TFTC: A Bitcoin Podcast - Rabbit Hole Recap: Week of 2019.06.03

Episode Date: June 6, 2019

This week Marty and Matt discuss: - Rooftop RHR in SF - code "tftc25" - First 100 person CoinJoin https://blockstream.info/tx/e4a789d16a24a6643dfee06e018ad27648b896daae6a3577ae0f4eddcc4d9174 - 6102 Bitcoin hodl privacy leak overview https://github.com/6102bitcoin/FAQ/blob/master/hodl-privacy.md - Ring cameras creeping https://www.cnet.com/google-amp/news/amazons-helping-police-build-a-surveillance-network-with-ring-doorbells/ - SEC files suit against Kik https://www.theblockcrypto.com/2019/06/05/skeptics-lens-not-defending-crypto-anymore/ https://www.sec.gov/litigation/complaints/2019/comp-pr2019-87.pdf - Initial rollout of LN Watchtowers https://bitcoinmagazine.com/articles/watchtowers-are-coming-lightning#click=https://t.co/5VuAHhvsoq - Samourai Dojo open sourced and released https://blog.samouraiwallet.com/post/185312260292/introducing-samourai-dojo-10-open-source-and/ - Utreexo proposal https://eprint.iacr.org/2019/611.pdf - "Buy" stocks and ETFs with bitcoin using Abra in 150+ countries (not US) https://twitter.com/AbraGlobal/status/1133697009381138434?s=19 - Statechains https://medium.com/@RubenSomsen/statechains-non-custodial-off-chain-bitcoin-transfer-1ae4845a4a39 - Weird YouTube AI https://twitter.com/Max_Fisher/status/1135529605530411008 - Fed to cut rates? https://tftc.io/martys-bent/issue-499/ Shoutout to this week's sponsors: Cash App. Head over to the App Store or Google Play Store, download cash.app and start #stackingsats today. Unchained Capital. Head over to www.unchained-capital.com/vaults and checkout their 2-of-3 multisig vaults. You get 3-months free of Saifedean Ammous' The Bitcoin Standard Research Bulletin when you sign up.

what's he have to apologize for who roger needs to apologize before anyone's gonna forgive him for shit okay do you think he ever will no he's never going to that's why it's a meaningless conversation what is up freaks welcome back to tales from the crypt it's your boy marty so you know i'm at discussing forgiveness uh before we jump into this episode a rabbit hole recap you know i don't know if i'd ever forgive either but that's the beauty of bitcoin you don't have to yeah they can use it no one can stop them yeah that's what's beautiful about it speaking of bitcoin the price of bitcoin right now is sitting at seven thousand five hundred eighty one dollars 41 cents pretty volatile the last few hours according to the trade block xbx index sitting

at black 579 565 according to my node right here and my mempool has 557 transactions in it right now about one megabyte worth of transactions uh we got a lot to talk about this week popping week how you feeling today matt i love the mempool readout that's a new one it's good yeah you know i gotta let the freaks know um mempool was empty last night about 17 hours ago you've been mempool watching the mempool watching yeah you know i gotta gotta haven't been sending any transactions just just observing um before we hop into the topics of today's episode is brought to you by the cash app you freaks already know all about them the number one app uh in the finance sector for the last two years in the app stores there's only two google apple uh app stores with the cash

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then stack some more sets again go to your local uh podcasting excuse me podcasting your local app store the google or apple app store and then obviously our second sponsor this week is on chain capital uh their vault program in particular if you guys sign up now you're going to get three months free of the save adina moose research bulletin uh and obviously you're going to test out their vault program which is a two is free multi-sig you can use your ledger your trezor and you can keep control of your keys at all time you have control two or three you can move your bitcoin whenever you want if you ever need unchained to come into the picture and sign that second key of that two or three scheme they will come in there for you and then on top of that

they're gonna let you access loans uh us dollar loans via the vaults going forward so check out those vaults at www.unchained-capital.com vaults matt there's a lot of that was a lot of ad read there it was indeed um i talking about the mempool i realized that people were talking about on twitter they were talking about cash app not giving you fee selection when you withdraw they just eat they just pay the fee cash app just pays the fee for you yeah they're eating that fee so it should be interesting as if as if as fees go up which they inevitably will um how quick they'll change that policy yeah i'm sure they're thinking that sure that's on the roadmap if they uh the team's smart they should be thinking of that because

hey in u.s dollar terms fees will probably go up i mean but that's great for people who are you know stacking stats and worried about transaction fee costs so just something to note yes definitely take note of that this week uh should we should we talk about san francisco first i'm so fucking pumped yeah so uh we officially locked down we're gonna end uh the bitcoin 2009 conference being held by btc media bitcoin magazine that crew uh looks like matt and i are going to uh end that conference out with a rabbit hole recap a live recording our second live recording ever uh we're pumped we're gonna do it on the rooftop there we'll be drinking fun vibes i'm sure everybody at the conference will be tired so we'll try to end it on a on a

high note there it's gonna be such an awesome time i'm so excited yeah uh you know last time we did a live recording the price went up 3x in five months it's true so this is a this is a very seminal event we we only do these very every so often when when the bitcoin when bitcoin needs we need the sacrifice of a live recording um so we're here to do it again last time five drink mack came out we'll see if he comes out this time around uh i think i think people like when five drink mack comes out on the live stage he kept going afterwards too um speaking of being drunk it seems like uh the kick team was drunk when they were when they were emailing and talking about why they were they were launching an ico so the uh we talked about

this last week um the kick has officially been yeah they hadn't gotten they hadn't been placed yeah they had not been sued but this week the sec officially sued them uh and the the court proceedings and the documentation that came with the uh with the suit uh highlighted a bunch of internal emails and communications that the kick team had leading up to the ico and it was pretty egregious that it was a cash grab of a faltering startup that was hitting the tail end of its runway of uh its its initial vc money money raising so a couple of the defend crypto partners have dropped out uh since taking their their association off off the website coinbase being one of them i forget the other circle circle being the other uh ripple uh hilariously is now

on the defend crypto website no it's not ripple i don't think i think it's errington capital right oh errington capital i'm sorry yeah which is ripple capital or something right xrp errington some derivative some subsidiary um i think it says ripple in the name though it's denominated in ripple yeah so it seems like uh i mean i read the court or at least excerpts from the court docs It seems pretty egregious to me that the way Kik was marketed or Kin, the token that Kik launched, was marketed was something that you would invest in and would accrue in value. Like they basically perfectly described a security in some of their emails and marketing material. I mean, it was really bold of them to try this. You know, I think that the SEC should stay out of it.

i i think it's not mutual you can think that they both can go fuck themselves it's not mutually exclusive um and can you know can go to hell they're obviously not defending crypto um and i i think it's funny that people are pulling support because we immediately you know saw through what it was last week before the they obviously didn't realize how bad this bad the case was going to be now and it's um what'll be interesting to see is who gets dragged into it obviously you have usv who's involved yeah union square ventures coin fund fred wilson coin fund which is around the corner so many so many were involved in this one so this is uh yes whether you again we're we're not here to i mean we definitely have our own opinions and oh do we

i have my i mean i do not care for kick i think what they did it was scummy it was uh trying to exploit an easy money grab it's pretty obvious and at this point and again like you said last week to claim that they're the the number one used blockchain in the world the most used cryptocurrency in the world just an egregious lie uh you know fred wilson's line was one of the most used and then ted livingston said the most used so they're both definitely both wrong but at least you know fred covered himself a little bit yes but with that being said like uh i don't like the sec is stepping in whether we like it or not we would prefer that that this thing just go away but it was expected of course yes of course they were going to come

involved so they are involved now and we're going to find out who gets dragged in and what precedence gets set so this is whether you like it or not whether you want to defend crypto or not the there will be precedence set here it seems uh and it'll be interesting to see who gets caught in the crossfire yeah i mean i feel like this is probably just the beginning it should be it should be interesting to watch play out oh and they've raised like no money they they seeded it with like their $5 million, remember like $2 million in ETH, $2 million in Bitcoin, and $1 million in KIN, I think they received like $2,000 or something like that.

Yeah, something like that. And the value has gone down because it's crashed since the lawsuit. Yeah, so it doesn't seem like many people want to defend crypto with that team. Again, like we said last week, that's a tough, quote-unquote, industry leader to go into battle with the SEC with. yeah i mean fred wilson said that he personally donated to defend crypto so like he didn't donate that much if it's like total i don't know anyway um they they see it seems like they're fucked and i don't know why they wouldn't want to settle uh it seems like they had the opportunity to

settle uh none of it really makes sense to me so we will you know watch it play out but uh it's worth reiterating that the whole point of bitcoin is is that an sec lawsuit couldn't you know take it down but these centralized decentralized coins are super easy to take down you just need one legal action yeah it's uh that's why we're lucky satoshi left there's no central figure they're lucky sort of it has taken a while for the regulators to even come to understand this technology and i don't think we're completely out of the woods yet but bitcoin is probably the most the best position to to succeed uh on its path towards uh robust decentralization and therefore uh protection against the state i mean i feel like we have like we also have like

all this political cover from all the altcoins um you know like who they're going to go after first they go after kin first right then they go after tron see andrew yang with uh charlie lay yeah i did charlie is such an innovator i um such an innovator i couldn't help but be impressed i was i was i was i was pretty i was pretty impressed did anyone check if if like when price went up uh let's check i mean like the listeners know how i feel um on that respect but i was i chuckled when i saw it to innovate just to change the the script are you on like cut the block time in a court by four uh increase the supply by four it gets very innovative what did the tweet say i just said uh it was great meeting you he didn't tag litecoin in it right

no i tagged satoshi light satoshi light it was great meeting satoshi light and then they had like a picture of them standing next to each other yeah something about being an innovator yeah did the price go up and no this was like today that price has gone down or it's flat did the yang thing happen yesterday or today i'm not positive either way it's like flat flat to down um oh by the way if you do or if you if you do plan on buying tickets to san francisco our our discount code is TFTC25. You get 25% off.

TFTC25. Make sure you use it. We're a very low time preference here. We want you to save as many US dollars as you can so you can stack more stats. TFTC25. First 100 person coin join. We talked about it almost

happening a couple weeks ago. Yeah, you were right. I thought one had already happened, but you were right. It hadn't happened. But now it officially happened. So it's becoming more – is Wasabi going to join, I'm assuming? Yes, there's Wasabi. Yeah. So Wasabi is becoming more volume coming on to Wasabi, more liquidity,

more potential pairs to join. 100, though, still rookie numbers, right? I think there's a cap on 100 for some reason. Is there? I think there's – I think that's – I'm not sure if they can go higher than that. but uh i might be wrong but anyway 100 is great uh as more people use it we'll be able to hit that number more times um obviously the more people that are involved in each round the better it is yeah and this goes hand in hand with our next topic which is 6102's bitcoin huddle privacy

um oh this is great yeah 6102 bitcoin on twitter uh put together this quick little overview um different ways you can leak your privacy that people don't think about you know like going on a block explorer and looking up an address and um the one we've been talking about a lot you know if you use you know treasurer ledgers uh in-house wallets that they use their servers so you leak your keys that way and he tells you like different precautions you can take and stuff like that yeah and that yeah and it's again it's not easy yeah there's a lot of boxes you have to check off before having confidence that you're transacting completely uh in private or with as much privacy as you're expecting um one thing what is the open source explorer technology called from

blockstream is it l2 no esplora esplora yeah so you blockstream they open source their uh their block explorer stuff so if you want to create like a local block you don't even have to go that far like i mean that'd be great but but you can also just first of all blockstream.info says they aren't tracking you but like you know you have to trust them in that regard second of all you can connect to them through tor or if that's still too much for you like you can just get a vpn and connect through a vpn um and then that's better than than not like one of those shared vpns like a mulvet or something like that yeah that as well and if you want to go completely like hardcore cypherponking you like use the esplora open source stuff make your own no yeah

i agree and i i think noddle is going to put on a block explorer too which should be pretty dope yeah um i just don't want to i one of the nice things about this is he tells you like simple he tells you like simple solutions he says use tor you you know use the tor browser use careful browser plugins so it's so people shouldn't feel overwhelmed you know there's no such thing as perfect privacy at any time you can leak leak it so it's just like a constant battle just to like be more private you have to just like um but the every little thing you do helps you know so don't get discouraged because you think you can't do it perfectly no one can do it perfectly yeah no it is um you think this is all going to get easier yeah but it's never

going to be easy no i don't think that's something we harp on a lot um but anyway we'll post a link to this overview i just thought it was a good idea to uh chat on that yeah no wasabi wednesday still still rolling on uh they're rolling strong yeah bull bitcoins officially turned on doing that um so yeah coin join if you can it's getting easier they're making it easier with the hardware wallets they now have the pin did we talk about that last week what uh for the yeah the treasure one yeah i really think the treasure t is such a big upgrade from the treasure one though oh i do as well yeah um but yeah they added support for that wasabi usage just keeps growing so that's really good to see um next up this was pretty creepy uh amazon ring the uh the camera their

nest uh product so the cameras that you can put on your doorbells your doors in your house uh it's basically turning into a quasi like residential surveillance system cctv type thing it's so fucked up and the the police officers are the police departments are subsidizing it they're offering neighborhoods like discounts so that people install it in their home and they're getting access to it um yeah and a lot of times the police departments require access to it as part of the discount so you like agree to it so they just can pull so they they just have like cameras all through residential neighborhoods everywhere just like recording and connected to the internet and people are choosing to do it yeah people are bringing they're randomized to

following the uh the pied piper but do you don't want you don't want your community to be safe marty matthew i do it's just doesn't have to come at that cost that weird neighbor marty over there is he's he's such a creep he doesn't he refused to put the ring doorbell in like all the rest of us what the hell is he fucking doing over there that he doesn't want to put his camera in he can't be that he just likes privacy and doesn't want people creeping on him he's gotta be doing something bad i think we talked about this in uh in rhr with uh bitcoin sign guy but that i think this is one of the reasons why i think if you want real privacy in the future you're going to have to like live in communities that focus on privacy yeah no again it's like 23 and me you you have

the people who don't think about the consequences of those actions just diving headfirst into uh into products that uh basically cede their personal liberty and privacy uh over time yeah I mean, like imagine if you you just bought like a brand new house for because you're because you're, you know, about to have a kid. Your wife is pregnant. You just bought a brand new house. You're living there for like three months. And all of a sudden, all your neighbors install cameras pointed outside their front doors, like on the streets and everything. You just automatically your whole house is just like blanketed.

And so it's not even your own choices. You know, it's what everyone else is. And there was another story on YouTube this week. i don't know if you saw this not on youtube about youtube where people are posting like family videos of their young kids on there and like google and youtube's ais are like picking it up and like feeding these random family videos of toddlers to people watching other really weird videos um it's like even like just posting like stuff that you do post on to these websites into these these data hoarders these data silos like that data is getting used and and fed to people

in weird ways there's a thread on it uh there was a good thread on it on twitter i'll share it it's weird like some random family videos are getting like 400 000 views because uh because of google's ai yeah that's weird yeah i mean i mean the parents should just like that's kind of on the parent you know the parents should just switch that to private yes um i always get kind of skeeved out by the the public online postings of children yeah yeah again just putting that in public just because like i feel like it builds a better facial recognition too yeah we've already talked about you're basically like doxing your kid at three or something we're face fucked we've already we've already given up on that especially with the ring cameras right being installed

everywhere uh it's fucked up it marches on though is it inevitable are we just gonna like have no it's not inevitable it seems like it is man i think we just need more breaches we haven't like we hadn't we haven't had the proper proper fuck-ups yet nah and then people learn yeah but it's coming it's coming there's been like i'm pretty sure like some of those not ring in particular or nest in particular but some it's like baby monitor watching tech has been like hacked and oh all those things especially like the cheaper ones and stuff are like some of the most pwned devices they use horrible like wireless security standards and

everything yeah yeah some people are just literally live streaming their kids in their cribs and they have no idea the dark net yeah because i probably know some people that are it's fucked up uh on the on the more optimistic things the initial rollout of watchtowers uh has started from lightning labs watchtowers is uh is been much waited for sort of upgrades to the lightning network because right now uh you sort of have to trust that people on the other side of your channels aren't stealing your bitcoin especially when you're offline and the watchtower sort of helps uh keep everybody in check especially if you're nose protein to go offline and stuff like that thanks explain that yeah that's um yeah watches your channels for you if you're if you go

offline yeah and i guess their plan is they start it off free then it's like a reward-based system and then after that it'll be like a paid service so people will run watchtowers and you can run it for your friends or stuff like that and then they they can pay you or you can give it to them for free yeah um and the biggest requirement of a watchtower besides being always online obviously uh is is the regular lightning node but also increased storage space because you have to store all the channel states that's uh so the watchtower stores the states for you you store it too yeah but just in case you're offline and the other party tries to maliciously close the channel with a different balance than it currently is at um the watchtower will intervene

and do the penalty transaction so so just the fact that watchtowers exist should reduce the chance um that anyone would even try to make the move anyway even if it's not actually protected under watch it kind of creates like a herd immunity you know it's uh like like we said it's something that's been waited for for a while lightning labs has gone out in the wild now so slowly but surely it's getting built out getting more usable uh becoming more robust number of channels i think i saw hasu tweeting about this the number of channels and the uh lightning network has gone down recently but the number of nodes is going up which is probably probably a good healthy sign that people are creating less but bigger channels i think ellen big has been uh downsizing has he

yeah or she or they yeah i think it's a he but i'm not sure he's on twitter she or they is on twitter um why do you think he's downsizing do you know he said on twitter he was like heads up guys i'm taking i'm closing this many channels he's like people who obviously weren't using his channels he he was closing their channels doing some cleanup and it was nice that he gave a heads up on twitter so he's not as nefarious as some people once thought yeah no i yeah i don't think he's i yeah i don't think he's nefarious but we shall see yeah um gonna go along with second uh second layer scaling tech this week monday i believe ruben sobson who's based out of soul he runs the bitcoin soul meetup he released his proposal for state chains which is

another second layer uh scaling solution sort of which complements and augments uh lightning network and liquid it is uh wow how am i gonna describe it so it it allows you to exchange utxos off-chain and uh basically what it is is a two of two multi-sig setup uh one of the one of the keys which is held by a state chain entity which is a group of people that have to sign an n of m multi-sig for that one key in the two of two so you you would have like a an entity of 15 people seven of which would need to sign to sign the second key and then the other key would be for users and they would pass that private key along um and the the uh state chain entity sort of keeps track of who has the other private key at any point in the chain um and and basically the

the uh benefit here is again you're able to to exchange utxos off chain yeah this the the big thing is that it's a different layer to network yes right that's what that's what's going on it's a proposed additional layer just like we have right now we have liquid and lightning in operation this would be another option yeah i'm pulling up the article now so i can uh the uh the trade-offs are are different the lightning and and liquid so with lightning lightning is completely trustless um and where is this yeah so lightning's trustless and censorship resistant uh state chains are not necessarily not trustless because you need the state chain entity on the other side there um but if the state chain

entity decides not to sign the 202 multisig you can always use their private key to get that uh get that bitcoin on chain so it is trustless but you always have that fail safe you can back out you can back out of it if it's there um and another trade-off with state chains is you can't easily split utxos like you can in lightning channels and stuff like that um so this helps add to privacy um and and takes a little burden off of transacting on them on the main chain as well you can change the channels at will right that's one of the advantages yes the channel so you just pass the key along yeah at will um if you want to so that's cool interesting and then liquid is is more centralized yeah look it's federated model so it's like kind of similar to

like a ripple-esque thing but built on top of um built on top of bitcoin yeah and the downside with liquid is it's a little bit more expensive um but you get the benefit of confidential transactions yes which hide the balance amounts yeah so it's um again state chains that sort of came out of the blue for me apparently rubin uh presented at breaking bitcoin last year this was the first time i was hearing about i just thought it was interesting it's uh again it's an alternative and also a supplementary tech to lightning and liquid and stuff like that another tool in the toolbox exactly another tool in the toolbox it's just a proposal at this point i don't think it's been implemented um but it's out there look into it we'll link to it but out of all three lightning

transactions will probably cost the most why do you say that because it's it's like the most the most trust minimized and the most um has the most value from a most censorship resistant yeah so it'll probably cost more because well liquid definitely will cost less than lightning because liquid is you know you know they make the centralized trade-off they get more centralized and they get cheaper um cheaper fees in the long term this is actually reminds me um i wrote a last week or no i wrote a i tweeted out last week about bitmex and their uh their 9 a.m withdrawal we've been talking about that forever people are talking about we're talking about forever and bitmex came out and a couple traders on bitmex i believe suzu came out and

people are like oh they need to batch they need to do all this and that and uh what what we've come to find is it really doesn't matter if they batch or anything the traders on bitmex are trading at such a volume that they're okay to pay 0.01 bitcoin fee just to get their money on another exchange to guarantee that it gets there so they can trade on other exchanges but they're adding liquid right yeah bringing it in because they're adding liquid which will severely reduce uh that burden all the arbitrage anyone going from exchange from bitmex to another exchange won't even have to go on chain yes and their balance amounts will be hidden yeah no but it's crazy um like we a lot of people like to talk quote unquote about uh

like good use good usage of the bitcoin blockchain and people uh will sort of like say any use case is a good use case then they're yelling at bitmex because they don't think they're batching and it comes to find out it's just the traders on bitmex like willing to pay more um so maybe like the beginnings of a natural fee market developing because bitmex give you gives you a choice of fee yes i think yeah yeah um i mean i like that bidmex sends it out at a specific time of day i think that's just smart security practice um i also i mean look they said they're they're going to do liquid they said they're trying to to go full segwit um they were one of the first i think to go uh wrap segwit the three addresses and this week they just uh

their holding company or their their capital management company wherever they have donated to the mit blockchain initiative um digital currency and digital currency digital currency institute that was what we had a look of last time uh which is support which is paying to support bitcoin core dev so shout out to bitmex for that as well yeah that's right and the the founder that i met the co-founder that i never heard of before gave to the giving pledge oh really yeah the you know half your wealth by the time you die or after death i didn't i didn't see that that's awesome yeah i forget his name again it was the first time i've ever heard of him he's got great opsec you only know about arthur right yeah weren't they like college i think isn't it

ben dello i think his name was ben dello weren't they college roommates or something or working at desk somewhere honestly i don't think anyone would have noticed this guy gave to the giving pledge but the block caught it because it was just posted on it was posted on the giving pledges website with like 17 other people that also you know super wealthy people that built i think billion i think you have to be a billionaire that is given to the pledge and they just like put like a little blog post with this picture and it didn't say anything about bitmex and the block just put the two together it was great hey the block was just like not doxum if he wants to be like under the radar that's true i tweeted it out so now you're making me feel bad what the hell matt

you're making me feel bad whatever it's gonna get out there obviously people knew about it yeah good for you ben yeah that's pretty stand-up act i think that's good pr for bitcoin it is no again we've we've blown a lot of smoke up bitmex's ass on this podcast before i guess again i think they they back up what they say and going back to the fee thing like that's the other you have a lot of a lot of people have a lot not you not you at the end of this this audio but people have a lot of assumptions uh about how these companies are are operating specifically with how they're sending their transactions and it turned out there was the users uh using the blockchain in a certain way in this case um yeah i mean they can still do

some better practices but uh you can always get better yeah you can't expect everybody to be perfect at every given point exactly they're pretty good about it yeah and the bitmex research is freaking awesome bitmex research is dope they're running nodes they're testing out lightning network they're testing out the uh like the lightning network reference rate stuff just to see how much how much money rounding nodes can make they're they're they're getting their hands dirty yeah our notes connected to their note i uh what i thought was uh really funny is when i tweeted about um the co-founder max giving to the giving pledge someone responded like when contribution to core devs and then it was like an hour later bitmex announced that they were

contributing to the digital currency institute pretty funny i didn't know uh digital currency institute supports uh vladimir and someone else yeah is it is it cory fields maybe i think so yes i'm not i never knew that i never knew that uh yeah it's pretty cool he was funded by mit shout out to mit shout out to everybody supporting bitcoin core dives out there uh oh talking about bitmax polo who has margin trading like right before right before we went live yeah um they offer like the shittiest of shit coins or margin trading i didn't even know they did this yeah so poloniacs we've talked about them before they're one of the they were one of the kings in the 2014 altcoin casino craze they were still big in like 2017 early 2017 yeah

big until then but they're yeah they got their legs in the 2014 craze and have since been pretty neutered uh acquired by circle uh sort of have the the regulatory shackles thrown on them here in the states in particular and today uh they had some it was scheduled maintenance planned maintenance planned maintenance they went down um and they came out announced it on may 26th uh fucking eight days ago eight days ago due to uh high volume and uh excuse me high volatility and uh just a huge crash huge crash and the price of clams have you ever heard of this token do you know yeah clams is like old school clams was one of like the first oh it was the airdrop one yeah that's the same clam i'm pretty sure different one this is just called clam it's not clams it's

just clam i'm not sure then it might be the same one but it's the shittiest of shit coins if it's that one yeah and they're trading it on margin they lost 1800 bitcoin and their margin lending uh book ridiculous it's ridiculous this is a highlight that shit coins are are highly like they make your exchange highly susceptible to losing a lot of bitcoin like yeah because illiquid fucking shit coin market and so then what they do is they wait eight days i guess they're trying to figure out they close the accounts of the traders that owe them money obviously they wait eight days they while they try and get the money back they wait eight days they go down for a so-called planned maintenance they take off five four other shit coins i think

they're like made bit shares is on there how bit shares are you fucking kidding me made safe are you are you ridiculous brought back some mems and then the other two what are the other two i don't even know who they were i like didn't even recognize them those are the two i remember let me find them uh and then they open eight days later they go down for so-called plan maintenance when they come back online every all the margin traders got a haircut of 16 it didn't matter what position you were in if you were lending if you were trading whatever every margin user got a 16 haircut and they said like if they get the users to pay them back the money they will they will you know compensate them shit coining not even once freaks

planned maintenance is like the most overused term on exchanges crypto twitter on from the exchanges because it just freaks me out every time i see it now so it does the opposite of what they're hoping to do exactly it's been used so false like falsely so many times no but let's drive home the point here like every margin trader on that exchange was affected because they were running books on illiquid shit coin markets even if the trader wasn't participating in those only non-us because they didn't offer margin to us users yes but still and they like said it's only 0.4 percent of users just to make you feel better about it or something yeah not your keys not your coins right now your keys not your coins and if you're building a business out there just

be wary like your threat model has to include these especially if you're running an exchange like these illiquid markets uh have to enter your threat model and you have to weigh the opportunity cost is it worth it in the long run is it worth losing 1800 bitcoin it's not i wonder if it's not a small amount someone made a lot of money on this you know did we talk about the uh the kraken quote-unquote hack where kraken didn't get hacked somebody's account got hacked when it when it went down to 100 on kraken last week do we ever figure out what that was the bitcoin market went down to 100 the bitcoin canadian dollar market on kraken oh yeah yeah that one yeah yeah someone said it was like this would be if this is where this is all

speculation but that doesn't make sense to me because kraken has kyc and they could just lock the account that got it someone market sold uh a bunch of bitcoin so like 45 bitcoin to crash the canadian market then sold allegedly sold themselves the 1200 bitcoin from one account to the other account to move it or yeah because there was a stink bid for 1200 bitcoin sitting at 100 so the guy crashed the price with like 50 bitcoin and then sold the rest to himself is the theory yeah The theory is he got a hold of somebody else's account and couldn't withdraw from their account. So he pulled this trick off to get it via the order book.

To send it to the other account. Yeah. But my problem with that theory is Kraken could see that super easily and just lock the other account. Yeah. No, this was a Bitcoin market, a Bitcoin-Canadian dollar market, which you'd think would be pretty liquid comparably. I mean, who's trading in Canadian dollars?

You know, like, why wouldn't you use the U.S.? Right. i feel like even yeah i i don't maybe they don't have a lot of canadian users you know this is why like why separate why you know sometimes fewer markets make more sense yes i don't argue these two cases keep them more liquid yeah um but i don't think i don't know i'm not sure about the specifics of that story is it cracking or bit stamp we could be talking about the wrong and polo also has full kyc that was cracking it is you're correct that is cracking Yeah, this is the risk you take when you, you know, trade on these exchanges.

That's why stacking stats is so awesome. Just follow BTC seminars advice, Bill Burden, our old, our old hodling comrade, our 70 year old comrade, hodling strong. But anyway, I feel like that's kind of fucked up on Polo's part, but it should be interesting to see play out because like I said, they do have KYC, I'm pretty sure, on their users. so they they might be able to claw back some of the funds it should be the users class action or no uh that's what they said that's what they're gonna go after the users like hey the users that owe the money they're gonna try and collect you know we'll see how that goes um oh this was a little under the radar this week too i think samurai dojo officially uh open

source this is huge very very big this has uh been a very uh big point of contention when people are talking about samurai samurai wallet in particular because up to this point uh using their dojo machine like even using their wallet um you use their server you had to use their server which gives up your public keys to them so and your ip until they then they instituted tor so then at least you weren't giving them your ip but you were still using their server yes and now they have dojo which allows you to run a node at home that your that your mobile wallet is then linked to um and they open sourced it and they open sourced it and they packaged it easily so you can just run it on your own hardware if you have a computer at home you can just run it or you can

buy um they partnered with bitseed bitseed to sell a node in a box as well yes um so shout out to samurai team huge huge step for them they can finally get that 800 pound gorilla of people saying they're not completely trustless because of the server and yeah so if you're going to use dojo let's use it the right way and this node it's dojo is a big deal especially because they're rolling out their coin joint implementation whirlpool um and it needs a place to run because mobile isn't ideal for that so you run it on your dojo and then you connect back so you can have mixed funds easily in your samurai wallet like ready to go yes fucking awesome so uh it gets a little bit easier to run a node it gets a little bit easier to take your privacy into your

own hands it gets a little bit easier to use bitcoin like street money as the samurai team likes to refer to it bitcoin is street money i like that framing street money yeah bitcoin is just all the money it is all the money um and then yeah so like this is like the last two weeks in particular i think i've been like really under the radar cool uh sort of progressions from a Decentralization standpoint That you want to look for So we had the early proposal that came out Which would greatly reduce

The bandwidth burdens We had Goten and Blockstream Come out with the satellite collab that they have Allowing you to use the mesh network And satellite to receive transactions And data We had state chains That we talked about earlier

We had watchtowers Go live and then now um we got samurai dojo which is making it easier to be private and uh run your own private node your house now we have u-tree xo which was also noddle noddle we have casa we have pierre's node launcher but i'm talking these what i was just describing all happened in the last like three weeks in particular yeah that's pretty crazy yeah and uh and now and on top of that u-tree xo which uh thad dry dryja dryja i'm not good at pronouncing i'm pretty sure he's at mit as well um he actually covered the lightning network paper uh he came out with a u-tree xo proposal

uh to help read which would help reduce the the uh the uh storage burden of the utxo set um so making again making it even easier to run nodes and the the storage of utxos on your node storage is less but bandwidth is higher bandwidth is higher but he believes with some accumulator tricks it will be uh not tricks but use some sort of accumulation methods uh to to make it a worthwhile trade-off the cool thing is you can implement it without a consensus change with bridge nodes so like nodes that run the compact set and the full set at the same time yeah because what it that's sort of the crux of it is it uh it's separates the state from the holders of the bitcoin hold most of the data yes on their own side and there's a compacted

version held by the node. So to run it without a consensus change, you would have to have a bridge node, basically, that had both. So if you were running a compact node, you would just connect to the bridge node. It's interesting. Very interesting. And none of this is, or some of it is, but not all of it is foregone conclusion. A lot of it is just proposals. But again, this is the boring shit I like to look for and it gets me exciting because again if any of this is going to be worthwhile or going to happen we need to make it so people can i think i'm a strong believer in that we need people to be able to run cheap hardware to to make this dream of ideal decentralization come true yeah accessible

yes you saw somebody download a bit uh bitcoin d on uh nintendo switch this week to vivek yeah on twitter yeah someone was like uh facebook requires 10 million dollars to run a node bitcoin hold my switch but i would never want to run a note like ubuntu on a nintendo switch why just the touch screen and stuff is like kind of whack yeah i've never i've never touched a switch it's like great it's a great video game console i haven't gamed in a minute are we starting are we starting a twitch channel that's what that's what uh tasha wants to do maybe we'll do it um i've got a couple more here buy stocks and ets with bitcoin using abra in 150 countries i feel like this one kind of

under the radar outside the u.s um basically every country except the u.s if it's 150 right yeah i think there's yeah he said 150 plus so it must be like 151 yeah so that uh abragon global obviously you're holding like derivatives of it or something yes but you're getting exposure and 50 50 different tickers some are etfs some are actual companies i think he has amazon in their tesla it should be interesting to see what the usgov thinks about this yeah so starting today investors can use bitcoin to make fractional investments in stocks and etfs with zero trading fees so it's even different than robin and robin you have to buy whole shares it seems like you can only buy parts of shares here honestly i could see this being

like really desirable to people outside of the u.s how i don't know is is it is it difficult to buy like u.s stocks if you're in europe without a license maybe i would imagine i mean i imagine it's definitely difficult in like vietnam or something if they have like a td ameritrade broker over there i bet you could get access to us markets through that and i'm sure that exists yeah probably but um i imagine this will boost accessibility for some people you know like in the in poorer countries or something like that yeah countries where they don't even have bank accounts maybe they have a lot of bitcoin they want to diversify the stocks probably not though it's not they i'm just like trying to

think of the target market i don't know it's these are the these are kind of cool things that you can enable with bitcoin because it's just a better money um but because it's a centralized company there's going to be i'm not sure like if the u.s government was fine with this then we would already be able to you know people across the world would be able to trade in u.s stocks with like paypal or whatever their payment method is yeah yeah so we'll see uh we'll see what the u.s government thinks about this too it's been but abra's been getting away with this sort of stuff for years now not getting away with they've been doing it successfully um but not like this i feel like this is a little bit more brazen yeah i'm not sure i don't know i have like

i strangely just have i have like no opinion about abra never use their product i like just there's no negative opinion of it i have no positive opinion for it i'm the same way we got to get bill in the studio was lined up to speak with him the last time i was in san francisco But we had to reschedule Hoping to get that rescheduled soon So we'll pick his brain about that I in the same way Admittedly

Have never used it And same very neutral feelings Like what is going on at Abra Last topic of the day Seems as though The alarm bells are going off In the U.S. economy

And the Fed governors are starting to posture that it may be time to cut rates again uh so that's what i wrote about in the bent today wanted to touch on it here rabbit hole recap it's uh something to look at we kept rates below 25 bps for seven years hitting a low of seven bps at one point we have since raised them since 2016 from about around 25 bps we've gotten all the way up to 2.24 percent i believe so 224 bps and now it seems that the interest rate will not go much higher as the trade war there's always an excuse uh the bullard from the st louis fed came out earlier this week and said due to the trade wars and um fears of the the uh sort of fallout of that

it may we may see a rate cut in the in the near future um do we know like how much i don't know i would ponder it probably started like 10 to 15 bips 15 to 20 maybe and then just keep going down just keep going down depending on how it reacts i mean we've talked about it for a while i get i wrote about it last week too the macro landscape we this was this happened after we talked last week with the witcher bank stock hitting all-time lows like heading to penny stock territory it was below six dollars at one point and at the same time the german 10-year bond was negative so you have germany's number one bank and their 10-year somewhat long-term bond duration negative so anybody who bought

a german bond last friday was expected to immediately lose money on that um that's fucking crazy yeah and so it seems like there's there's warning bells going off in the world economy not just the u.s the fed posturing is probably not only looking at the trade war they say they call and blame it on the trade war but obviously there's other things going on beyond the trade war another thing to look at is a lot of big fund managers are getting uh redemption calls there was one uh historic fund manager let me see if i can pull this up real quick i don't have it here but um but if they if they cut rates like everything will just get extended

right it will well that's the question so for the last 30 years excuse me 40 years on this shit since the 1980s the fed funds rate which is the rate we're talking about here has hit lower highs and lower lows on its way to close to zero which so between 2008 and 2016 we were close to zero for that for that almost 10 years and now before that the the fed funds rate reached a peak of like around six percent like in 05 06 and but we'll never like now if we keep going down the question is will we ever go back above 2.5 and will we go down below zero so that's the question is do we break the x-axis this time never go back up it's if you look at the chart it seems like yeah it's maybe just crashed the markets right yeah well yeah essentially you wouldn't be able

to pay back the interest owed on the debt after a certain point because the liability has become too much so that's so we're heading in it seems as though i'm going to ring the bell here it seems as though we're heading towards another easing cycle and rates are going to drop and again like i said last time the low that they dropped to was seven bips seven basis points can't get much lower than that and i've been harping about the normalization of nerp in the mainstream the imf the ecb uh ken rogoff you name them they're all slowly but surely trying to normalize nerp get rid of cash yeah well with cashless societies well they've even figured out how to tax your cash to make nerp happen with like a cash society maybe libra is the answer i don't

know dude maybe facebook is going to create the one world currency backed by a bunch of world currency zuck the much maligned misunderstood tech leader is here to save the world i think it all really comes down to whether or not they call it libra or global coin like if they call it libra then it has like a real shot here you can pull it off they call it global coin like it's fucking dead in the water it's a horrible name what they just completely go right field and just call it face coin face coin face coin face i'd be i'd be about coin face coin face um point face me bro so so some more details leaked about facebook's coin upcoming coin 10 mil a node brah yeah 10 million a node they're aiming for 100 nodes now what's interesting is

the source is the information.com is the information like a magazine or newspaper or something it's uh internet it's a newsletter but a very high-end newsletter okay so the information got this leak according to people familiar to the matter um 10 million dollars per node targeting 100 nodes so that's a billion dollars and then they use that billion dollars to back the coin the basket of stuff currencies and stocks um it didn't make clear if they called it a licensing fee so i met they're paying 10 million dollars a year is my guess right it's not just a one-time licensing fee seems like something that will be paid again in the future yeah is it one time no one no like i don't like how do they add to the backing right

are they so if they do 10 million a year and then we don't know how the token is issued so they might it might be 10 million but then you get issued 10 million in the token at current market value or whatever and then every year you add another 10 million so it's not maybe it's not a true stable coin like it's not pegged to the dollar but it's it's like it's got a float it's like a stable coin in the more true sense of the word and that it holds a basket of shit i want to call that a stable coin either i know but you know i'm saying like in a theoretical like the those the theoretical economists like that's what favorites isn't that what banker was all about or basis no it's banker yeah that's what i'm talking about shit like that yeah so banker

was like one of the biggest icos at the time 2017 it was one of those summer 2017 icos that slowed down ethereum chain but that was their their idea but it would be a basket of cryptocurrencies but they i believe they eventually wanted to extend into commodities and in traditional markets as well yeah i mean i mean maker does backs it by just ethereum and they peg it to a dollar right this seems a little bit different because it's a basket i don't know you know i i and and how that how the licensing fee for the node is paying for the basket is is an interesting move you know i don't once you buy a node and pay the licensing fee do you have are you able to dictate or vote for how the chain like we've never seen this we've never seen

a stable coin with its own chain before right no so and it's not just money in a bank account do we think facebook can pull this off like when you issue new tether you you give them money this is theoretically or like when you get gemini usd you give them money then they print more gemini usd and they send it to you and put the money in the bank account it's like super easy to add more to the supply to keep it in the peg but how do you do that with the basket and if it's 10 million licensing fees every year and they're adding that into the basket then you right wouldn't you imagine like how do you dictate what the supply is we don't know what the supply is going to be yeah because you'd be forced to go invest in new markets right but you could deploy a billion

dollars a year essentially right and and yeah what do you deploy that in well we already see like how do you decide that don't we already see central like isn't the bank central bank of japan like buying equities and stuff yes well the central bank of japan owns 75 of the japanese etf yeah exactly so it's kind of like that right so this is gonna be facebook just buying up the like a separate fed almost yeah see i think it comes down to so it obviously doesn't compete with bitcoin because it's going to have no censorship resistance whatsoever but it is going to have strict kyc because facebook already knows everything about you so it's they're perfect for it um and they have like this quasi decentralization like this vote like 100 notes um

so so maybe the you know maybe the u.s government will look at them favorably and be like this maybe this will hurt bitcoin even though i don't think it'll hurt bitcoin maybe it'll compliment bitcoin even maybe they'll turn a blind eye and let it happen but if the u.s government nips this in the bud then they just can't even do anything they can't even launch it to begin with you know that's the uh the big question is the the cambrian explosion of private currencies make its way into the tech world and will the u.s government put up with it and then even if the u.s government lets them they still have to probably fight with all the individual countries to even allow their users access obviously india is not a fan yeah uh oh facebook's coming in with their

own you know currency interesting i'm excited to watch it play out i really hope they choose libra i'm looking forward to libra the standard are the rumors that they partnered with the for this trip is that a rumor so i didn't hear that there's no way of course he's like launching a coin right after they launched their stable coin or whatever. And he's naming it Libra after Gemini. I hope he names it Libra. Supposedly in the source,

they were talking about how everyone at Facebook has open floor plans and stuff. And the whole Libra team is in locked offices that you can only get if you have special permissions and stuff. Hey, if you're on the Libra team and you want to talk, hit us up.

You might just yeah you might just be bored and just going for it man risking it for the biscuit we'll see uh in my opinion facebook does not have the best uh brand value right now on the market it's got a black eye if you will now the big one's whatsapp and it's got great fucking brand value it's true that is true and instagram it probably shouldn't but it does and whatsapp is the developing world's messenger man oh i worked i worked for a company based out of ecuador like five or six years ago that's the only way we communicated exactly yeah that's the killer that's the killer for their for their coin at least i think yeah um you build the wallet right

into the app they already have the phone installed on there and then you pay off merchants to accept the shit with your one billion dollar war chest a year yeah just think think of who you want to see this control to freaks do you want facebook controlling this currency do you want marcus zuckerberg controlling the currency of the future or do you want an apolitical uncontrollable currency like bitcoin oh i saw a fun conspiracy theory let's rip it um so fuck is gpdr or is it gdpr dread pirates no no the regulation and oh gdpr gdpr in europe was the privacy regulation um that said facebook couldn't do a bunch of stuff unless the user opted in so a bunch of users all got opted out of a bunch of facebook stuff right but now

that they're launching this token they're going to probably give it to their users for free and they'll say to them you know to to get the token you have to opt into all the shit and then once they go on a public blockchain facebook isn't directly collecting the data they're just observing the blockchain like along with the other nodes so they can get around the regulation financial panopticon being developed right in front of our eyes people be aware just be aware just be aware just be aware it's happening it's inevitable and again like you said it uh does not compete with bitcoin in my opinion but it will be not at all will be interesting to see if um if it gains traction and if so how quickly and if so do they get into trouble with the government

yeah i mean i'd be really worried if if i if i like own bags of centralized shit coins like why would why is someone going to use ripple um if they have this and it'll probably be even cheaper than ripple yeah and everyone already has whatsapp yeah yeah just things to ponder also something to ponder this is the 31st anniversary i believe of the tiananmen square massacre that was this week 31 years ago um patrick chanovich is somebody who documents that every year i'll share a link to that um but again it's like something that's why we're on bitcoin trying to avoid the digital panopticon uh yeah you still can't search it in china still can't search in china you get blocked from wechat if you post about it yeah um so trying to avoid

that situation just be aware be aware of all these things that's why we're here shout out to our one contributor uh donation of the week for a hundred dollars some uh it's not random anonymous donator we have no idea who it is yeah and uh thank you everybody using the dime bag that's so fucking cool i wonder if it's because we said last time that we love that we could just get anonymous donations and have no idea who yeah hey it's still it's still possible privacy conscious donation tftc.io slash contribute if you guys want to get a shout out on here buy us a bottle of whiskey just throw us a hundo we're accepting um and every contribution goes a long way this stuff's getting expensive with the newsletter the website hosting getting more

gear for this stuff it's not cheap especially as it gets more popular which is a good problem to have yeah i mean look we're flying to san francisco yeah oh yeah tftc25 for the bitcoin 2019 conference i'm so excited for that yeah so we're gonna be there top man we're gonna yeah we're gonna be doing an episode live in person again the first one we did on january 3rd was bumping i think we had like 60 people there we were like at the bottom of the market yeah um even even so it was just great vibes with the live shows we like to make it interactive so we'll have you freaks throw some topics at us we'll riff on them it's more of a conversation with you guys than uh than us pontificating between each other yeah i think we're gonna

have like guests cycling yeah it'll be good it'll be fun we'll all get drunk yeah um that's all we got this week freaks you got anything else matt um what was the sign off i gave at the last live show when you tuck your kid in that night just ask yourself do i have enough bitcoin you don't want your kid to look at you in 10 years and say daddy how come we don't have any bitcoin hopefully you don't have to say people were mean to me on twitter peace and love freaks cheers