TFTC: A Bitcoin Podcast - Rabbit Hole Recap: Week of 2019.12.16

Episode Date: December 19, 2019

This week Marty and Matt discuss: - Bottle Pay shuts down rather than implement KYC per upcoming AMLD5 regulation - Binance Singapore allegedly flagging accounts that CoinJoin after withdrawal - Phoenix lightning wallet by ACINQ launches on Android - c-lightning 0.8.0 released - Wasabi Wallet V1.1.10 released - Coldcard firmware 3.0.6 released - Ronin UI for Samourai Dojo - Trace Mayer on CoinJoin usage - BTCPay integration with M5Stack - cheap point of sale option - Alex Gladstein in Coindesk, Quillette, Tor blog - Polo adds no KYC option - Direct deposits delayed nationwide due to Fed glitch - NYTimes report on location tracking using phone apps Shoutout to this week's sponsors. Cash App. Start #stackingsats today. Use the promo code: "stackingsats" to receive $10 and contribute $10 to OWLS Lacrosse you download the app. Unchained Capital. Head over to www.unchained-capital.com/vaults and checkout their 2-of-3 multisig vaults. GiveWell. Learn how much good your donation can do by visiting GiveWell.org/tftc. They accept traditional payment methods, Bitcoin, and several other cryptocurrencies

You didn't know because you weren't on there, but they did. They would end up on Reddit. The good ones would end up on Reddit. Yeah. It was just a nice way to quickly look at what was the top news. And then it just kind of devolved really quickly. Yeah. Hey, freaks.

It's Matt and Marty here. We're talking about the old days of information sources and Bitcoin. Yeah. Marty never used r slash Bitcoin. That surprises me. Yeah. I was prolific on r slash Bitcoin. I definitely went on.

I never had a Reddit account until recently when I was trying to pump the podcast when first put it out i haven't really used it much since but yeah i never really used reddit much back in the day it's a big bitcoin talk guy that's what we were saying i've had like 15 reddit accounts yeah because i would just i was that i was really i had that's when i used to have good opsec well everything on reddit i feel like would would leak on the twitter that wasn't like one of my main sources too that like bitcoin talk well it's funny because it used to be that you would go on twitter and you would see people would be linking to things from reddit on twitter now whenever i do end up on r slash bitcoin which i rarely go to now um a lot of the top

posts are just tweets right they're linking out the opposite way fascinating how uh how the information spreading evolves over time and now we have podcasts where people get their information from now i mean we had podcasts back then too they were just fucking horrible well i not all them actually a great podcast it's still around today i'll give a shout out to ansel linder bitcoin markets was always a great podcast back in the classic every thursday getting the news it's still there yeah still there been hustling for years btc markets go check it out um ansel's got like a great podcast voice too a little southern draw absolutely um current price is 7 153 dollars and 53 cents uh would give you their current block is 608 835

would you give you the hash rate but we took it off the ticker because the hash rate that we were pulling uh for the site it was terribly off it was showing like 1x a hash at some point yesterday i was like this is fucking wrong dj um so actually dj is working matt you don't know this yet he's working to uh he's i think he's going to issue a pull request to blockstream.info um to to put in a hash rate feed there and then we'll pull from that at blockchain.info blockstream okay good yeah we shouldn't be using blockchain.info yeah um i think that's what we were using and they were giving us bad data yeah no one should be using blockchain.info so i'm glad we're changing that um it was in in in our defense it was to produce an mvp all right a prototype absolutely

absolutely constantly iterating uh the total according to bitcoinity is 90.4 what can bitcoinity you don't know bitcoinity no i do data.bitcoinity.org yeah dude's a fucking this guy too is an old school hustler he's been around exactly that's what i'm gonna say that's one that's actually one of the few tabs i have on my uh few bookmarks i have on my browser right here i remember being like a young kid and you know diving headfirst into bitcoin and then i like realized at some point he was he was a he was a nim but at some point he came out with his identity the guy who runs bitcoinity and he was like a 15 year old kid or something i'm like this site that i like rely on on a daily basis to check prices and data and shit is this being run by a

14 year old kid 15 year old kid i thought that was the coolest thing ever i was like bitcoin man it's a whole fucking different game right and then you have like rashid uh who's he's just hacking hardware wallets yeah it's uh he's older now though right i don't know crypto ethan just graduated college yeah that shit always blows my mind we got the young people man uh so many young people are the future so many memes literally um before we're in a lot of topics to talk about this week i have some good spitballing right there i think i'm good reminiscing we got a lot of topics before we dive into them this episode of rabbit hole recap is brought to you by your good friends at givewell guys uh they're blowing up right now i just got an email

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thousand dollars yeah but didn't have the disclaimer that they might run out of money to match with yeah cool yeah so it's blowing up um in a good way yeah in a good way that's what you like to say uh this episode of tales from the crypt is also bought to you by the cash app our good friends at the cash after letting you stack sats uh you can buy and sell bitcoin from the cash app uh pretty easily now you can stack slivers of stonks as well if you want to not that you have to it's just there if you ever want to it is there um so uh if you're somebody who's wanted to invest in stocks but you've been uh unable to do so because the stocks that you want to invest in are too expensive cash app is letting you again stack slivers of shares so you can buy

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Unchained Capital is doing many things in the Bitcoin space. They're helping in the open source front. They're providing Bitcoiners with the ability to hold their Bitcoin in the form of Bitcoin collateralized loan. Friends don't let friends sell Bitcoin. If you are ever thinking about selling your Bitcoin and just need cash, Unchained is there to let you take out a cash loan using your Bitcoin as collateral. On top of that, they have their Volts program, which is their multi-sig setup. You can engage in a quorum, multi-sig quorum with Unchained, and they can be a signing key in your two or three or an N of them setup. And if you ever need Unchained to sign for you, they are there for you.

And on top of that, they're providing the tools that they use, and they're open sourcing them. So if you never went Unchained in the Quorum, you can use the tools that they've built, particularly Caravan, to create your own multi-sig setup. So go check out Unchained at unchained-capital.com. That's unchained-capital.com. How are we feeling, Matt? We did it, freaks. We did it. We made it through.

We made it through. I'm fucking cold, man. New York is cold. I'm not cool with it right now. i don't like the cold it's actually my final thought i'd prefer seven degree weather to like 36 degree weather when it gets this cold like your body just accepts that it's cold and adapts i feel like if it's colder i think so and this is just from like living in chicago i kind of shrugged at your final thought to be honest yeah that's exactly what i did when i read it i was like

yeah okay marty i'll take 36 over seven any day of the week ardo no because 36 it can rain and not snow like i'd rather it's snow than rain when it gets to this this temperature oh i agree oh yeah yeah i guess i don't like 36 yeah and rain that's horrible terrible much snow is much preferred were you safe during the snow squall yesterday this we got like nothing absolutely nothing well it was crazy though did you see it when it was snowing and i guess i was hibernating um we i was sitting here with bitcoin sang i recording an episode we had the windows open and it looked like you couldn't see shit. It was like crazy, crazy fast wind, and it was like real quick.

And we got the app alert. Snow squall on the way. You don't see too many snow squalls. Oh, the alert, right? Yeah. Oh, yeah. My lady got that alert, but I didn't. You can disable that in settings.

You should disable those alerts. They're so obnoxious. Yeah, remember when Trump sent one? Yeah, they're so obnoxious. Like, really? We got one inch of snow, and they're like buzzing phones left and right? Ridiculous. like people can you can see the snow like you know it's snowing you don't need an alert for that

well again i think the squall was the important part it's a snow squall not just your typical snowstorm it's got the squall aspect to it do we know what the difference is what makes it a squall i think a squall is just like very quick winds uh not tornado but like uh chaotic winds if you will i don't know that's just what i assume squall that's the connotation that the word squall uh imbues in my head gotta look it up gotta look up squall don't trust verified freaks yeah look up squall um but we're not here to talk about the weather uh we're here to talk about bitcoin big week a lot to talk about a lot of topics we're 10 this might be a longer episode we're already 10 minutes in here um let's start with we'll follow up with what we ended on last

week uh which was the conversation about repo markets and what was going on there and it's a short comment here i recorded an episode with parker lewis over the weekend and posted that on sunday if you're interested i think parker does an incredibly good job at laying out uh the landscape of uh how this liquidity crunch was created what's happening and uh what needs to be done going forward and what is currently happening happening in the repo markets um so go check that out great episode yeah fascinating fascinating quick 45 minute rip um or 50 minute rip but uh yeah it's it's the uh people in charge of our monetary system seem to have uh no idea uh of the repercussions of their policies that's what it seems i as i've said in the past i always just

end up market buying bitcoin when i listen to parker speak so yeah this time is no different it is true he is uh he is a mensch when it comes to fed he he has done his homework and uh knows the fundamentals and does a very good job at laying them out um so definitely go check out that episode 122 uh matt i wanted to talk about this last week but you censored me uh it was too early to talk about a lot of things going on there i know the aml d5 regulation uh particularly god damn it's too already um bottle pay shutting down rather than implementing kyc uh you are obviously disclaimer and advisor what the hell happened um just it was just a really sad week uh

they've been grappling with the decision for a couple weeks uh amld5 is this new regulation that comes into effect january 10th um across the eu um and technically applies to all eu residents like if you're a business serving eu customers but especially if you're a company based in the eu yeah and this this is a law the past like this time last year i believe right it was like a one year yes delay um and bottle pay is based in the uk um which is still in the eu for now um but so each member state the law is like really vague um and each member state of the eu gets to enact it independently um they have to be they have to follow the guidelines but they can be more strict if they want to be more strict right and the netherlands released theirs first um and

then the uk released theirs um and frankly it's just it's extremely vague legislation which is you know it is what it is we've come to expect that uh out of regulators um but But they weren't, they were afraid that, you know, Bottlepenny never had KYC, and they were afraid that they were going to get into a situation where they had to shotgun KYC on people. You know, what we've seen Binance and a bunch of other companies do in the past, which is basically you hold the funds hostage, and you make them do the KYC to get their funds out.

and also at the same time like any information that you'd use with bottle pay in the past would then get connected to that new kyc information right because users weren't even weren't aware that there was going to be kyc in the future um so they thought the most responsible approach and i'm really proud of them for this they thought the most responsible approach was to shut down um make sure all user funds are out by before the january 10th uh gets enacted um and like wait and see and see how this how this exactly plays out um and any funds i also like this touch i mean it just goes to show uh what type of people there are any funds that are left over at the january 10th date get donated to the human rights foundation um which is a nice

touch very admirable no i told you this off air i think it'll work out uh in the long run for bottle pay it was a good decision and um tough one to eat obviously it fucking sucks like do you think this law is intentionally big yeah yeah it's like the bid license was really vague too uh with the bid license we at least got an absolute carve out for non-custodial wallets but i remember when it was actually happening the new york bit license when it was actually happening we weren't really positive if that carve out was going to exist you know like while it's like uh electro yeah or blocks in green or something um but so no one really knows how they're going to enforce this amld5 and one of the issues here is that um as it's written it

could potentially apply to non-custodial wallets uh so the question is how far do they want to take that are they only going to go after non-custodians non-custodial wallets that have like a company and a business behind it are they actually going to go after like open source devs that seems like really hard to enforce um especially if they're under nims and stuff like that um and and and specifically uh non-custodial lightning where you're providing some liquidity um how does that fall you know so so we love breeze uh here we're going to talk in a little bit about phoenix uh but from async and they both they're both non-custodial wallets but they provide you inbound liquidity on the lightning network and there's some questions there whether or not that

is going to fall under amld5 if not all non-custodial wallets maybe just those types and the whole way bottle pay works is is you know you need to have everyone needs to have liquidity if you don't have liquidity you can't send the payments back and forth so like a lot of the takes people have had uh in terms of it's because it was a custodial wallet But, like, there was a plan in place there to move it to a non-custodial model. And no one's sure if that would have been, if they would have had to, they might have had to implement KYC anyway and hold funds hostage to do it, right? So they said, you know, we're in a good place right now. You know, the users have been very happy.

let's just shut it down wait and see and and and take a safer approach here what is the justification of aml d5 well the justification is always the same it's it's the you know the truce mayor uh justification it's terrorists and money launderers and all that stuff yeah um you know they that's they there's that famous meme like how do we package this right yeah uh terrorism or uh or save the children yeah exactly yeah um yeah so that's i mean we i think we've expected this for years uh they're not gonna just go lightly into the night yeah they're gonna try and clamp down as much as possible they'll stifle innovation in a lot of their countries um you know innovation will move abroad will move to different jurisdictions

there'll be the whole jurisdiction arbitrage type of thing i mean we have with there's a it's interesting that no one really has been talking about amld5 and i think it's because everyone's like been in their like war rooms trying to figure out how their company's gonna fucking handle it and don't want to be on the record saying anything but like for instance like binance is a big one they just did jurisdictional arbitrage moving to malta but malta's in the eu right so are they going to move are they going to put kyc on everyone how are they going to handle it um so you'll see a lot of people moving bitmex is still in the seychelles right so seychelles isn't european is it no all right it's just a random island isn't in the pacific

somewhere uh i think it might be off the coast of africa or something like that no i could be wrong i have no idea my geography is not uh sharp right now matt's gonna look it up no but it is uh it's just it's uh disconcerting right that the the government in in europe uh wants to clamp down on this and it's uh the dutch company started shutting down first because that was the first country to to make a move correct right yeah because yeah they all enforce it i mean this just goes this is one of the annoying parts about the eu too right it's like so that each each member country is going to be uh like passing their own uh procedure for handling amld5 yes so it's off the coast of the other side of africa in the indian ocean so i was right

yeah it's off the coast of africa i was like i guess the indian ocean is technically in its own ocean but it is yeah i always think of that as like i guess my u.s centric mindset that's we have one side is the pacific ocean the other side's the atlantic and that's just the two oceans yeah that is all the cost of africa but um yeah uh shout out to the bottle play team i think you guys made the right move uh very admirable um i know they're back in the war room now trying to figure out how they can come back from this i mean it's a perfect example too it's like all these people we hear all the fucking time like we hear from cz fucking at binance where he's like we you know we have no choice we're like can we have to shotgun kyc the users right like there is an

option right there there's always you always have options um and this just goes to show that there there is you know there's some ethical actors out there exactly um speaking of binance and speaking of springing kyc on people apparently their singapore uh branch does not like people who coin join after they withdraw uh there was a thread on twitter this morning from biddlecat uh that was making the rounds uh apparently he uh got kyc sprung on him no no i i think he was already kyc oh yes yes yes he was already kyc they stopped they uh they paused his withdrawals because uh he had withdrawn the coin join previously and they asked him a bunch of uh intrusive questions about where his money came from um they asked him and why and why is coin

joining your current occupation your annual income range and what is the purpose of withdrawing the funds to wasabi wallet hey binance fuck you it doesn't matter what the purpose is yeah so binance singapore is uh talking about jurisdictional arbitrage regulatory arbitrage binance has like they have all these separate exchanges all throughout the world that are like fiat to like a couple pair of gateways right like they recently launched binance us they finance singapore they're all over the place um and they have reduced trading pairs so like this one like you can i think you can buy like six it's basically just fiat to a couple coins yeah like a couple coins um and it is kyc and actually one thing that was interesting that i never knew

uh uh i'm definitely going to mispronounce his name but zoo was on a podcast yeah suzu suzu yes suzu was on a podcast recently he was talking about uh sing a binance singapore in singapore it's really easy to open an exchange but not for singaporeans so there's like a bunch of exchanges including finance singapore that's there but like you can't get an account as a singaporean which is weird what yeah i don't know but that's just a random fact yeah but let's talk about wasabi getting uh so this is our first really known blacklist of uh specifically of of coin join usage right yes uh that i can think of and it's my it's funny because we've been waiting for it to come on the deposit side and this was on the

withdrawal side so presumably well he's he's he said this as much on on twitter uh that they previous transactions he had put through wasabi wallet so then they didn't let him do this one right because they you can see after the fact if you coin join um it's clear on chain you have like a bunch of transactions of similar out inputs you know similar outputs coming out and then yeah so these exchanges can see where you're sending it it's gonna be a b1 address and it's gonna be with a bunch of other inputs of similar right similar value there's a coin join heuristic there that's like pretty obvious yes with wasabi it's even more obvious because

they use this fixed fee address where every time every wasabi transaction gets paid to the same exact reused address so all they have to do is like in their chain analysis software just like flag that address and they automatically get all the wasabi coin joins um the wasabi guys will they claim that the reason they do that is for transparency so you can see their fee structure you can see all their fees how much they get paid you can easily track how many coin joins they've done without like advanced chain analysis um and that you can find the like even just like a semi-sophisticated actor can easily you know have a formula to identify the coin joins you might as well let every every schmuck be able to

do it um but i i've it's always rubbed me the wrong way the fixed fee address it just seems like an odd place to be for something that's about like coin join and obfuscation and shit yeah would there be a way with like well samurai doesn't use a fixed fee address well i know i know that but like if you want like going to wasabi's reasoning for the fixed address being transparency would there be a way like schnor and taproot to like anonymously no disclose that no because if we knew like if they gave us like an x pub or something else like then the chain analysis companies are the x pub yeah that's true like you can like publicly disclose it without

revealing. I mean you can see like how much each transaction paid in fee right on chain and you could probably reverse engineer it. So you could probably actually reverse engineer but if they made it easy for you they'd also be making it easy

for the chain analysis companies. I think but I mean yeah I mean I think this will probably become more common um i know for a fact cash app doesn't do it because i do it all the time um to both samurai and wasabi uh so that's good to see i don't think they should be doing it they've already kyc'd you um but you know some exchanges will be doing it and some won't and you just well and let's

boycott the ones that do well yeah and let's take a time here to reassert that it is okay to coin join privacy financial privacy is okay it should be a human right not according to trace what trace has been trace meyer's been oh yeah all right we'll get into that but back to the reassertion privacy is okay you shouldn't feel dirty in a coin join and apparently trace mayor does feel dirty but so that that is one of the issues with the fixed fee address is that it does create like this connection between the fee address and like every other transaction that's gone through the coin joins and your transaction so it does like it just it just seems unnecessary i think it's just so you just get rid of it and then the other thing which is

like kind of separate but like i really love how samurai's model is the every amount every uh output that goes in is exactly the same amount so because they collect the fee right in the beginning so they collect their fee in the beginning you have a like a perfectly similar output and then that's what keeps getting remixed and and because of that heuristic that they do there um and the fact that they force remixing within the rounds um and they incentivize the remixing because we talked about on the pod last week that the remixing is super important i think that those two combinations make it you know very powerful i think that should be like you know where wasabi goes as well because people don't realize like wasabi the amount of each coin join it goes down the min

goes down over time so you can remix right because everyone's paying the fee every round right so so like when you're at the end of the day you have a bunch of different outputs with all different amounts ever so slightly different right but they're all different amounts it's not uh and they're all paying this fixed fee address yeah uh so i really think that in that way the samurai model is is strictly superior but uh just because samurai doesn't have this fixed fee i just doesn't mean they can't like the i think we've been pretty clear on the pod and it's always worth reiterating is that when you coin join people you pay in the future and people who have paid you in the past know you've coin joined if you do it properly and you don't fuck anything up it'll be

a lot harder for them to actually see what your you know what your current transactions are follow you through the chain but they'll see that you went and you started coin joining they'll know you went you started coin joining on the other side they'll know you coin joined in the past there's no um at least in the in the near term there's no getting around that and that's why Right. You're very keen on getting more people to coin join because the more people that coin join and make it more socially acceptable and more importantly, hire everybody's, excuse me, increase everybody's anonymity set. Again, socially, it should just be accepted and something that that is OK. Privacy is OK. The more you do it, the more you're hiding amongst and also the more normalized it becomes. Right. Yes. Becomes less of a heuristic. One thing that Chris Belcher mentioned, which is interesting, is that PayJoin doesn't use equal outputs, right?

Because I'm pretty sure PayJoin is the one where the person receiving the payment is contributing something to the payment, right? Is that PayJoin or Snicker? Snicker is the two of two equal output CoinJoins, I believe. Okay. and then pay join you're not paying the person in snickering you're just broadcasting yeah you broadcast the transaction and then someone meets you you broadcast it that fits someone else's transaction and you hope they accept it and meet you yes yeah i'm pretty sure pay join is like i'm paying you and you contribute some bitcoin and it's an interactive process you contribute some

bitcoin in so so that there's at the at the end of the day there's two to four outputs or whatever where no one knows who's paying who, where it's going, how much is being paid. And it's a harder heuristic to break because it's not as obvious as 50 relatively equal outputs all in the same thing or five outputs that are all the same size. I feel like it would destroy that heuristic if it's truly any amount.

Yeah, so we have things here. I mean, Lightning, I'm still super bullish on Lightning uh in terms of like making privacy easier and more accessible um and i you know i i think this is you know one of the this is going to be one of the battles you know and i think that someone who tells you that you shouldn't be coin joining because uh you might be mixing with terrorists or north koreans or something just like they sound like a no-coiner to me saying why i shouldn't use bitcoin um and and it you know if if people if people can't spend their money i will if there's like a large amount of bitcoin that's just unspendable because it's blacklists that are

actually enforced successfully like we're gonna have a lot bigger problems than whether or not you can sell your kyc bullshit coins uh because the price was like at the end of the day number won't go up the price the price will fucking crater if people can't spend their bitcoin yeah there's uh we talked about this last week too when people uh were fighting over whether bitcoins uh for hodling or censorship resistant transactions it's for both and it doesn't work if one fails it you need both yeah to hold each other up yeah save good money spend it i will yeah so the battles are among us the war has begun freaks the war is well underway you may not recognize it but it is here we are in the middle of it and uh bitcoin needs you i mean if

you if you if you think it's something that uh we should have in our world and in the future you got to fight for it and as you can see the powers that be are definitely trying to uh curb its growth at least i mean i think it it just comes down to it comes down to bitcoin security right like at the at the end of the day you don't want to be leaking all this information out there you don't want people you pay to see all your past and past and future transactions and how much how much money you have how much money you make um you know depending on where your government is you don't want them to know because that's a first the first step to seizing it is knowing how much you have um you know obviously the ideal here is to use non-kyc exchanges but a lot of you know especially

at scale it's it's it's very difficult to get you know large amounts of of non-kyc coins so these privacy tools become extra important because because this kyc is so intrusive should should should they have used monero in the binance singapore case yeah there's plenty of people that And Shum, Binance Singapore doesn't have Monero support, so you couldn't use Monero in this situation. Yeah, come. Couldn't use Monero. Yeah, yeah.

I mean, yeah, they already blocked that route. Yeah, they just never opened, they never had support for Monero. Yeah. That's why, like, Trace said that too. Trace was like, they might blacklist your Bitcoin, so like you should use like privacy focused coins um why wouldn't they just blacklist like that's not i there's plenty of good arguments for why default privacy is better than non-default privacy

but this idea that the privacy coins won't get blacklisted but the coin joint transactions will just doesn't make zero sense to me yeah it doesn't make any sense at all it's like the same exact logic and if you're talking about swaps in and out like okay then you just i'll blacklist bitcoin that have gone through a swap with Monero, you know? Done. Yeah. Yeah. I mean, I don't think that'll be easy to enforce either,

but I don't think coin join bans will be easy to enforce. So to compare the two, it makes zero sense to me. Well, and I think what's more productive and more imperative and more importantly is to get people, to ask people to say something, to stand up and fight for it. Like, hey, I want some financial privacy. Everybody's just passively, to me at least,

sitting by as these laws get passed and they're complying. How far is too far? How far will be too far? At what point will people scream out, like, this is too fucking much? The other thing is, like, sorry, I'm still so triggered. We've got to win the war of ideas. Trace also, you know, the reason he's been going on the podcast is because he has this Proof of Keys thing on the 3rd of January.

Where if you have funds on exchanges, you should remove them from exchanges to see if they're solvent, if they have enough Bitcoin, right? Keep them honest. But, and he actually, he used the word slave to describe people who don't exercise this right. But at the same time, said that he won't do coin joins because, you know, he doesn't have permission to take his own financial privacy, right? So I think there's a real dichotomy there. I don't understand how you can see why you don't really have sovereignty, even if you take control of your keys, if they're fully KYC'd. And it's almost like a quasi-permission system at that point

where you're not taking your privacy into your own hands. You're too scared to. And it's not really a way to live, personally. and then the other thing about proof of keys is i mean here at the pod i think we practice proof of keys 24 24 7 365 you know not your keys not your coins um the worst time to withdraw your coins is probably day up so like if you have coins on exchanges you should remove them before that uh right like why would you do it could be a mental spike yeah yeah the fees will be higher exchanges are going to their hot wallets will be drained it'll be you know harder for withdrawals

to process even if they're completely solvent right like they're getting hit with 100x the withdrawal request like proof of reserves is way more shout out nick carter like proof of reserves is way more i think productive if we can get like real exchanges to to honor some type of proof of reserve system yeah what is bit floor the only one that's been doing proof of reserves for like five years now tiny asshole exchange in the uk and they just went bitcoin only no isn't that coin floor that's what i just said yeah you said bid for are they two different exchanges no coin floor i thought i said coin floor are they two different exchanges is bid for exist i don't know before exist i don't know about before i know about coin floor

so is coin floor the one that was doing proof of reserves i think you might be right yeah yeah i'm pretty sure yeah they just want bitcoin only shout out to biflor there you go if you're in the uk okay so i think we had enough conversation about that especially since we talked about all the fucking time yeah let's talk about uh cooler things phoenix async launches uh so fucking dope this app we talked about it a couple months ago i do not have android though so i haven't tested it i tried it what's it like and it was fucking badass it reminds me of the breeze flow a lot um so they provide you inbound liquidity uh but with breeze they provide you the inbound liquidity before um you make or receive any payments they just

open a channel to you right away um and then if you do transfer funds in then they take the cost of opening that channel they take the fee from you with this it's really interesting you can just as it's non-custodial as soon as you install the app uh you can generate a lightning invoice and if you pay that invoice uh it says you just received a payment for this amount are you willing to pay us this amount in fees to receive it and you press that and then they open the channel and you're good to go it's very clean and you can also send them on chain and it automatically swaps it over into lightning for you and creates a channel and charges you a little fee boss so yeah so you can literally open it you don't have to worry about channels you don't have

to worry about um they they don't do the backup flow in the beginning which is so great when you're testing it out right like they just notify you on the top like please back up please back up please back up but they don't force you to go through the whole seed word backup um and you can just basically instantly receive lightning payments and spend lightning payments non-custodial So I really like it for the same reason I like Breeze. And I think they're two top-tier apps, like really great on mobile. What's interesting is they didn't go the Neutrino approach. I think it's on their roadmap, but they still haven't gone that approach

with Phoenix by Async. It's an Electrum server. So they connect to like a random Electrum server, and you can put in your own, which I don't think is ideal. I think I would prefer Neutrino, but we'll see. We shall see. I think there's more overhead on doing Neutrino-style block filters on mobile than just connecting to an Electrum server.

So I think that's why. Yeah, because you'd have to feed them, right, from the company server? It's just that the filters that they have to send, well, yeah, I mean, either way, it'd be from a company server right now, right? But ideally, Neutrino gets merged into core, and then people will be serving Neutrino filters all over the place, right? like wasabi right now runs their own i think lightning labs runs their own um but i think the bigger issue is i think the actual data load like the amount of data that gets sent in the

filters um it's just way higher than when you sell phone server yeah but don't quote me on that but anyway it's a fucking dope app super clean just really really excited about it uh and yeah yeah staying on lightning launches see lightning version 0.8.0 was released blockstream's got a good huge medium post out on it is a huge huge uh update let's walk through it big ones multi-part payments you get multi-part you get amp amp is finally here uh you can splice in splice out uh extend it's extending the plug-in capabilities uh and a bunch of other stuff what uh and this is going to help like combine channels together as well multi-part payments i mean it's it's what it sounds like but uh it's fucking huge uh is is so like right now uh if you wanted to pay someone

lightning you have these channels right like imagine them like an abacus and you can move the the balance back and forth the amounts you can do but there's a cap whatever your your largest payment is maxed by whatever your largest channel is route is to the user the receiver in in multi-part payments you'll be able to basically send a bunch of little payments that all add up on the final side as the the amount you're paying yeah cross channels which is pretty huge so it makes liquidity easier because you know you're not limited by your biggest channel in terms of the amount you can send and it makes private it could make like right now in current implementation there are some privacy leaks still but it's significant improvement to privacy especially

going forward um because just think about it you're sending multiple little payments all through different routes on the network um so you need to control way more nodes if you're trying to to spy on that transaction yeah it's huge really cool so you but you need both the both both users need to the payer and the receiver need to have it um have have amp support in order for it to go um lightning labs doesn't have it out yet in lnd pretty sure async does um and now c lightning does uh rusty russell a block stream he's been working on c lightning he was on stefan's podcast this week definitely well worth a listen they talk a lot about multi-part payments um multi-path payments yeah go listen to that one um it's

happening slowly but surely it seems so big updates this week go check out uh go check out phoenix and if you're running sea lightning make sure you uh upgrade or i don't want to force you to upgrade if you want to upgrade and start testing out version 0.8.0 it is not released phoenix is android only but it's going to come out on iphone next year supposedly boss i can't wait to test it out when it does uh speaking of new updates wasabi wallet which was the topic of conversation earlier they have a new release out to version 1.1.10 the big one for this is it has bitcoin core baked into it bitcoin core is now so you just go into settings toggle it on and you have a full node as well yeah it's all coming together and then it'd be cool to see

bitcoin core just bundled in a bunch of shit i think that's already happening yeah like i'm jack mauler's talking about that on zap like that'd be fucking ideal yeah um i think it's gonna happen uh staying on the updates cold card new firmware uh version 3.0.6 if you're running or using cold card excuse me make sure you upgrade that firmware it's always good to stay up to date with the firmware especially if you're using multi-sig it seems like there's a similar vulnerability to the single sig uh change change vulnerability uh there's they haven't released full details yet but it does have a as does have in bold there that if you're using multi-sig a disclosure will be released and the update fixes it so you should fix it yes and uh you should you

should update yes and we'll use this as a reminder to remind your freaks if you're running a treasure team make sure that's update with the latest firmware as well because it has a bug that matt was alluding to where uh if identified and uh and attacked you could have the the change of your transactions sent to a hacker yeah yeah just update before you send transactions you know you should go check the firmware updates for your your hardware wallets yes um they like the keep key got owned by kraken too last week you saw that i did not see that but i think it was just it seems like it's a similar own as what happened to the treasure which is neither of them have secure elements uh like the cold card and the ledger do um so if you have physical access you

can extract the seed and i think i remember when ledger did it to trezor they were saying like the device like the idiot device like they were going to build a device that just any idiot could plug into trezor and pull out a seed it'd be like 110 dollars kraken said it's 75 dollars um so in that case i mean i don't think anyone should be using a keep key they're just like giving them out for ten dollars because they want to get you onto shapeshift's uh kyc platform and read all your pub keys um which is fucking crazy uh but with with if you don't have a secure element it's extra important like if you're using a treasure if you're using a cold card it's a not cold card a keep key it's extra important that you use a strong passphrase because the passphrase isn't

stored on the device so if they extract your seed they still need to then brute force your passphrase they have to basically rapidly guess your passphrase which they'll probably get through eventually but it gives you some time and then just try and prevent physical access as best as possible right yes yes um i mean i operate under the assumption that if any of these devices are physically uh taken by anybody that they're fucked yeah i mean the secure element's a huge improvement because you're able to encode stuff like you know 13 wrong pin entries and the thing just wipes itself yeah um but yeah i mean that's the assumption you should take um yeah and just the number one thing you can do is just have multiple methods of storing things

storing your bitcoin so it's just like if one fails you don't lose everything yes diversify diversify your custodial risk um last update that we're talking about uh ronin ui for samurai dojo has been added um so this is actually independent but uh like it's not out of the samurai team it's in the contributors but it's basically like a nice ui for setting up dojo dojo is samurai's full node suite um we've talked in the past about it uh usually you have to use command line but they set it up so you have a nice little ui for setting it up it's it's relatively easy you get a raspberry raspberry pi 4 uh which are pretty cheap nowadays i mean it just came out but they're pretty cheap and an ssd and you just throw this ronin on it and then you

have a dojo and then you connect the dojo to samurai wallet and you can use your full node with samurai and you can use it with whirlpool to do mixing and stuff like that um again it's all coming together baby it's all coming together and on that note my noddle dojo shipped as well so i'm pretty excited for that i'm excited for you i'm very excited i'm excited for you and selfishly because i want to learn about it sexy piece of hardware it's faster too it's red oh yeah always um here's another cool thing and these have been popping up more and more recently uh the btc pay server integration uh for m5 stacks uh sats they added it's just m5 stack yeah it's m5 stack they added stats to it but um m5 stack is that uh sort of general purpose

hardware uh i believe it's based out of japan correct i'm not sure where it's based but it's modular it's a cool part so you can like tinker with it and run your own shit on yeah it's modular general purpose general purpose computing and that's what i believe uh justin moon used to make the bitboy yes um and uh yeah there's been a lot of videos floating around online and you can integrate btc pay server on it now people are making very small pos systems yeah this is the first one that integrated btc pay and there's a guide coming out soon the other ones i thought the ones like the they had big in berlin where it was like bitcoin payments but it wasn't btc pay okay like you could pay to this is like full proper btc pay integration so for like relatively

cheaply um anyone can roll out these um point of sales and i think they're pretty sexy they're nice and small they got the nice readable screen on them yeah dennis uh raymond has a demo online we're going to drop that link in the bio or the show notes of the bio i mean i think this we were talking about earlier about you know trying to avoid kyc as the first step here we're trying to reclaim some privacy when using bitcoin um getting paid is a great way to do that it's probably the best way and will continue to become even more best way and that's what when people talk about spending bitcoin and like you should spend bitcoin more well like first of all it's your fucking money you do with it as you please um but i think merchant spending with

bitcoin in 2013 we had this whole thing where like everyone wanted to get people to accept bitcoin but they were just converting it to fiat so there's gonna be two things here like bitcoiners will be more likely to spend bitcoin on things that they can't spend otherwise like fiat's not accepted um where the where they think the the merchant is keeping the bitcoin and where the merchant offers a discount and the merchants will offer a discount because i know i me personally i would totally pay five percent you know receive five percent less for goods and services just to not have kyc right you're paying for that you're paying a little a little bit with a discount to not have kyc yeah no i mean just anecdotally from personal experience it's having btc pay

and being able to watch uh people buy from our merch store with bitcoin and send us shout outs and whiskey and dime bags um it works and it's been a great way to like passively just make bitcoin yeah yeah and you don't have that kyc overhead which is fucking fantastic yeah yeah so i think we'll see that more um and that's that's the other thing with the site like and this is like the big argument that's been going on too like fuck all the arguments everybody needs calm the fuck down with like you're damned if you're due damned if you don't right as a bitcoin quote-unquote bitcoin company for us like if we don't like we tell people to hodl i think that's most advantageous in the long run is the hodl but uh if we do have a store and we're bitcoiners we

have to offer payment in bitcoin and i'm not trying to say i am scamming people out of their bitcoin but hey that's your decision to spend your we also accept dirty fiat exactly and the option is to be a little hypocritical if we didn't accept bitcoin exactly exactly we have to we can tell people to hodl but then also tell them i think eventually what we should do is we should offer discount if people pay in bitcoin yeah we're just our store is not sophisticated yeah we're not to do that we're not sophisticated enough in principle we're there yes in principle we're there to offer a discount if you pay in bitcoin yeah we're working our way that's the path going forward and we got to figure that out but yeah i mean this is it's a ridiculous argument i i don't

even want to talk about like it's no one there maybe there's one percent of people that think hodl means like hold forever and never fucking spend ever you know like i that is the most ridiculous interpretation um just you save money and you spend it when you want to spend your money you know like that is uh and you and we personally think dollar cost averaging is like the easiest way to invest in this super volatile asset right so you mix those two together and if your dollar cost averaging and your salaries in fiat like do you have even less incentive to spend your bitcoin because you're actually net buying bitcoin every week why would you or every month or whenever your dollar cost averages why would you um not just take some of that fiat and spend it everywhere

that accepts fiat yeah exactly i mean instead you're paying the transaction fee and then maybe they're converting it back to fiat anyway it's ridiculous and you're preaching to the choir here brother ridiculous it's uh it is ridiculous but yeah people have to fight about stuff especially in times like these this really reminds me of 2015 yeah because that's what bitcoin does to you is what really kills people is the relief rally like that rally to 14k where everyone thought they were like through the woods and then it came back down that's when it really just it just like knocks you down takes you out right yeah drags you like oh my god because i remember when like it went up to like six hundred dollars in like 2015 or 2014

and everyone's like moon it's gone moon i was right all the haters are wrong you know and then it came back down hit new lows and it was just killed everyone yeah yeah it is uh bitcoin is a a cruel mistress she uh she's a cruel bitch um speaking of cruel alex gladstein we shot him out before he's not cruel but he uh he goes to talk uh talk about how cruel regimes i'm blowing this segue all right alex gladstein what a boss what a boss wrote another great article this time for colette which is getting a it's not the most mainstream publication but it's more mainstream than than uh just the crypto bubble or the bitcoin bubble that we're in you dropped three posts this week in three different outlets right

quillette coindesk and tours blog and tours and i thought it was really funny because i i think we talked about him last week or the week before and i was like he's the best shill on bitcoin like when i when i like sit down with myself i'm just like matt be more like alex when you show bitcoin you He just has such persuasive arguments. He's very good with his words. And I felt like he was listening because he just went on a sprint here, just content, content, content.

Content, content, content, content is key. That is the game we're in. All three posts were great. I recommend reading all three of them. The Quillette one was extra special because it was more mainstream. But I thought the Tor one was really good. Yeah, it was just, you know,

bitcoin has free speech money basically keep on keeping on alex are you okay over there need some water i'm coughing man i think it's the air heat in here yeah a dryer outside the heat on in here yeah you're blaming the atmosphere at the studio it's the squall it's the squall um a couple more things to touch on here this was uh making the rounds this morning there was a couple there was a few banks that were now i'm coughing jesus um it's contagious a few banks that were affected by a glitch in the fed system this morning which delayed direct deposits nationwide and i just wanted to throw this well you threw it in here but i want to talk about it because we were talking about earlier it's like holy shit imagine if this happened for like two

weeks of this glitch lasted for like two weeks and people weren't getting paid like you could just go on twitter and see people talking about not getting paid this morning and how angry they It was interesting, like a half an hour after it usually comes through, people are already complaining. And they were like livid. It would be, shit would devolve so fast if this persisted for like more than a week. It is crazy how fragile this could be. Why is the Fed even involved in this shit? I didn't even know they were a part of this process, the direct deposit.

They're the clearinghouse at the end of the day. That's what everything gets marked to, or excuse me, written down. i just never i never expected that in the direct deposit flow they were you know they're the final ledger well that's what like that's what freaks me out i guess does this have to do with the repo markets i'm not saying it does but it's like yeah so a couple couple of uh questionable uh moves by the fed towards the end of the year here this uh being a software glitch is what they're blaming on i think capital one was the bank most affected but there were others as well but yeah again like but capital one blamed

the fed yes padma wong did blame the fed um and now again like it is like again going back to the twitter comments of how angry people were like imagine i think we talk a lot about how people are working paycheck to paycheck in this country imagine if people didn't get their direct deposit for like two weeks straight like how fast would shit develop in this country well it reminds me of that horror story in new york where it was the reverse remember instead of getting their direct to deposit it was all they got pulled money pulled out and then exit scammed yeah yeah that bank they like ran with it here the payment processor take a sip of my water thank you marty i'm dying over here yeah i'm like i feel like i'm about to give you cpr it's like that'd be weird it's sparkling

yeah that's good um yeah so that that happened and and again just it was just a reminder of how fragile the system can be and like how much we take all this shit for granted you just think that oh yeah i'm gonna get my direct deposit in the morning it's gonna show up there's gonna be no problem uh stuff has to happen in the background to make that happen and sometimes i can get fucked up and it happened this morning and of course like all the people came out and they're like bitcoin never goes down bitcoin has gone down sometimes like rarely just say rarely yes amazing uptime is like 99.9 or something there have been we can stand behind that uptime we cannot stand behind bitcoin never goes down yes yes it uh factually you can't say that it's not

a fact yes it's not a fact she'll bitcoin properly please she'll lightly and properly um and the last topic the big topic we should probably riff on this for a bit here uh what i wrote about in the bent this morning and uh probably the big story you freaks have probably heard about it by now or should have heard about it if you haven't it's fucking insane actually good journalism coming out of the new york times gotta get props for props or do we talk great blog talk shit on the blog that is new york times a lot but um stewart thompson and charlie uh walser i believe let me uh find get the correct last name um they always have the best infographics and the best parallax graphics here uh at the times warzel yes charlie warzel

and stewart thompson wrote a piece and basically they had a source approach them or sources excuse me approach them from a company that collects location uh location data from cell phones and sells it to marketers and basically these sources working at this company approach the the two journalists at the new york times because they were so scared of the amount of data they had and how people were using it and so they actually gave uh stewart and charlie access to a chunk of the data not even all the data just a tiny sliver of the data and uh stewart and charlie basically walk through how they followed a bunch of people uh high-ranking military officials celebrities they pretend it's anonymized but like if you can see everywhere a phone's been you can

figure out who the person is yes yes exactly but that was scary like these two journalists just did this themselves they were handed the data and they constructed these profiles of people based off the metadata and basically showed that they were able to follow people who were in meetings with president obama and the pentagon so this is like different apps you have installed on your phone like weather apps stuff like that um that are all that information is then aggregated and sold and moved around to companies that you have no idea exist and they pretend it's anonymized because technically it doesn't say your name or your phone number next to it but if you look at the location history you can figure out who the fuck it is yeah like i said in the band i was like

i i thought like i think yesterday nothing would have shocked me this shocked me like how i wasn't like that shocked they just i mean just the fact that two journalists were able to paint these yeah they display it well these profiles again like one thing that shocked me was that they show the pentagon in the white house and you see like tons of information there so to me that says that they're just blind yeah completely oblivious to this issue uh because their own people are being tracked using it right like and it reminded me of uh what was it like it was it was a fitbit competitor or something like their data their publicly accessed data like showed a bunch of like secret military bases around the world because all the all the agents would be running

around with their activity around the circle behind like the middle of a desert somewhere yeah um yeah they're just oblivious that's not great that's not great well and i wrote about this is what i said in the bend today like it's the way this stuff is architected right like the way cloud services work the way that you trust these companies with your data instead of having the data yourself and custodying the data yourself and and pushing that data out instead of having these companies pull it from you um i think the internet in its first iteration at least up to this point may have failed from a privacy perspective like we may need to restructure the stuff from scratch and it may need i think it does need to be built using cypherpunk tools and

just brought timothy may up in today's letter because the uh specifically the um the signature and the emails that he used to send rest in peace to may crypto anarchy encryption digital money anonymous networks digital pseudonyms zero knowledge reputations information markets black markets collapse of governments and so he's basically outlining the tools you need to get to what a sovereign individual would like over time is the collapse of the state and so we have encryption that's widespread we have digital money but we need the anonymous networks digital pseudonyms zero knowledge reputation systems information markets and black markets that don't track your data and this is i know you you get uh triggered

by this trigger warning to all you freaks out there as well who may get triggered by this like projects like erbit that are working too erbit's a shit coin yeah all right but uh it's not there's an episode dropping tomorrow where we i talk with bitcoin sign guy about erbit all right are we a shit coin podcast now no we're not we're right it depends no we're not a shit coin podcast it depends on what we'll discuss after it depends if you come to the conclusion that erbit is a shit coin and then even then we're only going to talk about bitcoin i talked about erbit because because of this problem specifically like it could solve so again we have encryption that's widespread the common man can access very powerful encryption tools digital money there's a very

promising digital money in bitcoin i think we're working on that but the anon networks digital pseudonyms zero knowledge and the reputation systems that can only be built on top of uh in my opinion systems where users hold the data and hand it out uh in a permission way we need to build those networks because the networks that we have now the internet facebook the social media landscape and all that stuff is basically a digital panopticon that i don't think we'll ever be able to tear down we need to we need to build something side by side to that yeah i mean i think i this idea that regulators can protect you and that politicians can protect you is just never going to happen um so like stop waiting for them to get their act

together like we need we need to solve this with tech like you you need to build systems that just can't be censored by design you know can't be uh abused at scale um that's that's the only solution there's no there's there's no other solution yeah and it's it's scary if we don't do it if we don't do it we are fully surveilled enter the panopticon we are the panopticon is here freaks exactly it is here it's just whether or not uh powers that be want to use the panopticon they can at any moment decide to use it right they're using it when they can decide to use it more overtly yeah absolutely like china yeah i mean on that note i'd like to give a shout out to at hybrid soul uh he sent me a pgp encrypted dm this week so thank you here we go hybrid soul

appreciated that um let's see if he figured out how to decrypt it after i responded to him um but the other thing was there was it just broke uh polo poloniex which was the biggest shitcoin casino in 2017 circle bought it circle bought it brought it to the u.s oh it was already in the u.s circle bought it added kyc to every account um it absolutely killed their value prop because these shitcoin casinos you know people don't want kyc on them everybody went to binance and now justin son of tron fuck justin so led a group that bought poloniex from circle at a huge discount brought him outside the u.s uh kicked off all u.s users um which was really easy to do because everyone had kyc'd right um and now they just opened non-kyc accounts so they moved out of

the u.s and now they can be a proper shitcoin casino i have no kyc and it's like similar to binance uh where there's the only limit is like withdrawals so ten thousand dollars you can withdraw per day uh if you're not verified you just need an email address um so we'll see if they start doing shotgun kyc and stuff like binance has been because binance has a similar tier basically like their lowest tier is no kyc with uh withdrawal limit but they've been known to just force you to do kyc and hold your funds hostage so yeah and uh be careful of palani x2 i I mean, it could be a fool me once, shame on you, fool me twice. I don't even know how that saying goes.

But, like, if they did it once, they could definitely shotgun KYC again. I mean, look, I just think that if any of these guys can shotgun KYC on you, and I just assume that they will at any time, even someone with, like, a stellar reputation like BitMEX, like, at any moment, they can just hit you with KYC. And you should just assume that that's the case. But I think more importantly here, it just really highlights, I think, that like you can't you can't run like a fully regulated shitcoin casino it's just like it's

an oxymoron uh so you need to like in the regulated countries they should be in the u.s and stuff people should be focused on on you know basically being an on-ramp off-ramp like pretty much bitcoin only you know if you want to add like one or two other chains there uh so be it but i mean it should be a bitcoin only on off-ramp you know what we've seen with cash app what we see with river are coming out um instead of like coinbase where coinbase is like trying to be the binance of of the west which they can't compete with binance and they're worse on ramp off ramp so they just where did they just sit in the middle no focus yeah kind of find focus yeah and uh a note there like circle they also shed their otc desk kraken uh yeah they sold to kraken kraken bought that

this week what's happening a circle just bending the knee folding yeah i don't i mean because they just had that really good interview the x circle otc guy on on the brink and it seems like it was a very profitable business for them yeah but he was an x circle guy that's true maybe for a reason i don't know kraken in general has been making a lot of acquisitions and moves lately so might say more about kraken than it does about circle yeah that's a good point very good point That's all we have on the list today. I was told to give a shout-out, but I'm not going to read it. I've got to give sats back to somebody.

Should we say who it was? Yeah. American Hoddle sent us a very vulgar shout-out. Yeah. And he said if we don't repeat it word for word, then he gets his sats back. So we're just going to send those back. Yeah, yeah. So me and M-Boys, you're getting your sats back.

But we love you, dude. Appreciate the shout-out regardless. Yeah. I'm not going to read vulgar stuff. Yeah, definitely. Apparently there's kids in cars reading this stuff. no listening listening reading reading wow this is not reading children no you're not reading right now no you're not um all right that's all we got this week anything else you want to write about

stay humble stack sets peace and love