TFTC: A Bitcoin Podcast - Rabbit Hole Recap: Week of 2019.01.28

Episode Date: January 31, 2019

This week we are joined by Murad Mahmudov to discuss a litany of topics. Had a bunch of topics planned but didn't get to all of them. A lot of tangents. Thanks to our sponsors: BlockFi - Head over to www.blockfi.com/talesfromthecrypt and learn how to leverage your crypto without selling! HoneyMiner - Now available for Linux users! HoneyMiner is the easiest way to earn BTC. Peep their site here to learn more - https://honeyminer.com/?utm_source=bent&utm_medium=banner&utm_campaign=marty%20bent%20honeyminer

What is up freaks? We're jumping right into it. Welcome back to Tales from the Crypt, Rabbit Hole Recap Edition, special edition. We got a guest in the house tonight, but before we get to our guest, we got to introduce our sponsor, BlockFi. You've heard all about them, how they all have one thing in common. They hate selling their crypto, especially if it's for paying taxes. Government's back open, people. It's going to have to happen. The IRS is back at work, so this service is becoming more pertinent by the day. The best way to use your crypto without having to sell is to use BlockFi. Use your Bitcoin, Ether, or Litecoin to get USD funded directly to your bank account and get your crypto back at the end of the loan.

The best part is that the interest you pay on the loan can be deducted from your taxes, saving you money and a headache dealing with tax debt. Visit blockfi.com slash talesfromthecrypt to learn more about using your crypto without having to sell. Hold on to your Bitcoin freaks, blockfi.com slash tales from the crypt gentlemen it's great to be back in the studio you two in particular uh for you freaks that don't remember we made a bet what five six months ago that the price on jan january 1st 2019 would be uh the bet was would the price be below or above 6200 uh or 6525 dollars excuse me uh the price was considerably below uh marad welcome back to the pod we are winners how's it feel to be a winner as per usual we are the winners of the bet

so as a result matt is going to be providing the payment for the festivities later tonight yes i'm very excited about our dinner um i'm hungry too dude i've been fasting all day all week actually um but yeah i'm super happy and excited to be back on my favorite show well we're glad to have you back uh we're gonna get to your price predictions in a little bit we got a lot of topics to get to matt do you want to you got anything to open up the episode with from your end how's it going guys i'm excited for the dinner that should be good i think the price was 66 25 and it was well we made the bet in like november for january 1st yes um so i lost this bet a little bit ago i lost this bet like a month ago yeah really lost like two months ago

So I put the money aside a long time ago. I'm ready to go. We're going to feast out. It should be a really good time. Let your lesson be learned that you should never bet against Murad's price analysis. All right. That's first and foremost. Wait, wait, wait.

Keep the mic. Let's jump into your price analysis. You dropped another thread this morning talking about how people who think that Bitcoin isn't going to move below its 200-day moving average may be wrong. Am I correct in dissecting your thread? Admittedly, this is partially speculative on my part, but I still believe that 200-week moving average is likely to break. And there are primarily two reasons I see for that. first of all um if you sort of extend some of the moving averages from the bitcoin's earliest days you will see that um the very first support was found around ma50 the subsequent one um in uh

2011 2012 was found around ma100 then we know the famous ma200 um so the just uh the simple moving averages we're discussing here and so i believe that um it is uh the the moving average that ends up supporting the price at each subsequent um bear market i believe it becomes the longer and longer uh simple moving average um i actually believe that we might bottom out somewhere around 300 or even 350 dollars no no i'm sorry uh the 300 week moving average or the 350 week moving average okay um in the sense that um it will be um the longer one supporting it this time around but um i also believe that the altcoin market cap is down around 90 percent from uh 465 billion to around 45 billion right now which uh to be honest i believe is not enough

uh all alts put together being worth uh 45 billion dollars even though it's just on paper still i think is far too high um and i wouldn't be surprised if we went if that gets cut at least and half more and probably even by 60, 65 percent. And I believe that we still have not seen the final capitulation in the market, not in Bitcoin and certainly not in alts. And I believe that we need to be punished by either time or price, probably a mix of both. And I think that this bear market will still last for several more months. And so if your theory holds true and comes into fruition, what do you think the sort of the prolonged nature of each subsequent bear market means for adoption? Do you think that's like a healthy sign for long-term adoption? Do

you think it should be speeding up? Do you think people are losing interest? Do you have any comments around that? So I'm realizing as of late that market as a whole does not care about our particular human preferences. And so as we sort of learn more and more about Bitcoin and cryptocurrencies and get sucked into this rabbit hole, we start kind of getting ahead of ourselves and thinking about things, how they will be like in the far future. But I believe that the eventual success and dominance of cryptocurrencies is inevitable, but it might take a little bit more time than some of us would like or some of us think. It doesn't matter that the bear cycles get prolonged more and more.

I think it's kind of natural. You see similar patterns in gold and other monetary asset classes. And what's important is that each subsequent bottom is higher than the previous one. So the previous generational bottom was $200 around, right? If this time around it's around $2,000, I believe that Bitcoin is showing itself as a massive success because it shows that the fact that bottoms get higher and higher literally symbolizes that the number of hodlers is increasing. And that is what you want for your store of value. Yes, the entire monetization might be happening a little bit slower, but as long as the bottoms get higher and higher, volatility doesn't matter.

Volatility is just people coming to the reality of a new monetary system. yeah no i like that and the fact that the bottoms are getting higher as as more supply has been distributed to the market over time is is even like adds to the bullish case for that so thank you for your for your price analysis it's been uh wonderful seeing your your uh your blossoming into like a chart whore like uh progress throughout time love your charts so i have a follow-up question so the price now is like 3400 we our recent bottom was like 3100 ish right so it's like 10 down so what do you have a number for what do you think the bottom is going to be so i believe another bet coming i believe that uh so i believe that the next bottom

the bottom is going to be around 2k and um i like to give a range and i think the bottom is going to be somewhere between 1700 and 2300 and in terms of time it will be somewhere between april and july if i was a betting man which i'm not but um those that would be my range for the president of the poker club at princeton no no one who draws charts isn't a betting man um okay that's interesting we'll see how ready is this time around so it's a little price analysis we don't do that too often so glad to have you come give that uh side of things because we haven't talked about price a lot of times we'll definitely we'll definitely construct a bet but we'll wait till the whiskey

flows a little bit more on this side for some inspiration and we got a mixture of drinks mirage drinking coffee matt's got whiskey i got a beer we got some uh we got some spectators in the crowd too some family members hanging out thanks for listening to us do this do this show guys love you so uh moving on to the first topic you put this in there is there a better hash update or you simply just want to pump better hash right now i just felt like it was it was good time for a show yeah great time for a show so we talked about this what three or four weeks ago better hash it's really not being uh talked a lot about a lot or has been recently i actually have heard more people talking about it in the last couple weeks which has been great

um but better hash uh mining pool protocol not to be confused with uh a competitor of of our sponsor tonight honey miner uh that goes by the same name uh is something that a lot of people would like to get uh adopted in the bitcoin network um so to quickly explain for you freaks who might not know what better hash is it is a competitor to the stratum which is a mining pool protocol and the stratum protocol right now gives mining pool operators a lot of undue influence over the network because they are able to decide how the block is templated and then they divvy up the block reward to the miners in the pool what better hash does is give the individual miners in the pool the ability to construct the block template and then all the pool

operator does is distribute the reward um so this uh arguably makes mining uh pool mining uh in particular a lot more decentralized gives a lot more power back to individual miners um but there's a lot of hurdles to overcome it's a it's a chicken and egg problem um sort of figuring out how to bootstrap uh better hash there's not really a great profit motive at the moment a lot of people would argue yeah we need the miners to care about sovereignty basically yeah but uh i think they'll come around and i think it's uh you did a great job explaining it and uh it's an important project for us all to support yeah so that's actually i met with matt corallo a couple weeks ago wrote the protocol and there's spitballing ideas on how to make it happen and it's literally people

just need to talk about it more and i guess it will have to be demanded by the market and specifically miners, individual miners. If you guys believe that you should have the power to decide how your blocks are constructed, definitely let your local pool operator know that that's something you'd be interested in. Yeah, it's basically like don't trust Verify, but for miners.

Yeah, exactly. Yeah, so better hash for a better future. Trying to think of some propaganda slogans. I like that. That's a good propaganda slogan. Murad really liked that one. um yeah so that's a better hash update talk about it more people i feel like if more people are talking about it and there was a good bitcoin magazine article this week on it yes so it was

like we i was recently extra extra shield yeah who wrote that i forget who wrote that i don't think it was aaron it definitely wasn't aaron but it's on bitcoin magazine yeah we'll find it we'll link to it in the show notes sorry to that author we can't recall right now it was a good it was a good piece very good piece um jewel upgrades we meant to talk about this last week we never got around to it this is a big one there's a big have you been playing around with it well the big one is before you needed to use zap or something else to create your channels and now you can do it all in jewel so you don't you can skip the part where you install zap if you if you just want to do in browser lightning network and pierre updated his node launcher so now it's easier than ever

to have you know this jewel chrome extension or you shouldn't be using chrome but firefox extension or whatever uh to pay to make payments through your browser with your own node yeah and i guess let's dive into i mean we haven't talked about jewel in a while but the the use case is beyond like maker transactions like the vision for jewel um is sort of like a quasi internet passport to help you carry a reputation around on the web based off of your node activity which is an interesting concept

so Joule being an extension that communicates with a node and for micro transaction purposes now could be something potentially a lot more complex and intricate in the future

so they iterate at the transaction level just keep this stuff in mind i would say i mean i i think for like a lot of people in the future their interaction with bitcoin is going to be through something like jewel right everything is is going to all the user facing good stuff is going to be is going to be in an extension or something like that right or like a at least for microtransactions at least where like lightning comes in yeah but what do you think about like custodial extension services uh that are used as hot walls like do you think that like a lot of hardcore bitcoiners would say

are you crazy well one of the cool things about jewel is that you you hook it up directly to your node um i could see a world where as as long as they keep that as an option you could have you know maybe like plugins where where you can pick a node provider or something and then as if you have those nodes competing with each other like the node providers competing with each other it might not be the worst world and and you know you'll have some competition at least maybe they'll you that'll keep them honest yeah um but still would you would you recommend anybody keep more like 20 to 50 dollars on lightning like on your lightning node or like in a jewel wallet or something and like well jewel's not hot right now right jewel is i mean i guess it is it is hot but

it's not yeah somebody got access to your extension but it's not custodial right no no you have you have control of your keys but they're vulnerable because it's in a hot they're vulnerable in the browser yeah so like yeah you shouldn't i mean in lightning in general you shouldn't be keeping you know more than you're willing to lose on in any kind of lightning this is all you were all just testing and having fun right now yeah right what are your thoughts on the life-changing amount or your thoughts on this stuff um i am generally extremely bullish on lightning i've been meeting with a lot of people from the lightning ecosystem both building the uh lightning implementations themselves as well as some of the applications around it and um i think that

lightning and perhaps other sort of layer two technologies like it are going to be literally the next internet and i think that in their full in their full final form uh they will make the base layer blockchains themselves look quite minimalist by comparison um i like to describe kind of the ecosystem as an upside down pyramid where the bottom is like made of hard titanium for like occasional hyper secure settlement and then there's going to be this whole universe of layer two, layer three, who knows, even layer four, possibly, systems on top of it. And I just sort of delving into like channel factories and atomic multipath payments, some of these other technologies as of late, I am incredibly excited. And I think that it will

finally enable sort of the payments and the transactional use cases on a much more scalable, sustainable and um sort of long-term basis uh which i think will finally um make people see sort of the final vision i think even though we are all prioritizing the store of value right now it money can't succeed with that by itself uh you want we are investing in bitcoin as a speculative of store of value under the premise that there is also a path and a vision towards bitcoin becoming a full-fledged and technologically viable medium of exchange in the future as well and i think the incredible pace of lightning development is sort of making people more sort of making people believe in in in this vision and and bitcoin's potential for

all kinds of payments uh in the future as well i completely agree and i will add is lightning number one and the pace of development and growth on it number two a black swan that could fuck up your long-term charts so let's talk about price history up to this point in time that was all in a world mostly for at least nine years where lightning didn't exist and these building capabilities weren't around either so now we're living in a world where lightning exists and these building capabilities exist and i would argue it's a different animal you're you're you're approaching and you're and you're trying to define and so there's a lot more to price in um just play devil's advocate here i i disagree actually okay because even though uh lightning

is an amazing technology i personally still i'm not going to spend bitcoin for the next 10 years um i can agree with that right and so in that sense bitcoin's price is more of a function of like this speculative digital gold and will still be maybe for i don't know two two and a half cycles um i will start spending bitcoin and even then only a little bit when bitcoin itself is going to be in the trillions uh i am bullish on lightning as an enabling technology but i still think um at least in the next two three four years it will be kind of niche and it will be more like a toy because as i've said there are still very strong disincentives to spend bitcoin um i can just stand on the south uh i can just stand on the sidelines while all this technology

is getting built uh and all the ux is getting perfected um without sort of uh spending my bitcoin i mean i can i can play around with maybe a couple of satoshis here and there but um i think it it like it requires ideology over just pure profit seeking at this point in time still because bitcoin theoretically can still go up by quite a lot so um essentially it's in my interest if i am bullish on bitcoin it's in my interest to hoard it and strictly hoard it while using government money for payments. I would agree. I also agree with that logic in general.

But the question is, does Lightning enable payments that might not otherwise be possible? Like, are there business models here being created? Satellite API is pretty cool. Yeah, that wouldn't be possible with fiat payments. So in those cases, I might be inclined to buy some Bitcoin with Cash App and then use it for this purpose. There will be no mic-rabbing, all right?

We're going to hand the mic over nicely. So there are two things I will say here. And so the payments use case, even if you will have a lot of money flowing through either Bitcoin or Lightning, it doesn't necessarily lead to price appreciation, which kind of flows back to your previous question. For price appreciation, the single best behavior that you want to see by market participants is people desperately holding Bitcoin, making it completely disappear from circulation, and then restricting the supply to a point where every new additional demand just makes the price go locally vertical.

So that's A. But more importantly, and this might sound… To an extent. I would say that's an extreme. I agree. and i i guess um it definitely helps support the price uh but once again i believe at this point in monetization it's not so much payments um or lightning that supports the price or makes the price go up it's people desperately speculating on the store of value usage or simply uh like

using bitcoin as a store of value and essentially putting bitcoin on their balance sheets and ideally holding it for years you want the holding period to be as long as possible but more importantly and this might sound a little bit un-bitcoin like and not very cypherpunk of me but um i don't think it's the uncensorability uh or even the payments use case that are going to make bitcoin go to the trillions the mic grabbing rule goes both ways so i'm trying to be pragmatic and realistic and um i think uncensorability is cool unseizability is also pretty cool but i think over the long run it will really be bitcoin's uninflatability that will make it go into the trillions and i'll tell you why the people

so here's the thing right like all these business models like casinos porn whatever they really they they're not going to make a dent in the universe and um i mean if you put them all together it's a pretty sizable thing i suppose wait just let me finish just let me let me finish my three let me finish my train of thought and then you can comment on that so here's the thing right the people in the world um who control who collectively control trillions of dollars um tens of trillions of dollars hundreds hundreds of trillions of dollars i would say right um so those people they don't get censored anyway and they don't get their assets seized anyway now something like that definitely supports bitcoin's price as some people who require it sort of um

capture that market and push the market cap early on but if you really want bitcoin to go into like 5 trillion, 10 trillion, 15 trillion dollar territory in today's terms I think the reason why Bitcoin will find itself in big asset managers portfolios and ultra high net worth individuals portfolios in the cash

allocation of their portfolio is because the world will game theoretically converge on Bitcoin as the hardest money and because of its unprintability everything else all the other assets will kind of reprice themselves around Bitcoin

and i think that like bitcoin's extremely high quality as a store of value and just nobody's ability everybody's inability to print more units i think that will essentially will be the not the only force like these other forces matter but but it's uninflatability that let's put it this way that's 80 percent of the pie chart of the forces that will push the revolution forward that was just just a lot of just bullshit over and over again i i agree refute except i feel like you're creating a false dichotomy here you need both like it's both combined like if you don't have a censorship resistant properties then it's worth fucking nothing because you can't spend it at will so to say like oh these people aren't censored now well this is a completely different

system that we're talking about right so you need in in it needs to be censorship resistant it needs to be immutable the fixed supply is is absolute you know you know the monetary policy you know it's a truly scarce asset that we've never seen an asset like that but it all goes together if you don't the the store of value thesis requires all of these things right would you agree so i definitely agree with you that all of these properties they are inextricably linked and you need censorship resistance for the decentralization to stay intact for the unprintability to stay intact etc and they they all reinforce each other i agree with you however you you mentioned sort of the new business models that it will enable or whether lightning will

make the price go vertical and my only my well my only reservation is that um like relative to other business models or just socioeconomic structures and how wealth is concentrated around the world today like let's be honest like a handful of people own like 90 of the world so you kind of want um it's important for those kinds of people to start allocating to uh bitcoin and cryptocurrencies at least a little bit for sort of the next two three big waves of the market to come to fruition um and essentially what i was saying is i think at this point in time while bitcoin is still relatively small we're at what like 60 billion right now um yes some of these lightning and censorship resistant use cases might be beneficial for the system as a whole

but essentially i still believe that in the grand scheme of things um like big money like they they don't they don't really get their assets seized like especially in the developed world like that's not really a thing but it's a different level of guarantee right like they're doing what they're doing it costs them money but i i think for a lot of people you know especially that level right below the top you know half a percent like for those people the censorship resistant guarantees that that bitcoin gives you are way cheaper and way more effective than what they currently have yes but so couple everything that i've said also with the following in my uh several years in the cryptocurrency industry and just observing the world at large i've come to the following conclusion

99 of people don't really care about censorship resistance they don't they don't care about decentralization they don't care about privacy right now they don't they don't care about any of these things what what most people care about is just making money and and the reason why the next bull market will start is when people see like eight consecutive uh tall green uh wicks on or green candles on bitcoin's price that's what's going to get the next wave of people in i mean um bitcoin thrives from greed first of all and it and it thrives from fomo from these waves of desperation and these waves of desperation they don't come because suddenly 50 million people decided to care about their self-sovereignty they come because people want to make more money

like week to week or month to month and our hope is of course is that each wave of these speculative bubbles um like five to ten percent of the people that that it brings with it will stay for the right reasons that um matt odell likes to evangelize so much but um really the the biggest driving forces in bitcoin's market cycles and particularly bitcoin's price is uh fear and greed i would agree but i would also caveat that with i'm a big believer and we never know when something will just turn there will be there could be a tipping point at some point in the future too i i think you're not giving the bitcoin community enough credit i think that more people should care about censorship resistance and privacy but like we have a large percentage of people that do i

agree man i think the percentage is growing but i think mirage being realistic i think no i mean look i'm in it i'm i'm in it for the tech right like that's the meme like obviously like i want to fucking get rich too like i know that that that is a key part of of why like bitcoin is such a fucking mind virus right but i do think that we have an outsized group of people that do care about privacy and censorship resistance i mean i see i see it every day i interact with people every day like we have a shit ton of people that care about that shit and we need to grow it that's you know one of the reasons i'm doing this podcast with you yeah we are playing devil's advocate again i'll play devil's advocate on this episode we are in a bit of a bubble though uh until or

conversationally we tend to congregate we're definitely in a bit of a bubble and uh as as mr odell here he mentioned that oh but bitcoiners don't think like that yeah but like bitcoiners are like a tiny tiny minority within a tiny tiny minority of people why it's ridiculous to trade it right now when you can be fucking accumulating well i do believe we'll see a couple of better entry points but that topic aside um my point is that most people are lazy and uh to care about self-sovereignty and privacy i mean i'm as libertarian as they find but we have to be realistic about the majority of other market participants and frankly uh many people both poor and rich alike they just don't care about these cypherpunk ideals we need to understand

like if you're managed if you are trading or investing or managing money you need to put your ideals aside and you need to you need to say okay this is what i want this is how i see the world this is how i want the world to be and this is how the world is and the people who adapt to market conditions and adapt to the world they need to sort of be in the minds of the average market participant and so i think like to care like these things like self-sovereignty decentralization privacy um censorship resistance and they might be important and but the thing is they're very intangible and people at least i believe in this in this age or in this particular part in the human evolution i think people are just like not very good at mentally valuing

intangible things and so um still like there are there are other forces at play here no and i would agree but again going back to my previous caveat about the tipping point like bitcoin produces this tangible thing where it's like hey i can actually see these properties being played out in this technology i would argue unlike anything that has ever existed up to this point in time so with that being said right now people don't care but uh and this is what i believe bitcoin is truly like a better product at the end of the day and it was the ux gets built around it will prove to be a vastly better product in terms of speed settlement uh certainty that that your transaction is going through and having certainty that you actually own what you do and again like like you

said there's the notion of privacy and self-sovereignty is something that was very intangible in the past but i believe bitcoin does present that sort of tangible good and technology through which you can experience those ideals in a very accessible way like i bitcoin gives you responsibility right like you have to you have a financial cost for fucking up um i think i think one of the things that is is pretty that's going to be big for education for user privacy is basically further increase as we put more and more stuff on the internet we're gonna have bigger and bigger privacy uh exposés or dumps right we'll have like bigger incidents like we so so this week we had the the we had two iphone oh let's talk about

this this is actually almost this is freaky man yeah this is freaky we have two of them two of them got disclosed let's talk about the facetime one first so the facetime one they basically if someone facetimed you and did a group chat they could without even if you didn't answer they could listen to your mic and if you decline the call they could see out of your camera and listen to the mic at the same time so this is like a major major vulnerability um this is what teaches people right they see this and they're like oh shit like maybe the guys that were saying that that my iphone could mike could turn on when i'm having a conversation with some people weren't so crazy right and they start taking their privacy more seriously you know that's a closed piece of

hardware you don't know anything about what's going on there and you should just assume that any of these devices like they can be compromised especially if they're connected to the internet yeah what was the other hack i don't even know the other was a like a later disclosure routers had a report out about the UAE's spying program and they were using American contractors and those American contractors were using a program called Karma

and the supposedly the vulnerability that Karma used was an iMessage vulnerability where you just needed to have the phone number. They didn't even have to click a link or anything. If you just had the phone number you can get their text messages their emails, their locations, their photos

everything um and because it was an iMessage vulnerability so like that's pretty fucking crazy like imagine all the people that have your phone number that could get your phone number and so they have so these this back door gives somebody access to apple servers supposedly yeah supposedly it gives you access to the phone i guess but you know iMessage goes to a computer too so who the fuck knows steve jobs probably rolling in his grave right now yeah that's pretty bad fuck up both of them yeah it's pretty crazy to think about no but like we keep saying this and you're like oh data data hacks need to keep happening but like equifax everybody got wrecked

like social security passport like that's ridiculous home information and nothing's happened no one learned right did anyone there's no one learned but nothing like we get some people every time we get some people yeah and hopefully they get their their family members like i got like i have my whole family uses signal now like does signal have its issues yeah it signalizes it i've railed against signal plenty of times but they're all using an open source encrypted messenger like that's a step in the right so every time you get someone you don't just get them they become an evangelist right but you're powerful evangelist like i'm not as powerful yeah i don't have all my help we're still

using whatsapp facebook still got our stuff well whatsapp is like whatsapp's like the half chub it's like pretty good right like because you have encryption supposedly you know but but they're they're facebook so you probably shouldn't yeah no that facetime hack in particular is really uh really frightening because like you could be fucking sleeping and somebody could just like facetime you and fucking have access to your like deep breaths as you're sleeping yeah it's a real eye-opener right like i think we get a lot of people from something like that i don't think These eye openers happen so frequently and yet nobody gives a shit.

I believe there needs to be a fight club moment for people to be like, oh, fuck. Yeah, I mean, over the years we've seen a Facebook hack, Equifax hack, all these hacks, Panama Papers, WikiLeaks, all this stuff, right? And nothing changes. Nothing changes because, as I've said, it comes back to my previous point,

no one cares. People just don't care. Has your privacy gotten better? My privacy? Yeah, has it gotten better? i mean yeah my privacy has gotten better but in general i just think like most 99 percent of people they just like they don't care if facebook can read all their messages and so it's just the reality of the situation right um people are generally driven by more short-termist desires

and short-termist sort of ambitions to even care about this stuff and i i think all these precedents that we saw it's just that the the status quo when it comes to privacy is just probably will remain no but it's like that's why i feel the need to play like i don't want to say this heel but like this role of sort of making people aware that they should think about it because it's like one day you don't really care about it until there's a boot on your neck like that's the that's the famous saying like and i and again i've said this story many times on this podcast like my old boss dimitri from i grew up in soviet russia i was like marty you gotta gotta be careful of this stuff and people are slowly like seeding their privacy and their

their freedom their liberty like you're fucking innate liberty as a human being we're slowly seeding that i would argue and this is a perfect example like nobody gives a fuck So I still believe that the monetary forces at play will be stronger here because if Bitcoin succeeds, then it's going to defund. Exactly. And that's why I'm so bullish because I do think it's honestly a better product and people will realize that over time. It's just coming to that realization. I think like Bitcoin succeeding, I like to say that Bitcoin is like the real Occupy Wall Street, which can actually succeed. Like not just some hipsters like rallying on the street, but something that can actually be successful and can actually have an impact.

And if Bitcoin succeeds, then it's going to defund a lot of the quote-unquote oppressors and a lot of the quote-unquote sort of gatekeepers, middlemen, people who infringe on your privacy, etc. Both on the government side as well as on the markets themselves side by making sort of monopolies harder to maintain, subsidies harder to come by, and just sort of make the markets freer. And I think that my bet is still on, like, people's greed taking us there because of, like, the limited supply as opposed to relying on just sort of the herd suddenly getting, like, better privacy or habits or whatever. Yeah. No, it's an interesting debate. no no i think it is something like as bitcoiners obviously again like going back to like we are in a very niche bubble and have these very stringent ideals and stepping outside of that bubble and realizing like the greater landscape but going back to the fact that the fact that

like bitcoin is inevitable because it is a better product and it will like people like you were saying these properties been so intangible in the past and i do honestly believe that bitcoin presents this tangible sort of realization of these properties and it's just getting people to wake up like hey you should probably care about this be aware be aware freaks that's our be aware of the week one person at a time one person at a time yeah it's true dominoes will fall speaking of one person at a time looks like charlie lee's trying to get the uh the light quinn train back going he bought back in he definitely bought back in he hasn't admitted to it yet but he definitely bought back in why are you saying this this is on the list you put

this on the list sold the top sold the top right and then decides like litecoin's mission is confidential transactions on the bottom that's what he just did he totally bought back in marad do you think he bought back in i'm not going to speculate on that yeah i mean um i don't want to i don't want to sort of make any harsh comments but let's put it let's put it this way in this industry there exists some dark incentives to get out of certain illiquid altcoins at market tops and get back in to certain illiquid altcoins at market bottoms especially if you are a big centralizing figure who can essentially move the market because you have a big mind share of followers it's really quite an unfortunate situation but uh a lot of people realize that

this reality presents themselves with a lot of quote-unquote money on the table which can be abused and exploited so uh sort of without mentioning any names or making any explicit comments i believe that there is certain um great maneuvers that can be executed here are you talking about yourself or are you talking about charlie lee no comment it had to be said i don't yeah so that people so that people don't accuse me of anything later i'll just come out and say it like i genuinely believe that um many altcoins will outperform Bitcoin 2019 bottom to 2023 top. I'm just putting it out there before the final capitulation. So in the future, people can't say, oh, you waited for the bottom to happen to then

say things like that, right? I'm telling you straight up right now, I think many altcoins will outperform, probably fewer than it was in 2017. The returns will be more concentrated than last time because i believe the average iq of the average market participant uh is going to be climbing up as more institutions and quasi smart money will be entering the race but um i just think that's the reality of the situation and you should be allocating and researching accordingly uh you've been saying that since july since you first came on the pub um right like i was never i was never like hiding that fact yeah i didn't even want to get on you i wanted to get back to charlie lee and uh just talk about the this isn't talked about enough like

listen i bet charlie lee's a nice guy but the the moral hazard that existed at coinbase when he was cto and they added like litecoin and then he sold the top like on cnbc is vastly under talked about like so two things i'll say here first of all um the only reason why litecoin even exists is because charlie lee was a vp of engineering at coinbase and he made it so that a year or a couple years before the 2017 bubble litecoin ended up being a uh top three all a coin with a smaller price in the eyes of the millions of the consumers who see that interface and they think oh, either I can't afford one Bitcoin or this is smaller, so it'll pump more, etc. That's the only reason why Litecoin essentially pumped in the first place. It feeds off of ignorance of the

masses. That's the only reason. I believe Litecoin is still to this day 20 times overvalued. It has literally zero value as a store of value it's completely undifferentiated there is nothing that litecoin can do that bitcoin cannot do uh i believe that uh litecoin's reason for existence or joie de vivre as they say is almost completely non-existent i mean it just shouldn't exist joie de joie de vivre is simply the reason for existence in french joie de vivre use that and so i think that um or rather no sorry joie de vivre is like the the the joy of life i should have said the raison d'etre the raison d'etre yeah um and so yeah i mean just litecoin is a complete joke that ideally just should collapse and like the argument that it's a test net for bitcoin

because that shouldn't be worth billions of dollars like that should be still worth 10 times less than it is today charlie lee can go fuck himself that what he did as cto of coinbase was just the most fucking ridiculous irresponsible bullshit ever and he made fucking bank off of it and like should have sold we all should have sold when charlie sold you know regardless of what asset you held but again he seems like a very nice guy but he literally got it on he used high high like he said high uh supply amount to make the price look cheaper and he got it on fucking coinbase and he like pumped the shit out of it like and that just grinds my gears like it's just really just like the worst of the worst yeah it's a storyline that really skirts skirts under the

rug here well if if litecoin was like at least somehow differentiated in a way that's important for a horde of for for a hordable money then it would kind of make sense but it really isn't and something else that we should note is that and this is kind of a problem affecting the entire industry and also one of the three or four major reasons why like the altcoin bubble like happened in the first place is because a lot of these engineers and like people who are super talented like technologically and in terms of software and cryptography etc they don't really understand monetary economics and how like currency competition works or has worked in the past and so they think that like having a lot of currencies like a good thing when it isn't like

Because currencies are not like Pepsi-Cola or like Sprite. Like it's not a consumer good in the sense that you want choice. Ideally, you actually want a very small number of them. You want to be able to take your Bitcoin and spend it anywhere in the world. Exactly. Like just the single liquidity pools being as dense as possible is what you want for your money. Because like when you go to sleep, you want to go to sleep with your currency being as globally saleable as possible. and essentially having like a thousand currencies just hurts that you don't want that at all but at

the same time i guess like this was kind of inevitable because you could argue that a hundred thousand currencies springing up is essentially the polar opposite of like the government monopoly on a single money so now that we finally have currency competition and everybody being able to issue their own private coin or token and what i call like essentially what we are observing today is what the denationalization of money would have always looked like. So this is just a regular process. I believe that...

People going drunk with freedom. Yes. And also, I believe that, as I've said, people will get smarter and smarter and they will be educated about these dynamics as time goes forward. And we will do our part to educate them as well.

But essentially, I believe the number of strong currencies in the digital currency arena will become smaller and smaller with just a few sort of dense pockets remaining. Now, that being said, and this might sound controversial, I don't think that we will have just one currency anytime soon. But I also don't think we will have like 10 big currencies either. I think a more realistic and plausible scenario is three or four dominant chains in the medium term,

even if Bitcoin does take 70-75% of the market. do you think that an altcoin can overtake bitcoin um i think we have to pay our respects where respects uh are due and uh anybody who says anybody who thinks that bitcoin doesn't have um the highest chances of winning at the moment would be lying uh bitcoin probably has the highest probability to win at the moment And it remains to be seen whether its first mover, Immaculate Conception, and the liquidity advantage remain insurmountable. I mean, so my logic is this, like Bitcoin is a 10x improvement over gold and fiat. And in order to supplant it, you need to do another 10x improvement.

essentially, or at least a 6x, 7x improvement or whatever. And doing that is much harder. What Bitcoin did to gold, doing that to Bitcoin is significantly more difficult. And it's also important to understand that these currencies, they're not competing just technologically, but they're also competing in terms of the Lindy effect and the community and the religiosity aspect of it. And so usurping Bitcoin will definitely be incredibly difficult, but I wouldn't go as far as to say it's completely impossible, but it's probably extremely, extremely difficult.

That's a bit of a cop-out. What's your percentage? What's the percentage of Bitcoin being supplanted? Yes. 25 percent what are you fucking kidding me dude no fucking way but you don't believe in you don't believe in like in forks right in like any kind of fork governance well so i think that first of all like bitcoin succeeding in general is itself a speculative proposition so uh me saying that it's 75 percent that bitcoin is going to be the guaranteed winner i think that's totally reasonable i think that if there's any type of

groundbreaking feature or something that an altcoin has then then bitcoin will add it through a fork and whichever and if it truly has value then that fork will become the dominant fork of bitcoin so i find very few scenarios here where you know 25 just seems ridiculous to me that and even if you had like some kind of completely different technology you could use the bitcoin utxo set to start that chain because it's the most fair ledger that we've ever had that will automatically have added value because the ledger has value. Well, it took the Bitcoin community

how many years to decide on the block size debate? Four years? And it didn't go through. So I think any significant major... Well, I guess, yeah, in a way. In any case, that relatively small change, in my opinion, took an extremely long amount of time.

I prefer to take that much longer then it'd be a lot easier so saying that um like any like saying that any kind of superior technology can get implemented in bitcoin just like effortlessly and instantaneously uh i'm not quite sure yeah also um no one said it was instantaneous well also i think that bitcoin definitely has a lot of uh advantages and it will probably be the winner but once again like it's by no means guaranteed and it's bit like bit first place is bitcoins to lose for sure and it will have to be defended um i actually think altcoins are valuable because they force bitcoin yeah they definitely light a fire under people's asses to stay on the bitcoin community

to stay on their toes yeah and so just to go back to it took forever to get um segwit adopted uh again i would go back to i think that is advantageous again because the alternative is a somewhat quasi formal governance structure which i don't think is advantageous at all and i think while uh these quote-unquote on-chain governance structures may work now uh i don't think they're socially scalable because at the end of the day again we want bitcoin to ossify at some point and i think the existence of these governance mechanisms will just lead to a system where you have quasi like lawyers making laws like just the the fact that a governance sort of process exists means it will be exploited and uh bitcoin's rough governance by rough consensus is while

not always the quickest route to figure things out is the only way i would argue i honestly i think people are talking about ossification of the base layer quite a bit too early because we're only like human life might be short i'm not i'm not saying we should need to do it right now but i'm saying like even when you get to the point where it is ossified even if it's 100 years now you'd want it to be ossified in a governance structure like bitcoins and the the uh probability that it will become a protocol with governance will become ossified i i would argue uh like you realize bitcoin has governance as well right just because it's not formalized on chain doesn't mean that it's not there yes but if anything i would argue that you can design an on-chain governance

system which is far more transparent than anything you've ever seen before but no i would argue that like a governance like mechanism just like makes these proposals more likely where if there is no like governance mechanism to sort of present these ideas they won't like they won't even get like the voice they would like the fact that you have a mechanism to present these ideas gives them an unheard voice that doesn't exist in bitcoin or a leveraged voice that that maybe shouldn't exist i am personally still attracted to systems where the investors or the coin holders such as i have some voice or the community at large has a bigger voice in the direction of the system yeah no i agree this is something to to uh debate i mean bitcoin holders have plenty

of discussion plenty of voice in the conversation the the fact that that it can't be changed easily is a feature not a bug it goes with everything else we've been talking about today the immutability the store value proposition in its whole in its entirety censorship resistance all of this goes with the fact that this system is ridiculously difficult to change you know it's a resistance to change as opposed to systems that we're used to that that tend to be highly change prone right like you can change them and then it's like once you change them though it's like hard to go back but but you can change them and and i think that's it's a feature it's not a bug i would agree generally we have five minutes left we haven't gotten through like a third of the topics

it's been a good episode though it has been i love these free riffs what should we talk about to end it hamas is using bitcoin apparently no i mean that's just they have no source like whatsoever like that's fucking ridiculous i was just i put that on there because like i wanted to say it was ridiculous so we got that down yeah bloomberg reported that come on if we could if we could stop hamas from using bitcoin then bitcoin's worthless because we can't stop people by design that's the whole point yeah um all right we'll skip over hamas because we've already talked about that stuff cold card has a pin brute force vulnerability yeah the new ones don't but the way they set up the firmware

i think you can't update the old ones but if you use a long pin then you're pretty good yeah it's just if they have physical access you should just assume that if someone has physical access to your hardware wallet they can compromise it but it's the attack is if they have physical access they can get around the the delay so you can brute force a short pin like relatively easily yeah um cold course cool i need to get my hands on one of this the new version has mechanical buttons oh yeah rodolfo is awesome yeah i didn't mean to talk over your shout out but the new one has mechanical buttons like actual push buttons instead of touch screen buttons which is way better like the original was it was a little bit finicky to use but it's a great product

yeah so check that out uh as a hardware solution but also be uh be advised the vulnerability with the pin stuff um and then this will be the last topic things are getting weird in venezuela we talked about it last week still not sure what's going on latest thing maduro has frozen uh the new president guido's uh accounts i guess his bank accounts venezuela i'm not sure how that's that action will probably be in vain i mean that's a pretty obvious thing for him to do and i just thought it you know made uh it's the perfect example of why bitcoin's useful right and it's a perfect example of why censorship resistance is important because you could have the best store and value in the world and the dude can just fucking freeze your assets

then yeah and that needs some sense and it's actually i read about this in the bend today too like highlighting i mean volume's still relatively low compared to on uh exchange volume um but local bitcoins in russia and venezuela in particular denominated in bitcoin volume is is rising uh pretty quickly and that is an example of where like bitcoin is better technology for those people and they get it more innately so again maybe this revolution happens in these countries first and it moves on from there yeah for sure but um i still think that i mean even if you put all of like venezuela and or with north korea and all these fringe states like money together or or even isolate like the demand from those countries that need something like this

um and like i don't want to sound cold but like that doesn't add up to as much money as uh just like 100 millionaires buying somewhere in the west you know i mean or somewhere in asia yeah which is really um what i think once again was going to be driving the price more yeah no and i'm not even like trying to allude that that will drive the price but it is showing like it is getting more use there and the product itself is being used well as far as like the actual governments go like we're more we were more talking about like opposition people who could get their bank accounts frozen as far as governments go you have like sanctions and those kind of issues those countries are actually bigger drivers i would say long term for mining

like they because they can mine way below what other people might say is the cost of break even because they can't sell at their energy on the markets they're already ostracized and then they get the censorship global currency right and in reward for that it's like perfect for them yeah um censorship resisting global currency um yeah no so a lot of stuff going on pretty basic stuff We've riffed a lot today. It was love of marauds in the studio. We're going to enjoy dinner tonight. Do you have any parting words for the freaks out there?

I think it is likely that this bear market will be prolonged. And importantly, we will reach a point where people will say that Bitcoin is dead or this thing is done. But the time where people will proclaim Bitcoin dead, once again, will be the time where you should be considering entering the market in my opinion very wise words um yeah this is very different than the last the last bear cycle people were saying zero like they were like this shit is you're just maybe we were wrong and we were talking about that meme last week um anyway should we should we do a bet sure um i'm thinking

six months from now will the price be over 3400 the the hodler's bet it's the hodler's bet it's like august 1st okay so six months from now that's august 1st i believe march april may june july august or september 1st uh will it be over 3400 by august september 1st september 1st yes um i will do august 1st five months um i will do um 3550 on august 1st sure below wait wait so this is what i'm talking about so so the charts are nice you've gotten all your calls right but at the end of the day like if you're just a normal person and you have this once-in-a-lifetime opportunity to invest in something why are you trying to time bottoms

like those people shouldn't be timing bottoms right like they should just be dollar cost averaging in right now and because in six months time you think the price is going to be a hundred dollars higher than it is right now so like why are they even fucking around trying to time call try and time a bottom uh no no sorry i'm saying that the price will be lower in six months like i'm betting i'm betting five months five months right i'm betting that uh we will be lower than we are here today in five months but then why 3500 should be 3400 i'm just negotiating the i'm just tweaking the bet to sort of defend my position more fiercely but that's pretty much it no i want i want it to be a hodler's bet i want i guess five months is what we're doing let's just

put it this way today's price august 1st you are over i'm under simple as that yes yes okay okay bet what are we betting uh we need to raise the stakes for sure we have to raise the stakes we know no no but the michelin once you get into the michelin stars like to be honest like steakhouses aren't really we're at like you should like once you go into michelin's you shouldn't be doing steakhouses so why don't we just agree to so i the original bet was a michelin two star but there's no michelin two star steakhouses in new york there's only two one stars we need to figure out this goddamn bet people owe me like 14 dinners in new york right now well i mean you had a good streak you know but all good streaks come to an end all right what

do we bet we'll come to the terms off air at dinner tonight okay and uh we'll announce it on twitter i'm gonna side i'm gonna side with my co-host on this one i bet we're higher i mean by august 1st it's nice to have you with me yeah you know i think we never would have dumped if marty stayed with me like that's he he did this all marty so far my predictions have been feeding you quite well so are you sure you want to switch positions because the track record of your partnership with me has thus far been much more fruitful at least when it comes to bets i feel like the hand's too hot right now it's too hot you guys i believe might be of underestimating how harsh the winter is gonna get uh i've been through a harsh winter before the winter is coming

the winters are getting harsher I bought new gloves today we're talking about like the crypto winter not like the actual winter I understand but it's metaphorical it's a nice metaphor so we'll decide on the bet terms but Marty and I are going over

I'm going to ride or die with the co-host honestly if we're over on August 15th like that's one of those win win bets it's like whatever if he wants to move it he obviously doesn't feel that secure in his position if he's trying to negotiate terms of this kind of thing.

I mean, I was taught growing up that you should always negotiate terms, but I am pretty confident that I'm pretty confident in my bet here. We will be lower than this price on August

1st. Trade block index, XBX index, 3421.65. That was a really weird way of putting it. $3,421. There you go. And $0.35 if it gets that close. That would be awesome if it gets that close.

Now, I will admit that this bet is much more intriguing for me than last time was because last time I was 95% certain I would win, and I did. But this time is closer. This time is more interesting. And we are actually closer to the bottom, of course. So this actually is much more intriguing for me. yeah of course he's you know like i'm surprised you're not 2020 in hindsight you know like of course you're 95 now but that's that's besides the point he's gotta wet the beach always bust

your balls maran thank you for stopping by again pumped to to enjoy dinner tonight uh definitely likewise and um always happy to be a guest on rhr um thank you so much and i uh sincerely hope that my occasional presence in um in your franchise will continue oh it definitely will next time we have to have your uh brother masir on as well yeah when you get masir on he's my favorite brother i prefer him over you sometimes it depends on the day it depends on my mood the the mamadav bloodline is strong at must stop marad find him on twitter freaks it's been a been a pleasure. Well over an hour this time. We'll be back next

week and hopefully I'll have some interviews lined up too. Shout out to my wife and my brother for putting up with us for the last hour. Love you guys. Peace and love. Cheers.