TFTC: A Bitcoin Podcast - Rabbit Hole Recap: Week of 2019.03.04

Episode Date: March 7, 2019

This week Marty and Matt discuss: - Canadian Revenue Service asking for BTC addresses: https://twitter.com/kyletorpey/status/1103467047412002817 - Ripple, FinCen agreement: https://twitter.com/nic__carter/status/1103356359284805633?s=20 - Is Bitcoin Twitter engagement back at 2015 levels?: https://twitter.com/matt_odell/status/1103673829832970240 - ABCore 0.70 released: https://twitter.com/LarryBitcoin/status/1102255072799535105?s=20 https://play.google.com/store/apps/details?id=com.greenaddress.abcore - QE, NIRP creeping - BlockFi Interest Account: https://twitter.com/BlockFiZac/status/1103293858283245569 https://twitter.com/vandrewattycpa/status/1102953966537752576 - Coinbase: https://twitter.com/coindesk/status/1103443720307912704 - Facebook going private?: https://twitter.com/SarahJamieLewis/status/1103476030503739393?s=19 - Facebook 2fa phone number leak: https://www.theblockcrypto.com/tiny/facebook-faces-criticism-for-handling-of-phone-numbers-required-for-2fa/ - Chinese database surveillance leak, https://www.eff.org/deeplinks/2019/03/massive-database-leak-gives-us-window-chinas-digital-surveillance-state - QuadrigaCX update, https://www.theblockcrypto.com/2019/03/07/quadrigacx-co-founder-michael-patryn-allegedly-traded-large-positions-on-bitmex/ Shoutout to this week's sponsors: Honeyminer, head over to stackingsats.com and download Honeyminer today. The one-click solution to mining altcoins to stack sats. Unchained Capital, if you're in the Austin area on Monday March 11th, 2019 Unchained is demo'ing their new multi-sig vault product. If you're not in Austin, do not worry. The event will be live streamed. Link to attend below: https://www.meetup.com/Austin-Bitcoin-Developers/events/259337229/

What is up freaks? Welcome back to Tales from the Crypt. It's your boy Marty Bent here sitting down with Matt O'Dell for another edition of Rabbit Hole Recap. It is Thursday, March 4th around 3.30 on the Beast Coast. The price of Bitcoin according to the trade block XBX index is $3,868.68. Matt, what block are we at? 566-088. Nice. Getting closer to the halving. Block, what is it, 630,000? Yeah? One block at a time. block at a time stacking blocks uh we got a lot of topics today uh before we get into those quick shout out to our sponsors first off we got honey miner you guys know all about honey miner

there are uh a favorite of ours to help you guys stack sats easy one click download of mining software on any spare gpu or cpu hardware you have lying around uh what honey miner does is it finds the most profitable uh chain to mine at any given point in time mines that chain and then auto dumps it for btc and divvies out satoshi's to to the miners on the network we have a special ref link there stacking sats.com you can go check out honey miner there if you don't want to support us you can just go to honeyminer.com but we prefer you go to stacking sats.com also next up uh new sponsor shout out to the new sponsors always like when we get new sponsors uh next sponsor up is unchained capital unchained for you freaks don't know uh company down in texas they're coming out

with the multi-signature vault. I actually tested it the other day and it was really sleek. We've been talking a lot about multi-sig UX on this podcast in particular. I think Unchained has definitely improved the UX a little bit. It will be a two of three multi-sig, 100% cold storage supporting treasurers and ledgers

and designed for users to remain sovereign, controlling two of three keys. There'll be a live demo of the product at the Austin Bitcoin Developers Meetup on Monday, March 11th. That's four days from now. If you're down in South by Southwest in Austin and you want to see this demoed live

at the Austin Bitcoin meetup, that's where it's going to be demoed next week. Again, March 11th at the Bitcoin meetup in Austin. Bitcoin developers meetup, excuse me. Our boy Justin Moon leads that meetup. He's been on this podcast before. Great dude. Very excited to see this product demoed.

If you're in person, you can see it in person. They'll also be streaming it online. We'll get you guys a link to that eventually. It'll be on Twitter. Matt, what a fucking week. Dude, the jackpot was fucking dope. Well done. Heck yeah, sir.

It was surreal. It was surreal. And I really liked that picture. It was really, it was a badass picture. Photo Craig goes to Miles. Shout out, Miles. There you go. Miles is the man.

No, yeah, it was a surreal experience. I felt like when it was all said and done, we recorded for 31 minutes. I think he was in the room for 35 minutes. He's all business. He's all business, that Jack. All business. Yeah, when it was all said and done, I felt like Will Ferrell at the end of old school when he's debating and he wakes up.

He's like, I just blacked out. What happened? that's essentially what happened it was for it it felt you know everyone was disappointed that he only gave us a half hour but that was like the densest half hour ever it felt it felt a lot longer so well done on that on that account thank you i was very uh cognizant of pushing the conversation forward not going off on too many tangents though i would have liked to um but it has been interesting to see the uh sort of lesson i'm taking from this is firsthand experience of experiencing fake news everyone just jumped on that one that that that one quote

taken out of context well it wasn't even a quote what happened was like people went on twitter and like basically knew that the jack had never said ten thousand dollars and he said he limited it out on yes cash out yes and then bitcoiners of course made us abreast to the fact that the limit is ten thousand dollars and uh the mainstream ran with that and just assumed that he's buying 10k every week jack's just just balling out man stacking sets i mean besides the point like i'd be so frustrated if i was jack and i was getting limited on my own company i was like when i first heard the because you gave me like a sneak peek of it when i first heard the the quote i was like there's no way that his own company is oh like oh jack is such a you know fraud risk

right like they need to have a limit on his like an account it was kind of nice that he plays by the same rules i guess yeah that or maybe it was just like a sly remark to hint that he doesn't like the limit for anybody who knows meanwhile like the next day while you're on the plane coming back he's he stacks sats and and wasn't limited out right yep he stacks sats 29 did a it's completely random 29 i guess that's a code for something yeah i don't know maybe that's the year we we hit hit the one cent one satoshi parody that would be interesting 2029 2029 decade away wouldn't surprise me a million dollar bitcoin is what satoshi parody would be um that would be 100 million dollars wouldn't it oh no because it's one cent yeah there's 100 million satoshis

yeah i'm wrong i'm wrong i thought i thought it was a dollar for a second um well that'd be crazy talk for 2029 yeah no and then he uh then he drew on satoshi's place too yeah and and he he drew a borderline irresponsible thing too he did the bitcoin to the exit right no he didn't draw that he just didn't do the bitcoin to the exit no he tagged at jack like that was that was all he did was the ad jack i know we can only assume i like to think that he did the the the big the man running to the bitcoin exit door and i was like i saw that i was like wow jack you're trying to institute some fomo going on here yeah and uh we can only assume i don't know if you want to assume he did i'm just gonna assume that's what he did okay i feel like

that's what most people got out of it so yeah no it was a fun way that's what people think he did i think yeah um no but it's a fun experience we talked about jack for a while and i'm sure it's a worn out topic on this podcast but it's cool experience uh sit down and speak with him in person um like i said i would have loved to like jump down a bunch of other rabbit holes with him but the time uh constraint just forced me to push forward it was really cool happy it happened i would be freaked like i hope you freaks liked it um i hope it's good for the mainstream too i think he i think he did like a very good job of creating like a grander vision um or not a grander vision like you're describing the grand vision well yeah and he you know he helped he helped our pod move

up on the rankings on itunes that too spread the bitcoin mind virus some more right yeah that i got a i got a text from a couple people whose parents had said hey i listened to this this podcast and i'm like open to bitcoin now apparently it's uh turning some older minds happy to see that i mean i told i told my parents that uh you recorded with jack it was like a nice validation in the middle of a bear market to you know bring it back to them look i'm not like completely fuck up yeah i don't know i don't know if my parents have uh they may still think i'm a fuck up i'm not sure yet they may just think like what the hell how did this happen i sent the picture i sent the picture to my mom and she's like she's like is marty the one on the left or the right i

was like ah you know you take you take what you can get yeah i doxed myself there you guys know i have blonde hair now um moving on though to another topic heavy topic pretty fucked up what's going on in canada but but it should be expected right so is it the treasury doing this or just like the canadian government so um it says on the tweet right do you see it you don't link to the tweet my bad so anyway uh canada is sending out uh audit questionnaires to known bitcoin and crypto holders asking them um to just it's the yeah it's the canada irs the canadian revenue agency um they're asking you know how much bitcoin you own how much crypto you own they're asking people to disclose addresses which is something that i've theorized a lot behind closed doors um

i actually haven't really talked publicly about it a lot because uh there's like a fine line here We're like, I'm not trying to advocate for anyone to like break laws or anything like that. I've had a couple of people poke me about that today. What do you mean? With the wasabi shit that you're recommending? No, like the point is, the point is, is like pretty much every government in the world in the near future is going to put laws on their books that asks you to disclose, disclose addresses. and all i'm saying is is that when that happens it should be more of a voluntary process like you should you know disclose what you you know comply with your laws but disclose

what you want to disclose don't have like a gun to your head and like people don't realize like how much information they're leaking out there and it's it's the natural progress you know the natural progression here is is they they ask you to disclose addresses and then if you don't disclose an address that they know about then they throw the book at you right yeah yeah it's so so like nanny state shit though it's like crazy i can't imagine ever handing over i mean it could definitely happen here in the u.s having to hand over a list of addresses they own um i mean look it's gonna get messy it's not it's not easily enforceable um there's no way to prove you don't own a certain amount of bitcoin you didn't lose a private key right

yeah you can prove that you own a certain amount if you want to yes um but there's no way to definitively prove that you don't uh so it's it's it's going to be messy but they'll do it on like a case-by-case basis and what they're going to want to do is they're going to want most people will disclose their addresses right and as people disclose their addresses it reduces the anonymity set for everyone else right like uh if like one of your friends discloses an address and like two years ago you transacted with him to like buy him a beer or something yeah it's like sharing your dna with 23andme you're fucking over everybody for everyone else too not just yourself yeah um so it's important that like when you're you know when you're pulling out of kyc exchanges and

anything that's linked to your identity you know you take precautions right and right now that the easiest precaution to take is is to use wasabi wallet uh just because it's super user-friendly and it's accessible to pretty much everyone yeah no this was uh actually sparked another not this uh canadian revenue service incident in particular but uh the coinbase discussion around neutrino sort of sparked a conversation on twitter i believe pierre and francis pullet were talking about it like what are these exchanges legally obligated to collect like from from users because we had the case in the netherlands last couple weeks ago where uh nefarious actors identified a crypto trader a bitcoin trader and we don't know if it was

we still don't know if like i saw that in the band we don't know for sure we know he was a crypto trader we don't know if it was necessarily an exchange like it probably was but we don't know if it was it was necessarily crypto related my spreading fake news that i'm the crying you know it's it's the it wasn't in english first of all the one story about it yeah and you know we don't know what they took or you know what exactly happened there we just know he was a crypto trader and he was violently robbed yeah he tortured him in front of his like little daughter yeah it's fucked um no but but that does make like i can't answer this off the like i don't know uh what exchanges are legally obligated to to extract from users in the form of personal

identification but especially with this stuff like especially with home address like the home address shit and the phone numbers and all that shit it's the same thing with like these like you think the canadian government can keep this shit safe like they can't keep it safe like having a database of all of your citizens holdings and where they live and shit is like horrible it's absolutely horrible um and and i don't trust them at all with securing it even if they mean the best intentions right they don't um the as far as we never really talked about it happened in between when we last recorded was the coinbase rep accidentally leaking that they were having issues with it seems like chain analysis that were leaking data selling customer

data yeah and what what they mean by that is the way these chain analyst companies work is there's like a give give and take agreement where basically they're they're providing a data set that includes people from other exchanges and stuff addresses linked to people basically yes and they're using that in their product yeah so as coinbase interacts with these chain analysis companies the one in particular that they're trying to get away from it seems uh that company was just able to throw that data into their models and use those models with other exchanges. Right, and then they sell that product to other exchanges.

They're like, we can identify who people are who are sending things, right? But they're not exactly selling the direct data set. Exactly. And the scary thing here is that all of these exchanges or pretty much all the fiat exchanges are doing it. And to go back to the Pierre point, they probably in a lot of situations

aren't required to do it. They're going like above and beyond because they're so scared of getting fucked. But I think that's... Do people need to stand up, though? Do you think we need a corporate stance or a stance in the corporate world? It's good that we fight back on this stuff.

Look, delete Coinbase worked. Everyone said it wasn't going to work. They announced that they're going to fire the hacking team guys or whatever. Hopefully, the hacking team guys will be angry about it and then we'll hack them. No, we don't want Coinbase to get hacked. We're not trying to sue them.

We should fight back. like you should be angry you should do social pressure and whatnot but the thing is even if these exchanges aren't required to do this data collection if they don't do it then the laws will be passed that will require them to do it right like i a lot of it is because it's new so if if you need if you need to make it so that it's in the books that they legit have to do it all you need is one of these big exchanges not to do it right and then then it'll become in the books right didn't uh what did i read was this i'm trying to remember if this was um no it's not but i was thinking of the coin center piece that dropped today it has to do

with something completely different but it is an interesting problem we find ourselves in like i mean that's a heavy topic of this conversation this podcast excuse me is keeping your data secure uh in this world on the internet in particular and i think we need to have the open conversation especially around bitcoin exchanges it takes it to a whole nother level with money and bear assets in particular like you should think about people's safety over uh orwellian oversight well i mean you said it well on the bent like all this is a temporary issue right like we just need it's only an issue for these these exchanges that are they're fiat on ramps off ramps and um they're a temporary stopgap thing until you know everyone's

using bitcoin and you don't need to go in between fiat right yeah and until then i think we said on a previous pod you know you have like maybe one two kyc services that that you are trust you have to trust because you have no choice uh it's the easiest way to get in and out you know unless you use something like bisque or like local bitcoins or um and then and then you you use wasabi or you know you you disconnect your your connections use coin joint to disconnect your connections to that particular exchange and then hopefully in the future we'll get better privacy guarantees like really the solution here isn't social pressure the solution here is to make it so chain analysis and similar companies like neutrino and stuff can't fucking track us to begin with right and

you know i because of these topics we've had a lot of talk about privacy wasabi vpns tour a lot of these things that i don't think are talked about enough and i i love that because these are the teachable moments that we were talking about with marad where i was like every time you have these privacy situations you have the ability to convert like a couple people um but one of the issues with all this right now and i see this firsthand as like people ask me questions in my dms and telegram and keybase like because all those are open if any of you ever have any questions just reach out don't get angry at me if i don't respond for a couple days but i will respond um is that using bitcoin privately right now is more of an art than a science right there's so much

nuance to it there's so many different independent little things that you have to do as an individual to tailor to yourself to tailor to your threat model who are you worried about who you're trying to protect yourself from what what draw trade-offs do i have what drawbacks do i have it's way more an art than a science it's very hard for for someone to say do this this is the way you should do it you know follow these steps and and that's where increasing bitcoin's privacy guarantees that's why it's important because you need we need to make it so that it's very easy very straightforward not nuanced on how to how to be private with this shit and then there's a lot it's a long way to go it's where you know we're not that close yeah slowly but surely brick by

brick again like yeah we're only a decade in we still have a lot a lot to get done in terms of fungibility and scalability in particular i mean the other issue is like is like for someone like me like i'm trying to educate people on this we're both trying to educate people on this and at the same time we're trying not to hurt our privacy too much right not not to talk about exactly how we do things how what our processes are and what we take and we're not anons either right so like for instance like today like i'm telling people like if you don't take your privacy back like you're gonna have to disclose all your addresses right and like people are are are messaging me like matt are you advocating breaking the law like no i'm not advocating breaking the law you

know like i have to be you have to be very there's so much nuance here it makes it so much more difficult like it needs to be more straightforward wasabi is making a lot better um i'm really excited about all the things that have been happening with sabi wednesday it seems like we're starting to hit more of a critical mass have people been participating yeah i mean look uh the the default and the default mixing round amount like the amount of participants in the mixing around uh no power keeps increasing it wasabi keeps increasing the amount as more people join uh mixes are going through quicker volumes picking up the more people that use it the more private it gets we've seen the hashtag take off um we got a little treat for you guys next week

we have uh no para adam of wasabi he's going to come on for wasabi wednesday next week for a special rhr so that should be a lot of fun he's going to join us we're going to jump in uh to wasabi and dive deeper into this privacy in general yeah i'm very excited for that uh dude i respect a ton and it'd just be great to have him on right i'm pumped for that as well um so that's next wednesday that'll be dropping um so participate in wasabi wasabi wednesdays if you haven't already wasabi wallet.io it's available on all all different platforms um i mean look unless you guys are a new listener you've heard us show this a million times yeah um but yeah check it out it is a hot wallet you know your computers connect to the internet so

send batches through it you know don't put all your funds in it at once it is connected to the internet but i have been full disclosure i've been using wasabi you know since this came out no problem did i have yeah what was the problem when every 24 7 i've been using wasabi like 24 7 since fucking august so like what's your excuse guys come on get to it what was the problem when uh Like in one of their text bars when people would type up Chinese characters would come up. Oh, that was just like a little joke that they put in. People did not like it. They liked it because it, forget their reasoning around it, it was actually like a pretty good reason.

We can ask Nopar next week. Yeah, it was a pretty good reason. it was an advantage having different types of characters was an advantage from a ux perspective um because it shows different chinese characters instead of uh just star star star star star for your password um but i guess like if you spoke chinese it was like stupid america stupid like westerner doesn't know how to speak chinese or something is what it says yeah type it out that's funny um now yeah so be on the lookout next week for wasabi wednesday we'll have no para spitting all privacy knowledge um next topic ripple and finson they're uh i guess the

the documents from the the case finson brought against ripple labs have dropped it doesn't seem good it seems like uh the government was pretty easily able to coerce ripple labs to um sort of give up information and uh they have to track everything ripple is tracking everything for finson yeah they're tracking everything um so it goes hand in hand with what we said before they basically like think of it like they have like a huge ass excel table and every single time they connect a ripple address to like a phone number or person stuff like that they just keep track of it and then they can de-anonymize as many people as possible how many people are using ripple like 15 people or something like that they all have like 100 bot accounts each right i don't

know man fucking but but this is what happens if you're if you're if your network is centralized if you prioritize fast and free transactions um your network is going to be centralized and if your network is centralized i mean ripple didn't even try to not be they just were centralized from the start but if your network is centralized there's somewhere where they can put pressure on they're going to put pressure on you and they're going to regulate your chain like that's the end that's the end days of every single chain that prioritizes fast and cheap transactions over censorship resistance and distribution right you want it to be as distributed as possible right and i've actually heard stories of people trying to like run a ripple node and ripple labs

having to literally send them a usb with the blockchain on it because they couldn't yeah our buddy got he had they sent him like what three terabytes on i think four i think four terabytes Yeah, and FedEx. That's how they're spreading their chain around the world. Yeah, you got to distribute the blockchain through FedEx. Yeah, I mean, Ripple is a fucking joke. All right, Twitter engagement, man. It's at 2015 levels.

What does that say, man? What does that say? Nobody's interested. Okay, so this is the second time it got posted. Murad posted it a month ago, okay? It's BitInfo's chart that they have this chart that's supposed to show Bitcoin tweets. No one really knows exactly what it's tracking.

There's some people are guessing it's tracking hashtag Bitcoin. It's not tracking any just regular Bitcoin mentions or anything like that. And the chart shows that engagement on Twitter mentions of Bitcoin and stuff are lower than 2015 levels. Well, I'm interested to see if it's like the cash tags, because I remember back in 2015, 2014, like the cash tags were like a lot of cash BTC. the cash tags don't come up as often as they do but you know there was also like a ton of bots and shit right that would just like auto if this then that like post stuff um but that that's all besides the point because we don't know how they tracked it in 2015 we don't know how they track it today all i know is that we were around in 2015 not only was 2015 way deader than today

across all platforms it was dead twitter hadn't really taken off as a as a bitcoin crypto platform yet most of the discussions were happening on reddit and irc and bitcoin talk and so bitcoin twitter was probably crypto twitter back then it was all traders right it was it was mostly altcoin traders and stuff and like i brought up i had a thread today where like i brought up uh old tweets that are still there today from like vitalik and charlie lee and stuff and i purposely did like non-necessarily bitcoin people but you know big follower accounts that is like no engagement you know like vitalik is like he quote tweets zuku and he has like three retweets seven likes and no replies and it's not like those are just 2015's engagement that's all the engagement on that 2015

tweet to today right like that tweets existed for four years and engagement was so low back then that he got no fucking replies not even a fucking bot so like it's not even close it's it's way off the chart is like extremely misleading this gets matt riled up freaks because it's really he's enraged right now the whole reason jack the whole reason i took the lightning torch to begin with was because marad posted this fucking chart in february and so like the first thing i did was i just replied to him bitcoin and then you remember like a bunch of people replied bitcoin i got like 55 different responses to that one tweet that was just people replying bitcoin chart didn't move a fucking inch right then passed it to the pass the torch to the ceo of twitter toward and and he goes

on a fucking tear and just goes crazy pro bitcoin shilling all over right yeah now he's buying ten thousand dollars a week chart didn't move at fucking all just kidding right gets a casa huddle note uses uses satoshi dice you know uh does stacking sats chart doesn't move at all so it's it's highly questionable and then at the same time like the level of engagement that these tweets are getting that are you know like like marad marad's original tweet got like a thousand likes you know uh alex who's the alex krueger who's the one who posted it today like he got like 250 likes like 60 responses like 35 retweets like that would have been insane engagement in in fucking 2000 just the engagement they get on the tweet saying that there is no engagement

compared to 2015 proves that there's like way more fucking engagement than 2015 right this is a topic that that's dear to matt's heart like you guys kind of know how it feels to live in 2015 but like no you don't you know and anyone who was there knows that it was like it was fucking dead that's pretty rage quit right what was rage quit january 2016 or 2015 yeah uh it's 2016 i think right i think it might have been i don't know january 2015 was the bottom all right that was when that that was like right around there he like did it like right low it was 2015 then it was like the the he did it at like the worst possible time i mean like he's always gonna mike hearn will always have the best rage quit like i don't think kevin kevin fam can ever compete with him bitcoin is a

failed experiment yeah wasn't that the title of his blog yeah then he joined r3 and like where the fuck is r3 now right nowhere to be seen um next topic ab core uh version 0.70 is out ab core is a cool project uh that ud and larry bitcoin and larry bitcoin are working on ud worthmeyer um and this basically allows you to run nodes on android devices bitcoin nodes yeah like old phone or like uh the android tv boxes you can get for mad cheap like 50 60 bucks or whatever you can run this. It's a version of Bitcoin Core that runs on Android. Yeah, so shout out to those two for putting the team on their

backs and putting this out. That's pretty dope. It's a fun way to It's a fun way to have a cheap note. It's a nice way to have a cheap, full note. Helping out on the quest for further decentralization.

Decentralization is a scale and it's an ideal that you strive for. This helps us get a little closer to that ideal, I would argue. There you go. next topic oh by the way we're we're drinking uh tequila courtesy of the mamudov brothers mamadav mamadav brothers shout out to the mamadav brothers strong bloodline you got there boys this is fucking delicious tequila they got us very

very nice tequila it is good tequila we got new drinking glasses here at tails from the crypt too mrs marty put the team on her back um qe nerp a lot of people talking about nerp these days draghi came out or draghi's not there anymore somebody at the ecb came out and said that negative interest rates draghi is still there uh negative interest rates um are are going very well in in some countries uh obviously the imf has that blog that i wrote about a couple weeks ago uh it's basically explaining how we can get to a cashless society cash negative interest rates um And then I guess the Fed Chairman Williams commented on it, too.

It just seems like the talk of negative interest rate policies is heating up. And I've been warning about this. I've been sounding the alarm bells. This is not very good. This is not something we should be striving for. It's an essential tax on your deposits. It disencourages or dissuades people from saving, stuff like that. but it seems like there's a coordinated effort

by the banking industry, more importantly, like the IMF, the World Bank, the ECB, the important decision makers in the banking world are trying to normalize negative interest rate policies. This is why we Bitcoin freaks. This is why I Bitcoin, at least. Yeah, I mean, this is like the core of the Bitcoin thesis, right? The core of the Bitcoin long-term thesis.

Yeah, this goes back to the sovereign individual. When they predicted it, they said, is going to get to a point where citizens demand an asset through which they can protect their wealth against overarching and overbearing governments who have an insatiable thirst for money and money spending in particular. Yeah, I mean, I think this path is inevitable.

They have no other path forward really, right? And it shows how inevitable it is that they're actually talking about it. Because for a long time, this was stuff that just was reserved for the pages of Zero Hedge or conspiracy theorists with tinfoil hats and stuff. It's becoming a thing. When a Reuters reporter tweets it out in all caps, then you know it's real. Right. So be aware. Keep following that trend.

Again, macro is a theme on this podcast, this Rabbit Hole recap in particular. And if you take a look at the macro scene right now, it's pretty frothy. I mean, we've been saying this for a while. Like, this is part of the thing, right? Like, if they're going to ban cash or, like, dissuade the use of cash to the point where it's effectively banned, institute negative interest rates. Like, of course they're going to put laws on the books that say you have to disclose all your addresses. Right. the the key is that you know if you if you handle it properly like they won't know unless you want

them to well they shouldn't even be able to that's the fucked up thing is that people would so willingly give up this shit like you get people have to realize that it is so bad that it's gotten to this point that they're trying to get every fucking cent and satoshi they can out of you because they fucked up uh basically the funding machine for all their vast projects around the world whether it be war or the social programs and now they want to tax you automatically when you get a direct deposit into your account with negative interest rate policy you get basically essentially it's not a direct tax but it is essentially a tax on your hard-earned money right away they're just they're just following their incentives marty that's true you can't be

you can't be mad at humans when they act greedy or when they act in their own self-interest you You know, that's the beauty of Bitcoin is we just expect it to happen. That's true. That is true. Plan for it. Yeah, but make people aware of this, freaks. Sound the alarm to the people in your lives that you care about. Next topic, BlockFi.

Crypto Twitter blowing up. Obviously, disclaimer, they've been a sponsor of this podcast in the past, very recently. But they released an interest rate product for Bitcoin. excuse me it released a product that allows you to earn interest on your bitcoin if you store it uh on block fi right it's not a savings account no that some pubs called it a savings account people called it a savings account it's not a savings account i actually our buddy uh uh uh i don't know what you're thinking of uh fuck fuck fuck okay anyway someone's described it very good on twitter he said uh it's like a junk bond you know you think of it like a bond uh and that's

why the yield the yield is you're basically paying on the risk of them you know uh on them defaulting yeah no it's a good analogy i mean it sounds like a good analogy to me and i think the the biggest sort of cause of controversy was they released their their terms and uh were very transparent about what exactly what they're doing and we're basically made it known like hey it is possible that we could get hacked or become insolvent right that was jeff van drew who did that our buddy jeff yeah van drew cpa oh yeah yeah what's his uh van drew watt cpa waddy cpa you know great so i'm in the show notes um but yeah so they they released their their report and it's sort of up in the air i'm not i mean this is not in my risk appetite this product so

i haven't done i'm not going to use it yeah i haven't done insane due diligence on it but uh speaking of due diligence like people are freaking out about their terms of service and i just got a little chuckle because this risk exists across every exchange and service that you use in crypto and they and they just wrote it on paper and just like made it known to people like this can't happen and well they literally freak the fuck out they literally wrote uh they literally wrote the word rehypothecation on the they're like oh they might rehypothecate so that's not good yeah but i mean they were like trying to trigger uh caitlin long right uh like but but yeah they're disclosing all this stuff that's what the rate is there for um if people don't use it the

rate will go up yeah if people use it the rate will go down it's a market it's a market derived rate and it's an option for people and uh it depends what your risk appetite is and it's not like you're putting all your money in it or you're putting none of your money in it like some people might choose to put a little bit in uh it is a privacy hole as well like as we were talking about before like you're going to link those transactions to you you do you have to pay taxes on the interest yeah you have to pay taxes on it too so all decisions that should go into your model whether or not you engage with this product so those addresses you will definitely have to discloses the government because they know you're making profit off of them as well yeah um like i

said it's not in my risk appetite right now i'm not i'm not locking bitcoin up on a centralized third party at the moment but i think it's still a big deal it's a good option you know and i do i have to say that i do like i fucking i love bitcoiners i just i love how a new product gets announced they're immediately skeptical like 50 are like super excited and then 50 are like this company should burn in hell they're gonna take all of our bitcoin yeah and let me be clear i don't think block fi is gonna do anything nefarious or lose anybody's bitcoin it's just like well they might they could they're taking that risk and they're not liable for it yeah they're not liable for it i think that's the difference right than an exchange like right

now the de facto accepting thing for exchanges is that they're supposed to be full reserve there's no exchanges out there that are like we're not full reserve yeah and then and then insuring your reserves is a fucking headache and a half from what i understand this is not insured yeah nothing and they're storing with gemini yeah gemini handles all so a lot of the disclosures is because they have to handle it with gemini yeah but again like that's with these sort of disclosure documents too i actually experienced this when i worked at the hedge fund like the concept of abundance of caution like when you're making these reports or these disclosure reports especially as a financial institution uh you you basically uh exercise what's called an abundance of caution

where you basically try to make it as transparent as possible say every fucking possibility that could happen with the funds while you have custody of them as a financial service provider and actually like so when i worked at dearborn capital management in chicago bloomberg actually came out with a hit hit hit piece on uh the president of the fund i worked for dave cavanaugh because he uh he uh exercised an abundance of caution in our ddq and basically said yes i'm i'm a registered trader on uh cbot and the cme like it is possible for me to trade against the fund like if i wanted to put trades in just as an individual and a bunch of publications took that and ran at like dave was actively trading against our fund which was couldn't be further from the

truth he was just exercising an abundance of caution to make it known hey this is possible and i think it's a similar situation you find block fine um so just from being close to a similar situation like that like i i would not uh assume nefarious intentions off the bat yeah i mean i don't i don't think they i don't think they they mean bad uh they have a very extensive disclosure which is what you want to see not what you don't want to see but you also want to see bitcoiners get angry about disclosures when they disclose certain things that aren't are very questionable and then the other thing is they are it seems like their main client on the other side right the people who are taking the borrowed bitcoin are short sellers right so there

is the argument to be made here that in times of high bitcoin price appreciation their short sellers get fucked and then they end up you know not having full reserves and then you end up getting a haircut on your bitcoin or losing your bitcoin um and part of the bitcoin thesis is that at any point you know the price could just go crazy on you and just get out of control and you can't get back in yeah um so that's why i personally that long tail risk like i would never be comfortable doing that for just six percent and you're trading in you know privacy elements but like i said people some people might and the market will dictate where that fucking interest rate is like if they can't attract people they're gonna have to raise the rate if they if they can

attract people then the rate goes down no yeah exactly and and like you said like you love bitcoiners and i do too i actually read about this week like no one's beyond reproach like you should be criticizing everybody like we made coinbase bend the knee exactly again um i love when they bend the knee it's the best no but yeah but also with that being said it's like all right like this is uh no never mind i'm not gonna get into that but yeah so block by has that it's a it's an interesting product it's not in my risk appetite personally right now but um yeah they disclosed their their transparency report yesterday and people freaked out i did i did like how like zach from block fi and stuff uh prince was like out there responding to

criticisms and talking to people he's a very accessible person yeah um they mean well for the ecosystem they're trying to make the ecosystem grow yeah exactly i love yeah i zach's been on this podcast go listen to the episode he's been on every podcast but yeah your your episode with him is very good um we already talked about coinbase bending the name we talked about that in the beginning facebook privacy bullshit facebook's going fully private did you hear that did you hear that did you see the end of that bullshit though yeah well they want to do like they want to they basically want to do the telegram model i would say of social networks where like you move more to like group chats that are encrypted right yeah

and it seems like they're condensing the messaging platforms from instagram and facebook together and whatsapp and whatsapp all three of their major messaging platforms facebook insta whatsapp combined is like 2.6 billion or something and they want you to message across them um one of our listeners pointed out that like if they were going to go the wallet approach like integration would be the first step right because you don't want to roll out different wallets for like facebook and stuff yeah implemented in a messenger um we're going to link to a uh a great a great thread by uh sarah lewis i think her name is she's a privacy proponent she runs open priv um and she talked about how most of this it's still a good step

forward i would say but but most of this is um is bullshit right most of this is they're going to encrypt the independent conversations but they're going to still try and monetize metadata and all this other shit i mean like that their whole business has been invading our privacy how do they you know you're only an idiot if you just take them at at face value when they say that they're going to become more private of a company right yeah i'm not sure if they'll ever regain my trust i mean i would have to create a new account because i've deleted it already so we'll see yeah i deleted mine as well um and then on top of that you know like three days before they announced that it came out that the two factor that they push people into which is sharing their

phone numbers with everybody yeah they just combined it into their database they just threw it into their database and we all know about sim swapping and shit in this industry like that's a huge security risk for people who use facebook right and that's another thing twitter stop asking me for my phone number please i'll put that out there jack if you're listening i was glad you asked jack about that that was good because like you we need to protect like if nims if you can't use if you can't use twitter uh like pretty much anonymously like it's over it's the the network is dead and then yeah we move to something else i don't i would like not to move to something else what if we have to oh but anyway on that note with the two factor it's just always important

to talk about use an app you know use one of the app based ones um if you have an android you can you can use there's a couple good open source ones on f droid get a ub key if you can if you want to take it to another level yeah but i i think i don't i don't i think when you start threat modeling like people getting hacked having the cell phone app route it's like that never happens to anyone they're too busy sim swapping everyone else you know i agree with that but like i had actually i couldn't write the bent first time i fucking missed a bent in my life but if If you're app-based, you don't need the internet. How did that happen?

Exactly. So what happened, I was in the air. I bought the $30 Wi-Fi on United on my laptop and went to sign in the MailChimp, had my 2FA come up, and went to go to my 2FA app. And it had to be updated. Oh, so it was just bad timing. It was horrible timing, yeah. Because usually the app works completely offline. You can be in airplane mode.

You can be in whatever. It works offline. but there's one instance i had to update it and i'm like 40 000 feet in the air i wound up buying wi-fi for my cell phone so i could update it and then the wi-fi wasn't strong enough to update it but they block they block updating apps they only let you do certain things so that's what it was um they blocked vpns and stuff so it was like i was like in the air i was like fuck i wish i had a yubi key right now it would be a lot easier yeah i mean i guess that's like like the one yeah it was one instance i mean just use the app based if you want to do the yubi key fine

absolutely it can't hurt but but uh the app base is a whole lot better than phone to the point where having a phone number on these accounts a lot of times even if you have the app set up having the phone still linked can fuck you because uh a lot of the password reset authenticator reset goes through the phone so they like still even if you have the app base they like so like you have to like actively remove your phone number from a lot of these services get a burner phone yeah use google voice such a mess this is what i'm talking about like privacy it's such a mess it's more of an art than a science and it's like kind of it makes it so fucking difficult to talk about maybe that's the industry of the future fixing all of our data problems but again we've been talking

about this forever nobody cares um speaking of database leaks china had a huge uh surveillance database leak dna fingerprints everything recognition yeah so you could basically clone all of china right now if you wanted to i don't think the tech is there yet i mean that's a big one nation sale so you have that like china is like i would say on like a polar end of the privacy uh spectrum being completely orwellian uh obviously they have their social credit system all that and obviously it's a huge honeypot for a lot of very personal data as personal as the chemical makeup of your being uh and you have countries like india who are trying to get into biometrics and slowly but surely there's dominoes falling

on that i mean in america we have problems here with privacy and all this stuff right they're doing the thing is china's just the most aggressive like right what china's doing today is the end game of all these different countries um every country or most of them i mean there'll probably be some that are like more privacy preserving um i was actually thinking the other day like the best countries to be in and like i will be the ones where you can wear a burka in you can't do facial recognition even if they you know they want to but um i think they want all this information they want all the identifiers and they're slowly going to just keep adding identifiers on right so face recognition fingerprints utxos yeah utxos like

we talked about today addresses and ip addresses yeah god stop fucking snooping please it's so messy it's just really we need open and like we need we need people to sack the fuck up and be like hey every government around the world you're pretty much impeding on everybody's uh god-given right to liberty and freedom this is can you please chill out can people wake up and like stop watching the oscars and start yelling at these world leaders please this is why the fucking watching that stupid pussy bachelor jump over a fence this is why the most important mission here is is to further open systems you know open software you know open networks open hardware we need as much of this stuff as open as possible so people can actually interact privately can

interact you know with some semblance of privacy um face to recognition though is one of those things that is just we're fucked we're gonna have to get face tattoos no i i like glitter paint ourselves before we walk out of the door i mean like have you you've traveled out of the country recently uh it's been a few months like even our government scans our face now when we go in and out yeah and everyone else yeah you have to take that and then i got to china they scanned my face right you're like walking down the to the to the subway like they scan your face like every almost everyone has pictures online with their faces on it and we can't get away with it away from it it's our face you know like you can't change faces yet yet hopefully we've got

to get to a minority report level to do that like i'm i'm i'm super freaked out about the the facial recognition is going to be like a major like when you land in a new country in five years ten years you're going to land they're going to do a facial recognition of your face they're gonna know like your bitcoin addresses they're gonna know where you live they're gonna know your age they're gonna know your occupation they're good they might know your dna they might know your fingerprints uh you know they might know if any like siblings did anything bad then they have all the sibling stuff like crazy just just the second literally the just the second the camera picks your face up right then all that information they have at their fingertips yeah

again minority report that doesn't end well like there's no way that's good no and how do we get Again, stop watching The Bachelor, people. Please. Last topic of the day. We're actually timing, pacing very well today. Quadriga CX, complete clusterfuck. They stole all the Bitcoin. I don't even know where to...

Yeah, I think they might have went bankrupt. No, they were... They were already insolvent. I think it was... Yeah, they were insolvent. They were running a fractionally reserved exchange. It just seems as though their cold wallets were drained between 2016 and 2017, I believe. It came out that he was like a BitMEX whale.

Oh, really? That's the link I posted today, which continues the clusterfuck. Mike, what's his last name? If you click the link, his last name's there. But his username was MikeXBT. I remember him. Michael Patron. Yeah, I remember him in the Bitcoin markets threads.

uh you know he was throwing millions of dollar positions around on bitmex and bragging about it and shit uh so there actually is a theory here they they they uncracked the laptop uh there's a theory here that there's some money still on other exchanges because they had other exchange accounts and stuff but either way you know most of it is probably lost and this is just another reminder like that sucks but like it's another reminder of not your keys not your coins And this is one of the reasons why people push back on BlockFi so much, right? Yeah. So did this guy die?

I'm not sure which one died. I think, did Cotton die or did he die? No, I don't think Patron's the one that died. I think Patron's a different, he's like affiliated. Yeah. The other guy, it seems like he did die. But he might not have cared about his health as much when he found out that they were insolvent and he was fucked, right? Yeah.

But maybe he didn't die, who knows? It doesn't really matter at the end of the day. Where's the coins, you know? and uh doesn't seem like there are many if any yeah so that's a shame yeah heartfelt sorry goes out to any you quadriga users who got who got scammed there you're not gonna let it happen to you again i'll tell you that much no i learned that lesson once you only have to learn it once it's not fun i've been a part of that stuff um that's the last topic what do you want to riff on we got nine minutes what else we unless we got a fidelity we had a breaking news announcement

Oh, yeah, we were supposed to add that to the list. It literally just happened. Fidelity custody is live. Officially open? Yeah. For beta users. They have eligible high net worth people that are involved. Yeah, Galaxy is one of the first.

Bitcoin only right now. Is Fidelity the largest manager of money in the world? Is that a stat? I can't speak with certainty on that stat. They're massive, though. Yeah, they are massive. right they have large amounts of money under management yeah and they now have bitcoin custody in beta right no other coins just bitcoin right now no yeah i think they mentioned in that

announcement too they were going to add ethereum but uh are not comfortable enough with the the uh sort of the roadmap the roadmap yeah the unfinished roadmap um yeah i mean coinbase wrote like a clickbait article about it today uh you know fidelity is not accepting ethereum because of uncertainty or whatever but yeah like they don't know what's going to happen so like i mean that that this is the argument we've made with bitcoin for like the longest time but mostly about miners and stuff but industry participants want to know that they have something that that is um that they can be comfortable with knowing well you know in five years i can still access my funds I can still, you know, nothing, nothing major will change.

I'll be able to. Do you know if they have like multi-sig setups for their custody or? Look, they've been very savvy. They took the, the trust chain, uh, the, the LN chain. Uh, I know they run their own nodes, but we have like tons of respect for Nick who used to be over there with them. Right. So I, I imagine they're doing it the right way.

They've taken a long time to do it. So I imagine they're doing it the right way and we'll just, we'll see. i would not use them either but but there are people that are going to use them that's the thing right like no this has like been a strong narrative that's been fucking talked about for years now is when is the institutional money gonna get custody and it seems like the first dominoes fall i mean gemini and other bitcoin exchanges have existed but uh an incumbent from the traditional financial system taking a taking a big leap like this is incredible to see um your mention of the lightning network torch actually piqued my interest is the lightning

network church i believe between now and the last time we met went through iran and that was a big uh was that between now and the last time we met yeah and not only did it go to iran after iran it went to israel yeah and then they tried to get it to palestine but then i don't think they were able to it's crazy bitcoin bringing the world together maybe but uh was that illegal well no it was a went from wales to to iran right so i don't know if they have sanctions I don't know either. Do they have an extradition clause with the U.S.? They definitely have an extradition clause with the U.S.

You can just ask the WikiLeaks guy about that. Julian Assange? Julian Assange, yeah. But I, yeah, I mean, who knows? It just shows the power of Bitcoin. Right? That you can't stop us even if we want to. And that's one thing I write about in the bento.

I was like, that's what I hate about, again, the macro geopolitics that go on where politicians are just screaming at each other, politicians from different countries screaming at each other. But the individuals in these countries are good people. Like the Iranian dude that took the torch, I can't remember his name off the top of my head, but he's been providing good information on Bitcoin on Twitter for a while. Oh, yeah, like Zaya. Yeah, Zaya. Zaya seems like a chill dude. He seems badass. Yeah.

um but just because he lives in iran us americans we're not allowed to like him that well we're definitely not allowed to send the money like i love you zaya like i'm not in a non-account on twitter like i can't send you i can't send you lightning uh transactions yeah um it's a shame you know like maybe i would do it behind i would do it behind closed doors possibly you know i'm not gonna advocate for that but but not on twitter yeah but i'm glad it happened i'm really glad it happened it's cool to see you go to israel right after yeah it was huge i think um gave us like a nice a little bit of good press too which is always a plus yeah um but that's what bitcoin's about right breaking down borders

borders don't exist yeah um as far as financial on the internet yeah yeah they do exist in real life they are a real thing um yeah that's all we got for this week freeze hope you enjoyed this edition of rabbit hole recap it's been a fun week i haven't slept that much a lot of adrenaline pumping um again i hope you guys enjoyed the episode with jack share with your friends and family if you're liking tales from the crypt and rabbit hole recap in particular smash that subscribe button share with somebody retweet it write a review if you feel so inclined um we got some big plans matt and i were spitballing before this we got some interesting things coming out for you freaks in the next couple months um i know we teased that in the beginning of the year but

now the ball really is rolling well i think we've been successful at so far uh yeah bringing that to them yeah since the beginning of the year but we have even bigger things coming and uh i'm really excited for next week we're gonna have wasabi wednesday with the creator of wasabi like he's badass yeah no yeah definitely tune in for that one i'm pumped to speak to nopar i've never i think i don't think i ever have spoken to nopar directly other than dms as a as a prep you should listen to is stefan lavera wasabi uh he has a he has a pod with stefan lavera so if you if you feel so inclined you should probably listen to that before you listen yeah definitely check that out that's a good one and then the samurai while dev uh also on stefan yeah that was a good one another good

one too i think they're back to back um all right thanks for joining us this week freaks got any last words matt stay humble stack sats peace and love