The Breakdown - Biden’s Top Antitrust Adviser Is a Bitcoin Millionaire

Starting point is 00:00:04 Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. The breakdown is sponsored by nexus.io and produced and distributed by CoinDes. What's going on, guys? It is Tuesday, June 8th, and today is a multi-news recap sort of day. There has just been so much going on. So I wanted to have an episode where I got into a few different topics. First up, we have news to follow up with out of Central and South America. By the time I recorded yesterday about El Salvador's announcement that they were submitting a bill to make Bitcoin legal tender, there had already been a politician from Paraguay who had

Starting point is 00:00:51 added laser eyes and referenced their inspiration from El Salvador. Since then, politicians from Panama, Brazil, Nicaragua, Mexico, Ecuador, and Argentina have all added laser eyes as well. The official from Paraguay, Carlitos Rejala, wrote, As I was saying a long time ago, our country needs to advance hand in hand with the new generation. The moment has come. Our moment. This week, we start with an important project to innovate Paraguay in front of the world, the real one to the moon, BTC, and PayPal. In Panama, an official wrote, this is important and Panama cannot be left behind. If we want to be a

Starting point is 00:01:28 true technology and entrepreneurship hub, we have to support cryptocurrencies. We will be preparing a proposal to present at the Assembly. If you're interested in building it, you can contact me. Now, there is a cynical take here, and that is that these politicians figured out that putting laser eyes on would get a swarm of people to follow them and retweet them, potentially making them look more significant than their position really suggests. Indeed, Bitcoiners are tweeting summaries of these places as though the leaders of all of them have declared Bitcoin legal tender as well, and that's obviously not the case. In point of fact, in many cases, these are junior politicians. But the cynical case fails to understand that even junior politicians from

Starting point is 00:02:06 seven different countries signaling support for a monetary revolution, and more importantly, explaining why that revolution is significant to the places and people they represent, and doing so in a manner that is completely uncoordinated or planned, is a remarkable thing. And even if you want to take the most cynical view, that they're just doing it for Twitter plotts, the fact that these folks think that aligning with Bitcoiners will give them status is a reflection of how far this space has come. As I promised yesterday, this is going to be a fast evolving story, so we will keep checking back in on it. Next up, I have to give at least a little mention to this. In an interview with Fox business, Donald Trump, hey, there's a name you haven't heard for a while, went off on

Starting point is 00:02:48 Bitcoin. When asked his thoughts on Bitcoin, he said, Bitcoin, it just seems like a scam. I don't like it because it's another currency competing against the dollar. I want the dollar to be the currency of the world. That's what I've always said. He also went on, blah, blah, to say it should be regulated more. You'll also note that this wasn't the first time Trump has gone after Bitcoin. On July 12th, 2019, while he was still president, he tweeted, quote, I am not a fan of Bitcoin and other cryptocurrencies, which are not money and whose value is highly volatile and based on thin air. Unregulated crypto assets can facilitate unlawful behavior, and so on and so forth, he then went on. At the time, it was pretty clear that the real target of his tirade was Facebook, which had just announced Libra,

Starting point is 00:03:27 and most assumed that the tweet itself was, if not literally written by Treasury Secretary Stephen Mnuchin, then basically parroted from what he thinks. I will note that it is pretty remarkable that in those two years we've gone from Bitcoin and Crypto not being money whose value is highly volatile and based on thin air, to I don't like Bitcoin because it's a currency competing against the dollar. I also joked on Twitter that there's nothing that could do more for Bitcoin's image with the Democrats in power than Trump deciding to crusade against it. Really, though, it's worth noting that holding aside one's politics,

Starting point is 00:04:00 there are few cantillionaires who have benefited more for the existing system than folks like Trump and Mnuchin. Of course they want to see that existing system preserved. It allows them no true financial recourse for their failures and mistakes and a never-ending spigot of new fiat opportunity to leach off of. It's not about right or left. It's about power and position. Third, no, the FBI did not break Bitcoin. Yesterday afternoon, news broke that U.S. officials said they had captured 63.7 of the 75 Bitcoin ransom that had been paid by the colonial pipeline

Starting point is 00:04:33 after a ransomware attack had shut down the nation's largest gas pipeline. Deputy Attorney General Lisa Monaco said, today we turn the tables on Darkside. Darkside and its affiliates have been digitally stocking U.S. companies for the better part of last year. The commentary from the blue checkmark class on Twitter was predictably stupid. Here are a few highlights courtesy of whale panda. Justin Walfour says news that the government has figured out how to snatch Bitcoin from the online wallets of cybercriminals surely reduces the use cases for Bitcoin even further. Luis Mench, MA, writes, the FBI apparently begged to differ.

Starting point is 00:05:07 They can empty anybody's Bitcoin wallet. Jeff Bennett says clarification via Ken Dillian NBC. While Bitcoin isn't stored on a server, the private keys to unlock the Bitcoin may have been. In any event, an FBI official just told reporters that it doesn't matter where the Bitcoin wallet is, the FBI can still get access. They won't say how. If you ever need an example of why Bitcoiners get so frustrated having to defend themselves all the time, it's the absolute inanity of these types of responses and triumphal point scoring that goes on day in and day out with the people who don't like Bitcoin. We could have a whole conversation about how much that's Bitcoin's fault versus Twitter's

Starting point is 00:05:47 fault, I increasingly feel like this network is an extreme net bad for humanity, but that is a subject for a different time. Either way, given that you're listening to this show, your question is probably, wait a second, how the hell could the FBI get the private keys? Looking for the best way to unlock your crypto's liquidity? Nexo.io is exactly what you need. Borrow against your digital assets at just 6.9% APR. Earn passive income, with yields of up to 12%, and swap between more than 100 market pairs with the Instant Nexo Exchange. Try the Nexo Wallet app to get the whole 360 degrees of crypto banking.

Starting point is 00:06:26 Get started at nexo.io. That's nexo.io to get started today. Let's just walk you through a thread by Jordan Shachtel, author of the dossier on substack and proof that my beef that I was just explaining isn't with journalists, or even blue check marks really, but the people who dunk without learning to understand anything that's actually going on. Jordan Shackdell writes, I'm having a tough time believing that this supposedly Russian hacking network was so sophisticated

Starting point is 00:06:57 that it could shut down our infrastructure, but not knowledgeable enough to maintain safe custody over their Bitcoin. We're missing the whole story here. The Russian hacking claim has been used illegitimately so many times in recent years that it's impossible to know if the feds are being truthful about these matters. Messaging about the Colonial Pipeline incident is a total mess. Have no idea what to believe about this. Here's a perfect example of the confusion.

Starting point is 00:07:17 Why do you need a court order if you have the password to their wallet? reverse is also true. If the Bitcoin was transferred to a custodial wallet, you don't need the password keys. Here's the claim from the DOJ statement. How did the FBI obtain the alleged hackers' private keys? More info from the warrant here. So it looks like I was right. The FBI did not obtain the private keys. Instead, they took legal action against an exchange or some kind of custodial wallet that has servers in Northern California. Coinbase lull? These hackers were grossly incompetent. So the hackers brought down the largest pipeline on the East Coast but couldn't spend 50 bucks on a clean hardware wallet to secure their Bitcoin?

Starting point is 00:07:53 Makes sense to me. This description by the New York Times Cyberbeat reporters is not what happened. To be clear, there was no hack. Feds did not do something innovative here. They used legal mechanisms and tracked a publicly available ledger to secure a Bitcoin from this alleged hacking group. The TLDR is very simple. No, the FBI didn't break Bitcoin.

Starting point is 00:08:13 They took advantage of the fact that the hacked funds were stored in a custodial hot wallet with a company under their legal purview. Jesus, guys, if you're going to tank Bitcoin's price, at least get some better fud. By the way, a quick aside about price actually going back to El Salvador, one thing I've seen quite a bit is people asking how come the Latin America stuff hasn't impacted Bitcoin's price. The first answer, which I believe is gruesome but true, is that most people in rich parts of the world don't give a crap about things that happen in poor parts of the world. It's why conflict and genocide goes barely noticed most of the time. It would be unrealistic, frankly, to expect something that can be callously written off as a

Starting point is 00:08:46 poor country doing something desperate or flashy to influence decisions in rich markets, sad as that is to say for the state of the world. But the other part is something I've talked about a fair bit on this show. And that is that in Bitcoin, narrative is a momentum gain. It's not about day-to-day things that happen and how they influence price, at least not most of the time. Instead, it's about big patterns of where the narrative is. We had a big narrative upswing from March 2020 to April 2021, all about the institutions coming in on the meme of money printer go burr and the attendant fear of future inflation. That narrative has now stalled, and it's stalled not only because of a barrage of fud. Maybe that's keeping some institutions out, but honestly, I don't really believe so.

Starting point is 00:09:24 It's stalled because we're now in a liminal period from a macro sense, a new in-between, a new administration, a new economy post-COVID. There's a lot of wait and see what happens next, and not a lot of high conviction about what happens next. That's not a time that people are going to allocate a bunch of capital to Bitcoin or anything else. And even exciting news, take in isolation is not likely to change that without a fundamental shift in the narrative direction. Anyway, let's go to our final and title topic. In March, Tim Wu was appointed by Joe Biden as a special assistant for technology and competition policy at the National Economic Council. He was a Columbia Law professor who also had roles

Starting point is 00:10:01 at the Obama-era Federal Trade Commission and the National Economic Council back then. Now, Tim Wu has a couple claims to fame. First, he coined the term net neutrality in 2002. Net neutrality is the concept that certain websites shouldn't be able to pay for faster, better internet. Many have pointed to net neutrality as one of the foundational ideas that has allowed the internet to be so competitive, a place in which upstarts could beat incumbents. It might not surprise you then that Wu has also been critical when those companies who were once the scrappy upstarts instead become the powerful incumbents themselves. He has written numerous books and papers about the internet and communications and is considered one of Biden's top antitrust advisors. According to Politico,

Starting point is 00:10:39 recent personal disclosures have revealed that Wu owns between one and five million. in in Bitcoin. He also owns between 100K and 250K in Filecoin's native token as well. Now, I tweeted this morning that I think it actually makes perfect sense that an antitrust advocate is into Bitcoin, and here's what I mean. Bitcoin is the most powerful decentralized technology ever created. It is a counterweight in many ways to the incredible power of today's big tech platforms. It's not controllable in the same way. It has a mythological founder who hasn't had any functional relevance in a decade. It is unlike anything that makes big tech threatening. This is, in my estimation, yet another reason that even if the Biden administration

Starting point is 00:11:19 has concerns about power in the tech industry, they should view Bitcoin as an ally and a force for financial democratization and access. It is not some foregone conclusion that only those of a libertarian bent have to like Bitcoin, and we do well to remember that. With that, guys, I hope you're having a great week. I appreciate you listening. Until tomorrow, be safe and take care of each other. Peace.

The Breakdown - Biden’s Top Antitrust Adviser Is a Bitcoin Millionaire

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