TFTC: A Bitcoin Podcast - Rabbit Hole Recap: Week of 2020.02.10

Episode Date: February 13, 2020

This week Marty and Matt discuss: - Dropbit CEO arrested for running a centralized mixing service called Helix and a dark market search engine called Grams - Self payments lightning privacy proposal - Coldcard releases PSBT Faker tool for testing - Tor Browser v9.0.5 - Tails v4.3 - Wasabi implements Apple Code Sign - Escher App demos paying any lightning invoice with your connected bank account - Liquid support on Bisq goes live - Anon submits Taproot critique to mailing list - Chainalysis has been paid over $10M by US gov agencies - A world without bitcoin thought experiment by Alex Gladstein - US Federal Budget Proposal Mentions More Cryptocurrency regulation and enforcement - Trump admin to introduce new FinCEN requirements - Redditor posts IRS audit request - If US Marshals never sold seized bitcoin they would currently be worth over $1.8B - Casa releases home defense primer - CNBC clip - Coronavirus Close Contact app - CIA owned encryption company facilitated global spying for decades - The Chinese Gov allegedly hacked Equifax - Yandex facial recognition tool - FTX launches US elections futures markets for top 6 candidates 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 check out their 2-of-3 multisig vaults.

Hey freaks, this is Matt here. We just recorded RHR. This episode is brought to you by Unchained Capital. Our good friends at Unchained Capital help you have a multi-sig vault where they control a single key in the quorum and you control two keys. So you never lose control of your Bitcoin, but they will help you use financial services with your Bitcoin. Marty, do you want to to continue on this on this thread yeah so on top of that uh if you have your bitcoin in a vault you're also going to get access to their uh bitcoin lending services you don't need to be in a vault to get these services but if you are in a vault you're going to get them as well and if you're not you can get them anyway all right their vault uh services can help you with

multisig and then their lending service is going to help you not sell your bitcoin friends don't let their friends sell bitcoin all right what you do is you uh engage uh you put bitcoin up as collateral and you get liquidity right away it's tax beneficial uh you're going to be able to get liquidity and you're not going to have to sell your bitcoin right away uh hopefully you don't sell your bitcoin at all eventually you're able to pay back those loans on top of that they're doing a bunch of stuff in the open source world the multi-sig quorum we were describing earlier uh can be created uh outside of unchained using their caravan desktop app all right they've open sourced how they're creating the multi-sigs because they just love the community on top of

that uh they've got gradually then suddenly which is incredible blog series from our good friend parker lewis who's just basically red pilling everybody excuse me orange pilling everybody one blog post at a time bullish as fuck they've got slip 39 hermit as well they're really giving back to the community as they're building out these bitcoin uh excuse me financial services for bitcoiners all right go to www.unchained-capital.com all right www.unchained-capital.com and uh gotta give a shout out to our other sponsor the cash app the fuckers all right you know all about them and if you don't let me tell you about them they're gonna let you do many things on this app i use this app every day uh whether it be using the boost program and my personalized debit

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as one dollar in that stonk if you so please you don't want to stack stonks it's available there with the boost program and stacking sats cash app investing is a subsidiary of square and member sipc remember you don't have to wait four to five day days for uh your money to get on the app you can start investing today whether it be sats uh stonks or just using the boost program use the code stacking sats that's one word s-t-a-c-k-i-n-g-s-a-t-s you're gonna get ten dollars and cash up is going to be so kind to send ten dollars out of good friends at owls lacrosse owls lacrosse fuck stonks stack sets enjoy this app hey there freaks it's your boys marty and matt we're back for rabbit hole recap

big week oh shit we're live we're live dude i just ninja launched you there um before we get into the topics matt is taking a sip of a delicious uh whiskey that was sent to us by a listener a mitcher's single barrel is it mictors mictors mictors mictors mictors maybe well the freaks will let us know i think it's mictors mictors mictors uh by an at captain haddockle uh on twitter it's the best bottle we've ever received yeah marty told me that 1 p.m was too early to drink but i insisted so i am currently sipping on yeah i took some delicious bourbon i took a sip i taste tested it but i will not be uh drinking more than a sip this afternoon shout out to captain had a coal captain h-a-d-a-c-o-l on twitter thank you for this

incredible gift i appreciate you dude this is fucking delicious appreciate all of you you don't have to send us whiskey for us appreciate you if you're here listening just know that we appreciate you too yeah but i might appreciate you a little bit more if you send us a bottle like this um big week big week um let's jump into let's check clark moody's dashboard too before we get into this he added some stuff this week forget exactly what current price is ten thousand two hundred and twenty two dollars um block height is currently six hundred seventeen thousand two hundred thirty eight getting closer freaks twenty two thousand seven hundred and sixty two blocks away from the halving that was good math you can check it clark actually provides that number for

us right so you don't have to be crazy oh where is it you don't have to rely on your math let me find it let me find it um oh yeah yeah 12 762 there you go no more on the fly math necessary not not necessary um shout out to clark keeps uh keeps adding to this every week um we're mining epoch three will be mining epoch four uh very soon the estimate on the dashboard is may 9th 2020 um i saw like an estimate for late april at one point a couple weeks ago um but it seems to be early may no it keeps moving up right because yeah the difficulty keeps adjusting up well it's not the difficulty it's more the hash rate is for yeah that's for So the hash rate goes up and then the difficulty goes up.

Yeah, yeah. But between difficulties, the hash rate's increasing. Right. Such that blocks are coming in a little quicker than 10 minutes. So it's been constantly moving forward, basically. Well, the block time this period during this difficulty adjustment is actually 10 minutes and 10 seconds, so a little higher than usual.

Oh, so now it's moving back. Look at this dashboard. We just have all this information at our fingertips, bitcoin.clarkmoody.com slash dashboard. Check it out. Go check it out. What's our tour percentage? Tour percentage.

On Lightning. It's a top node. On Lightning, it is, tour nodes are 39.6%. Creeping towards 40%. See, it wasn't that, that was my, what, like three weeks ago, I was like, let's get it over 40%. You got to have achievable goals. Almost there.

Almost there. I think we're at like 38.6 last week. Let's do it, guys. um yeah big big loud week uh from the government particularly a lot of agencies so we got a lot of stuff to talk um about and pertaining to the u.s government particularly uh posturing towards bitcoin and virtual currencies uh you want to start with the steve munching butts um the irs cftc i think let's let's first just jump right into the drop it ceo getting arrested okay yeah so that news uh it went i mean i think it went public

earlier this week uh if you were like scouring uh indictments but i mean i think the bitcoin twitter community was made aware last night when uh peter mccormick tweeted uh that the founder of drop it which owns a parent company coin ninja i believe was arrested uh for uh charges relating to a centralized mixer helix.com is that what it was called i think it's but first of all i think it's the opposite right i think coin ninja is the parent company of drop it yeah that's what i said um yeah he so he wasn't arrested for running drop it which is a a hybrid bitcoin wallet mobile wallet where it has on-chain uh it has a non-custodial on-chain wallet and then it has a custodial lightning wallet he apparently didn't get arrested for that he got arrested for allegedly

running a centralized mixing service called helix and he had a dark market search engine called grams and i think he shut both of them down in 2017 yes um so if you read the indictment uh Who arrested him? The FBI? I think the FBI arrested him. They're saying that the Helix mixer was being used by criminals on AlphaBay who were looking to, quote unquote, get clean coins. Again, this comes back to the verbiage of the marketing of Helix and the nature of centralized mixing services like that. So he was arrested, particularly for enabling dark net market users to mix their coins after acquiring them on dark net markets. Right. So AlphaBay was one of the leading dark markets at the time. The indictment alleges that he had some kind of partnership with them. We're not sure what that is whether that was an advertisement that he had on alpha Bay or if it went farther than that So helix was a centralized mixer, which is

We've seen a lot of those in the past with Bitcoin They had a bit mixer a Bitcoin fog best mixer which got shut down. So this is it's There's some nuance here comparing it to The current Charmian coin joint implementations that we have these like wasabi and whirlpool because those aren't custodial this is a very simple custodial mixer where basically a user sends bitcoin into the mixer and then the mixing the mixer operator sends them different bitcoin and takes custody in between there so it's hopefully it doesn't set a precedent for non-custodial options i mean it shouldn't they're different but don't be surprised if it does yeah

never really know um and then as you said the verbiage is important um in how these services get marketed um i never used helix but some some people showed screenshots i'm not you know i wasn't able to uh verify whether those screenshots were correct but a lot of the verbiage on the website was about you know send your dirty coins receive your clean coins um who knows if there was advertisements and stuff uh with similar verbiage uh like wording uh when you see someone like wasabi has gone in the exact opposite way and it's gotten a lot of for it because like if you read their terms of service it says you know you can't use it for any illegal uses all this stuff um that is purely a privacy tool and i think that was probably part of the

reason why you know they don't say that but i think it was part of the reason why they hung on to that fixed fee address for such a long time is that they're trying to um you know whether that's an effective strategy or not they're trying to approach it as a compliant privacy tool uh you know that pays all its taxes and reports everything that it does yeah it's this weird weird gray area we find ourselves in and i think that's like the theme of the week of all these announcements or news coming out from government agencies across the board is that there's just so much confusion around the definition of what these things are how we can use them and how we can most importantly use them correctly to uh to preserve privacy um so that's the the big thing

i've taken out of this week is that i don't know if the confusion's on purpose or the lack of consistency across uh agencies and uh different sectors of the government but um it's there's it's hard to be a bitcoiner and and uh actually know how you can actually use this without getting in trouble right now it's probably a little of both um you know malice plus incompetence uh we've seen governments criminalized privacy has been an ongoing phenomenon um for basically our whole lifetimes and it keeps it keeps increasing and it keeps um escalating yeah even outside of the states uh roy sebag sebag i think that's how you pronounce his name from gold money and many uh he hopped on twitter last week and basically said hey i just want to let

my customers know that the canadian government is is uh forcing arduous and draconian aml kyc compliance on me and forcing me to shut down and he did like a minority report he like called it pre-crime right yeah he's like supposed to like guess the motives of his users yeah and that's mostly gold users uh many accepts bitcoin i think gold money does as well but uh it's it's majorly a gold platform uh to buy and sell gold uh and and at the same time while they have a lot of this vagueness um they're they are actively going after people and trying to set precedent here like they're throwing the book at this guy it's i mean they're going for 30 years i think took all this property yeah i mean it's it's it's worth it to keep in mind that they all of these

you know unverified whatever but it's allegedly like they mixed a lot of coins too did you see the number it was like 300 million or something i current at that valuation then right now it's now it's like over a billion dollars worth was mixed well if he was doing it like december 2017 and could inflate that number as well could be yeah around there um but no and yeah so that's one instance and let's be clear here like that helix way it marketed itself was very dumb and that's not how you should set up a mixing service like centralized mixing services are achilles heels and are subject to getting shut down pretty easily they're centralized services that's why chami and coin joins where users sign the transactions for the inputs and

the outputs there was sobbing Whirlpool yeah it makes makes a lot more sense and and gives you better ability to argue that you were simply looking for privacy and weren't doing anything nefarious before that yeah I mean we've we've already seen regulators crack down on custodians as money transmitters right so it it does follow that it makes sense that they would crack down on custodians that are also facilitating privacy that's even you know more egregious to to regulators uh so you know hopefully you know hopefully regulators understand the nuance there between custodial non-custodial right but who's you know uh you know you can't bank on regulators doing that right

no um i mean let's move to picking up picking on the irs so the irs this week is confusing the hell lot of people there um they have they've changed their guidelines at least three times since the beginning of the year uh in regards to um the definition of a virtual currency and how it should be reported uh on your taxes this year and we reported in the uh a couple episodes a few episodes ago that uh the irs here in the states is making it mandatory to uh basically check a box that says whether or not you have received, bought, transacted in virtual currencies. And since that box has been added to the 1044 form, I believe, a lot of people have been scrambling to figure out what the definition of a virtual currency is.

And the IRS has been changing the definition the first two months of the year. So earlier this week, the definition included of virtual currencies included any virtual currency that's not legal tender, including cryptocurrencies like Bitcoin, but also virtual currencies like V-Bucks. And what's the other one? Roblox? Roblox. Roblox. They used them as examples. Yeah, use them as examples, but it seems that they're trying to basically tax any money outside the U.S. dollar that people are accruing.

But how do V-Bucks work? Aren't they like stable coins as well? Yeah, I mean, it's a centralized token on the Fortnite platform. You can't even, I guess you can trade them through their platform. You can put in an email address to gift V-Bucks to someone. um it's it's worth mentioning here that you know they haven't actually this isn't them necessarily taxing vbucks they it's a box that just you you're supposed to check if you've sent received held used any virtual currency it's like the it's the step before they start saying you know next year maybe the year after that then they start going after people and say disclose addresses disclose

holdings disclose all these things yeah um but this is this is merely um and it is you know a privacy transgression general and just a phishing expedition but they it's specifically a disclosure if you've if you've touched it right yes and and also the other thing is those what they've changed online isn't the official guidelines it's like that's not what you're supposed to officially go by what they change that's like an extra context thing that's what i saw on twitter today from some lawyer but it's so fucked man they've been changing the definition of this throughout the years the at what there was a thread a few weeks ago uh when the box became apparent to everybody and jeff vandrew uh who's obviously he's an accountant has had to do

taxes for people and particularly people who have bought or invested in speculated on cryptocurrencies and the definition uh uh last year or the year before i believe i forget which year it was but it like excluded any cryptocurrency that was uh regarded as legal tender in any country so i popped in there i was like oh bitcoin's legal tender in japan like is that like a loophole in this in this definition they changed it after that uh and so now uh the guidelines say if it's not legal tender in the u.s uh you have to have to check the box i think basically the plan is to keep it as vague as possible so they can enforce it you know indiscriminately whenever they want that's usually the mo here especially in like early industries stuff like you know with with

bitcoin is and you know you you gotta yeah i we're not tax attorneys we're not lawyers or anything but yeah we can't give you any advice here but there is your accountant consult your accountant and there is apparently we haven't verified whether this is a legit um document or not but there is a document floating around reddit of somebody who claims to be uh under an audit of the irs uh and there might be photoshopped but regardless i think this is what people should expect to see so you know i think it's uh should be a wake-up call for people whether or not it's fake yeah uh do you see what they asked for like they wanted full addresses like everything they wanted everything and then at the end they were like this may not even be all the information

it's not an exhaustive list give us more if you have it yeah yeah we may ask for more in the future so definitely check that out breaking news here on tales from the crypt i just ripped my pants my balls are hanging it got too hot for him um one other thing i just want to jump back to drop it real quick if you are using drop it the the on-chain portion of the wallet is non-custodial so funds shouldn't be at risk but you should probably transfer them out anyway just to be sure to transfer them to a new wallet the lightning side is custodial and those funds can be at risk uh if for some reason drop it assets are seized as part of this process um so you should there's like a withdraw to on-chain wallet from lightning withdraw from

lightning button click that button withdraw it to the regular on-chain wallet and remove your funds as soon as possible yes not your keys not your coins um the next uh encroachment of the government is something i talked about in the uh bent today again we don't know exactly what's going to come out of it i felt uh uh compelled to just get ahead of it maybe overreact to the the headline but uh because i think it's important for people to speak up steve mnuchin i don't know how to say his name i'll get made fun of for it i think it's mnuchin all right maybe i got it right i wrote munching butts in the newsletter um he basically came out and said the trump administration is going to create new guidelines for cryptocurrencies uh in an attempt to uh

prevent illicit activity and money laundering um so we don't know exactly what these guidelines are what they're going to target yet but it seems that at least the concept of cryptocurrencies is on on the mind of the Trump administration. And I believe Trump has actually allocated a portion of the Secret Service budget this year to enforce these new guidelines that will be coming out. Yeah, so both that came out this week separately. The budget specifically mentions cryptocurrency regulation, further cryptocurrency regulation and enforcement, specifically relating to the Secret Service being in charge of it rather than the Treasury department. And then at the same time, Mnuchin had a speech where he mentioned this FinCEN

regulation. There's no like actual official release of that. But he did use, I don't know if the freaks remember, he gave a speech maybe six months ago or five months ago where he was saying that Bitcoin and cryptocurrencies were being used for illicit use. That's when he did that interview um on cnbc yeah where he said that like fiat is never u.s dollars is never used for legal purposes um and he's he's parroting these same lines that we see um in terms of saying that bitcoin is used for money laundering that is used by terrorists and by criminals um and it's a way to you know paint it into a corner so that they can easier it's easier for them to enforce these types of regulations yeah and just a reminder that it has been proven that bitcoin is not being

used as much as people like to think it is for these types of activities it certainly is in some instances but it seems that the the biggest use case whether you like it or not right now speculation in a savings vehicle we see this with pretty much every privacy and sovereignty technology governments will quickly paint it as a criminal use even though the overwhelming majority 99.9 percent of users are law-abiding users um and it's it's bad for the users and it's bad for their citizens at the end of the day yeah and just think about this and in the context of where we are at this juncture in history like they need bitcoin is an affront to their ability to control the money supply and control the flow of the money importantly if you're using it in a

closed loop type way and they're going to fight back and this is the i mean slowly but surely they've been um they've been encroaching on this but it seems like it's starting to heat up their their attention on this space and always remember like financial privacy is okay we we need liberty in the digital age and something that we need to fight for and i me personally um i'll just speak for myself like i think bitcoin is imperative for uh preserving liberty in the digital age if we don't have bitcoin uh or something like it and i think bitcoin's probably our only shot um we are doomed to live in a digital panopticon i'd like to give a shout out to alex gladstein who wrote a post uh basically working through the theoretical situation of a world without bitcoin and you're

in the year 2030 and it's financial surveillance is everywhere and we're all living um in this panopticon which we already are kind of living in but it's just been escalating and getting worse and getting worse and just a really good thought piece that everyone should check out yeah um i believe he he read that for the unchained podcast too right he wrote it and then read it on the podcast yes um so go check that out uh we're not done with the government encroachment yet the cftc this is actually brought to my attention right before we hit record um by uh misha gutentag on on twitter uh earlier this week the cftc um basically tftc announced that they are um they're filing a civil enforcement action here in new york state against an llc called q3 holdings llc

for for raising money under the guise of trading it as a crypto hedge fund and then using the funds for something else so that's why they're um they're going after them in a enforcement they're going excuse me, they are putting an enforcement action against them but if you go and read the indictment

bullet point number 46 states that virtual currencies are encompassed in the definition of commodity under section 1A9 of Act 7 USC 1A9 2018 so again

going back to the theme of confusion between agencies in the U.S. particularly. If virtual currencies are to be defined the way the IRS is defining it, this means that stuff like V-Bucks and roll boxes are virtual commodities as well. Excuse me. Yeah, so everyone who uses those

should also check the box. Yes. Yeah, so they're trying to set a precedent here, I guess, right? It seems. um i mean the cfdc has always been bitcoin's a commodity right that's how they get to because they're the commodities regulator right but then irs says it's property right because they're the property taxer uh so all the agencies wanted to be under their their guys what the fuck is going on though they're hitting him from all the different angles as individuals are we allowed

to are we allowed to to plead like confusion like what is it like how do you how do you not have succinct definitions across agencies that's bullshit make at least the best attempt you know you have to make a best attempt here how do you make a best attempt you know hopefully judges will realize what a best attempt is right yeah well hopefully people don't have to go in front of that's the whole thing no i agree all this confusion agree leads to like like and do we even leave live in a free country anymore i think it's important it's really important to be clear here that even if you live under the false assumption that you have nothing to hide and that you completely trust the u.s government um i disagree with you but that's fine if if you

operate under that assumption you know we found out this week i have it later on the list but might as well bring it up now that the u.s government is is saying that the chinese allegedly were the ones behind hacking equifax that it was a state-sponsored hack um if if the U.S. government can't keep our private information safe and we can't be private from the U.S. government, then we're basically saying that all of our citizens, that all Americans are, it's completely fine that all of our Bitcoin transactions are going to be tracked and traced by the Chinese. When you submit all these KYC documents and stuff like that, you should just operate under the assumption that the Chinese are eventually going to hack these institutions. I

I mean, Equifax had information on every single adult American, all of our personal information, and the Chinese were able to hack that. So, yeah, we can have back doors. If we have these back doors, if we have these databases of private information, then other nations, other malicious actors will be able to take those,

and it's a threat to all of us. Yeah, and it's fucking bullshit. like and that's why uh again like this morning's bent may have been a bit of an overreaction because we don't know exactly what finsen the finsen islands are going to be but we need more people to speak up like this is not acceptable like are we the land of the free anymore like this is this doesn't make any fucking sense like and then actually i had lee quinn on from coindesk yesterday and we got on this this this topic as well like a lot of people like to talk about dystopian futures and history is written in retrospect like we may already be living in

the dystopian world and we won't fully recognize it until decades from now that that we we are already in the panopticon and if we are like do you want to live in it and how how how can we get out of it and again i think technologies like bitcoin are imperative for preserving that liberty which is being encroached upon every fucking day i mean look i love this country but we're clearly sliding in the wrong direction and i i it's very much make or break it's very much make or break and people need to uh speak up and stand up for your rights yeah um so that was our almost half an hour spiel on the oh on the on the bright side if the u.s marshals hadn't sold all the bitcoin they seized it would be over 1.8 billion dollars right now so we got that's the

bright side yeah so the u.s marshals they've uh all the bitcoin they've confiscated either from dark net markets or other uh operations they've taken down they've done uh they've done uh auctions throughout the years most famously i believe tim draper bought like when he bought 30 000 bitcoin at 300 or something like that best trade ever yeah from the silk road auction yeah um and And so they had another auction in January this year. They sold 4,000 Bitcoin, I believe. Yeah, so they seized in total, they've seized 185,000 Bitcoin.

That's a lot of fucking sats. And they've only made 151 million from those auctions because they pretty much auctioned it immediately following, as soon as possible after they seize it. And the current USD value is almost $1.9 billion. So they missed out on about $1.8 billion. dollars worth of gains talk about government incompetence yeah they can't even trade again it's not even like they they had to buy those funds they seized those funds yeah yeah they

could have they could have huddled them like if you're talking about like geopolitical game theory they should have at least a little stash of those those confiscated funds for themselves just in case talk about the debt crisis if they were just huddling 185 000 bitcoin that would go a long way right yeah the debt's getting worse none of this is getting better um yeah yeah so that 30 000 that they sold to tim draper was 18.7 million dollars holy shit 30 000 bitcoin um yeah and while we're still on the topic of this stuff too like if if today's bent wasn't an overreaction um and they are going to release a more stringent guidelines. Uh, these guidelines are probably going to be, um, enforced at the exchange level.

So, um, just be aware, like even cash app, if they, if they're forced to, um, uh, operate under new guidelines, like, uh, just think about how much money you have on that app or any other exchange and seriously think about your taking your SATs into your own possession and self-custodying them. I mean, you should keep funds held on custodial services, whether that's an exchange or whether that's a wallet, to an absolute minimum. They could be blocked off from you without notice.

You should just be constantly withdrawing if you do use a custodial service. And this is one of the things that I've always operated. under the assumption this whole time that I wasn't going to be able to buy Bitcoin or at least take self-custody of my Bitcoin in the future and I'm just trying to accumulate as much as possible for that point which is also one of the reasons

why I drown out the short-term noise in terms of like trading and whatnot because I think it's more of a long-term game and you're just trying to get as much Bitcoin before they close the spigots but yeah that could happen at any time

so people should just always be aware of that and then the other thing is if you don't coin join after you pull from these services um if if we do hit this point where they end up criminalizing coin join saying it's illegal to use coin join uh saying uh you have to disclose all of your addresses then the overwhelming majority of people are going to have to comply with this stuff because they will know your addresses if they see stuff move they will know your addresses they'll know all your past and future transactions if you don't use coin join and because of timing analysis like this is something that you have to do ahead of time because if you try and move large amounts of bitcoin through these services it's it's

relatively easy to then to base it off of timing you know you see you see five bitcoin move through a service you see five bitcoin leave uh and and you're able to make some conclusions so it needs to be done over time and you need to be prepared because if you're not prepared um you're yeah and then on top of that also taking a consideration uh exchange limits with moving that stuff off as the price is going up so you could think that you'll be able to move all your bitcoin off at once at one point but if the price jumps up uh unexpectedly which has tends to happen every once in a while uh you can find that you're only able to move a portion of your money off so to keep keep that in mind as well and i know that cash app's working on increasing those limits freaks

so um patience and again yeah they don't they don't like the limits as much as you don't no they wish there was no limits yeah um all right let's get on to some rosier news yeah let's get excited i i was i'm super bullish this week did you see the cnbc fucking clip yes are we i didn't retweet your tweet because i retweeted american hottles but i thought yours was good are we not i was i've been trying to stay humble man i've been trying to stay humble i we've been counter trading cnbc for the longest time and cnbc is bullish it's usually a time that the price is going to go down well i don't trade but just like mentally counter trading but i don't think we've ever really seen cnbc like a panelist panel of cnbc people be that woke that we saw on that like

they some of those quotes that were in that that fucking clip were the most bullish thing ever we've never seen them uh they get the value prop that was that was something it was like in a world of fiat currencies bitcoin will be the victor you know they said safe haven they called it a safe haven asset no that was uh that was guy adami who said that particularly uh about in the world of fiat currencies bitcoin is a safe haven he actually came out a few weeks earlier and i hopped in his men she's like let's go boy uh because he said like you know we're gonna look back in history and the federal reserve and their actions are going to be uh i'm paraphrasing here they're going to be looked at as some of the most evil things that ever existed on this earth yeah i i

that was the most bullish fucking cnbc clip i've ever seen i think we can uh most bullish mainstream media clip i've ever fucking seen absolutely insane i don't we i am always bullish you freaks know that but this next cycle is gonna like absolutely knock our fucking socks off like it's gonna be insane i don't even unfathomable i don't think we can really truly fathom what we're about to witness here let's not get too let's not get too ahead of ourselves i'm super bullish you don't think this government action can throw water on this i think the government action is a response to how bullish the fundamentals are you know right um i mean individual bitcoiners could still get fucked and the price could pump right we could be cut off

from self-custody they could be forcing disclosures they could be selectively enforcing people lying about the disclosures growing big precedents at people you know big cases and bitcoin could still be pumping right yeah i think we could take solace in the fact that brian kelly wasn't on that panel he's usually like the number one uh indicator or contraindicator at the top shilling ripple shilling like not shilling ripple telling people how to buy ripple step by step like no i'm poloniacs and then uh and then litecoin as well he shilled that at the top as charlie lee was dumping on all of us or anybody who had litecoin um wasn't dumping on me uh that clip was so good that clip is worthy of like a cold open just play it at the beginning

of the podcast that was crazy all right this is what we can segue into we don't have it on the list either but um brendan's fire thread this week i think how long has he been gone off of twitter i think like six months at least we're fortunate enough to have him in telegram but he came out of uh out of nowhere and dropped the thread uh basically explaining the demographic tectonic shift that we're running into here in the united states particularly like we have all the boomers retiring, entering retirement. And they've been passively investing in stocks and bonds for the last few decades. And they're gonna have to pull that money out to finance their retirement. And that is going to cause a huge void in these markets. And the Fed is going

to have to step in and print insane amounts of money as the participation rate in the economy falls because as these boomers retire it's again it's a demo they've been a demographic tailwind for quite a while now and population growth has not been has been falling as they've been accumulating wealth and passively for the last few decades so as they start to retire and pull that money out of the stock markets and the bond markets there simply aren't enough people to fill that void that's going to be created and we haven't we haven't been fucking enough there hasn't been enough fucking no bitcoin just fuck a lot yeah we're at least like baby making a lot of baby making baby making on this podcast or that's weird never mind there's no baby making

on the podcast no individuals that participate in the podcast have been baby making yes yes that's true um but no so this demographic uh shift in the workforce is about to slap us in the face and so the fed is going to be for i mean and that's you see trump tweeting about the stock market all the time like it is brendan mentioned it in his thread it is a uh uh an issue of national security now did you see well first of all love brendan he's a friend a very good friend of both of ours um he always gets me bullish he like has a special place in my heart like next to parker him and parker are like um i read their shit i watch their presentations and i just get really bullish um and i i would what did crypto bobby said uh in my menchies under under the cnbc thing

and he's not wrong he's like matt just wakes up in the morning looks at the mirror just like stay humble stack sats stay humble stack sats i'm trying to remind myself like guys stacking sats is the easy part staying humble is the hard part we saw this week Jerome Powell the Fed chair he was giving speech right and the stock market was pumping and then the stock market dropped and Bitcoin went up right yeah cuz he said it's pretty crazy like from a Mac that gets really becoming a macro asset like it's turning into this macro I think the comments for us the comments the particular comments he made were about uh the budget deficit and if it stays on the track that

it is on now it's going to be unsustainable and i guess he didn't mention lowering rates right which the not mentioned hurt as well yeah and it's actually funny arbed out pointed this out in the thread uh comparing pal's um comments earlier this week he also mentioned um cryptocurrencies currencies uh particularly central bank currencies um central bank digital currencies in his speech and so we have uh munching butts coming out and saying that we need to nip this in the butt because we can't let like anonymous and illicit transactions happening and then our doubt said contrast this with pal's comments a day earlier on chinese plans for a stable coin a ledger where you know everybody's payments is not something that would be particularly attractive in the

context of the u.s so we have more contradiction across uh u.s agencies and uh banks or the central banking system and in the government i i think like an important part of growing up and becoming an adult is realizing that no one has any fucking clue what the fuck is going on that is very true right yes and everyone's kind of just making it up as they go along and pretending that they're not so that was like a major realization for me so once once you realize that um it all makes a lot more sense like we have no idea what what the plan is no one has like even the smartest people in the country they have no idea what the plan they might not even be that smart no this is i came even the smartest people that's what i'm saying like no i'm not saying that the smartest

people in the country have you know positions of power i'm just saying that even the smartest people have no idea what the next step is where what direction do you take because we've never been in this situation before no and that's actually how i came to that realization holy shit nobody knows what they're doing is when i worked in finance particularly following the fed and in their policies i was like oh my god these motherfuckers don't know what's going on how the hell does this happen that's when i that's when i dove headfirst into bitcoin yeah i think it becomes really obvious if you're a fed tea leaf watcher right yeah it comes blatantly obvious more bullish news we had jack mallers on uh he came to the studio last week dropped the episode

on tuesday bullish on jack bullish on jack uh we talked about his app uh strike and uh the path he took to building that and sort of the the i think it's a really good episode if you want to know uh the trade-offs that exist with uh the lightning network and the services built on top of it uh we're still figuring out the best way to use this um but with that being said uh lightning stripe allows you to connect your bank account bank account to the app and then pay lightning payments right away and then less than a week later uh iterative capital uh drop the beta for a very similar app escher hub does the same exact thing i'm getting access to that beta uh hopefully tomorrow and we'll start testing it out and i did they uh iterative uh teased it with a

a little demonstration video in which they um uh bought a gift card on fold and as somebody using fold and currently using a debit card because i don't want to spend sets uh to get sets back um you get more sets back if you do use lightning i believe so you do using uh something like escher or stripe where you're actually paying strike yeah where you're paying strike yeah that's what i said where i think that's what i said i think you said stripe might have i got you no worries um so if you use these apps you hook it up to your bank account and fold just sees you're paying with lightning so you get more sats back but you're really paying a fiat basically you you change who does the payment processing right because folds able to give you a better

rate because they don't have to convert the fiat to bitcoin and and so but if if you're paying it depends what your price and your fees are if you're paying on the escher or the strike side right because you that that's that's the difference in the sats back is is fiat based fees um and like fiat to bitcoin act you know uh spread and like how like how what price you can buy that they also demoed it uh with funding a um a breeze wallet invoice um which i you know i thought was also just basically any Lightning invoice you can pay. And I think with Escher, they're using Zelle as their integration, which I have still, I've never used Zelle.

I've used Zelle, it works well. I don't think any of my banks support Zelle yet. I think Zelle is supported by Bank of America and Wells Fargo right now. But yeah, it's good to see just extending out the ecosystem and allowing people that accept Bitcoin to support more users. Users that have never necessarily used Bitcoin can pay Lightning invoices, which is a really fucking big deal, I think. And just to reiterate, January of last year,

I said that no exchanges were going to support Lightning. At a live show hosted by Iterative. And now Iterative has Azure app, which allows you to seamlessly go from your bank account to Lightning. I was owned in the best way possible. This looks cool. Cold Car releases a PSBT faker tool. Oh, you got the acronym right.

Yeah, I always do now. Yeah, so this is for testing purposes. You can fake a PSBT. Yeah, if you want to practice. Practice makes perfect. Practice makes perfect. Practice, practice, practice. that's actually what lee said yesterday when we were talking is that

somebody who considers herself not as technical as your advanced bitcoin user she's become more comfortable over time as she's practiced that she's received and sent more transactions if you are out there and you're you're have your coins on exchange you're just nervous because you don't think you're technically competent enough to do this stuff practice practice practice it gets easier over time i will i will be drilling that into people's heads uh as much as i can because as somebody who was nervous himself at one point too again the more you send the more you receive the more comfortable you get get your fucking hands dirty and also there's only three spots left in the citadel workshop in san francisco it was during bitcoin 2020 newsflash um tor browser

version 9.0.5 is out uh so with this new release what are we getting i don't know just update they updated firefox they updated a bunch of things just update your shit tor browser is great um if you're using a mac or windows it's like the most private you're going to get on those platforms so it's really really good browser this release updates firefox to 6 68.5.0 esr no script to 11.0.13 and on desktop tour to 0.4.2.6 yeah it's a maintenance release and then they released an update to tails which is a little bit bigger of a release for bitcoiners because so tails is the tour projects um operating system it's the idea is that you put tails on a usb stick you run on a computer it doesn't store anything on the computer when you pull the usb stick it's

not supposed to store anything on the computer when you pull the usb stick it wipes everything and it has tor built in and it has electrum built in so it was always a very user-friendly way to set up a pretty private cold storage wallet especially if you never connected to the internet but even if you connected to tor it would broadcast through tor you're you are trusting electrum servers which are probably run by chain analysis companies but at least they don't have your ip address one of the issues was if you wanted to use a hardware wallet you had to install the packages separately every time because tails doesn't remember anything you had to do it every time now they have the treasure package built in so you run

tails you can just immediately connect your treasure to it without connecting it to the internet or anything like that which is pretty dope yeah just a fantastic tool everyone should have just a USB Drive with tails on it just whenever they need it you know tour has a lot of trade-offs who knows if it's It's probably secure against everyone except the U.S. government. Maybe it's secure against the U.S. government. No one really knows. But Tails is the easiest way to do it without shooting yourself in the foot

because it's just like everything is purpose-built to be as private as possible while still being relatively user-friendly. Like it's, you know, my grandma can't use it, my mom can't use it, but a lot of my peers who are not necessarily that technically proficient are able to use tails so check it out get your hands dirty freaks get your hands dirty it's actually uh very uh encouraging to see too uh next release of wasabi wallet will be signed with the proper apple code sign so you're not going to get that weird uh this is untrusted application immediately throw it out and move it to the trash like dude so so this helps them with

the virus scan things we were talking about supposedly um but it also helps because not enough of you freaks are verifying your pgp signatures which you should be doing so at least that it will be signed through this apple you know closed system bullshit it's like a closed centralized system um but at least it's some kind of check that's being done here if you're not verifying with pgp you should absolutely verify with pgp and then also on top of that it will it won't scare people out of using uh the software so it'd be nice if other bitcoin projects could try and go this route i understand a lot will be denied and apple might crack down on say that you're not allowed to um but if they're allowing wasabi then you know maybe

others that aren't currently being um you know that aren't current part of the project i think you have to pay a little bit for it really it's like 100 a year or something like that we'll pay to play action um but it's just good it's good to have uh so that's it's really good to see yeah and again there's a little bit uh a little less fearful when you're downloading that software yeah and it's just nice that it has the built-in verification um you should still verify through pgp um if you're running a mac um i think it's gpgtools.org is the easiest way to use pgp on a mac um don't be overwhelmed it's not that difficult uh if you have any issues you can dm me you gotta stop moving your face like away i keep moving my face away from the mic so i apologize to you guys

for leaving you and coming back to you and leaving you and coming back to you but gpg tools check it out very easy to use um and verify your pgp signatures why do we verify our pgp signatures because if wasabi server that that gives you the download gets or any other server the server that gives you bitcoin core gets compromised and someone puts a fake bitcoin core up there that takes your money the only way to tell if it's been changed is verifying the pgp signature so so the person who uploaded the file could still fuck you but at least you know that it hasn't changed since the person uploaded the file you know someone malicious hasn't and we saw that with monero where someone malicious got onto monero's website switched the file so if you

downloaded you downloaded a malicious file if you verified with pgp you would know that it got changed and someone did notice like a half an hour in because they verified it um so the more people we have verifying it it also gives like kind of a crowd immunity yes um i need to get more uh more up on my pgp i got you let's do it let's have a bitcoin day after the baby we do need that um another light news item here blockstream announced that uh liquid lbtc is now available on bisque so if you want to jump on the liquid network and trade via bisque uh you can do that now i actually i mean we talked about the btc pay integration i said it was like kind of non-story The combination of BTC pay plus BISC is like kind of a nice one-two punch

to try and make liquid a little bit more censorship resistant. It is still semi-custodial. It's not as censorship resistant as Bitcoin. But if you have BISC, you can pretty much, you know, I mean, BISC doesn't have great liquidity, and I doubt they have much liquidity for liquid out of anything. But if they do get some kinds of liquidity there, then you're able to move in and out without any KYC, which is like a prerequisite to try and make this censorship resistant. And then with BTC pay, you're able to receive it without KYC.

So, yes, it's an interesting one-two punch. It's something to watch. I wonder if they're going to have a CoinJoin implementation. um with so so liquid we've said this in the past as confidential transactions um so that masks the amount it doesn't amount and and masks the the asset type so you could be sending like bitsy shitty exchange token or you could be sending lbtc no one knows whether or not you're sending which or the amount but they know sender and receiver so you really get the privacy gains if you mix that with a coin join um afterwards when

you get during it yeah you like mix that with a coin join so it should be interesting to see if they implement some kind of coin join implementation um just something to be aware of and keep an eye on uh i don't really have like any day-to-day usage of liquid but i did try it with side shift dot ai and green wallet and the you know side shift is completely centralized but they don't do kyc and it's relatively seamless experience yeah i've never i haven't tried out liquid yet dealer yeah um you should try with green wallet and side shift just check it out i'll check it out i'll check it out this week bitcoin saturdays uh another interesting news item we want to keep you guys abreast of this we've been talking about bip tapper which recently got broken up into three

bips bit 340 through 342 uh uh brian bishop at kanjur k-a-n-z-u-r-e on twitter announced sunday afternoon that a group of anonymous, quote unquote, group of anonymous devs was relaying a message through him to the Bitcoin mailing list with critiques of these BIPs, BIP taproot particularly. And the main claim, this is from Lucas Nuzzi, at Lucas Nuzzi on Twitter. So the main claim that this Anon group of developers is making is it would be safer to implement MASS, which is Merkle Eyes Abstract Syntex trees, the technology that enables taproot as a standalone bip as opposed to mass plus snore equals taproot albeit simpler uh he lucas isn't convinced that's a good approach and uh i believe matt corallo and insta gibbs

also came out publicly and on my radar and said they weren't convinced by the uh critiques either it does seem like it's a pretty big mass shill um but uh i just want you guys to know that show mast shill a mast show yeah um i just want to let you guys know this critique is out there it's good to see critiques in general yes it is um i don't really know enough to discuss the actual critique but it's good to see critiques we've talked about this on the pod that we want to see more critiques um i think someone was uh fighting it saying that it could be a chain analysis i see that i did not see that um but well since we can't explain it i'll read uh why lucas thinks that the critiques are unwarranted or not unwarranted but uh aren't that good mostly

a complexity thing right yeah one of the biggest benefits of taproot is that it makes the outputs and transaction indistinguishable from each other that necessarily requires schnor's key aggregation within the tree it would be tricky to implement if both were to be separated i get the point on complexity and audibility and that the anon group is bringing up but to be frank there's a lot about taproot that i still don't understand what i have seen is that the current implementation path for these bips has already been simplified considerably even for dummies like me within the initial scope of schnor for example was cross put excuse me cross input aggregation which is a way to aggregate all inputs in a transaction into a single one huge potential especially for coin joins but also

very complex for this reason the current implementation is much simpler with moosig what peter willa and others discovered while researching snore was that cross-input aggregation could be implemented via a generalized version of taproot groot which is yet another reason why mass can be an incredibly useful technology if combined with snore lucas isn't convinced that the risk of splitting mast and snore outweighs the potential benefits of both technologies combined especially when it comes to privacy having said that the point on the need for more thorough technical feedback on these bips still stands uh the more feedback the better the more clarity that comes out of it uh it's even if these questions are sure these concerns

are shot down more clarity comes out of the stuff i i mean i have two two quick comments i mean the first thing is i fucking love um that bitcoiners are so ethical and the imposter syndrome is so real that we all consider ourselves dummies along the whole level of bitcoin understanding And it's just a bunch of dumb asses running the whole network because we're all a lot of people are the majority of people are very humble about it. And I really respect that. Like Lucas called himself a dummy there. Like he's not a dummy. Right.

And the the other thing is it really goes to show, I think, how great Bitcoin's bid process is evolved to this point where we could have, you know, people say, you know. I mean, me personally, I've disagreed with so many things that Pomp has said, so many things that other crypto influencers have said. And then people come and they go with the complaint, why do these people that are targeting the lowest common denominator have an oversized voice in the community? But meanwhile, we have people who are just completely anonymous, a group of people or one person just submits this to the mailing list, right? and it gets real responses it gets real thought and real responses put towards it this is just completely anonymous though right um so like it's literally the exact opposite of saying that like a crypto influencer has um oversized influence on actual real bitcoin things right no i completely agree really great to see very good to see and yeah we need to be as critical as possible again

I think this is an imperative, uh, technology and we should treat it as such. And that means, uh, scouring for any potential, uh, hiccups in any upgrades that we have going forward. Um, so yeah, this is out there, uh, be aware of it and do more research into, into Taproot and, and what it can, uh, enable. And yeah, I just thought, uh, just to put my two sats in there after the, the vigorous review process that involved hundreds of people I found it a little weird

that this was coming out after that like how come this wasn't brought up during the review process the reason the chain analysis FUD was circulating was because it seemed like the person who responded wasn't aware of the privacy benefits of having them

combined so it seems unlikely that they wouldn't be aware of it so maybe they're just disregarding that aspect because they're really trying to was the reason but you know like look everyone should try and steel man the shit out of fucking tapper steel man it but before we implement it it's best that everyone tries to fucking steel man it i want i want as much as possible as much critique as possible yes um more critique

the better uh speaking of chain analysis uh coindesk dropped a story uh basically broke down the government agencies that are paying for chain analysis chain analysis works for us we pay for chain analysis i helped pay for chain analysis through my tax dollars was it over 10 million dollars they've received over the last four years from the irs alone i thought that was from everyone that's just the irs oh no no two well no yeah just the irs since 20 i thought that was the cumulative number well in 2018 the irs paid 3.3 million dollars it might be cumulative it is cumulative you're right all the agencies over all four years is like 10 million but it's escalating they're paying more and more every year they're spending more and more money on this shit

and they're aware you know and if they don't understand bitcoin they pay chain analysis to understand it for them and they have this little tool it's they call a reactor and they get to see they get to click buttons and see the flow of the bitcoin transactions if you're working at chain analysis or any of these other chain analysis chain analysis like talk about like confusing there's a company chain alice's which does chain analysis it's a good name now there's others like elliptic if you're working for these companies and listening to this podcast what the fuck are you doing like do you care about liberty in the digital age are you trying to fuck over your fellow humans just think about that you know the money they like the money yeah i uh that that's

why i think you know fuck fuck appealing to ethics appealing to morality like we need to have the tools in place to to render their business obsolete that's the only real bitcoin way to solve this that's the only real uh solution here um but it is extremely frustrating to see our tax dollars being spent on on this kind of surveillance technology um but but people have to realize like every single bitcoin transaction you send is recorded on a ledger forever like we're all bullish on bitcoin here we think the bitcoin blockchain is going to last forever all of your transactions on this chain for fucking ever you submit kyc docs the chinese will get those kyc docs keep that in mind they will see all your past and future transactions if you do

not educate yourself on bitcoin privacy then people you don't want to know all of your past future transactions your net worth your salary everything will be able to see that and you have to take it into your own hands are we larping here like is no is bitcoin sufficient enough we're half larping because we're very public bitcoiners so we could potentially get very fucked here and i'm aware of that freaks i know i know that we could get fucked here i do not want to go to jail for 30 years i am a patriot i love this country i wish this country went in a better direction i think we can push this country in a better direction it's important but it's also important that you take your rights into your own hands that you realize privacy isn't fucking

criminal um and the first step there is to educate yourself 6102 bitcoin our buddy on twitter um has a website that that lists very good privacy resources i i obviously have a vanity domain that connects to that's btcprivacy.org btcprivacy.org educate yourself and and stand up do you are you confident that bitcoin's privacy will get better throughout time i am no i am cautiously bullish as we said last i'm cautiously optimistic lightning specifically has made me way more optimistic than i was before um and the privacy benefits that could potentially come from lightning but i think that people cannot get complacent this is the most uh important issue here in terms of bitcoin succeeding i mean i i think bitcoin's value prop fails if every single

bitcoin holder gets is is easily identified and and attacked basically right yeah no i i agree i agree wholeheartedly that's what i mentioned in the bend today too like i see this is also a product of the era of bitcoin in which we live in where we're highly dependent on these centralized services that take kyc aml like as we move closer to a closed loop bitcoin economy uh i think this stuff will get better as well yeah but the closed loop is far away right it's far away you need solutions here now for the people that will inevitably go through kyc bitcoiners like to talk a big game about being anti-kyc i fucking hate kyc i use i use cash app right i use a kyc service i try and limit my kyc exposure but i have to use a kyc service i think the majority

of people listening to this podcast right now are buying their bitcoin they're stacking their through a kyc service even though we all hate kyc and we talk big games on twitter the majority of us are doing that. So we need to have solutions in place where people that are using KYC services can lessen their privacy burden. And that's why I'm really supportive of things like BTC Pay, Wasabi, and Whirlpool, and Samurai, just Samurai in general. It's very important. It's the most, and JoinMarket. I'm sorry, guys. I'm sorry I don't mention JoinMarket enough. I think it could be more user-friendly. We're thinking about starting some bounty programs in that regard. But all of these services, and Lightning, you know, all these services that help with privacy, all these tools that help with privacy, all these projects that help with privacy, it's super important.

It is probably the most important aspect of Bitcoin right now. Perfect segue into the next topic, which is a pay swap on Lightning. Z-Man. Z-Man, our beast. If we had Val here, she could tell us the exact name. z i'm trying to z m n s c p no i think you missed a j ah did i isn't there a j in there i don't know z no i got it right z m n s c p x j uh the j was late okay freaks you decide if we give it to him or not i don't know i don't know better but z-man z-man proposed this i it was his initial uh we

talked about pay swap which is on chain a page swap was inspired by this the idea is that you you send a self-payment through lightning and then one of your routing fees to one of the nodes that routes to you uh is actually the payment so it's the payments going along it gets back to you but on the way it pays a routing fee to to someone who is that's the actual payment yeah so it's a self-payment and uh if there is a drawback to this it's just it may be a little bit more expensive because you're making more hops that you have to pay fees along the way um but it does seem like uh it could help with privacy uh aaron van weirdem the great aaron van weirdem i love aaron wrote uh wrote a a piece on on this particular proposal so if you guys want to go check that out we are

definitely going to be linking that in the show notes oh all right what what is this coronavirus virus close contact app did you not see this no so the chinese government is leveraging their surveillance state to create this close contact app you put in your government id number and it uses the surveillance of you and the surveillance of known infected people to tell you if you've been in close contact with those people so it uses the surveillance on both sides and they sell it to you as a benefit but it's only possible because they track every single one of their citizens way too fucking much that's scary scary as fuck and uh another topic i talked about lee yesterday uh i officially am not going to be talking about the coronavirus on twitter

anymore because i'm so fucking confused i have no idea what's going on i've had people in china uh and around china reach out to me and say uh some of the stuff i've been posting on twitter is a bit alarmist and uh probably shouldn't be i mean i don't know again i don't know i don't know what's going on i appreciate that as well i think i've uh reached out to you a little bit about it because because the problem is we can't verify any of this fucking information um i you know this is like really one of the first times where you see uh on social media the inability to verify video specifically there's a lot of video that's been coming out that we're we're not really sure where it's coming from what it's showing um and and this is before we've we

haven't even hit the deepfake era yet guys like we're about to hit the deepfake era but right now we're in the the era where you can post a video you can post an alarmist claim with it and no one really knows what the fuck is going on um and as bitcoiners we're not supposed to trust we're supposed to verify and it's just really hard to verify i'm gonna try and be better i'm gonna try i'd be better hand up hand up i could be better all right um and this was actually pretty fucked up talking about the government spying on you and backdooring shit the cio cio the cia uh owned an encryption company that was purported to be private and that was facilitating global like 70 years or something insane yeah they had a front company that was selling encryption uh technology to

other governments around the world they were like the leading company yeah backdoor they had a back door they could read everything yeah crypto ag and they sold all their assets in 2018 so it was operating from like after world war ii in partnership with the west german government which if you're a part of our generation hasn't existed in our lifetime but they partnered with them and they sold this encryption technology starting from physical encryption all the way to chips in modern day encryption to governments um not the two major adversaries not to china and russia because they understand do their own in-house stuff um but latin america to pretty much every other government and they were just tracking everything and this is why it's so ironic

that the u.s government is scared about huawei uh having 5g access everywhere which i am also scared about huawei because they are definitely going to track everything and have back doors to track everything um the u.s government knows that because we do that to everybody else right and we've been doing that to them for decades it's all fucked there's no such thing as a secure back door you have a back door if if if we can access this back door then other other nation states other malicious individuals entities can then also access that back door um and everyone is less secure for it you can't secure the majority of people um if if you choose if if you're able to surveil everyone the majority of people will never be safe and so you have to prioritize the

majority of people over um your will to have control over a small minority yeah and this is why open source is probably the best way forward as well yeah probably absolutely without a doubt the only way forward is free open source software you have to be able to read the code you have to be able to verify for yourself um because there's just too much there's just too much history here we can't just forget all the fucking history anything that's closed source is backdoor you should just assume that like maybe it's not but you should fucking assume it yep uh let's end on a good note here really cool markets being launched uh by ftx u.s election futures we actually have to end on a bad note if you're gonna go with there but yeah ftx is great why is that a bad note no

this is great because you missed a bad note what uh yandex yeah did you see that no let's just jump back to yandex all right before we get to the elections yandex is russian google if you submit a selfie of yourself that's never been on the internet before nine times out of ten it will pull up your information yeah so eric wall at erc wl on twitter uh cryptocurrency researcher and uh so he he basically tested out yandex and did a google reverse image search versus yandex facial recognition search and uh he inputted a snapchat pic of his and google pretty much didn't bring up anything because google doesn't do it ethically for they don't do it for pr and ethical reasons they hold their technology back and they just say like oh a

gentleman's in this picture yes but yandex doesn't have that reserve and they yandex which probably has worse technology than google let's be honest it's russian google um they just pull up right away eric wall yeah they links to his coindesk articles bitcoin.com articles links to his twitter tweets uh so he makes the point like i guess he'll never be able to go on a dating app without giving away his full name social media home address let's be honest eric you in your dating app you definitely say like you're a cryptocurrency analyst no but um whatever you guys do do not upload your selfie to yandex like to test it out don't do it try you know if you have to do it like if you have a friend that you don't really like and

they have like a closed facebook profile well you should delete your facebook but let's say you still have your facebook and you see them post a picture upload their picture see if their name comes up don't do that don't be at that don't upload your own but and then delete your facebook but don't upload your own picture because then yandex has it and they have it connected to an ip address which you probably shouldn't do so just be careful about that yeah now let's turn to the positive news futures futures markets for presidential candidates here in the in the states this will be the most accurate way to tell who's going to win this election i avoid all politics the freaks know i don't like talking about politics this is if you want to avoid the

noise you want to see who's winning you check the ftx markets uh and the reason is because they have a non-KYC. Technically, the majority of the world is not allowed to participate in FTX markets. They have the verbiage, the wording there that says you're not allowed to, but they do have a non-KYC threshold where you're able to withdraw up to 2K a day if you have no KYC. So theoretically, they're never going to say this, but anyone in the world can access it if they have a VPN. And I think it will become quickly the most liquid prediction market in the world. it will become more accurate than polls. This is what Augur was supposed to fix,

but Augur is way too complicated and is not decentralized in the right ways. You know, it attempts to be, but it's just, it's still centrally controlled, but not in the way that makes it easy to use, you know? So like, this is like BitMEX. Well, FTX is a competitor, but it's like BitMEX for elections, right?

Yeah, and I mean, it highlights that maybe sometimes decentralized services are better for these types of markets. if they're able to evade getting shut down. So right now, according to this futures market, Trump has about a 64.5% chance of winning the election in November. Yeah, so it's not great for the operator. The operator is always at risk.

FTX is always at risk. The user takes custodial risk. You know, what is it if FTX does shotgun KYC? They could. They haven't, but they could. You have all these issues. But from a user friendly perspective, it once you have uncensored, you know, hard to censor money, censorship resistant money that we could have bucket shops around the world that offer these kind of trading options. Right. Yeah. And you have VPNs, you have Tor and all of a sudden, you know, it's opened. It's opened up globally. And when you have real skin in the game, the beauty of prediction markets in general is when you have real skin in the game, you see more accurate results.

you know we saw this with trump last election where people won't answer polls uh accurately because they didn't want to be labeled as a trump supporter um but when you have skin in the game you're just trying to make money uh you're gonna answer exactly accurately like how you think right yeah yeah completely agree um so this contract will expire uh i guess when the election results are in and the way it works is a futures contract expires to one dollar if trump wins the the u.s election so right now it's trading at about 64 and a half cents and bloomberg's been pumping man did you see what he did bloomberg is bloomberg gonna start alt season the bloomberg where is bloomberg uh i can't find him on here bloomberg is currently trading i have it open right now

um bloomberg is currently trading at 10.5 percent and it opened at like seven percent yeah um all of them refer to win the election so on the democratic side there's five democratic candidates they do all the top candidates the top six candidates um they're they're all discounted uh because they also have to win then not only they have to win the primary they also have to win the general right yes but it's very simple it finishes if they win it finishes at one dollar if they lose it finishes at zero dollars and in classic shitcoin casino fashion ftx allows you to do like 100x leverage on those as well which i you should not do you know but um yeah no have you seen bloomberg's like funny latest uh the influencer strategy yeah did he reach out to you

not yet i'm like i'm waiting for my million dollar cash out uh from is that what they're paying them no i don't know freaks i will never sell any of my tweet space or any of my neither will i but yeah no i think i've been actually pretty repulsed by all these influencers like posting these screenshots it's obviously an intern interacting with yeah and then like they post underneath like oh paid for by bloomberg but no one knows if that's like sincere or if it's a joke so most people don't think of it as a disclosure yeah but they have technically been disclosing it whatever you can't like manufacture memes like that's what the ethereum guys tried to do like you can't you can't do that like memes are organic they just they just they get born

the people that create them don't even know they're creating them when they get created exactly they're emergent true memes if you see people out there uh uh putting out contracts for memes mark them as an idiot that's not how memes are created i think we would be mistaken to not mention that talking to the mic i apologize freaks um like we should probably mention that it does feel like the 2017 chaos of alts and stuff is about to oh yeah come back in full full storm as much as we like uh we'd like uh these alts to die out because most of all of them in my opinion don't have a lot of merit to them uh it's just inevitable it's this nature of these open source protocols and we could spin them up if exchange is going to offer uh the trading

of them on their exchange uh people are going to trade them and it seems that alt season is starting and the the proof of stake pump that we've been talking about for a while here um where exchanges are incentivized to pump proof of stake chains yeah because it gives them more control influence and revenue um has also been the case i think brave new coin uh josh carpe noctum on twitter um josh alschewitz yeah carpe noctum right uh he posted that what 18 percent of all tezos are on are on exchanges right now yes staking through exchanges on exchanges in custodial wallets so exchanges have a have a direct benefit to shill you these previous stake chains yes keep in mind that altcoins especially these super liquid shit coins will will pump

bigger than bitcoin in this next cycle for short periods of times and then they will dump bigger than Bitcoin. That is a loser's game, in my opinion. All of these chains are trending to zero in Bitcoin terms long term. I think fucking real estate and stocks are trending to zero in Bitcoin terms. I think gold is trending to zero. I think everything is, but especially these alt coins. So, you know, if you want to touch the fire, touch the stove and get burnt, by all means, fucking do it. But from my experience, the overwhelming majority of people will have more money at the end of the day if they just fucking stay humble and stack stats and don't fuck with that shit i agree and this is part of the reason why we have cash app as a sponsor they don't

confuse retail with a bunch of tokens uh it's only possible to buy bitcoin there uh hopefully it stays that way if it ever changes we probably will rethink our partnership with them um but uh doge toshi our boy doge toshi yeah yeah from the block he pointed out uh it's pretty crazy actually during the 2017 run up on coinbase users had four options they could buy and they only had really three for most of the year um they could buy bitcoin bitcoin cash ethereum or litecoin and now that's increased to four five six seven eight so many 11 12 13 14 15 16 17 18 19 20 21 22 23 24 fucked up six x so they have six x the the confusion and the options to pick from when they go to the app like the shittiest of shit well this is a good time to remind people of

unit bias right so a lot of people that's the standard sats are the standard but uh unit bias a lot of people will go on coinbase and they'll see something trading at below a dollar zero ox zero ox trades at like seven cents or something yes and they'll think that's a cheap uh coin to buy that will have a potential to reach bitcoin's level why am i gonna buy bitcoin at ten thousand dollars when i could buy zero x at fucking seven cents maybe it'll hit ten thousand dollars one day exactly it's the fucking unit bias bullshit yeah that's why every single altcoin has a larger supply than bitcoin well not i've spoken absolute 99 of altcoins have a larger supply than bitcoin because of that fucking unit bias yes so this is why ripple a bunch of people pump ripple and

they're like ripple's gonna get to hundreds of dollars one day not realizing that that would be a decatrillion dollar market, which is highly unlikely. Well, sats are cheaper than XRP. Yes. Sats are standard. That was a long rip. We're almost an hour and a half in. We riffing on anything? You know, we've

been riffing for a fucking hour and a half. I I've really enjoyed this episode. This was a very good episode. I really enjoyed this fucking Mictors is what I really enjoyed, so I appreciate that Marty let me drink at 1pm. I mean, hey, teach their own man it's your body your choice um yeah my balls are hanging out of my pants they

ripped as soon as i hit hit uh oh i have something all right here we go that i wrote down do we want to talk about jp morgan and consensus oh my god well let's talk about consensus last week announced another round of layoffs as they're trying to raise another round i believe 200 million this time around uh but they i believe they laid off like 16 of their workforce or something like that and then uh the block was reporting and coin desk was reporting earlier this week that jp morgan is thinking about selling their quorum uh blockchain unit to consensus that's their private um corporate blockchain centralized bullshit hey the banks are using ethereum man is that bullish it's that if we're looking for a banker's chain isn't that

supposed to be ripple they own money grant he has to be aware um again that's it's garbage news it doesn't matter right it's bullshit it doesn't it's in the scheme of things it's complete non-story that doesn't fucking matter right exactly but uh again like so think about consensus like there you are a vc um bucket shop for focused on ethereum and bitcoin doesn't really have anything like that and alex bosworth actually made a good point on twitter earlier this week he said bitcoin strategy to defeat its competition is to wage a long war of attrition centralized governances will eventually die due to secession issues and corruption people will give into temptations to hyper inflate marketing funds will run dry and bitcoin will still be here so just keep that

mind freaks stay humble stack sets peace and love if you don't like that picard too bad