TFTC: A Bitcoin Podcast - Rabbit Hole Recap: Week of 2019.02.04

Episode Date: February 8, 2019

This week Marty and Matt discuss: - Matt handing off the LN torch to @jack https://twitter.com/jack/status/1092891165966229509 - Matt Ahlborg's LocalBitcoins analysis and new metric https://medium.com/@mattahlborg/nuanced-analysis-of-localbitcoins-data-suggests-bitcoin-is-working-as-satoshi-intended-d8b04d3ac7b2 - Koala Studio Lightning Chess https://koalastud.io/ - Blockstream Proof of Reserve https://bitcoinmagazine.com/articles/blockstream-open-sources-development-its-proof-reserves-tool/ - ZCash inflation vulnerability disclosed https://z.cash/blog/zcash-counterfeiting-vulnerability-successfully-remediated/ - Abra releases new equities exposure product https://bitcoinmagazine.com/articles/abra-users-can-now-buy-stocks-and-etfs-using-bitcoin/ Shoutout to our sponsors: BlockFi, head over to www.blockfi.com/talesfromthecrypt and learn how you can avoid selling your BTC today! Honeyminer, peep www.honeyminer.com/labs to see the new Honeyminer Max implementation for Linux users. Or www.stackingsats.com to pump our ref link. 21Lectures, go to www.21lectures.com and learn more about their Bitcoin developer classes!

What is up, freaks? Welcome back to this week's edition of Rabbit Hole Recap. It is Friday, February 8th, 2019, the year of our Lord. The Bitcoin price on the XBX index is $3,629. Bit of a pump today, freaks. Exciting Friday here at Bitcoin Markets. It's been dull for a while, but it's been a crazy week. Big come-up week for the pod, for this crew right here. But before we get into all the topics that we have to talk about, I'd like to introduce you to the sponsor that we know very well by now, BlockFi.

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Visit blockfi.com slash talesfromthecrypt to learn more about using your crypto without having to sell today. Save on those taxes, freaks. Every Satoshi that you can. Matthew, speaking of Satoshis, you handed some off this week. Probably the biggest news item of the week.

You were involved in it. Pretty fucking badass. Yeah, dude. So for you freaks that were living under a rock all week, Matt, when was this? Tuesday? Wednesday? two days ago two days ago was it i don't know it's been a blur it's been a blur feels like years yeah so you were holding the torch the lightning network torch that's been passed around we

explained it last week or marad i believe we did did we i don't think we did i don't think we did actually explain that on uh uh the heavily armored clowns podcast that that i was on but uh yes lightning torch for you freaks that listen to this podcast and i've not heard yet uh it's basically an experiment to play around with lightning network and sort of stress test network where it started with hodl not on twitter you started with what a hundred thousand satoshis yeah three bucks three bucks and then every time you know so then you find somebody that you trust you pass uh the proverbial torch on and you add uh ten thousand satoshis like 30 cents yeah and then you keep passing it on to people you trust it eventually ended up in your hands and you shot

When I got it, it was like, it was, it was 2.85 million Satoshis. So it was like 96 bucks, something like that. You got it. That's pretty high for a lightning payment right now. We're really stress testing the network with how large the payments are. Yeah. When I had it, I think I got it like two or three days before you, mine was at like $90 and it was, it was like, yeah, I, I'm not going to lie.

I had to try a couple of times to send it through. Yeah. If you don't have like channel liquidity, then you're not going to be able to do it unless you use like a custodial wallet, but we didn't want to use custodial wallets, you know? No. Yeah. I was going, uh, going with my Casa node, but enough about me, dude, you shot your shot. So what started it all was after we had Murad on the pod,

he released that horrible thread where he was talking about how like Bitcoin tweets were at an all time low. They were below 2015 levels, right? Yeah. And there's no way they're below 2015 levels. Like back in 2015, like shit was a ghost town. It was like absolutely, you know, Vitalik was getting like 12 likes on his tweets or something you know like it was absolutely not even not even fucking close and the first thing I did was I just tweeted out in bitcoin right and everyone everyone went crazy and people were all just posting bitcoin bitcoin bitcoin all over the place let's juice the stats looked at the graph there was like barely any movement it's like

what's going on here there's barely any movement so then someone tagged me in the trust chain they like matt you haven't taken it yet will you take it and i was like okay i'm gonna take this thing and i'm definitely gonna send it to like the highest profile person that will accept it from me right like let's absolutely juice the bitcoin metrics and after i finally got it the um the guy who sent it to me you know like we were saying you need liquidity and stuff so it took a little couple tries or whatever after i got it i settled on jack it seemed like the perfect fit you know he's an investor in lightning labs cash app has bitcoin um he's active on twitter he's the ceo of twitter you know yeah pretty involved so it's like literally the perfect it was like a high

enough reach where it was like a game changer it was like a really good bitcoin advertisement basically like a viral bitcoin advertisement and but not too far out of reach that he wouldn't take it yeah and he took it it was so fucking dope when he posted that the invoice it was just dude i was absolutely people were giving me so much shit they were like matt you're stealing it like come on guys like i'm not stealing a hundred dollars you shouldn't trust me but like i have a little faith um i'm not gonna steal the hundred dollars that you guys sent me what did it feel like when you were sending him the transaction were you nervous at all well when i was sending it it was really fucking nerve-wracking imagine if it failed that would have just been oh jack can

you resend an invoice can you send me can you send me a new invoice yeah that would have been a bad look yeah so when it actually when it actually like turned green and zap and was like it sent i was just overjoyed it was fantastic and then the mentions just blew up and i just turned off twitter i was just like super excited we you know opened a bottle of scotch yeah and just so that was uh just soaked it all in just so i can enjoyed it yeah well thank you for inciting uh what uh turned out to be a night of twitter joy for bitcoin maximalist uh oh yeah then you just went off it was great jack just went off and it i don't want to say like a night for bitcoin maximum i just think it was good for anybody who thinks there's a lack of principled stances out there

on bitcoin in particular especially from high profile people like jack so it was just refreshing from my perspective to see somebody of his stature and with so much skin in the game to come out and like have a principled stance on bitcoin and saying hey like i actually think this has the best chance and and arguing it uh was sort of good theory like basically talking about bitcoin resiliency and the amount of attacks it's uh sort of survived up to this point um it was just refreshing to see every everyone should be happy about it not just maxis you know even if you're a multi-corner you should be happy about it you know everyone is saying the the masses are saying bitcoin is dead crypto is dead um and here you have a a major player in in technology and global

markets endorsing it essentially um putting his name on it reaffirming his belief in it and it we're in the middle of a bear market like enjoy yourself it's a nice little community building thing we had where we all just got to you know take a day off and like have a good time and like i'm not a huge fan of jack's move the moves that have been made on twitter with censorship and banning people and whatnot and i think a lot of why is they're shooting themselves in the foot um but and i think they have a lot of good paths to monetization if they do like lightning custodial or something and i'm sure i'll end up giving them shit about it because the wallet will be custodial but i think overall this is a net benefit he's not going to be able

to co-opt bitcoin or do anything bad to bitcoin so just enjoy the additional publicity like what we spent like 34 cents a person yeah for 140 people and we got probably better engagement than a super bowl ad would have gotten us on sunday right wow that's a very good point dude that is a very good point wow i'm happy to say i contributed to that though we basically did like it was like a tron level you know like pornhub partner partnership but we just did it organically like the bitcoin way and like props out to hodl not for starting it all yeah everyone passed it on speaking of hot or not uh open invite to come on tftc if you're ever in town let us know we'd love to talk to you um no but again it was something organic and uh it was like a refreshing

shot in the arm during the depths of this bear marker it's like all right like uh seeing jack like play with this is like all right now obviously signals to other people in the industry throughout the world like all right maybe this is something that we should be paying more attention to and he was even like alluding to like answering people's tweets that were saying hey did you make the the character count up to 280 so you could send lightning invoices and he was like maybe i don't know man so like you could tell he's definitely open to uh applying this stuff to his businesses obviously with cash but uh via the posturing after after he got the torch and handed it off it seems like it maybe sparked some ideas in his head as well yeah i mean there's a

lot of pats for his two businesses you know square and uh and twitter to leverage yeah full bitcoin and lightning obviously full disclosure cash app has been a sponsor of this ad and potentially will be in the future so and we shill the shit out of them all the time yeah so keep that in pretty hard chills that's why i thought jack was a good fit as well yeah and like lightning tips just lightning tips on bitcoin on twitter just super easy use case they take one percent off the top and you know they have trouble monetizing that's a perfect it's a perfect fit for them yeah well again thank you for inciting some madness this week proud of you i'm just i'm just glad i could give back to all you guys out there this is fun you know what you're just doing your part man

i'm i'm in such a good mood right now i got my scotch i got marty here bitcoin's pumping it's like spring outside it's like super nice weather i was like popping on the walk here you know i I wore my parka to go get lunch. I started sweating. It's good. And then I ate my lunch and I started sweating too because I'm a fat piece of shit. That's a story for another podcast.

No, yeah. So again, thank you. Crazy week. We'll see what Jack, Twitter, and Square and Cash do with Bitcoin. It'll be crazy to see if they implement that. And Square in particular and Twitter in particular. imagine having the biggest pos system and communication tool in the country become bitcoin and lightning compatible um that would open up the doors to hundreds of millions of people

potentially billions um next one next topic holy shit this data that came out today this dude should we should we tell them that it looks like you're gonna you're gonna interview jack that's a big deal too it is yeah i didn't want to jinx it because i don't have the confirmation I think tentatively confirmed, March 1st, hopefully. Tentatively confirmed. I'll be flying out to San Fran to sit down with Jack, 30 minutes of his time to discuss this stuff. So very honored, flattered.

I wanted it to be longer than 30 minutes because I wanted you to be there and tag team it, but Matt and I talked about it. We think tag teaming a 30-minute interview may be a bit ambitious. It's a little aggressive. Yeah. We'll just have to do that next time. yeah it'll be the uh it'll be the first interview of many hopefully hopefully we become friends hoping we did jack um yeah so that's on the horizon uh but enough about about that episode

uh local bitcoins volume we've been talking about a lot i've been talking about a lot in the bent recently particularly like venezuelan and russian uh bitcoin denominated volume on local volume on local bitcoins excuse me it's definitely been rising and i've just been surmising that hey this is like a good sign that um that like bitcoin is actually being being used by the people that need it most and then this dude i'm trying to find his name right now matt agroll is that correct where's my excuse me yeah it's matt matt alborg excuse me matt alborg uh literally came out of nowhere i don't even know this dude is on twitter or doing data analysis of bitcoin stuff just dropped an incredible analysis of local bitcoins data on everybody's head today and

basically came out with a new metric uh that attempts to basically index countries and separate uh basically index countries by how much uh bitcoins being like how much utility bitcoin is providing based on a gdp per capita and access to the internet sort of basis so sort of tries to to show where bitcoin is shining where where it may be needed more and it proved uh that over time over the last six years at least that um bitcoin this metric that he used like uh bitcoin volume and it's like an adjusted per capita basically yeah so right because the main thing is is like population that has access to the internet right yeah the metric's called usage per online economic person right so it's a perk it's adjusted per capita with internet

included right yeah so it looks basically i guess tries to line up like the number of ip addresses with the amount of citizens and then use that to sort of derive a an internet freedom index and is that what he said he's using the ip addresses i'm assuming he's using like oh excuse me fact book or something ip equals internet penetration of a given country yeah he's probably just using like survey percentages or something from some source yeah um so basically go check it out we'll obviously link in the show notes but he's got an interactive map where you can like scroll through and you can like just visually see bitcoin spreading in these countries that are going through some strife right now particularly venezuela um countries in the soviet block

And in Africa, too, Central Africa as well. So it's basically proving that Bitcoin is working as intended for the people that need it most, as we've been trying to allude to here, but haven't had sort of concrete data to point to. And it seems like Matt may have provided that for us. Not this Matt, but the other Matt. Yeah, the other Matt. And he's also got a dope just just normal line graph in there that just shows the spike. Not that one. The other one that just shows the volume spike.

It just goes up like crazy amounts. Yeah, no, it's crazy. All the Western world is trending downwards, and the only three, I shouldn't say the whole Western world, but the two main upwards trending areas are non-Europe, Eastern Europe, non-EU, Eastern Europe, excuse me, and South and Central America, overwhelmingly, while the majority of the Western world is sort of trending down. And another interesting stat from this essay in particular is that the last quarter of 2018, when prices are obviously in the depths of the bear market and at their lowest point in a while, 23 countries on LocalBitcoin had their best quarters ever. So, like, highest volume. To be fair, like, some of them had, like, $250.

Maldives had $162 worth of volume. but uh venezuela had their highest volume quarter ever yeah we'll go we'll go above a million which was one two three four five six countries venezuela had 81.2 million dollars in this quarter fourth quarter of 2018 that's pretty crazy yeah and we also must note that like that's only the reported volume on local bitcoins like people make relationships with these these uh people that they meet and exchange bitcoin with and they become comfortable with them it's probably most likely that they'll cut local bitcoins out at some point and just do it on the side i was listening to a theory uh on peter mccormick's pod uh he just had a venezuela episode out i had

that on the docket i didn't listen to it yet um one out alejandro machado tftc alum yeah he was on it and um i don't remember their other names i wish i remember their names but one of them dropped a theory that the Venezuelan government, he thinks the Venezuelan government are, they're taking when they print money, they're taking it and they're putting it in the Bitcoin market. That's why it's, I think he said

it's trading at a 40% premium over the dollar in Venezuela. Wait, so it's trading at like a 40% premium over what the USD price is everywhere else. Trading near five grand right now in Venezuela? Yeah, that's what he said on the

pod and that he thinks the reason for the premium is because the venezuelan government is like taking the newly printed money or like at least corrupt officials in the government is taking the newly printed money and they're just immediately converting into hard money bitcoin and that's why the premium exists um since i haven't listened to the episode yet can you did they speak to like the average venezuelan citizen using bitcoin was it do you think it was it's both yeah but um if you're talking in absolute numbers like it's probably more corrupt politicians yeah just because they're richer yeah that's that's i mean very interesting story i mean that was the other thing i tried to do with lightning this with the exposure that was happening i was thinking um

what's a good way to continue the lightning engagement that's happening on my page like the mention is blowing up so i did our friends at btc ven uh jerry brito over there uh they accept lightning for they have two projects they have a mesh network project that they accept lightning for and they have a humanitarian aid project which is like food water uh charity education and if you donate with lightning up to a total of i think i said six million satoshis i will match if you post the confirmation under my tweet i will match your donation so we got like like 10 people did it or something like that which is pretty nice damn some guy donated 17 cents so i matched his 17 cent 5000 satoshis matched it damn dude look

of you doing good things all week i thought it was i thought it's a good way to test out lightning network like if you need someone to send it to you know yeah yeah might as well send them the 17 cents yeah and certainly need it more than we do um anything else interesting in that episode that caught your eye or your ear there's a really good episode everyone should listen to it i mean it's three venezuelans on the episode and peter even you wanted to get it out right away so you didn't do any ads or anything so it's an easy listen boss um staying on lightning network um not that we were fully on it there but uh koala studios i got an email earlier this week to test their their lightning chess game um i did and it was actually a really cool experience uh so

to explain sort of the onboarding ux flow uh basically click the button um create an account and had to jot down an account private key basically that'll let me sort of recover my account if I ever download it on another computer or something like that. So that took a little bit to write it down and then make sure I had written down perfectly. And then from there,

basically the onboarding was seamless and asked for my name and asked for anything. Basically it was a lightning wallet that I was able to quickly top off using my CASA extension. so I just opened my KASA extension, wrote in my password. That's new, too. Yeah.

And basically sent, I don't know, 100,000 Satoshis to the chess game and was able to play, hopped in, clicked a link, sent a link to Jack Mollers, actually, and played him. I believe I played him. I don't know if I played him. Somebody hopped on the link, and we wagered 475 Satoshis. I won due to a technicality. My opponent ran out of time, whoever it was.

I think he was on the plane, right? He might have been. He was flying. He was on a plane, I'm pretty sure. He might have been. I saw it on Twitter. He was on the plane when he sent the lightning torch. I think that's what you're thinking about.

He was playing someone in chess on the plane. Was he? So he might have been playing you on the plane and you didn't even realize. Maybe. And then you played Hasu, right? Then I played Hasu. Beat him too. You beat Hasu.

It was like 30 Satoshis or something, right? Hasu actually... 45 Satoshis. Hasu's node was a little glitchy, so he wasn't able to fund his account in time. So he wasn't able to accept my $475 Satoshi wager. But I would have won that, too. So I'm 2-0 in Koala Chess. Maybe...

We should play. Maybe the best... May have the best record from a percentage standpoint on Koala Chess. So I'm just going to don myself the king of Koala Chess right now if anybody wants to come out to the throne. Oh, I'm coming out to the throne. Download it. I'm coming out to the throne, but we have to get fucked up before we play. that's my rule i'm very good at fucked up chess i'm not very good at chess at all i'm lucky that

uh my opponents didn't realize the clock aspect of it and ran out of time yeah i know i saw you starting moves they were really really interesting yeah don't chess is like a foreign language to me jack is like dope at chess did you jack mallers yeah yeah jack yeah he like posted this tweet like analyzing his play-by-play moves or whatever yeah he came made me feel horrible at chess he He came here on a chess scholarship and said, no, this isn't the life for me. I'm going back to Chicago. Turn down all that money.

Those big chess winnings. Yeah. No, but it was a cool experience. The vision's there. That's why I tweeted about it. The vision's there. The UX flow's there, it seems. Obviously, there's some kinks to figure out.

The Lightning Network. Let's caveat this whole conversation with the Lightning Network's nowhere near complete or ready for the mainstream or fully battle-tested. but with that being said like it was a really cool experience you could just like see the vision and i know lightning koala and his partner andres have big plans to start including more games imagine if they were at a card game what could happen and then like a bunch of people were asking if they could uh look in and games and sort of bet and wager on games as they're

as they're watching as you went on twitch or something like that i don't even think you could do that on twitch but twitch like feature that will allow people to to watch the game and then bet on it and they said they're working on it so what's cool about i'm i'm super bullish on gaming with bitcoin specifically with lightning um i think it's going to be the especially as this younger generation grows up as our generation even grows up um i think it's going to be the confluence of gaming and gambling it's going to be the best of both and it'll probably overtake like all other types of gambling at some point in the future um it's just a matter of time now what's interesting about the twitch betting is i hate qr codes i like fucking hate qr codes and of

course i fell in love with bitcoin and i've just been surrounded by qr codes for six years or whatever with this particular situation twitch has blown up i don't watch games on twitch but it has blown up i'll watch clips of people like if somebody clips something on twitch i'll watch that they can easily put all these like betting things and stuff in because of qr codes right like qr codes work perfectly in like pictures in the chat twitch in like a streaming environment yeah i don't know but it's just a picture or even if you show it on the screen right you could show it on the screen yeah who's that dude who no one can stop you from showing it on the screen who's that dude making the rpg game that allows you to uh buy things like on the go oh yeah that's badass

too yeah so that's another game like this dude's making an rpg game basically a first person shooter game uh third person third person shooter game there we go um but it's just a proof of concept right now but basically same same scenario twitch like scenario where users can participate using satoshi's and the lightning network uh basically allowing the viewers to interact with the game they can buy zombies to come attack him or buy him ammo or health or something like that or send a send a zerg after him what's a nice little twist is i think on that game if you send enemies at him the player gets the money and if you buy him like lives and stuff the developer gets the money really this is an interesting incentive thing interesting and you

can do very creative things i think with that you can you know even just percentage it up on both sides matthew it feels like it feels like we're hitting a tipping point i don't know there's still a lot of lightning fud out there though are all our bitcoins gonna get stuck on the lightning network matt not if you don't put them there yeah again we should also stress like only put a little bit on time they'll be too reckless i've already i'd like to think of myself as like a more technically proficient user and i've already just assumed that i've lost all the money that i have on my lightning node yeah me too that's the that's the situation i'm operating under right now so you should do the same yeah do you think you'll ever get to a point where you don't have to operate

under that assumption yeah absolutely i just you know i think it's early days and uh yeah we got to flesh all this out we got to bootstrap it yeah speaking of um assuming all the bitcoin you have on lightning network is lost uh i think you would also say that you assume all the bitcoin you hold on exchanges is lost as well um that's one thing we advocate here is learn how to use a personal wallet a hardware wallet paper wallet whatever it may be teach yourself become comfortable with it first and then take custody of your bitcoin if possible obviously we've been reminded starkly the last couple weeks with the quadriga cx debacle we don't know what's going on do you think he's dead i don't know i'm going back and forth i think he's dead and someone else has the keys

and pretending they don't have the keys whether it's like a family friend or a family or friend or a co-worker or something someone has the keys and is pretending that he died with them yeah interesting that's my guess that was my either way the weird part is that we haven't seen the addresses for the exchange i know lorenz been doing some uh some forensic research on it i don't know um how far he's gotten or how much information he has so you can go to his page and see see what what wilds he's tracked down on oxt.me um but uh what this incident we've already talked about this i believe we talked about it last week but what this incident sort of uh brings to the forefront and it should remind all of us is like bitcoin gives us the ability to

to audit uh exchange reserves so uh we should be demanding from exchanges that they they prove that they have the bitcoin that they say they do and prove that they are not fractional reserved and this is something that a lot of people have been harping on for years like it's technically possible with bitcoin i would argue that most people are not aware of this therefore aren't demanding it but in a situation like this quadriga cx debacle sort of highlights the need for these types of functionalities and luckily for the market uh blockstream released an open source product uh this week uh a proof of reserves product that uh exchanges can use to give their customers peace of mind and prove that they have reserves on hand uh when when asked or when need

be so um it was already possible to do proof of reserves but blockstream's tool makes it easier for them to do it in a safe way yes um i think kraken was doing it a couple years ago yes i think kraken was doing it and nobody was asking like nobody was using it right yeah because nobody was using it that's why and um i'm pretty sure max uses separate addresses for people but don't quote me on that i know bitfinex did and that's what caused them to get hacked but they had like kind of a proof of reserves type of system in place either way it still doesn't stop from fractional reserve necessarily because they might not have the usd balances they say they have that's interesting um very good point altcoins aren't going to support a lot of these

things um i don't even is there like a safe way to do ethereum multi-sig or something i don't even know if that's the case so you still have all these other holes you should no matter what we should absolutely demand proof of reserves for etfs and stuff like that too because it's possible and they should provide it but you should still no matter what if you're using a custodial service just assume that any morning you wake up like that could be gone they could take that from you yeah it was interesting uh barstool wrote a couple articles on the quadriga cx debacle there's a lot of people still don't get bitcoin in the mainstream um it got us a lot of press it did i had so many people text me like oh my god this did you get fucked this dude died

and lost 190 million dollars and i was like and every response i sent was he might not even be dead but they're like the shrug emoji it was my response every time someone no but it's like we've been through this a couple times like when malcox went down like everybody's like oh i heard bitcoin failed dude it's like malcox is like hard to explain but we're going through it again and it seems uh the same assumptions are are floating around this time around as well that's why this jack torch thing is such a big deal because like think about the headlines they were running with their like typical fud bullshit bear market headlines you know bitcoin's dead it's going to zero hamas uses bitcoin the bitcoin ceo died and lost all the bitcoin and then all of a sudden

it was jack dorsey i have enough bitcoin i taking the torch i'm using it on twitter sending it around the world like going on bitcoin podcast such fucking good press right just broke their fud yeah at least for a little bit at least for a little bit it was a good the fog is cleared the fog is cleared a lot of hopium in this bear market the fog is cleared um and the flog is cleared the first half of this podcast freaks we've got multiple ad reads this this time around on this episode of rabbit hole recap second sponsor today is our friends honey miner they've been around too honey miner uh max for linux in particular they just came out with a new linux product recently all of you linux freaks out there that uh want an easy way to earn bitcoin

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talking about charging more money z cash inflation bug was it exploited the the problem isn't whether or not it was exploited the problem is that we'll never never know for sure if it was yeah so they fucked up they they sat on this news they sat on this 11 i thought 11 months maybe yeah i could be wrong they sat on it for a considerable amount of time like four people knew about it in like the zcash company inner circle yeah you could just inflate zcash on a whim yeah and this is something peter todd's been warning about for for years and be getting lambasted for on twitter in particular um may have been vindicated but it's interesting the uh i don't say whitewashing but it seems like people are trying to gloss it's not a bullish news story right some people are saying

like oh this makes me so much more bullish on zcash like fuck you man it's not bullish this is like worst case scenario they even said in their blog before they like tried to diminish the impact the title of the blog post is like worst case scenario yeah or at least zuku's tweet is he said the words worst case scenario and then they just tried to dismiss it in the actual blog post can you jump into the technicals of uh the inflation bug at all or in particular uh does it have to do with the trusted setup or something after it i i i'm not positive i part of the issue is that all this shit is super complicated and that's why they've had the bug in the first place but it it the the key takeaway is is that you know they have shielded they have shielded z

cache and they have non-shielded z cache and you can inflate in the shielded pool which is remember when we were talking about their recent sapling upgrade we mentioned that it was interesting that they were forcing all the people that were already shielded to go unshielded and then reshield that's why because

they'll know if more shielded come out than had went in to do the transition to the new address structure the new address structure it has to go to transparent before it can go shielded again and that's why they did it because

they're gonna they're auditing it as it goes through yeah so basically if you have shielded z cash right now you should really be rushing for the exits right you should be trying to get out before presumably the you know the inflated coins become obvious if you if there are inflated coins we'd only know once it passes through that audit yeah what if somebody just sends like 800 million z cash to it to an address one day it could happen who knows well so i don't think someone can exploit it now for what it's worth since they did the sapling upgrade no one can explode it fresh okay so after that's why they you know that's why they say they disclosed it now um but like this is like a perfect case like so these four people i'm pretty sure they all live in america they all work

for the z cash company the z cash company has rich american investors it's based in america it's based in colorado i'm pretty sure um if the u.s you can't launch a privacy coin that's centralized in the united states like did the snowden leaks tell us nothing like the u.s government is not against pressuring their own citizens their own companies into complying with their demands right so like imagine like right now zcash is probably not really on their radar right but let's say for some reason which we don't think is going to happen i think this is like the nail in the coffin for zcash i was already super bearish on zcash i was already super suspicious of z but let's say they survive in 10 years right and they're super big and people

are using it for private transactions all over the place like this is exactly the type of bug that the u.s government pressuring those four people that knew about it would be able to compromise right that's exactly the type of situation they would do yeah so uh so is this a case study in centralized governments and authority or uh and experimental tech and experimental tech and privacy on layer one yes oh this is actually right yeah this is actually a conversation we had like three different things yeah so we had a very good conversation earlier actually had this conversation last night the pleasure meeting alex gladstein from the human rights foundation he's in town um got dinner last night with him and a couple of other bitcoiners and

the topic of privacy at the protocol level came up and it's an interesting one uh it's very nuanced too and i think it's uh definitely debates it's going to need to be had so the question is do we want complete fungibility at the protocol level and a lot of people are starting to realize probably not i mean i would say that there needs to be a way to always be able to audit the supply yes so it's a balancing act it's a balancing act and would you agree that like this the amount of fun or the degree of fungibility is on a spectrum i think there's a difference between not knowing how many Bitcoin there are

versus not knowing if it's my Bitcoin or Marty's Bitcoin. Yeah. And that's what we need. We need it to be so that you can't tell if it's... The privacy guarantees need to be strong enough that if I...

that if whatever Bitcoin user goes to buy some coffee or goes of course they use the coffee analogy goes to buy a Porto or something like that goes to buy a Lambo or goes to sell on Coinbase like all their transaction history

should not be linked to them they should be able to safely spend their Bitcoin or send their Bitcoin to someone and not worry about them being able to find all this other fucking information yeah but at the same time you need to be able to audit the supply

and you have to balance those two things And part of the reason why I have always said, well, I've said two things with Zcash. Zcash is one of the only altcoins that isn't as much of a net benefit. Like I say that altcoins aren't really bad for Bitcoin. They're just bad for the people who speculate on them. But with Zcash, like it's kind of questionable because if they're trying to push out other privacy coins, privacy technology from the market to have like a government friendly one it's kind of an attack vector to the whole privacy sector but um with with zcash like this is a perfect example of where

we have altcoins that like like the zcash proponents wanted to put this shit in bitcoin right like this is a perfect example where they just fuck around and learn all this shit for us and if for some reason in 10 years we all think like snarks are like the biggest fucking deal they're awesome and i'm fully fleshed out and tested and we trust them whatever then you could always add that into some kind of bitcoin compatibility right whether that's a true hard fork or whether that's side chain or layer two or whatever it is so they're testing it out for us and bitcoin isn't at risk like that's fantastic yeah um very interesting to see though just beware be aware people will market these things as foolproof and um later find out they're

they're not as foolproof as previously thought i feel like z cash's price hasn't suffered much though uh i haven't been paying attention much yeah neither have i though i don't know actually i just talked out of my ass it might have suffered yeah um i think it hit all-time lows though so speaking of uh price pumps like coin pumping pretty hard today 30 charlie is literally just pulling the same exact playbook he pulled the last two times and it it should be noted i'm sorry i'm just like a little deflated about it so marty told me to speak up um it should be noted that confidential transactions oh if if if we have turned and we don't pass the bottom you know i'm i'm knocking on wood that charlie's top call when he said i sold and if you're not willing to wait

till 20 that litecoin falls to 20 like you should sell too like litecoin i'm pretty sure litecoin's usd bottom was 22 so if that truly was the bottom that will as much as i just despise charlie that would be like the most badass call ever it did he would have just called it fucking perfectly and then he literally right after it hit 22 he was like we're gonna do privacy we're gonna do we're gonna do yeah they teamed up with beam today which kind of like sprung board the and he keeps tweeting about it he has millions of followers like yeah moral hazard is it moral hazard are we here to be moral uh authorities i just at this point it's like litecoin's not a threat to bitcoin uh i don't speculate in litecoin i think it's absolutely worthless and uh

it's just i don't know it's just not worth the time because it can't it can't threaten bitcoin right but like people should be people i think i think at the end of the day like litecoin even fails like the altcoin marketers playbook because they don't even have any differentiation right it's just dude confidential transactions a clone of bitcoin with all all the same issues and beam partnership dude beam partnership are they also partnered with like that tokens token pay or something for the bank they like bought half a bank or something like that dude they bought half a bank like differentiated dude they're getting good at the the marketing they're trying to like the tron approach that hot bean partnership be on the

look out for that charlie making trades speaking of trades you're not now going to be allowed to uh to trade or get equities exposure uh via bitcoin on abra what did they just announce they just came out with uh basically derivatives exchange that you can get exposure to via bitcoin cfpds correct yeah but but to the user they just think they're trading like apple stock or something yeah right they're essentially derivatives right yeah yeah they're like doing like hedging formulas and stuff to yeah even it out yeah um and apparently i mean not apparently there are a lot of people on twitter uh giving abra flack not even giving them flack or just pointing out that this is very similar to what one broker did and one broker was

running a similar operation got shut down by the sec was the sec or uh i think it was the other alphabet soups i think it was the sec yeah but yeah like and one one broker famously it was a bitcoin only didn't have kyc um abra is also bitcoin doesn't have kyc um they're actually using two of two multi-sig so basically like they can't take your money but like you can't take your money either like neither of you have custody you have to together you give custody um and they i think they want to make a two of three with a arbiter or like our arbitration situation yeah uh independent arbitration or whatever they're gonna have to implement kyc at some point soon otherwise they're gonna get shut down they like have some kind of like regulatory arbitrage

uh like loophole type thing going on um because it's a two of two multi-stick like they're not going to get away with that so be on the lookout here if you do use the service it could be very much like a polo situation poloniac situation we've seen it happen on multiple exchanges where they actually implement the kyc while your funds are already on the exchange or on abra so like you're in the two of two multi-sig yeah i guess they don't have custody but they say you can't even withdraw unless you do KYC on your account. Yeah. I've got Bill lined up to come on the pod in a couple weeks, too,

so I'm going to talk to him about that. Yeah, we'll get Bill's perspective and Abra's perspective on what they're doing. He's not going to say that, right? They could be operating completely legally, right? But it's not in the spirit of the law. so eventually they're gonna like the u.s government doesn't want people anonymously trading equities like they just don't want that so whether or not they're like whatever they're doing legally got them around it doesn't mean shit in my mind right but you know we'll see

we'll see what he says maybe by that time they'll already have kyc who knows we'll see i met bill miami briefly a few weeks ago very nice man but it is i'm sure he's a nice dude but still like it it does add a value prop even with kyc if you live in places where you can't get exposure to u.s equities yeah because it lets you trade at uh like very small amounts right i mean not only that i just i think i think the process in some places in the world the process of getting exposure to like something like apple or something you know some of these big stocks like these big equities like you just can't do it easily like it's a really complicated process or it's not possible at all and you know so so it does go hand in hand with bitcoin as like

a liberating technology even if they have like like even one broker which was fully custodial sketchy bucket shop exchange like goes hand in hand with the Bitcoin as a liberating censorship resistant money, right? Yeah. Yeah, so we'll it'll be interesting to see how this plays out.

We'll see how much traction it gets. I don't really have demand for this product in particular right now. I'm not a big trader, so. Yeah, I mean I just use TD Ameritrade. Yeah. Like I'm not gonna. But we'll see.

I'm interested. I'm pumped to talk to Bill in a couple weeks. That's all we had on the docket, but I want to get your thoughts on the Green New Deal. Or the New Green Deal. What is it? Oh, I had a Matt Kvelenid, our Twitter buddy. He said Bitcoin's the Green New Deal.

Which I fucking loved. I thought that was fucking fire. It's scary, Matt. I don't know why I say it's scary, but it is an ambitious New Deal. Seems to come with a lot of overarching taxation schemes. I think that I actually haven't looked that much into it because Bitcoin allows me to just zone out politics

because it gives me the ability to opt out. so i know that like not all my wealth is in their hands and it's just a super liberating feeling but i did catch that there's going to be that they that they want like super high taxes on the wealthy um and i i like sent out a tweet today like the easiest way to pump bitcoin's price is to tell the wealthy that you want to take their money because i've been in rooms where like i'm like pitching like super rich people to to invest in bitcoin a lot of them don't talk to me now because of the run-up we had and everything but whatever that argument would have been way easier after this because it's literally just like matt why should i buy some bitcoin and it's it's wealth

insurance right you know it's if this stuff happens like you'll have some portion of your wealth that can't be seized and they can immediately see the value like they're being educated on the value prop with these kind of these kind of antics yeah um very very ambitious if you're unwilling to work there will be a there will be support for you apparently in the green new deal that actually pissed me off a little bit they use the words unwilling to work yes might have been a mistake who knows um maybe uh maybe not the perfect wording for i'm sure they meant like incapable or whatever no they said incapable or unwilling wow yes that's interesting yeah um well i try and i only try and bring up politics when it connects into bitcoin

yeah i thought this connected it does connect into bitcoin i mean i like i think we should call it like today's the aoc pump like i think we went through this debate i wouldn't be surprised if it was the article about local bitcoins though like i don't know about that that's like only i feel like only a niche the niche bitcoiners are like talking about that at least yet right matthew i wrote about it in the bent today and some of the most esteemed investors in the world read the bent all right so they all heard they might have went around and bought bitcoin immediately after i mean look you're not wrong about that for me for me that's like the stuff i really like to see right is the like the local bitcoins uh analysis that we saw today yeah i mean

you know that's bitcoin truly doing what we're hoping bitcoin will do uh being used in the in the the whole reason we do all these trade-offs is so people in those situations could use bitcoin right yeah exactly very good point um but it could also like jack could have helped a little bit we're also you know down 90 95 whatever it is not that far but close to it um but we're winning our bet right now there you go knock on wood marty has nice wood floors so i can just knock right on the floor it's really convenient stop doxing my apartment i um i sent i sent marad a direct message today that was just high

and he hasn't responded. He's a busy man. He's a busy man. Yes, that's all we got today. Actually, we'll end it with one more topic, but before we get to that, we have our last sponsor today,

third sponsor today. I'm actually pumped that the sponsor is on with us and the fact that they exist because I love seeing this stuff. 21 Lectures. This episode is supported by 21 Lectures. 21 Lectures' mission is to bring more developers to the Bitcoin ecosystem with in-person courses lectured by world-renowned Bitcoin and Lightning developers.

21 Lectures courses teach participants the fundamentals to work with blockchain technologies. We cover cryptography, the structure of transactions and blocks and how they are chained, smart contract language and lightning protocol, as well as software and toolkits to develop on top of the Bitcoin blockchain and lightning. To learn more, visit 21lectures.com. That's 21lectures.com. The number is 21lectures.com. Pumped to see the proliferation of these Bitcoin classes, the spreading of Bitcoin knowledge. We need more eyes, particularly on the testing and review process on the Bitcoin code base. So the more the merrier.

If you're a coder out there that listens to us two idiots and you want to learn about Bitcoin, go to 21lectures.com. Shout out to the Switzerland Bitcoin Foundation, I bet, or I believe that's who sponsors it. Zappa is behind this company as well. I believe Christian Decker is one of the lightning teachers. so very good resource to have you got a topic you want to know anything outside of Bitcoin in the real world should we talk about like non-nerd

internet money stuff did you do anything interesting for the Super Bowl nothing too interesting had a couple family members up for lunch and they went back down to Philly we slow cooked pork butt and watched it

here alone while drinking some wine Do you bet on it? No, I'm not a big sports gambler. Yeah, we talked about that last episode. Never caught the bug. Did you watch a halftime show? I did. It was pretty horrible.

It was pretty terrible. There was a drone swarm. Yeah, there was. In the... Peace and love. My... One love, excuse me. One of the things that I think about a lot is we have drone swarm technology

coupled with the way you combat drones mostly nowadays is you jam their signal they're all commanded remotely right but if you have autonomous drones you get around that because they're just thinking for themselves they're not receiving a signal and on top of that if you have autonomous drones that you use like off-the-shelf parts with there you have tons of plausible deniability so you can just engage in like ridiculous attacks with no like very making it very difficult to trace so that's just something you should put in your threat model yeah i think we saw the first instance of this in yemen was it um or pakistan where a military uh parade got attacked with a with a rogue drone with made by off the off the

counterparts no wasn't that in venezuela it happened in venezuela too it happened to both but i think that was just controlled that wasn't like autonomous right like it gets crazy when the when the drone's actually making the decisions when there's not a person behind it yeah i didn't know we were going to end on this crazy dystopian future topic but well we can end on a happier topic because i see behind you that you also received a bit piggy to test out yes i have i've yet to uh reach out to james to to give him the review on how incredible i think it is we have this we both have these little pigs on our desk um these little 3d printed pigs you know they're bitcoin piggy banks and uh they come with an open dime and that that twitter account is at bit

piggies yeah they're pretty cute i believe it's p-i-g-g-y-s i don't believe it's i-e-s is it no it's y-s yeah yeah yeah that's not how you spell piggies no btc piggies with a y yeah really cool uh james the founder is really cool dude hit us up has a very good story he sent like a very nice letter with uh with the piggy bank yeah what's nice is he sends it with an open dime so he doesn't know the private key but he's able to send you a sticker of the public key you can just put the public key wherever then you can just load it up with um satoshi's for your for your kids it's a nice way to teach them you know how to save in bitcoin early on and it's just a cute little pig yeah very good decoration very good conversation starter just started one right

there i actually before i left my office today i had it like sitting on my desk like super nice and i was like matt this is a huge object failure and i like threw it in my drawer before i left because like you don't want them you don't want someone to just walk in and be like okay like this guy owns bitcoin but if you have in your kids bedrooms whatever that's why i'm a big fan of raw dog in the laptops yeah no stickers i'm not a sticker man yeah the other we also got another piece of merch from a fan from crypto brekkie he sent us oh yeah shout out crypto brekkie he sent us wallets that say dirty fiat on them and they're pretty badass they are pretty badass um hell yeah it's it's i the i was really happy with the quality i was surprised both of

those are not paid ads by any means they just sent us free shit so just keep that in mind and i i do i like both of them was that a bribe to the freaks were you just trying to bribe the freaks out there no i'm not i'm not i just they sent us free shit i like them as people there's no free ads no free ads and their products are good okay no free ads no free ads you asked me for topics you know you asked me for topics i'm gonna just the last free ads we ever give out shill the nice free products we received i'm kidding no these are dope products shout out to crypto brecci and uh james deruccio i believe his last name is i just know his display name of fart face yeah for the longest time i think it still is right yeah maybe he cleaned it up now

that he's all professional he doesn't have to he could be silly i'm like i like fart face i do too it's a it's a brand now yeah you uh you ate friday for you age you don't get old all right i'm gonna stay young forever yeah okay yeah yeah enjoy your fry it's beautiful here in brooklyn dude i'm gonna get impeccable today's gonna be such a good day this is pretty good scotch we have new scotch here scotch do you want to try and pronounce it i i picked it out because the bottle looked nice on the shelf and i was feeling good brew clottage brew clittage brew glittage brew clottage yeah brew clottage i don't know it won the 2000 is that 2009 it was made or did it win an award

i think that might be the year i don't know but it's uh tenure single malt scotch whiskey it's very nice very nice cool bottle yeah i didn't think i was gonna be able to take a sip today it's actually pretty smooth yeah the only reason i bought a new type of scotch because you had that awesome tweet last night where you're like recording in whiskey in 20 hours it's like marty's down to go yeah we're ready i think i tweeted that out before i went out last night no you We tweeted it at like 11 p.m. You're already drunk. That was the problem.

Oh, damn. Shit. That was the problem. I ate it on the subway steps last night. If it's raining in New York City, don't try to skip steps when you're running. Oh, yeah. That always happens. That happens to the best of us.

Ruined a nice pair of white vans. Rest in peace. Freaks, it's been an incredible week. It's beautiful here. I got a buddy from college on the way in town. I'm pretty pumped for this weekend. I hope you guys are as pumped for the weekend as we are. And, hey, just enjoy life.

You only got one of them, you know? just stop being dicks to each other i just it eats me up inside it eats me up inside to see the family all fighting let's bring together you know what just make an effort to say something nice to somebody this weekend and just remember that like if you can't agree with i'm gonna try myself too i'm guilty myself the nice thing about this space is if you don't agree with someone and you get into like this long circular argument with them and neither of you agree like at the end of the day like the winner of that argument

is going to make more money than the other person like that's what it is so just enjoy that aspect you know if you both have skin in the game if they don't have skin in the game then you're definitely you know you're definitely winning the bet but that's what it is

true because you do you shout out to our sponsors BlockFi, HoneyMiner and 21lectures first three read pod Three quality sponsors though Check them out if you get a chance Shout out to Matt again

For handing off the torch To a Twitter legend The Twitter legend The Twitter founder The Twitter founder I know We will be interviewing him in a few weeks So be on the lookout for that How the fuck did I pull that off

I don't even fucking know man I don't know either But I'm happy you did Peace and love freaks Cheers