are you supposed to do this? No, but I'm saying the, like, these attack vectors are getting found, and they're getting iterated on, and getting better, and that is another thing,

like, as we're rounding the 10-year sort of marker here, is that's where we have to realize that's where we are in this lifespan of this technology, is it is still fucking raw it is still terrible to work with and it is getting better like and i would argue uh at i don't want to say an exponential pace but at a pace i haven't witnessed up to this point in time uh while being in bitcoin boom i think these things also like classic right so you have the problem to repeat so you want

people to withdraw the funds and like take responsibility and like one week earlier you You can have a hot tub, a nice hot tub. Ah, basically. Okay. I agree. This is a beautiful situation. See, and that's probably the attack where people are more vulnerable, and that was the

last talk about one, was the Electrum Phishing attack, where you're more likely to get attacked via Phishing attack than somebody physically getting your treasure or ledger. You're most likely to get attacked because the motherfucker walks up to you, hits you with the the wrench. It's like, give me your Bitcoin. So are we too paranoid?

No, you can never be too paranoid. You have a good question. Well, if you say that you should, even before wallet out fail, you should just assume that if somebody has a manager, that they can compromise it. So what's the best practice? Just keep it in a safe or keep it in some massive thing or something?

You should... I think the most important thing is you don't keep all your Bitcoin in one spot. Don't put all the eggs in one basket. As a simpleton, the easiest thing you can do is just not put them all in the same place so if someone attacks you like they take some of it and they're happy with it they make money you know and they just don't worry about it and and it takes multiple compromises you're you're set you're you're reducing your

attack surface right like you're trying to create a situation where it is it is way less likely that you lose all of your money at once and i think like if you're on your own bank like that should be your main priority. Is this the ideal future we want to live in? Yes. That's the thing, though. Are we going to have to live in it or are we forced to live in it? Yes, you have no choice. We're happy. We should be lucky.

We should be grateful that we get to live in this future. Do you think heavy regulation of Bitcoin would accelerate or decelerate progress? I think it will fuck America. Because you're talking about America, right? Heavy regulation in America? Or around the world?

Are we talking global? Let's say, I'm not talking about progress, American progress. I'm talking about, let's say America were to severely regulate Bitcoin. Would that accelerate or decelerate progress in Bitcoin globally? So would regulation in America hurt Bitcoin? Or precipitate its proliferation? It would definitely hurt Bitcoin short term, but I think it will hurt America more.

I think you end up in this adapt or die situation. I think we're seeing it happen. What about New York? I think we're seeing it happen from the other angle, where the U.S. government in particular, MasterCard, I don't even know if it's the U.S. government, it might just be these payment processes

that are coming down on these content creators. And it's not forcing people to Bitcoin by banning it, it's by banning other things content creators having access to payment processors that are essential to their livelihood that's

forcing people to Bitcoin. But with that being said, if I think if Bitcoin were to be regulated here in the States, it would have a short term... It hurts America. It hurts wherever you regulate it. Bitcoin doesn't give a shit.

That's the beauty. Bitcoin doesn't care, man. Oh, no, it doesn't. It doesn't matter. Like, it hurts Americans. It hurts... When BitLicense got passed, it hurt me as a New Yorker, not as a Bitcoiner. Yeah.

As a Bitcoiner, I was unaffected. As a New Yorker, I was fucked. They fucked me. My people fucked me. And they know it. You know, Ben Lossky, he went and joined Ripple. He doesn't fucking give a shit. He does not.

Right? No. But they fucked me and it hurts us. It hurts our tax dollars. It hurts the amount It is amazing to me that here we are in New York I would have never imagined this what bit license was what three years ago in the middle of the bear market Lasky just dragged us through that shit. Yeah. Yeah, he dragged us through that shit in the middle of bear market Bitcoin was $200 They were telling us it was gonna be zero, but we're gonna regulate you anyway you know and but and he did that right and here we are in new york this is pretty amazing right

that we have all these people here in probably the most heavily regulated bitcoin jurisdiction in the world because of the bit license the bit license was garbage absolute garbage it screwed new york for ben losky's own personal gain and well here we are because bitcoin is dope Jonathan was trying to get at, but like, how can the U.S. government allow it to proliferate? The crux of their power My question is, does Trump

own Bitcoin? I don't know. Does Trump own Bitcoin? I don't know. Trump owns Bitcoin. No, let's get it. Isn't that beautiful? I bet somebody in history definitely owns Bitcoin. He owns Bitcoin, and the question is do you want to be

not owning Bitcoin when Trump owns Bitcoin? well i'll leave that to you guys but well even there he'd be all about this if he wasn't president he'd be mcafee let's be honest like he and he'd be better than mcafee he'd be amazing we'd have all the amazing coins with with with trump yeah no but i think it drives home an interesting point where it's like how can the u.s be receptive to something that would be so corrosive to their power um like i don't that's what i think as we turn the 10-year marker here like i think yeah it's been a it's been a tough journey up to this point but if bitcoin is to become what we think it's going to become like fucking we haven't experienced anything yet like things

things are going to get heavy drew So, great question. So, for you freaks at home, Drew just asked, the first decade, what was the most important hurdle for Bitcoin to overcome for it to survive into the next decade,

and then in the next decade, what will need to happen for it to continue to survive in perpetuity. I would argue going from zero to $1 was probably the biggest move that Bitcoin made, just like the fact that people accrued at value at some point in time was the biggest event that happened in the last 10 years.

Going forward, me personally, I think Bitcoin needs to survive a state attack. I think a state is going to attack Bitcoin. It's literally just survival, right? Yeah, exactly. I think that is the biggest thing in the next 10 years. If we survive, we win. Like, Bitcoin is such a threat to these incumbents

that if it has the balls to do what it says it's going to do, it's going to need to survive one of these attacks. And I think that might be one of the biggest hurdles over the next decade. I mean, I think it's like a little bit of a cop-out. Brooks? Well, Marty, don't you think that the state has already attacked Bitcoin in the last 10 years?

I mean, most people think that it's been attacked. When? When do you think a state attacked Bitcoin? I want to be surprised I also want to be surprised that that was somebody or not somebody but a group of people with a sort of different narrative they were trying to push but I wouldn't be surprised

if the state has attacked it I'm talking about Do you think Bitcoin Cash was a state attack? I don't think Bitcoin Cash was a state attack because it'd be way better if it was a state attack. It was very ineffective. And over the next 10 years, too.

So, what are we at? 2019 to 2029. How many Bitcoins are going to be mined at that point? What's the fee regime going to be like? I don't know. You're saying, do you have an answer? It might not even be an attack. It might be just like, hey, can the system survive

on a pure fee regime and not a block reward regime. Chris? Yeah, just as a final thought since we're almost out of time. Wow, way to tell us. I was waving, but... What do you think Lightning is going to do

to all the issues you talked about tonight, like the proof of keys issue? What happens when exchanges are incentivized to put all the coins they have into a channel or into channels? Yeah, it's something interesting. This is like an interesting debate. say the question uh so chris asked uh what happens when like uh what happens when lightning

proliferates and it becomes like exchanges are more incentivized to use the lightning network rather than on-chain data and it's a very interesting debate like we will find out like again we are exploring this expanding universe so uh bitcoin maximalists would respond hey jevin's paradox like hopefully the utility of the lightning network is such that the demand for that utility drives the demand for on-chain transactions of people transacting between Lightning Network and the main chain. And then on top

of that, I would also argue that Lightning Network is still exploratory. I don't know if it's going to be the end-all be-all for scaling, but I'm definitely bullish on it. And it'll be, I think Lightning coming in in the last year

and growing as much as it did is very promising. and I think it'll be interesting to see that during the next bull run how much of the on-chain burden Lightning takes and whether or not that takes away from the needed fees to keep it going in the future. Again, I don't know.

What do you think? Like exchanges aren't going to put a lot of money into Lightning. You don't think that? No. Why not? It's just too risky. They're not going to make that much money doing it.

Why? They're not going to do it. So to make money on the Lightning Network... This is not going to do it. You need to be a relay network. Why not? They'll have enough so that they can send out Lightning withdrawals for low amounts.

And bigger amounts, they'll just do on-chain. And they just will not put large amounts into Lightning. Why is this? Because the stake reward isn't high enough. People who stake for Lightning aren't going to make large amounts of money, and that's fine. That's absolutely fine. It's mostly

ideological. I worry about them staking Ethereum and staking proof-of-stake currencies that have super high returns.

Returns. You get 10% or something. Something ridiculous. Obviously So you're going to stake all of your exchanges funds. But with Lightning, you stake a small amount and you just pay it out. It's like, no worries.

When you say staking, staking is not completely analogous. You're putting money into the Lightning network that is getting paid based on how much money is in the Lightning network. That is literally... But I will mark that creating a Lightning relay node and staking

and bringing Satoshis from that action takes a lot more work than actually throwing tokens into a staking. You've never done the second. I've done both. You've done both. Wow, what a shit corner. We have another question on here? Yeah, so I guess we're going to wrap

it up. Well, he kind of wrapped us up. He wrapped us up. He was like, in my question while you guys are going over the time, this is my question that's literally what he did here's a final thought for the wrap up

the final thought is how much bitcoin do you own is that enough I wonder I hope it's enough it might not be you're too cocky tonight it's our 10th fucking birthday happy birthday bitcoin

yeah happy birthday thank you guys for having us Subscribe to this shit. Not to the bottom. We're going to save this. You guys can participate. Thank you, guys. Thank you, dude.

Thank you. Both of you gentlemen on Google Play or iTunes or wherever you get your podcasts. What was that other one, Marty? Anchor. Check out anchor.fr. Yeah, I have Matt under-Odell. Matt Odell, Marty Madden.

Thank you. Craig.